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Guest Post by @schneidermaria: Google’s Self-driven “Carma”

May 17, 2017 1 comment

Maria 17

[Editor Charlie sez: We’re pleased to publish this guest post written by Maria Schneider, a five-time GRAMMY-winning composer and bandleader, a board member of the Council of Music Creators, and an active supporter of MusicAnswers.org. Her GRAMMY awards including two 2016 GRAMMY Awards, Best Arrangement, Instruments and Vocal for “Sue (Or in a Season of Crime)” recorded by the Maria Schneider Orchestra and David Bowie, and Best Large Jazz Ensemble Album for “The Thompson Fields”.  Maria’s posts on MTP can be found here.]

Written by Maria Schneider

It’s the height of irony that Google finds itself in court suing Uber over the piracy of documents and creative works it believes should be protected as its intellectual property (IP).  The lawsuit is a battle royale between two mean-spirited data lords, each wrestling to secure its world domination over self-driven cars.

My short summary of their self-driven car case goes like this:  Google offered Anthony Levandowski a whopping 120 million dollars to head their self-driving car development.  Loyalty not being his strong suit, Lewandowski left Google after a few short years, and not before pirating 14,000 drawings, plans, and other creative works Google had spent a ton of time and money to create.  He then used those 14,000 stolen digital files to start his own company, Otto.  Within a year, Uber made Levandowski insanely rich when it bought Otto from him for 680 million dollars.

Google alleges that Uber and Levandowski have “illegally downloaded” Google’s creative works and distributed them to others.  Google is outraged to find its valuable IP in the hands of hundreds of Uber engineers and employees, none of whom have any obligation to Google.  Realizing that their valuable creations will now surely spread to others and devalue Google’s investment even further, Google’s attorney, Mr. Verhoeven, insists that the damage to Google is “irreparable,” exclaiming, “you really can’t put the toothpaste back in the tube!”

Ah yes, karma is a bitch.

Whatever sting Google is feeling, it’s but a mosquito bite compared to the wounds Google has inflicted upon creative artists: composers, songwriters, recording artists, authors, filmmakers, journalists, cartoonists, photographers, the list goes on.  It’s an incalculable number of individual livelihoods, deeply damaged, if not destroyed by IP theft, not only in the United States, but worldwide, all at Google’s greedy hand.

If Google’s claims come to bear in court, Levandowski could go to jail.  Uber’s attorneys and managers could be fired for buying what was obviously “hot merchandise.”  And Google’s attorneys and management will surely be reprimanded for not having better protections in place to protect Google’s valuable IP.  But should anything about all of this surprise Google?  The highly coveted, wildly overpaid man-boy, Levandowski was just a bad apple that didn’t fall far from the tree.  He was only paying forward the general culture Google itself created – a culture Google has imposed on the entire world through its monopoly on information, its massive market power, and its incessant lobbying to destroy others’ intellectual property rights for its own financial gain.

Let’s go back to 2006.  Back then, Google was kicking the tires of YouTube, trying to decide if Google should acquire it.  In trying to make that decision, these following statements were made by Google’s management:

“I can’t believe you’re recommending buying YouTube . . . they’re 80% illegal pirated content.”

YouTube is a “rogue enabler of content theft.” 

YouTube’s business model is completely sustained by pirated content.”

Even armed with that corporate knowledge, Google gave a big thumbs-up to what they clearly recognized as theft, and went ahead and bought YouTube for 1.65 billion dollars.  And since then, Google has ridden the YouTube train, loaded with its massive cargo of stolen goods, to become the most powerful company the world has ever known.

Google’s culture of disrespecting and exploiting other people’s IP is finally coming home to roost.  With some sort of perverse poetic justice, Levandowski has now done unto Google what Google has done unto others.

Buddha offers the world very powerful words about bad karma: “One who previously made bad karma, but who reforms and creates good karma, brightens the world like the moon appearing from behind a cloud.”

It’s time for gargantuan data lord companies like Google to turn away from darkness and reform, to generate a different karma that brightens the world around them.  It’s time for these companies to stop enabling piracy, to stop making revenue off it, and to stop making revenue off of terrorism, pornography, and fake news, as well.  It’s time they pay a fair amount to acquire content, and pay fair taxes on the valuable data they extract from their billions of worldwide users.  It’s time these companies accept responsibility for the daily crimes that occur on their platforms, instead of hiding behind their weaselly, “we’re not accountable under the DMCA” approach.

It’s high time these companies stop “moving fast and breaking things,” and start driving a little slower and more respectfully, obeying the basic rules of the road.  It’s time for them to make a complete U-turn on our information highway, and steer in the direction of nurturing an internet community based on respect and fairness.  More than needing judges, regulators, lobbyists, lawmakers, or even “moonshots” like self-driving cars, what companies like Google most need, is a shiny brand new karma.

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To see more of Maria Schneider’s writing, go to Advocacy for Musicians at Maria Schneider’s Wikipedia page.

Bunk about “Fair Use Industries” from the CCIA: What do Derek Jeter, Tom Adams and Ari Emanuel have in common?

March 3, 2012 Comments off

Now that the WIPO and OAS report on the economic contributions of copyright has been released, the Computer & Communications Industry Association (of which Google is a dominant member) is recirculating one of those greenhouse studies that comes with more than the usual ration of gas: “Fair Use in the U.S. Economy: Economic Contribution of Industries Relying on Fair Use.”  This is not to say that “fair use” (a defense to copyright infringement in the US) does not have its place in the infringers toolbox, but if the recent “Hargreaves Review” debacle is any guide, destroying copyright in order to save it is going to find barren ground–particularly when the “evidence” is founded on, well, tripe.

The CCIA’s piece of work was heralded by Rep. Polis (and we know a lot more about whose side he is on now than we did at the time the report was released) in a special press conference in which he emphasized the jobs created by the vast “fair use industries.”

Meaning Google mostly (which is why it’s often called the “Google Review“).  It didn’t wash in the UK with either the press or the Commons, even though the Joe Camel of Search actually hired the wife of one of the Prime Minister’s top aides to sell it to Hargreaves and stacked the Hargreaves Review task force with people like James Boyle of Creative Commons who loathes copyright.  Remember–Google gave millions to Creative Commons.

The way that the CCIA gets to this large number of jobs represented by the “fair use industries” is simply by counting all of the industries that most of its members are—to be kind—borrowing from.  Their methodology is based on the analysis of a leading anti-copyright academic, not the economist whose name is on the report.

If you think that the movie, television, recording, book and newspaper businesses think that they are in the “fair use” business, think again.  But even if you did believe that these companies receive some small benefit from the fair use defense, wouldn’t you think that the benefit to the U.S. economy from the fair use defense should be limited to the economic benefit from fair use?

And wouldn’t that require the companies themselves participating in the study to accurately allocate their revenues from works that had nothing to do with fair use?  Not to mention the fact that the fair use defense is largely a U.S. concept, so a further adjustment—downward–should be made for earnings outside of the U.S.?

And is it not just a little disingenuous to say that Viacom benefits the Joe Camel of Search based on Google’s fair use defense against Viacom? Or that any book publisher benefits Google on fair use grounds given Google’s spectacular loss in the Google Books case?

We will first take a look at the double counting fallacy imbedded in the flawed CCIA study and then bizarre notion that the management of CCIA’s largely non-union members whose employees are forced to give up their IP rights as a condition of their employment seeks to challenge the judgment of the legitimate union members.

The CCIA Study

According to The Hill, “[t]he study, which was commissioned by the Computer & Communications Industry Association, found that industries that depend on “fair use” exceptions to copyright laws make up one-sixth of the U.S. economy and employ one in eight American workers.”

Does that sound like bunk stuff to you?  It does to me.  What exactly is a “fair use industry” and does that not sound at least intuitively counter to the purpose of the fair use defense to copyright infringement?  (See 17 USC Sec. 107(4): “the effect of the use upon the potential market for or value of the copyrighted work”.)

The Hill also reports that CCIA asserts that “[f]air use industries weathered the recession better than many other sectors of the economy, according to the report.”  I wonder what other explanation there might be for that assertion aside from the one they want you to draw—which is that fair use leads to profit.   Actually–Google’s definition of fair use leads to one of the biggest income transfers of all time (see Ellen Seidler’s description of that income transfer at Popup Pirates).  I don’t mean the drug ads sold by the Joe Camel of Search, I mean the cyberlocker ads.

I ran into one of the senior CCIA folks at a public policy conference a few years ago and was struck by how little he actually knew about how the music and movie businesses actually work, particularly from a rights perspective.  For example, he had no understanding at all of the independent label and artist part of our business, and did not understand that the RIAA did not speak for songwriters and that the RIAA could not license for its members.  Very basic misunderstandings.  So it is not surprising that they got it wrong on this study—and since it’s a study they commissioned to advance their agenda, you have to assume that they got it wrong intentionally.

So why did they release this “study”?  The Hill reports that “[Rep.] Polis compared some stringent proposals to combat copyright infringement to fighting piracy at sea by shutting down seaports [that would be the rogue sites legislation Polis lead the opposition on]…. Ed Black, president and CEO of the CCIA, said in statement, ‘Too often we hear about the cost of piracy without also considering the cost to legitimate sectors of the U.S. economy of poorly targeted copyright enforcement measures like the pending Protect IP Act.’”

Ah, yes.  Of course.  This is all about CCIA member Google’s opposition to the Protect IP Act—which will have an extraordinary negative effect on the earnings of the Joe Camel of Search–Google could have really used that $500,000,000 they paid for a drugs fine to bolster their fourth quarter 2011 earnings.  (Because, to quote Rep. Debbie Wasserman-Schultz, Google is engaged in “aiding and abetting theft.”)

Or alternatively, the ever-popular theory of the “positive effects of crime” which the GAO has taken such a fancy to.

So what they want you to believe is that the members of the AFL-CIO, the Teamsters, the American Federation of Musicians, the American Federation of Television and Radio Artists, the Directors Guild of America, the International Alliance of Theatrical and Stage Employees, the Screen Actors Guild, Nashville Songwriters Association International and the Songwriters Guild of America do not speak for American workers.  Because they are…you know…union thugs according to Net Coalition and the EFF.

No, no.  You know who speaks for American workers?  Yep, The Man 2.0.  The CCIA speaks for American workers.  And this authoritative voice is because of their largely non-union member companies whose workers are required to give up any ownership interest in their work product as a condition of their employment in the “fair use” industry?

The Double Counting Double Cross

So who is in this “fair use industry”?  The Hill tells us that “[i]ndustries that rely on fair use exceptions include the news media and search engines such as Google.”

Ah yes.   Google, of course.  We expected to see Joe Camel get mentioned.  But who else?

In order to know that, one has to drill down a bit into the tables and appendices of the study.  The study breaks down the “fair use industries” into core and non-core businesses and each are listed in the tables.

I knew there was skullduggery afoot when I saw this sentence: “Portions of this report were prepared with the assistance of Professor Peter Jaszi of American University Washington College of Law.” (Buried in the fine print on page 2.)

Now who is Professor Jaszi?  He is, among other things, the Faculty Director of the Glushko-Samuelson Intellectual Property Clinic at American University.  (The mothership Glushko-Samuelson clinic at Berkeley just received $200,000 from Google in the controversial class action settlement of the Google Buzz litigation.   See “Google Hands Millions to ‘Independent’ Watchdogs“.)

Professor Jaszi’s unit at the Glushko-Samuelson clinic was reportedly unusually influential in the drafting of the 2006 orphan works report by the U.S. Copyright Office (and in implementing legislation that was itself heavily influenced by Google).  That report led to several years of failed legislative attempts to impose an orphan works regime that was almost unilaterally opposed by artists, particularly visual artists.  And just one other implication of Google involvement: during the seleciton of cy pres beneficiaries in the Google Buzz case, the Glushko-Sameulson group was referred to by EPIC in court filings as one of the proposed cy pres recipients who were either consultants or lobbyists for Google.  To which none of the recipients objected when given the chance to do so.

This passage from the APA website about the (now) failed 2007 orphan works legislation sums it up:

“Copyright, [Jaszi] wrote, is rooted in outdated concepts of ‘possessive individualism.’ The ‘romantic myth of authorship,’ he argued, is a vestige of the 18th and 19th centuries ‘in which entrepreneurial publishers…[and] entrepreneurial writers…played out their shared conviction that the “individual [is] essentially the proprietor of his own person or capacities — and thus of whatever can be made of them.’

Professor Jaszi has criticized the US for joining the international Berne Copyright Convention, calling it ‘an international agreement grounded in thoroughly Romantic assumptions about creativity.’ And he noted with disapproval:

‘The first Act of this preeminent ‘authors’ rights’ treaty in 1886 represented the culmination of a process which got underway in the mid-nineteenth-century with Victor Hugo’s vigorous campaign for the rights of European writers and artists. Other famous ‘authors’ rallied to the cause: Gerhard Joseph suggests that the manic energy with which Charles Dickens championed international copyright stemmed from the novelist’s private insecurities about his own ‘originality.’”*” (Emphasis mine)

So naturally, Professor Jaszi would be on the short list to work on the CCIA study: “Data for the key economic measures listed below—revenue, value added, payroll and employment—are segregated into core and non-core industries according to the structure developed by Professor Peter Jaszi, as described above and detailed in Appendix I.” (Study, at p. 19)

Naturally, all of the economists and business experts lack the special insights of an anti-copyright campaigner when it comes to providing the econometric basis for the study’s conclusions.

So let’s look at these “core” and “non-core” industries in Appendix I, which has a handy list of industry sectors and a cross-reference to the section of the Copyright Act—the U.S. Copyright Act—that qualifies them as a member of the “fair use industry.”

The first few listings are mostly companies that either make things that copy or that make the things that go into the things that copy.  Then we get to the first of the odd inclusions as a “core” sector of the “fair use industries”: Newspaper Publishers.  The Copyright Act code sections they rely on?  “102(a) (noncopyrightability of facts); 102(b) (idea/expression dichotomy); 107 (fair
use: criticism, comment, news reporting); 105 (no copyright in U.S. government works).”

I find this reference to newspapers peculiar.  Aside from the fact that many newspapers have sued to keep Google’s paws off of their copyrights, the noncopyrightability of facts and disclaimed copyright in U.S. government works has nothing to do with fair use.  Remember, fair use is a defense to copyright infringement, so if there’s no copyright, there’s no copyright infringement, so no defense to copyright infringement, so no fair use.  So why is that category even there?

Reliance on the idea/expression dichotomy is also not about fair use, it’s about whether an idea is subject to copyright protection (usually not until fixed in a tangible medium of expression).  So why is that in there at all?

So that’s just weird.  But it gets weirder still.

CCIA now includes in the mighty “fair use industries” all software publishers—be sure to let Tom Adams at Rosetta Stone know about that one.

And then we have the motion picture and video industries, the sound recording industries, bookstores, cable television networks (like Comedy Central maybe?), radio and television broadcasting, live event promoters, agents and managers.

Be sure to let Ari Emanuel know that he’s in a fair use industry.

Note: Songwriters and music publishers are not included at all.  Like I said, these guys have a fundamental lack of understanding about the industry they are trying to screw over.

My personal favorite is “independent artists, writers and performers” who are “independent (i.e., freelance) individuals primarily engaged in performing in artistic productions, in creating artistic and cultural works or productions,  or in providing technical expertise necessary for these productions. This industry also includes athletes and other celebrities exclusively engaged in  endorsing products and making speeches or public appearances for which they receive a fee.”

Derek Jeter—you’re in a fair use industry, brother.  Be sure to alert the MLB licensing folks.

So as you can see, CCIA is including in its “fair use industries” list the industries that its members cannibalize for supposedly fair use purposes.

What that means is that if you start with industries that should not be included at all and add to those industries Google and  similar companies that steal from us, you should not be surprised to learn that the “fair use industries” will always look like a bigger group than they really are.

And then you can get someone to stand up and talk about how important jobs are and that the Protect IP Act will kill jobs not protect jobs.

And how the non-union management of CCIA companies can tell everyone how the members of AFL-CIO, the Teamsters, the American Federation of Musicians, the American Federation of Television and Radio Artists, the Directors Guild of America, the International Alliance of Theatrical and Stage Employees, the Screen Actors Guild, Nashville Songwriters Association International and the Songwriters Guild of America–you know, union thugs–do not speak for American workers.

It’s all just bunk–but here’s the fun part.  You know you’re winning when the other side starts lying.  Now if the press would just do a little fact checking….

The Smartest Guys in the Room Can’t Handle the Truth: Google pays $1 billion premium for YouTube

October 6, 2009 Comments off

KAFFEE

I think he wants to say it. I think he’s pissed off that he’s gotta hide from us. I think he wants to say that he made a command decision and that’s the end of it. He eats breakfast 80 yards away from 4000 Cubans who are trained to kill him, and no one’s gonna tell him how to run his base.

From A Few Good Men, Screenplay by Aaron Sorkin

One word: Hubris. This is what Google is all about. This is why they would pay $1.79 billion for YouTube–and zero for the content that made the site valuable, yet try to get away with paying $125 million for all the world’s books, a quarter of which they were paying to themselves.

But you do have to wonder what in the world Google was thinking to overpay so much for such a huge liability as YouTube, which–by most reports–is losing money hand over fist without taking into account the litigation cost or exposure. (See also “Google Holds Back Stock in YouTube” and “Does Google Adequately Reserve for Losses in Copyright Infringement Suits?”)

In a fascinating piece of journalism, Greg Sandoval has uncovered Eric Schmidt’s Jessep moment:

“Google has revealed little about how it decided to pay $1.79 billion but CEO Eric Schmidt said under oath last spring that he was willing to pay a premium–a big one–for YouTube. Leading up to the acquisition, Schmidt told Google’s board of directors that his estimate of YouTube’s worth was somewhere between $600 million and $700 million, according to court records reviewed by CNET.

A Google representative declined to comment about Schmidt’s valuation.

Schmidt had his reasons for asking his board to OK an offer of $1 billion more than what he thought the site was worth. The CEO made the comments during a deposition he gave in May as part of the copyright lawsuit Viacom filed against Google and YouTube in 2007. In short, he believed that Google had to offer that much, or competitors, presumably Microsoft or Yahoo, would walk away with the increasingly popular video site.

‘This is a company with very little revenue,’ Schmidt said while being questioned by Stuart Jay Baskin, a Viacom attorney. ‘(YouTube was) growing quickly with user adoption, growing much faster than Google Video, which was the product that Google had. And they had indicated to us that they would be sold, and we believed that there would be a competing offer–because of who Google was–paying much more than they were worth…We ultimately concluded that [the target price of] $1.65 billion [that ended up being closer to $1.79 billion] included a premium for moving quickly and making sure that we could participate in the user success in YouTube.'”

Hmmm. He wanted to “participate in the user success in YouTube.” What in the world does that even mean? Could it mean paying a premium for attracting so much illegal content?

This was a brilliant piece of lawyering by Viacom, straight out of a movie–“I think he wants to say it. I think he’s pissed off that he’s gotta hide from us. I think he wants to say that he made a command decision and that’s the end of it.”

And the smartest guy in the room fell for it hook, line and sinker. I doubt seriously whether the same deal would get done today. I don’t know if this statement by Schmidt from the WSJ sounds “rueful” to you, but it does to me: “The problem with buying at those levels is you have to get your money back.”

What exactly was the $1 billion premium for? Perhaps as one analyst quoted by CNET put it: [YouTube] was popular because it had access to content that it shouldn’t have had and that you couldn’t get elsewhere because no one else was willing to put it up illegally…Clearly, (Google’s leaders) [understood] what was driving momentum behind YouTube.” So maybe they did pay for content after all–just not to the content owners. Could it have been a big tip for taking the “infringement risk” on the path to participating in “user success”. Of course–user success. Like the Pirate Bay.

If it was the premium that Schmidt decided to pay for illegal content it was a Satanic bargain at best and it dwarfed any payments to content owners that were made after the fact to those lucky few with the financial and market clout to threaten the Leviathan of Mountain View. So at least that billion is our money–all of those artists, songwriters and indie labels who couldn’t afford to put the litigation gun on the table. As the monopsonist book enthusiast Sergey Brin put it so clearly–“Content owners will not set the price. “Everyone is familiar with this problem in selling your house. We’re not going to use the price you suggest.”” That’s right, kiddies. Keep talking like that. Where are the anonymous amici when you need them? (And by the way–I guess no one told the Google CEO that you can’t compare physical and digital assets–so I guess it’s like selling your house if you lived in Second Life? It’s so hard to keep it all straight, isn’t it?)

You should read the excerpt from the Schmidt testimony in the CNET piece. It is a fantastic piece of lawyering and a good lesson in why you should pay attention when your lawyer objects and s-h-u-t u-p.

But only read it if you can handle the truth.

Although you have to ask yourself, where in the world was the board?

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