Distributed Computing Industry
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Altnet Action

Industry News

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Techno Features


September 13, 2004
Volume 6, Issue 2

Altnet Acts to Protect Patents

DCIA Member Altnet last week filed a civil suit against the Recording Industry of America (RIAA) and web services Overpeer, Loudeye, and Media Sentry for breach of Altnet's "TrueNames" patents. Altnet alleges that these defendants infringe on its patents by "spoofing" peer-to-peer (P2P) users with bogus and corrupted media files. Altnet asserts that this has stifled the growth of P2P for legitimate file sharing that compensates copyright holders, which Altnet advocates, and thereby has injured its business.

The suit, while narrowly focusing on a specific, patented algorithm that permits the unique naming of files among P2P software users, has far-ranging implications in the ongoing battle among artists, copyright holders, record labels, and consumers over their respective rights. Recently, the US 9th Circuit Court of Appeals ruled that file-sharing programs were not liable for the actions of their users who share files.

"We've exhausted every means of trying to work with the defendants and those they represent to patiently encourage and positively develop the P2P distribution channel," said Altnet CEO Kevin Bermeister.

Altnet president Lee Jaffe added, "Overpeer and the other defendants have had the opportunity to work with us to innovate and improve the overall content experience for file sharers, yet they have chosen to send a continuous barrage of damaged files that erode relationships among artists, bands, and their fans."

Altnet has built its business advocating authorized distribution of files over the Internet and stresses its commitment to providing full compensation to copyright holders through advertising, content sales, and revenue sharing. The company has successfully distributed video and audio clips from the recent Warped Tour online and has entered into agreements with more than 70 independent record labels to assist them in distributing their artists' music via the P2P distribution channel.

The DCIA decries the destructive acts of "spoofing" that are the subject of this lawsuit and could so easily be replaced with a beneficial activity conducted in good faith as a pre-cursor to full licensing of the P2P distribution channel by major labels. These few but important companies are quickly becoming the music industry's only hold-outs in utilizing file-sharing technologies for legitimate purposes.

Instead of corrupted media, messages containing obscene insults, and potentially damaging "white hiss" files, why don't these entities introduce positive cross-promotional messages and previews of their pop-music content? Why don't they respect the bona fide IP of a company whose sole purpose is to support their ability to commercially exploit P2P – by licensing its patents and changing to such a constructive course of action?

We hope Altnet's action will compel the defendants to come to the table and agree to work together to move forward in the profitable development of this attractive and promising new distribution channel.

Report from CEO Marty Lafferty

With Congress' reconvening after the August recess, the Office of Copyright and Senate Judiciary Committee redoubled their efforts to complete the daunting task of seeking consensus among entertainment, technology, and consumer electronics industries for mutually acceptable language to proceed with S. 2560 (The INDUCE Act).

Regrettably, this has become a restricted closed-door activity for large established players and their special interest groups only.

Meantime, without ever having held a hearing and without other steps normally taken during due process, the House Judiciary Committee has reported out HR 4077 (The PIRACY Act).

We continue to oppose the processes behind both of these bills on principle. This entire effort is being driven, not by private sector consensus or legitimate consumer concerns, but by a handful of entertainment copyright aggregators that shun change in order to protect their existing distribution infrastructures.

These measures and others like them would clearly take us in the wrong direction – towards more litigation and more divisiveness – and away from commercially viable marketplace solutions.

Twenty years ago, the major entertainment cartel attempted to shut down the then-new VCR industry, but failed when the Supreme Court recognized the negative effects this would have on technology advancement. Last month, the 9th Circuit Court similarly ruled against their attempt to thwart this decade's most promising new entrant, peer-to-peer (P2P) file-sharing.

Now as then, the motive of the large conglomerates is the same: to block innovation not under their immediate control. But what is at stake is the opportunity for consumers to have a significantly expanded choice of distribution channels and selection of content.

The danger of capitulating to "FOLLYWOOD" pressure to quickly enact S. 2560 and HR. 4077 goes far beyond hampering the development of P2P.

Even as redrafted, S. 2560 would potentially outlaw a wide range of hardware and software offerings. Basically, anyone who a powerful content aggregator could claim was inducing infringement by means of a new invention would be liable for violating copyright law.

HR. 4077 would criminalize consumers for non-commercial acts of file sharing – or more specifically, for just having a collection of digital music on a networked device, whether or not anyone ever uploaded a single song.

The effect on innovation would be devastating: no investor would be willing to take the underlying risks of developing or introducing new display or distribution equipment or software faced with the looming specter of inducement litigation. Make no mistake about it, this would reverse the Betamax doctrine that has benefited consumers and encouraged technical innovation since 1984.

In addition, S. 2560's implications are so broad that they would endanger a wide range of existing consumer electronics products and computer programming applications. Trial lawyers would enjoy a new legislatively-sanctioned open season on virtually anything that touches entertainment content in the digital realm. HR. 4077's implications are so draconian that they would likely foster a consumer revolt.

There are several key reasons why Senators and Members of Congress should "just say no" to S. 2560 and HR. 4077. They would penalize consumers by restricting choice of distribution channels for legitimate entertainment and ultimately selection of available content. Likewise they would hurt independent and emerging artists, who now benefit from the few alternative distribution channels major entertainment conglomerates do not control.

An increasing number of independent labels and artists, who had found the doors closed to them under the old major label system, have embraced file-sharing solutions for the promotion and sale of their works. They are using this technology to find their fan base and earn a living in their chosen profession; they could not have done either without P2P.

S. 2560 would stifle innovation by threatening software and hardware makers with costly litigation every time a service or product is developed or introduced that major content companies could allege induces copyright infringement. This and HR. 4077 would hurt American competitiveness by artificially constraining the marketplace, and give overseas companies a decisive advantage.

These bills would insulate rich entertainment interests against healthy competition and the benefits to society of alternative channels. They would have the effect of severely limiting further development of digital distribution, which have so much potential to benefit all affected parties once major rights holders embrace them the way consumers and independent content providers already have.

What Would Thomas Jefferson Say?

By John Parres, ClickTheVote

Thomas Jefferson was not only an author of the Declaration of Independence but also a US President, Secretary of State, founder of a major University, major contributor to the Library of Congress and, perhaps most importantly, a prolific inventor.

Throughout his life Jefferson struggled with the balance between the rights of creators and society. As Secretary of State, he inherited the Patent Office and created many rules which remain today. In his writings, Jefferson put forth the notions of the "taper" referring to an idea that is shared with others but does not diminish the original, as well as "limited times'" for copyright monopolies.

As the DCIA referenced in a tribute to Thomas Jefferson in the introduction of its P2P TECH DEMO DAY for Congress on September 17, 2003, appropriately conducted in the Jefferson Building at the Library of Congress:

"He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me."

"That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation."

"Inventions then cannot, in nature, be a subject of property. Society may give an exclusive right to the profits arising from them, as an encouragement to men to pursue ideas which may produce utility, but this may or may not be done, according to the will and convenience of the society, without claim or complaint from anybody."

Read more about why Thomas Jefferson can be considered P2P's founding father

Digital Hollywood Fall Conference

The DCIA is proud to support Digital Hollywood's "Digital Rights Management (DRM) & Anti-Piracy Day-Long Track, End-of-Day Reception and VIP Dinners" co-hosted by Philips Electronics, ContentGuard, and Entriq on September 28th and 29th at Loews Santa Monica Beach Hotel in Los Angeles, CA.

This two-day focus on DRM and combating copyright infringement reinforces our trade association's efforts to provide content and technology organizations and other interested parties with opportunities to come together in various forums focused on constructive solutions.

Conference Registrants should fill-out the DRM Form (scroll down Digital Hollywood Track webpage) and based on availability, invitees to the Dinner will be notified. All conference registrants are welcome to attend the End-of-Day DRM Reception on Tuesday, September 28th.

DCIA Members Chip Venters, CEO of Digital Containers; Gabe Zichermann, VP of Trymedia Systems; and Les Ottolenghi, President of INTENT MediaWorks, will participate in a panel entitled "Next Generation P2P: DRM, Paid for Pass-Along, and Other Legal Distributed Computing Models and the Entertainment Industries" on Wednesday September 29th from 12:50 PM to 2:00 PM.

Joining them will be panelists Ted Cohen, SVP, D3 – Digital Development & Distribution, EMI Recorded Music; Jim Flynn, CEO Artio Systems; and Mark Ishikawa, CEO BayTSP. DCIA CEO Marty Lafferty will moderate this panel.

With over 2,000 attendees expected at Digital Hollywood, entertainment transformation and convergence will be the central themes of the fall conference. To see the entire Digital Hollywood agenda online, please click here.

Copyright 2007 Distributed Computing Industry Association
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