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Jury Finds User Liable for Downloading, Awards $9250 Per Song in Damages

October 5, 2007 by

The first Recording Industry v. End User lawsuit to go to trial just ended, and the industry won big. Jammie Thomas, a single mother in northern Minnesota, was found liable for illegally downloading 24 songs via Kazaa, and the jury awarded damages of $222,000, or $9250 per song. It’s always risky to extrapolate much from a single case – outsiders, schooled by TV courtroom dramas, often see cases as broad referenda on social issues, while in reality the specific circumstances of a case are often the decisive factor. But with that caution in mind, we can learn a few things from this verdict.

The industry had especially strong evidence that Thomas was the person who downloaded the songs in question. Thomas’s defense was that somebody else must have downloaded the songs. But the industry showed that the perpetrator used the same distinctive username that Thomas admitted to using on other services, and that the perpetrator downloaded songs by Thomas’s favorite performers. Based on press stories about the trial, the jury probably had an easy time concluding that Thomas downloaded the songs. (Remember that civil cases don’t require proof beyond a reasonable doubt, only that it was more likely than not that Thomas downloaded the songs illegally.)

People often argue that the industry has only weak evidence when they send their initial settle-or-else demand letters to users. That may well be true. But in this case, as the trial loomed, the industry bolstered its case by gathering more evidence. The lesson for future cases is clear. If the industry has to go to trial with only the initial evidence, they might not win. But what end user, knowing that they did download illegally, will want to take the chance that more evidence against them won’t turn up?

The most striking fact about the Thomas case is that the jury awarded damages of $9250 per song to faraway corporations.. That’s more than nine hundred times what the songs would have cost at retail, and the total of $222,000 is an astronomical amount to a person in Jammie Thomas’s circumstances. There is no way that Jammie Thomas caused $222,000 of harm to the record industry, so the jury’s purpose in awarding the damages has to be seen as punishment rather than compensation.

My guess is that the jury was turned off by Thomas’s implausible defense and her apparent refusal to take responsibility for her actions. Litigants disrespect the jury at their peril. It’s easy to imagine these jurors thinking, “She made us take off work and sit through a trial for this?” Observers who hoped for jury nullification – that a jury would conclude that the law was unjust and would therefore refuse to find even an obvious violator liable – must be sorely disappointed. It sure looks like juries will find violators liable, and more significantly, that they can be convinced to sympathize with the industry against obvious violators.

All of this, over songs that would have cost $23.76 from iTunes. At this point, Jammie Thomas must wish, desperately, that she had just paid the money.

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Amazon’s MP3 Store Wisely Forgoes Watermarks

October 2, 2007 by

Last week Amazon.com launched a DRM-free music store. It sells tracks from two major labels and many independents in the unprotected MP3 file format. In addition to being DRM-free, Amazon’s songs are not individually watermarked. This is an important step forward for the music industry.

Some content companies see individualized watermarks as a consumer-friendly alternative to DRM. Instead of locking down files with restrictive technology, individualized watermarking places information in them that identifies the purchasers, who could conceivably face legal action if the files were publicly shared. Apple individually watermarks DRM-free tracks sold on iTunes, but every customer who purchases a particular track from Amazon receives the exact same file. The company has stated as much, and colleagues and I confirmed this by buying a small number of files with different Amazon accounts and verifying that they were bit-for-bit identical. (As Wired reports, some files on Amazon’s store have been watermarked by the record labels, but each copy sold contains the same mark. The labels could use these marks to determine that a pirated track originated from Amazon, but they can’t trace a file to a particular user.)

Individualized watermarks give purchasers an incentive not to share the files they buy, or so the theory goes, but, like DRM, even if watermarking does reduce copyright infringement, that doesn’t necessarily mean it makes business sense. Watermarks create legal risks even for customers who don’t engage in file sharing, because the files might still become publicly available due to software misconfigurations or other security breaches. These risks add to the effective cost of buying music for legitimate purchasers, who will buy less as a result.

The difference in risk between a customer who chooses to share purchased files and one who does not is ultimately determined by computer security issues that are outside the content industry’s control. Aside from users who are caught red-handed sharing the files, who can be sued even without watermarks, infringers and noninfringers will share a multitude of plausible defenses. Their songs might have been copied by spyware. (If watermarking becomes widespread, spyware authors will probably target watermarked files, uploading them to peer to peer networks without users’ knowledge.) They might have been leaked from a discarded hard drive or backup tape, or recovered from a stolen laptop or iPod. The industry will need to fight such claims in order to bring suit against actual infringers, leaving noninfringers to worry that they could face the same fate regardless of their good intentions.

With individualized watermarking, there’s no knob that the content industry can set that varies the disincentive for sharing purchased files independently of the disincentive for purchasing them at all. Inevitably, legitimate customers will be scared away. This makes individualized watermarking a blunt antipiracy tool and a bad bet for the content industry. Amazon was wise not to use it.

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One Laptop Per Child (New Version), Reviewed by 12-Year-Old

September 26, 2007 by

[Today we welcome back SG, a twelve-year-old who previously reviewed the B2 version of the One Laptop Per Child computer. SG had a chance to examine the latest (B4) version of the OLPC machine and write a new review. As before, the review is unedited, just as SG wrote it. – Ed]

After my first review, the administrators at OLPC were kind enough to send Mr. Felten the newer model of the computer, the B4, for me to review. The difference between the two models was quite dramatic. Between new games, new applications, design changes, and a few touch ups for the system, the B4 clearly outshines the B2. I didn’t even know about a bunch of problems in the B2 until they got fixed in the B4!

The minute I picked the new computer up, I saw the physical differences. There are bumps on the handle of the B4. The B2 has none. The flip- up antenna on the B2 was encased in hard plastic, and on the B4, it’s just thick rubber. The keyboards are pretty much the same, apart from a few minor differences along the top. Once I opened it up and started it, I noted how much quicker it booted up than the B2. Then I saw the icons. The B2 has less than half the icons than the B4, which has 13!

As for games, entertainment, and the internet, this computer has bountiful resources. There were many new and fun programs. One of them, called “Block party”, is just plain old tetris with a different name. As I am not really gifted in tetris, I had a lot of fun losing repeatedly. The internet was a lot better on this newer laptop. In my last review, I complained about how slow it was and how the connection was so-so. In the B4, both of those problems have been fixed. It is quick, always connects, and is really very nice. If you don’t want to go on the web to read the new Freedom to Tinker article, “News Reader” lets you subscribe to websites’ feeds. In the games category, “Connect” is a game which can only be played on two separate OLPC laptops . The game is a little like tick tack toe. If you’ve ever played “Connect 4”, that’s the same game. If you want to watch some video clip from the web, “watch and listen”, OLPC’s media player, has you covered. Want some music? Use “tamtam”. This application is similar to Garageband, but not quite the same. Last but not least is “Record”. On the B2, “record” just took pictures with an okay camera. On the B4, you can take pictures with a pretty good camera AND record video with no time limit (as far as I can tell). I was surprised and overjoyed to discover I could take video with the new one.

One of the coolest applications is called simply “Chat”. It is basically an IM-ish kind of thing that works between all OLPC laptops. Since I got two laptops from OLPC, I could test out the chat application with my friends and family. I spent a lot of time having silent conversations with the friend sitting across the room, so that was fun. Etoys is another cool application, and it is definitely the program of a genius technologist. Although it is difficult to understand and use, once you get into the swing of things, it’s awesome. To use Etoys you make a “sketch” on the computer, then save it, and that’s where the fun begins. You can write “scripts” that make the sketch move around the screen in the way that you want. You can put it in “books” that have multiple pages for a flip book or make animations with it (ie. a bouncing ball, flying bird, eating kid, etc.). In Turtle Art, you get a chance to write a simple program that makes the turtle in the middle of the screen move. It’s very cool.

Last review, I said that my main problem with the computer was its slow speed and its battery charge. And I am happy to say that both of those problems have been fixed in the new version. It has more applications, higher quality camera, more games, a few design changes for the better, and much more. I tested how long it would stay alive by opening it and leaving it open. Surprisingly, it stayed awake for more than four hours! And some other testing revealed that the B4 does, in fact, auto save your documents and stuff if it runs out of battery while an unsaved document is on it. I like that feature, because there were many times with the B2 that I was typing and it just died, leaving me rather stunned for a couple seconds until I came to my senses and wearily plugged it in. Then it would take hours to charge up again. But in the B4, it charges up really quickly. Another minor turn for the better is the plug. Now they are greener, more round, easier to hold, and they have the XO sign on them.

I thought that this version was way better than the last one. It was just easier to figure out, more fun to spend time on, just better. It’s going to be hard to send it back to OLPC, but I’m going to have to. It’s great that they’re going to start selling them to the public. (You have to buy two, and you send one to a needy kid in a third world country and keep one for yourself. Read about it in the New York Times… …) I hope I can get one!

For a regular laptop, this would be the paragraph about its problems, its deficiencies. But the thing is, there aren’t any problems with this computer! Congratulations, OLPC. You’ve done it. Or will you come out with yet better laptops? Is that even possible? We’ll have to see…

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Major Intrusion at MediaDefender

September 25, 2007 by

MediaDefender, a company providing technical countermeasures and intelligence gathering for copyright owners, suffered a severe cyber-intrusion over the past year or so. This was revealed last week when the intruders released what appears to be most of MediaDefender’s email from this calendar year, along with the source code for its products, and even one of the company’s VoIP phone calls.

Published analyses of the released material mostly confirm what was already suspected, that MediaDefender’s technical tactics had mixed effectiveness, and that the company may have edged across the ethical (and possibly legal) line by launching active cyber-attacks on suspected infringers.

The intruders, on the other hand, went far across the line, committing serious crimes. If caught, they’ll face severe punishment, and rightly so. No excuse can justify this kind of break-in.

Nor have the intruders struck a blow for online freedom. Instead, they have helped their opponents paint a (misleading) picture in which righteous copyright owners are under attack by a small cabal of scofflaw super-hackers.

Expect a backlash. And the main victims of that backlash, as usual, will be ordinary users who aren’t out to hurt anybody but just want some way to coexist peacefully with copyright owners.

[Correction (Sept. 25): Corrected the first paragraph, which previously said voice mail had been captured, to say that a VoIP phone call was captured.]

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On freezing your credit reports

September 20, 2007 by

In my last post, where I discussed the (likely) theft of my SSN from the State of Ohio, I briefly discussed the possibility of “freezing” my credit report. I’ve done some more investigation on how, exactly, this works.

Details seem to vary from state to state (Consumer’s Union has a nice summary), but you generally can write to each of the three major credit report bureaus, via postal mail, and request that your account be “frozen.” This will not prevent you from getting “pre-approved” credit-card offers. For that, you separately opt-out, although you can at least do it online. Once your request takes effect, most requests to access your credit report will be denied. There are a wide variety of exceptions, mostly related to people who you’re already doing business with, which strikes me as entirely reasonable.

Cost? If you’re the victim of identity fraud (and it’s unclear whether I meet that definition), it’s free. You include a copy of your police report when you’re writing your letters to each of the credit ratings bureaus. If not, the cost is $10 per bureau. Multiply by three, and that’s $30. You’re married and want to do it for your spouse? Add another $30. What if you want to temporarily (or permanently) lift the block? The price varies, but it’s comparable.

Here’s the problem with this system: let’s say you’re doing the sort of things for which people legitimately want to look up your credit report (e.g., borrowing money for a car, opening a new credit card, renting a new apartment, etc.). Particularly if you’re changing jobs, moving to a new area, and so forth, you’ll be doing a lot of this all at once. As a result, precisely when you’re most often giving out your SSN and thus increasing your vulnerability, you also have to disable the block on your account, exposing yourself to the risk of identity theft.

The proper answer, of course, is to arrange for SSNs to have no more value to an identity thief than your name and address. The unanswered question, then, is what exactly can replace it as an authenticator? One possibility, raised in the thread on car dealers who insist on fingerprints, is to require these sorts of transactions be notarized. A notary public‘s main function is to authenticate that a specific person signed a specific document. You already need a notary’s services when you buy or sell a house. Why not require their services for any transaction that involves a personal credit report? The answer, I imagine, is cost, both in time and money. Department stores would be unable to give you “instant credit cards.” Applying to rent an apartment would become more complicated and annoying. There would be more friction, all around, to get credit. However, if identity theft continues to be such a significant problem, maybe it’s a trade-off worth making.

(Aside: how, exactly, do you convince the notary of your identity? The answer varies, but it seems to involve a photo ID, signature, and in some cases a thumbprint. You could certainly imagine cutting the notary out of the process and pushing the same authentication process out to a cash register or wherever else, but this creates a trusted path problem. When a human notary is authenticating a paper document, there’s no question to anybody what, exactly, is being authenticated. If you give your biometric and ID card to a scanner in a store, you have no idea where that data is going and what, ultimately, is being authenticated on your behalf. Astute readers may see a connection between this and the need for election systems to have voter-verifiable paper trails, but that’s a discussion for another day.)

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