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High-Tech Tension Over Illegal Uses

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      High-Tech Tension Over Illegal Uses

      Tue Feb 22, 8:10 AM ET
      By Jonathan Krim, Washington Post Staff Writer

      In 2002, a young software programmer in Seattle named Bram Cohen solved
      a vexing Internet problem: how to get large computer files such as home
      movies or audio recordings of music concerts to travel rapidly across

      Among the benefits of the invention, called BitTorrent, was that
      millions of users could quickly see lengthy amateur videos documenting
      the devastation of the December tsunami in the Indian Ocean, helping to
      spur an outpouring of charitable aid.

      But BitTorrent also is wildly popular because the technology makes it
      easier to freely trade Hollywood movies and television shows, putting it
      in the cross hairs of the entertainment industry.

      Increasingly, that same tension surrounds a dazzling new generation of
      high-tech products and services that help people copy, customize and
      increase the portability of digital works, sparking a sharp legal
      debate: How should courts view technologies that have beneficial uses
      but also are heavily used for illegal acts?

      Next month, the U.S. Supreme Court (news - web sites) is scheduled to
      hear arguments on whether a file-sharing service named Grokster should
      be held liable for the millions of people around the world who use it to
      illegally trade music, movies and software.

      The entertainment industry is asking the court to rule that even though
      Grokster itself does not engage in stealing files, the service is
      responsible because it is predominantly used for theft and has done
      nothing to try to stop that use.

      The prospect that the court might adopt this legal reasoning is sending
      shudders through the technology and consumer electronics communities.
      Hundreds of existing products could be threatened, they say. And they
      fear that new products, and early funding, will die in the crib if the
      gear might be co-opted by people wishing to use it improperly.

      "If it's so risky for me to try out new things or put new things on the
      market, you are really going to devastate people's willingness to
      innovate," said Elliott Frutkin, chief executive of Time Trax
      Technologies Corp., a Gaithersburg start-up.

      His company's hardware and software turn individual songs or entire
      programs from XM and Sirius satellite radio broadcasts into digital
      files that can be stored on a computer, burned to a CD or transferred to
      portable players like Apple Computer Inc.'s iPod.

      Frutkin said his product safely falls on the legitimate side of current
      law and regulations. But he also knows that many users of technology,
      especially those who are the quickest to latch onto new gadgets and
      services, may be willing to push legal boundaries.

      "The first people who were playing with the technology TimeTrax is based
      on weren't people that I would have over for dinner with the family,"
      said Frutkin, who does not condone stealing. "But that's the way things

      Major technology companies, including Microsoft Corp., Google Inc.,
      Yahoo Inc. (Nasdaq:YHOO - news) and America Online Inc., have urged the
      court to avoid basing its decision on how much a product is used for
      nefarious purposes. They argue that courts should look at whether
      Grokster actively encourages and helps users to steal, which would be
      punishable under existing copyright law.

      Officials of the Motion Picture Association of America and the Recording
      Industry Association of America (news - web sites) say that approach
      would make it too easy for companies to avoid prosecution for acts they
      tacitly approve but never explicitly encourage.

      The Grokster case, they insist, is not about scaring off new inventions.
      It focuses purely on file-sharing services -- including Kazaa and
      several others -- whose operations the entertainment companies claim are
      built to encourage, support and profit from piracy, even if the
      underlying technology has legal uses.

      Firms that do not have illegal file-sharing as their primary business
      model have nothing to fear, said Fritz Attaway, chief policy counsel for
      the MPAA.

      As an example, Attaway said the MPAA has not sued Cohen, the inventor of
      BitTorrent, instead targeting several operators of Web sites that serve
      as BitTorrent directories and openly list copyrighted movies.

      Cohen said he developed the technology to allow devotees of bands that
      allow their concerts to be recorded to share copies with other fans. But
      he is well aware of the misuse by some BitTorrent index sites, whose
      operators have openly pitched their directories as resources for
      copyrighted movies.

      "That's like putting a big 'shoot me' sign on your forehead," Cohen said
      of the sites.

      Device makers have fended off the entertainment industry before. In a
      case that set the legal standards that will be reviewed in the Grokster
      case, the movie industry sued Sony Corp (NYSE:SNE - news) (news - web
      sites). over its Betamax recorders, arguing that copying television
      programs violated copyright laws.

      In 1984, the Supreme Court ruled that making a copy to view at another
      time -- or "time-shifting" -- was an acceptable personal use. More
      broadly, it determined that device makers could not be held responsible
      for illegal acts of users as long as the product was "merely capable" of
      substantial uses that were legal.

      The decision did not stop the entertainment industry from targeting,
      sometimes successfully, other products, including digital audio tapes,
      an early MP3 player and ReplayTV (news - web sites), a digital
      television recorder that also allowed users to skip commercials and send
      program copies to a handful of others.

      In ReplayTV's case, the company was forced to shut down rather than
      fight industry lawsuits, said Andrew Wolfe, who was the company's chief
      technology officer. He said that once the litigation started, the
      company could not raise additional money from venture capitalists or
      other investors.

      "What would have happened if you applied these same standards [sought by
      the entertainment industry] when people were shown the first Xerox
      machine?" Wolfe asked.

      The ReplayTV brand was later purchased by another company.

      One problem, many technologists said, is that it is hard to know what
      the entertainment industry deems to be acceptable use.

      The recording industry, for example, has never explicitly said whether
      burning songs to CDs is acceptable use, said Steven M. Marks, general
      counsel of the RIAA (news - web sites). But burning a CD and
      distributing it to others is "clearly illegal," he said.

      There is also a difference of opinion about what someone can record with
      a VCR. According to the MPAA's Attaway, the Betamax case gave consumers
      the right to record over-the-air television transmissions, but not
      programs via cable or satellite TV.

      Such distinctions could pose problems for the burgeoning business of
      digital television recorders, said Gary Shapiro, head of the Consumer
      Electronics Association, the lobbying arm of roughly 2,000 device

      "The content people will tell you that everything that is not authorized
      . . . is infringing," he said. "This is the corporate equivalent of
      living under a tyrannical dictator. You are not breaking the law, but
      you want to keep your head down and not be noticed because the dictator
      randomly kills."

      In one ongoing dispute, the movie industry is challenging Federal
      Communications Commission (news - web sites) approval of a new feature
      from digital-recorder maker TiVo (news - web sites) Inc. that allows its
      users to make copies of digitally enhanced television programs and
      transfer them to a limited number of other locations.

      Attaway argues that product and service providers who base their
      businesses around piracy should not be able to hide behind the mantle of

      "Why should device manufacturers be exempt from all possibility of
      litigation?" he asked.

      Another source of tension will probably be copying of digital radio
      programs and other broadcast "streams" designed to be listened to but
      not downloaded.

      Marks of the RIAA said his organization has told the FCC (news - web
      sites) that users should be allowed to record only an entire program or
      stream, not cherry-pick individual songs to build their own music

      TimeTrax allows recording of individual elements of a program, Frutkin
      said, but to demonstrate the company's anti-piracy commitment, it
      electronically stamps any recorded element so that if it showed up on a
      file-sharing network it would be easy to trace.

      Other small companies are working to steer clear of any potential
      confrontation with the entertainment industry.

      A California company called Grouper Networks Inc. makes file-sharing
      software for the private use of family members or other small groups,
      mostly aimed at those wanting to share photos. The software prevents the
      copying of music files and imposes restrictions on the size of any group
      wishing to share photos.

      "We know what people want to do" with the software, said founder Josh
      Felser, "but we are not going to get embroiled in the controversy
      surrounding file-sharing."

      Some who are concerned about the Grokster case say no matter what the
      Supreme Court does, the movie studios and recording labels are
      ultimately fighting a losing battle by trying to bottle up new

      "We are moving into a world where access to information is more
      democratized," said Brad Burnham, a New York venture capitalist who
      works with early-stage media companies. "It's too easy to move it
      around. Value is going to shift from the creation of content to the
      organization and customization of that content."


      Also in this issue:

      - Security products put Microsoft in quandary
      If Microsoft Corp. doesn't do more to stem Internet attacks, the
      company risks further alienating customers unhappy with the multitude
      of threats already facing its ubiquitous software.
      - E-mail scam targets families of Iraq war dead
      Federal authorities are investigating two e-mail scams, including one
      targeting families of troops killed in Iraq, that claim to be
      connected to the Homeland Security Department.
      - Google's toolbar sparks concern
      Search engine firm Google has released a trial tool which is
      concerning some net users because it directs people to pre-selected
      commercial websites.
      - Apple laptop is 'greatest gadget'
      The Apple Powerbook 100 has been chosen as the greatest gadget of all
      time, by US magazine Mobile PC.
      - Making phone calls over the net
      Telephone calls made over an internet connection are predicted to be
      the next revolution in telecommunications. Cheaper broadband costs and
      user friendly software is helping users to start making Voice over IP
      (VoIP) calls, with a number of companies offering products.
      - The price paid for blogging Iran
      Iran is becoming an increasingly dangerous place to keep an online
      - Google book plan sparks French war of words
      France's national library has raised a "war cry" over plans by Google
      to put books from some of the world's great libraries on the Internet
      and wants to ensure the project does not lead a domination of American
      - Opera allows viewers to talk back to their TV
      Opera has unveiled a voice-enabled electronic programme guide to allow
      users to interact with their TV and other home entertainment systems
      without having to navigate an array of remote controls.
      - Nokia dumps IE for Firefox: 55,000 times
      REPORTS ON TWO Scandinavian web sites said that Nokia is pushing
      Microsoft Internet Explorer off its desktop PCs in favour of the
      Firefox browser.
      - Mobile Phone Virus Found in United States
      The world's first mobile phone virus "in the wild" has spread to the
      United States from its birthplace in the Philippines eight months ago,
      a security research firm said on Friday.
      - High-Tech Tension Over Illegal Uses
      In 2002, a young software programmer in Seattle named Bram Cohen
      solved a vexing Internet problem: how to get large computer files such
      as home movies or audio recordings of music concerts to travel rapidly
      across cyberspace.
      - Linux For The Future
      Linux providers are trying to convince business customers to expand
      the services and strategies they buy around the base operating system.
      Red Hat Inc. and Novell led that charge last week at the LinuxWorld
      conference in Boston.

      Member: Association for International Business

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