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-07.
2013
•
02QUARTER
STORIES
•
01QUARTER
STORIES
2013
•
102- PublishingComponentSale
•
108-
CharityInvestmentTradeout
•
106- The limits of copyright
law.
• 106-
ResellerCopyrightRuling
• WebUsersGuild.com
- Reports
•
106-ResellerCopyrightRuling
Supreme Court sides with book reseller in
copyright ruling
••
The Supreme Court gave foreign buyers of
books, video discs and other copyrighted
works a right to resell them in the U.S.
without permission of the copyright owner,
giving discount retailers a victory and
the entertainment industry a setback.
•••
The 6-3 decision Tuesday came in the case
of Supap Kirtsaeng, a USC graduate student
from Thailand who figured he could earn
money for his education by buying low-cost
textbooks in his native country and
reselling them in the United States.
•••
John Wiley & Sons, a textbook
publisher, sued him over copyright
infringement and won $600,000 in damages
from a New York jury. Kirtsaeng was
ordered to turn over his golf clubs,
computer and printer as partial
payment.
•••
But in Tuesday's decision, the Supreme
Court found the Thai student's view of
U.S. copyright law "more persuasive" than
the publishing industry's, and it threw
out the verdict against him.
•••
In doing so, the justices adopted a
version of ebay's motto: "If you bought
it, you own it, and you have a right to
sell it.".
•
Judges
had been divided over whether --
copyright
protection extended to works that were
lawfully made and sold abroad, but were
imported for resale in the United States.
One part of the law says the U.S.
copyright holder has an "exclusive right
to distribute copies" in the United
States.
•••
A second part of the law says the rights
of the copyright holder are protected only
for the "first sale" of a work. For
example, a book publisher profits from the
first sale of a novel, but the buyer is
then free to sell it as a used book.
•••
In Kirtsaeng vs. John Wiley, the high
court decided the copyright holders get
only the protection for a first sale and
not a protection against copies being
imported into the U.S. for resale.
•••
"This decision is a landmark win for
consumers, small businesses, online
marketplaces, retailers and libraries,"
said a coalition called the Owners' Rights
Initiative. Its members include EBay and
Overstock.com as well as libraries,
used-book stores and discount
retailers.
•••
But U.S. companies that sell books and
software around the world said they were
disappointed by the ruling.
•••
"The truth is, the ruling for Kirtsaeng
will send a tremor through the publishing
industries, harming both U.S. publishers
and students around the world," said Keith
Kupferschmid, counsel for the Software
& Information Industry Assn.
•••
Indeed, the ruling has ramifications that
extend beyond books to all types of
copyrighted works -- including music and
movies -- sold around the world, said Tom
Allen, chief executive of the Assn. of
American Publishers.
•••
The motion picture and recording
industries had told the court their
international marketing strategy would be
upset if they could not prevent
unauthorized sales of video discs or CDs
in the United States. They said filmmakers
often introduce films at different times
in other parts of the globe.
•••
"Under Kirtsaeng's view, a studio could
not release a movie on home video disc in
one market while the movie was still in
theaters in the United States …
without incurring risk that unauthorized
importation of those discs could detract
from the success of the U.S. theatrical
release," the Motion Picture Assn. of
America argued in its friend-of-the court
brief.
•••
In response to the ruling, the MPAA said
the decision "will hinder American
business' ability to compete overseas to
the detriment of the long-term economic
interests of the United States, and
particularly its creative industries."
•••
Howard Gantman, its spokesman, stressed
the ruling dealt only with resale of
products made abroad, such as DVDs, not
with theatrical releases or online
distribution of movies.
•••
Kirtsaeng, who returned to Thailand to
teach after earning a doctorate in math,
was unavailable to comment on the ruling.
His New York attorney, Sam P. Israel, said
he had not yet spoken with his client.
•••
"I'm delighted the Supreme Court has found
the logic in the statute that has eluded
many others," he said. "There is nothing
inherent in the copyright law that makes
subsequent sales after a first sale
illegal."
•••
The case had been closely watched in the
retail industry because many products,
such as watches, have copyrighted logos or
labels that could have prevented their
resale in the United States without
permission of the copyright holder.
•••
Justice Stephen G. Breyer, speaking for
the majority, said the justices were wary
of extending copyright protection to all
manner of products, including books and
artworks, that were lawfully made and sold
abroad.
•••
In dissent, Justice Ruth Bader Ginsburg
called the ruling a "bold departure" from
"Congress' aim to protect copyright owners
against the unauthorized importation of
low-priced, foreign-made copies of their
copyrighted works." Justices Antonin
Scalia and Anthony M. Kennedy agreed with
her.
•••
Allen, head of the publishers group, said
the Supreme Court's ruling would harm the
ability of American publishers to compete
in global markets.
•••
"That ruling creates a disincentive for
American educational publishers to
continue to produce Asian editions or
editions for foreign markets," Allen said.
"If that disincentive takes hold, there'll
be fewer American educational materials,
which are the gold standard, available for
students and educators around the
world."
•••
The entertainment industry has long relied
on the more restrictive reading of the
copyright law to prevent the sale of
movies licensed for sale abroad from being
purchased and imported to the U.S. for
resale.
•••
"Now those types of movies cannot be
stopped," said Jonathan Kirsch, a
publishing and intellectual property
lawyer in Los Angeles.
•••
It is unclear how the movie, music or
video game industries will be affected by
the high court's decision, as more
entertainment content is sold
digitally.
///
•
aWebUsersGuild.com
Report
•
102-PublishingComponentSale.
WUG4-Smart90
reported that Yahoo Inc in talks to buy
YouTube-like video site "Dailymotion" --
is in talks with France Telecom to buy a
majority stake in Dailymotion, an online
video site popular in Europe that has been
scouting for a U.S. partner to take on
Google Inc.'s YouTube.
•
Google
reports that the YouTube deal represents a
major growth opportunity for the Internet
gian•••
Google has said YouTube represents a major
growth opportunity for the Internet
giant.
•••
Executive Marissa Maye reported that if
the deal is excepted, it would be first
major acquisition since taking over Yahoo
last summer.
•••
Under the ownership structure being
discussed, Yahoo could buy as much as 75%
of Dailymotion with the possibility of
buying the rest of the site at a later
date, the Wall Street Journal reported.
The deal would value Dailymotion at around
$300 million.
•••
Spokespeople for Yahoo and France Telecom
declined to comment.
•
Dailymotion
is hoping that by selling --
a majority stake to a U.S. partner
will help boost distribution, content and
marketing deals. The addition of the
largest streaming video site after YouTube
would give Yahoo a major presence in Web
video outside the U.S.
•••
France Telecom bought Dailymotion in a
two-part agreement over the course of two
years for $168 million. Dailymotion
editorial and executive management operate
independently of France Telecom.
Dailymotion had 112 million unique visits
and 2.5 billion page views in January,
according to research firm ComScore.
•••
At a recent technology conference, Mayer
said video "is going to be very important
to our strategy." Last July, Yahoo struck
a syndication deal with Dailymotion.
///
•
aWebUsersGuild.com
Report
•
106- The limits of copyright
law.
--• The Supreme Court has forcefully
declared --
that copyright law does not extend to
prohibiting
the resale of books bought overseas.
• March - 2013 was the month that
--
Supap Kirtsaeng was a Thai student in
the United States who helped finance his
education (and then some) by reselling
textbooks that family members bought for a
low price in Thailand. Textbook publisher
John Wiley & Sons sued Kirtsaeng for
copyright infringement in 2008, citing a
federal ban on importing copyrighted goods
without the copyright holder's permission.
Lower courts agreed with Wiley, opining
that the "first sale" doctrine -- a
buyer's right to sell, lend, rent or give
away a lawfully purchased copy of a
copyrighted work.
•
But that
did not apply to foreign-made products
--
even if they'd been manufactured under
contract with the copyright holder.
•
On
Tuesday, the Supreme Court overturned
--
those decisions in a forceful
declaration of the limits of copyright
law.
•••
The justices ruled, 6 to 3, that the
first-sale doctrine applies no matter
where a copy is made, as long as it's done
in accordance with U.S. law. The decision
in Kirtsaeng vs. John Wiley & Sons
provides a welcome clarification that
Americans are free to redistribute the
copies they own that were legally made and
sold overseas, just as they are with the
copies they buy in the United States.
•••
Writing for the majority, Justice Stephen
Breyer noted that the lower courts'
interpretation would cause nightmares for
libraries and museums, whose ability to
collect, lend and display works would be
threatened if there were no first-sale
rights to books and artwork made overseas.
EBay, Goodwill Industries and other
markets for used goods would be exposed to
huge liabilities, as would sellers of new
software-powered products that were
assembled overseas.
•••
But that's the category that's expanding
rapidly, thanks to globalization and the
ubiquitous use of computer chips. Limiting
first-sale rights to products made
domestically also would give publishers
such as Wiley an incentive to print
overseas, because doing so would allow
them to prohibit used copies of those
books from being traded by students in the
United States.
• Lawyers for the entertainment
industry --
software makers and other copyright
holders argued that extending first-sale
rights to copies made outside the border
would make it all but impossible for them
to set higher or lower prices in countries
depending on the local economy. Breyer
conceded that it would be more difficult
to segment markets geographically, but
added that "we can find no basic principle
of copyright law that suggests that
publishers are especially entitled to such
rights."
•
But
that's a key point --
Courts shouldn't assume that copyright
law was designed to protect copyright
holders' slowly evolving business models.
If Congress wants to outlaw the kind of
"gray market" importing that Kirtsaeng
practiced, it can do so explicitly.
•••
But there are many other industries that
have found ways to deter those practices
without the aid of copyright law -- for
example, by using contracts to keep tight
control over foreign retailers. Courts
have to balance copyright holders'
interests against the public's ability to
access those works and exercise the rights
of ownership. In the Kirtsaeng ruling, the
justices restored that balance.
///
A
WebUsersGuild.com
Report
•
108-Charity Investment
Tradeout.
The book itself looks beyond the glossy
appeals.
•••
As
tax deadline looms, ex-NPR chief Ken Stern
looks at how little donors understand
about the needs and the operations of even
the most prominent charities 'With Charity
for All' looks beyond the glossy
appeals.
•••
Americans just love feeling philanthropic.
In any debate over cutting tax breaks in
the income tax system, the deduction for
charitable donations is always held sacred
-- even more than that other sacred cow,
the mortgage deduction.
•••
It's a rare political leader who doesn't
bow to the role played by charitable
foundations in filling gaps left by
government services to the indigent, the
sick and the elderly, here in the United
States and around the globe. The
globe-trotting, tent-dwelling relief
worker, the doctor without borders, the
logistics expert getting food and medicine
to camps of war refugees -- all elicit
unique reverence from us armchair
empathizers in civilized lands.
•••
So why, asks Ken Stern in his new book,
"With Charity for All," do we spend so
little time thinking about the charities
we give our billions to?
• Stern is a veteran of the
nonprofit world --
having spent nine years running
National Public Radio, the nonprofit
organization with which most of us are
more familiar than any other. Thanks to
his experience and a wealth of further
research, "With Charity for All" makes
many important points about how little we
understand about the needs and the
operations of even the most prominent
global philanthropies. The book opens with
a telling anecdote about the American Red
Cross and its response to the disaster of
9/11.
•••
In brief, its response was, well,
disastrous. Material and personnel were
deployed to the wrong places. Logistics
broke down so badly that the organization
was unable to get supplies, volunteers,
food or cots for first responders quickly
to the Pentagon -- which was all of 2
miles from its national headquarters and
emergency response center.
•
What did work to perfection was the --
Red Cross'
fundraising apparatus, which collected
$543 million for its Liberty Fund to aid
the attack's victims. This was far more
than could reasonably be spent on direct
relief. Yet when Red Cross President
Bernadine Healy decided to divert the
excess funds to fix what 9/11 had shown
was broken -- improving its relief
infrastructure, telecommunications and
logistics management -- she provoked a
firestorm. Congressional hearings, threats
of prosecution for fraud, the whole
instrumentality of public outrage was
deployed against the Red Cross. Healy soon
resigned.
•••
"The widespread fury," Stern observes,
"was both predictable and misguided."
Donors large and small don't understand
that delivering direct relief requires
investing in a sound infrastructure, yet
such investments are often derided as
waste and featherbedding.
•••
Stern makes a strong case that the average
American donor has become a sucker for any
charity's glossy yarn. That's because
almost no system exists for measuring a
charity's effectiveness on the ground; the
few efforts that have been made to hold
charities to account have been overwhelmed
by feel-good PR and undermined by the
sector's resistance to transparency.
•••
Stern tells this story terrifically
through the prism of Third World water
projects. Beats there a Western heart that
hasn't been beguiled by a glossy brochure
showing a white charity executive throwing
her arms around an African child at the
site of a village's gleaming new water
pump? Billions of dollars have been thrown
into the fight for clean water. It's an
inviting cause, because it's cheap to
install a brand new pump. But "drilling a
well is far easier than maintaining one,"
Stern rightly observes. Once the drilling
is done and the publicity photos snapped,
the charity organizers move on.
•••
As a result, the proper image of the
standard Third World water project, as an
expert tells Stern, should be one of a
"woman walking slowly past a broken hand
pump, bucket at her side or on her head,
on her way to (or from) that scoop hole or
dirty puddle that she once hoped would
never again be part of her life.".
•
One topic
Stern explores is the exploitation--
of tax exemptions by nonprofits that
don't resemble charities by any stretch of
the imagination. Many are hospitals, which
despite their nonprofit status behave with
all the chilly inhumanity of a
profit-seeking conglomerate -- dunning
indigent patients for inflated charges,
leaving emergency rooms to fall to pieces
while spending lavishly on surgical
facilities for wealthy patrons of
high-profile specialties -- and, by the
way, paying their CEOs in the
millions.
• Consider the New York Stock
Exchange --
which until recently was a nonprofit
enjoying a tax exemption and which in 2003
awarded its chief executive, Richard
Grasso, a pay package of $140 million.
Three years later, bugged to distraction
by the attentions of charities regulators,
the Big Board reorganized itself as a
profit-making corporation. As Stern
observes, the Grasso affair "stands for
the proposition that some organizations
have no business being nonprofits in the
first place."
•••
Unfortunately, there's no discussion in
"With Charity for All" of the latest
outrage in this category, the tax-exempt
"social welfare" organizations that
funneled millions of dollars in donations
into electoral campaigns last year.
•
American
Crossroads, founded by GOP --
operative Karl Rove, was the most
prominent such outfit, but there were
similar groups across the political
spectrum. Their designation as "social
welfare" organizations under section
501(c)4 of the tax code allowed them to
keep their donor lists confidential, but
in return for offering anonymity to
well-heeled contributors they weren't
supposed to engage in electoral politics.
It wasn't until June last year that
federal and state regulators began taking
a look at the C4's, and obviously the
probes didn't yield results before the
election.
•
They
still haven't. "With Charity for All"
--
-- also falters in its most important
role: proposing remedies. The answer to
underperforming nonprofits is to remake
the tax law and empower aggressive
regulators to distinguish functional
charities from those that are exploiting
the exemption for a free ride. Withdrawing
the tax break and tossing the creators of
bogus "social welfare" groups in jail
might do wonders to clean up U.S.
politics. Requiring water charities to
meet minimum sustainability standards for
their projects might cut back their
drill-'em-and-forget-'em habits.
•
But these
are minor flaws in a book --
that marks an important advance in
educating the donor public. Whether
they're writing occasional checks for 50
bucks or making multimillion-dollar
bequests, donors too often give to the
wrong organizations and for the wrong
reasons. "With Charity for All" is a good
guide to what makes an effective
charity, and how to figure out that the
one getting your money meets that
standard.
///
•
aWebUsersGuild.com
Report
•
106-
FCC's Genachowski Steps
Down
WASHINGTON -- After nearly four
years on the job Julius Genachowski, a
former venture capitalist and technology
executive will step down in the coming
weeks as Chairman of the Federal
Communications Commission (FCC).
••••
In a 20-minute speech, to FCC
employees in a gathering in the
commission's meeting room, Genachowski
highlighted the agency's accomplishments.
He noted that the FCC released a national
broadband plan three years ago that called
for increasing high-speed access.
••••
Part of that strategy included
expanding access to wireless spectrum, and
the agency has worked to try to lure
broadcasters to give up someof their
airwaves in exchange for money from the
government's auction of rights to use them
to telecom companie
••••
He said his biggest accomplishment
was focusing the agency on expanding
high-speed Internet access. For example,
he pushed the FCC to make more public
airwaves available to deliver the Internet
over smartphones and other mobile
devices.
••••"Three
years ago, the U.S. mobile market was on
the doorstep of duopoly. It would have
been bad for the American innovation
economy and bad for consumers," said
Genachowski, who helped derail AT&T
Inc.'s proposed $39-billion purchase of
T-Mobile USA Inc. in 2011.
•••Consumer
advocates acknowledged that Genachowski
deserved credit for helping block the
AT&T-T-Mobile deal. But some leading
public interest groups said the FCC under
Genachowski approved other mergers that
have reduced competition.
••••
When he was appointed the first
Democratic FCC chairman in eight years
many hoped for a tough regulator that he
would bring to connclusion such major
issues as the limits of media owwnership
in major makets. But these issues remain
unresolved..
••••However,
Genachowski worked on some longtime thorny
issues that didn't get widespread
attention.
••••Under
his leadergsuuod the FCC in 2011
overhauled the $8-billion Universal
Service Fund. The fund, paid for by fees
on consumer phone bills, provided
subsidies for phone service to rural and
low-income households. The FCC refocused
the fund on providing subsidies for
high-speed Internet service.
••
Genachowski
touted a huge believer in
wireless.
••••
David Kaut, a telecommunications
regulatory analyst at brokerage Stifel,
Nicolaus & Co., said
Genachowski has been
"a huge believer in wireless."
•
•••• Kaut noted
the FCC's push to encourage broadcasters
to give up some of their airwaves in
exchange for some of the proceeds from
government auctions of spectrum use to
telecom companies. The first such auctions
could take place next year, freeing up
more airwaves for mobile Internet
access.
•••••••"Cleary
the wireless industry has boomed over the
last few years," he said. "I think there
will be a lot of debate about how much of
that was because of the FCC."
••••Some
public interest groups, such as Free
Press, said Genachowski's should have
pushed for tougher "net neutrality" rules
to preserve open Internet access.
••••Public
Knowledge, a public interest group that
has pushed for more protections for
consumers against large telecommunications
companies, said Genachowski's tenure was
one of missed opportunities. The group
urged Obama to appoint an FCC chair "who
will put the public interest first.
••••But
Mark Cooper, director of research at the
Consumer Federation of America, said
Genachowski did a good job balancing the
needs of consumers without squelching
innovation.
•
Speculation
about Genachowski's replacement
--
••••Among
them so far are Democratic FCC
Commissioners Mignon Clyburn and Jessica
Rosenworcel; Catherine J.K. Sandoval, a
member of the California Public Utilities
Commission; Karen Kornbluh, the U.S.
ambassador to the international
Organization for Economic Cooperation and
Development; Lawrence Strickling, head of
the Commerce Department's National
Telecommunications and Information
Administration; and Washington, D.C.,
venture/ capitalist Tom Wheeler.
••••Clyburn
told reporters Friday that Genachowski had
"done remarkable things." Asked about her
interest in the job, Clyburn said she
would continue to serve in "any capacity"
that Obama chooses.
•
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