Information Week’s Mitch Wagner posts an excellent question to the internet community. Are there any examples of a company fighting piracy and launching lawsuits as a successful business strategy?

Wagner has several examples of the opposite; where lawsuits only alienate customers. He begins with Hasbro’s recent takedown of the popular Scrabulous game on Facebook to launched its own unpopular Scrabble game, coving the music industry and Garfield.  Matt Mason’s “The Pirate’s Dilemma” is a book length list of examples of lawsuits hurting businesses.

There are even examples of companies embracing piracy to improve their businesses.

So does anyone have an example of lawsuits helping companies?

[Via Techdirt]

Congress has passed the Higher Education Act with special provisions requiring universities to push the content industry’s agenda on its students.  In order to get funding for students, universities will have to advertise commercial downloading services to students and educate them on a one-sided view of file-sharing and piracy.

The controversial provisions were added partly on the basis of the MPAA’s admittedly flawed research that claimed 44 percent of piracy occurred on college campuses - the number the MPAA later admitted was 15 percent.

So why are universities suddenly mouthpieces for a specific industry?  Even with flawed research, what makes universities responsible for the content industry’s obsolete business models.  The fact that these companies can’t track all the file-sharing makes me wonder how universities are expected to do better? Some artists want their content shared, others don’t, so leaving filtering up to a third parties will lead to overzealous blocking and can also affect educational uses for file-sharing tools.

Universities and consumer groups were able to block this bill last year when the MPAA included requiring filtering technology in its wishlist. William Patry points out that the content industry likely postponed filtering technology - doing it all at once caused too much backlash.

What concerns me is the silence among academic, from administrations and students.  College campus are the front line in the content industry’s Save Our Obsolete Business Model campaign simply because it’s easy to pick on students. There’s a reason the RIAA avoids suing students at Harvard.  Unfortunately, most universities are letting a lone industry and the government turn places of education into propaganda mouthpieces with a rare few standing up for their student’s rights.  Regardless of your position on file-sharing, universities should not be responsible for doing what the content industry already can’t do itself.

And universities need to stand up for themselves and student’s rights. What better way to educate than to lead by example.

Blizzard recently won its case against MDY, the makers of Glider, a program that played the World of Warcraft game by itself.  The court banned the distribution of Glider on the ludicrous claim of copyright violations.  Blizzard pointed to its EULA document (which can only be read after buying the game and are “enforced” once you open the package) that tries to limit what users can do with a product they legally purchased.  Blizzard says it sells you a limited license of the game, not the game itself thus negating your First Sale Doctrine rights.  Courts have been mixed on the power of EULA agreements since no one reads them or actually agrees to them.

Now that Blizzard won its summary judgement, it’s looking to push harder on Glider, asking the court to ban the source code from being open-sourced and preventing the developers from helping anyone else create a similar product.

I already have issue with the initial ruling, negating consumer’s first sale doctrine rights just because Blizzard says those don’t count because of a document no one read or agreed to.  The court believes this instance is copyright infringement, but now Blizzard wants the court to basically ban any future products just because.

This case already sets a bad precedent for future EULA and software modification cases.

The Dark Knight hit theaters two weeks ago to monumental hype, an unmatched marketing budget, and rave reviews from critics and fans. But according to Warner Bros., the Dark Knight’s record $158 million opening weekend came all thanks to the movie company’s anti-piracy efforts.

The LA Times decided to regurgitate corporate spin profiling Warner Bros. “painstaking care to thwart pirates” preventing the movie from hitting file-sharing networks.  The six month anti-piracy bonanza kept camcorder versions of the film off the web for a whole 38 hours, by Friday night.

Warner Bros. is once again missing the point.  Dark Knight did this well because it’s an amazing movie people wanted to see.  That’s why IMAX theaters were sold out into August before the movie opened.  A theater experience, especially IMAX, is a different experience than a person can get at home, whether its a social outing or better quality facilities with surround sound and bigger screens. Word-of-mouth likely helped Dark Knight break the record for second weekend gross, a week after pirated copies surfaced.

The LA Times tries to support Warner Bros. theory, but ends up proving otherwise.  It cites Ang Lee’s 2003 Hulk got leaked two weeks before the movie opened leading to terrible reviews from fans.  The movie wasn’t that good, though it still made $62 million its opening weekend, even with pirated DVDs having a two week head start.

The LA Times also points out Star Wars: Episode III Revenge of the Sith had DVD-quality screeners leaked online days before the movie opened.  But good reviews and word of mouth led the movie to gross $380 million domestically.

What the LA Times left out was how much money and man power Warner Bros. wasted on its anti-piracy efforts and how much of that could have been shifted to marketing or merchandising or just saved.  Pirates will get copies of movies and they will share them.  Movies succeed when they are quality pictures offered in compelling ways so people want to see them.  Maybe Warner Bros. should lessen its six month anti-piracy efforts and think up ways to make the movie experience even more compelling.

The Economist has two articles showing the lighter side of piracy, reveal how media and software companies are using file-sharing systems to help their businesses.

Music companies find out which bands are popular using file-sharing statistics tracked by companies like BigChampagne.  These statistics help decide tour locations and target advertising dollars.

Movie and TV companies are using file-sharing statistics from BigChampagne to set advertising rates for online video sites like Hulu.

Software also benefits, as Bill Gates says “It’s easier for our software to compete with Linux when there’s piracy than when there’s not.”  90 percent of PCs in China use Windows from mostly pirated sources. Gates recognizes long term revenue increases from loyal Microsoft users than if the company fought piracy, pushing companies to free alternatives.

While admitting piracy helps their businesses, these companies continue to fight file-sharing in every possible way.  Piracy needs to stop being scapegoated, but rather embraced as a competitor - something to learn from and beat at its own game.

[Via Against Monopoly]

My many issues with copyrights and patents stem from them being used for reasons beyond their intention.  These government granted monopolies are meant to encourage people to create new works of arts and inventions.

This is why I’m confused by the European Union’s decision to extend copyrights for musicians by 45 years.  If musicians made music before this extension, that means the original copyright deal worked - artists were rewarded with 50 years of control over their work.  But now all those musicians get another 45 years and what does the rest of Europe get? A copyright system used for welfare.

Irish EU commissioner Charlie McCreevy didn’t hide the fact.

I am not talking about featured artists like Cliff Richard or Charles Aznavour. I am talking about the thousands of anonymous session musicians who contributed to sound recordings in the late fifties and sixties. They will no longer get airplay royalties from their recordings. But these royalties are often their sole pension.

It’s not the government’s job to retroactively create a pension system specific to one field. What about the airline workers loosing their agreed upon pensions? I don’t see governments stepping into make airlines pay these workers for every plane they helped run.

The irony is the Gowers Report on Intellectual Property conducted in the United Kingdom found that extending copyrights would be more harmful. The writer of the report, Andrew Gowers, later added that he thought copyrights should be lessened.

The United States had its own copyright laws extended in the Copyright Term Extension Act of 1998.

Ralph Koster outlines the tangled web of patents covering the popular world of music-based video games.  A patent thicket describes when several patents cover a single product, owned by several different groups.  Music based video games like Guitar Hero and Rock Band are finding themselves mixed up in a web of lawsuits.  First Konami is suing Harmonix for patents on music games, even though Harmonix has its own assortment of music game patents (including a patent on a “game controller simulating a musical instrument”).  Konami previous made GuitarFreaks and is looking to get back into the music game genre since Harmonix help make it such a success (more than Konami ever did).

Let’s not forget Red Octane and Activision, the team still responsible for Guitar Hero (which Harmonix headlined before getting bought by MTV). They’ve been licensing patents from Konami while getting sued by Gibson who also has patents on music games even though they sold likeness rights to the game for toy Gibson guitars. And let’s not forget Harmonix had sued Activision over unpaid royalties (now bargaining instead).

All the lawsuits shows none of this is about innovation, but is about greed and strong arming bargaining positions for more licensing fees.  That’s not what the patent system is supposed to be for.  The more these companies fight over music game patents, the worse consumers will be as the games will be more expensive, if they can even afford to be made.

This week a french court ruled eBay had to pay $63 million to Louis Vuitton for not doing enough to prevent counterfeit goods on its website.  eBay is even liable for users selling legit products because Vuitton claims no one can resell its products.

This ruling makes eBay responsible for the actions of its users.  One of the only good parts of the United States’ DMCA are the Safe Harbors which means service providers, like eBay, cannot be held responsible for what its users do.  This allows websites and ISPs to focus on providing services and goods for users without worrying about legal responsibility if things are taken out of hand.  France doesn’t have the same protection.

The problem is somehow eBay is expected to know what’s counterfeit and what’s real.  A similar argument is being made against YouTube over copyright, claiming its too much work for copyright holders to police the site so YouTube should do it itself.  How is eBay supposed to know what’s allowed to be sold and what isn’t?

The upcoming G8 summit has many important issues to discuss - climate change, world poverty, and file-sharing. That’s about it. Everything else is fixed.

On topic for the G8 is the secret (yes, secret) Anti-Counterfeiting Trade Agreement (ACTA) that only became public knowledge after details were posted on WikiLeaks.  The ACTA is a new treaty being written completely in secret for the purpose of restricting international piracy, allegedly allowing border security to check your iPod for illegal downloads, bring criminal charges against file-sharers, and require ISPs to police their networks.  While the public and consumer groups have not been privy to the treaty negotiations, a RIAA got a chance to submit its wishlist.

Aside from the improprieties of privately writing legislation, why is the G8 taking the time to prop up one industry’s unwillingness to adapt to the internet.  As I’ve written before, the entertainment industry does not have a right to revenue.  It’s their job to find business models that work, not the government’s.

The entertainment industry has pushed many copyright requirements into trade agreements with other countries (often falsely referred to as free trade).  The argument is these laws are needed to encourage innovation and content creation when in reality, these laws only help current copyright holders, hampering development in other countries who now have to spend money policing their citizens.

While several countries around the world waste time spoon feeding copyright holders, I’d have hoped the G8 wanted to at least pretend it cared about helping solve the world’s important crisis, of which their are many. It’s even listed first on the official website, “protection of intellectual property rights.” Piracy is not a world issue, even if the revenue losses the entertainment industry makes up were true.  That’s because it’s not the government’s job make you money - that’s your job through innovation and competition.  The G8 should try dealing with the food crisis, climate control, oil prices, genocide, poverty, human rights, and terrorism to name a few.  Of course, the U.S. attorney general says piracy funds terrorism.  Yeah, that’s convincing.

[Via CustomPC]

The judge presiding over the Viacom vs. YouTube case has ruled Google must hand over IP addresses and user names of its users and a list of the videos they watched, whether on YouTube or embedded on other sites (an estimated 12 terabytes).  Viacom is asking for this information to prove YouTube deals the majority in infringing material.

The result of this ruling is a privacy nightmare.  The Electronic Frontier Foundation has argued the judge’s ruing violates, ironically, the Videotape Privacy Protection Act that says the government can’t snoop your rental history (library books are fair game).  Google, however, has argued before that IP addresses aren’t personal data because they aren’t attached to a single person, says Google “in most cases, an IP address without additional information cannot [identify a user].”

Unfortunately, the IP address can get you pretty close.  It identifies the computer and location, including households and laptops.  The result isn’t just embarrassing users who watched far too much Dog on Skateboard videos.  It’s what does Viacom, the RIAA, and MPAA do with this list once its public.  Most of their effort in suing customers was finding the IP addresses.  Now Google’s handing them over on a silver hard drive.

Viacom obviously wants to analyze Google’s data itself, ignoring a study by Vidmeter.com that found copyrighted materials accounting for a fraction of YouTube viewership.  Based on their sample of more than 1.5 billion views of 6,725 videos, 9.23 percent were taken down.  Those remove videos accounted for only 5.93 percent of views.  You can read the full study here.  Viacom itself accounted for 2.37 percent of of views, the highest of for all content owners.  How they monetize that to $1 billion would be magic.

[Via Mathew Ingram}