Possible Free Tabloid from LA Times

The Los Angeles Times may start a free daily tabloid, in a bid to up its circulation, reports Reuters via Yahoo! News. Sister paper Chicago Tribune already has such a paper, called Redeye, which reaches 600,000 readers - a large number for a newspaper - many reportedly in the desirable 18-34 demographic.

Several newspapers publish such freebie papers to counter loss of subscriptions and paid ads resulting from popularity of the Internet.

No Honey for Pooh Family

An appellate court upheld a ruling from 2004 dismissing a suit by the owners of Winnie the Pooh against Disney, reports the Los Angeles Times. The suit had claimed that Disney had failed to pay hundreds of millions of dollars in royalties for merchandising, software, and home video.

The ruling, against the heirs of Stephen Slesinger, who obtained the rights to the famous bear from the stories' author, A. A. Milne, was based on a finding of misconduct against the family - specifically, that they had hired an investigator who broke into Disney offices and rifled through the company's trash.

Sony Starts Digital Studio (2)

See other post. (This post is a placeholder because there were too many keywords to all fit on the other post.)

Sony Starts Digital Studio

Sony has started a studio called Deca to identify, develop, finance, market, and distribute new media content on various platforms, reports Online Media Daily. The division/entity received $5 million in outside funding. It's unclear why Sony sought outside money.

Deca is one of a number of such ventures (name, key founder and key financing, per the article):

Deca - Sony Pictures - Mayfield Fund, General Catalyst Partners, and Atomico Investments (started by Skype and Joost co-founder Niklas Zennstrom)

Vuguru - Michael Eisner (former head of Disney)

FunnyOrDie.com - Will Ferrell - Sequoia Capital (large VC)

60Frames Entertainment - United Talent Agency (UTA) and Spot Runner (digital agency partly owned by WPP Group, huge ad agency conglomerate)

Worldwide Biggies - Albie Hecht (producer) - NBC Universal

BermanBraun - Gail Berman (former Paramount Pictures president) and Lloyd Braun (former Yahoo Media Group head) (both are experienced TV execs)

Unclear whether any of them will be able to bridge the gap between user generated content (UGC) and Hollywood, and whether they can make a lot of money doing so.

Oracle v. SAP Trial Date Set - in 2009

Oracle's lawsuit against SAP accusing SAP of unlawfully downloading thousands of pieces of copyrighted code and documents from Oracle's servers continues to work its way through the legal process. The latest development is that a trial date was set -- for approximately 1-1/2 years from now -- reports CRM Buyer.

The long lead time probably stems from the fact that this is a very complex dispute, with thousands of downloads alleged and both sides wanting to interview a large number of witnesses. The case may not settle until significant discovery has occurred, and both sides have educated themselves as to the strengths and weaknesses of their case. For more, see previous post.

Disney's MVNO is N.O.G.O., Again

Disney is shuttering its Disney-branded cellphone service, reports Variety. The service ran on the Sprint network, which meant that Disney was an MVNO, or Mobile Virtual Network Operator.

Last year, Disney closed down its ESPN-branded MVNO operation. In sports terms, that's 0 for 2. Seems like outside content brands just don't translate into the mobile network world.

Verizon Wireless Cleans Up Its Act

Last week, Verizon Wireless blocked text messages from an abortion-rights group (see previous post), a decision that was widely publicized yesterday. Today, Verizon changed its mind, and called last week's decision an "incorrect interpretation of a dusty internal policy" (!), reports the New York Times.

Hollywood-Created Internet Programming

The Los Angeles Times has a nice piece on the labor issues Hollywood faces in creating online content. The gist is that such work is non-Guild, the studios often form one-off non-Guild subsidiaries, and there is uncertainty about business models and whether the work is promotional or deemed to be original content. No news there, but a good summary of the issues.

Vonage Patent News - Redux

More bad news for Vonage on the patent front. As I noted in an earlier post, Vonage was found liable for patent infringement in separate suits in Missouri and Virginia. Now the Virginia verdict, for over $50 million plus 5.5% of future revenue, has been upheld on appeal, reports CNET News.com.

The verdict might be reduced somewhat on remand, because Vonage won as to one patent out of three, but the news isn't good for the co. No word on whether Vonage will appeal.

Verizon Wireless Content Discrimination

Verizon Wireless has refused to allow an abortion-rights group to send pro-choice text messages to its members, reports the New York Times. Other carriers have permitted the group, Naral, to do so. Verizon says its position is viewpoint-neutral, and applies to all "controversial or unsavory" texts, but texting appears to be more widely used by liberal groups than conservatives.

Naral may have little recourse legally. There's a law prohibiting common carriers like telcos from discriminating based on content, but that law applies only to voice communication. Ironically, it was adopted over 100 years ago, to prevent Western Union from discriminating in transmission of telegrams, which of course were a form of text messages.

Little help will come from the First Amendment - it applies only to government action, not corporate. Let's hope public pressure makes a difference - and that Congress steps in to amend the law. Shame on Verizon Wireless.

Series Business Ahead of Possible Scribe Strike

ABC and NBC placed a number of series orders yesterday, months ahead of the usual season for such orders, reports the Hollywood Reporter. This is in order to have scripts ready in case of a writer's strike next year.

A, BB, C - Activision Buys Bizarre Creations

Activision is buying Bizarre Creations, a UK based game developer, reports the Los Angeles Business Journal. The acquisition gives Activision automobile racing titles. Financial details were not disclosed.

Vonage Runs Afoul of Patents - Again

A jury in Kansas City has determined that Vonage infringed six Sprint telecomm patents, and ordered the IP telco to pay $69.5 million in damages plus a 5% royalty in the future, reports Law Day Newsletter. Earlier, a jury in Virginia found the company guilty of infringing three Verizon patents, and awarded that company $58 million plus 5.5%. Combined, that'd be a royalty of over 10%. Vonage is appealing both rulings.

Microsoft Loses EU Antitrust Appeal

An EU court ruled that Microsoft must pay a $605 million fine imposed in 2004 by the EU Competition Commission, reports CNN / Money Magazine. The fine related to Microsoft's alleged efforts to use its market power in PC OS's as leverage in the market for media players and server OS's.

The ruling was criticized by Microsoft, which hasn't decided whether to appeal, and by the U.S. Assistant Attorney General for antitrust.

Marley Ring Tones Strike a Sour Note

Bob Marley's family is threatening to sue over a ring tone deal between Verizon and Universal Music, which owns the rights to the late singer's music, reports the New York Times. The family objects that the deal amounts to using Marley's trademarked persona to endorse Verizon.

Verizon disagrees, and says it has the right to advertise that it provides the ring tones. Case could turn on relatively minute details of the advertising.

Slingbox Sold

Echostar will buy Sling Media, creator of the Slingbox media portability device, for $380 million in cash and options, reports the Hollywood Reporter. Echostar was previously an investor. The deal, and Echostar CEO's comments, signal that Echostar is diversifying beyond satellite into other platforms, such as Internet and mobile.

Expensive Book?

Facebook may be in play, reports Variety, and at a $10 billion valuation. (School yearbooks always cost too much.) Microsoft is dropping hints about spending $500 million for 5% of the company, and Google may try to outbid them. No other potential bidders are mentioned as likely. Over at News Corp, Rupert Murdoch must be happy that MySpace only cost him $580 million.

Anerican Airlines AdWords Lawsuit

Litigation continues over Google AdWords (see previous post). The latest development: Google is seeking to dismiss a suit by American Airlines, reports the Dallas Business Journal.

American's miffed that AdWords can display a competitor's ads next to search results for a company's trademarks (search for "American Airlines" and you might get United ads next to the American results).

Google says this is no different than a drugstore displaying generic drugs next to brand name drugs, or printing a coupon for Minutemaid on the back of a grocery receipt of a customer who bought Tropicana. Good analogies.

What Google's fighting is a line of cases regarding "initial interest confusion," which prohibit using a competitor's trademark in meta tags in order to attract search engines. But Google's an information provider, not a competitor of American. It's a close case - for instance, if Google displayed the ads in a popup that hides the actual search results, that would seem wrong. But where the ads are merely adjacent to the search results, or at the head of the list, I think Google's right.

Back in the USSR

They didn't know how lucky they were, boy. In September 1990, the Soviet Union was assigned the Internet domain .su. Fifteen months later, the country ceased to exist. Not so the Internet domain, which continues to soldier on, reports Reuters. ICANN wants to kill it off, but a small group of enthusiasts is crying "nyet!" Putin has yet to weigh in on this one.

VARA Not Violated by Viewing Very Incomplete Artwork

A contemporary art museum in Massachusetts has the right to display an unfinished artwork even over the objections of the artist, rules a federal court, as reported in the NY Times.

The Visual Artists Rights Act is one of the few U.S. laws that deal with "moral rights" - rights such as the right to attribution, that the creator retains even if he sells a work and its copyright. VARA also allows an artist to remove his name from a work in the event of a "distortion, mutilation, or other modification" of the work.

However, the judge ruled, VARA says nothing about works that are unfinished, so the museum can display the work so long as it includes a disclaimer that the work is not complete.

VARA applies only to fine art works, sculpture and art photography, but not to writing, motion pictures, or other works protected by copyright. Moral rights in Europe are much broader.

No End to DVD Format War In Sight, Report Says

The high def DVD format war will continue at least through 2011, predicts a report by Screen Digest, as reported in Video Business Magazine. The sales split between Blu-ray and HD DVD will be 50-50 at that point, and both formats will have widespread support from consumers, and probably from all studios. In other words, if the report's right, there probably won't ever be a single winner.

No Place for Undisclosed Product Placement, Says WGA

The WGA told the FCC that product placements in TV shows should be flagged by a crawl on the bottom of the screen alerting viewers to the placement, reports Variety.

The WGA wants the crawl to identify the product and the sponsor, and include a disclaimer that the writers and actors don't endorse the product. (No word about the directors.) In my opinion, the idea of a crawl doesn't have legs.

The writers are also seeking consultation rights on placements. That's a possibility, though not likely. The whole issue has no economic impact on writers, and is posturing more than anything else.

Actors have a bigger problem with product placements - they call them "forced endorsements," because the actor (through his or her character) is forced to seemingly endorse the product, and receives no extra compensation for it. I predict the new contract being negotiated next year will give them a (small) piece of the action.

Feel the Burn

Retailers and individuals will now be able to burn copy-protected DVDs using the same copy protection technology, called CSS, that's used on commercial DVDs, reports Variety.

The announcement, which came after years of negotiation between studios and consumer electronics companies, opens the way for burn-while-you-wait kiosks at Wal-mart, for example, which plans to deploy such a system. Also possible: download-to-burn at home, though this requires a new DVD burner for your PC, and special blank discs.

The technology will especially benefit indies and niche libraries unable to attract shelf space. Approval was required from the DVD Forum, which controls the DVD format, and the DVD Copy Control Association (DVD CCA), which controls CSS.

What's unclear is how much effect the new systems will have on illegal download-to-burn, which works with existing DVD burners and discs, has no copy protection, and is, obviously, free.

Antitrust Lawyer Cries "No Tiers!"

A class action antitrust lawsuit filed today claims that the pay-cable industry is a cartel that maintains its profits by forcing customers to buy channels in prepackaged tiers, reports the AP.

The suit names numerous MSO's (cable companies), satellite companies, and cable and broadcast networks, and seeks to require that cable channels be offered a la carte. This has also long been a goal of conservative activists, who object to sex, nudity, violence, and language on some channels. There's no indication that those activists are involved in the suit, however.

The cable industry opposes a la carte, saying it would lead to higher prices, fewer channels, and higher billing and customer service costs.

Unpleasant Dreams for Paramount and DreamWorks

Looks like no one's getting any REM sleep at Par and DreamWorks, reports the Los Angeles Times. Spielberg and Geffen have been suffering seller's remorse for months - the deal is less than two years old - but things have come to a boil over matters such as credit, bruised egos, and money.

Geffen apparently has the right to walk starting sometime next year, and if he does, then Spielberg can too - and if he does, then so can his ally Stacey Snider, who runs the studio.

They'd walk out the door with little more than the studio name, reports the LAT. Par would get to keep the projects in development. The DW library's already gone, sold by Par to defray the cost of acquiring the studio.

Ironically, Spielberg would still be directing and producing several movies for Par even if the DW arrangement imploded. And Spielberg and Geffen's third partner, Jeffrey Katzenberg, would also remain tied to Par: Katzenberg's the chief of DreamWorks Animation, a separate, public co. spun off from DW, and DreamWorks Animation has a long-term distribution deal with Par.

Movie Clean Plays Dirty Pool, Studios Say

All of the major studios have sued a company that allegedly takes DVDs, modifies or deletes scenes and dialog that it considers objectionable, then sells the edited movies on DVD-Rs, Intellectual Property Litigation Reporter reports. The studios charge that the company, Movie Clean, is infringing their copyrights, and are seeking damages, an injunction, and destruction of the infringing goods.

The studios are clearly in the right, in my opinion, if the allegations are accurate. Creating an edited or revised version of a work - in copyright terminology, creating a derivative work - is one of the exclusive rights of the copyright owner. And taking an entire work, altering it, then selling it as a substitute for the original is scarcely fair use.

Barnes Art Museum Moves Despite Charter Prohibition

The Barnes Foundation art museum - with a priceless collection including Renoirs, Cézannes, and Matisses - took another step towards moving its home from the Philadelphia suburbs into that city's downtown, the NY Times reports.

This is interesting from a legal perspective because the Foundation's charter and bylaws prohibit moving a single piece of artwork from the exact location on the walls where the Foundation's eccentric founder, Albert Barnes, placed them over fifty years ago.

With the Foundation facing bankruptcy - and several other foundations offering a bailout conditioned on moving the collection to a more publicly-accessible location - a judge three years ago released the Foundation from the strictures of its own charter and authorized the move.

Another Union Contract Up for Negotiations

AFTRA's TV network union agreement expires Jan. 31, reports Variety. The agreement covers daytime TV, reality, game shows, talk, news, and the like. Issues include new media, as with the SAG, DGA and WGA agreements.

Speaking of SAG, the AFTRA agreement is separate from the SAG motion picture and primetime television contract, which expires June 30, as does the DGA agreement.

The WGA agreement expires the end of this month, but is likely to be extended on an interim basis for a few months - perhaps to coincide with the SAG and DGA expirations - as negotiations proceed (imperceptibly, so far). Busy times in the guild world.

Big Changes Afoot in Patents?

The House has passed sweeping revisions to the patent laws, Bloomberg reports. The Senate has not yet acted on similar legislation. The House bill - which reflects Bush Administration input - would make patents harder to obtain and easier to challenge, and is supported by Microsoft, Intel, Cisco, Goldman Sachs, and others.

Janet Jackson in Concert at the 3rd Circuit

Remember the Superbowl "wardrobe malfunction"? Oral arguments are scheduled for this Tuesday in CBS's challenge to the massive fine imposed by the FCC in the incident, reports Law.com.

In true legal fashion, a roughly half-second incident, in which Janet Jackson's right breast made its brief national television debut au naturale, has spawned litigation that has dragged on more than three years, and counting.

Justice Department Opposes Net Neutrality

The Department of Justice has told the FCC that DOJ opposes net neutrality, the AP reports.

Net neutrality is the principle that all servers should be allowed to connect to the Internet on an equal basis with regard to quality and speed, and is generally the norm today. Proponents say this makes it easier for small start ups to compete with established Internet sites. Telcos and cable cos. oppose the principle, and want to be able to charge more for faster connections.

Google Phone Payment Patent

Looks like Google's been working overtime on phone technology: they've filed for a patent on making payments to vending machines and retailers via text msg or SMS, reports PC World. Sounds like part of an interesting business model.

Lulu Ululates Over Hulu

Lulu.com is suing Hulu.com for trademark infringement, reports CNET. (To "ululate" means to howl or wail, and when else am I ever going to get to use that word?)

Crux of the complaint is that the names and business models are too similar and will cause consumer confusion. The names certainly are similar, but the business models seem different: Lulu.com is a self-publishing service (print, publish and sell your own books), whereas Hulu.com is a recently-announced digital video company jointly owned by NBC Universal and News Corp. I'm not sure where the confusion lies, but I guess we'll see.

Mumbai Monitoring

Under orders from the Mumbai (Bombay) police, cyber cafes in that city are installing key loggers and automatic screen capture software on their PCs, reports an Indian newspaper/website.

The police are also looking at software that will monitoring browsing, file transfer, chat, IM and e-mail. In addition, cyber cafes in the city will need a police license to operate, and will have to register their IP addresses with the cops.

UMG Sues Veoh

Universal Music Group is suing Veoh for copyright infringement, based on alleged "massive" copyright infringement by the site's users, Forbes reports. Ironically, one of Veoh's backers is Michael Eisner, former head of CAA and, briefly, CEO of Disney. Veoh counters that it is protected by the DMCA safe harbor rules for internet providers.

ESRB Rates Games Without Playing Them?

In what seems like an odd disconnect, the ESRB apparently rates some video games without actually playing them. In an interview with PC Magazine, the president of the ESRB describes the ratings process, and notes that it involves reviewing a written form and watching a DVD depicting "pertinent content" from the game. However, she doesn't say anything about raters actually playing the game. The ESRB website says only that the process "may involve" the raters playing the game.

If it's actually the case that the raters don't play the game, then this seems strange to me - sort of like rating a movie based on clips and a written description. How can raters get an idea of the overall feel and context of game content without actually playing, at least for an hour or two?

Patriotic Decision re ISP and Telco Records

A federal district judge has struck down part of the USA Patriot Act, AP reports. That provision, challenged by the ACLU, allowed the FBI to obtain ISP and telco customer records (among other things) without a warrant or subpoena, and allowed the FBI to prohibit the target company from telling its customer that the records had been sought and disclosed.

The judge's ruling cited "constitutional principles of checks and balances and separation of powers." The government is bound to appeal.

Fashion Fisticuffs

The other designer shoe has dropped: designer Joseph Abboud is being sued by the company to which he sold his name, the WSJ reports. (See my previous post.) That company is alleging that Abboud's plan to describe his new line, jaz, with the tagline "a new composition by designer Joseph Abboud" will confuse consumers and violates the company's trademark rights in Abboud's name.

Abboud counters that he didn't sell his right of publicity, and will presumably argue that this use of the trademark is simply descriptive of his goods.

Sounds like a tough case. A lot may turn on the specificity of the contract between the two parties.

ABC Entertainment and Warner Bros. TV in Innovative Digital Deal

ABC and WBTV have entered into a complicated deal relating to rights in shows that WBTV produces for ABC, Variety reports.

Digression - essential facts for those not in the TV biz:

Many network shows are produced by outside producers. All of the networks are owned by studios, or vice versa, or by conglomerates that own both networks and studios.

Thus, the conglomerates are frenemies - they sometimes produce content for their own networks, and sometimes for their competitors' networks. Co-ownership of studios and networks was prohibited for many years by the FinSyn (Financial Interest and Syndication rules), but those were eliminated in the mid-90s.

There's a third set of corporate players in the TV business: the affiliates. Most network TV stations are not O&Os (Owned and Operated stations, e.g., owned by the networks themselves). Rather, they are network affiliates -- standalone entities or part of station groups owned by other media companies such as Hearst.

Back to the story:

The deal apparently allows ABC to stream the shows on ABC.com in year 1 (non-permanent) for up to 4 weeks from initial broadcast, then allows WBTV in year 2 to distribute the same shows via permanent downloads, DVD box sets and non-permanent streams. Each party keeps ad revenue from its own 1-year window.

WBTV has to brand the shows as ABC offerings. This is not surprising, since consumer perception of TV show brand is the network, not the producer. WBTV has not decided where to distribute the shows.

Last year, on "The Nine," the deal was different: ABC had streaming rights and WBTV had download. Contracts with its affiliates limit the number of shows ABC is permitted to offer via download to 25%.

Slow Growth for Movie Downloads

A study by Screen Digest Magazine predicts that the aggregate U.S. and European movie download biz will be $1.3 billion by 2011, reports Variety -- only 3% of the total home vid market.

Why so low? Lack of a "single download model," the trade paper reports. Presumably this refers to the diversity of formats and websites. In other words, the only one-stop shopping for movies will probably continue to be pirate services such as BitTorrent servers. :(

Terminology refresher:

Electronic Sell Through (EST) = download-to-own = customer downloads the movie and gets to play it forever on the proprietary player corresponding to the format of the file - analogous to home-video sell-through (sale).

Broadband video-on-demand = download or streaming that is playable for a limited time only - analogous to home-video rental.

Virtual Production - Real Issues

HBO has acquired an animated "documentary" entitled "My Second Life: The Video Diaries of Molotov Alva," that was shot entirely in Second Life, Variety reports. The production legal questions must have been interesting.

For instance: Did the filmmaker get personal releases and location releases? In what form - were hardcopies signed? In whose name - the avatar's or the RL person? If there is later a dispute over the release, what law and jurisdiction apply?

Location releases pose an interesting problem. Buildings in a virtual world are actually just artwork, of course - and artwork is more highly protected under the Copyright Act than physical buildings generally are. The release should be drafted in a way that takes account of this.

Likewise, an incidental image of an avatar may constitute copyright infringement, whereas an incidental shot of a RL person is not copyright infringement, and if it is in a public setting, it is generally not an invasion of privacy either.

Another difficulty is posting notices at virtual locations. How do you post effective notices in a world that allows people to teleport right into a space without ever seeing the posted notice? And how do you post a notice at all if the virtual building won't permit a virtual notice to be taped up onto it?

Blame Canada?

SAG and several below-the-line unions/guilds have filed a petition with the U.S. Trade Representative alleging that Canadian production incentives violate World Trade Organization rules, report Variety and the LA Times. The WGA and DGA are not part of the coalition.

The timing is odd, because runaway production has abated in the last several years. Indeed - ironically - the city of Toronto has just unveiled a list of recommendations for halting a slide in film and TV production in that city, reports Variety. Production declined by more than one-third over the period 2000-2006.

The reason for the gain in the U.S. and decline in Canada: the weakened U.S. dollar and aggressive countermoves by various U.S. states, which have offered enhanced incentives of their own. These are generally in the form of tax credits and rebates.

L'YouTube Ces Moi (in Thailand)

The Hollywood Reporter reports that the Thai government has lifted the five-month old ban on YouTube. Prohibition resulted from YouTube's refusal to take down content that disparaged the king, an offense in Thailand. YouTube ultimately caved - another reminder that free speech means something different overseas, even though the case isn't as troubling as the Yahoo-China dispute (see my earlier post).

Closing the Blinds on AdWords Suit

Google's AdWords system allows companies to have their ads run adjacent to search results that relate to keywords, including keywords that are their competitor's trademarks. For instance, if Pepsi wanted to, it could have ads for its soft drinks appear every time a user searched for "Coke". (Just a hypothetical example.)

Is this trademark infringement? A company called American Blind thought so, and sued Google. That suit ended in a settlement yesterday, however, reports Law.com, with no admission of liability. The issue will no doubt be litigated again, perhaps to conclusion.

Bespoke IP

The Fall shopping season has begun. While the rest of us buy clothes, the fashion industry is shopping for new IP protection, reports the NY Times. Fashion designs have very little protection under copyright, but the newly-revised Design Piracy Prohibition Act aims to change that, prohibiting copying of the overall appearance of clothing, handbags, belts and eyeglass frames. This specialized form of copyright would be for a term of three years.

In contrast to the designs themselves, fashion logos and designer names are already protected, by trademark law. In fact, the WSJ recently reported that designer Joseph Abboud can no longer use his own name as a trademark - he sold it. After two years out of the business, he's back, but under a new brand name ("jaz"), and in competition with the owners of his own name.

BTW, the customized form of protection proposed by the Design Piracy Prohibition Act serves as a reminder that there are many forms of IP, each with different (but sometimes overlapping) subject matter. A short list includes:

• Copyrights: Works of authorship, such as books, movies, music, software, art, characters.
• Trademarks: Logos, brand names, slogans, book and movie titles (sometimes), characters.
• Trade Dress: Overall look of a product or service.
• Patents: Inventions, processes, business processes (incl. Internet), software, designs.
• Trade Secrets: Confidential information with economic value
• Moral Rights ("Droit Moral"): Creative rights, such as the right to receive credit (attribution) or not have a work destroyed; limited applicability in U.S.
• Mask Works: Semiconductor chip layouts
• Designs: vessel hulls (boats) and fashion designs (if the proposed bill is enacted)
  

Microsoft & Machinima

The machinima blogosphere has been abuzz for the past two weeks with discussions of Microsoft's new Game Content Usage Rules. The new rules allow machinimakers to do their thing using a number of Microsoft video games, with a few restrictions. The devil is in the details, and negotiations are underway to loosen the new rules a bit.

Machinima, in case you're not a devotee, is the art of producing animated films using video games: instead of playing the game, the filmmaker (machinimaker) makes the characters interact with each other and records the interaction, adding dialog or a sound track.

Human-Implanted RFID - Chips Ahoy?

Giving privacy a shot in the arm, the California Senate passed a bill prohibiting employers from requiring their employees to have RFID microchips implanted under their skin. These are the same type of chips you've probably already implanted in your dog or cat. The State Assembly had previously passed the legislation.

One company already has FDA permission to sell chips for implant in humans, and apparently 2,000 people have had this done. There's also a company in Cincinnati that requires its employees to have them if they work in its secure data center.

Back in California, the bill now goes to the Governor, who once had a similar device implanted up his nose in the movie Total Recall. One hopes, based on that experience, that he will promptly sign the legislation.

Even if he does, the bill only applies to employers and employees. That leaves open a host of other scenarios. One day soon, no doubt, prisoners will be required to be chipped as a condition of parole, probation or house arrest, just as they're sometimes required to wear ankle bracelets today. In fact - ironically - the same day the Senate acted to restrict chips, the Assembly approved a bill expanding law enforcement's ability to impose ankle bracelets.

We can also expect to see chipping of registered sex offenders, even after their sentences are complete, just as they are required to notify police for life whenever they move. Next may come illegal immigrants, chipped as they are escorted out the door, or as a condition of amnesty. Welfare recipients might follow (they're already often fingerprinted).

Then there are the more voluntary applications, although the line between "voluntary" and "coerced" is not always clear. Parental fear of kidnapping may lead to chipping of kids, just as some parents today already fingerprint, photograph and collect DNA from their kids. You can see the rationale: "if it's worth protecting your cat, isn't it worth protecting your kid?" As those kids grow up, they'd probably remain chipped. Mental patients, and elderly people suffering from or at risk of dementia, are also likely target populations for chipping.

One day, too, as in Total Recall, the RFID chips will acquire GPS capability, increasing their allure, and the privacy risks. Unfortunately, we're on a slippery slope to a nation of geotracked "chipizens," but we've never been able to resist clever technology even when its benefits come at a price. Blogging's a perfect example - look how much privacy we're willing to give up in exchange for networking opportunities and 15 minutes of fame.

As they say, the road to hell is paved with good intentions. One day, we'll know the exact locations and identities of everyone on that road. Read more.

Facebook Faceoff

The dispute over who owns the Facebook IP turns out to be a three-way affair, perhaps like some of the hook-ups on the site itself.

In 2004, the founders of of a site called ConnectU sued Facebook, alleging copyright infringement and theft of trade secrets. The ConnectU founders - Harvard students at the time - claim that they conceived the idea of a collegiate social networking site, and asked another student, Mark Zuckerberg, to write the source code.

Zuckerberg, the suit alleges, began to write code, but then jumped ship and used the code - and the idea - to start what is now Facebook. ConnectU foundered, while Facebook prospered.

Today, the NY Times reports, another Harvard student - Aaron Greenberg - has appeared, with emails between himself and Zuckerberg that allegedly prove he created an on-line facebook before Zuckerberg/Facebook or ConnectU. Greenberg says Zuckerberg lifted his ideas. He's bitter, but he's not suing. (At least, not yet.)

Who's on top in this three-way tussle? Allegedly, there was no contract between ConnectU and Zuckerberg, and Zuckerberg was not a formal employee of ConnectU. If true, ConnectU may find its suit disconnected, because without a contract or an employment relationship, trade secrets are generally not protectible and the programmer owns the copyright.

Likewise, Greenberg apparently has no legal claim, because his ideas weren't secret - his system was public - and because he doesn't claim anyone stole his code.

The lesson for ConnectU: get it in writing. Without a Non-Disclosure and Invention Assignment Agreement, the other guy gets the girl (or guy) while you stay home alone playing video games. The lesson for Greenberg: first doesn't always win. And the lesson for the rest of us? See a lawyer before you start bringing in partners and collaborators. Class dismissed.