Letter from AmeriKat: It's Super Bowl Sunday!!!

This week marks the 100th AmeriKat post (although there have been several non-AmeriKat posts from this feline). There would be no more apt a day to publish her 100th Letter than on SUPER BOWL SUNDAY! FOOTBALL!!!!!!!! Readers will have to excuse the AmeriKat for her sudden burst of feline frenzy, but she does love a good American football game. This year it is the Pittsburgh Steelers and Green Bay Packers who are at loggerheads -- the AmeriKat is rooting for the Steelers, although this may change following half-time. For those who have been engrossed by the rugby this weekend on this side of the Atlantic, take a moment and enjoy the beauty that is American football, not just the sport but its impact on IP. Last year the Supreme Court ruled on an issue regarding NFL team trade marks and competition law issues in the American Needle case (AmeriKat reports here). Ahh ... the NFL, bringing together two American pastimes - Sunday night football and litigation. You can't really say that about rugby, can you?

The AmeriKat will be gone next weekend as she will be finishing off (or writing) a book chapter on the Viacom v YouTube litigation, but will be back the following week with news of Microsoft's Supreme Court filing in the i4i case.

Google's "Bing Sting" takes a punt at Microsoft, but is it really copying?

Another epic battle between two massive teams has also been launched when last week Google accused Microsoft and their Bing search engine of copying their search results. Google's engineers had created 100 "synthetic" search queries such as "hiybbprqag" to which predetermined real search results that had nothing to do with the original query would then appear. After a few weeks of implementing this 'sting', these same search results were also displayed on Bing. Google's Amit Singhai published a detailed blog post about the ins and outs of Google's sting and said that their experiment confirmed their suspicion that something strange was happening with Bing. Google suggests that individuals who are using some combination of Internet Explorer 8 - which can send data to Microsoft via its Suggested Sites feature and/or the Bing Toolbar which can do the same, are inadvertently sending data to Bing about what keywords they search for on Google and what results Google in turn displays. A sort of "search engine espionage" if you will. Singhai stated that

"At Google we strongly believe in innovation and are proud of our search quality. We’ve invested thousands of person-years into developing our search algorithms because we want our users to get the right answer every time they search, and that’s not easy. We look forward to competing with genuinely new search algorithms out there—algorithms built on core innovation, and not on recycled search results from a competitor. So to all the users out there looking for the most authentic, relevant search results, we encourage you to come directly to Google. And to those who have asked what we want out of all this, the answer is simple: we'd like for this practice to stop."

Microsoft denied copying Google and has instead accused them of conducting "spy-novelesque stunts". Vice President of Bing, Harry Shum, stated that

"We do not copy Google's search results. We use multiple signals and approaches in ranking search results. Opt-in programs like the toolbar help us with click stream data, one of many input signals we and other search engines use to help rank sites."

Click stream data basically tracks or maps how users are searching and using the web. So if you use the Bing toolbar or Internet Explorer to search something on Google then it can see the URL for that query and the resulting search results. It can also see when you search something on Amazon, or when you check out the latest YouTube clip or browse shoes on Nieman Marcus (picture, left - the AmeriKat asleep in one such shoe). There is no specific Google signal, just a general search signal for the whole gambit of websites. Some of these search signals are very weak (tails) and some are very strong (heads). Head signals are generic terms such as "movies" or "shoes" - terms that millions of people search every day and will thus be 'strong'. Tail searches are your more obscure searches, such as the nonsensical queries used in the sting operation. Because these tail searches are searched less frequently a search stream will thus have less data to go on and thus the results may appear to be that Bing is "copying"' Google's results, but really there is less data to go on and the data that is out there is from only a few sources including Google (if the AmeriKat is understanding this correctly!). According to Danny Sullivan, both Google and Bing agree that this replication of search results can occur in instances of weak signals.

According to Sullivan, Google's test proves that the surfstream is a weak signal because even where Google was providing the sole signal or sole data for the nonsensical terms, Bing used this signal (data) only about 9% of the time. So are Google's claims of being copied legitimate? Shum says that Bing is not copying Google, they are only watching how users search and use the web. Much, says the AmeriKat, like what Google does with Google Chrome and their own search and browse settings. Although she knows this is not an equitable issue, the maxim "one who comes into equity must come with clean hands" is chiming around the AmeriKat's head right now ...

So is this just a PR battle being waged by Google? Is there any copying taking place at law? Further, what protection does Google have in the search results? If algorithms are being copied (of which there does not appear to any evidence of direct taking), perhaps copyright infringement is taking place or, if there is some patent at work, is there patent infringement? In so far as results are displayed, is there another possible copyright claim in the layout or table of search results? The AmeriKat has to admit that the inner workings of search engines are a mystery to her, so identifying the intellectual property rights is also a stab in the dark. What do readers think?

If anything, the AmeriKat is sure that Viacom and their amici (which include Microsoft) in Viacom v YouTube are loving hearing Google whine about being copied and saying choice things such as

“I’ve got no problem with a competitor developing an innovative algorithm. But copying is not innovation, in my book."

The Amerikat would like to thank Dave Sant of the BBC for spurring her interest in this story.

US Officials score a touchdown in fight against online counterfeits

Last week, with the assistance of Immigration and Customs Enforcement (ICE), the US Attorney's Office of the Southern District of New York seized 10 websites that allegedly streamed live sporting and and pay-per-view events online - mere days before the big SUPER BOWL GAME! The Super Bowl game attracts about 100 million viewers a year and in recent years many viewers have been tuning in online, either legally or illegally. The websites that have apparently assisted in the illegal viewing of sports games that were subject to the seizure under Title 18 of the United States Code included channelsurfing.nehq-streams.com, firstrow.net, ilemi.com and rojadirecta.org. What makes the seizure of rojadirecta.org particularly controversial is because this Spanish site was held to be operating legally by a Spanish court last May. (picture, top left - the notice now displaying on the seized websites)

These websites were alleged to illegally provide links to sites that would show or stream professional sports organizations' content, including games from the NFL and the NBA (National Basketball Association). For anyone who has ever watched an NFL or Premier League game, you will know that the sports organizations will usually own the copyright in film and sound recording of the game/match, the trade marks of some of the teams' logos and/or uniform, the music, layout, etc. Thus, unauthorized streaming or use of this content is a violation of their copyright. With more and more fans turning to their laptops to watch their favorite game, sports organizations are now facing the age-old battle with sites that illegally provide this content.

US Attorney, Preet Bharara (photo, right) stated

“The illegal streaming of professional sporting events over the Internet deals a financial body blow to the leagues and broadcasters, who are forced to pass their losses off to fans by raising prices for tickets and pay-per-view events. With the Super Bowl just days away, the seizures of these infringing websites reaffirm our commitment to working with our law enforcement partners to protect copyrighted material and put the people who steal it out of business.”

But the efficacy of such seizures is under question and anyone who battles counterfeit websites online know what that is: as soon as one domain goes away, another one will soon swoop up in its place. However, ICE Director John Morton remains undeterred

“This swift action by our Homeland Security Investigations New York special agents and analysts sends a clear message to website operators who mistakenly believe it’s worth the risk to take copyrighted programming and portray it as their own. We will continue to aggressively investigate this type of crime with our law enforcement partners."

But how effective is this? Although it may not completely get rid of these types of sites, it does shove the domains back down in the Alexa ratings which means they are more difficult to find. The more difficult a site is to find, fewer users access it, which in turn results in any advertising revenue on the site drying up. It may not be perfect, but it has the desired effect of essentially making the commercial viability of counterfeit websites less attractive to their operators.

However, not everyone is happy about the seizures. A critic of these types of seizures and of an anti-piracy legislation that will probably be reintroduced this term,Senator Ron Wyden (D-Oregon, left) wrote to Attorney General Eric Holder and Morton expressing his concern. He called for greater transparency about the criteria on why these domain seizures were being allowed to proceed. He noted particular concern in that the 10 websites that were seized last week providing links to infringing content, not providing infringing content themselves, and an apparent lack of due process. Senator Wyden stated that

"These seizures represent a major shift in the way the U.S. government combats copyright infringement in the digital environment...I grow concerned when the methods used may not be effective and could stifle constitutionally protected speech, job-creating innovation and give license to foreign regimes to censor the internet."

Steven Tepp of the US Chamber of Commerce (a private lobbying institution) previously stated in an e-mail to the AmeriKat that the anti-priacy legislation Combating Online Infringement and Counterfeits Act (COICA), that has Senator Wyden concerned does provide for due process in that the legislation does require the Department of Justice to "simultaneously give notice to the accused domain so that they have an opportunity to come to court to defend themselves" and allows a party served with an order the opportunity to modify or vacate the order. To read the text of this bill click here.

At the same time the website seizures were taking place Deputy Director of the ICE Kumar Kibble announced another successful sting, which was cleverly dubbed in time for Super Bowl Sunday as "Operation Interception". The Operation saw $3.56 million in fake NFL merchandise seized. The Operation will continue throughout the weekend.

Now that the Digital Economy Bill's website blocking clause is being reviewed by the UK Government, what do IPKat' readers think about introducing similar enforcement procedures in the UK as those undertaken by the US ICE?

Many thanks to Oliver Weingarten of the Premier League for alerting the IPKat to the ICE seizure-story.

Letter from AmeriKat II - American Needle v NFL (Part 2 of 2)

The Court continued to state that the teams not only competed against each other on the playing field and for the attraction of fans, but they competed in the market for intellectual property:

"To a firm making hats, the Saints and the Colts are two potentially competing suppliers of valuable trademarks. When each NFL team licences its intellectual property, it is not pursing the 'common interests of the whole'league but is instead pursuing interests of each 'cooperation itself'...Decisions by NFL teams to licence their separately owned trademarks collectively and to only one vendor are decisions that 'depriv[e] the marketplace of independent centers of decisionmaking'."

The Court considered the argument advanced by the NFL that they had formed a single entity (the NFLP) and had marketed their NFL brands (picture, left - all 32 teams) through this single outlet for a long time meant that their conduct fell outside section 1. The Court did not find favor with that argument and stated that "an ongoing section 1 violation cannot evade section 1 scrutiny simply by giving the ongoing violation a name and label." Although at times the 32 teams may operate through NFLP, the teams remained "separately controlled, potential competitors with economic interests that are distinct from NFLP's financial well-being." Ouch.....The Court did recognize that professional sports organizations have to necessarily unite and cooperate for advancement of the league, but cooperation is not justification when that cooperation is so concerted as to fall foul of section 1 (page 14 of the decision).

In closing the Court recognized that while the NFL teams share an interest in making the league successful and profitable in areas like scheduling, but that it does not justify "treating them as a single entity for section 1 purposes when it comes to the marketing of the teams' individually owned owned intellectual property." The case is remanded back to the lower court for further proceedings. In light that NFL agreements are capable of violating section 1, the parties will now have to argue that the NFL-Reebok licence agreement itself is or is not an unreasonable restraint of trade.

The ruling is heralded as being great for the NFL's players. How so? Had the NFL won the case they may have been able to justify continuing to act as 'one business entity' in implementing players' and coaches' salaries collectively, rather than the current system of individual bargaining. (picture, right - Brian Urlacher of the NFL's Chicago Bears and of the AmeriKat's home state) Commentators are suggesting that the ruling could initiate the stalled labor extension talks between the National Football League Players Association (NFLPA) and NFL team owners. However, Peter King of Sports Illustrated stated that the decision may not be the champagne-popping moment for the NFLPA. For further interesting sports-centric view on the impact of the decision see this article from ESPN and Huffington Post (here).

By way of interest, the AmeriKat directs readers to compare the position of the NFL with that of the Major League Baseball (MLB) who benefit from a host of anti-trust law exemptions. God bless the American past-time!

The AmeriKat has to mention that reading Justice Stevens's clear, structured, and well-argued decision makes his upcoming retirement even more poignant. He will be much missed.

Breaking News: American Needle v NFL

Breaking News: The Supreme Court didn't deliver Bilski today but they did unanimously decide that American Needle's important IP and anti-trust lawsuit against the NFL can proceed (see decision here).

In brief, a 2001 agreement made between Reebok International and the National Football League (NFL) granted Reebok an exclusive licence for the rights to use the NFL's (i.e., all 32 NFL teams) IP (team trade marks, logos, etc) for baseball caps and other apparel. It therefore followed that American Needle and other merchandise manufacturer’s licences with the NFL were not renewed. Consumer prices for NFL team’s merchandise in turn increased. American Needle et al filed a complaint in 2004 alleging that this agreement was in violation of sections 1 and 2 of the Sherman Antitrust Act.The NFL (the biggest of the big sports businesses) asked the court to shield them from anti-trust laws which could have allowed the potential anti-competitive licensing of their intellectual property to continue affecting manufacturers like American Needle and consumers of NFL products (for further details see previous post here). The NFL's argument was that the NFL was one single entity, not a plurality of 32 individual teams, and so thus fell outside the Sherman Act's plurality requirement.

The Supreme Court held that the NFL's "alleged conduct related to licensing of IP constitutes concerted action that is not categorically beyond section 1's [of the Sherman Act's] coverage" and that the NFL does not constitute a single entity for the purposes of the Sherman Act. This decision overturned the lower court's decision which threw out American Needle's lawsuit at the summary judgment stage. Justice Stevens, giving the majority opinion, wrote:

"Although NFL teams have common interests such as promoting the NFL brand, they are still separate, profit-maximizing entities, and their interests in licensing team trademarks are not necessarily aligned."

The Supreme Court have remanded the case back to the lower court for re-consideration of its section 1 analysis.

This Kat will be back with a detailed update once she has time to digest all of the 20 pages of the decision. In the meantime see these articles in the Financial Times and the Wall Street Journal.