Normally when a consumer purchases a copyrighted work embodied in a tangible object (e.g., a book or a CD) they are completely free to lend or resell that object without the permission of the rightsholder. In the United States, this is called the doctrine of first sale and it has been recognized for over a century. Business practices, prices, and consumer expectations all reflect the assumption that sale of a book is just a regular property transaction. This article discusses how this changes when we switch from tangible objects to digital distribution.

Downloading a book for a Kindle or a song from iTunes is not the same as purchasing it in a store. As we all know, what you pay for when you "buy" an electronic book is a limited, non-transferable licence to reproduce and read that book. There are no used e-book stores. Digital content can only be sold by authorized vendors. Of course, some of the characteristics of tangible objects (reselling, lending, gifting) can be emulated by DRM, but for the purpose of this article I will assume that digital content can only be legally consumed by the purchaser. I will also focus on the e-book example even though the same ideas apply to other forms of content.

There are many reasons behind the first sale doctrine; a recent episode of the lists three. First, it reduces transaction costs by allowing people to lend or resell their tangible objects without the permission of the rightsholder. Without first sale, the purchaser of a textbook would have two choices at the end of a semester: keep the unneeded book, or get permission from the author to resell it. Second, it creates a secondary market where the work can be purchased for less. This allows people who might not otherwise be able to afford the work to purchase it, rent it, or borrow it. It also creates some price competition for the original copies. Third, it helps ensure that works are available from multiple sources and continue to be available even if they have been orphaned.

When applied to digital content, these three reasons may be irrelevant. The transaction costs explanation assumes a tangible object that the consumer will eventually want to dispose of and resources (dead trees) being spent on manufacturing a new object when a perfectly good one is sitting on a shelf somewhere. Neither of these are true of an e-book.

Of course, I left out the primary reason to get rid of old textbooks: money. However, the affordability justification may also be suspect when applied to digital content. One of the reasons textbooks are so expensive is that publishers know that students will resell it at the end of the term. In theory, though, if they could sell the book to each student, they could make more money by charging less. The biggest worry here is the lack of competition. Sticking with the textbook example, students are a captive audience. However, if the profit margin is too high on a product (e.g., a digital textbook that is profitable at $20 being sold for $100) then competition will naturally appear. The IP Colloquium episode discusses the possibility of more targeted pricing in a world without the first sale doctrine. For example, a textbook could be sold at a lower cost to law students than to firms (a low margin sale being better than no sale at all).

The third justification (maintenance of a market) might need to be addressed by orphan works legislation. However, given the ease with which an inventory of digital content can be maintained, there is no need for a book to go "out-of-print". Further, given the variety of e-book formats, it is likely that a book will be sold through multiple distributors (Apple, Amazon, Sony, etc) and unlikely that all of them will go out of business without transferring their licences.

Even though a workable system for distributing digital content could be created without the first sale doctrine, it casts a long shadow. The assumption of the doctrine dictates the environment in which content is currently sold in two important ways: price and consumer expectations. The price of a book, CD, or DVD must cover the potential lost sales to everyone to whom the object is lent. Consumers are used to receiving certain property rights for that price. In a way, these rights are bought back by the publishers when they lower the price for a digital download. At the same time, publishers gain by removing the guess work out of pricing an item: if a publisher guesses a book will be read by four people and sets a $20 price, then they lose if it was read by 5 and they could have sold it to each of them for $5. The first sale rule doesn't make sense in a world of digital downloads, but that shouldn't be a problem once the initial price-setting phase is over.

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According to a , the organization that oversees the domain name system, less than one quarter of domain name ownership records are accurate. Recent statements by the FBI and the UK Serious Organized Crime Agency (SOCA) have drawn upon this report in calling for stricter identity verification when registering a domain. This article discusses the findings of the study, possible solutions and their drawbacks.

ICANN does not actually run the domain name system (DNS) itself. Instead, it accredits registries to oversee individual top-level domains (the part after the final dot, e.g., ".com", ".info", or ".ca"). ICANN itself acts as registry for the most common top-level domains. The registries then accredit registrars, the front-line companies that sell and manage individual domain names (e.g., "iposgoode.ca"). When a person registers a domain name, the registrar will ask them to provide contact information(name, post, email, phone). This information is---in most cases---available through a public whois service operated by the registry. In some cases, registrars will offer a proxy service where they submit their own contact information to the whois service and forward communications to the owner's private address.

The study

The study, conducted by the National Opinion Reporting Centre (NORC) at the University of Chicago, reached a number of interesting, though unsurprising, conclusions about whois accuracy. It checked for three criteria of accuracy: (1) the postal address existed and the phone number was in service, (2) the name, address, and phone number were independently verifiable through a phone book or similar means, (3) the individual was contacted and confirmed ownership. While there are deficiencies in the accuracy of whois databases, the problems are not quite as severe as has been reported.

Only 22.8% of the records surveyed contained wholly true, verifiable information. However, this does not mean that the rest are false. A further 24.6% of records were probably accurate: they matched up with directory information but the owner did not return their phone calls or emails. An additional 22.7% of domain name owners could be contacted by phone or email but their information could not be independently verified---either because it was false, out-of-date, or unlisted. The third category should be counted as probably accurate given the prevalance of unlisted cell phone numbers. In the end, only 8% of owners failed all three criteria. The study has a number of failure points: not everyone will respond to surveys, 14% of users registered their domains through a legitimate proxy, many people will have unlisted phone numbers or use P.O. boxes. That said, the team did go to great lengths to locate and contact owners.

Why is it a problem?

Inaccurate whois information poses a few problems. It makes it difficult for law enforcement to track down operators of illegal websites. For example, it is currently very easy to create phishing websites by registering a common mistyping of a popular domain name under a false name. The FBI and SOCA are particularly worried on this point. They regarding improvements that may be made to increase the accuracy of whois databases. The recommendations have not been released publicly yet, but SOCA reports that Interpol and numerous other police agencies also support them. It is expected that ICANN will publish comments on the proposal in the coming months. In a similar vein, inaccuracy can slow down the process of removing a website that infringes upon a trademark and frustrate companies that may wish to pursue damages in court as well. Inaccuracy may also aid in theft of domains since the registrar's notifications of ownership changes will go unnoticed.

Despite these problems, there are reasons why inaccuracy might be considered a useful evil. The foremost reason is privacy. There are certainly cases where a website owner may not want their home address and phone number associated publicly with their domain name. This concern, however, is largely addressed by the rise of proxy services offered by most registrars. In Canada, for example, all domains are private by default and CIRA (the ".ca" registry) provides a contact form on their website to forward inquiries to owners. These proxies, however, only conceal information from the general public. There are some (corporate whistleblowers, bloggers under oppressive regimes) for whom this may not be enough.

Addressing the problem

A solution to the problem would involve heightened verification practices for registrars. As the only entities in direct contact with the domain owners and being in contact before the domain goes live, registrars are in the best position to test the validity of contact information. Currently, the Registrar Accreditation Agreement governing registrars for the major top-level domains only specifies that the contract between registrar and domain owner must have a condition stating that all contact information is correct. If the information is incorrect, the registrar may choose to deactivate the domain name but there is no duty to enforce this condition. In addition, the databases of contact information are kept by the registrars and only queried when needed. Thus there is no easy way for ICANN to search for false entries.

Other approaches are used for other top-level domains. For example, Nominet, which runs the ".uk" top-level domain, requires that contact information be verified, does not allow the use of proxy services and maintains its own database of owner contact information. It has on occasion discredited registrars that did not comply with the rules. Eurid, the organization running ".eu", also requires verification and has dedicated staff checking contact information.

The NORC report contained a few suggestions for improving the accuracy of the whois databases. Many of the errors they uncovered were merely due to carelessness on the part of the owners. A very common error was forgetting to notify the registrar of a change of address (I must admit that all of my domains are still listed with my last address). Periodic reminders and simplified update procedures would address this issue. Similarly, many errors appear to be due to users misreading the registration forms. They either misunderstood the information being requested or were uncertain of the differences between the four types of contacts they are asked to provide. The report dismissed the idea of checking addresses against credit card details: too many people use a personal credit card to pay but provide work contact information.

The report hinted at but did not actually suggest one particularly good method. It noted that most people using proxy services give accurate information to the proxy. It is possible that some of the intentional misrepresentations would be avoided if it weren't automatically placed in a publicly accessible database. Many owners may choose to self censor the information they provide rather than pay for a proxy service. In the words of the report:

In most registry type systems which could reveal information about a person’s identity and address (motor vehicle registries, telephone directories, property ownership, credit status, medical records), there is an inherent tradeoff between the accuracy of the information and the degree of unrestricted and/or undocumented access.

It's worth considering the need for so much information in relation to domain names. There may be valid technical, law enforcement or legal uses for the information, but it need not be instantly available to the most casual inquiry.

Such an approach would do little to prevent anyone who was determined to provide false information. It would not be impossible for registrars to undertake some more verification than they currently do. For example, there are automated services that verify phone numbers. Yet even this can be thwarted by a criminal with a stolen credit card and a pre-paid cell phone. It will, however, increase the transaction costs of cybersquatters who may register hundreds or thousands of domains. At the same time, those most in need of anonymity may be faced with a choice between exposing themselves and engaging in criminal activity to hide their identities. ICANN will have to carefully balance the need for authentication with the privacy of domain owners and the costs of registrars.

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Joel Tenenbaum was the second person to go to trial after being accused of internet file-sharing. His struggle with the RIAA has won him plenty of supporters as "the average David fighting against the corporate Goliaths." This is just part of a larger social movement that sees piracy not only as acceptable, but laudable. While it's hard to defend the recent decisions of the RIAA and other big media companies, I think this is the wrong path to take.

Peter Menell, a law professor at Berkeley, recently wrote an interesting on this subject. Apparently, someone commented on the startling coincidence that Joel---standing up for the oppressed---was being sued for downloading Outkast's song Rosa Parks. This comment sets the stage for Menell's piece. While I disagree with a few statements made in the article, I accept the main points: downloading music is not civil disobedience and Joel's decision to reject the settlement was probably misguided.

Reading comments on popular blogs, you see a trend. One comment will explain that piracy is good for artists and labels because it exposes people to music they might not otherwise hear. Thus by sharing music with friends, one increases the likelihood that they will buy the album or attend the concert. Another comment will explain that most artists only get a tiny portion of the profits, so it's not really stealing. Other comments will say that art is meant to be shared, the record companies deserve to lose money, they're an evil monopoly, or that pirating music will force them to listen to their customers. All of these are offered to justify taking music without paying, but music is not a scarce resource subject to a monopoly. Further, while Rosa Parks had a right to sit wherever she wanted without discrimination, no individual has a right to a particular song.

This is not the proper way to protest the music industry's practices or legal tactics. By pirating content, file-sharers demonstrate to the music industry that there is a demand for their product. The music industry then concludes that if there was no piracy they might sell some more music. Those who have determined not to purchase content from these companies must do two things: they should decline from pirating it, and they should buy music from the companies they do wish to support.

As for Joel's decision to fight for justice, it's tough to see it that way when you consider the facts. He did download and share the files, and he turned down a fairly reasonable settlement offer. He was originally accused with sharing 7 files and offered a $3,500 settlement when the statutory minimum would have been $5,250. Instead, he denied ever having used an online sharing tool on several occasions. It was then proved at trial that he had downloaded and shared hundreds of songs (though they only claimed damages for 31) on several networks from at least 2002 until 2008---more than a year after he filed his answer to the suit.

None of this means that the RIAA chose the right tactics. It was definitely bad for their public image, doesn't appear to have had the desired effect, and had an extreme impact on those who were targeted. Of the nearly 18,000 others who settled, there were no doubt many more sympathetic potential defendants (we know the RIAA pursued at least one deceased grandmother and a family that didn't own a computer). Joel simply wasn't the right David.

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Last week, the Federal Court of Australia published a highly anticipated judgment in . iiNet is an Australian ISP accused of authorizing copyright infringement by creating a service by which it profited from infringement and by failing to take "reasonable measures" to prevent illegal downloading on its network. The Court held in favour of iiNet. One of the more interesting findings was that a notification and termination policy is not a reasonable measure to prevent copyright infringement.

The case, quickly

iiNet is an Australian ISP. There were 34 applicants, but the central player was the Australian Federation Against Copyright Theft (AFACT). AFACT conducted an investigation that determined illegal content was available through iiNet's internet service and was actually being shared on BitTorrent by iiNet customers. The judge accepted this evidence. He did not, however, accept the applicant's arguments that iiNet authorized infringement for three reasons. (1) iiNet did not provide or control the means of infringement. There is a distinction between the means (BitTorrent, in this case) and a necessary condition (internet access). (2) Notification and suspension of accounts is not a reasonable measure to prevent copyright infringement. (3) iiNet did not sanction, approve, or countenance infringement.

Reasonable measures

of the Australian Copyright Act directs the courts to consider (a) the extent of the person's power to prevent infringement, (b) the relationship of the infringer and alleged authorizor, (c) whether the person took reasonable steps to prevent the infringement.

This is a serious issue when one considers the type of power the typical user agreement gives an ISP over terminating an account. Generally, as with iiNet, there is a specific provision allowing the ISP to terminate an account used to infringe copyright. Is an ISP obligated to enforce voluntary contractual rights in favour of a third party? The Court held that it was not. The mere ability to interrupt an act of infringement is not "power to prevent infringement."

Under Australian case law, "power to prevent" is synonymous with "control". Just because a company provides a component necessary for infringement---and therefore could prevent it in the strictest sense---does not mean they have to act. There has to be an ability to prevent only the infringing uses of a technology that has legitimate uses as well. ISPs have only two potentially relevant powers: termination and notification.

Termination, it is easy to see, is not a delicate enough tool to meet this definition. Further, to terminate for infringement based on anything less than a court order would be unreasonable because an ISP cannot merely accept untested claims of infringement---even when backed up by data provided by copyright holders. Finally, even if infringement is proved to scientific certainty, suspension of an Internet account for an individual (and, in effect, a household) would be unreasonable if infringement was not the primary use of the account. Having found that termination is unacceptable, the Court found that notification is useless without a threat to back it up.

This section of the judgment reads like a direct attack on the "three-strikes" rule. Particularly, given that the 10 pages of reasons why termination is not an appropriate measure is prefaced by a remark that the discussion is not necessary to the decision.

Relevance to Canada

Canada already has a on whether ISPs authorize infringement. But SOCAN sought royalties, not termination of user accounts and the question of what reasonable measures an ISP might be obliged to take was left open (notably the "notice and takedown" approach). The Court was also careful to soften its finding on the connection between knowledge and authorization: "The knowledge that someone might be using neutral technology to violate copyright (as with the photocopier in the CCH case) is not necessarily sufficient to constitute authorization" [Italics in original, underlining added]. To my understanding, then, the question addressed in iiNet is still relevant to Canada.

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MyTVR, a new remote storage digital video recorder (RS-DVR) service has recently launched in Australia. The service allows paying customers to record TV shows and stream them to their PC or mobile phone. It sounds great, but the legality of the service is far from certain.

This issue has recently been considered in two other jurisdictions: the United States, and Singapore. In the United States, the Second Circuit held that Cablevision's RS-DVR service did not infringe copyright law. As I , however, the High Court of Singapore (trial level) held that RecordTV's similar service did infringe copyright. The RS-DVR services faced similar problems in each country: agency, authorization and communication to the public. According to , the same problems apply to RS-DVR under Australian law.

Before continuing, I should note an important feature of all three jurisdictions: it is permissible to record TV for time-shifting. In the US, time-shifting falls under fair use. In Singapore and Australia, it is expressly permitted by statute.

Agency

It is important to determine who makes the recording. In all three jurisdictions, time-shifting is only permitted for personal use. The RS-DVR service, therefore, cannot make recordings for other people. The American and Singaporean cases both found that the user made the recordings, but the service played them.

Authorization

Speaking generally, secondary infringement (US) or authorization (Singapore/Australia/Canada) occurs when one entity does something to encourage or sanction someone else's infringement. The issue was not plead in the American case. The Singaporean court found that RecordTV did authorize its users' infringement, but as I stated two weeks ago, I believe the judge erred. There can be no authorization when there is no infringement. Like RecordTV, MyTVR is careful to only support channels that are freely available over the air and covered by the statutory timeshifting exception.

Communication

If the RS-DVR service is responsible for the playback of recordings then, in all three jurisdictions, it would be liable if it communicated the recording to the public. The American and Singaporean judgments differed on a factual issue. Since the American service kept a separate copy for each user, the court held that it couldn't be viewed as a communication to the public. They were merely communicating to an individual his own personal copy. This was not true of the Singaporean service and the judge felt that was determinative. Information on how MyTVR works in this respect is unavailable.

Nic Suzor suggests that an Australian court may find CCH persuasive. In CCH, the Supreme Court found that the Law Society of Upper Canada's Great Library did not infringe copyright by copying and distributing photocopies of copyrighted works to members who did not reside in Toronto. The Great Library was merely instrumental in the user's exercise of his fair use rights. However, I believe there is a significant difference between the Great Library and MyTVR: money. McLachlin C.J. wrote:

When the Great Library staff make copies of the requested cases, statutes, excerpts from legal texts and legal commentary, they do so for the purpose of research.  Although the retrieval and photocopying of legal works are not research in and of themselves, they are necessary conditions of research and thus part of the research process.  The reproduction of legal works is for the purpose of research in that it is an essential element of the legal research process. There is no other purpose for the copying; the Law Society does not profit from this service.

The court let the Great Library in on the user's fair dealing defense because the Library had no purpose outside of it. MyTVR, on the other hand, intends to make money.

Concluding Thoughts

As I said in my last post, I think RS-DVR should be permissible based on the effect it achieves without regard to the technology behind it. While it will be interesting to see what an Australian court has to say about RS-DVR when MyTVR is sued, I don't think it will be immediately relevant to Canada. RS-DVR has a bigger obstacle in Canada than agency or communication to the public: the right to timeshift television programming has not been recognized in Canada. Until that changes, I don't think we will see RS-DVR here.

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A year after the US Second Circuit found that remote storage digital video recorders (RS-DVRs) , the High Court of Singapore has come to the . The Court found that operators of commercial RS-DVR services would be liable for authorization of copying and communicating copyrighted works. The judge's discussion of the law and expressed dissatisfaction with his own decision highlights just how strained copyright law is when dealing with the Internet.

The plaintiff, RecordTV, operated a website on which Singapore residents could choose to record and view over-the-air television broadcasts. The recordings would be made by RecordTV's computers and transmitted on-demand to the user. RecordTV sued for a declaration that their service was legal and that the defendants' cease and desist letters were groundless. The judge considered three issues: primary infringement, authorization, and communication of copyright works. He found RecordTV would be liable on the second two grounds and that the defense of fair dealing was not available.

Three things trouble me about this decision.

First, the finding of authorization seems to put an unsurpassable burden on RS-DVR services. Section 114 of the Singapore Copyright Act provides that recording for one's own "private and domestic use" is not copyright infringement. The judge spends 7 pages explaining how this exception applies to users of RecordTV and then still finds RecordTV would be liable for authorization. This conclusion seems to rest on RecordTV's failure to show that *all* of its users fell under s. 114. That is a pretty heavy burden to carry. It also poses an interesting problem when it comes time to calculate damages since there is no way to know which copies are infringing.

Second, the judge finds that RecordTV would be liable for communicating the recording to the user. In the first section, he concluded that the user--not RecordTV--is responsible for making the copy because it is the user's action that causes the system to record a program. In this section, however, the judge finds that the user is not the one responsible for the transmission. This is the part that particularly confuses me:

If we can say that the end-user has made the infringing copy and transmitted the infringing copy, there is little to prevent us from concluding that the end-user is, in fact, an RS-DVR in disguise. For where, in that analysis, would there be room for the implication of any properly culpable technology? If the RecordTV system neither copies nor transmits any material, how can it be said to have infringed copyright? [83] The line, therefore, has to be drawn somewhere...

This paragraph begs the question. It assumes both that infringement is occurring and that RecordTV is liable and then, because they aren't liable for recording, concludes they must be liable for transmission. The judge uses the following example to support his conclusion: the person responsible for the transmission is the one who determines the content; assume the user makes a recording and then attempts to play it; due to a technical error, the user sees scrambled video; the user can't be said to have determined the content of the scrambled video, therefore RecordTV is responsible. I find it hard to accept that the lack of responsibility for a technical glitch says anything about the normal operation of the system.

My third difficulty is one shared by the judge himself. The judgment finishes with a nice discussion of the problems associated with the law's current focus on the details of copying technology rather than the purposes. An RS-DVR does nothing more than a VCR and yet, because one operates remotely, it infringes while the other does not. If time-shifting is permissible, then it should be permissible however it is achieved. More distressing to me, however, is the need to replicate existing technologies. The argument in favour of RS-DVR is the analogy to the VCR, yet this requires the duplication of incidental faults of the VCR as well. RecordTV and the American Cablevision product both require that a recording be scheduled in advance (which is inconvenient) and that a separate recording be made for each user (which is inefficient). These characteristics are required because that is how a VCR works. But there is no a priori reason why a user's right to time-shift--in countries where such a right exists--should be contingent on advance planning or why a thousand people wanting to record a particular program could not be served by the same copy. It has been observed time and again that the law cannot keep pace with technology. Technology, however, is only about means. The law can beat technology by going straight to the ends.

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If information falls on the tenth page of Google results and nobody reads past page three, does it make a sound? Orin Kerr recently posted a suggestion for increasing your privacy online: change your name to one that already gets lots of results. Odds are good that you won't be the most famous George Washington who ever lived. Professor Kerr's suggestion is a joke, but it hints at the truth. Privacy is too much work.

This article began as a call to make a New Year's resolution to manage your privacy but as I researched, I found that almost every suggestion for privacy protection was impractical or unhelpfully vague. For just one example, the website for the Office of the Privacy Commissioner recommends that we read all of our email offline. I can't imagine that working. Is privacy worth all the effort?

It is surprisingly hard to pin down precisely why some of us are uncomfortable with companies knowing intimate details about our lives. We know that none of the companies that are collecting information about us are going to judge us in any way based on what they know. They really don't care except insofar as it allows them to provide better services or more targeted advertising. The only time the threat become credible is when information is provided to somebody who knows you. But I have never heard of an employer refusing to hire someone or a person being ridiculed based on information from a credit card company. Instead, what normally injures people is information they post online themselves or that their friends post about them.

There are two separate ecosystems of personal information. The first is the intimate usage data being automatically collected by just about every company you interact with online or off. This is the common subject of intellectual property blog posts, laws and privacy policies. It's the least likely to cause real harm to the average person and the hardest to guard against. The second is the content published by individuals and their friends. This includes blogs and social networks. When people talk about privacy, they tend to speak as if these two ecosystems are somehow related, but they aren't. They affect users in different ways and must be managed differently. The first, usage data and the market for personal information, is the proper domain of the law. I believe that for the majority of users, this type of privacy is simply not worth the effort. Rather, users should focus their energy on the more accessible problem of what they publish themselves.

In the New Year, then, don't stress about what Google knows about you (unless that's your job) and take a few minutes to look over the new privacy settings in Facebook.

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The Australian government by the Productivity Commission to repeal the Copyright Act's parallel import restrictions. Parallel import restrictions, which exist in most English-speaking countries including Canada, prevent the importation of copyrighted works without the consent of the local rightsholder. Australia's Copyright Act currently forbids parallel importation of books if an Australian publisher releases the book within 30 days of its first release elsewhere.

that the parallel import restrictions allowed Australian publishers to set prices much higher than the prices set in other markets: the average price of an Australian book was found to be 35% higher than the equivalent American edition. They concluded that permitting bookstores to stock copies of books imported from outside Australia would encourage lower prices.

The Australian government, however, did not agree with the Commission. The current regime allows exceptions for individuals buying books from overseas retailers. In other words, an Australian citizen can already order a book online at the US price and, with at least one popular store, free shipping. Further, they noted that electronic books are increasing in popularity and compete with locally printed books. With already available competition and the likelihood of that competition increasing, the government decided that whatever benefits may come from removing the restrictions would be outweighed by the effect on the Australian publishing industry. They also rejected suggestions that a price cap system (as is in place in Canada for some books) be introduced or that the length of the local monopoly be shortened.

I largely agree with the Australian government on this issue. In particular, it seems unwise to remove import restrictions while other countries maintain them. First, because it expands the markets of foreign publishers without expanding the market for Australian publishers. Second, because it would undermine the ability of authors to negotiate Australian rights: exclusive rights would become non-exclusive. Further, the actual price differences found in the report have been criticized for comparing Australian recommended retail prices to reduced prices at American online retailers---prices which are available to Australian customers as well. If the only goal of removing the restrictions is encouraging Australian publishers to monitor foreign prices more carefully, then competition from online retailers and e-books may be enough. It's far too early to tell.

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Last Friday, Google filed a revised for the class action law suit regarding its Google Book Search service. The settlement addresses many complaints directed at the in October 2008. The two most important of these are the handling of unclaimed and orphan works, and potential antitrust issues. This new agreement solves some of the most glaring problems with the original but leaves some cause for concern.

The Class

The original settlement would have applied to all owners of U.S. copyright interest in a book. This included non-U.S. citizens who had a book published in the United States, or who lived in countries that are members of the Berne Convention or countries that have other copyright relations with the United States. The revised settlement only includes the United States, Canada, Australia and the United Kingdom.

Paying the Rights Holders

The original settlement proposed a Book Rights Registry to track ownership of copyrighted materials, distribute payments to authors, and deal collectively with Google. 63% of revenue generated by Google (through uses such as advertising, database subscriptions, and e-book sales) would be given to the registry. Rights holders would have five years to collect their money before it could be used by the registry. The obvious problem is that this provided little incentive to actually search out the rights holders. The revised settlement addresses this with two changes. First, unclaimed funds can no longer be absorbed by the registry. Instead, after five years the money may be used to pay for efforts to locate rights holders and, after ten years, it can be donated to a court-approved charity or turned over to state governments where required. Second, it requires an independent court-appointed Unclaimed Works Fiduciary to represent the rights holders of orphan works and who must approve all uses of unclaimed money.

Competing with Google

Under both versions of the settlement, the Book Rights Registry is able to deal with other organizations on behalf of rights holders. However, the original settlement contained a clause (3.8) stating that the Registry "will extend economic and other terms to Google that, when taken as a whole, do not disfavor or disadvantage Google as compared to any other substantially similar authorizations granted to third parties by the Registry". In other words, no other organization could get better terms than Google. The new agreement removes this clause.

One possible source of future controversy is the powers of the fiduciary with respect to third-parties. The settlement grants the fiduciary the power to license uses of unclaimed works but also states that this power can be exercised "to the extent permitted by law". The Registry has the same powers and phrasing with respect to claimed works under the added restriction that they cannot go against the directions of a rights holder. But copyright law doesn't permit a person to license work they do not own. What does this mean for third parties? One is that the Registry would not be able to license to organizations other than Google without authorization from rights holders. The other organizations are not party to the contract and thus can't rely on its provisions with respect to them. On the other hand, the contract says the parties will create a registry that has the power to license works. The registry should therefore have the power to license works. The phrase may also anticipate future legislation governing the licensing of unclaimed and orphan works---a possibility that is addressed elsewhere in the settlement. Critics have argued that the solution proposed by this settlement will set back such legislation, but if the agreement does indeed give Google an advantage over its competition, it might lend the issue a sense of urgency that it had previously lacked. If the registry does have the power to deal with third parties, it will probably attract regulation.

Final Thoughts

Normally one doesn't think of a class action lawsuit as being a good thing for a company. Yet, it's only because of this suit that Google can reach an agreement with all rights holders at one time. Many have argued that it unfairly benefits Google, but Google took a big risk and is paying a large price for these benefits. Hopefully, they will extend to others but in any event, I believe we're better off with one giant digital library than none.

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Did you know that Facebook will 'memorialize' a person's profile after their death? Until recently, not many people did. The feature has existed for a few years now, but it received minimal media attention until a member of the Facebook team posted about it on the Facebook blog last week.

According to : "When a user passes away, we memorialize their account to protect their privacy. Memorializing an account removes certain sensitive information (e.g., status updates and contact information) and sets privacy so that only confirmed friends can see the profile or locate it in search. The Wall remains so that friends and family can leave posts in remembrance. Memorializing an account also prevents all login access to it." An account is memorialized at the request of a friend or family member and requires this person to fill out a form and supply evidence of the user's death. There is one obvious omission to this policy: they don't grant the option to delete the account. It was once the case that a memorialized account would be removed after 30 days, but requests in the wake of the shooting at Virginia Tech to keep the profiles indefinitely.

Memorialization was addressed in the on Facebook released by the Office of the Privacy Commissioner of Canada earlier this year. The complaint alleged that Facebook did not provide sufficient notice of this use of personal information, and that it was an unnecessary purpose for which consent was a condition of using the service. On the issue of notice, the Commissioner agreed with CIPPIC: Facebook's new Terms of Service and Privacy Policy provide no discussion of memorialization. On the second issue, the Commissioner decided that consent to memorialization could be implied because users could reasonably expect their personal information to be used in this way. This doesn't directly address the allegation, but I take it to mean that memorialization is just a corollary of the normal purpose of Facebook and as such doesn't count as an unnecessary purpose. Both CIPPIC and the Commissioner treat memorialization as a new purpose requiring notice and consent, but I have to side with Facebook. The deceased user's personal information is not being used for a different purpose when the profile is memorialized. All that happens is the profile created by the user continues to exist, the only difference is that Facebook increases the privacy settings.

I think that Facebook has taken the right approach. They need not, as CIPPIC suggested, give the user a chance to opt-out or the family the option to delete rather than memorialize. As Facebook wrote in their reply to the Privacy Commissioner, users have more reliable ways to make their wishes known. If they wish the profile to be removed, they may leave directions to that effect. Leaving the profile in place merely continues to give effect to the last instructions of the deceased. Further, the memorialization process has been at least once and certainly will again, so the consequences should be kept to a minimum. That said, a privacy setting allowing a user to specify whether they would like their memorial to remain indefinitely or be deleted (along with the rest of their personal information) might be useful---though I can understand why Facebook might not want to ask the question of its users.

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