OldFox.info is a personal Knowledge Management blog for comment, criticism, parody, research, reference, text-searchable, personal clipboard. Comments, suggestions, contributions are invited.
email: oldfox-at-gmail.com
All content is copyright protected and permitted under the Fair Use Doctrine.
Wednesday, April 26, 2006
Blog Law Squishy
Wednesday, April 26, 2006 ISSN 1535-1610 News
Copyrights Blog Law Squishy, But Copyright Law Clear, Panelists Say
SAN FRANCISCO--The worlds of blogging, journalism, and the law are colliding online and in the courts, with media and business advocates clearly disagreeing on free speech and trade secret theft.
The California Court of Appeals heard oral arguments April 20 on whether a trial court can order bloggers to reveal who leaked information to them about upcoming Apple Computer Inc. products. O'Grady v. Superior Court , Cal. Ct. App., No. H028579, oral arguments 4/20/06).
Kurt Opsahl, an attorney with the online civil rights group Electronic Frontier Foundation who argued on behalf of the individuals Apple sued last year, said bloggers enjoy the same First Amendment protections as journalists regardless of the medium or audience size.
"The size of the community has never been a basis for limiting the First Amendment rights, or the specialized nature of that community has been a basis for limiting those rights," Opsahl said. Consumers seek information vital for making choices, he said April 21 in a panel discussion at the Law Seminars International blog law conference.
Journalists all the time ask people for information that is unknown to the general public, said Terry Gross, an attorney with Gross & Belsky in San Francisco representing ThinkSecret.org which Apple sued for posting allegedly leaked information.
"The key really is, does the journalist do anything wrong in obtaining the information?" Gross said.
In another EFF case, the same California Court of Appeal that is hearing the Apple case held that the defendant, who posted DVD descrambling code on his Web site, was protected by the First Amendment. DVD Copy Control Association Inc. v. Bunner, Cal. Ct. App., No. H021153, 2/27/04. The court said that by the time the defendant posted the code, it was no longer a secret.
Marc Martin of Kirkpatrick & Lockhart Nicholson Graham, Washington, D.C., said the issue is whether information in the Apple case was rightfully obtained and whether the information is privileged.
While Section 230 of the Communications Decency Act grants broad immunity for service providers from liability for defamatory information, ISPs are not protected from intellectual property claims, according to Martin. Martin represents Apple in some issues but not in the case in the California appeals court.
At technology companies in general, Martin told BNA, all employees sign nondisclosure agreements, the firms operate secure facilities, have trade secret policies, and computers are behind firewalls, Martin said.
"If you're taking information that's proprietary from a company and one of your employees takes that treasured secret, walks out the door tucked in their sock, and runs over to the competitor, took it out of their sock, and gave it to them, that would be obvious. No one would contest that," Martin said.
"So what's the difference of that person instead of putting it in his sock and walking to the competitor, he instead went home, fires on line, and posted the content, and then all of a sudden it's available?" Martin said.
A California Superior Court, Santa Clara County, judge ruled in March 2005 that neither the First Amendment nor California's shield law for journalists bars discovery of the identities of persons who allegedly leaked Apple trade secrets to Apple-oriented bloggers. Apple Computer Inc. v. Doe, Cal. Super. Ct., No. 1-04-CV-032178, 3/11/05.
Blogger Protections
The California appeals court's decision is due within 90 days of oral argument. While not a federal case, the decision will be persuasive on judges in other states, Opsahl said.
"So long as the number of blog cases you can count on the fingers of two hands, I think this will be very important," said Bruce E.H. Johnson with Davis Wright Tremaine in Seattle.
The difference between a blogger and a journalist, said Johnson, is "a journalist has an editor."
Ensuring bloggers are included in state shield laws can be a fight, said Johnson. A failed Washington state shield law bill this past session was intended to be media neutral did not cover bloggers. "It's hard to create a privilege that applies to 13.4 million people," Johnson said.
The bill died in part because of opposition by business lobbyists and from the Society of Professional Journalists which wanted more extensive protection, Johnson said.
Copyrights and Blogging
A much clearer issue is who owns the copyright of material posted on a blog, said Raymond Nimmer, director of the Intellectual Property and Information Law Institute at the University of Houston Law Center.
"Copyright's automatic. Everything you're going to be dealing with, both stuff you write and gets written on your site and linked to, everything's copyrighted," Nimmer said at a session April 20. "Posting online is not waiver of copyright."
The professor gave the example of placing a book on the table and letting others look at it. "That doesn't give anybody the right to copy it. The simple fact of posting online isn't a waiver of copyright," Nimmer said.
Among the perils of employee blogging is ownership. When someone in-house is blogging, such as a law partner, Nimmer said an express contract is essential. "You really only get in trouble if you don't have a written contract," he said.
Putting aside the employment and work-for-hire issue, "if I write an entry on your site, either a comment or guest entry, I own the copyright to that unless I transfer. What you get is an implied license," Nimmer said.
Reproduction or redistribution, in whole or in part, and in any form, without express written permission, is prohibited except as permitted by the BNA Copyright Policy, http://www.bna.com/corp/index.html#V
You may not realise it, but you are almost certainly taking a punt on one of the key investment questions of 2006: is the explosion in commodity prices the start of a sustainable super-cycle or a bubble waiting to burst?
Even if you have not joined the rush to ride the oil, gold and base metals bandwagon, your pension fund most likely has. Unprecedented amounts of retirement savings are flowing into the sector as money managers seek better returns and a diversification away from equities.
The Sainsbury's pension fund has bet 5pc of its £3.2bn fund on a continuing rise in prices. Hermes, manager of the UK's largest pension, recently launched a commodities fund into which it has invested £1bn of the £34bn it manages.
It is easy to see why investors should be attracted to the sector. Gold has broken through $600 an ounce for the first time since 1980, more than twice its level five years ago. The oil price has risen six-fold since 1999. Copper has tripled in six years while the prices of other base metals like nickel and zinc continue to hit new records.
With movements like these, it is no surprise that speculative investors have spotted an opportunity. Investment bank Macquarie estimates that $80bn was invested in commodity index funds in 2005, up from $55bn in 2004 and less than $30bn in 2003. Forecasts point to an inflow of up to $150bn a year by the end of 2007.
But this is about much more than mere speculation. All investment booms require a plausible story and with commodities it is an unusual combination of rising demand and constrained supply. The "super-cyclists" believe this will underpin a multi-year upswing.
Others caution that things are never "different this time". They argue that rising interest rates around the world, a slowdown in US consumption and growth in production will soon prick the bubble.
First, the bull case, most of which can be summarised by one word - China. The Asian dynamo's remarkable expansion in recent years means it dominates the growth in global demand for raw materials.
China makes 90pc of the world's toys, 50pc of its cameras and 70pc of photocopiers. It is estimated that 80pc of Wal-Mart's 6,000 suppliers are in China. The country has 130 cities with a population of more than 1m. Around 300m Chinese will move into new houses by 2020, all of which will require new plumbing, electricity and appliances. The mind-boggling statistics go on and on.
China is at a resource-intensive stage of its economic development. Post-industrial countries like those in Europe and North America use less base metal and one day China and India will too. But that day is a long way off.
The second part of the bull case is the supply side of the equation. In the past, commodity prices have followed a well-worn trajectory. As economic growth boosts demand, metal prices rise and producers respond by investing in new supply. Thanks to long lead times, this usually comes on stream just as interest rates rise to choke off inflation. Subdued demand and over-supply combine to slash prices.
This time really does look different in some key respects. Over the past couple of years producers have shied away from new developments, despite the surge in demand. Mining companies are more focused on returns than they were and they have seen share buybacks and acquisitions as lower risk ways of cashing in on rising prices.
After years of under-investment there is now a serious shortage of qualified workers and equipment, with Caterpillar, for example, warning that mining kit is sold out through 2007. Such is the shortage of big tyres, that machinery is routinely sold without them. There has also been a massive fall in metal discoveries over the past 25 years and, while there has been an uptick in exploration recently, it looks too little too late.
One last reason for thinking that commodity prices have further to go is the fact that in inflation-adjusted terms, they are not expensive. According to UBS, despite doubling in two years, base metal prices have only just broken through a 30-year down trend. On average they are less than half their real price in 1974. This is where veterans of the dotcom bubble get nervous. When investors start to talk of new paradigms and things being "different this time", it is usually the time to be most cautious.
Capital Economics argues that there has been a good reason for the real price declines over the past 50 years. Despite global consumption of steel and copper, for example, rising seven-fold over the period and aluminium nearly 30-fold, producers have always satisfied massively greater demand. There's plenty of ore in the ground.
It also believes that a shift in China away from investment towards consumption of goods and services will make its economy less commodity-intensive. This will compound an expected slow-down in the US economy and lower global growth next year, all of which should reduce the upward pressure on prices.
Finally, it says speculative demand, which has fuelled much of the recent boom could easily swing into reverse if prices start to fall.
In the short-run, prices do look frothy. But however plausible the bearish argument, the force is with commodities. Market trends continue long after prices have left fair value behind. So, super-cycle or bubble, don't count on this boom ending soon.
