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A couple of recent court decisions create some hope that the ordinary understanding of terms like “copy” and “own” may have some life in them, in spite of the best efforts of the intellectual property industry to twist these words’ meanings out of shape to the disadvantage of consumers. These examples pick up the story line of Chapter 6 of Blown to Bits.

You can TiVo a television program and watch it later. You can record it on a VCR and watch it yourself as many times as you want. You can’t legally sell it or make multiple copies, but as long as the copy is for your own use, you have no legal issue.

Cablevision offered a videorecording service where the bits would be held on your behalf at Cablevision, not on your home machine. The bits would be physically in “the cloud,” as the saying goes, but functionally Cablevision’s service would walk and quack like a home VCR. Legal or not?

The entertainment industry thought not, and sued Cablevision for copyright infringement. A lower court held Cablevision liable, but an appeals court agreed with Cablevision that it didn’t matter where the bits happened to be held, only who could do what with them. Entirely sensible, it seems to me. See the Reuters story that came out today.

The other story was in May. A Mr. Vernon bought stuff at garage sales and resold it on eBay. Among the stuff he sold were copies of AutoCAD, a computer-aided design software package used by architectural design firms. These copies of AutoCAD were used, but were in their original packaging, and included the original disks. Autodesk, the company that produces AutoCAD, cried foul — that was copyright infringement. The folks who originally acquired those copies of AutoCAD didn’t actually buy them. If they had bought them, then Vernon’s resale would be just like reselling a used book. Bun in fact all they had done was to acquire a right to use AutoCAD. The license agreement clearly stated that it was nontransferable. No one else could “buy” the used software package because it had never been “sold” in the first place.

A U.S. District Court in Washington State, in its opinion, notes that Autodesk actually referred to users “purchasing” the software, and charged a one-time fee with no continuing charges. The transaction looks and quacks like a purchase; Autodesk can’t turn it into a licensing agreement simply by stating that that’s what it is. Mr. Vernon can go back to selling the used software on eBay without Autodesk hassling him with DMCA takedown notices.

Will this decision have any impact on things like the Yahoo Music “Store,” which actually only issues revocable music licenses, as Hal has been blogging? Probably not — in that case there is nothing that looks like a used book that the consumer could wave at the judge. But these are both welcome decisions. Maybe some judges are starting to understand how this stuff works.

We have a short piece on the Business Week web site today about things to consider before storing corporate data in “the cloud,” that is, using a service such as Google or Amazon to hold your files for you. The piece got edited in a way that is a bit disappointing, since it left out one of the crucial points we wanted to make:

Who would fight a subpoena? With your data in the cloud, the cloud’s lawyers, not yours, will decide whether to resist a court order to turn over your data.

It actually seems that they ran the version they gave us for review, without incorporating any of the suggestions we made in response — for example, we pointed out that the sentences identifying the authors are ungrammatical.

One of the points of contention in a variety of ongoing controversies about regulation of Internet Service Providers is whether they would ever abuse the power they hold over who sees what. In Blown to Bits we talk about the case of Verizon denying text messaging service to Naral, a pro-choice group, because it considered Naral’s agenda “controversial.”

Today we have a silly example, but one that drives home the point that ISPs have arbitrary and unlimited authority, and where there is little or no competition in broadband services, they have the power to control what the public knows. Verizon told one Dr. Libshitz, a retired radiologist of unquestioned reputation, that he could not have DSL service because he wanted to use an identifier — his name — that contained a word on Verizon’s no-no list. A helpful employee suggested to Dr. Libshitz that he change the spelling of his name to accommodate Verizon’s decency standards. After several more telephone calls, Dr. Libshitz got his DSL connection — but only after Verizon tracked down the guy in India who could override the automated name filters.

One of the basic bottom lines of Chapter 2 of Blown to Bits is that the Orwellian nightmare of constant government surveillance through advanced technology hasn’t worked out quite that way. The government is doing it, to be sure. But so are teenagers with their GPS systems and cameras in their cell phones. So are corporations, who can boost their profit margins at tad by keeping track of the digital fingerprints we leave everywhere without thinking about it. And so are jealous husbands and suspicious mothers, who install spyware on the computers that their family members are using.

The spyware business is going mainstream now, supported by the social movement toward flexible work hours, work-at-home arrangements, and the dispersal to domestic settings of jobs like answering 800 numbers. Those social trends are a boon to parents who need to work from home, and will doubtless become even more popular now that moving the employee to the office in a gas-guzzling automobile has become even more expensive, by comparison with moving the bits representing the workload to the worker’s home. Socially useful as work-at-home may be, it has always been tainted with an odor of unprofessionalism. How is anyone to know if the worker is really working?

Last Wednesday, July 30, Sue Schellenbarger of the the Wall Street Journal reported on the trend to install software on those workers’ computers which takes screen snapshots every ten minutes or so, and logs every keystroke and web site visited. Some even take periodic webcam photos and screen outsourced call centers using voice recognition, waiting for hot-button words or just tonal indications that the call-center employee is getting angry. (Sorry, no link; it’s the WSJ. I wonder if Mr. Murdoch will change that.) Mentioned in the story are oDesk.com¬†and Working Solutions. Some expect employees to time their bathroom breaks so the clock is not running while they pee.

If you’ve never seen Chaplin’s¬†Modern Times, you should. It’s hard not to think that there will eventually be some workplace standards for stay-at-home bits workers in the way there are for assembly line workers — developed either through legislation, collective organization, or competitive pressure, as certain businesses succeed by having happier and less stressed employees.

The Higher Education Act is now at the President’s desk and is certain to be signed. The full text can be viewed here. Like most such laws that update ones previously passed, it is almost unreadable, because it is really an edit log: “change this word to that, add this sentence at the end of that paragraph,” etc.

It includes many disclosure and reporting requirements (colleges will have to include textbook costs in their online catalogs, for example). While I am all in favor of more transparency, my guess is that this will mostly result in colleges adding more clerks to satisfy the requirements, or, for colleges unable to afford more hires, conversion of educational and student-service positions into bean-counting and bean-reporting positions.

A lot of recent interest in the bill has come because of the entertainment industry’s efforts to pressure Congress into making colleges copyright enforcers on its behalf. Colleges are in a unique position — their residential students have no choice of Internet Service Providers. All the bits that students get go through the college’s connections to the Internet. Monitor and choke off illegal activity there, and students have nowhere else to get their bits.

The problem, as I noted in the Commencement issue of the Harvard Crimson, is that colleges should be the last place where communications are monitored for anything without probable cause. Students who have come to college to have new worlds opened up to them, to explore ideas and works that would have caused them shame and shunning at home, should not have every bit they are reading screened for appropriateness. That’s what we expect of Chinese universities, not American universities. If the entertainment industry (which pays a lot of the bills for many congressional campaigns) can get filtering installed on college’s networks, they will likely use that as a precedent to pressure Congress to act against other ISPs. And if the government can compel colleges to exclude this particular kind of material, it can compel colleges to keep out other kinds of bits it deems bad for the young to be consuming.

The compromise version of the Act that is at the President’s desk doesn’t mandate that colleges filter all incoming bits, only to disclose what weapons they are using to help the entertainment industry’s anti-“theft” crusade. But Congress hands the entertainment industry a different huge gift. It mandates that colleges develop plans to buy music subscription services. Here is the relevant language:

`SEC. 494. CAMPUS-BASED DIGITAL THEFT PREVENTION.

• `(a) In General- Each eligible institution participating in any program under this title shall to the extent practicable–
  `(1) make publicly available to their students and employees, the policies and procedures related to the illegal downloading and distribution of copyrighted materials required to be disclosed under section 485(a)(1)(P); and

  `(2) develop a plan for offering alternatives to illegal downloading or peer-to-peer distribution of intellectual property as well as a plan to explore technology-based deterrents to prevent such illegal activity.

Is there another area of private industry from which Congress mandates that colleges plan to buy subscription services? This section goes on to promise grants to colleges who fight the good fight against piracy. The recording and movie studios are rubbing their hands and setting up their money-changing tables right now, waiting for the colleges to line up to negotiate with them as federal law will soon demand.

Here’s a suggestion. Let’s instead pass a law requiring colleges to inspect laptops at the border of their property, the way DHS inspects laptops at the U.S. border, without probable cause. Students arriving as freshmen will have their laptops searched as they are unloaded from their parents’ cars. Same after they come back from winter break, etc. Ipods too, of course.

The reason this won’t happen is that students and their families wouldn’t stand for it. There would be face to face confrontations of a kind not seen since the draft protests of my youth.

The problem with network monitoring, and what makes it a more plausible and acceptable alternative, is that no one would see it happening. We all tend to accept intrusions that are logically equivalent to physical searches, even if we know they are happening, if we don’t see them happening.

The entertainment industry is winning in its efforts to force public and other private institutions keep its anachronistic business models alive for a few years longer. As much money as they claim to be losing, they have plenty to lobby Congress to do their bidding.

I wrote last week about Yahoo’s shutdown of its Music Store Server, thereby stranding customers who had bought music controlled by the Music Store’s digital rights management. This week, Yahoo announced that it will compensate stranded customers with coupons for replacing music tacks from Real Network’s Rhapsody, whose music is free of DRM copying restrictions.

It’s good to see Yahoo showing concern for its customers, and even better to see them offering higher-value, i.e. non-DRM, replacements. As recently as February 2007, Warner Music’s CEO was deriding the idea of non-DRM music as “completely without logic or merit.” Now DRM-free is becoming the norm for on-line music, with the growing realization that DRM is bad deal for music, not only for customers but for publishers, and also, as explained in Blown to Bits, for innovation. I expect that we’ll see the same shift in attitudes toward DRM-free video within a couple of years.

Yahoo was wise to quickly make amends to its customers, because there’s a lot more at stake for the IT industry than lost music tracks. The basic phenomenon of Yahoo’s (and earlier, Microsoft’s) announcement about shutting down DRM servers was that of leading high-tech companies offering a product that entailed a long-term commitment to maintaining a customer service, and then abandoning that commitment when the economics went sour.

What does that mean for the industry’s growing emphasis on cloud computing? After all, if you can’t count on Yahoo to keep your music available for five years, how can you count on Microsoft, Google, IBM, and others to keep your company email and documents available for … do you need to have confidence for 10 years? 20? 50? I’d be viewing these server shutdowns nervously if I were a corporate CIO faced with the option of moving to cloud computing. And I’d be thinking hard about them if I were high-tech exec eager to get into the cloud business. After all, maintaining “long term” DRM servers seemed like a great business opportunity in 2004.

The Department of Homeland Security may take your laptop at the U.S. border and remove it to an off-site location for as long as it wants. Doesn’t matter if you are a U.S. citizen. There it may examine its contents and have any text it contains translated.

WITHOUT HAVING ANY REASON TO THINK YOU HAVE DONE ANYTHING WRONG.

I love Michael Chertoff’s explanation of why border guards won’t bother with the niceties of probable cause provided for in the Fourth Amendment: “As a practical matter, travelers only go to secondary [for a more thorough examination] when there is some level of suspicion. Yet legislation locking in a particular standard for searches would have a dangerous, chilling effect as officers’ often split-second assessments are second-guessed.”

He’s right, of course. The Bill of Rights has a chilling effect on the government. That’s what it’s there for!