Welcome to "On the 50 Yard Line" The Blog of Stuart L. Pardau, Attorney, Professor and Observer of Political Economy; It’s not just about football.

Friday, September 30, 2011

The RightHaven Saga: It keeps Getting Worse

The RightHaven saga (the so-called "copyright trolls" based in Nevada) continues to get a worse. Now a federal judge in Colorado has ruled against them, indicating that they have no standing to bring a copyright infringement suit.


The History of Violence in The World

This is an absolute must read of Harvard Professor, Steve Pinker's work in this area. The history of world violence and mayhem does not trend, according to Pinker, as many of us (including me) would think.  Over tim, the world may be getting more peaceful and civil, not less. And Pinker has what he believes is empirical data to back it up.


The Tale of the Lawyer Sperm Donor

A big part of me hopes this is a joke or at least a wild exaggeration. I have a sinking feeling it is not.  Imagine that. 70 hyper-competitive, OCD, argumentative little creatures, presumably with above average intelligence. Hopefully most of that cocktail of skills won't go to waste and many will do something useful like become scientists, inventors and teachers.


Amazon's Growing Ubiquity in the Cloud Raises Privacy Concerns

Interesting piece in today's WSJ. In particular, issues around tracking web page views for those in the Amazon cloud. I have not yet parsed the Amazon privacy policy, but caveat emptor.


The Golden Parachute is Alive and Well

Despite Dodd-Frank "say on pay" provisions, where shareholders have a right to vote on executive compensation (including these golden parachutes), ISS reports that only a small percentage of firms have had these shareholder votes (which are non-binding in any case). Recent examples of very, ahem, generous severance packages include $17 million+ for Robert Kelly formerly of Mellon New York Bank and $10 million for Carol Bartz, formerly of Yahoo! who was unceremoniously (and rather classlessly) given the boot -- a Yahoo! Board member delivered the news over the phone.


Wednesday, September 28, 2011

Health Care Costs Continue to Rise

The link below comes from a distinct point of view to be sure, but it is empirically the case that health care costs continue to rise to unsustainable levels.   We are in need of more market-oriented solutions. Health care savings accounts, for example -- which better align medical-related expenses with those that actually pay for them -- or deregulation of health insurance for sale across state lines are two immediate ones that come to mind. Greater emphasis on prevention, healthy living, and nutrition are also needed.


OnStar Reverses Decision on Tracking Movement Even After Service is Cancelled

I blogged about the incredibly ill-advised OnStar revisions to their privacy policy which enabled tracking of movements even AFTER onStar service had been cancelled. This policy has been wisely revoked.


Steep Decline in Law School Class Entering Class of 2011

The numbers are in: Law School applicants for the entering class of 2011 are down 10% from last year, the steepest decline in 10 years. Poor job prospects and a lot of bad publicity around allegedly misleading employment data statistics from certain law schools (separate lawsuits have been filed against Thomas Jefferson Law School in San Diego and the Cooley law school in Michigan) has had a chilling effect on potential applicants.


Tuesday, September 27, 2011

Reader Privacy Act of 2011 (SB 602) -- The Development of Digital Rights in California

 SB 602, the Reader Privacy Act of 2011 that is now pending in California's legislature. The Reader Privacy Act would bring privacy rights to digital books, electronic reading records, and including the records of commercial book service providers.
As Californians increasingly rely on digital services to browse, read, and buy books, it is essential that state law keep pace to safeguard readers. The market for digital books now represents a nearly $70 million dollar market and sales in the past year have increased more than 115% . The book records of public libraries are protected under California law, but the records of private libraries and booksellers are not. The explosion of digital books makes this problem even more acute, since digital book services can collect extraordinarily detailed information: which books are browsed, how long each page is viewed, and digital notes made in the margins. A link to the text of SB 602 is contained within the link below.


Solyndra Update

While there is a lot of Monday morning quarterbacking that always goes on following one of this major screw-ups (scandals), Solyndra does serves as Exhibit A for why government acting as "venture capitalist" is an extraordinarily bad idea.


India Legal Market -- Cracks Opening to International Competition

The U.S. and U.K. global law firms would be the biggest beneficiaries of any deregulation of the Indian legal market, which is potentially huge and presumably in need of sophisticated legal services).  Up to now, has been insulated from foreign competition.


Monday, September 26, 2011

Sarah Palin Threatens to Sue Rogue Book Publisher

Sarah Palin’s attorney  has written a letter to the publisher of the Crown Publishing Group, a division of Random House, that Palin may sue her, the company, and the book’s author Joe McGinniss “for knowingly publishing false statements” in his book released last week, “The Rogue". 


And here is a link to the letter from the Palin attorney:


Symposium on the Deregulation of the Legal Market

Absolutely fascinating reading from Larry Ribstein's "Unlocking the Law: Deregulating the Legal Profession" online symposium from his Truth on the Market blog. An excerpt:
"Licensing and regulation of lawyers, long questioned by scholars, is emerging as an important public issue.  Legal costs are rising for individuals and firms with increases in litigation and regulation.  These costs tax business growth and entrepreneurship and impede ordinary Americans’ access to the civil justice system.  Meanwhile, the development of new business structures and technologies and significant regulatory moves toward opening up competition for legal services in the UK and elsewhere are forcing policymakers to address lawyer licensing and regulation."   


Sunday, September 25, 2011

Expenses up at Big Law; Ahead of Revenue Gains

The balance of this year could prove to be rough going for Big Law. According to a CITI study/analyses cited in the article:

"Building on the positive signs we started to see during the first quarter of 2011, demand and rates were even stronger at the midyear point, while revenue (cash collections) held steady throughout the first six months."
"[B]ut we have seen expenses grow so quickly that they are now increasing at a faster rate than revenue, putting a squeeze on profit margins...[w]hile it’s hard to forecast what the impact of today's conditions will be on law firms, we believe it could disrupt law firm work pipelines and deal flow, at least in the short term."


Sayonara: McDonalds Closed Down 200 locations -- In Japan!

It looks like the power outages caused by the catastrophic tsunami had some impact on these decisions. Interestingly, however, net income for McDonald's in Japan was substantially up during that same period. I guess it's that whole, improving efficiency profit maximization thing.


The Best States in the Union to do Business -- From Top to Bottom

A very interesting set of metrics for ranking the top states in the Union for doing business. In this year's ranking, Virginia eclipsed Texas as the best state for businesses.  California which ranked 32nd overall, ranked dead last (50th) in the category of "business friendliness". Given some the wackiness coming out of Sacramento, local cities and counties, this was, unfortunately, not a surprise. What was a surprise -- well, more of an encouragement, really -- is that that California ranked #1 in two separate categories- 1) innovation; and 2) access to capital. California also ranked 7th in quality of infrastructure. All of this is an important reminder, that despite all the doom and gloom, California still has a lot going for it. The story of this incredible state is still not over.


Friday, September 23, 2011

Reporter sued for allegedly stealing trade secrets and copyrighted works of NFL Scouting Reports

National Football Scouting Inc., which researches colleges football players for many NFL teams, sued sports reporter Rob Rang on Wednesday in Washington federal court alleging he published proprietary, copyrighted information from scouting reports.


Governor Brown signs Amazon "delay bill"

It is generally not a good idea to raise taxes in the middle of a recession, but cash-starved Sacramento did just that when it took steps to start taxing e-commerce sites like Amazon, which have a decided advantage over traditional brick and mortar businesses to the extent they have no real physical presence in the state; if no physical presence exists, then there are no sales taxes. Upon hearing the news that new taxes would be imposed, Amazon promptly withdrew their relationship with all their "affiliate" sites in the state, resulting in a loss of further income -- and jobs -- in California. The upshot is that everyone gets a one-year reprieve in a sort of standstill arrangement. Punting of this nature seems the norm for most important political and economic decisions these days. Why take a tough decision now, when you can kick the proverbial can down the road?


Unemployment rates in CA increases

Unfortunately, more discouraging news on the economic front in California.  Per EDD government statistics, unemployment rates in CA have increased from the previous month. That said, and as I indicated in previous posts,  I think a better and more accurate measure of private sector employment statistics, is probably via the payroll company, ADP since ADP has "real-time" employment information and a large enough sample pool to be statistically meaningful.


Thursday, September 22, 2011

The Fed's QE3 and "Pushing on a String"

Further to the points I have made in previous posts (including from yesterday), the Fed's low-interest policy appears to be ineffective.  Daniel Mitchell makes these and related points in the interesting posting below.


Barnes and Noble objects to Privacy Standards Set Forth by BK Court

Barnes & Noble ("B&N") is looking to purchase certain customer data from the Borders liquidation. Since this data is a valuable asset, the Bankruptcy court not only had to establish a monetary value around this asset but restrictions and parameters on how the data may be used by B&N. An expert was hired by the BK court hired to identify those restrictions.  B&N apparently is not pleased with what was recommended.


Wednesday, September 21, 2011

OnStar Continues to track personal data on driving patterns even AFTER service is terminateds

The need for data and consumer behavior grows exponentially as do the various methods by which such data may be collected. So it is not at all surprising that Onstar, a major GM supplier, would modify its privacy policy to enable greater sharing of largely aggregate driving pattern data to third parties such as insurance carriers, law enforcement and others who find this information particularly valuable. What is surprising, however, is that onStar would, per their revised privacy policy, still allow for such sharing even after the Onstar service has been terminated.  This seems over-reaching and though I haven't thought of an appropriate legal theory or theories, seems challengeable in the courts.


Courtney Love Faces Suit for Defamatory "Tweet"

We will no doubt see more of these types of cases involving defamatory statements made via social media.


The Fed's Next Move

There are really not many tricks left in the Fed's bag. Interest rates cannot go much lower. This environment is similar to Japan's situation beginning in the early/mid 90's more or less until today. Does this mean we have another 15+ years of this? Certainly the U.S. is not Japan but it does seem to me that interest rate manipulations have largely proven ineffective. There is no substitute for a broader macroeconomic strategy from the Congress and the President to spur economic growth and to restore a broader confidence.


Monday, September 19, 2011

RightHaven Saga Continues

The notorious "copyright trolls", Nevada-based, Righthaven now got hit with an order to execute/seize their assets (bank accounts, personal assets, etc.) in connection with a judgment to pay attorneys fees in an underlying copyright infringement claim in which Righthaven was found to have lacked standing. (Ninth Circuit law holds there is a prohibition against  a "naked assignment of a right to to sue under copyright" ; but that is precisely what Righthaven did and deceived the Court as well with false statements.)


The Two-Tiered Economy

Interesting posting on how toy companies are now ostensibly segmenting the market in two categories - high end and low end, reducing on the "middle". The author makes the case that this reflects the growing squeeze-out of the middle class.


Sunday, September 18, 2011

Reduce Size of EuroZone, Expert Says

Mohamed El-Erian, CEO of PIMCO, the largest bond fund in the world, makes the case that to "save" the Euro, the Euro-zone must "shed" (or as El-Erian puts it, "be placed on sabbatical") some of the poorer performers like a Greece or a Portugal, so the region (and its currency) can recover its footing and lay the basis for a turn-around. It sounds analogous to a large conglomerate spinning off or selling non-performing business units. The difference here, of course, is who is the buyer?

Prior to the commencement of the war in Iraq, then Secretary of State Colin Powell purportedly told the President Bush that once the conflict were to begin, the "Pottery Barn" rule would kick in: Namely, that once "you break it, you own it." It seems to me that while El-Erian's suggestion is an interesting and even plausible one, the bigger Euro centers (Berlin, Paris, etc.) are in far too deep to countenance a sabbatical. It is axiomatic to state that the Euro system is severely damaged, if not broken. And it is too late to say that Berlin and Paris don't own it.


Saturday, September 17, 2011

What "Lucky" People Do Differently

Sony v. Tenenbaum: First Circuit Rejects District Court's substantive due process rationale for reducing statutory damages award

The First Circuit vacated the District Court's due process damages ruling and reversed the reduction of the jury's statutory damages award. The jury's award of damages was reinstated and the Court remanded for consideration of plaintiff's motion for common law remittitur based on excessiveness.

Notably, the First Circuit rejected of the following arguments by Tenenbaum: 1) that the Copyright Act is unconstitutional under Feltner, 523 U.S. 340; 2)  that the Act exempts  "consumer copying" (which was the P2P subject-matter of this case) infringement from liability and damages; and 3), that statutory damages under the Act are unavailable without a showing of actual harm. The First Circuit made the point -- correctly, in my view -- that the due process arguments raised by Tenenbaum (and channeled in the District Court opinion) were inapposite given that the Act clearly specifies the range of damages; hence, the notion that there are due process or notice issues are entirely misplaced.

The application of the Gore punitive damages standard to statutory damages awards was rejected outright. The Court pointed out there was no support for such a proposition, except in limited dicta cited in two cases. 

The First Circuit also relied on the general principles of Article III Constitutional avoidance and concepts of judicial restraint in support of its overturning the District Court opinion. 

Finally, while I believe the First Circuit reached the correct legal ruling, by virtue of kicking it back for remittitur, in effect the court is "punting" on the practical issue of  the damage award itself. Sony and the other plaintiffs have previously indicated they will reject the remittitur process. Which means that there will be yet another trial.  Capitol v. Thomas, a similar statutory damages P2P copyright infringement case, went through a similar fact pattern with three trials, where remittitur was rejected each time by the record companies.

Friday, September 16, 2011

Thursday, September 15, 2011

Still No Deal on Settlement re Google Digitization of Books

These discussions have been going on for several years, still with no deal.

Wednesday, September 14, 2011

Tuesday, September 13, 2011

A Dear John Letter to California

Monday, September 12, 2011

Online Tracking Practices Face Increased Scrutiny

As has been previously reported on this blog, online tracking practices face increased scrutiny. Here is a link to an excellent Hunton posting which summarizes some recent developments.


Sunday, September 11, 2011

Copyright Protection Found in Telephone Recording

Stewart Baker at the Volokh Conspiracy has an interesting posting on a recent ruling by a Federal Judge in New York on the copyrightability of a phone recording.  Swatch watches had an analyst call wherein Swatch had recorded the call and apparently provided a clear notice to that effect and instructing no one else to do so. Nevertheless, a Bloomberg reporter went ahead and recorded the call and then tried to disseminate its contents. As Baker points out, one would have thought this would give rise to a privacy/cyber breach claim. Instead, Swatch, sued for copyright infringement. Bloomberg filed a motion to dismiss which the Court denied (a link to the Judge's order is imbedded within the attached link below). Some strange and undesirable outcomes could arise out of this ruling: Imagine, as Baker states, a politician on a campaign trail who records all of his/her events and then takes the position that all the content therein is subject to copyright protection. Hopefully, this is where fair use would clearly prevail, but why even have to go there in the first place?


The Start of Another NFL Season -- I M Hipp, But Get out the Ben Gay, Happy Feller

While the first game of the 2011 NFL Season started with the Packers-Saints weekday game, this Sunday the 11th is really the official "kick-off". While I take my football seriously, a review of some of the more unusual names in recent NFL history may help put things in perspective:

1. Ben Gay – former Cleveland Browns running back who seems to have dealt with a lot of drug and other problems.  Unclear whether the strange name had anything to do with it; unlikely that it helped.

2. Fair Hooker – wide receiver also formerly of the Cleveland Browns. With a name like that he should have been on the other end of a vice squad.

3. Dick Shiner – For this former Pittsburgh Steeler quarterback, based on name alone and under different circumstances, I would imagine that he could have been a client of Hooker.  It takes a special cruelty for parents with the Shiner surname to name their son “Dick”.

4. Vivian Lee – Yes, this Oscar-winning actress of such epics as Gone with the Wind and Street Car Named Desire was also an African-American male who played cornerback for the New Orleans Saints in the 1970s. Who would have guessed?

5. Dick Butkus – This legendary middle linebacker of the Chicago Bears not only had a great name, he backed it up with great skill.  He is not a guy you messed with.  Heaven forbid, if I were ever in prison, I would not want to be on his bad side.

6. Harry Colon – An evocative name for sure, this former journeyman defensive back with the Patriots, Lions and Jaguars would make most doctors get out their copy of the Physicians Desk Reference (PDR) to figure out what in hell was going on.

7. Happy Feller – This place-keeper must have been a jovial guy to be around.

8. CJ Ah You – The name of this former St. Louis Ram sounds more like a fan taunt against the opposing team at a rowdy High School basketball game.

9. I.M. Hipp – This former Nebraska Cornhusker star never did make much of himself in the NFL, but he definitely had one of the coolest, albeit immodest, names of all time.

10. B.J. Askew – I won’t go there.

A Beautiful Book

James Grant had an excellent book review write-up in the Saturday WSJ on Sylvia Nasar's new book, Grand Pursuit, about the development of modern political economy through the biographical lenses of some of the leading figures of the past 100+ years, including the likes of Karl Marx, Hayek, Keynes, Joan Robinson and Milton Friedman. Nasar, you may recall, is the author of A Beautiful Mind.


Friday, September 9, 2011

Not So Golden Years

At a time of life when most retirees (and those nearing retirement) should be enjoying and/or looking forward to their golden years, a growing number of age 55+ Americans are not only not saving as they should, they are going further in debt. Much of this can be attributable to the culture of instant gratification and financial excesses so ubiquitous in recent recent history. But it is also true that we are living longer and therefore not surprisingly will be working longer. That is not necessarily a bad thing. When social security was passed the average life expectancy was 61.7 years. Today it is almost 78 years old. Now how exactly is it that the retirement age remained fixed for so long at age 65?


Tuesday, September 6, 2011

Patent Reforms are Coming

As I stated in previous posts, the U.S. patent regime will move to a "first to file"system as a opposed to a "first to invent". This link from the EFF provides a more detailed critique.

Groupon enters the...education market

On its face, there should be nothing different about this offering from Groupon's offerings for a restaurant or a hotel. But somehow this does seem a little weird and cheesy. Probably not the way an education institution would want to maintain or a grow a brand.


Is California Crumbling?

With the recent unemployment figures showing California behind only Nevada in jobless rates, the excellent observer of all things California-related, Joel Kotkin, presents a bleak and dark picture for the Golden State. It is hard to disagree with many of his criticisms (namely, how the primary constituencies that control the state seem and actually probably are disconnected with business realities), I do believe many of the state's comparative advantages remain and continue to make California, much like America, a compelling story whose best days still lie ahead. These advantages include: a) world-class research institutions (Stanford, Berkeley, CalTech, UCLA); b) the world's technology sector is still squarely centered in Silicon Valley; c) the State's rich ethnic backgrounds, with deep roots and connections with the world's leading economies like Japan, China, Mexico, the Republic of Korea, India, Brazil, Russia, Israel, among many others, which only enhance trade and commerce, create jobs, and grow wealth; and d) some of the major corporations in the world like Disney and Apple, yes, but a whole slew of small and mid-cap companies few have ever heard of, but someday, at least for some, will become household names.

California, and by extension, the U.S., is in a funk and has been since at least 2008, following the financial crisis. This funk will likely continue and probably will get worse before it gets better. But it will get better. A lot better. We are an innovative and risk-taking people and so long as that remains, we will be just fine. If we also simplify our tax code, reduce regulations, and do a better job of educating and training our people, we will be all the better.


Saturday, September 3, 2011

Rights of Songs of Certain Major Musical Artists will revert back to them

Under a little known termination/reversion provision of the 1976 Copyright Act, recording company's copyrights can revert back to the original artists beginning in 2013. The artists potentially impacted include Bruce Springsteen, the Eagles and Billy Joel. In 1976, U.S. copyright law was amended to give artists the right to regain the rights to their work after 35 years. The first batch of albums, those created on or after January 1st, 1978, become eligible for so-called "termination rights" from the record companies in 2013. Don Henley says the Eagles have not yet filed termination paperwork but are considering their options. 


Bob Lutz rejoining GM as a consultant

Bob Lutz is one of the iconic, "larger than life" executives in the automotive industry. After joining GM in 2001, he helped revitalize their line-up, helping push the Buick LaCrosse, Chevrolet Equinox and the relaunch of the Camaro.  (Among the ones he had his hands in were some real dogs as well,  like the Pontiac Solstice, but even there the Solstice was a stylish looking sports-car at an attractive price point; like a lot of GM, the problems rested elsewhere, such is in quality and in the broader issues with the Pontiac brand itself.)

In any case, the 79-year old is a font of ideas and energy, and GM is smart to bring him back in some capacity.

Lawsuit Against Cisco Systems for Allegedly Aiding Chinese Government in Monitoring and Apprehending Falun Gong Members

The link below is the Complaint in the case obtained from the EFF website which also has a good write-up and background. (Causes of action include Alien Tort Statute and Tort Victim Protection Act.)


Friday, September 2, 2011

Can a Judge "Friend" on Facebook an Attorney Who Regularly Appears before them?

No Jobs Created in August According to Government Stats (But the True Picture May Not Be As Bad)

According to government statistics, private sector jobs grew by only 17,000 the past month (which is very anemic), and creating a net zero number since there was that same number of reduction of the growth of government jobs. As of right now at least, the market seems to be reacting negatively. (The Dow is down by about 2% last time I checked.)


Each month I am amazed by the obsessive focus on government statistics since the payroll company, ADP, produces numbers of its own which always has intuitively struck me as far more reliable. Why? Because ADP processes payroll for something like 20% of the entire U.S. private sector. When new employees are brought on board a company, they are of course immediately added to payroll and that is reported to ADP. So undoubtedly ADP has excellent data, I would suspect the best data, by far, that is out there. What do their numbers show? Close to 100,000 private sector new jobs for the past month. Still not great but a heck of a lot better than the 17,000 number reported by the government.


Federal, State, and Local Government Spending Levels Now Reaches Highest Levels in History

According to this study by George Mason University, Federal, State and local government spending in the U.S. now approximates 35% of GDP. This is the same level as the peak of government spending in circa 1944 as the U.S. was in a World War leading the charge rolling back Nazism in Europe and North Africa and against Japanese Imperialism in the Pacific. We were also coming out of the throes of the Great Depression.

What is different today? Well, it is true we are still fighting at least two wars (Iraq and Afghanistan) and yes we are repeatedly hear how this post-2008 Financial meltdown economic environment is the "worst since the Great Depression". All correct, but still it seems a stretch to argue we are anywhere near the level of  crisis points (internationally or domestically) that would justify or explain the massive spikes in government spending. Stated another way, what are we, as American citizens and residents,  actually getting for all this government spending? In the 1940s, while it came at a great cost, we defeated two of the greatest insidious political movements of the modern era (Nazism and Imperial Japan). We also got institutions like Social Security and the SEC, though both as currently constructed today are flawed and in need of reform,  are as necessary and proper today as they were in the 1930s and 40's. What are we getting today for this spending? Dodd-Frank? The growth of government employees, protected by employee Unions, which FDR himself said (when talking about unionization of government employees) was wrong and set with pitfalls.


Thursday, September 1, 2011

Beijing Court Convicts 21 Defendants for Privacy Violations

Based on this excellent summary in the Hunton privacy blog, it looks like the breaches these defendants committed were truly of a criminal nature. It will be interesting to see if this conviction represents a more aggressive attempt to go after bad actors or may be used as some kind of precedent to go after legitimate data collection efforts by legitimate marketers and market research firms operating in China.


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