Earlier this month, the U.S. Senate Judiciary Committee unanimously approved S. 978, a bill that would expand the scope of felony criminal copyright infringement under federal law. While the legislation enjoys broad congressional support, a number of bloggers have slammed the bill on the grounds that it would allegedly impose criminal liability on lots of innocent U.S. Internet users.

In this essay, I’ll answer a few “Frequently Asked Questions” about the legislation — and explain why you should care.

Here are some links to get you up to speed:

• Text of S. 978 as reported by the Senate Judiciary Committee on June 16
• TechDirt’s latest commentary on S. 978
• Electronic Frontier Foundation’s analysis of S. 978

If I embed on my website a YouTube video that turns out to be infringing and ten people watch it, in what circumstances could I be charged with a felony under S. 978?

Mike Masnick at TechDirt recently posed this question. To begin, federal law defines “public performance” in two ways:

1. performing or displaying the protected material in a place open to the public or  in which it can be viewed by a “substantial number of persons” (not a small family or friends setting); or
2. to transmit or communicate to such a place by using “any device or process,” regardless of whether the people viewing the material are in different locations and viewing it at different times, or in the same location viewing it at the same time

Streaming appears to fall under the second prong, as a recent White House Intellectual Property White Paper argued. This also comports with a 2010 case from the Second Circuit, in which the court observed that “[a] stream… like a television or radio broadcast, is a performance because there is a playing of the song that is perceived simultaneously.”  Thus, each stream of a copyrighted video could well constitute a public performance for the purposes of 18 USC 2319(b). As Masnick points out, under S. 978, you may be open to criminal liability in such a situation.

However, that only answers part of the question.  Embedding a video is linking to content which is potentially hosted elsewhere, so the act of embedding would not likely be direct infringement through reproduction or distribution of that protected content, though this is far from certain.  If you post copyrighted works and host them yourself for streaming, you could be charged provided you meet the other statutory criteria.

Terry Hart of Copyhype has a more nuanced view, arguing that even if the law would technically make criminals out of individuals who post infringing videos online, the chances of prosecution would be slim, especially given the limited resources of federal prosecutors and other considerations. Hart further notes that the higher standard of proof in criminal cases compared to civil infringement cases will serve as a check on rampant prosecutions.  But this sounds an awful lot like, “just because they can doesn’t mean they will.” Hart’s arguments, therefore, are unlikely to alleviate the concerns raised by skeptics of S. 978.

What does case law tell us about what must prosecutors do to prove that I’m guilty of willful infringement?

For a prosecutor to show “willful” infringement, most courts have held that “the government must show the defendant specifically intended to violate copyright law.” (John Grimm, et al., Intellectual Property Crimes, 47 American Criminal Law Review 741, 770 (2010)). This requirement is in contrast to civil copyright lawsuits in which no such proof of “willful” infringement is necessary; only that infringement took place.

Additionally, 17 U.S.C. § 506(a)(2) states that, “evidence of reproduction or distribution of a copyrighted work, by itself, shall not be sufficient to establish willful infringement of a copyright.” In other words, merely posting an infringing video to YouTube can’t serve as the sole basis for proving you intended to violate copyright law.

How frequently is criminal copyright infringement prosecuted?

According to statistics cited by Terry Hart via the Administrative Office of the U.S. Courts, 234 federal prosecutions have been commenced for criminal copyright infringement between 2006 and 2010. 

What sort of activity is this bill aimed at deterring? Are there bad actors out there who engage in large-scale copyright infringement for commercial gain by willfully linking to and/or streaming copyrighted works without actually reproducing or distributing said works?

In Senator Amy Klobuchar’s own words:

Currently, if a criminal is selling pirated DVDs or CDs on a street corner, and they’re worth at least $2500, it is a felony. But if that same person is in their basement and felony streaming movies or books, whatever they could do, they could only be charged with a misdemeanor. This legislation fixes that loophole.

[The legislation] does not go after legitimate businesses or innocent people who post a video or post a blog. In other words, the bill is not intended nor does it allow law enforcement to prosecute people who may stream videos and other copyrighted works to their friends without intending to profit from the work of the copyright owner. It also does not allow prosecutors to go after individuals that innocently post links on their blogs to copyrighted protected works.

Perhaps the most notable case involving a large-scale copyright infringer who only linked to infringing content is that of Brian McCarthy, who was charged with copyright infringement in March 2011. Allegedly, he operated a “linking site” on which he posted links to infringing content hosted on external websites.  The criminal complaint (embedded here) alleges that he violated the copyright through “reproducing and distribution, including through electronic means.

It is unclear if merely linking to content amounts to reproduction and distribution. In any event, Klobuchar’s bill purports to target individuals whose conduct resembled McCarthy’s alleged behavior.

How could Congress amend the Copyright Act to target these bad actors without putting casual, noncommercial infringers at risk of prosecution?

One way to focus on the most egregious infringers would be to heighten the thresholds for infringement set forth in 17 U.S.C. § 506. As written the threshold is set at ten or more performances within 180 days, with 1) a retail value of the performances, or total economic value to either the infringer or owner in excess of $2,500, or 2) the total “fair market value” of licenses for those performances exceeds $5,000. If the legislation is truly aimed at the bad actors streaming massive amounts of content, setting the threshold above ten performances would more narrowly target the bill’s scope. And as Robert Cringely suggests, a person could reach the monetary value threshold for either a film or a song without much effort. Moreover, Kiernan Maletsky observes, “the value of an online video is totally speculative at this point.”

To the extent that Congress wishes to establish a new legal avenue for criminally prosecuting entities engaged in large-scale infringement in the form of linking or streaming, setting the bar much higher than it is currently would not likely impede that effort. On the plus side, raising the threshold would do a great deal to assuage popular fears that posting a few videos online might land one in federal prison.

Would S. 978 endanger online intermediaries, such as YouTube, that stream and/or link to user-generated content without screening it in advance?

It is unlikely that the legislation would affect intermediaries like YouTube and others, given that the prosecution must prove the specific intent to infringe; that could be very difficult to establish for those websites. However, others believe criminal liability for those sites remains a very real possibility, citing the vagueness of the legislation.  Check out this piece by Mike Masnick for some consideration of this issue.

Combating “rogue websites” is a top priority for many in Congress this year. Lawmakers have held several hearings over the past few months to explore ways to address these rogue sites, which are typically foreign-based websites that are dedicated to trafficking in counterfeit goods and/or facilitating unlawful copyright infringement. Most recently, on May 12, several U.S. Senators introduced the PROTECT IP Act (bill text). The bill would establish new legal mechanisms designed to enable the government and rights holders to combat Internet sites that are “dedicated to infringing activities.”

Congress deserves praise for incorporating several of the ideas we proposed last year in the context of COICA, a similar bill that was introduced — but not enacted — in the last session of Congress. As several dozen law professors warned last year, COICA lacked procedural safeguards, was overly broad in its scope, and risked hindering free expression by triggering “false positives” rendering lawful websites inaccessible. Compared to COICA, PROTECT IP represents a more balanced approach to fighting online copyright and trademark infringement while recognizing fundamental civil liberties.

However, in spite of these improvements, the PROTECT IP Act contains some troubling provisions that should concern lawmakers who believe in balanced, thoughtful intellectual property laws that “promote the Progress of Science and useful Arts.”

Over on the Technology Liberation Front, I penned an essay explaining some of the crucial differences between COICA and PROTECT IP — and why they matter:

• Under COICA, a website would have been deemed “dedicated to infringing activities” if it had no “demonstrable, commercially significant purpose other than” (emphasis added) to facilitate infringing activities. PROTECT IP, however, only covers websites with “no significant use other than” to facilitate infringing activities. This slight change in wording may seem trivial, but it’s actually quite significant, as lots of blogs, forums, and other sites engaged in noncommercial, but still protected, speech that may well have been subject to domain name disabling under COICA would likely be in the clear under PROTECT IP. However, as Public Knowledge’s Deputy Legal Director Sherwin Siy points out, PROTECT IP’s definition of sites “dedicated to infringing activities” remains overly broad, as it doesn’t explicitly exempt online intermediaries that are otherwise protected by the 17 U.S.C. § 512(c) safe harbor. A site operator that is not engaged in direct or willful secondary infringement should be shielded from PROTECT IP actions if the site abides by the DMCA notice and takedown process, has no actual knowledge of infringing activities, does not derive a financial benefit directly attributable to infringement, and does not induce infringement.

• PROTECT IP, unlike COICA, does not categorically deem websites “otherwise subject to civil forfeiture” under 18 U.S.C. § 2323 to be “dedicated to infringing activities.” Given the extraordinary breadth of section 2323, which permits the government to seize any “property used, or intended to be used, in any manner or part to commit or facilitate the commission of” criminal copyright infringement, it’s a relief that language was removed.

• PROTECT IP requires that the Justice Department or a rights holder, in bringing an action against a site under the statute, attempt to commence an in personam action against the operator of an allegedly infringing website before an in rem action can be brought. From a due process perspective, this change is an improvement over COICA (which only provided for in rem actions), as it’s much more likely that an in personam action will provide a site operator with an opportunity to participate in an adversarial hearing prior to the issuance of a temporary restraining order or preliminary injunction requiring an intermediary to disable service to the site.

• PROTECT IP adds information location tools to the list of intermediaries that are required to disable service or cease linking to a website upon being served with a court order deeming the site “dedicated to infringing activities.” This provision would apply not only to search engines, but also to blogs, chat rooms, and message boards. Like COICA, PROTECT IP also applies to DNS operators, financial transaction providers, and Internet advertising services.

• PROTECT IP allows the Justice Department to take action only against nondomestic domain names. (DHS asserts that it is already empowered to seize domestic domain names in accordance with 18 U.S.C. § 2323, as it has done successfully on numerous occasions in recent months.)

• PROTECT IP contains a new private right of action under which a rights holder may seek a court order against any domain name. Actions initiated by rights holders, if successful, only require ad networks and/or payment processors – but not DNS servers or information location tools – to disable service to infringing sites.

Considering all the changes made to the bill, I’m inclined to disagree with commentators, such as Techdirt’s Mike Masnick, who’ve argued that the PROTECT IP, a.k.a. the “Son of COICA,” is worse than its father. On net, PROTECT IP appears to be less likely to impose incidental burdens on protected expression and more likely to afford website operators a chance to successfully challenge actions brought against their sites.

However, I’m still concerned about several aspects of PROTECT IP. Its private right of action, while limited in scope, may result in small websites whose users frequently post infringing content being targeted by costly, burdensome litigation initiated by rights holders. CDT’s David Sohn elaborates on the risks of creating a private right of action in his informative analysis of the bill.

The voluntary actions clause is also quite troubling, as I’ve argued before and as Wendy Seltzer argues on her blog. While I’m all for voluntary actions in principle, such actions should not override private contracts or terms of service agreements that would otherwise be enforceable.

It’s also unfortunate that the PROTECT IP Act does not include a cost reimbursement section, as I suggested last year, or at least an exemption for small entities. While the bill establishes an affirmative defense for an information location tools that doesn’t comply with an order “by showing that the defendant does not have the technical means to comply . . . without incurring an unreasonable economic burden,” it’s far from clear what exactly court would deem “unreasonable.” News of the Justice Department seeking injunctive relief against a small search site operator for failing to comply with a court order issued under PROTECT IP will have a chilling effect on all kinds of small-time Internet platforms.

As lawmakers consider the PROTECT IP Act in coming weeks and months, they should also revisit 18 U.S.C. § 2323, a civil forfeiture provision enacted in 2008 as part of the PRO-IP Act. This extraordinarily broad statute has recently been criticized by many legal scholars. Rep. Zoe Lofgren, among other legislators, has been very critical of the way in which seizures have been conducted. While seizures are certainly justified in some instances, the statute should be narrowed to include only websites “dedicated to infringing activities,” and it should require the government to attempt to commence in personam actions in all instances. Domain names aren’t movable property — unlike illegal drugs or weapons, there is no risk of a criminal “hiding” a domain name or destroying it before evidence of its illegality can be secured.

Congress should also conduct or seek a cost-benefit analysis of PROTECT IP Act. Rights holders argue that under current U.S. and international laws, it’s very difficult for rights holders to do anything to meaningfully combat piracy-driven foreign websites that ignore valid takedown requests (i.e. The Pirate Bay). If such sites are in fact significantly undercutting the incentive to create expressive works in a way that creates deadweight loss, then legislation that dragoons the whole DNS into regulating Internet access (subject to meaningful procedural safeguards) may be worth the substantial costs. A robust, thorough economic analysis that explores the implications of the PROTECT IP Act on social welfare could help Congress immensely in judging the merits of the legislation.

In the ongoing copyright debates, areas of common ground are seemingly few and far between. It’s easy to forget that not all approaches to combating copyright infringement are mired in controversy. One belief that unites many stakeholders across the spectrum is that more efforts are needed to educate Internet users about copyright. The Internet has spawned legions of amateur content creators, but not all of the content that’s being created is original. Indeed, a great deal of online copyright infringement owes to widespread ignorance of copyright law and its penalties.

For its part, Google yesterday unveiled “Copyright School” for YouTube users. As Justin Green explains on the official YouTube blog, users whose accounts have been suspended for allegedly uploading infringing content will be required to watch this video and then correctly answer questions about it before their account will be reinstated:

Of course, boiling down the basics of copyright into a four and a half minute video is not an easy task, to put it mildly. (The authoritative treatment of copyright law, Nimmer on Copyright, fills an 11-volume treatise.) Copyright geeks and fans of “remix culture” will appreciate that Google’s video touches on fair use and includes links to in-depth resources for users to learn more about copyright. It will be interesting to see how Google’s effort influences the behavior of YouTube users and the incidence of repeat infringement.

Update: EFF’s Corynne McSherry has an essay up on the Deeplinks blog arguing that YouTube’s Copyright School video omits several important facts about copyright. She raises several very good points, but the unfortunate reality of copyright law is that uploading content that’s not substantially original — even in cases that might constitute fair use — is legally risky, particularly for those who aren’t familiar with copyright law. While I’d love to see YouTube create a follow-up video that explains fair use doctrine in an accessible manner, Google’s decision to urge YouTube uploaders to err on the side of caution is quite reasonable in light of the severity of the statutory penalties for copyright infringement.

Over at the Technology Liberation Front, I discuss the “Combating Online Infringements and Counterfeits Act” (COICA), which the Senate Judiciary Committee unanimously approved last week. The bill would enable the U.S. Attorney General to obtain a court order disabling access to web domains that are “dedicated to infringing activities.”

These “rogue websites” are a real problem, as the website Fight Online Theft explains, so it’s a good thing that Congress is working to address them. However, some of COICA’s provisions raise profound constitutional concerns, and the bill lacks adequate safeguards to protect against the unwarranted suspension of Internet domain names, as the website Don’t Censor the Net argues. The bill also doesn’t provide a mechanism for website operators targeted by the Attorney General to defend their site in an adversary judicial proceeding. This week, a group of over 40 law professors submitted a letter to the U.S. Senate arguing that COICA, in its current form, suffers from “egregious Constitutional infirmities.”

To address these concerns, CEI is urging Congress to amend COICA to provide for more robust safeguards, including:

• Providing a meaningful opportunity for Internet site operators to challenge before a federal court an Attorney General’s assertion that their site is “dedicated to infringing activities” prior to the suspension of their domain name;

• Requiring that the Attorney General, upon commencing an in rem action against a domain name, make a reasonable and good faith effort to promptly notify the site’s actual operator of the action;

• Clarifying the definition of an Internet site “dedicated to infringing activities” to ensure that websites with nontrivial lawful uses that facilitate infringing acts by third parties will not face domain name suspension if their operators:
  • Comply with legitimate takedown requests from rightsholders;
  • Do not receive a financial benefit directly attributable to infringing activities;
  • Do not design their site primarily for the purpose of facilitating infringing activities; and
  • Do not induce infringing activities.

• Instructing the Department of Justice and federal prosecutors not to request that domain name registrars, registries, or service providers suspend domain names that have not been deemed to be “dedicated to infringing activities,” or otherwise unlawful, by a federal court; and

• Requiring the Department of Justice to compensate domain name registrars, registries, and service providers for any reasonable costs they incur in the course of disabling access to infringing domain names.

• Eliminating the provisions requiring the Department of Justice to publish a public listing of Internet Sites “alleged to be … dedicated to infringing activities” but that have not been the target of a successful in rem action by the Attorney General to disable access to their domain name.

Image credit: minkj’s flickr photostream.

The Supreme Court doomed Chicago’s handgun ban Monday by ruling 5-to-4 that the Second Amendment applies to state and local governments like Chicago, not merely the federal government.  (Most guarantees in the Bill of Rights are deemed so fundamental that they apply to both state and federal governments, but a few rights deemed trivial, like the right to a jury trial in lawsuits seeking over $20, only are applied by the Courts to the federal government, not the states.)  In 2008, the Supreme Court ruled that the Second Amendment protects the individual right to possess a handgun in a federal enclave, in striking down a handgun ban in Washington, D.C., in District of Columbia v. Heller.  Chicago’s ban is quite similar to the one found unconstitutional in Washington, D.C., so the Supreme Court’s ruling Monday in McDonald v. City of Chicago dooms Chicago’s gun ban.

In 2009, President Obama’s first Supreme Court nominee, Sonia Sotomayor, claimed before her confirmation to accept the Supreme Court’s ruling in Heller as binding precedent.  But on Monday, she joined a dissent by the Supreme Court’s four liberal justices calling for the Heller decision to be overruled.  Second Amendment scholar David Kopel says that Sotomayor was not candid, noting that her opinion “contradicted” what she told the Senate before the Senate confirmed her to the Supreme Court.  It is likely that future liberal Supreme Court nominees will pretend to support gun rights until they are confirmed, then vote against such rights once on the Court.

Obama’s current Supreme Court nominee, Elena Kagan, lumped the NRA together with the KKK as “bad guy orgs” while serving in the Clinton administration, suggesting that she will consistently rule against gun owners if her nomination is approved by the Senate.  Kagan failed to defend federal laws protecting crime victims while serving as Solicitor General.

As a Harvard dean, Kagan blocked the military from recruiting, in defiance of a federal law requiring access for military recruiters.  Kagan claimed her opposition was based on the military’s exclusion of openly-gay soldiers, not hostility to the military in general, but this is hard to square with the fact that she had no problem letting the Saudis sponsor an Islamic studies program at Harvard Law School, even though the Saudis flog and execute gay people, and she had no problem serving in the Clinton administration, even though Clinton signed into law both the restrictions on gays in the military she claimed to object to (the Don’t Ask, Don’t Tell policy), and the ban on federal recognition of gay marriages contained in DOMA.

The Supreme Court Monday also ruled that religious clubs can be forced by colleges to admit atheists and others who disagree with the club’s religious perspective as members, as long as the college requires this as part of a general policy of banning clubs from discriminating based on any characteristic.  The Supreme Court’s four “conservative” justices dissented against this ruling limiting the First Amendment’s freedom of association, while moderate Anthony Kennedy joined the Supreme Court’s liberal bloc in ruling against the religious clubs in Christian Legal Society v. Martinez.

In Free Enterprise Fund v. PCAOB, the Supreme Court, in a 5-to-4 ruling, cut back on restrictions on the ability to remove high-ranking bureaucrats, ruling that provisions of the Sarbanes-Oxley law that kept anyone from removing members of the Public Company Accounting Oversight Board except for willful misconduct unconstitutionally infringed on the constitutional separation of powers, which requires that important government employees be subject to some degree of accountability to higher-ups in the executive branch.  However, the Supreme Court left intact the bulk of the Sarbanes-Oxley law.  The red tape adopted by bureaucrats under Sarbanes-Oxley has driven many IPOs and American jobs overseas.  The red tape costs the economy $35 billion a year, according to the American Electronics Association, and it did nothing to prevent the mortgage meltdown, Bernard Madoff’s $50 billion fraud, or the faulty valuation of sub-prime mortgage-backed securities that helped spawn the financial crisis.

The Supreme Court overturned a ruling that allowed business methods to be treated as exclusive property under the patent laws, but did not definitively rule out the patenting of business methods, in Bilski v. Kappos.

In a pretty remarkable move, the United States District Court for the Southern District of New York yesterday held that genes can not be patented merely because they have been isolated and purified out of their surrounding DNA.  Attorneys from the American Civil Liberties Union and the Cordozo Law School’s Public Patent Foundation, working on behalf of the Association for Molecular Pathology, challenged the validity of patents held by Myriad Genetics and the University of Utah on the BRCA1 and BRCA2 genes (particular mutations in which are associated with breast cancer).  District Court Judge Robert Sweet held that isolated “wild-type” DNA sequences are “naturally-occurring” things, and are therefore not patentable subject matter under the U.S. Patent Act [read the full decision in PDF format here].

The decision also invalidated Myriad Genetics’ patents on all methods of comparing the sequences of “normal” and “mutated” BRCA1 and 2 genes because they are “abstract mental processes,” which are also unpatentable subject matter.  Although the case addressed only the BRCA1 and 2 genes, the decision now calls into question the validity of some 2,000 other gene patents that have been granted by the Patent and Trademark Office since the National Institutes of Health applied for the very first gene patent back in 1991.

Natural phenomena have always been unpatentable under the U.S. Patent Act, so the existence of patents on wild-type genes has long posed a bit of a paradox.  However, as long ago as 1911, a federal court permitted the patenting of adrenaline, on the grounds that, once purified from the human body, the chemical existed in a substantially different form from that which was not extracted and purified.  Similarly, patents on isolated genes have been rationalized on the grounds that they do not appear in nature in a purified and isolated form.  Importantly, the scope of the patents on adrenaline or the BRCA1 gene extended only to those that were isolated from the human body.  That’s why, for example, my mom and sisters haven’t been infringing the BRCA1 patents merely by having those genes in their DNA.

This is also why it is not perfectly clear that this District Court decision will stand up on appeal.  Judge Sweet and the plaintiffs may be right that the isolation and purification doctrine is merely “a ‘lawyer’s trick’ that circumvents the prohibitions on the direct patenting of the DNA in our bodies but which, in practice, reaches the same result.”  But, it’s a lawyer’s trick with a very long pedigree, and which has repeatedly been upheld in analogous situations over the past hundred years.

Nevertheless, I’ve long felt uneasy about the patenting of wild-type genes.  This is quite different from, for example, intentionally changing the genetic structure of an organism to one that doesn’t exist in nature, which by all reasonable thinking amounts to a genuine invention.  Judge Sweet’s opinion will have no effect on, for example, the ability to patent a new plant variety developed by conventional breeding techniques or a microbe genetically-engineered with a novel gene that makes it helpful in cleaning up oil spills, both of which have been upheld by the U.S. Supreme Court.  These are, in fact, “new and useful process[es], machine[s], manufacture[s], or composition[s] of matter,” subject to patenting under the Patent Act.  An isolated gene (or an isolated chemical for that matter) that already exists in nature, and which has not been modified by human hands, just isn’t.

Spending the time and resources to identify, map, sequence, and characterize a gene is a very useful activity, and one that the beneficiaries of which ought to be willing to pay for.  If Judge Sweet’s decision does stand, and all gene patents become invalid, then I would expect to see an awful lot less of this very useful activity.  That’s appears to be something that those cheering loudest for this decision seem not to have acknowledged.  Still, I suspect that permitting the patenting of a product of nature is not the way to go about optimizing the level of such activity.

Hosting a Super Bowl party this Sunday? You might be interested to know that it is technically illegal to watch the Super Bowl on a tv larger than 55 inches under certain conditions.

Ars Technica’s Nate Anderson was kind enough to look through 17 USC 1.110 and lay out what’s legal and what isn’t.

This is serious stuff. The NFL sued a church three years ago for holding a Superbowl party… and won.

(hat tip to my fiancée)

Nice article in the Wall Street Journal today by Anne Jolis on a trademark brouhaha between France and Australia that highlights some of the absurdities of the French (and other countries’) protection of geographic designations. Usually France is the country protecting its local food, wine and even chickens by ensuring that other countries’ imports can’t use a French geographical or place name description, such as Roquefort cheese or Champagne.

But this time the Australians and New Zealanders have decided that turnabout is fair play.  Acting on a New Zealand complaint, Australia’s trademark office has refused to okay the import of a French wine called “Kiwi Cuvee 2007 Sauvignon Blanc” because using the name could deceive or confuse consumers into thinking it was produced in Kiwi Country, i.e., New Zealand.

France is not alone in its protection of its local and regional products; the UK, Germany, Italy, Poland, and many other countries have their own registries.  The European Union also has its own system of registration and protection of geographic specialties, such as for the Polish Truskawka kaszubska lub Kaszëbskô malëna. Even the World Trade Organization has limited protection for certain geographic designations under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights. The U.S. has a few such geographic protections in place, for instance, for Vidalia onions, Florida orange juice, and Idaho potatoes.

Jolis provides some of the arguments proponents use to defend the practice but also suggests a private standards-setting alternative to bureaucratic procedures and protectionism:

So the justification for what is effectively a trademark is that a product’s origin partly defines the product itself.

Perhaps there is truth to that. But then, nothing stops producers from these prized regions from simply applying for and defending regular trademarks. This would eliminate the temptation for every local producer in the world to seek privileged status for otherwise ordinary place-names. Producers of Parma ham or feta cheese could very easily certify their products as meeting privately developed standards of quality and brand them accordingly, without the global bureaucracy that has grown up around “geographical indications.”

Imagine a state in which the public records retrieval process is so convoluted that the government needs to publish a user manual explaining how to apply the public records law works. You would assume that the state would make this manual freely available online, right?

Not in Oregon. In that state, the printed how-to manual for accessing public records is available for $25, a fee they claim helps them cover the printing costs.

Apparently it’s still 1992 in Oregon, and widespread public adoption of the Internet hasn’t yet taken place. In all seriousness, though, it appears state officials could use a reminder that the marginal cost (MC) of distributing a document to over the internet is  $0.

Recently a University of Oregon economics professor has come under fire for trying to improve access to state law. Bill Harbaugh scanned the entire 326-page book and made it available for free on his website. The Oregon Department of Justice has threatened to take legal action on copyright infringement grounds if Professor Harbaugh doesn’t remove the manual from his website.

Professor Harbaugh accuses the state of using copyright to restrict the public’s access to government documents, saying that “trying to use copyright law to keep the public from getting information about how to get public records strikes me as wrong.” Making it difficult for citizens to access and understand the law is pretty shady, no doubt. Producing a helpful manual explaining the law and then using copyright to keep it from being distributed it is just asinine.

Intel alleges that its due process rights were violated by a massive $1.45 billion fine recently imposed as a result of a one-sided antitrust investigation that excluded evidence of its innocence. It says that a biased investigation by the European Commission violated the European Convention on Human Rights. Despite its title, the Convention protects not just humans but also “non-governmental organisations” like corporations, as its text and many court rulings confirm.

I think Intel has a strong case. But some commentators have greeted Intel’s argument with scorn. They say it can’t rely on human rights because it is a corporation and not a human being. They also say that the fine can’t be challenged because it is civil, not criminal — even though the Convention protects due process in both civil and criminal proceedings, and treats massive penalties like the one imposed on Intel as criminal, not civil, because of their punitive nature.

In May, the European Commission fined Intel a record-setting $1.45 billion dollars for violating EU antitrust law for allegedly using rebates to potentially penalize clients who purchased too many computer chips from a smaller rival. “Intel is the world’s biggest computer chip maker and controls roughly 80% of the computer chip market.”

Recently, however, the Commission’s proceedings against Intel were criticized for unfairness by the EU’s own ombudsman: “The European Union’s ombudsman has issued a rare rebuke of the bloc’s antitrust regulator, saying it failed to record ‘potentially exculpatory’ evidence from a witness in its investigation of chip giant Intel Corp.”

Despite this unfairness, Intel has been criticized for even raising a due process claim, under the theory that companies don’t have “human rights.” A writer in Forbes Magazine claimed that “the chip giant is grasping for straws with its ‘human rights’ appeal against Europe’s $1.5B fine,” since the “idea of a company appealing to recognize its ‘human rights’ sounds a little odd.” Intel’s argument drew a hail of scorn among commenters in response to a blog post at Ars Technica, including the following reactions: “Please destroy corporations who claim their human rights were violated,” “I had never laughed that hard . . . .before,” and “Any corporation that claims personhood for the purpose of asserting human rights opens a very scary Pandora’s Box.”

But the text of the European Convention on Human Rights is clear that it does not apply just to humans, stating in Article 34 that “any person, non-governmental organisation or group of individuals claiming to be the victim of a violation” may seek redress. For that reason, court rulings have routinely applied the due-process protections of Article 6 of the Convention to corporations. See Michael Addo, Human Rights Standards and the Responsibility of Transnational Corporations (1999) at pp. 194-95 (discussing four such cases, including (1) Dombo Beheer v. Netherlands (1993), (2) Editions Periscope v. France (1992), (3) Union Alimentaria Sanders SA v. Spain (1989), and (4) Societe Stenuit v. France (1992)).

It is odd to see the media disparage the idea of a company having rights, given the fact that media companies constantly invoke the First Amendment and other constitutional rights, like the right to a public trial. The most important First Amendment cases in the past half century have been brought by media companies, such as New York Times v. Sullivan (1964), which overturned a damage award against a media company for libel (and in the process radically cut back the reach of American defamation law), and New York Times Co. v. United States (1971), which ruled in favor of two media companies seeking to publish the Pentagon Papers. Most constitutional rights have been held to apply to corporations (and corporations in general, not just media corporations).

Denying a corporation like Intel the ability to raise human-rights challenges would harm human beings: its shareholders, whose quarterly earnings were wiped out by the massive fine imposed on it by the European Commission, leaving them with a $398 million loss. Allowing due process violations to go unremedied is particularly dangerous in antitrust cases, since antitrust law is often vague and unpredictable and subject to differing interpretations.

And as lawyer Kimberly Curtis notes, Intel is not alone in protesting the EU’s handling of antitrust cases. “Intel and a growing number of other companies argue that the EU method of investigating antitrust violations is contrary to European human rights law since it is a political appointee who oversees the investigation and decides guilt,” in an administrative proceeding in which an appointee acts as prosecutor, judge, and jury. This “calls into question the EU’s practice of having a political appointee — the current antitrust commissioner is Neelie Kroes of the Netherlands — who supervises investigations, and then decides whether the company is guilty and what the punishment should be.”

Moreover, the exclusion of exculpatory evidence in the Intel case was strikingly similar to a human-rights violation found in a landmark case decided by the European Court of Human Rights, in Dombo Beheer B.V. v. Netherlands (1993) 18 EHRR 213. In that case, the court found that the legal system of the Netherlands had violated the due-process rights of a corporation under Article 6 of the European Convention on Human Rights through a one-sided proceeding that excluded one side’s evidence, while permitting the other’s. It also made clear that the right to a fair trial applies not just in criminal cases, but also in civil litigation: “The Court agrees” that in “litigation involving opposing private interests . . . each party must be afforded a reasonable opportunity to present his case – including his evidence – under conditions that do not place him at a substantial disadvantage vis-a-vis his opponent.”

Huge administrative fines such as Intel’s are subject to particularly exacting scrutiny under the Convention both because of their size and punitiveness, which makes them “criminal” in nature, and the fact that they were imposed in an administrative proceeding that combined “investigative and judicial functions.” That’s the lesson from the European Court of Human Rights’ June 11 decision in Dubus S.A. v. France, which found a violation of a corporation’s rights despite a much smaller penalty and seemingly less egregious facts, where an administrative agency had the power to award potentially large sanctions using procedures similar to what the European Commission uses in antitrust cases.

The court found that the “potentially” “high amounts” of the penalties the agency could impose made its proceedings criminal in nature, and that its “combination of investigative and judicial functions” — a feature shared with European Commission antitrust proceedings — subjected its proceedings to heightened human-rights scrutiny. The court ruled that the French Banking Commission violated an investment company’s rights under Article 6 of the human-rights convention by subjecting it to disciplinary proceedings that lacked “independence and impartiality”:

“The Court of Human Rights found that there was no clear distinction between the functions of prosecution, investigation and adjudication in the exercise of the judicial power vested in the French Banking Commission. While the combination of investigative and judicial functions was not, in itself, incompatible with the need for impartiality, this was subject to their being no ‘prejudgment’ on the part of the Banking Commission. The Court stated that there was a need for strict controls, to avoid giving the impression that guilt had been established from the very start of the disciplinary proceedings. The Court of Human Rights also found that Dubus could reasonably believe that it was prosecuted and tried by the same people, and consequently could entertain doubts about the impartiality of the decision of the Banking Commission, which, in its various capacities, had brought disciplinary proceedings against it, notified it of the offences and imposed the penalty. Interestingly, the Court of Human Rights also held . . . that the penalties in the form of fines were penal in character given the high amounts that could, potentially, be imposed.”

As the EU Law Blog notes, this ruling is “significant” for antitrust cases like Intel’s “because the procedure used by the European Commission in antitrust cases is rather similar (but not identical) to the one applied by the French Banking Commission.

Similarly, Kimberly Curtis notes, “the massive size of recent fines” in EU antitrust cases

“suggests that the fines are ‘deterrent and punitive’ and therefore implies that they are criminal in nature. Cases from the European Court of Human Rights in Strasbourg detail what constitutes a criminal case, and one factor is the severity of the punishment. . . billion dollar fines are quite severe. But criminal cases are overseen by an impartial tribunal and defendants are allowed to present a defense, two things guaranteed under European human rights law through the European Convention on Human Rights and two things that the current EU antitrust system lacks.”

It may well be that European courts will be reluctant to overturn what the European Commission has done to Intel, given that a ruling in its favor might call into question the Commission’s handling of other high-profile antitrust cases that have likewise led to large fines. Forbes reports that “in an interim hearing on this case, the president of the Court of First Instance” refused to grant Intel the relief it sought.

But since that hearing, the EU Ombudsman has rebuked the Commission for its unfair treatment of Intel. Indeed, Intel seems to have been treated worse than other litigants whose rights under the Convention were found to have been violated. In light of the strong evidence that Intel’s rights were violated, the European courts may have no principled alternative other than to rule in favor of Intel.