As internet sprints into ’10s, IP law lags behind

In 2002 Nancy Stouffer, having published two books 18 years before with the phrases ‘Larry Potter’ and ‘muggles’ in the titles, alleged copyright infringement against the most successful new writer of that decade, J. K. Rowling. But the New York district court which heard the case dismissed it with prejudice, fining Stouffer $50 000 for ‘bad faith conduct’, and criticising her fraudulent insertion of the word ‘muggle’ into documentary evidence.

Rowling last week was forced once more to deny allegations of plagiarism after her name was added as defendant to a High Court writ asserting that she stole the plot of the fouth Harry Potter book. Solicitor and author Adrian Jacobs had depicted wizarding schools (like Hogwarts) and wizards’ contests (like Quidditch) in his 36-page book The Adventures of Willy the Wizard, whose publication he financed himself in 1987. While Jacobs is now dead, the claim was lodged on behalf of his estate’s trustee – ‘independently’ of his family. The estate’s PR representative said that he estimated it was ‘a billion-dollar case’; Rowling that ‘the claim is without merit’.

The Jacobs suit has a quaint feel. In the era of BitTorrent and Google Books, it is even somewhat staid, and that sense of obsoleteness tends to emphasise the pace at which demands made on intellectual property laws that were conceived in the era of print are changing.

For instance in New York on Friday, a federal judge delayed his ruling on the fairness of the Google Books Settlement of 2008, explaining that ‘There is just too much to digest’. The settlement represented an unsteady compromise between Google, which began its project to make available on the web digital scans of millions of books in 2005, and the authors and publishers who reserve rights to data it created in doing so.

The BBC called the hearing a ‘showdown’, and quoted Amazon’s lawyer warning that the settlement ‘turns copyright law on its head’ – just a quarter of the many parties whom the judge heard from gave it support. One popular argument was that the settlement unjustifiably endorsed Google’s move to scan the libraries’ contents without having sought rightsholder permission first.

The Independent’s Stephen Foley commented: ‘Old interpretations of copyright laws are not really matched to the task, while anti-trust laws are also being invoked inappropriately. In short, it’s a mess’.

During online culture’s fractious adolescence, pirates have acted as a de facto Google Audiovisual, and film and music firms are jittery in the face of falling revenues. In only the latest gesture of retaliation, on Thursday Chairman of GIPC and Vice President of NBC Rick Cotton urged both Congress and the Executive branch to enforce IP laws more rigorously, connecting the industry’s struggle against piracy with America’s recovery from recession.

Both stories come in the context of brisk negotiations over two of the biggest legislative fish in intellectual property: the UK’s Digital Economy Bill, and ACTA, the plurilateral Anti-Counterfeiting Trade Agreement.

A nugatory change of language in the former bill was misreported yesterday as a concession on the government’s part. Where the bill had mandated that ISPs ‘disconnect’ recidivist filesharers, it would now mandate the ‘temporary suspension’ of their accounts. TalkTalk had sponsored a petition against the measure.

The bill’s policy of ‘disconnection’ after three strikes was derived from what ACTA calls its ‘graduated response’ scheme. But the word ACTA uses for the consequence of a third infringement, in leaks quoted by PC World, is ‘termination’.

A draft leaked on Friday indicated that, under the new agreement, ISPs would be required to use ‘deep packet inspection’ – a technology that assists internet censorship in China – to detect acts of intellectual property theft committed by customers. ISPs would moreover be liable for any data their customers upload or download illegally.

Such a prospect impelled protest from watchful internet users because of its large potential for abuse in government transgression against privacy.

Following the leak, European Data Protection Supervisor Peter Hustinx said he regretted the failure of the EC to consult with his office. In a combative press release, he made known his ‘concern’ about the secrecy of the negotiations, and warned of the possbility of conflict between European data protection law and the mooted ‘three strikes’ policy. He recommended less intrusion than the ‘not necessary’ policy would encourage, safeguards on data transfer, and transparent dialogue on ACTA – advocating, in his own words, ‘A right balance between protection of intellectual property rights and the right to privacy’.

Events continue.

February 23, 2010 at 20:23 Leave a comment

Tax Law Today

Tax law is always in the news, particularly because taxpayers like to break it. Whether this happens in extravagant or in tawdry ways, it will happen. Take America: in Texas this week domestic terrorist Joseph Stack quite extravagantly flew his plane into IRS offices, citing dust-ups with the agency in his detailed suicide note. On the same day, former New York police chief and hero of September 11 Bernard Kerik was convicted of tax fraud, and instructed to pay some £120 000 in tawdry restitution.

But this year, tax law has entered the international stage. In the context of recession government revenues have been falling around the world. Indeed, the Treasury urges us to consider the £4.3bn it had to borrow last month in light of the revenue-draining effect of ‘one of the worst recessions in modern history’. (It is also true, and predictable given the size of banks such as RBS, that our bailouts were the most expensive in the world by proportion of GDP.)

The least unpopular remedy for the budget deficits these misfortunes create is to raise taxes on the rich. In Britain, Brown will raise the top rate, and Cameron cannot promise to lower it should he win this May. In the US, a Democratic Congress will let Bush’s cuts expire. And the 95% of families which Obama’s ‘stimulative’ taxcut reached, naturally, excluded those top 400 households who earned $130bn in 2007: for according to Matt Yglesias, the 24 million ‘who comprise the bottom fifth’ together earned only $117bn more.

Closer to home, tax haven the Isle of Man determined this week to pass an ‘auterity budget’ that would raise taxes on income – with, according to the Financial Times, ‘bills for some rich individuals rising by more than £5,000’. Presenter Jeremy Clarkson owns land in the dependency.

And in parallel, the dated concept of a ‘Tobin tax’ on financial transactions has gained political momentum recently with filmmaker Richard Curtis’s rebranding of it as ‘the Robin Hood tax’.

Even those measures, however, will yield returns that are dwarfed by revenue shortfalls. And this is where the law comes in: as governments start to pinch pennies, they will try harder to enforce or modify tax laws the richest have historically evaded. Harbingers of this trend are emerging now.

For example, in Germany this week, 1 800 tax evaders declared their Swiss holdings to the government after it threatened to buy a disc that contained details of the hidden accounts.

Last month Labour’s Treasury Minister described the practice of hiding money from the taxman in offshore accounts as ‘morally and economically unacceptable’. Many had given themselves up as a result of an HMRC amnesty, itself following the G20’s renewed commitment in 2009 to tax transparency, and the formation of a new ‘high-net-worth unit’ within the department. The Times reports that

The HMRC expects to raise £500 million over three years as a result of the people who have come forward voluntarily and much more from those who have not.

The government’s finance bill would prescribe new maximum fines of 200% for such infractions.

Most important, the Court of Appeal and the Tax Tribunal, in two separate rulings this week, undermined regulations of long standing that had exempted non-resident Britons from tax on foreign earnings and ‘not ordinarily resident’ foreigners from tax on earnings here. Millionaire Robert Gaines-Cooper was found not to have ‘severed’ ties with the UK, which in the Court’s view ‘remained the centre of gravity of his life’ (he maintained an Oxfordshire estate). The decision shattered what lawyer Christopher Groves called the ‘myth’ that living in the country for less than 91 days a year was sufficient to qualify as ‘non-resident’. Furthermore, the income of Austrian financier Andreas Tuczka was deemed taxable by a Tribunal despite his not having reached the third anniversary of his arrival here – the usual benchmark for residency status. Tuczka’s intention, he claimed, had been to leave before the anniversary.

Reporting the rulings, the Financial Times talked in worried tones about ‘the risk of retaining close ties with Britain.’ Some economists fear a ‘brain drain’ of financial and business talent if the government continues to seek the money rich citizens owe it under law. But – reply the populists – with some of that talent lies most blame for a downturn, and attendant bailouts, that indebted a nation.

Tax doesn’t have to be taxing? Increasingly, governments have seemed to conclude, for the richest it hasn’t been taxing enough.

This post lacks all links and owes much to its sources

February 20, 2010 at 20:15 2 comments

Prospective personal injury reregulation would upset lawyers, benefit litigants

Two developments in the last month heralded a reassertion of consumer rights in the large and fast-growing personal injury sector.

The seriousness of the situation has inspired a British equivalent of the American term ‘ambulance chasing’: ‘claims farming’.

Even five years ago, The Times reported that Lord Falconer had blamed the sector for ‘creating a compensation culture that has led to children having to wear goggles while playing conkers’.

For an idea of the size of the industry, one statistic will suffice: there were ‘625,000 new [motor bodily injury] claims registered in 2008–09, which represents a 13% year-on-year rise’, according to Datamonitor, a business information firm.

‘No win, no fee’ has been a popular tagline, even while it misrepresents the obligations which contracts with personal injury lawyers tend to put upon claimants.

And when damages are won, ‘The legal costs of a claim have sometimes been 10 times as much as the cheque finally received by the injured party’, wrote the Guardian’s Marcel Berlins.

Indeed, in the view of Simon Douglas, director of AA Insurance, lawyers’ practices are not only a bane on those involved in litigation – either beaten defendants, or those claimaints who are unsuccessful. A rise in claims encouraged by prolific marketing is pushing up the cost of motor insurance cover for all drivers, he explained.

A less familiar practice that has disadvantaged the consumer is the auctioning of injured policyholders’ names to solicitors. By this means, insurers have earned ‘referral fees’ as high as £10 000.

But in the first week of January, the new Solicitors Regulation Authority criticised this practice, arguing that it tarnished the profession; the authority indicated that it would review practitioners’ compliance with its regulations, and in the absence of good behaviour would consider a ban.

This promise went hand in hand with a farther-reaching review of the costs to clients of personal injury claims, published later in the month. Lord Justice Jackson’s extensive Review of Civil Litigation Costs took a year to complete, and caused significant anxiety to the industry it was asked to scrutinise.

The report, like the relevant law, is complicated and technical. And because it was not commissioned by the Ministry of Justice itself, but by Lord Clarke when he was Master of the Rolls, it is not necessary for the government to act on its recommendations now. Lacking that political cooperation, one avenue of reform for a concerned judiciary would be to work with the rules as they now exist. ‘A cultural shift, rather than new rules, is what is needed’, Times journalist Neil Rose maintained, before the report was released.

Justice Jackson’s headline conclusion was that ‘costs are disproportionate and impede access to justice’. Among his recommendations were genuine ‘no win, no fee’ arrangements, or contingency fees, which are achieved by mandating that lawyers are remunerated from a legally capped percentage of damages won, rather than the ‘after-the-event’ insurance that leaves litigants unexpectedly indebted. He urged, as well, reforms that would shift the cost of success from the defendant to the injured client, but also raise the maximum level of damages by 10% to make that affordable. He joined the SRA in advocating an end to referral fees.

‘The focus of our litigation process should be on compensating victims, not upon making payments to intermediaries’, Justice Jackson said. Trade union firm Thompsons estimates that with his regulations in place successful lawyers would take ‘up to 50% of an injured person’s compensation’.

The recommendations may not sound momentous, but according to Marcel Berlins ‘their cumulative effect will be radical’. Interviewed by Legal Week, Peter Clough of Osborne Clarke used the same language: ‘This is pretty radical’, were his words.

From the press conference at which Justice Jackson introduced his report, Marcel Berlins concluded that the judge’s ‘attitude to the fact that, under his proposals, lawyers would undoubtedly lose income was simple: “Tough.”’ Certainly, many lawyers quoted in the Law Society Gazette’s article on the report were dissatisfied with it: the headline portrays it as sending ‘shockwaves through the industry’. But perhaps they should not worry, if, as Ross Clark declared in 2005, ‘Claims-farmers are not really lawyers at all, but loan sharks who have come up with an ingenious way of saddling people with debt.’

This article lacks some links as of its posting

February 20, 2010 at 20:01 1 comment

Are juries fair? Ministry of Justice offers a qualified ‘Yes’

An 18-month study conducted by UCL Professor Cheryl Thomas for the Ministry of Justice has – with a few reservations – verified that juries are fair.

The study derived evidence from simulated trials in Blackfriars, Winchester and Nottingham, and from analysis of 552 000 real trials that occurred between 2006 and 2008.

The media have taken the study’s lead in emphasising its recommendation that judges provide juries with written guidelines to their oral instructions about the law.

A majority of Nottingham jurors had difficulty understanding judicial directions. The study found that surprisingly few jurors in any city (31%) could answer accurately two simple questions about the instructions they had received, but acknowledged that more jurors did understand the law in their own terms: or they had translated the legal question, ‘Did the defendant believe it was necessary to defend himself?’ into, ‘Did the victim push the defendant first before he was punched?’

Another noteworthy finding contradicted Lord Judge’s worry that

the younger “internet generation” may find the oral presentation of information in jury trials unfamiliar and this may ultimately have a negative impact on jurors’ ability to follow information presented orally at trial.

In fact, many more young than old jurors answered correctly the study’s questions about this information, rather as the majority of jurors who admitted to looking a case up on the internet during the trial were over thirty years old.

The study found no evidence for three popular assumptions: that white juries discriminate against black and ethnic minority defendants, that in certain courts juries rarely convict and that in rape cases juries acquit more often than they convict.

‘One stage in the criminal justice system where BME groups do not face persistent disproportionality is when a jury reaches a verdict’, the study’s summary said. It seemed that sensitivity to race was affected by jurors’ location: white Nottingham jurors were readier than Winchester ones to convict white defendants accused of violence against minorities.

As for rape, the fact that fewer male than female complainants were vindicated in court was said to challenge the view that rates of acquittal in rape cases are affected by sexist bias. However the research did discover that gender was relevant to jury decision-making in a subtler way: ‘Female jurors were more open to persuasion to change their vote in deliberations than male jurors. Male jurors rarely changed their mind’, it concluded.

In a column for The Times, barrister Matthew Scott distinguished between judges’ summaries of the evidence and their directions as to points of law. He alleges that, in the former, more complicated task, judges too often display inappropriate bias, ‘knowing that the more [they appear] to be speaking from a position of lofty disinterest the more effective [their] advocacy will be’.

The study suggested further research into several questions, such as whether communities’ different conceptions of crime are to blame for geographically variable conviction rates, the quality of jurors’ understanding of impropriety rules and whether jurors discuss trials on social networking sites. On this the evidence was clear: ‘jurors want and need new tools to better understand the process.’

February 20, 2010 at 19:41 Leave a comment

Equality laws in the headlines

When law turns up in the news, it’s often because a controversial matter of politics is due to be judged by its independent rule.

Employment law, specifically that of Labour’s equality legislation, furnishes some recent examples of this process. They have in common their connection to the tolerance of individual difference in the workplace.

As OUT-LAW reports, Nadia Eweida was on Tuesday denied appeal to religious sentiment in her attempt to contravene the dress policy of her employer, British Airways.

The Court of Appeal has ruled that: ‘There was no evidence in this case that might support any suggestion that the provision created a barrier for Christians’. It was ‘an entirely personal objection’, the Court found.

The ruling comes after voices of religious advocacy in the public square – such as the Christian Fellowship – had leveraged the case beyond its legal significance. Lord Justice Sedley was quite categorical about how he thought the law should be interpreted. But the last Archbishop, Lord Carey, ‘condemned’ the decision.

That reaction was not confined to religious observers. Liberty, who provided Mrs Eweida with legal assistance, expressed ‘disappointment’ in the Court of Appeal. Lawyers Edward Wanambwa and Anna Birtwistle argued that the Court’s decision might encourage perceptions of a legal bias against Christianity, and that its use of scripture to classify Mrs Eweida’s choice of jewellery as ‘personal’ issued from a practical desire to keep the kinds  of religion protected by law ‘objective’ in nature.

Labour Deputy Leader Harriet Harman’s new Equality Bill, though it has yet to become law, has provoked further discussion in this vein, and further complaints from Christian leaders. Ironically this time the Catholic Church is protesting the discriminatory potential of a bill whose purpose is to forestall discrimination.

Telegraph columnist Christopher Howse is blunt: the Church has ‘no plans for welcoming homosexuals, be they in the most loving of partnerships, into its hierarchy.’ Harman’s bill would not render that position illegal. But against what the Pope describes as ‘natural law’, Labour would, in defining the roles for which religious employers can lawfully refuse homosexual applicants, assert a secular one.

It is not difficult to imagine a headline case disputing this provision that would draw a brighter spotlight even than Mrs Eweida’s. And since David Cameron, upsetting onlookers to his right, has made accommodating noises when asked about homosexuality, the future in Britain of this policy remains in doubt.

For now, though, the government’s amendments – which it portrayed as in keeping with the status quo – have failed to pass the House of Lords. Terry Sanderson, who is President of the National Secular Society, for his part believes that ‘the tactics used so successfully by the religious right in the US have now been introduced into this country’, raising in defiance the spectre of the European court.

Evidence that the government’s pursuit of the implications of a 21st-century consensus on values into law has had effects beyond the workplace came on Tuesday with the news of a Northamptonshire Sikh who has said he intends to join the British National Party. ‘I will be absolutely delighted to shake his hand and give him his membership card’, party leader Nick Griffin said. The BNP, under threat of litigation from the Equality and Human Rights Commission, had altered its constitution on Valentine’s Day to permit membership to Britons of any race. This was in accordance with the verdict of a county court in London, but notably the Commission’s threat did not have to go in front of a judge for the party membership to vote for change. Whether the BNP would accept non-white citizens as employees remains to be seen; should anybody sharing the inclinations of Mr Singh and Mr Griffin apply, owing to Labour’s bills a discriminatory rejection would be against the law.

The FT’s Wolfgang Münchau, meditating the distinct question of how the EU’s legal structure absorbs fiscal crisis in a member state, informs us that ‘Of course, justices are never objective interpreters of the law, and are always influenced by current political fads.’ We might ask in response (with the news related here in mind), If the law itself is influenced by politics, would issuing judgements in isolation from that world not be to do it an interpretive disservice?

February 20, 2010 at 19:29 Leave a comment