web 2.0 principles

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Interesting news (by way of an alert from Winston & Strawn) on a series of principles agreed upon by various internet and media companies (though it seems primarily the latter). To wit:

Several of the world’s leading Internet and media companies today announced their joint support for a set of collaborative principles that enable the continued growth and development of user-generated
content online and respect the intellectual property of content owners.

The principles self stated goals are “(1) the elimination of infringing content on UGC Services, (2) the encouragement of uploads of wholly original and authorized user-generated audio and video content, (3) the accommodation of fair use of copyrighted content on UGC Services, and (4) the protection of legitimate interests of user privacy”, though the emphasis would appear primarily to be obligations on operators of services oriented toward user generated content to prevent the misuse of copyrighted materials.

As noted by the Winston article, the principles “…are not a legally binding agreement, and compliance with these principles by a user-generated content service provider does not preclude a copyright owner from filing a complaint for copyright infringement.”

It will be interesting to see the extent to which they’ll be adopted by the marketplace. I have a feeling it may not be all that popular due, in part, to the noteable absence of some of the more prominent user-generated content sites, such the 900 lb video sharing gorilla now under the auspices of the googleplex.

xkcd is great

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I’m probably late to this and you have probably already heard about it. Anyway its an online comic called xkcd and its great. At first glance I thought, well, stick figures ain’t exactly impressive. But then once you read a few of them you quickly develop an appreciation for the humour in them. Particularly if you know, for example, what sudo means.

And its also educational. To wit, the third row of one of the more recent strips, reproduced below for your reading pleasure. Somewhat tech legal related. Least enough for me. And no, I have no idea how to pronounce xkcd other than saying the letters.
xkcd

long live the revolution! and lawsuits!

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Someone in China got upset that the state censors there required cuts to Ang Lee’s film Lust, Caution. From Reuters:

Dong Yanbin, a Ph.D student at the China University of Political
Science and Law in Beijing, had filed a suit against the nation’s film
censor, the State Administration of Radio Film and Television (SARFT),
for infringing upon his “consumer rights,” the Beijing Times said.

Power grows out of a statement of claim. Its the new Mao.

new startup vc fund

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Most of you have probably already seen the story in the Globe. on the new partialy government participating VC fund:

TORONTO — The Ontario government has unveiled a
new $165-million venture capital fund that will provide much-needed
capital to start-up companies in the province.

The fund is a partnership between the government and some of the
province’s largest pension managers and financial institutions. John
Wilkinson, Ontario’s new Minister of Research and Innovation, said in
an interview that this is the first time the province has entered into
a direct partnership with the private sector.

The government is injecting $90-million into the fund and is counting
on the private sector to kick in another $180-million, Mr. Wilkinson
said. So far, Ontario Municipal Employees Retirement System, Royal Bank
of Canada, the Business Development Bank of Canada and Manulife
Financial Corp. have invested a total of $75-million.

Very good news, I think, for entrepreneurs in Ontario. As many readers of this blog know, Canada in general has suffered from chronic underfunding for startups compared to our neighbours to the south, with the result often being that many startups will simply not bother and head south straightaway. Not a good thing, IMHO. <soapbox>Hopefully this will be the first step to showing the world that Canada is a great place to start and run a business, in addition to being a great place to invest. </soapbox>

vc monster

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Saw a very interesting interview with a gentleman by the name of Rob Monster, who heads up Monster Venture Partners in the US. Mr. Monster is a well-heeled entrepreneur who has had considerable success as such. In the story, he outlines his particular investment strategy and the reasons for it:

In an interview this week, Monster said he plans to invest in about three to five companies each year in the healthcare services and online marketing sectors, with investments ranging in size from $250,000 to $1.2 million. That’s a hefty amount for an individual investor, but Monster – who has been investing since he was 12 years old and started working at the American Stock Exchange at 17 – is experimenting with a new approach he dubs “angel (investing) on steroids.”

“There is a middle ground between angel investing and venture investing and that sweet spot is woefully underserved,” said Monster.

As well as his perception of the existing VC market:

MONSTER: “Venture has earned, deservedly, a bad rap for being not forward looking in its approach to creating value in partnership with the entrepreneur. (Venture capitalists) have become short sighted … and tend to design financing structures in a way that biases toward preferences that are not aligned with the objectives of the common shareholders. And they can optimize certain outcomes in favor of the preferred shareholder, none of which, per se, is wrong. But from the standpoint of the entrepreneur they have figured it out…. Entrepreneurs are kind of backlashing a little bit… There is now an accountability for VCs to behave and to follow through on their commitments of being a partner of building a company. But a lot of times VCs get involved and say they have all of these strategic relationships and will make all of these introductions and then it doesn’t happen. This is the universal rant of most entrepreneurs that have interacted with VCs.”

MVP plans to invest through simple common shares, rather than the typical preferred shares with minimum returns and liquidation preferences, anti-dilution rights and so on. His reasons:

“Whatever happened to investing and being right there in the trenches with the fellow company builder, as opposed to baking in a preference whereby I can win and you can lose? My personal view is that the guys who back a company have a responsibility to help the company be successful.”

I recall giving a speech (an admittedly poor one to be perfectly honest) a couple of years ago about how the use of common shares seemed to be increasing as a financing vehicle for not only angel type rounds, but also early stage VC rounds. It didn’t quite ring with some of the VCs that were also presenting, so its interesting to now see a fund specifically and deliberately adopting common shares as its primary investment vehicle.

I’ve had the pleasure of some (very limited) interaction with MVP – quick, straightforward and candid. However, he’s not without his detractors (see for example some of the rather stinging comments in the above article). It will be very interesting to see how things work out.

pushing daisies, amelie and ip claims

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I don’t watch much TV at all but by coincidence caught part of this new show, called Pushing Daisies. Overall, I liked what I saw – interesting premise, well told plot, good acting, and keen attention to pacing, cinematography (if one can use that term for a TV show), music, colour, etc.

But something struck me within the first 10 minutes of watching it – something oddly familiar. Not the stories, but rather, the whole look and feel of how it was presented – like: the sometimes oddly surrealistic but realistic presentation of scenes (exaggerated or bright colours, quirky but cute interiors (and exteriors); unusual and repeated focus on otherwise insignificant details (ages down to the hour of each character – oh and also by an omnipresent unknown third party voice over storyteller); oddly familiar patterns of speech – sometimes quick and rapid bursts of somewhat deadpan humour; curious static shots of people or things with some sort of special effect, like zooming away or seeing through something; oddly familiar patterns of music; eccentric but lovable characters like Chuck’s two aunts; eccentric backstories of characters (Chuck’s aunts again – who had wonderful careers as synchonized swimmers until devastingly felled by contaminated kitter litter); oh, and of course, oddly tragic (albeit someone humourous) events that people undergo (see the aunts) as well as oddly humourous but sometimes well-deserved deaths (like that of a rather fat thieving undertaker).

And then I suddenly realized that what I was watching was a show that, for lack of a better word, had (intentionally or unintentionally) “borrowed” the entire look and feel of “Le fabuleux destin d’Amélie Poulain”. Not the story, mind you, not that at all. But rather a multitude of little bits and pieces that all go into how a story is told.

I marvelled, for a moment, at what a great job the creators of the show had done in transposing the look and feel of that movie into the series, and wondered how much effort (if any) went into deliberately attempting to create or invoke the look, feel and mood of Amélie (which, by the way, they do quite well). Then, needless to say (given my profession), I ruminated about which intellectual property laws, if any, could the owners of Amélie used to protect the “look and feel” of their film. Certainly most people (even non-lawyers) are familiar with the Apple v. Microsoft look and feel case back in the 90s (which tried to base a claim in copyright and didn’t get very far if I recall correctly). It would be interesting to see how that would play out in the context of something like a movie or similar work. Not that I’d like to see that happen to Pushing Daisies – its already tough enough to find decent shows…

hybrid computing – bigger than i thought (possibly)

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I recently mentioned Prism in a prior entry and how it was an intriguing business model. What I didn’t realize is how widespread a movement it seems to be, as suggested in this Knowledge@Wharton article. A brief blurb:

It’s been a busy few weeks for the big technology companies. On October 1, Adobe Systems announced an agreement to buy Virtual Ubiquity, a company that has created a web-based word processor built on Adobe’s next generation software development platform. One day earlier, Microsoft outlined its plans for Microsoft Office Live Workspace, a service that will combine Microsoft Office and web capabilitiesso that documents can be shared online. Recently,Google introduced a technology called “Gears” that allows developers to create web applications that can also work offline. The common thread between the recent moves of these technology titans: Each company is placing a bet on a new vision of software’s future, one which combines the features of web-based applications with desktop software to create a hybrid model that may offer the best of both worlds.

Such a model seems to make a lot of sense, both from the perspective of users as well as developers. From a developer perspective, I can see how simply gaining information on how their products are used (albeit possibly involving some privacy complications) could be invaluable. In addition, tying software to a service will likely curb piracy – its one thing to bypass protection mechanisms on standalone software but something quite different to try to fake an account setup to take advantage of an online service (at least given what little I know about it).

Then again, as the article points out, this movement may simply be the latest iteration of a trend that has never quite caught on (e.g. MS Hailstorm, “thin” computing, network as the computer, etc. etc.).

so much for the paperless revolution

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Lexology had an interesting story that serves as a really good reminder that sometimes, despite all the great things about modern technology, plain old paper may sometimes be the best way to go.

What happened? Well, to make a long story short, the US Federal Trade Commission inadvertently disclosed a large amount of information that was filed with the FTC that should have remained confidential. To wit:

The mistake made by the FTC was basic. In preparing its brief for filing, FTC staff wrongly assumed that the metadata in its word processing file would not migrate upon direct conversion from native format to portable document format (.pdf). In particular, they wrongly assumed that using Microsoft’s “Highlight” (or “Borders and Shading”) tool to black out text actually removed the text from the file’s contents. It does not. It “covers up” the text, but the text itself remains in the file, fully searchable and available for copying. The resulting .pdf appears at first glance to contain only black boxes in place of the redacted content. That content, however, is present in the .pdf file and can be easily revealed either by copying and pasting the blacked-out text into a word-processing file or an e-mail message or by viewing the .pdf file in a reader such as Preview or Xpdf.

Its one of those stories that makes you want to laugh and cry at the same time. The laughing because its easy enough to think “What kind of idiot would do that?” because the error was (at least for most readers of this blog) rather obvious. The crying because, if you give it some thought, there are instances that this could very well happen to even the most technically sophisticated of you – not just with PDFs, but any number of other forms of digital documents, communications and storage – and in any number of ways. The bottom line is that when things are put into digital form, they are often harder to get rid of. Its something well worth keeping in mind.

the (not so) long arm of the tax authorities

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The recent case involving the Canada Revenue Agency and eBay took an interesting (and perhaps somewhat ironic) twist on access to information. Without getting into too much detail, the essence of the issue was this: CRA wanted eBay Canada to cough up information on folks known as “Power Sellers” – those that sell a lot of stuff on eBay. Presumably so that CRA could helpfully remind those folks of their tax obligations in the unfortunate event they somehow forgot to report all the income they made in Canada by selling on eBay.

eBay Canada’s response was that the legal entity in Canada did not in fact own that information and it was also not stored in Canada. Rather, the information was owned by some of its affiliates and stored in the US, outside of Canadian jurisdiction. So they couldn’t provide the information, they asserted.

Unfortunately (for eBay) it came out that eBay Canada was able to access the information even though it didn’t own the data. In fact, it had to be able to access that information in order to run its business. So the court ruled in favour of the CRA, with this rather cogent analysis:

The issue as to the reach of section 231.2 when information, though stored electronically outside Canada, is available to and used by those in Canada, must be approached from the point of view of the realities of today’s world. Such information cannot truly be said to “reside” only in one place or be “owned” by only one person. The reality is that the information is readily and instantaneously available to those within the group of eBay entities in a variety of places. It is irrelevant where the electronically-stored information is located or who as among those entities, if any, by agreement or otherwise asserts “ownership” of the information. It is “both here and there” to use the words of Justice Binnie in Society of Composers, Authors and Music Publishers of Canada v. Canadian Ass’n of Internet Providers, [2004] 2 S.C.R. 427 at paragraph 59. It is instructive to review his reasons, for the Court, at paragraphs 57 to 63 in dealing with whether jurisdiction may be exercised in Canada respecting certain Internet communications, including an important reference to Libman v. The Queen, [1985] 2 SCR 178 and the concept of a “real and substantial link”.

The implications in this case are relatively clear. In other cases, it may become less so. For example, what happens with this concept when someone who once stored their docs on their local hard drive starts using Google Docs, only to find out that the authorities in whatever far-flung jurisdiction have ordered an affiliate of Google to disclose that information? Or in the near future when things like Prism get to a point where users aren’t even sure whether their data is here, there, or elsewhere. Interesting times, indeed.