P2P defendant Joel Tenenbaum was lucky to get hit with a damages award on the “very low end” of the range provided by the Copyright Act, RIAA told U.S. District Judge Rya Zobel in Boston. The case, now in its fifth year and second judge, went back to trial court after the 1st U.S. Circuit Court of Appeals overturned the first judge’s reduced damages against Tenenbaum to $67,500, from the jury’s original $675,000, or $22,500 for each of 30 recordings infringed. Tenenbaum told Zobel she couldn’t constitutionally award anything more than the minimum $750 per infringed work under the Copyright Act, and argued that juries shouldn’t decide awards of statutory damages at all (WID Jan 5 p1).

The FCC’s net neutrality order has become “the hotel Sunday brunch of administrative procedure,” with the reconsideration petitions and rounds of court appeals, said Austin Schlick, FCC general counsel. Verizon offered a “very creative theory” that it could file an early challenge -- and it had to go to the U.S. Court of Appeals for the D.C. Circuit -- because the order amounted to a licensing decision, he said Monday at a webcast Practising Law Institute seminar in New York. With the court’s dismissal of a filing by the carrier before the order was final, “the legal aphorism ‘Pigs get fat and hogs get slaughtered'” applies, Schlick said. But the punchline is that a court lottery held after timely appeals were filed in several circuits determined that “the case goes where Verizon wants it to go,” he said: the D.C. Circuit, which had ruled against the FCC on closely related issues in the Comcast case.

The FCC’s net neutrality order has become “the hotel Sunday brunch of administrative procedure,” with the reconsideration petitions and rounds of court appeals, said Austin Schlick, FCC general counsel. Verizon offered a “very creative theory” that it could file an early challenge -- and it had to go to the U.S. Court of Appeals for the D.C. Circuit -- because the order amounted to a licensing decision, he said Monday at a webcast Practising Law Institute seminar in New York. With the court’s dismissal of a filing by the carrier before the order was final, “the legal aphorism ‘Pigs get fat and hogs get slaughtered'” applies, Schlick said. But the punchline is that a court lottery held after timely appeals were filed in several circuits determined that “the case goes where Verizon wants it to go,” he said: the D.C. Circuit, which had ruled against the FCC on closely related issues in the Comcast case.

Adscend Media said Friday it “vehemently denied” allegations by Facebook and Washington state Attorney General Rob McKenna that Adscend is a “clickjacking” operation that tricks Facebook users into turning over personal information and then sells the information (WID Jan 27 p2). “At no time did we engage in the activity alleged in the complaints,” the company said, calling the allegations against it “absolutely and unequivocally false.” Adscend said it’s investigating whether its affiliates engaged in the alleged activities -- tricking users into giving their personal information in order to watch salacious videos -- and will “administer its longstanding company policy and immediately terminate” any affiliates that are responsible. Adscend lawyer Mark Rosenberg said the company didn’t appreciate the “public spectacle” that McKenna created around the lawsuits -- hosting a press conference Thursday at Facebook’s Seattle office -- without first “questioning” Adscend during McKenna’s investigation, and “even more inexplicably” not notifying Adscend before filing suit. McKenna allowed “public resources to be used in an irresponsible manner” and could do “tremendous harm” to Adscend’s reputation and business, Rosenberg said. He said Adscend was “fully prepared” to file a defamation suit against “the source of these false allegations.” Adscend is a member of the Performance Marketing Association, PMA Executive Director Rebecca Madigan confirmed. The group’s member Web page lists only charter members and “platinum” members such as Amazon, Yahoo, Dell and eBay. Adscend describes itself as a “performance-based marketing network.” Madigan declined to review the allegations against Adscend and give her judgment on whether the company’s alleged activities run afoul of accepted practices in the industry. “I have no knowledge of this case” and wouldn’t comment on litigation involving any PMA member, she said. PMA’s website points its members to FTC regulatory guidance on matters such as CAN-SPAM Act compliance and links to a 2009 article about state attorneys general taking actions against affiliate marketers -- a key element in the Adscend suits -- and how those marketers can “avoid raising the ire of the law.” The association also maintains several working groups, including for “anti-fraud/anti-abuse” and a code of conduct, though a handful appear to be in the recruiting stage. Adscend isn’t listed as participating in any working group.

"Used” digital music reseller ReDigi has no “colorable” claim to fair use that would excuse its infringements of Capitol Records’ music, Capitol parent EMI told U.S. District Judge Richard Sullivan in New York. The companies have been sparring in separate letters to Sullivan in the past two weeks ahead of a Feb. 6 hearing where he will consider EMI’s request for an injunction and ReDigi’s motion for summary judgment (WID Jan 24 p8). ReDigi’s first distortion is that it’s simply a “cloud storage service,” when its website prominently describes the company as a “marketplace” for purchasing music, EMI said: The service is “no passive participant, but an active consignment retailer.” ReDigi doesn’t come close to qualifying for a fair-use defense, because its uploading of users’ music for resale is purely commercial, sound recordings are “less susceptible to fair use” and ReDigi resells whole songs, and its “euphemistically described ‘used’ files … directly supplant the market” for legitimate song purchases, EMI said. The service also doesn’t qualify for protection under the “essential step” doctrine in Section 117 of the Copyright Act because music files aren’t “computer programs,” copying them isn’t needed for the “utilization” of the files, and ReDigi isn’t the “owner” of the files, the letter said. EMI said it was baffled by ReDigi’s claim that it’s getting the label’s artwork and preview clips from a licensed provider, saying EMI is “unaware of any of its legitimate affiliates” having worked with ReDigi. Perhaps most controversially, EMI said it was under no obligation to use the notice-and-takedown procedure laid out in the Digital Millennium Copyright Act, responding to ReDigi’s claims that its notices were deficient under the DMCA. The DMCA gives “Internet service providers” a defense against secondary liability, but no “affirmative obligations on copyright owners, who may choose to use” its notice mechanism but “are under no requirement to do so.” ReDigi’s summary judgment motion is “destined to fail and redundant” of issues EMI raised in its motion for an injunction, the label said.

The House Communications Subcommittee plans to be active this year on FCC process reform, cybersecurity, the LightSquared controversy and the future of video, audio and data, Chairman Greg Walden, R-Ore., told reporters Wednesday morning. Walden said he was optimistic about passing spectrum legislation as part of the payroll tax cut bill. And he criticized FCC Chairman Julius Genachowski’s remarks at the CES show seeking more flexibility from Congress on auction conditions.

Outgoing FCC Office of Strategic Policy Chief Paul de Sa is a new target of Sen. Charles Grassley’s push for insight into the FCC’s process in conditionally approving LightSquared’s terrestrial use of its frequencies. De Sa, who has said he will leave in February, is seen by many as playing a key role in making the case for LightSquared’s merits at the highest levels at the FCC. Grassley, R-Iowa, asked FCC Chairman Julius Genachowski in a letter Wednesday to make de Sa available to answer questions before he leaves government.

Communications between an executive affiliated with LightSquared and Sen. Chuck Grassley’s staff included an “unseemly invitation to discuss a quid pro quo,” the office of the Iowa Republican said Monday. Todd Ruelle of Fine Point Technologies raised the possibility of including a “call center in the Midwest, possibly in Iowa, if this deal goes through,” according to the senator’s account of the interaction in a Monday letter to Harbinger CEO Phil Falcone. Grassley’s staff then contacted the Senate ethics committee, who advised them to sever contact, said a spokeswoman. Ruelle, who told Grassley’s staff he hasn’t been paid by Harbinger and won’t be until the LightSquared “deal goes through,” told Grassley’s staff he was supportive of the investigation into LightSquared. “Conduct the investigation,” said an email between Ruelle and Grassley’s staff that was distributed Monday by the senator. “That is an issue you need to run separately to be blunt run it hard.” Ruelle then said he would ask that LightSquared ask the FCC to release some information. Ruelle’s role was also questioned in a recent batch of emails obtained through a Freedom of Information Act request. In one email, Ruelle was asked by Deputy Chief Technology Officer Tom Power of the White House Office of Science and Technology Policy to stop contacting him about LightSquared. Ruelle and Harbinger didn’t comment. “Clearly this guy acted inappropriately,” said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington. “It’s amazing to me that someone would make such a suggestion, particularly to anyone on Grassley’s staff, because Grassley is known as such a straight arrow.” It’s also surprising because of LightSquared’s huge lobbying expenses that give the company access to a huge number of Washington lobbyists and lawyers, who would never had made such an offer, she said. It’s still important to know and remains to be seen the exact relationship Ruelle has with LightSquared, something Grassley is clearly curious about, she said.

The author of the PROTECT IP Act, Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., expressed his regret that a cloture vote on the bill would not occur this week and continued to promote his legislation in a speech Monday on the Senate floor. “I regret we will not go forward with it this week. I regret that so much misinformation has stopped it. … I hope after our delay we can come back together.” On Friday Senate Majority Leader Harry Reid, D-Nev., postponed Tuesday’s cloture vote on the PROTECT IP Act, and Senate Minority Leader Mitch McConnell, R-Ky., agreed that lawmakers should “reconsider fast tracking” a bill that raised “serious legal, policy and operational concerns” (WID Jan 23 p1). Support for the antipiracy bill quickly eroded last week after Wikipedia, Craigslist, and thousands of other sites blacked out their home pages in a coordinated protest of PROTECT IP and its companion bill, the Stop Online Piracy Act (SOPA) (WID Jan 19 p1). Following the protests at least seven of the bill’s original sponsors withdrew their support. Leahy said Monday that he has “remained flexible” on the issue. “I have listened to people both for and against the legislation, made changes in it along the lines as suggested by Senator [Ron] Wyden [D-Ore.]. I took seriously the concerns about the domain name provisions so we fixed that in the manager’s amendment,” he said. “At the end of the day, this debate boils down to a simple question. Should Americans and American companies profit from what they produce and be able to provide American jobs, or do we want to continue to let thieves operating overseas steal that property and sell it to unsuspecting American consumers? I hope that in the coming days the Senate will focus on stopping that theft that is undercutting our economic recovery. I remain committed to confronting this problem.”

On January 19, 2012, the Consumer Product Safety Commission voted 3-1 to provisionally accept an agreement with Hewlett-Packard Company (HP) that would settle CPSC staff allegations that HP failed to immediately inform the Commission of a defect on its lithium-ion battery packs for its notebook computers. HP agreed to settle the allegations by paying a $425,000 civil penalty. While Commissioner Adler voted against the agreement, stating that the penalty amount was too small to deter violations, Commissioner Tenenbaum voted for the agreement, but with significant reservation.