FRON LEGAL BLOG WATCH

Legal Blog Watch

Copyright Ruling Sounds the Death of 'Net Radio Will the March 2 decision of the U.S. Copyright Royalty Board raising royalty rates for Webcasts 30 percent mean the death of Internet radio? U.S. Rep. Edward Markey, D-Mass., thinks so. As CNET News reports, he testified yesterday before the House Subcommittee on Telecommunications and the Internet that the CRB's decision "represents a body blow to many nascent Internet radio broadcasters." That is also the conclusion of the Radio and Internet Newsletter, which did the math and found that the royalties an Internet radio station would pay would easily exceed any revenues the station might bring in. Among bloggers, the decision likewise won no fans. Here is a sampling of what they are saying: Andrew Raff at IPTAblog:  "If the royalty rates are set so high that webcasters cannot afford to operate and pay artists, the webcast royalty pool may end up smaller than it is currently." Alan Wexelblat at Copyfight: "Nothing short of Congressional action is going to hale the Copyright Board's new rate structures." Erik J. Heels: "The Copyright Office's recent decision that Internet radio stations must pay higher royalty rates for music than broadcast radio stations is puzzling. The Copyright Office is propping up old broken technology (broadcast radio) at the expense of newer better technology (Internet radio)." William Patry at The Patry Copyright Blog: "The decision ... will, by the accounts within the industry, lead to the death of small, independent Internet radio. The noticeable swaying of these canaries before they die may also be a signal of the impending death of the present system of rate fixing, a system that has never worked, despite the expenditure of vast amounts of Congressional time on the issue and vast amounts of money by the affected parties." Bill Goldsmith at Save Our Internet Radio: "Crippling an exciting, groundbreaking industry like Internet radio is certainly not in the best interests of the public, nor that of musical artists, and not even - if history is any judge - of the music industry itself." Doug Isenberg at GigaLaw.com Daily News: "The board ignored the arguments of the International Webcasting Association and other webcasters, and apparently simply endorsed the proposal of the RIAA-associated SoundExchange royalty organization, which represents the major and some indie labels." Paul Fakler via Martin Schwimmer's The Trademark Blog: "It boggles the mind how a supposedly market-rate determination by the Copyright Royalty Board could end up with such a rate that no sane webcaster ever could have agreed to." Mike at Techdirt: The industry continues to think that it needs to do this because it wants to own all distribution and promotional avenues in order to be able to continue to take its large cut. However, that's no reason for the Copyright Royalty Board to put in place these artificial barriers that only serve to protect the recording industry's outdated understanding of its own business model. The rate-setting authority of the Copyright Royalty Board is governed by 17 U.S.C. section 112. Posted by Robert J. Ambrogi on March 8, 2007 at 12:14 PM | Permalink | Comments (0) Are Noncompetes the New SOX? A Financial Week article on the rise of noncompete litigation directed at top executives piqued Jay Shepherd of the blog Gruntled Employees to do some research. What he found was that, over the last decade, the number of published noncompete decisions in state and federal courts nationwide has doubled. In just the last two years, the number of decisions surged 37 percent. If that many noncompete cases are being decided in written opinions, he notes, then the number being filed has to be significantly greater. Why this surge in noncompete cases? One reason, Shepherd says, is the increasing number of employees who are signing noncompete agreements. Another is the fiercer competition for top-level talent. Whatever the reason, there is irony in these numbers, as Shepherd sees it. Many in-house counsel view their biggest employment-law concern as the rise in Sarbanes-Oxley whistleblower lawsuits. But given the numbers, perhaps they should reconsider, Shepherd suggests. "[C]ompare the number of cases filed under SOX's Section 806 (the only part of the Act that allows an individual to sue) with the noncompete statistics above. According to the U.S. Department of Labor, only 130 SOX whistleblower cases were decided in 2006. ... And while that number has risen over the four years since the Act was introduced, the number of those cases pales when compared to noncompetes." For Shepherd, the conclusion is this: "Maybe noncompetes are the new Sarbanes-Oxley whistleblower bogeyman." Posted by Robert J. Ambrogi on March 8, 2007 at 12:09 PM | Permalink | Comments (0) Software Cited for Unauthorized Law Practice A recent decision from the 9th U.S. Circuit Court of Appeals may be the first to cite a software program for the unauthorized practice of law. Entrepreneur Henry Ihejirika offered the so-called bankruptcy expert system through his company Frankfort Digital Services and a series of Web sites operating under the names 700law.com, Ziinet.com and others. Ziinet described the bankruptcy service this way: "Ziinet is an expert system and knows the law. Unlike most bankruptcy programs which are little more than customized word processors the Ziinet engine is an expert system. It knows bankruptcy laws right down to those applicable to the state in which you live. Now you no longer need to spend weeks studying bankruptcy laws." In 2002, Jayson Reynoso visited Ziinet, plunked down $219 and used the program to generate a complete set of Chapter 7 bankruptcy forms. But when he filed them, the trustee noticed errors in the petition. Upon questing Reynoso, he learned that the debtor had paid for the assistance of the artificial-intelligence program. The trustee brought an adversary proceeding against Ihejirika and his companies, alleging that the Web-based program had acted as a "bankruptcy petition preparer" in violation of the law and had engaged in the unauthorized practice of law. The bankruptcy court agreed, and the 9th Circuit, in a Feb. 27 decision, affirmed. "Frankfort’s system touted its offering of legal advice and projected an aura of expertise concerning bankruptcy petitions; and, in that context, it offered personalized -- albeit automated -- counsel. ... We find that because this was the conduct of a non-attorney, it constituted the unauthorized practice of law." As the Wired blog 27B Stroke 6 notes about the case, Ihejirika used a flesh-and-bones attorney for his defense. But Seth at QuizLaw raises an intriguing question: What if the software had first taken and passed the California bar exam? Posted by Robert J. Ambrogi on March 8, 2007 at 12:03 PM | Permalink | Comments (0)

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