Google has recently signed an interesting distribution deal with “Family Guy” creator Seth McFarlane:

Google will syndicate the program using its AdSense advertising system to thousands of Web sites that are predetermined to be gathering spots for Mr. MacFarlane’s target audience, typically young men. Instead of placing a static ad on a Web page, Google will place [McFarlane's show's] video clip. Advertising will be incorporated into the clips in varying ways. In some cases, there will be “preroll” ads, which ask viewers to sit through a TV-style commercial before getting to the video. Some advertisers may opt for a banner to be placed at the bottom of the video clip or a simple “brought to you by” note at the beginning. . . . “We feel that we have recreated the mass media,” said Kim Malone Scott, director of sales and operations for AdSense. . . .

Media Rights Capital, a boutique production company that has the ability to invest about $400 million a year in movies, television and Internet episodes, thinks it has figured out a sustainable business model with the Google Content Network. Every time someone clicks on one of the syndicated videos, the associated advertiser pays a fee, with shares going to Mr. MacFarlane, Media Rights, Google and the Web site that generated the click.

My question is, as revenue is re-negotiated in the future, how soon will it be before we see headlines like this for video content-providers:

Amazon, the online retailing giant with a fast-rising share of the consumer book market, has adopted the literary equivalent of a nuclear option for rebellious publishers who balk at its demands. In the latest in a series of disputes over the division of revenue from online sales, Amazon has disabled the “buy now with 1 click” icon on its British Web site for hundreds of books published by the British unit of Hachette Livre, from back-list Stephen King novels to, naturally, “The Hachette Guide to French Wine.”

The button allows registered users to purchase titles instantly, with free shipping. Customers can still buy the affected books, but they have to navigate to an open marketplace that links them to third-party sellers of new or used books. And they have to pay for shipping.

I suppose a lot depends on the elasticity of demand for the products involved. What’s the demand for Seth McFarlane (as opposed to other young-male-humor) compared with the demand for backlist Stephen King (as opposed to other frisson-inducers)? My sense is that a sense of information glut ends up increasing the power of intermediaries, as weary consumers begin to opt for whatever’s most available.

And while I’m just speculating here…any bets on whether Amazon’s growing dominance will make a Borders/BN merger more likely? Seems like a move very similar to the XM-Sirius merger, though perhaps the relevant market in the radio case is “bigger” (whatever that means) than the one in books.

Hat Tip: Eric Goldman.
Title Credit: Ralph Waldo Emerson.

Genericide is one of the most interesting doctrines in trademark law, and the First Circuit’s recent opinion on Duck Tours should prove interesting to scholars working in the area. Judge Howard of New Hampshire was on the panel, joining an opinion written by Judge Lipez. Lipez could have cited any of a number of pieces on TM law to explain the concept of genericness, but wisely opted for a preternaturally aptly titled piece:

Because they serve primarily to describe products rather than identify their sources, generic terms are incapable of becoming trademarks, at least in connection with the products that they designate. . . . Awarding trademark rights to any user of the term, especially the first user, would harm competitors and consumers alike. Competitors unable to use a common term that describes or designates their product are at a significant disadvantage communicating to potential customers the nature and characteristics of the product. See Vanessa Bowman Pierce, If it Walks like a Duck and Quacks like a Duck, Shouldn’t it be a Duck?: How a “Functional” Approach Ameliorates the Discontinuity Between the “Primary Significance” Tests for Genericness and Secondary Meaning, 37 N.M. L. Rev. 147, 154 (2007).

Fortunately, AFLAC can rest assured that its own mascot is sufficiently fanciful to resist such a judgment.

The splogs are getting sublimely absurd. A splog, or spam blog, is a fake blog filled with advertising links and/or links to malicious software. In order to create traffic, splogs link to the comments and trackbacks of legitimate blogs using web crawling algorithms. This site, which linked back to a post on a personal blog on which I jabber about philosophy and theology, is an accidental work of art, given these link titles:

“Looking for ONTOLOGY?”
“Get ONTOLOGY here for free!!!”
“Best ONTOLOGY videos!”
“Shopping for ONTOLOGY?”

Hmmm…. What kind of world will I end up in if I follow one of those links?

This is a wonderful project to collect information on A2K in Africa.  They have a nice blog as well.

It’s hard to think of two movies conveying American joie de vivre and weltschmerz as well as Ferris Bueller’s Day Off and Requiem for a Dream (respectively). So why not superimpose the music from one on images from the other (in Requiem for a Day Off)?

Like Reese’s Pieces, two great movies that taste great together. Shakes McFadden’s work here reminds me of the growing genre of minimally transformative mashups. Two years we saw the Nietzsche Family Circus; now there’s Garfield Minus Garfield, a cartoon “Hamlet Without the Prince” which simply excises the feline protagonist from every frame of Jim Davis’s cartoon strips. Davis himself loves the concept:

“I think it’s the body of work that makes me laugh — the more you read of these strips, the funnier it gets,” Mr. Davis said. As for Garfield himself, “this makes a compelling argument that maybe he doesn’t need to be there. Less is more.”

McFadden masterfully re-cuts Ferris, but doesn’t appear to add much to Clint Mansell’s music (which may well be inspired by Phillip Glass). I suppose Mansell would have a better chance at a copyright infringement suit than the moviemakers. But I still find it bizarre that courts might ask, in the fair use inquiry, whether the video comments on the music (parody), or merely uses it as a convenient platform to make a humorous point (satire). Then again, I always thought the guy in the Numa Numa video was parodying Romanian dance music.

Hat Tip: Andrew Sullivan; Cross-posted from Madisonian.

The U.S. Supreme Court issued its opinion in Quanta Computer v. LG Electronics on June 9.

The patents at issue in Quanta related to data transfer and management in a computer. LG Electronics licensed the patents to Intel, a computer chip maker, as part of a patent portfolio. The LG-Intel license prohibited the combination of licensed products with third party products in a manner that would infringe any of the patent rights granted under the license. Further, Intel was required under LG license to give notice to its own customers that the LG license prohibits such combinations. However, the LG license stated that the agreement was not intended to limit the doctrine of exhaustion.

Quanta Computer and other computer makers purchased chipsets from Intel and received the notice from Intel required under the LG-Intel license. Nevertheless, Quanta combined the chipsets with third party components in finished computers in ways covered by the LG patents. When LG sued for infringement, the district court granted summary judgment based on exhaustion. The Federal Circuit reversed in part and held that exhaustion does not apply to method claims and that, in any event, the LG-Quanta license did not permit combinations with non-licensed products.

The Supreme Court reversed. The Court held that there is no meaningful distinction between method and apparatus claims for exhaustion purposes, and that engrafting such a distinction into the exhaustion doctrine would allow patentees to game the system by drafting their claims to cover a method rather than an apparatus. As to the combination of components, the Court relied on U.S. v. Univis.

In Univis, the Court which held that the sale of an uncompleted article, which embodies the essential features of the patented invention, and which is intended to be finished by the purchaser, exhausts any patent rights in that article. The patent at issue in Univis covered finished eyeglass bi- and tri-focal eyeglass lenses. The patent rights were extinguished when unfinished lenses blanks were sold by the patentee to wholesalers and retailers who ground the blanks into lenses. The Univis Court held that “the authorized sale of an article which is capable of use only in practicing the patent is a relinquishment of the patent monopoly with respect to the article sold.”

The Court found the Univis facts essentially indistinguishable from the incorporation of the LG patented methods into finished computers. The only “reasonable and intended use” of the Intel chipsets, the Court found, was to incorporate them into computers that would practice the LG patents, and that the chipsets “’embodie[d] essential features of [the] patented invention.’” The Court further held that nothing in the LG-Intel license agreement prohibited Intel from selling to manufacturers who intended to combine the products covered by the LG-Intel license with third party products. The LG-Intel license required only that Intel give notice that LG did not license customers who mixed components to practice the LG patents – and Intel had provided this notice to its customers. But LG’s permission or lack thereof to the customers was irrelevant because the first sale to Intel exhausted LG’s patent rights.

This is very funny.

Are the biggest data-aggregators and reputation-makers online successful due to sheer innovative genius, or did law play a decisive role in their business models? Many fortuitous legal and regulatory decisions (originally designed to benefit telecommunications companies) paved the way for the success of Google, eBay, MySpace, and Facebook. These dominant intermediaries now are using law to consolidate existing advantages–and one has to wonder to what extent those moves should be checked, or conditioned on the companies’ willingness to promote both interoperability and public values.

In my co-authored article Federal Search Commission? (FSC), I have argued that search engines are new “utilities” of our time, crucial bottlenecks for information with enormous power in the new economy. I extended these claims in Internet Nondiscrimination Principles (INP), which proposed that the same types of regulation Google, Yahoo!, and Microsoft would impose on telecommunications firms should also be developed for those companies’ general purpose search engines. I’m now trying to expand the scope of FSC and INP by proposing public service obligations for dominant online intermediaries other than general-purpose search engines. These intermediaries include social networking sites and online ranking and rating systems. Left to privately legislate use of their data via “browsewrapped” Terms of Use contracts, they may snuff out both commercial competitors and academic researchers’ efforts to make their operations more transparent.

How might that snuffing out work? Consider the recent Josh Quittner article “Who Will Rule the Net,” which describes how some major platform providers are competing:

Google’s core business, search, depends on openness. Google can’t find the things you want on the Web—documents, music, images and so on—unless they are open and accessible, Kraus says. The richest Internet company on the Fortune 500 (it’s ranked 150, with $16.5 billion in revenue), Google has a business plan that depends on the Web being used by as many people as possible. That’s why the company spends so much time and energy building new applications that make the Web more useful or fun.

Social networks are a threat to that business; users tend to stay within their network and communicate among themselves or simply fool around with apps. When Facebook’s users are playing Scrabulous or tagging photos, for example, they’re not using Google. Indeed, they’re more likely to discover new things via friends or in-network applications such as iLike, a service that matches your friends’ musical tastes to your own.

So Google retaliated last November with OpenSocial, an alliance of Facebook’s competitors—MySpace, hi5 and Google’s own social network, Orkut, among others—to try to create a write-once, run-anywhere application platform. That means a developer, with only modest tweaking, can build an application that runs across all the major social networks except, of course, Facebook. “When you talk to developers, most of them don’t have 50 people; they can’t write their applications 50 different ways,” [Google exec] Kraus says. “They really want to write their application once and get as much distribution as possible.”

Quittner and other focus on the “clashes of the titans” over platform domination. But just as important are the ways in which the current dominant platform owners treat those who depend on them. Another important point is that we shouldn’t only be trying to maximize competitive opportunities online–it may turn out that general-purpose search (for example) is basically a natural monopoly. And while data portability would be a godsend for competition, it has some disturbing implications for privacy.

The FTC has opened a formal investigation into Intel’s pricing practices.  The investigation seeks to determine whether Intel engages in predatory pricing and represents a new round in the global legal wrangling between Intel and AMD.

Here’s the first part of a Wall Street Journal forum interview with FCC Chairman Kevin Martin and Verizon Wireless CEO Lowell McAdam. Good questions by host Walt Mossberg about device cross-compatibility and termination fees.