But that was several lifetimes ago (in Internet years), and the content industry is having a difficult time grasping the current reality. Content is no longer king. Instead, distribution is king.

For decades in the book, music and movie industries, distribution was viewed as a necessary evil. Antitrust cases forced some content creators out of the role of distributors of their own content, and other industries just found in easier to let others distribute their content. Content creators developed close relationships with the distributors of their product –- making sure that the distributors made enough money to stay in business, but not allowing the distributors to make too much money, or to have too much control over distribution of their content.

After all, those developing the content were the creative people who wore the tuxedos and designer gowns at the gala celebrations of their industry, while the distributors were those faceless minions who got their hands dirty warehousing and shipping content through a maze of wholesalers, jobbers and retailers, until that content finally reached the consumer. Content creators made money by the millions, while the distributors made a few cents per unit. Content creators were household names. And that was the way it was suppose to remain.

But no one told the Internet entrepreneurs. Steve Jobs, Jeff Bezos and others did not grow up answering to the entertainment industry content owners. They grew up talking to venture capitalists, investment bankers and major shareholders. As long as they had a vision for their companies and could execute on that vision to the satisfaction of their investors, they were free to do virtually whatever they chose.

In the early days of the Internet, the major interactions between the techies on one hand, and Hollywood and the publishing industry on the other, were generally in the area of licensing pre-existing content for videogames, CD-ROM titles and the like. At that time, the low processing speeds of personal computers (and videogame consoles), combined with low network speeds and limited storage capacity, did not allow for the distribution of music or movies online. While books and other printed materials could have been distributed online, few viewed that as a viable business model.

But that has all changed over the last decade, as computers have become blindingly fast, storage has become dirt cheap, technology has permitted enormous files of music and video to be compressed to a manageable size, and broadband technologies have made it possible to distribute content almost instantaneously to an array of devices – from computers to cellphone and e-book readers.

Today, digital content distributors, such as Apple’s iTunes Store, Amazon’s Kindle Store and Google, have established themselves as the gatekeepers for the distribution of music, books and virtually everything else. Content creators/owners are still acting as if they controlled the distribution of their own products –- when it is obvious to virtually everyone outside the hallowed halls of content companies, that they do not.

That is not to say that the content creators are incapable of establishing their own online distribution networks that could rival (or exceed) those of Apple, Amazon, Google, et al. But the fact is, they have not done so, and there is no evidence that they will do so (at least not in the near future). The question is why they have failed to do so.

There are myriad factors that have lead to the situation that content creators find themselves in today, but there are two that are paramount. First, those in charge of the major content creators today (the movie studios, the record companies and the book publishers) reached the top of their professions because they were good at executing the old business model. Today’s movie moguls were good at distributing films to movie houses (and more recently distributing movies on shiny discs for home viewing). The same is true for record company executives, who reached the pinnacle of their industry by being good at distributing shiny discs to consumers through a multi-layered distribution system. Similarly for print publishers, who know how to print and distribute paper-based products. Not one of these top-level executives became successful by executing an online, digital distribution business model. To them, the choice is either try to squeeze a few more years of profitable operations out of their tried-and-true business model until they can retire with a fat pension -– dumping the digital transition in the laps of their successors. Or to try to execute a risky, digital distribution model with a significant chance of failure. Not surprisingly, most have chosen the former -– using litigation and lobbying for new laws to help them prolong the old business model and slow down the digital juggernaut.

The second primary reason for their failure to develop a successful digital distribution model is the fact that content creators are still dependent on their existing distributors for the bulk of their revenues. Despite all of the hoopla surrounding digital distribution, the fact is that the vast majority of content is still delivered the old fashioned way — in tangible form. Content creators cannot alienate their traditional distributors, who also see that their business model is going away and are trying to hang onto their markets as long as possible. Content creators cannot be seen as favoring digital distributors over the traditional distributors and cannot establish their own digital distribution systems that would be seen as competing with their traditional distributors.

Content industry executives, who may have hidden their heads in the sand when digital distribution was in it infancy, fully understand where the future lies. Unfortunately, they are carrying an enormous amount of baggage that they cannot just jettison for a new digital business model. As a result, entrepreneurs who are not encumbered by such baggage have been able to establish themselves as the dominant players in the digital distribution market. They are the ones who are wearing the crowns and reaping the spoils from their investment in technology. They are the kings.

I use Google Reader to help me locate interesting blog entries, news articles, law review articles, etc. I subscribe to slightly more than 500 different blogs, so I receive hundreds of items per day from Google Reader. I spend on average about two hours per day reviewing all of these entries.

I review each entry to determine whether it is on topic, timely, etc. If I think it is, I then highlight the title of the article and use bit.ly (a URL shortener) to generate a tweet. The tweet consists of the title of the linked article (in quotes), plus the shortened bit.ly URL. I then post the finished tweet to the appropriate Twitter account.

You may see other tweets that contain the identical title (in quotes). That means that the other Twitter user used a process similar to what I have just described. It is a fairly standard process used by Twitter users who post the same types of tweets that I do. But usually the URL will vary, depending on what URL shortener they used.

Hope that explains the process. If you have any further questions, please feel free to contact me directly at mdscott@swlaw.edu.

There is no hard-and-fast definition of “network neutrality.” However, as a baseline, “network neutrality” (or “net neutrality”) should include the general principles that ISPs that provide access to the Internet should not be allowed to discriminate between users, websites or content. ISPs should provide the conduits for the exchange of messages, data and content, and should otherwise stay out of the way.

The Federal Communications Commission has jumped into this debate in its Comcast ruling on August 20, 2008, where it held that Comcast had violated the agency’s Internet Policy Statement when it blocked certain applications on its network. This practice, the FCC concluded, “unduly interfered with Internet users’ rights to access the lawful Internet content and to use the applications of their choice.”

Comcast appealed to the U.S. Court of Appeals for the D.C. Circuit, as have other public interest groups. Comcast argued that the FCC does not have the authority to enforce its Network Management Principles and the Commission’s order was invalid for that reason. The FCC argued that it has ancillary authority under Title I of the Communications Act to implement the broad statutory goals for an open, user-controlled Internet laid out by Congress.

A recent hearing (January 8, 2010), before the D.C. Circuit, did not go well for the FCC. The three judges were openly skeptical of the Commission’s assertion that several provisions in various laws, including the 1996 Telecommunications Act, gave the FCC the ancillary authority required to regulate network management.

If the appellate court rules against the FCC, which is likely, there are several avenues that the Commission can pursue. It can appeal the decision to the U.S. Supreme Court. It can also go to Congress to ask for legislative authority to pursue network neutrality.

It is also possible that the Federal Trade Commission could step in and develop network neutrality principles, under its general authority under Section 5 of the FTC Act, to go after unfair and deceptive trade practices.

To a great extent, the future of the Internet depends on enforceable network neutrality rules. Without them, the Internet may become balkanized, with different ISPs applying different rules to websites, users and content.

Rupert Murdock, head of News Corp., and Dean Singleton, chairman of the Associated Press, have both singled out Google, claiming that Google is “misappropriating” their news. They claim that Google should be forced to pay to link to the news articles that they already post online – for free. Or, in the alternative, or perhaps in addition, they want to charge Internet users for access to that news.

What they don’t seem to realize is that news is NOT the issue. Instead, the problem with newspapers is that the Internet is a much better place for most advertisers than print publications. It is the loss of advertisers that is killing newspapers, not Google.

It is Craigslist, and eBay, and a thousand other online services that have siphoned off newspapers’ classified ad revenues. Once viewed as one of the most lucrative revenue generators, classified ad sections today are a shadow of their former selves. Those advertising dollars have moved online.

The same is true for display ads. For Macy’s to advertise a nationwide sale, it must either pay local newspapers in every geographic region in which it has stores to run multi-page ads (at enormous expense), or it can spend a fraction of that money to place those same ads on its own website, as well as mounting an effective email marketing campaign directly to its customers. It’s no wonder that the big, fat Sunday newspapers of yesteryear are now about the size of a Tuesday edition.

Newsstand and subscription revenues don’t ever cover the costs of distributing newspapers, let alone the costs of an editorial staff. No matter what Google does, if newspapers can’t attract and maintain advertisers, they are doomed.

Much of the technology underlying clean tech is patented and licensed like any other technology. The licensing skills that lawyers have developed for other fields of patent licensing are equally applicable to clean tech.

Similarly, much of the money being invested in the development of clean tech is venture capital money, and the deals involving clean tech companies are not significantly different from those done in the IT industry. Indeed, many of the VC companies and lawyers who have worked for decades in the IT venture capital area are also working in the clean tech field today.

The same is true for corporate law, securities law, employment law, etc. The fact is, most of the laws that apply to an Internet company also apply to a clean tech company.

Another force that is moving IT lawyers into the clean tech area is the fact that many of their larger clients have huge server farms, which use enormous amounts of electricity and generate large amounts of heat. These companies realize that if they are not proactive in moving to clean technology for electricity generation, they will be targeted by politicians and activists who are concerning about greenhouse gases and global warming. These companies see the necessity of investing in clean tech – both in developing their own technologies and in utilizing other people’s technologies to deal with these problems. Their lawyers increasingly are being asked to provide them with legal counsel as they move into the clean tech area.

That is not to say that there will be a lessening of developments in the IT law area. But it is clear that technology lawyers are expanding their expertise into legal areas that a decade ago they probably never thought they would be involved in. Never a dull moment!!

The program will be divided into four panel discussions addressing a variety of topics, including:

1. The New Government Energy Policies and CleanTech’s Opportunities: Incentives and Market Drivers

2. Learning from the World’s Renewable Energy Leaders

3. Clean Technology Innovation and Protection (focusing on cleantech patents, licensing and tech transfer)

4. Financing Clean Technologies

The keynote speech will be given by Ted Flanigan, President, EcoMotion, Irvine, CA

More detailed information on the event, as well as a copy of the conference brochure, is available here.

The cost for the entire event is only $195 (early bird discount) and 5 CLE credit hours are available. (Space is limited to 95 attendees, so early registration is advised.) Online registration is available here.

I look forward to seeing you and your colleagues at the Summit. If you have any questions, please do not hesitate to contact me directly at mdscott@swlaw.edu.

The IT Law Wiki has reached an important milestone with the posting of its 5000th article. We are grateful to all of the lawyers, law students and law professors who have contributed to the wiki.

While the work done thus far has been impressive, there is much more to be done. We have thus far been able to summaries only slightly more than 850 cases — most of which were decided in U.S. courts. We hope to continue to expand the number of case summaries and could use help in doing so. We are also looking to expand the number of articles that focus on non-U.S. law.

So we are issuing a general “Call for Articles” to accelerate the growth of the wiki.

If you are a law professor, and you have your students writing papers for your class, consider suggesting to those who write the best papers that they post them to the wiki.

If you are a lawyer that supervises law clerks or young associates who may not be fully occupied due to the slowing economy, consider having them do research for the wiki. It will keep them busy and help them continue to develop their research and writing skills.

Also, if you are a lawyer, law professor or judge writing papers for conferences or your firm’s website, consider posting them to the IT Law Wiki as well.

Authors retain copyright ownership of all materials posted to the wiki, and those postings are made under a Creative Commons license.

If you don’t have the time to post the materials yourself, you can forward them to me at mdscott@swlaw.edu, and I will make sure they are promptly posted.

Onward to 10,000 articles!!

The first ten years of my practice saw a need to learn copyright law, while the second ten years required a working knowledge of patent and trademark law, and some privacy law, with a little international trade law thrown in for good measure (including U.S. export control laws and regulations). It was also the time when state and federal legislators were beginning to craft a specialized field of computer crime laws.

By the late 1980s there was a convergence of sorts between the computer and entertainment industries, primarily through videogames and CD-ROM titles. As a result, computer lawyers needed to learn about how the entertainment industry worked – again, primarily in the contracting area — but also with regard to trademarks, Hollywood guilds and unions (e.g., SAG, DGA) and right of publicity issues. It also required computer lawyers to learn a lot more about copyright and contract law in areas that had previously been limited to entertainment lawyers.

Since the 1990s we have seen the subject matter of computer law expand rapidly. We have had to learn telecommunications law, expand our knowledge of trademark law to deal with domain name issues, cope with the ever-expanding body of federal and state laws that deal with the financial laws and regulations underpinning e-commerce, privacy issues, cybercrimes, and a host of other fields that computer lawyers (now called IT lawyers) never thought they would need to deal with.

Now, cloud computing may require us to learn another body of law – admiralty law. Google has recently filed patent applications for ocean-going data centers that would be housed on large merchant ships and could be moored off-shore or sail blissfully in international waters – avoiding the problems arising from pesky local or national laws. These ships would generate their own power, provide their own cooling, have Internet connectivity (presumably from satellites or undersea cables) and generally be subject to no country’s laws. But underlying this concept is still the fact that we are dealing with ships. And ships are subject to both national and international laws – namely admiralty laws.

Dang. Just when I thought I was done learning new laws, I now find myself having to delve into the esoteric area of admiralty law. Ships containing data centers are no different than, and are subject to the same laws as, any other ship. Thus, they are subject to such things as piracy, salvage and seizure (arrest). Yet their cargoes may be infinitely more valuable than any previous ship that has ever plied international waters – the data of thousands or tens of thousands of corporations, millions of individuals, and numerous governments from around the world. How much would that cargo be worth if it fell into the hands of Somali pirates? And what if the assets of even one customer (or the ship owner itself) were subject to a seizure (arrest) order, and the entire ship was seized and the computers taken off the grid?

Far fetched? It was only a couple of months ago that the FBI, looking for assets of a company that had allegedly defraud the local telephone company, raided and seized all of the servers in several Dallas-based data centers – putting all of the data centers’ customers, not just the target of the seizure, out of business. Now multiply that by thousands of customers whose access to their data could be lost if the ship on which their servers and data are housed is arrested under existing admiralty law.

So to all of you IT lawyers representing clients that have or will be entering into cloud computing “solutions” to their data processing needs – start boning up on your admiralty law. It looks like you’re going to need it.

AP Chairman Dean Singleton, who spoke at the AP annual meeting in San Diego several months ago, was quoted as saying: “The news cooperative would work with portals and other partners who properly license content – and would pursue legal and legislative actions against those who don’t. We can no longer stand by and watch others walk off with our work under misguided legal theories.”

The main “misguided legal theory” that Singleton was referring to is the copyright concept of “fair use” — which allows others to quote from, refer to, and otherwise use portions (and in some cases the entire content of) another’s copyrighted work. While AP’s wrath is undoubtedly proper when focused on blogs and other websites that take AP’s news stories in their entirety, Singleton directs most of his anger at Google and other search engines, whom he claims are stealing AP’s copyright content by using its headlines and sometimes short snippets of an article in its search results. He is wrong on many fronts.

First, the technology developed by Google didn’t come free. Tens of millions of dollars have been invested by Google in technologies with no guaranty that they would work, or that anyone would care to use them. Content providers assume, somehow, that the complex platforms that make search engines, etc. work are free, or without risk. Google was willing to take that chance and has, so far, seen a good return on its investment. The newspapers have not been willing to take that risk.

Second, nothing is preventing newspapers (or other content providers) from building competitive platforms to compete with Google. They have chosen not to do so, but instead complain about Google’s willingness to do so. If Google is, as alleged, siphoning off money that should be going to the newspapers, then let the newspapers develop their own, competitive platforms and capture that “lost” revenue themselves. Every website can choose whether to allow search engines to index these site or not. It’s as easy as setting a “switch” in the robot.txt file. If AP, or any of its affiliates believe that Google or other search engines are unfairly exploiting their content by indexing it on their databases, it’s a simple thing to opt out of future indexing.

But to do so would be suicide for these websites, since search engines make their content accessible. Without them no website would be successful (and most would be invisible to users). Yet, Google doesn’t charge anyone for being indexed and made accessible. There is again an enormous cost for Google to continuously update its search engine database to make the most recent articles posted by the newspapers accessible.

Google provides the front end for newspaper websites so that users can find them for free. Snippets are how users find newspaper sites, and are not a substitute for those sites. Without the ability to use snippets in indexing news stories, users would find it difficult to locate the content they want on news sites. The fact that newspapers have not successfully exploited the free accessibility provided by Google is the newspapers’ fault, not Google’s.

Search engines are not AP’s enemy. Without them AP content would be inaccessible, and AP-affiliate websites would be invisible. While these are those who improperly repurpose AP’s content, and AP is well within its rights to stop such activities, AP’s focus on search engines is wrong-headed, and self-defeating.

Some fads, however, do seem to peak. While virtual worlds still seem to be growing, they are not expanding nearly as quickly as in their early days. Many of those who went into virtual worlds thinking that they would be as liberating as the Internet was in its early days have been disappointed and have scaled down their presence or left entirely.

Music-based videogames, like “Guitar Hero,” seem to have peaked and people are talking about “Guitar Hero burnout” – people seem to be tiring of the genre.

Today, “cloud computing” seems to be all the rage. Virtually every computer industry publication is filled with articles about the subject, even though people vary greatly on what they mean by the term. As stated in the IT Law Wiki:

Cloud computing involves the sharing or storage by users of their own information on remote servers owned or operated by others and accessed through the Internet or other connections. Cloud computing services exist in many variations, including data storage sites, video sites, tax preparation sites, personal health record websites, photography websites, social networking sites, and many more.

From a legal perspective, the critical factor in “cloud computing” is that the applications programs and your client’s data reside on computers that are not under your client’s control. This obviously raises security and privacy issues. One of the “benefits” of the “cloud” is that the user does not need to be concerned about where the computers are located. A given application could use computers in multiple jurisdictions to provide services and the user is unaware of where the computers are located. But since sensitive data is being processed in these cloud computing applications (e.g., corporate payroll, individual tax returns), the user must be concerned about where that data is being processed and stored.

Not all countries have the same data protection laws as the United States, yet U.S. laws may place a non-delegable legal obligation on your client to safeguard that data, no matter where it is physically located. Adding to the problem is the fact that many cloud computing applications are contracted for online using a clickwrap license, which does not give the client the opportunity to negotiate appropriate safeguards for the data to be supplied.

Another problem with cloud computing is the possibility that the vendor will cease doing business. Not only will the applications no longer be available to process the company’s data, but the data may disappear as well. And even if the client retains backup copies, the data may be useless without access to the applications needed to run it, display it, or even port it to a different vendor.

Whether cloud computing is a fad is still an open question. But whether or not it is, there are some real legal issues that exist today that clients need to be concerned about and must be dealt with before they jettison their in-house computer systems and move to the cloud. Clients cannot afford to bury their heads in the cloud!