Monday, November 29, 2010

Latest Car Rental Scam

Latest Car Rental Scam – Charges for Pre-existing Damage and Loss of Use

It's practically a law of economics that when corporate business falls in a recession, each consumer must pay more to make up the difference. Case in point: You rent a car, have an accident, and under the contract, you are responsible for the costs of repairing and lost use of the car, but minor scratches are no-cost normal wear. Right?

Not anymore. Several articles in the last two years note that car rental agencies are dinging renters for damages that don't even qualify as dings. One renter failed to receive his $763 deposit, which according to Thrifty was forfeit for damage. The damage in the photograph, however, was a "barely visible nick on the car door and a small scratch on one bumper."

One Enterprise renter received a bill for $600, with a photo of the damages – except that the car in the photo was not the car he had rented. An Enterprise renter failed to mark normal wear damages on the check out sheet, and was charged several hundreds of dollar for the cost of repair and the time off the lot to repair the "damages."

So, what's a car renter to do? The first step before leaving home is to check whether your insurance or credit card coverage includes rental cars. It is also always a good idea to travel with your proof of insurance and agent contact information.

The first step on the lot is to carefully inspect the car – outside and inside - before starting the car, and mark the checkout sheet with every scratch, spot, or smudge. Be sure also to completely check the headliner, seats and carpeting for food stains and tears. Document everything.

The second step is to photograph the car before leaving the lot, include the built-in date & time stamp – so you can use your evidence against theirs. As one former car rental agent said, "From my experience, many customers were blamed for damage they did not cause.”

Another option, as much as it pains me to say to say this, is to purchase the Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW). CDW and LDW are not collision insurance. It just means that the rental car company will pay for accident damage or loss of use that occurs to the vehicle.

Lastly, when returning the vehicle, either demand a full drop-off inspection before you leave the lot, or again photograph or videotape the car – and let the agent know that you did. As the former car rental agent also said, "agency employees aren’t in the customer service business. They’re paid a commission [based on] the dollar amount we’ve brought in each month and quarter."

If after all that, you do get dinged, you have a few options. If your credit card is charged, call your card service number and dispute the charge with a demand that the car rental agency provide a body shop repair invoice.

Then call the rental office, get the name of the person you are talking to, demand a retraction of the charge until you are provided proof of damage and proof of repair and remind them that you have evidence that contradicts them.

Don't be surprised if you are told regional office approval is required. It's may be another stall tactic, but ask the agent for the name and telephone and fax number of the person at the regional office. If that fails, write a letter of dispute to the corporate level and copy the state insurance commissioner in the state in which you rented the car. Be sure to include copies of your evidence and that you are disputing the charge with a demand that the car rental agency provide proof of damage and a body shop repair invoice.

Your last option is small claims court, although don't be surprised to hear from the rental agency that the contract states that disputes must first be arbitrated somewhere outside your state, and likely not even the in the state where you rented the car. If so, contact the insurance commissioner in both states, and a consumer advocate agency in the company's 'home' state. Your local TV station also provide consumer advocate service – rip-offs make for good news.


Christopher Elliott, Washington Post, Paying upfront for rental car nicks and scratches, 11/14/2010,

Christopher Elliott, Tribune Media Services, Broadsided by a rental car bill, July 29, 2009,

Christopher Elliott, Washington Post, 6 secrets car rental companies don’t want you to know, April 16, 2008,

Christopher Elliott, Tribune Media Services, Who should pay for scratch on rental car? 9/3/2010,

Rent A Car – Preparation, 9/4/2010,

Tuesday, November 23, 2010

Introduction to Copyright

(FN1) Copyright provides the creator of a qualified work the legal authority to prohibit, or conversely, the right, to grant and limit another person to make a copy of the creator's work. The legal considerations regarding copyright include the qualified work, limitations on the copyright, registration, and licensing. Copyright is a property right, meaning that the creator may sell, give, exclusively license or assign, or even grant non-exclusive licenses. Other laws describe the creator's right to recover an assignment, as well as defining circumstances when the nature of employment grants ownership in the work to another person.

Copyright applies to eights types of works. These are (1) literary works; (2) musical works, including any accompanying words; (3) dramatic works, (such as a play or musical) including any accompanying music; (4) pantomimes and choreographic works; (5) pictorial, graphic, and sculptural works; (6) motion pictures and other audiovisual works; (7) sound recordings; and (8) architectural works. (FN2).

As indicated by the list of the qualified works, some works may include other types of work. A musical composition may have multiple copyright owners because one person authored a literary work, such as a poem or book, which became the lyrics, and another person authored the notes of the musical composition. Conversely, the producer of a play, a musical or a screenplay could create and own the copyright in the words of the work, and in the music accompanying the work if the same author also created the music.

In other situations, a song composer might grant a license to a band play a song. The band might then perform the song for a recording studio, which would own the sound recording rights, while a movie studio may hire the band and a choreographer for a movie. In a majority of cases, the band still owns its performance rights, the choreographer gets the rights to the dance moves the choreographer wrote for the backup performers, while the movie studio would own the movie rights. Along the way are artists creating posters (pictorial and graphic works) for the band, the recording studio, or the movie studio.

One point of clarification regards a confusion of copyright with patents and trademarks. Copyright protection does not extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work. (FN3). These protections apply only to patents, if the idea is eligible, or to trade secrets, if the idea is used in business and is properly kept a secret. A copyright protected work, generally artwork, may be used as a trademark, if the work is properly used to identify a brand of product or service.

While there are eight types of works protected by copyright, there are only six legal rights to the power of a copyright owner to prohibit, or conversely, the right, to grant and limit another person to make a copy of the creator's work. (FN4). The six legal rights fall into two categories, the right to copy, and the right of public performance. If a type of work is not covered by a copyright, then the public may freely exploit that type of work. As a matter of implicit exception, people have the right of private performance. The qualifications of a private performance, however, are limited. Home performances are usually private, although any commercial activity related to the performance is often enough to qualify as a public performance.

The first of the rights applies to all eight types of work. The creator may grant permission to anyone to reproduce the work in copies, or in the case the sound recordings, as phonorecords. A copy literally means exact reproductions. A song composer or the composers of the music and lyrics the composers may grant a license to a sheet music publisher to reproduce the sheet music. A band may record an album at home or rent a studio, and grant a license to a music publisher to reproduce the recording.

The second of the rights applies to disposition of the copies, i.e. the reproductions. The creator may grant permission to anyone to copies or phonorecords of the work to the public by sale or other transfer of ownership, or by rental, lease, or lending.

The third of the rights applies to the creation of derivative works based on the work. A derivative work is something other than an exact copy of the original work, such as taking a photograph of a painting, a painting a picture onto a tile, creating a motion picture based on a play, or even taking an image and distorting it for artistic purposes. The protection of derivative works is important for creators that create a work in one format (film), and then license a company to create the derivative work another form, such as a digital copy.

The fourth of the rights applies to allowing people to perform the work publicly. This right applies specifically to literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audio­visual works. This right protects authors and artists by requiring permission to use the protected work as part of a public performance. This right is often the subject of a performance license, which is discussed below.

The fifth of the rights applies to allowing people to display the work publicly. This right applies specifically to literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audio­visual work. This right protects authors and artists by requiring permission for people to publicly display, as for commercial purposes, works that they acquired for private display. Motion picture owners are the people who primarily enforce this right, although it legally applies to the use of paintings and sculpture in a commercial setting. This right is also discussed below.

The sixth right applies to people publicly performing sound recordings by means of a digital audio transmission (DAT). As suggested by the technology of digital audio transmission, this is a relatively new copyright, and generally applies to Internet and Broadband broadcasting. It would also apply, however, to the use of mp3 and other digital audio players used in a public setting. This right is discussed below in the licensing section.

As with other forms of intellectual property, copyright registration provides several benefits. The first benefit is that registration establishes a public record of the copyright claim as of the date of registration. Additionally, copyright registration allows the owner of the copyright to record the registration with the U.S. Customs Service for protection against the importation of infringing copies. Published works in particular benefit in that registration establishes prima facie evidence of the validity of the copyright and of the facts stated in the certificate if registration is made before or within five years of publication. (FN5).

Unlike other forms of intellectual property, copyright registration is needed in the U.S. to assert protection. This is because registration is required for works of U. S. origin before the copyright owner can even file an action for infringement. (FN6).

Saving the best for last, however, is the benefit of statutory damages and attorney's fees for infringing activity. For infringing activity before the date of registration, a copyright owner may recover only actual damages (lost profits) and the profits from the infringing activity. If however, registration is made within three months after publication of the work and for infringing activity as of the date of registration, the copyright owner may recovery statutory damages of $750 to $30,000 per infringement, plus attorney's fees, and up to $150,000 if the infringer knew the copying activity was infringement. (FN7). In instances of file sharing, where lost profits are generally small and there are no profits from the infringing activity, registration immediately after creation is practically a mandate for any recovery.

The categories of copyright registration are a little different than the categories of works or of licensing. The categories of works are groups created by Congress according to the order in which Congress passed legislation protecting that class of works. The categories of licensing exist according to the order in which companies organized to license works that did not have organized protection. Registration, on the other hand, developed after legislation, but the Copyright Office used its rule-making capacity to categorize registration. So while there are eight classes of works and four classes of organized licensing, there are six classes of registration that only in part match the works and licensing classes. These are literary works, visual arts work, performing arts work, motion picture/AV work, sound recordings, and serial issue works.

The good news is that if something qualifies for copyright protection, it generally qualifies for copyright registration, and copyright registration is both simple and inexpensive. The easiest form of registration is electronic filing with a digital copy of the work uploaded for registration.

The copyright registrant (or the registered attorney) first provides information about the work, including the date of creation and the date of publication (if published) and the author's information. The next sections ask for the owner's contact information, the contact information for people who might want to license the work, the contact information and address for the Copyright Office to use, and finally, a certifying signature.
The copyright registrant (or registered attorney) then uploads the digital file, which is often in native format as the Copyright Office accepts 44 file formats. Acceptable formats for images include jpg, tif or tiff; the formats for word processing documents may be doc, rtf, pdf, htm, and txt. The Copyright Office also accepts database and presentation formats and compressed files of these files as well. (FN8). The last step is fee payment, which for electronic filing is currently $35, and may be by credit card. (FN9).

In the rare instance of file incompatibility, or due to the lack of capable Internet service, a registrant may send the copyright registration documents by mail or courier. For these occasions, the Copyright Office prefers the registrant to download Form CO from the Copyright Office website. (FN10). Form CO is a computer fillable form. When used with Adobe Reader or Adobe Acrobat, Form CO converts the information typed into the fields into a 2-dimensionable bar code, which allows the Copyright Office to scan the form information directly into the Copyright Office computer. After filling out Form CO, the registrant prints the form, writes a check for $50 to the Copyright Office, and sends the Form CO, plus the check and the work for registration to the Copyright Office. Using Adobe Reader (which is free) or Adobe Acrobat is important, as other programs do not create the 2-dimensionable bar code, in which case the Copyright Office charges $65.

The last alternative is filing the old-fashioned way, using forms that are customized according to the type of work. There is Form TX for literary works, Form VA for visual arts works, Form PA for performing arts works, including motion pictures, Form SR for sound recordings, and lastly, Form SE for single serials. As these forms require manual handling, the filing fee is $65.

Although the Copyright Office still accepts microform, photographs, slick advertisements and color photocopies, electronic media such as audiocassettes, videocassettes, CDs, and DVDs are also accepted. (FN11). An important consideration for mailed material is that the Copyright Office is irradiating all mail to kill harmful organisms The Copyright Office suggests that any CD and DVD be packaged in standard full-sized jewel box as mail irradiation weakens slim-line cases.

FN1) This posting is Part 1 of a series on Copyright.
FN2) 17 U.S.C. § 102(a).
FN3) 17 U.S.C. § 102(b).
FN4) 17 U.S.C. § 106.
FN5) 17 U.S.C. § 410(c).
FN6) 17 U.S.C. § 411(a).
FN7) 17 U.S.C. §§ 412, 504(c), 505.
FN8) U.S. Copyright Office, Help: List of Acceptable File Types, Revised: 16-Jun-2009,
FN9) U.S. Copyright Office, Fees, Revised: 17-Sep-2009,
FN10) U.S. Copyright Office, Copyright Notices,
FN11) Copyright Office, Form CO Instructions, Revised 08/2009,

Monday, November 1, 2010

Minnesota White Deer

November 1, 2010

Dennis E. Simon, Chief, Wildlife Management Section, Division of Fish and Wildlife, 500 Lafayette Road, DNR Building, Saint Paul, Minnesota 55155-4020

FAX to 651-297-4916

Dear Chief Simon,

This letter is in response to your arguments in your October 5th letter to Mr. and Mrs. Dreher regarding the hunting of white deer. As you are likely aware, your letter is posted on Facebook, to which a friend directed me.

You argued, "protecting albino animals would be endorsing a rare genetic anomaly that could lead to other long-term problems in the local deer population." Your argument is valid only if protecting albino animals actually leads to other long-term problems in the local deer population. The facts, however, do not support your theory as the albinism trait and its associated problems die with the white deer unless it successfully mates, which is unlikely unless three factors occur. Instead, hunting deprives a natural predator of its prey and assures the destruction of the white deer.

First, the white deer young must survive long enough to reach maturity. You note that "[a]lbino animals lack pigments in their eyes and skin; thus, they are more susceptible to other problems such as vision loss and skin lesions." In other words, white deer young are more susceptible to death from natural predation and illness than their non-albino brethren. Thus, young white deer are less likely to reach maturity, and as young deer, albino or not, may not be hunted, hunting adult white deer does not affect prevent any suffering of the young white deer.

Second, to propagate the white deer gene and its associated anomalies, the adult white deer must survive long enough to mate. You note that "[a]lbinos [] suffer much higher natural mortality rates because they are much more visible to predators." Because of their vision problems, white deer are also less likely to see natural predators and if in addition are ill, as you stated, the white deer is too weak to flee danger. With this triple hazard to their lives, the white deer are more likely to die of natural predation, and are less likely to survive long enough to mate, even without hunting.

Third, the white deer must actually mate to propagate the trait. As you noted "[a]lbinism is a recessive genetic trait." As you may recall from genetics, two genes are present in each deer for color, each parent contributes one gene, a white deer carries two recessive albinism genes, and a normal appearing deer may carry one albinism gene and one normal gene, or carries two normal genes. Thus, a white deer mating with any deer would cause the fawn to carry at least one of the recessive white deer genes, i.e., nature as nature intended, but the odds of a white deer propagating another white deer depends on the prevalence of the recessive white gene in the deer population.

Based on the statistics of recessive genetics, and that according to one Facebook post there are only six white deer in the park (or less, now that one was shot and killed), I believe that less than one in sixty-four (64) deer in the general population of the park carry one of the recessive white deer genes. (Perhaps you have actual statistics?)

As such, the probability of a white deer mating with another deer and propagating a white deer fawn is 1/64 times 1/4 (the recessive cross mix), or one in two hundred fifty-six (256). This 256 number assumes that a white deer is just as likely to survive to maturity and is equally likely to mate as a normal deer.

Both of these assumptions, however, are likely false and overstate the odds. As you noted, a white deer is less likely to survive to maturity and to mate. Include that defective (vision loss) and ill (skin lesions) animals are generally shunned from mating, the likelihood of a white deer mating is less likely, which means that a white deer is unlikely to propagate its long-term problems in the local deer population.

Lastly, your arguments imply that white deer hunting aids nature. Humans, however, are the only predators capable of seeing deer with magnification and killing them without bodily contact, i.e., with guns or arrows from afar. As the white fur of the white deer increases the likelihood that a hunter would see an adult white deer, and their poor eyesight and health decrease their chance of escape, allowing white deer hunting assures a 100% kill. This kill then deprives a natural predator of its prey, and forces the natural predator to kill another animal perhaps not as defective or ill. Consequently, the hunting of white deer interferes the natural predation in the park, and with their very low numbers, unnecessarily ensures their destruction.

In summary, allowing the hunting of white deer does not affect "other long-term problems in the local deer population," interferes with the usual deer predators, and unnecessarily ensures their destruction. Thus, your arguments against protecting white deer from hunting are unfounded. Please reconsider, and ban the hunting of white deer. Thank you.

Best Regards,

Gerald R. Prettyman

Thursday, April 22, 2010

On Heart Attacks, Aspirin and Lying Down

There is another urban story in the rounds regarding what to do when a life-threatening event strikes. As is usual with these stories, the story of taking aspirin for a heart attack but not lying down is true in part, largely false, and needs a HUGE caution sign with further information.

The idea of taking aspirin for a heart attack dates back to 1991 with a public statement by an emergency medical doctor, but who had not done an actual study. (1). Even though almost 20 years have passed, the research regarding using aspirin to treat heart attacks is still from informal observation, i.e. reviewing the charts of people after a heart attack and seeing that people on aspirin generally lived longer. There is as yet no actual medical research study of placing some people on aspirin and using others as 'controls.' That is likely because the patent on aspirin expired decades ago and no drug company will fund an expensive test without a patent to control the market.

The first flag on this email is that it states an EMT (unnamed) suggested this treatment, but the email did not also include a confirmation from a named doctor or pharmacist, or cite another medical authority. Bayer (the aspirin company), in fact, received a warning letter from the FDA that such labeling and advertisement is illegal. (2). As the FDA warned Bayer, there are several situations in which aspirin should NOT be taken, even during a heart attack, and the consumer labeling would be too complex for a layperson to understand.

Even the American Heart Association has retreated to cautiously state that "research shows that getting an aspirin early in the treatment of a heart attack, along with other treatments EMTs and Emergency Department physicians provide, can significantly improve your chances of survival." (3, Emphasis added.)

Second, while the FDA acknowledges the idea of taking aspirin during the onset of a heart attack, the FDA does not discuss dosage, and in light of the Bayer warning, no authority likely would without a test that no one will perform. (4). Outside of the U.S., one or two of the 81-mg (a.k.a., child's aspirin) seems to be the suggested dose. (5). Bayer reported to the FDA that AspirinCardio, an aspirin-drug it markets OUTSIDE the U.S., states to take two of the 81-mg sizes in the event of a heart attack. (6). Bayer, however, did not state whether they made an actual study, or decided that recommending 2 pills would double the profit over recommending 1 pill.

Importantly, in the event of a heart attack, DO NOT take extra-strength size aspirin, and especially do not take the Bayer "crystal" aspirin. This formulation is dangerous because it contains 850 mg of aspirin (five times Bayer's suggested dose, which may cause stomach bleeding) plus caffeine, which raises blood pressure. (7).

The third concern is that if you are going to take aspirin during a heart attack, consider a chewable aspirin instead of swallowing a whole pill. The chewable version seems to work faster to reduce clotting than swallowing a whole pill. (8).

Lastly, challenge every email-based health advisory. This root of this "don't lie down" myth is well over a year old, yet EMTs and hospitals continue to place heart attack patients flat on a gurney or flat on a bed. (3). This fact alone is a certain signal that the whole email is to some degree false.

Also raising the caution flag is that this email is a revision of a March 2009 version that also lacks authoritative references. (1). Two other troubling aspects of this email are that early distributors that failed to substantiate the facts. One was a member of a group generally better known for name calling than fact checking. (9). Another source recommended Crystal Bayer for heart attacks under the title "Aspirin Crystal: Heart Attack’s New Dear Friend" from Bonsai International News and Reviews – of India. (10). Since when does heart attack have a "dear friend?"

(1) Barbara and David P. Mikkelson,, Bedside Companion, last updated: 1/12/2010,
(2) Public Health Service, Food and Drug Administration, Warning Letter to Bayer HealthCare LLC, 10/27/2008, last updated: 07/08/2009,
(3) Aspirin in Heart Attack and Stroke Prevention, American Heart Association, undated,
(4) Dept. of Health and Human Services, Food and Drug Administration, Aspirin: Questions and Answers, last updated: 06/18/2009,
(5) Robin Parks, MS, Aspirin for heart attack and unstable angina, last updated: May 14, 2007,, (citing Danchin N, Durand E (2006). Acute myocardial infarction, search date August 2004. Online version of BMJ Clinical Evidence.
(6) Bayer, AspirinCardio, 11/26/03, Aspirin® in cardiovascular indications including primary prevention indications,
(7) Bayer Aspirin Pain Reliever Extra-Strength Quick Release Crystals, 20-Count Pouches (Pack of 2),,
(8) Harvard Health Publications, Aspirin for heart attack: Chew or swallow?, May 2005,
(9) John Vescuso, NEW Aspirin - a reminder!, 2/27/2010, Valley Forge Patriots - Tea Party Conservatives,
(10) Bonsai International News and Reviews, Aspirin Crystal: Heart Attack’s New Dear Friend, 1/7/2010,

Monday, April 5, 2010

Copyright – Part I: Out-of-print and out-of-touch

Congress has a duty to "promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." (1) Of these rights, the most contested and contentious area is undoubtedly the copyright. This article looks at a significant copyright issue in the print media and in the entertainment industry and how consumers drive infringement.

Print Media

In 2004, Google drew both praise and criticism by scanning and posting on Google a copy of almost every book and magazine from select libraries.

On the praise side, researchers and the public were finally able to access out-of-print books and periodicals, which are notoriously time consuming and expensive to find. Where but Google Books, for example, could a modern day person find the 1904 series "The Works of Daniel Defoe" by Daniel Defoe and Howard Maynadier (2) or read the June 15, 1953 edition of Life magazine about the coronation of Queen Elizabeth? (3)

The criticism came from The Authors Guild, the Association of American University Presses, the Association of American Publishers and other publishers. The posting rankled some people so much that The Authors Guild sued on behalf of three of its author members stating, "[i]t's not up to Google or anyone other than the authors, the rightful owners of these copyrights, to decide whether and how their works will be copied." (4)

Google's defense was to assert fair use (discussed later), and a concept called "sampling," i.e., "[a]t most we show only a brief snippet of text where their search term appears." (5) The Electronic Frontier Foundation, which "battles for digital freedom" also weighed in, asserting that fair use favored Google. (6) Neither defense was really successful, however, because fair use has statutorily defined applications, which did not apply, and sampling really means a small part, and half or more is clearly not a sample.

Fortunately, The Authors Guild and Google settled. (7) The authors and publishers are to receive $60 per copy, for at least $45 million, with $34.5 million to set up a Book Rights Registry, i.e. an ASCAP equivalent entity for writers, and of course, a chunk for the lawyers. (Note: The settlement consolidates multiple lawsuits, which will likely be appealed separately on different points of law.)


The other high visibility aspect of copyright is in the field of music and video entertainment. Until 1984, there weren't many problems with copyright infringement of either. Disc records (33, 45, etc.) has so many flaws that the public could not make a good copy, and copied magnetic tape (cassette or 8-track) suffered from distortion and degradation.

Meanwhile, Sony released the Betamax video cassette for the time-shifted viewing of television, and even the Supreme Court accepted that "time-shifting may enlarge the total viewing audience and that many producers are willing to allow private time-shifting to continue." (8) The central issue feared by the entertainment studios was the home or commercial storage of copied content that would result in a "great deal of harm" because "the copyright owner has lost control over his program." (9) By a 5-4 margin, the studios lost because they failed to show this was true.

Since then, the studios and industry groups have been careful to monitor and adopt technology only when it could either control the technology, persuade Congress to legislate penalties for unauthorized copying, or both. For example, in the 1990's, as Congress was harmonizing U.S. copyright law with international treaty, the studios enlisted the help of Rep. Sonny Bono to revise copyright law to forbid the time-honored concept of reverse engineering if the product was subject to copyright protection. (10)

The studios then used technology called "Content Scramble System" (CSS) and coded DVDs so people could not copy a DVD or watch imported DVDs. Of course, the new law is only a U.S. law, so a teenager in Norway reverse engineered a DVD player and created a program he called De-CSS so he watch a DVD he had bought but couldn't watch on his DVD player. He gave the program to a friend, and in short time, millions of people became criminals. The studios, not surprisingly, starting suing U.S. users of the De-CSS program and similar encoding-cracking programs. (11) In 2004, the studios also adopted the now familiar hard-line warning seen before every movie.

The unauthorized reproduction or distribution of this copyrighted work is illegal. Criminal copyright infringement, including infringement without monetary gain, is investigated by the FBI and is punishable by up to five years in federal prison and a fine of $250,000.

While encryption, law and threats have had some curtailing affect to copyright infringement, the real disincentive occurs when the economics of rental and purchase prices achieve what many people have long said was the best option - the studios need to lower the acquisition price of purchases. There are two examples of this affect.

Driving Infringement

Currently, there are 50 million DVD sales monthly for about $18 each. (12) This sounds great for the studios until you factor in that DVD sales fell almost 14% to $5.4 billion in the first half of 2009. (13) While the move to downloaded content for the Apple iPod and similar portable players accounts for part of the decrease, the 8% rise in DVD rentals to 175 million DVD rentals each month at an average price of $3.50 says that the DVD is still a strong force in American video entertainment.

In addition, there are companies still trying to legally break CSS encryption. To legally sell a CD or DVD player, a device maker must have a CSS license. Kaleidescape bought such a license and sells an $8000 system for copying a DVD, and then playing the digital content without the DVD. Sued by the licensor for breach of contract, Kaleidescape lost an appeal on the scope of the contract, and is likely to lose on remand.

Here's the interesting part: The complaint did not allege copyright infringement, probably because the Kaleidescape system cannot replicate or distribute the copied DVD or CD. The real issue, however, is that the Kaleidescape system cannot distinguish between the user's purchased movies and those the user may have borrowed or rented. (14) Kaleidescape attempted to divert its liability by including a license agreement that mandates that a user will "never to load or permit someone else to load a commercial DVD or CD onto your Kaleidescape System ... that you do not rightfully own and possess." (15) Even so, a user can copy a DVD and create a library for unauthorized time-shifting, just as Sony feared.

Real Networks developed DVD copying software in 2008 and a $30 DVD copying system in early 2009. For its efforts, Real Networks received preliminary injunctions on both. The studios' attorney, Bart Williams, analogized DVD copying as using renting a car, buying a theatre ticket, or having a locker room press pass, and then keeping the car, filming the movie in the theatre, or stealing from the players. (16)

At one point, Kaleidescape tried a defense that people are not going to spend $8000 just to copy a bunch of $3.50 rentals. They know better. Apple's iTunes store (17) and the Napster file-sharing case (18) show that people want and will get inexpensive information and entertainment legally, illegally or in combination.

Overall, the intellectual property system works as envisioned more than 200 years ago. The public receives the promoted Progress of Science and useful Arts, and the Authors get compensated. The studios and industry groups need to pay attention. The more they continue to squeeze for high profit margins, the more out-of-touch they become with their market and technology.

(1) U.S. Constitution. Article I, Section 8.
(2) Volume 9 is available at:
(3) Available at:
(4) Elinor Mills, CNET News, "Authors Guild sues Google over library project", September 20, 2005, available at:
(5) Available at:
(6) Fred von Lohmann, Electronic Frontier Foundation, "Authors Guild Sues Google", September 20th, 2005, available at:
(7) Roy Blount Jr., The Authors Guild, "$125 Million Settlement in Authors Guild v. Google", October 28, 2008, available at:
(8) Sony Corp. V. Universal City Studios, Inc., 464 U.S. 417, 443 (US 1984).
(9) Sony, 464 U.S. at 451, citing 480 F. Supp. at 467.
(10) Digital Millennium Copyright Act, 17 U.S.C. §1201 (2009).
(11) See e.g., Universal City Studios, Inc. v. Reimerdes, 111 F. Supp. 2d 294 (S.D.N.Y. 2000); and United States v. Elcom, Ltd., 203 F. Supp. 2d 1111 (ND Cal. 2002).
(12) Bart Williams Munger, Tolles & Olson, State Bar of California Telephone Seminar, "Winning Strategies for Securing a TRO and/or Preliminary Injunction in IP Cases," October 27, 2009.
(13) Douglas A. McIntyre, "DVD Sales Crushed By Rentals, As Apple (AAPL) And Amazon (AMZN) Rise", September 22, 2009, available at
(14) DVD Copy Control Association, Inc., v. Kaleidescape, Inc., H031631 at 4, Santa Clara County Super. Ct. No. CV031829, Filed 8/12/09.
(15) Kaleidescape Service and License Agreement, provision 7, available at
(16) Bart Williams, State Bar of California, supra.
(17) Dawn C. Chmielewski, L.A. Times, "Hottest tracks to cost $1.29 at ITunes starting April 7", March 26, 2009, available at:
(18) David Kravets, Wired, "Napster Trial Ends Seven Years Later, Defining Online Sharing Along the Way" August 31, 2007, available at: