In this vein, I couldn’t resist posting an ad I came across last night that squarely raises these legal issues.  A company that appears to be [...]]]> President Obama is likely the first true “celebrity president”, at least the first in our time, in the sense that people see opportunities for making money from his persona and likeness.  Early on in the presidency, his office made some remarks to the extent that they were working on a policy asking people to be respectful of the president and his family in restraining some of these commercial impulses.  Of course, all of this raises the fine line between free speech and personality rights – a topic much debated on the cyberprof listserve in the early days of this presidency.

In this vein, I couldn’t resist posting an ad I came across last night that squarely raises these legal issues.  A company that appears to be in Michigan (although they do not give their postal address, but do require Michigan residents to pay sales tax on purchases from their website) has set up an “Obama shoes” website.  On this website, you can purchase Obama sneakers, backpacks, and basketballs.

The website uses video clips from one of Obama’s speeches and refers to itself as selling merchandise that is inspirational to young folks and that is intended to commemorate Obama’s inauguration. Thus, it obviously intends to juxtapose free speech interests in the inauguration against the commercial use of Obama’s name and likeness.

There are some other interesting little sidenotes about this business venture that suggest the people who set it up sought at least some legal advice before doing so.

1. They used the domain name “obamashoes.tv” presumably either because they couldn’t get a “better” domain name or because they wanted to avoid claims under the Uniform Domain Name Dispute Resolution Policy. They could argue that even if Obama’s name operates as a TM, they have not used his actual name in the domain name, but have added “shoes” to the end of it so no one will think it’s an authorized Obama website.

2. They include a disclaimer on their webpage to the effect that: “Obamashoes.tv is a private entity and makes no claim of affiliation or endorsement by President Barack Obama or his campaign for office.”

3. Interestingly, there is also a disclaimer on their FAQ page about the design of the sneakers themselves. “Q. Why does [sic] the shoes look like Nike Air Force Ones (AF1) and the Jordan Brand?
A. These design is [sic] been proven to be commonly preferred by most Adults & Children (black or white).” Now, I personally don’t know anything about sneaker designs, but I assume this is intended as a preemptive strike to ward of claims in trademark, trade dress, and/or design patent with respect to the actual design of the shoes.

So, interesting business model…
Legitimate free speech? Or intellectual property law infringement as far as they eye can see?

My guess is that the disclaimers are required by law and the multi-pack box cannot be otherwise offered. Still the size of the display and the choice of putting the boxes next to the sign with the sale information rather than just a sign is interesting. Maybe they had to do so or maybe folks are inured to the warnings. Either way it startled me and made me think this display is free market meets information.

I was struck (pardon the pun) by these new safety ads by the Metropolitan Washington Council of Governments’s (MWCOG) Street Smart program. In addition to the vivid ads (above), there’s also a radio spot that begins with the sound of a screaming pedestrian getting hit by a car. You can download the ads at the Street Smart website.

According to the Washington Post:

[O]n average more than 80 people die and 2,000 people are injured a year in pedestrian accidents in the Washington region. . . .

“The idea of the campaign is to get to the core of the issue. It’s a life-and-death situation,” said Jim McAndrew, vice president of Design House, the firm responsible for producing the ads.

D.C. Assistant Police Chief Patrick A. Burke [...]]]>

I was struck (pardon the pun) by these new safety ads by the Metropolitan Washington Council of Governments’s (MWCOG) Street Smart program. In addition to the vivid ads (above), there’s also a radio spot that begins with the sound of a screaming pedestrian getting hit by a car. You can download the ads at the Street Smart website.

According to the Washington Post:

[O]n average more than 80 people die and 2,000 people are injured a year in pedestrian accidents in the Washington region. . . .

“The idea of the campaign is to get to the core of the issue. It’s a life-and-death situation,” said Jim McAndrew, vice president of Design House, the firm responsible for producing the ads.

D.C. Assistant Police Chief Patrick A. Burke said risks have increased in recent years because pedestrians and drivers are often distracted by cellphones and text-messaging. “We’ve got to get people’s attention back on the road and the street,” he said.

The ads are put up on bus and transit shelters. The poster at the top of this post is a version of the ad that goes on the side of buses. The purpose of the ad is to shock people into being more careful. Effective? Or too vivid?

Hat tip: DCist blog

students would create a campaign against counterfeiting in which they would create a fake Web site to tell the story of a fictional student experiencing trauma because of fake consumer goods. One goal of the effort was to mislead students not in the course into thinking that they were reading about someone real.

The article raises some good questions: Why have students perform free labor for the fashion industry (and really pay for the privilege?)? What about the underlying lies? These issues remind me [...]]]> Inside Higher Ed details that Hunter College offered a course that was sponsored by an industry group called International Anticounterfeiting Coalition (known as the IACC). The group represents major fashion industry companies. The class well that is where the fun begins. Apparently the

students would create a campaign against counterfeiting in which they would create a fake Web site to tell the story of a fictional student experiencing trauma because of fake consumer goods. One goal of the effort was to mislead students not in the course into thinking that they were reading about someone real.

The article raises some good questions: Why have students perform free labor for the fashion industry (and really pay for the privilege?)? What about the underlying lies? These issues remind me of the LonleyGirl issues (there a fake videoblog lured people into what appeared to be a true personal site but was a front for a group launching a film company. Eric Goldman has a set of quick links that highlight the problems of user-generated content, ads, and quality. In general the school’s willingness to offer a class that propagates a shall we say less than authentic Web site is an example of the marketer’s will. Not that this point should exonerate the school. (Note that apparently Iowa turned down money when it was unsure about naming a school after the donor).

Still according to the article “other colleges do work with IACC” including Ohio State University but at least Ohio State does not operate in the same way as Hunter allegedly did. Ohio State seems to set up the projects as out of class activities. Hunter’s class according to some was directed by the IACC such “that the professor was required to teach only one side of the issue, had to accept industry officials watching him teach, and had little clout to fight back since he didn’t (and still doesn’t) have tenure.”

So it goes. Schools need cash and corporations have it. Would a school bow to its donors? Are schools market immune? Of course they aspire to be but the reality is different. Further as public schools lose the endowment race, they will be more and more beholden to outside funding. I am not, repeat not, saying that schools should operate so that they bow to corporate requests. I am saying that the issue is alive and well and not so easy to combat. If the allegations are true, Hunter seems to be the easy case, don’t do it. The harder ones will be the subtle questions of hiring, curriculum, and building funds which can easily look like a decision based on lack of funds when perhaps other interests scuttled the project.

Hat Tip: Slashdot

Image: Manuel Dohmen WikiCommons

License: GNU Free Documentation license, Version 1.2

“This is really a continuation of how the Web in general has enabled smaller businesses and individuals to compete if not at a level playing field, at least a more equitable level,” said David Hallerman, a senior analyst with the research group eMarketer.

AdSense is an automated program that places targeted advertising on sites big and small. Other programs such as PayPerPost are just as user friendly; bloggers sign up and [...]]]> It’s a grim season for Americans who own homes (or, shopping malls). Luckily, casual blogging for mediocre stakes is quickly filling the gap as the ultimate backstop for the American economy. Well, sort of:

[W]ith the right mix of compelling content and exposure, a blog can draw a dedicated following, making advertising a low-hanging fruit.

“This is really a continuation of how the Web in general has enabled smaller businesses and individuals to compete if not at a level playing field, at least a more equitable level,” said David Hallerman, a senior analyst with the research group eMarketer.

AdSense is an automated program that places targeted advertising on sites big and small. Other programs such as PayPerPost are just as user friendly; bloggers sign up and advertisers cherry pick where they want to place ads based on categories and the number of impressions a site captures.

Getting paid might even help validate what may otherwise seem like a silly or obscure obsession.

For Samuel Chi, BCSGuru.com started as a way to demystify the convoluted universe of college football rankings.

Chi, a former sports journalist with training in statistics, posts his calculations every Saturday night during the season before official results are released Sunday. From Saturday night to Monday, about 4,000 sports fans log on daily to check out the “guru’s” forecast.

This season, Chi made about $8,000 from the blog; ticket brokers contacted him directly after word about his site got out. AdSense brought in another couple hundred dollars for Chi, the owner of a bed-and-breakfast in Amelia Island, Fla.

A few things. First, it is very hard to imagine that $8,000 is going to validate what is, let’s be frank, a silly and obscure obsession with college football rankings. But putting that aside, it strikes me as odd that the article paid so little attention to the potentially pernicious consequences of running targeted ads on a niche website. With evidence growing that online advertising works, even when it isn’t clicked on, there are, I think, two sets of issues to think about.

First, privacy law. As a commentator to Dan’s earlier post noted, even Concurring Opinions, which has relatively few ads, runs lots of javascript hosted by third-parties. Obviously, sophisticated readers can opt out of this collection regime, but the percentage of readers with this level of know-how is small. I’m not in the group.

Second, total persuasion. As I argued here and more extensively here, we should be troubled by a world in which it is impossible to walk, or surf, “without feeling like a targeted consumer.” In a world where ads are generalized, like T.V., you can a) feel confident in your ordinary defenses to advertising – skepticism, caution, disbelief – will work; and therefore b) you will feel the freedom of being unpersuaded, and in making consumer choices that maximize your well-being, broadly defined. This is not true with targeted advertising. Thus, although it is nice that small blogs like ours can monetize themselves – indeed, I pushed and continue to support the decision to take on advertising – we should acknowledge the cost paid by our readers. Targeted advertising on a blog means that readers become consumers, subject to the most persuasive speech money can buy. Ultimately, I imagine that almost every blog with non-negligible traffic streams will take on advertising, if only to defray hosting fees. And folks can be persuaded from cradle to grave. Even during lunch!

(Image Source: Wikicommons.)

(ht Marc Bohn)

This is a complex case involving a number of legal issues, including creative commons licenses and copyright law, and the application of [...]]]> The New York Times has reported on an interesting case involving the alteration of a photograph for advertising purposes. According to the article, a girl was photographed by a friend at a church car wash, who uploaded the photograph onto photo-sharing site Flickr. The photo was then downloaded and altered by an Australian mobile phone company, and used for billboard advertising. The girl was portrayed in the ads as an example of the kind of “loser” pen pal that cell phone subscribers could finally “dump.” The girl has sought legal action against the Australian company under a number of theories.

This is a complex case involving a number of legal issues, including creative commons licenses and copyright law, and the application of U.S. law overseas, but I’m most interested in it as a privacy case, because the facts are strikingly similar to the seminal case of Roberson v. Rochester Folding Box Co., 64 N.E. 442 (NY 1902). In Roberson, a company used the photograph of another young woman to advertise its flour under the terrible slogan “flour of the family.” Although the New York Court of Appeals rejected the young woman’s claim that her right to privacy had been violated, the controversy that the case created resulted in the New York legislature creating a statutory right to privacy shortly thereafter. The privacy tort advocated by Samuel Warren and Louis Brandeis in their influential 1890 Harvard Law Review article “The Right to Privacy” was adopted in a variety of related contexts, but this dimension of privacy — the appropriation of likeness for commercial purposes — has been the most numerous and the least controversial. Dan Solove and I talk more about these cases (including Roberson) here, in an article that is about to go to press.

Assuming that some version of the appropriation tort is applicable to the Australian company (and that’s a fairly big assumption, I think), this case looks to be a straightforward application of the appropriation tort. The basic theory of the tort is that it is unreasonable to allow businesses to use photographs of unwilling subjects for advertising or other commercial purposes. The injury remedied is an emotional one – the hurt feelings stemming from the unwanted exposure of one’s likeness to the public, especially where (as here) it is an unflattering likeness. There are two points worth noting, though.

First, the theory of the appropriation tort contains a good helping of gendered notions of separate spheres. I think it’s no coincidence that most of the early successful privacy litigants were female, as courts recognized the cause of action to preserve Victorian and Edwardian notions of women as delicate beings whose sensibilities could be hurt by too much publicity. I think that even if we put archaic notions of separate gender spheres to one side, the appropriation tort is justifiable, but under a theory about what sorts of commercial activities are reasonable and unreasonable.

The second point is the lurking spectre of the First Amendment in all of this. Courts in 1902 (indeed for most of the twentieth century) rejected any idea that there was a First Amendment interest in commercial activity or even advertising. But with the rise of commercial speech doctrine since the 1970s (ironically first as an offshoot from the constitutional right of privacy to protect abortion services advertising), the commercial world of advertising has become enmeshed with the First Amendment. Although there are First Amendment issues raised by the other privacy torts, the appropriation tort in its core case does not threaten First Amendment values. The right of commercial advertising is founded not on notions of individual expression but on the need of consumers to receive potentially valuable information about new products. Misappropriation of pictures does not threaten that interest at all. If we take First Amendment arguments seriously in this context, it will become difficult to see how there is not a First Amendment right to engage in other kinds of commerce – we will have created (as I argued here) a kind of First Amendment Lochner.

In any event, the Flickr photo case shows that there seem to be legs in the old appropriation tort yet, and it will be interesting to watch this case as it develops.

Now in my view, you should absolutely click through to our advertisers’ webpages. It will help make this site better, and it doesn’t cost you much time. But I have the nagging suspicion that click-through rates for most blogs are quite low. So, why would rational businesses spend their marketing budgets here?

There is some literature on this problem. The answer seems to be something called the “exposure effect.” As John Timmer explains: There is a long history of experiments that show that repeated exposure to a stimulus that’s barely perceptible can [...]]]> So we’ve decided to take some advertising. Now that we’ve disclosed what we’re going to do with the ginormous revenue stream, no doubt other ads are on the way.

Now in my view, you should absolutely click through to our advertisers’ webpages. It will help make this site better, and it doesn’t cost you much time. But I have the nagging suspicion that click-through rates for most blogs are quite low. So, why would rational businesses spend their marketing budgets here?

There is some literature on this problem. The answer seems to be something called the “exposure effect.” As John Timmer explains:

There is a long history of experiments that show that repeated exposure to a stimulus that’s barely perceptible can enhance a person’s feelings towards what’s otherwise a neutral object. These feelings can include a liking or more subjective things such as “fame, truth, duration, loudness, stimulus brightness and darkness.”

Timmer is summarizing the findings from Xiang Fanget al.’s An Examination of Different Explanations for the Mere Exposure Effect, in which the authors noted that banner ads are a great candidate for increasing brand strength. They tested the hypothesis, and found that

“repeated incidental exposures to banner ads resulted in increased perceptual fluency without increasing recognition. Consistent with past research, we found increased perceptual fluency to be accompanied with more positive evaluations of the ad but not with negative evaluations, suggestive of a positive affect.”

Thus, the article tartly notes that a “practical implication of this research is that online advertisers might be placing excessive emphasis on the click-through rates—the primary metric for measuring the effectiveness of online ads. Our results suggest that even when there is no overt sign of effectiveness, such as recognition or click through, the banner ads may still impact ad liking.” Even more interesting, from the perspective of some who might be worried about overkill, “consumers tend to have a relatively high level of tolerance for repeated exposure to banner ads—the wear-out effects of banner ads did not kick in even after 20 exposures in this experiment.”

I’ve got to say that I find this research both fascinating and frightening. On the one hand, it hooks into my total persuasion hypothesis. On another, it suggests an inefficiency in the market for online advertising dollars, which allocates money based on click through rates. Perhaps as this research is replicated, that inefficiency will dissipate. What metric for online advertising’s efficacy is on the horizon? Change in Q-Scores?

(Photo Credit: Wikipedia Commons).

I would strongly prefer not to have ads for credit cards running next to my paper arguing for major changes in the credit-card market. And that subject-matter mismatch will often be the case.

The ads raise a number of interesting issues addressed by both Leiter and Lipshaw commenters. On the one hand, I agree with Hal Varian’s point that marketing in general can create a great deal of value by connecting people to products in unexpected ways.

On the other hand, I think it’s important to realize who is permitting these “potential rebuttals” and who is not. Many have called [...]]]> Via Brian Leiter: Scholars including Michael Fischl and Angie Littwin are disturbed by the Google-served ads that appear next to their papers on SSRN. Littwin states:

I would strongly prefer not to have ads for credit cards running next to my paper arguing for major changes in the credit-card market. And that subject-matter mismatch will often be the case.

The ads raise a number of interesting issues addressed by both Leiter and Lipshaw commenters. On the one hand, I agree with Hal Varian’s point that marketing in general can create a great deal of value by connecting people to products in unexpected ways.

On the other hand, I think it’s important to realize who is permitting these “potential rebuttals” and who is not. Many have called for a “norm of trackback” on newspaper editorial pages that would give some small platform to critics of their contents. But it’s not really catching on. By and large, the people who will have to give a “right of reply” to critics (via served ads) are people that can’t afford to run their site without such funds.

So though we’ve gotten a bit beyond Liebling’s old bromide “freedom of the press belongs to one who owns one,” inequalities of influence persist in unexpected ways. The credit card companies can easily afford to saturate served ads with their content by, for example, bidding up the price of adwords like “loan” or “luxury splurge.” I very much doubt Prof. Littwin could buy her way onto the MBNA site….though ISP-inserted advertising might provide a way around that.

Watch it here. (You’ll have to pass through a fund-raising machine to get there.)

1. The public is becoming more concerned about the contents of its foodstuffs.

2. With more interest in organic food, Big Food decides to buy into to the industry.

3. Once bought in to the industry, making money off of the public’s (perhaps legitimate) fear of the current foodsupply (that Big Food [...]]]> It appears that the titans of the food industry are having their way with the USDA and the feds may soon approve a list of 38 non-organic items that may be included in foods marked “organic.” All of this interesting regulatory play is inidicative of the fact that organic foods finally hit the big time, and thus became worth of Big Food’s attention. We see a several different things happening here.

1. The public is becoming more concerned about the contents of its foodstuffs.

2. With more interest in organic food, Big Food decides to buy into to the industry.

3. Once bought in to the industry, making money off of the public’s (perhaps legitimate) fear of the current foodsupply (that Big Food created and aggressively markets), industry immediately sought to make organic foods cheaper, more attractive, or tastier (or perhaps all three) by adding non-organic ingredients.

4. With its meaning diluted (and I’m not taking a position on whether this dilution is meaningful – whether these 38 ingredients make items more or less healthy), the term organic may slowly lose its value as an indicator that a food product is distinctively more natural.

5. This will open new opportunities for creative small food marketers to create new language signifying the concept that “organic” once conveyed.

In the end, Big Food is simply doing with “organic” what it does with so many of the food products it markets: taking the underlying item (usually things like wheat, but in this case the word organic), processing it until it is a first cousin to its natural state, and serving up this not-quite-real but plenty alluring product to a waiting public.

Is this an example of markets working? Or of the vices of regulation? I’ll leave that question for people who actually spend money on this stuff. And I’ll have a Snickers and a Coke.

A lunch today with a colleague at another school, coupled with an article in the Wall Street Journal, has brought me to back to a topic I blogged about back in January: Total Persuasion. As I suggested, there are analogies to be drawn between the government’s defunct secret possibly ongoing program to gather reams of information about its citizens and corporations’ desire to grab consumer mind-share by every persuasive avenue possible. Indeed, we’re rapidly approaching a time when it will be exceedingly difficult for the law to draw lines between advertising and not-advertising; between fraud and persuasion; and between censorship and consumer protection.

These claims are easy to overdraw, so let me give you an example and a theory to help set the stage [...]]]>

A lunch today with a colleague at another school, coupled with an article in the Wall Street Journal, has brought me to back to a topic I blogged about back in January: Total Persuasion. As I suggested, there are analogies to be drawn between the government’s defunct secret possibly ongoing program to gather reams of information about its citizens and corporations’ desire to grab consumer mind-share by every persuasive avenue possible. Indeed, we’re rapidly approaching a time when it will be exceedingly difficult for the law to draw lines between advertising and not-advertising; between fraud and persuasion; and between censorship and consumer protection.

These claims are easy to overdraw, so let me give you an example and a theory to help set the stage for the discussion. In today’s Journal, John McKinnon has a interesting article about Sara Taylor’s decision to leave her job as the White House’s political director to join the private sector. Taylor is an expert in microtargeting, a marketing technique developed by corporations to segment their consumer markets by mining data to learn more about the structure of consumer’s preferences. According to McKinnon, microtargeting was “honed” by political operations to “more effectively zero in on voters’ emotion triggers,” and uncover groups of voters that are susceptible to future efforts. Taylor sees a “big future” for taking such political lessons back to the corporate world by “helping corporations focus on potential customers’ . . . feelings about buying a product or service.”

There are some roadblocks in this prosperous path, as the article points out. Most salient, businesses are “more constrained in the claims they can make” than politicians, presumably by the law of fraud (in its various guises). But there is a solution to this problem: encourage consumers to make their own persuasive advertising by creating “social networks around products and brands . . .” In the future, we should anticipate that such social persuasion will become an increasingly prevalent aspect of corporate marketing efforts, just as politicians have worked to co-opt social networking sites for their own ends.

Why? Because consumers have fewer defenses to social persuasion, and aren’t cynical about it yet. Moreover, social persuasion is probably less subject to legal sanction in the general case (indeed, it may be immune under circumstances where the same language if spoken by the corporation would be actionable). It is also, obviously, cheaper to produce. The downside (loss of control over message) is probably something that corporations will learn to live with. (I thank my lunch companion for pointing this problem out to me!)

What’s wrong with a society in which most speech that you hear is designed to persuade you to consume? When framed that way, some might immediately respond: nothing! After all, no one is being compelled to any particular purchase. If the consumer market is efficient, and consumers had a taste not to consume, wouldn’t savvy marketers satisfy the taste with a unpersuasive campaign? (The idea is silly on its face, but isn’t it sort of what Saturn and Berkshire Hathaway were/are up to?) Even assuming that the consumer product market is somehow irrational, marketers would presumably compete to satisfy whatever inefficient desires are extant.

But I doubt that market rhetoric is going to provide satisfying answers to whether the law should work to hinder a total persuasion society. I haven’t fully thought this issue through, but my starting point is an essay by Jonathan Franzen called Imperial Bedroom, in his book How to Be Alone. Franzen attacks privacy advocates for focusing on privacy as just problem of being from free from others’ (corporations, the government, space aliens, the U.N., etc.) prying eyes and grasping hands.

Instead, the real loss of privacy in modern society is the “public sphere.” He argues that Americans increasingly do not differentiate between public matters and private ones, that there are few places where “codes of dress and behavior are routinely enforced, personal disclosures are penalized, and formality is still the rule.” Elsewhere, private life is “brutally invading” public spaces, through the media, cellphones, public conversations about private matters, and, in short, a “pajama-party world.”

Franzen contrasts this world with a “genuine public space,” a place where “every citizen is welcome to be present and where the purely private is excluded or restricted.” He suggests, interestingly, that legal spaces are among our few remaining public places: courtrooms and jury pools, along with art museums and some workplaces, are the rare place where discussions about personal matters are generally missing. (Incidentally, one of unforeseen losses in my move from law practice to the academy is that this public-sphere workplace model is less present. There are compensations for this loss, to be sure, but it is felt.)

There is a connection between total persuasion and the loss of public space. This connection is deeper than the mere fact that public places are being renamed in service of persuasion. I’m not the first to note that the problem with persuasion’s ubiquity is that it makes us unable to walk in public without feeling like a targeted consumer. To the extent that our fellow citizens are harnessed to this persuasive effort, this lack of noncommercial space will be all the more keenly felt.

Is the right to be un-persuaded, to develop preferences that are all yours, one that the law recognizes? Not currently, although the movement to get advertising out of school suggests that there is a something to this. Stay tuned.

(Art Credit: Kenney Mencher, Austen’s Persuasion, 2005)

I’m hardly the first to think that the NFL’s behavior is ill-advised and heavy handed. A quick Google search turns up blog after blog making fun of the NFL’s behavior. That having been said, I’m curious…..Is there anyone other than NFL counsel who’s out there supporting this behavior or the asked-for result?

The NFL’s explanation is that they want to stop people from piggy-backing on [...]]]> As a loyal Stanford alum, I don’t think I ever thought I’d see the day where Stanford and Cal would link arms over The Big Game. Thank goodness for the NFL, which has applied for a trademark on “The Big Game,” a title that has been applied for many decades to the annual football game between Stanford and Cal.

I’m hardly the first to think that the NFL’s behavior is ill-advised and heavy handed. A quick Google search turns up blog after blog making fun of the NFL’s behavior. That having been said, I’m curious…..Is there anyone other than NFL counsel who’s out there supporting this behavior or the asked-for result?

The NFL’s explanation is that they want to stop people from piggy-backing on the goodwill of the Super Bowl — you know, selling TV’s for “your big Super Bowl party.” In the story linked to above, the NFL says it sells sponsorship rights to Samsung, and suggests that the value of those rights would dissipate if they didn’t get the trademark. I’m a little surprised that someone isn’t defending this outcome as “correct” because it allows internalization of all social value from the Super Bowl to the NFL, thereby giving the NFL the proper market signal to invest in putting on its annual extravaganza. Perhaps I’ve missed it? Heaven knows I don’t read the whole blogosphere. Or, has the NFL taken us past the limits of the “internalize all externalities” policy?

Over the past dozen years, the lure of regulating the Internet has proven irresistible to legislators. For example, in the 109th Congress, almost 1,100 introduced bills referenced the word “Internet.” This legislative activity doesn’t always come to fruition. Still, in total, hundreds of Internet laws [...]]]> [Preface: I've already overstayed my guest visit, but before I go, I want to say thanks to the Concurring Opinions team for the opportunity to blog here, and thanks to all of you for the great comments and stimulating dialogue. A complete index of my guest blog posts. Meanwhile, I'll keep blogging on technology and marketing law at my main blog and on all other topics at my personal blog. Hope to see you there!]

Over the past dozen years, the lure of regulating the Internet has proven irresistible to legislators. For example, in the 109th Congress, almost 1,100 introduced bills referenced the word “Internet.” This legislative activity doesn’t always come to fruition. Still, in total, hundreds of Internet laws have been passed by Congress and the states. This body of work is now large enough that we can identify some winners and losers. So in the spirit of good fun, I offer an opinionated list of my personal votes for the best and worst Internet statutes in the United States.

[Keep reading for the list]

Best Internet Laws

With my libertarian leanings, it should not be surprising that my list of good Internet laws is both brief and skewed towards laws that minimized the scope of Internet regulation.

#2: Internet Tax Freedom Act

Many people mistakenly think this law eliminated sales tax for purchases over the Internet. It didn’t (if you don’t pay sales tax, you owe use taxes on those purchases). Instead, the law placed a temporary moratorium on states enacting Internet access taxes or e-commerce-specific taxes. By freezing new taxes, the law forestalled a tax frenzy during the dot com boom. The current moratorium expires in November, but Congress is proposing to extend the law permanently (see the Permanent Internet Tax Freedom Act of 2007, S.156 & H.R. 743). To which, I say: amen!

#1: 47 USC 230

The law was enacted in 1996 (as part of the Communications Decency Act, discussed below) during the heyday of the cyberspace exceptionalism movement–about the same time as Barlow’s Declaration of Independence and Johnson/Post’s Internet self-governance article. Indeed, this law is one of the most conspicuous examples of setting different rules for physical space and cyberspace. In this case, the law provides websites and other intermediaries a near-absolute immunization from liability for their users’ content—even if offline publishers would be liable for publishing the exact same user content in dead trees.

It’s hard to overstate the importance of this law to the Internet’s evolution. Without this law, all Internet content probably would be subject to a notice-and-takedown regime like we have for copyright law (see discussion about the DMCA Online Safe Harbors below). If websites had to remove user content upon notice to avoid liability, they would act conservatively, quickly pulling down complained-about content without much fuss. So, any company unhappy with negative consumer comments could simply contact the web host, claim that the comments were defamatory (making the web host potentially liable for the content), and expect the web host to scramble to take down the user’s comment.

But in this takedown melee, only negative remarks would be targeted (there would be no legal grounds—or reason—to target positive comments). Thus, notice-and-takedown rules would result in “lopsided” databases where only positive opinions/commentary would remain, but many negative comments could be quickly excised. This would ruin the ability of the consumer opinion sites (e.g., eBay’s feedback forum, Amazon product reviews) to hold people and companies accountable for their choices. Indeed, by undermining the credibility of Internet content generally, a notice-and-takedown scheme could diminish the Internet’s vitality as a mainstream information resource.

47 USC 230 eliminates the notice-and-takedown option for people and companies trying to escape accountability. As a result, 47 USC 230 is a big part of the reason why the Internet has been such a massive success.

Effective but Questionable Internet Laws

Two additional laws are noteworthy for substantially accomplishing their intended goals, even though I can’t classify them as “good” because of their deficient policy rationales.

#2: No Electronic Theft Act (NET Act)

In 1997, Congress changed the basic paradigm for criminal copyright infringement. Previously, the law required that defendants had to infringe for the money. After the NET Act, infringers may be criminal even if their infringement was non-commercial.

The NET Act specifically targeted warez traders, a group of hobbyist infringers who aggregate and disseminate copyrighted works as trophies—by finding and publicly presenting a hard-to-get copyrighted work, the warez trader demonstrates his/her prowess as a trader and earns recognition from the community. Warez traders generally subscribe to the “information wants to be free” philosophy, so they never exchange copyrighted works for the money, but their trading can have adverse consequences for copyright owners.

There are many reasons why the NET Act is lousy policy, most importantly because it will not change warez traders’ behavior. Yet, it has given the DOJ an effective tool to nail warez traders, and a couple hundred warez traders have been busted using the law.

#1: Anti-Cybersquatting Consumer Protection Act

The 1990s saw a frenzy of domain name registrations, often involving the registration of domain names containing well-known trademarks by someone other than the trademark owner (a process called “cybersquatting”). Courts struggled to apply trademark law to this behavior, so trademark owners appealed to Congress for help. Congress initially hoped that ICANN would promulgate its own anti-cybersquatting administrative regulations (which ultimately became the UDRP). But ICANN took too long, and an impatient Congress enacted the ACPA.

The ACPA targeted cybersquatting, and in that respect the law has worked well. The classic 1990s cybersquatting “land-grab” registrations of [trademarkowner].[tld] have effectively dried up, and the few cases where a true cybersquatter has gone to court to defend against an ACPA claim generally have resulted in resounding victories for the trademark owner.

A silver lining of the ACPA: it contains an immunization of domain name registrars and registries that completely eliminated them as the targets of trademark owners. Prior to ACPA, domain name registrars (especially Network Solutions, the monopoly .com registrar for most of that time) had been sued repeatedly. Now, plaintiffs don’t even think about it.

However, the ACPA isn’t all good news. From a defense perspective, the ACPA has emerged as a tool to attack gripers and other critics. From a trademark owner’s perspective, the ACPA hasn’t curbed domain name parking, domain tasting and other AdSense-fueled sites all using trademarks or typographical versions of them. So no one is really happy with the law. Nevertheless, as a point solution to the cybersquatting problem, I think ACPA is fairly characterized as a solid success.

Worst Internet Laws

I want a little credit for finding 4 laws that I could say something good about. It wasn’t easy. In contrast, the list of bad laws is much longer, so I’ve limited myself to 10.

What makes a law “bad”? Unfortunately, there are many routes to ignominy, and mere legislative cluelessness isn’t sufficient. Some common themes: poor/ambiguous drafting, unintended consequences, justification bait-and-switch (publicly declaring that the law was designed to do X, when it was never likely to do so), and attempts to legislatively manufacture markets or change consumer behavior.

The dishonor roll:

#10: E-Sign

E-Sign generally says that online contracts won’t be denied enforcement simply because they are in electronic form rather than on paper. Superficially, this sounds positive because it stops courts from underenforcing electronic contracts or engaging in funky cyberspace exceptionalism. The problem? This law was completely unnecessary, as many states had already enacted the Uniform Electronic Transactions Act (UETA) before Congress passed the substantially identical E-Sign. Worse, E-Sign has a partial preemption clause that makes it difficult/impossible to figure out what state laws survived it. So E-Sign is a prime example of how Congress cannot resist the lure of Internet regulation—even if it adds no value (or even subtracts value)in the process.

#9: DMCA Online Safe Harbors

Another law that looks good on the surface, the law purports to provide safe harbors to protect online intermediaries from copyright infringement caused by other people. However, this law has at least two major flaws. First, it sets up a notice-and-takedown procedure which has led to significant abuse.

Second, and perhaps more importantly, the law only governs late 1990s technologies. It doesn’t contemplate P2P file sharing and other decentralized forms of communications. This technological dependency makes the safe harbor increasingly irrelevant as technology evolves. As a stark example, consider that the online safe harbors didn’t get mentioned–not a single reference!–in the most important online secondary infringement case to date, the Grokster Supreme Court opinion.

#8: Unlawful Internet Gambling Enforcement Act of 2006 (see the end of this file)

As I have said elsewhere, this law is a “a flagship example of how special interest lobbying combined with legislative mumbling can produce an unreadable mess.” First, the law is written in unintelligible Congress-ese. Second, the law is pockmarked with special interest exceptions, clearly showing who has the best lobbyists. Third, and most importantly, Congress did not specify (in this law or elsewhere) what constitutes illegal Internet gambling, yet the law requires third party money sources to block the flow of money to illegal gambling operations. Thus, just like Kafka might write it, Congress deputizes private actors to block illegal activity without deciding for itself what constitutes illegal activity. The consequence is that banks and other money sources are going to curtail lots of legitimate activity to be on the safe side.

#7: DMCA Anti-Circumvention

There are lots of reasons not to like the DMCA anti-circumvention law. Most obviously, the law targets “bad” technology rather than bad behavior—a regulatory model that usually fails when technological innovation bypasses such restrictions, or worse, the restrictions inhibit the development of socially beneficial technology.

However, the anti-circumvention laws make this list principally because of their unintended consequences. The law was designed to bolster content protection technology: the purported justification was that content owners wouldn’t feel comfortable putting content online without content protection measures, and this law restricts the ability to bypass those measures.

As it turns out, the hottest area of anti-circumvention litigation has nothing to do with such content protection schemes but instead involves companies using the DMCA as an anti-competition law. Two flagship examples—Chamberlain, involving the sale of compatible after-market universal garage door openers (a case the EFF calls “mind-bogglingly absurd”) and Lexmark, involving refilled printer cartridges—ultimately reached pro-competitive outcomes, but only after significant litigation and some disconcerting early rulings. Even with these rulings, companies now routinely consider anti-circumvention claims as part of a general anti-competitor campaign. As a result, the law has increased the cost of doing business, given plaintiffs another tool to try to restrict legitimate competition, and done almost nothing to protect content owners.

#6: Electronic Communications Privacy Act

This law was written in 1986 (amending earlier versions), back when the Internet was an obscure academic network. Although the law wasn’t written with the Internet in mind, it has the heroic responsibility of governing a huge swath of private Internet communications, including emails, private chat, VOIP and others. Even if the law were well-drafted, applying a pre-Internet law to these communications would create plenty of ambiguity and friction. Unfortunately, this is not a well-drafted law; in my opinion, this law as one of the most poorly drafted statutes ever. The result is a tangled convoluted hairball that no one (even privacy experts) can understand or apply.

#5: Utah Digital Signatures Act

In 1995, there was some concern that the lack of Internet authentication would inhibit the development of e-commerce. As a result, VeriSign (and others) advocated that everyone on the Internet—both users and websites—should have digital certificates to validate their identity (the equivalent of an Internet driver’s license) so that websites and users each could figure out who they were dealing with. However, VeriSign and others expressed concern that a digital certificate issuer would face significant liability if the authenticated information was wrong. Thus, the argument went, if only digital certificate vendors could get some liability protection, digital certificate vendors would provide the necessary authentication that would allow e-commerce to explode.

In response to these concerns, Utah enacted the Digital Signatures Act to regulate the process of granting accurate certificates and limit the liability of digital certificate vendors. Utah hoped the law would make cause digital certificate vendors to relocate to Utah to take advantage of its friendly legal climate, making Utah a leader in e-commerce.

As it turns out, digital certificates weren’t needed to catalyze e-commerce, nor did the market materialize for digital certificates in the form contemplated by the statute (as a PKI-based system). As a result, this law was a complete failure, and no companies ever complied with the statute’s formalities. Indeed, the law proved to be so irrelevant that Utah has taken the highly unusual step of repealing the law. At least they owned up to their mistake (this time).

#4: Anti-Kid Spam Laws in Utah and Michigan

Nothing fires up the legislative machine like trying to protect kids from Internet dangers. In this case, Utah and Michigan created “do-not-email” registries, similar to the national Do-Not-Call registries, for the registration of kids’ email addresses. Porn spammers are supposed to check these databases and eliminate any registered kids’ addresses from their porn spam distributions.

While do-not-contact registries are generally popular, I’m in the minority of people of who think they are suboptimal policy (I explain my thinking, by deconstructing the federal Do-Not-Call registry, here). In these cases, the do-not-email registries claim to be protecting kids, but they actually don’t try to authenticate registrants’ ages—making them a generic do-not-email registry, something even the FTC doesn’t favor. Most importantly, assuming the database actually contains kids’ email addresses, it becomes a juicy targets for criminal hackers, pedophiles and other bad actors. Based on this concern, the FTC has advocated against the idea.

#3: Dot Kids Implementation and Efficiency Act of 2002

As we saw with the Utah Digital Signatures Act, legislators can’t stimulate market demand simply by legislating the market into existence. In my opinion, no legislative act better illustrates this principle than the Dot Kids Implementation and Efficiency Act of 2002. In the name of providing a safe online haven for kids, Congress co-opted the .kids.us domain and decreed that only kid-safe content could reside there. In theory, parents would feel safe letting their kids loose there, and content publishers would have a good place to reach kids. Ultimately, Internet filters could simply enable .kids.us websites and shut off the rest of the Internet to kids.

The problem? Not many content publishers saw the value of creating kid-safe websites and housing them under the restrictive rules of the law. As a result, .kids.us is a virtual wasteland, housing less than 20 websites, almost all of which have less-than-compelling content. (You mean to tell me you’ve never been there? Check it out yourself). Not exactly the most enticing destination for Junior. So .kids.us is a ghost-town-like reminder that legislators should stay out of the business of trying to manufacture markets.

#2: Utah/Alaska Anti-Adware Laws

Have you noticed a trend here? Utah makes my dud-law list three times—a hat trick of legislative incompetence. This is such a remarkable feat that we might consider banning Utah from enacting further Internet regulations until they can show that they will use their powers wisely.

This law makes my list because of the deceptive rationales used to justify it. Touted as “anti-spyware” “consumer protection” law, it was neither. The law only targeted adware, not spyware, and it gave enforcement rights to trademark owners, not consumers. As a result, the law gave trademark owners the power to take software out of consumers’ hands—even if the consumers actually wanted the technology. Further, by allowing trademark owners to attack competitors for engaging in comparative advertising, the law tried to inhibit beneficial competition rather than promoting it. Thus, despite its billing, this law was a profoundly regressive anti-consumer law.

Given its deceptive nature and adverse policy effects (which I explain in lengthy detail here), it should not be surprising that the law was quickly enjoined. (Disclosure note: I worked on an amicus brief challenging the law). Chastened, the act’s sponsor subsequently amended the law to make it effectively irrelevant.

However, before Utah amended its law, Alaska implemented its own bastardization of Utah’s initial law. Among the Alaska law’s defects, it expects adware vendors to pop-up a notice to potential downloaders asking them for their geography; with this information, in theory, the vendor can avoid downloading the regulated software to Alaska residents. In other words, in an effort to fight unwanted pop-ups, the Alaska law mandates that software vendors deliver lots of unwanted pop-ups to consumers–even when both the vendors and consumers are located outside of Alaska. Gotta love that logic.

#1: Communications Decency Act

Based on the discussion above, clearly there was plenty of competition for the worst Internet law of all time. However, I found picking a “winner” surprisingly easy. In fact, in my book, it isn’t particularly close.

The Communications Decency Act, passed in 1996, was Congress’ first comprehensive attempt to regulate Internet content. Not surprisingly, Congress made a lot of rookie mistakes. The CDA tried to keep kids away from Internet porn, a reaction to a sensational 1995 article (the “Rimm Report”) published in the Georgetown Law Journal that proclaimed that the Internet was awash in porn. But later examinations thoroughly discredited the Rimm Report—meaning that Congress’ efforts/overreactions were based on bad social science.

Worse, Congress mistakenly assumed that non-porn content could be easily segregated from porn. In defense of this assumption, the government’s expert witness proposed a content tagging system that would enable browsers to wall off porn. But this exposed a deep flaw in the law—the tagging system didn’t exist, browsers weren’t written to honor the tag, and it turns out that requiring publisher self-tagging for all Internet content is burdensome and cost-prohibitive.

Because web and email content publishers had no easy way to comply with the law, the law threatened to restrict virtually Internet speaker. Further, Congress imposed punitive and draconian sanctions (including stiff jail time) for breaking the law. Congress really, really wanted to wipe porn off the Internet, but it chose a particularly mean-spirited way of doing so.

Not surprisingly, the law fared poorly in the courts. Within a week, it was enjoined. The next year, the US Supreme Court unanimously struck down the law (although 2 judges would have found a way to preserve some of the law). For its lack of policy support, its sloppy blunderbuss approach to regulating speech, and its flat-out meanness, I hereby crown the CDA the worst Internet law (to date…).

First, from the Economist, on the relevance of postmodern theory to modern business:

Modern retailers are only just getting to grips with two of the consequences of the breakdown of authority and hierarchy that [pomo theorists] hoped for half a century ago: the “fragmentation” of narratives and the individual’s ability to be “the artist of his own life”. Modern business uses a different language to discuss the same ideas. In “The Long Tail”, an analysis of the impact of the internet on the music industry, with wider ramifications, Chris Anderson describes the “shattering of the mainstream into a zillion different cultural shards”. The [...]]]> Inspired by Ellen Goodman’s fascinating article on “Stealth Marketing,” here are two random thoughts on ads and such during this frenetic shopping season.

First, from the Economist, on the relevance of postmodern theory to modern business:

Modern retailers are only just getting to grips with two of the consequences of the breakdown of authority and hierarchy that [pomo theorists] hoped for half a century ago: the “fragmentation” of narratives and the individual’s ability to be “the artist of his own life”. Modern business uses a different language to discuss the same ideas. In “The Long Tail”, an analysis of the impact of the internet on the music industry, with wider ramifications, Chris Anderson describes the “shattering of the mainstream into a zillion different cultural shards”. The post-modern “fragment” becomes a “niche” and the mass market is “turning into a mass of niches”.

This is a bit abstract, but I highly recommend reading Clotaire Rapaille’s The Culture Code to see how it works in action. Rapaille uses extremely simple narratives to get at the subconscious wellsprings of consumer behavior.

Here’s a summary of his method from Malcolm Gladwell:

Over the past decade, a number of major automakers in America have relied on the services of a French-born cultural anthropologist, G. Clotaire Rapaille, whose speciality is getting beyond the rational—what he calls “cortex”—impressions of consumers and tapping into their deeper, “reptilian” responses. And what Rapaille concluded from countless, intensive sessions with car buyers was that when S.U.V. buyers thought about safety they were thinking about something that reached into their deepest unconscious. “The No. 1 feeling is that everything surrounding you should be round and soft, and should give,” Rapaille told me. . . . “Then there’s this notion that you need to be up high. That’s a contradiction, because the people who buy these S.U.V.s know at the cortex level that if you are high there is more chance of a rollover. But at the reptilian level they think that if I am bigger and taller I’m safer. You feel secure because you are higher and dominate and look down.”

Cupholders also play a key role: “And what was the key element of safety when you were a child? It was that your mother fed you, and there was warm liquid. That’s why cupholders are absolutely crucial for safety. If there is a car that has no cupholder, it is not safe.”

I suppose this all sounds a bit ridiculous–but it certainly strengthens Goodman’s view that advertising may need to be more explicitly thematized. I also find these words of wisdom from Dilbert creator Scott Adams quite interesting. In response to a query on why “the marketing department is always the enemy,” he responds:

Economics people can talk to engineering people because you’re always looking for the cheapest, easiest, simplest, most elegant solution. You’re looking at complexity and trying to simplify. Marketing people are trying to hide reality. They’re trying to take, for example, long distance telephone service, which is exactly the same no matter who you buy it from, and convince people that one is better. All of your instincts as an engineer are to be logical and simple and reliable — and in marketing, everything is to take what is clear and make it unclear. So when you put engineers and marketing people in the same room, it just doesn’t work.

Hmmm….those SUV cupholders look pretty well-engineered to me!

The American Lung Association has received several complaints about scented stores, spokeswoman Janice Nolen said. The fragrances have triggered flare-ups for asthma sufferers and those sensitive to certain chemicals. “I don’t want to sound like the Grinch,” Nolen said, but “sometimes these fragrances can be a barrier to people.” Evelyn Idelson . . . is one of them. She first noticed that her laundry detergent was scented. Then her dishwashing liquid. Now, she said, everything smells. “I can’t stand it,” she [...]]]> I serendipitously encountered two bellwethers of commercial culture today. The WaPo looks at retailers’ increasing use of fragrances to enhance consumers’ moods. Is this effort to get people in a buying mood a bit like subliminal advertising? Some unexpected nuisance issues arise:

The American Lung Association has received several complaints about scented stores, spokeswoman Janice Nolen said. The fragrances have triggered flare-ups for asthma sufferers and those sensitive to certain chemicals. “I don’t want to sound like the Grinch,” Nolen said, but “sometimes these fragrances can be a barrier to people.” Evelyn Idelson . . . is one of them. She first noticed that her laundry detergent was scented. Then her dishwashing liquid. Now, she said, everything smells. “I can’t stand it,” she said. “I think it’s an invasion of personal space.”

The California Milk Processor Board has responded to such complaints, removing ads that smelled like cookies. “Taunting [the obese] with the smell of off-limits cookies was just cruel, they said.” Given the parlous state of many Americans’ finances, perhaps Debtors’ Anonymous should launch a similar campaign for all luxury goods.

But then again, we’d never say the same thing about images of products, would we? Perhaps it turns out that scent is more visceral than sight:

“You smell a rose, and your brain doesn’t go, R-O-S-E,” said Charles S. Zuker, a researcher with the Howard Hughes Medical Institute. “Your brain recalls what a rose is like.” Daniel Lieberman, an associate professor of psychiatry at George Washington University, called smell the most “primitive” of the senses. Odor receptors in the nose are actually brain cells, he said.

So I suppose scent is in a category of its own.

But for those frustrated with all-pervasive commercial culture, there is another alternative: self help. Harvard’s Berkman center recently had a panel on “culture jamming,” including many leaders in cyberactivism. I was intrigued by Ji Lee’s bubble project, which encourages renegade “taggers” to scrawl commentary, in bubbles, on ads:

Our communal spaces are being overrun with ads. . . . Once considered “public,” these spaces are increasingly being seized by corporations. . . . Armed with heavy budgets, their marketing tactics are becoming more and more aggressive and manipulative. The Bubble Project is the counterattack. . . . Once placed on ads, these stickers transfom the corporate monologue into an open dialogue.

I suppose many will deem the Bubble Project illegal art, or mere graffiti, and may even think Ji guilty of inducing copyright infringement. But I think it’s worthwhile hearing his side of the story, and thinking about the ways in which ordinary citizens can try to avoid (or undermine) a barrage of commercial messages. As Hannibal Travis notes, there is a “battle for mindshare,” whether we like it or not.

PS: This is a very interesting disclaimer from the FAQs of the Bubble Project:

Q: Is it legal to place bubbles on top of ads?

A: No, it’s illegal. It’s consider[ed] vandalism to deface any public or private message. If you are caught, you may be subject for fines and even get arrested. You figure it out on your own. I’m not responsible for your actions.

Art Credit: Aric Obrosey, The Symbolic Lotus of a Thousand Colonels [Sanders]

We have become so accustomed to commercialization of just about everything that this story, while humorous, is entirely plausible. And that’s lucky, because it’s true. I wonder if a stadium naming opportunity can be created for any legit company in America. How about Jack Daniels Stadium or the Marlboro Center? (If these names don’t play in Utah, perhaps they’d work in [...]]]> I love that the Utah Jazz has sold their stadium naming rights to Energy Solutions, a nuclear waste storage company. The Times reports a series of great nicknames that savvy Salt Lake sportos have suggested for the facility. The Tox Box. The Glow Bowl. The JazzMat. And of course, my own personal favorite, Radium Stadium.

We have become so accustomed to commercialization of just about everything that this story, while humorous, is entirely plausible. And that’s lucky, because it’s true. I wonder if a stadium naming opportunity can be created for any legit company in America. How about Jack Daniels Stadium or the Marlboro Center? (If these names don’t play in Utah, perhaps they’d work in a place like Chicago.) Perhaps Howard Dean should have ponied up some cash and taunted Jazz fans by renaming the place Democratic National Party Hall. (Would locals derisviely call it the Dean Dome? And if t-shirt makers emblazoned souveniers with the motto, could Carolinians sue?)

Which all leads nowhere, except to ponder whether law firms will ever get into the biz. Surely Skadden, Arps would benefit from having the firm’s name surface regularly on NBA-TV and ESPN. I’m convinced there are some great nicknames a law-firm-titled stadium could generate, but for now I’m somewhat stumped. MoFoField just doesn’t knock my socks off. Anyone have suggestions?