Advice for summer associates

Suffolk University Law School is offering through iTunes U a 20-part podcast series titled “Transitioning from One-L to Summer Legal Work.” Those podcasts I’ve listened to are worthwhile for those law students trying to understand what it means to practice law, especially if they have not worked in a professional or office environment. Kudos to SUSL–and why do neither Boston University or the BU School of Management have offerings on iTunes U?

Why Not Give a Bible?

“America LOVES GUNS and GAS!” If you purchase a Ford or GM car or truck this month from Max Motors in Butler, MO the dealer will throw in either a card for $250 in gas or a handgun. The dealership’s owner recommends the pocket-sized Kel-Tec .380 pistol. Most purchasers are opting for the handgun. The owner credits the promotion to Barack Obama’s remarks about people clinging to their guns and their Bibles: “I found that quite offensive. We all go to church on Sunday and we all carry guns.”

Must be a tough church. (Thanks to Z!)

Classic Lawyer’s Mistake

The SMG website features an interesting 7-minute podcast from colleague Marshall Van Alstyne, Associate Professor Information Systems, on IP and Open v. Proprietary Systems. Among other things he advises “don’t make the classic lawyer’s mistake” and equate “maximum value with maximum protection,” which he illustrates with a discussion of the birth of Google mashups. In a world of digital technology openness can enhance value.

Lawyers too often care more about not being wrong than about being right. We are trained to protect clients by erecting fences and installing padlocks, and overcoming that training requires conscious effort. Last week I had dinner with a friend who is in-house counsel for the regional branch of a retail mall development company. He wants to convince his client to save tens of thousands of dollars in legal fees by abandoning the typical, paragraph-by-paragraph slash-and-burn lease negotiation and focusing only on the narrow range of business and legal terms that go to the heart of each deal. “Why spend thousands of dollars negotiating condemnation and casualty provisions? They almost never matter.” It’s the “almost” that causes the problem. The company’s general counsel, back at HQ, will never agree to Steve’s proposal, which flies in the face of every lawyering-by-numbers manual and would require the company to change it’s risk-assessment culture.

NY Online Sales Tax Fallout

Amazon continues to challenge NY’s recent law requiring the online retailer to collect and remit NY state sales taxes on sales to customers in the state, but meanwhile it will comply with the law when it becomes effective on June 1. New York asserts that Amazon’s New-York-based “affiliates,” third-party websites that link to Amazon and receive commissions in exchange for generating sales, establish the nexus with the state required by the US Supreme Court in its 1992 decision Quill Corporation v North Dakota. Overstock.com has taken the opposite tack, canceling relationships with its 3,400 New-York-based affiliates.

The New York law puts an Internet-specific spin on the issue addressed by Quill. The California Court of Appeal upheld the state’s collection of sales taxes from out-of-state Internet retailer Borders Online based on its agency relationship with Borders, Inc. in Borders Online v State Board of Equalization. Borders, Inc. had a number of stores in California and, notwithstanding its separate corporate governance, engaged in cross-promotional activities with Borders Online and gave cash refunds for merchandise purchased from Borders Online. This agency relationship was more pervasive than the commission-for-referral affiliate relationships employed by Amazon and Overstock.com, but the question remains whether changes in the manner of commerce require updating the commerce clause and due process tests articulated in Quill. This commentary–which I’m not prepared to endorse–presents an argument why the New York law is unconstitutional under Quill.

Judge Admits Error in RIAA Case

Last October a Minnesota jury found Jammie Thomas liable for copyright infringement for KaZaa downloads of 24 copyrighted songs and awarded damages of $9,250 per infringement, a total of $222,000. Last week Michael Davis, the federal judge who presided over Thomas’s trial, said that he erred when instructing the jury that ““the act of making copyrighted sound recordings available for electronic distribution on a peer-to-peer network, without license from the copyright owners, violates the copyright owners’ exclusive right of distribution, regardless of whether actual distribution has been shown.” In other words, the judge told the jury that it could find Thomas liable for copyright infringement merely by placing copyrighted songs in a KaZaa-shared folder, even if no one copied one of the songs from the folder. That instruction was counter to the 8th Circuit’s 1993 decision in National Car Rental System, Inc. v Computer Associates International, which held, quoting Nimmer on Copyright, that “[i]nfringement of [the distribution right] requires an actual dissemination of either copies or phonorecords.”

The judge’s mea culpa is the latest in a series of judicial pronouncements as to whether “making available” a copyrighted work constitutes infringement of the copyright holder’s distribution right. Two other recent cases include London-Sire Records v Doe, a 31-Mar-08 decision from the federal district court in Boston in which Judge Nancy Gertner examined the issue at length and concluded that “to constitute a violation of the distribution right under ยง 106(3), the defendants’ actions must do more than ‘authorize; a distribution; they must actually ‘do’ it.” Four weeks later in Atlantic Recording Corporation v Howell the Arizona federal district court cited National Car Rental System, London-Sire Records, and other cases and sources to support its statement that “[t]he general rule, supported by the great weight of authority, is that ‘infringement of [the distribution right] requires an actual dissemination of either copies or phonorecords.’

The issue should be familiar to this semester’s students in Internet law. I used the facts of the Howell case as the basis for their final exam.