The Good, the Bad, and the Trolls of Cloud Infringement

The Good:

So you’ve finally finished that e-book you downloaded for vacation last summer and feeling pretty good about yourself. You do a search for more e-books you could download and run across a cloud-based site called ReDigi. You click the link, read the information and wonder, “how can a company resell digital material?” ReDigi, created by John Ossenmacher, is a new concept that takes the idea of selling used music, movies, and books and takes them to the cloud and into the digital world. However, this new startup company has got the attention of some major entertainment companies. Capitol Records, home of some big name artists such as Elton John, The Beatles, David Guetta, and Jennifer Lopez, has found themselves in a suit with ReGigi. According Capitol Records, “while ReDigi touts its services as the equivalent of a used record store, that analogy is inapplicable: used record stores do not make copies to fill their shelves." Their stance suggests that ReDigi should not be allowed to operate under the same law as a physical used record store. However, for once, it is the artists who are reaping the benefits both on their residuals and with piracy. According to Judith Rosen, “their goal is to unlock the billions of dollars that consumers have invested in digital goods by reselling them, using the partners' patented cloud-based technology, which enables them to weed out pirated goods.”

The Bad:

With companies such as ReDigi trying to find ways to limit piracy with cloud-based technology, The Pirate Bay is using the cloud to find ways to make it easier to pirate music, movies, etc. and harder to shut them down. The Pirate Bay, a notorious tech savvy Swedish based torrent site that allows the sharing of digital content over several servers, has found their way to the cloud. The cloud has enabled The Pirate Bay to move their servers into the virtual realm and change them at will when a suspecting government agency tries to shut them down. According to The Pirate Bay’s Winston Brahma, “our data flows around in thousands of clouds, in deeply encrypted forms, ready to be used when necessary…attempts to attack The Pirate Bay from now on is an attack on everything and nothing.” Therefore, as governments and hackers alike zero in on the current location of The Pirate Bay’s cloud-based server, it reacts, disappears, and then reappears in another secret encrypted virtual server. Making them virtually (no pun intended) undetectable.

The Trolls:

As some companies face cloud infringement with startup ideas or evil bad guys who lurk around virtual cloud servers, others must face the trolls. Yes trolls and not the kind that live under bridges or sit on top of your pencil with neon blue hair. These trolls live off of the fear and poor patent writing skills of companies with unique technology ideas. These trolls, according to the BBC, “are companies also known as practicing entities (NPE) or patent assertion entities (PAE).” According to the US government, “62% of all patent lawsuits in the country are brought by NPEs, and in 2011 their victims paid out $29bn, a 400% increase from 2005.” Rackspace, cloud-computing gurus, are no stranger to patent trolls and the costs associated with fighting them in court. It seems that the trolls will challenge anything in court and according to Alan Schoenbaum, general council for Rackspace, "[they] claimed to have the right to any computer function that allowed for a floating point decimal calculation, which is pure math…if you round up or round down a number based on a mathematical calculation, they said they owned that, and we have to pay them a royalty or license for that, which is ridiculous." This creates a large amount of time and money that needs to be dedicated to keeping these trolls at bay, which usually isn’t accounted for properly in a company’s business model. "It is really hard on developers, it's hard on small businesses, it creates a lot of perverse incentives, it takes up a lot of time, it is a drag,” said Mr. Schoenbaum, “I mean, there is almost as much money being spent defending and settling these troll cases as being spent in R&D - no kidding, it's crazy."

Conclusion:

With new cloud technology bringing the world closer to our fingertips, it is bound to bring unwanted headaches for some companies. However, ReDigi is finding a way to get digital content into the hands of consumers cheaper while still paying artists and protecting them from piracy. Therefore, Capitol Records should be thrilled that someone has found a way to resell their intangible product. Moreover, the cloud has turned piracy away from Somalia and into the virtual world via The Pirate Bay. Hopefully, ReDigi’s cloud-technology will be savvier than that of a roaming virtual server and weed out all the fake pirated copies of digital content. Unfortunately, that could be blocked by a bogus patent suit brought on by annoying trolls trying to make a quick buck on basic mathematics. Regardless, the battle of the cloud infringement will linger on because the new technology is only expected to grow. Furthermore, since the beginning of time and in the time to come, large companies will try to muscle out new startups, pirates will pirate, and trolls, well, they’ll just continue to be a nuisance.