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Wednesday, May 4, 2011

Legal Issues For My Business

Designing a business plan concept has been difficult because I change my mind every other month. Yet, I developed an idea that I believe I’m happy with. My plan is to create a website that streams only music videos. Think Pandora/YouTube cross. Developing a website with other people’s content comes with several liabilities, one being copyright on the Internet. An example of this is the case of Viacom vs YouTube.

In this case, YouTube was alleged to have “distributed illegally copied videos that were uploaded to the site by individual users” (Arcamona, 2010). New York judge, Judge Stanton ruled that YouTube simply has to remove videos that infringe on copyright upon discovery of them. Since 20 hours worth of video gets uploaded every minute, I feel this was a fair ruling. Viacom threatened to appealed. The case called into question the DMCA (Digital Millennium Copyright Act). DMCA states that producers are not liable under “Safe Harbor.” Also, Section 230 of the Communications Decency Act says that producer’s are not accountable for the comments their users post. Both DMCA and Section 230 provide great arguments for YouTube. Scanning through 28,800 hours of video is impossible to do in a week and assigning someone to the task would be torture. I agree with the ruling, if Viacom is so worried about copyright infringement, then they can police it themselves. If they find something, YouTube will take down the video without a fight.
            
Another area I may be liable in is how I make income. Some sites use ad revenue to pay for their business. Pandora for example, did that, but got in trouble for how their ads were displayed. Fowler Woods LLC vs ten online-radio websites and web applications consisted of Fowler alleging that these sites infringed on a patent for showing ads while audio was playing (Meyer, 2010). One would think anybody could do this, but a team did in fact come up with the idea and protect it, meaning to use this concept, I’d have to pay Fowler Woods LLC and get permission. Seems ridiculous, but it’s true. If you want to investigate the patent, the number is 6,351,736, and it’s titled “System and method for displaying advertisements with played data” (Meyer, 2010).
            
One website that I got inspiration from was Ruckus and their Ruckus Music Player. Ruckus tried to combat the issue of piracy on the web. According to an article published by Reuters, Big Champagne Web consultant’s estimate 1 million free songs are swapped every day (2007). Even though this article was published four years ago, I’m confident that the amount of free songs swapped among peers has quickly grown. People use the Torrent sites frequently, downloading music and movies. It’s the old cliché “If it’s free, it’s for me mentality,” yet it hurts the industry people love. Revenue streams come from elsewhere because music sales are unreliable. Yet, the judicial system still tries to cut down on piracy. In the Pirate Bay Trial, the four men accused were sent to jail and each had to pay $905,000 for copyright infringement. In my business, I need to be extremely careful about gaining permission and what could be downloaded. Being a legitimate site like YouTube gives me the protection I need to grow my business. Torrent has the looming threat of being shut down because of their known dealings distributing copyrighted material.
            
Reviewing these past cases helps to make wise business choices when creating my business. Copyright is a huge issue on the Internet and needs to be taken seriously. I’ve learned that even the smallest details need to be considered so that way I am not sued, like the online-radio sites and applications, because I didn’t know about a patent or trademark previously in place.


Meyer, 2010
Arcamona, 2010
Pirate Bay Trial
Reuters, 2007

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