Copyright Infringement Claims to BitTorrent File Sharing on the Rise

BitTorrent is a peer to peer file sharing protocol that allows its members to share pieces of a file simultaneously such that each user can access and view the entire file without downloading it completely. It was designed to facilitate the sharing of large files and minimize the demand on an individual server. A seed user uploads the file and then peer users join the network, each simultaneously sending and receiving pieces of the file within the swarm of users.

BitTorrent file sharing has the capacity to be used for software and content updates as well as the authorized distribution of media content and comprises a significant amount of total web traffic and bandwidth consumption. Several BitTorrent sites index and catalog publicly-available media files, including movies, television shows, music, video games, and applications, while some files are shared only within a closed group.

When copyright protected material is shared using a BitTorrent protocol without the holder’s permission, each transmission among the users constitutes a copyright infringement. Media distributors, including movie studios, have begun targeting BitTorrent peers through their IP addresses and filing mass lawsuits against up to several thousand downloaders at time. Statutory penalties can be as high as $150,000 but are often much lower.

For the purposes of naming defendants in these sweeping lawsuits, internet service subscribers are identified by their IP addresses. For business owners, that means that any infringing downloads that occur over your connection by your employees, customers, and neighbors can be traced back to your business, in much the same way that a red-light ticket comes to the registered owner of a car regardless of who was driving it. While you may not be able to monitor all internet activity over your home or business network, especially if you have a large number of employees, network security and clear policies and training on internet use limitations can help to prevent unwanted copyright infringement in your business’ name. BitTorrent files and client software often carry viruses and malware as well and should be avoided unless needed for a designated purpose.

For more information on BitTorrent copyright enforcement contact Mike Oliver.

Perils of overpricing and responding to government RFPs

The article in Networkworld “Cisco network really was $100 million more” is a good example of the danger in responding to governmental requests for proposal (RFP) without considering the publicity downside of significant overpricing.

The article explains that in bidding on a large computer infrastructure project for California State University, Cisco’s bid was over 100 million dollars higher than the closest competitor for the same equivalent products and services.  Cisco’s bid, in fact was more than 5 times the accepted bid price.   While some premium might be attributable to Cisco’s products – superior quality, service or warranty, that difference is not likely to be worth more than 5 times any other manufacturer’s similar bid.

Government RFP responses in most cases become public.  Also, because an RFP is an “apple to apple” response, at least on a unit/performance basis, the only justification for real bid differences normally comes in quality of service (perceived or real), or in product quality distinctions.

With the amount of due diligence that everyone is doing on companies – investors, potential targets, potential joint venture partners, licensees, customers – any business that is responding to an RFP should consider that the response, whether accepted or not, will become publicly available.  The article suggests that Cisco might overprice on RFP responses when it senses it has no ability to win the bid.  Why?  It makes more sense to withdraw from the competitive bidding, than to overprice.

A similar risk presents itself for underpricing.  Many companies ask for “most favored nations” (“MFN”) clauses – clauses that require post contractual price adjustments based on later favorable pricing offered to other customers.  MFN clauses are dangerous for a host of reasons (one significant one is that if written incorrectly, they make literally every customer contract potentially relevant evidence in a dispute), but if a bidder underprices on an RFP response, in the hopes of later recouping the lower cost through add ons or change orders, that initial pricing is now public and can be used against the bidder if they had issued MFNs to other customers.

In short, many considerations must be reviewed in responding to any governmental RFP – not just pricing, units, metrics and services.

For more information, contact Mike Oliver.