Monthly Archives: November 2011
Federal Laws take aim at Amazon Tax Issues
Sorry I have not been writing for a while. Skyles Law Group is getting off to a great start, and I have been preparing to move offices. This, combined my obligations to actually practice law, means I have not had any time to blog, and there has been a lot of news lately. I have not been writing about the changes in ICANN , or the legislative activities involving PROTECT-IP and SOPA, (aka. Lucifer and Beelzebub), even though they have been in the news lately. This will change.
Continuing with previous themes, there has been developments in the Federal Amazon Law. The Venerable Declan McCullagh over at CNET has written a comprehensive article on the subject. In short, while Amazon.com has endorsed one of the two bills going through congress, others are not on board and are preparing to fight. Here is an exherpt.
“It (Ebay) is the largest retailers that are growing,” Cohen will tell a House of Representatives committee tomorrow, according to remarks obtained by CNET. “And not surprisingly, those giant retailers are lined up united in proposing a change in remote sales tax law.”…
eBay’s remarks represent an escalation in the war of words between it, Amazon.com, and big box retailers. An excerpt from Cohen’s (Tod Cohen, Ebay’s General Counsel) remarks:
The largest retailer on the Internet, Amazon, is a business with a national network of facilities, and is growing fastest. The giant “Brick & Click” retailers are also growing their market share online. In short, while small business retailers are active online and are adopting technology, they are not winning the race under the status quo…
The face of retail has changed dramatically over the past four decades. At the heart of the story has been the expanding dominance of giant retailers at the expense of small business. Giants have grown more dominant in retail; small independent retailers have been pushed to the edges. To illustrate, big-box discount retailers accounted for 42 percent of total retail sales in 1987. As of July 2010, their market share had jumped to 87 percent… The retail giants make up 18 of the Top 25 retail websites today…
The article addresses the main problem with the state Amazon laws, namely the Quill decision. It accurately states however, that Congress could step in, and that is exactly what Congress is doing in this case. More to come I am sure.
Nevada Company in Trouble Over Excessive Copyright Lawsuits
Righthaven LLC is a Nevada company with a single purpose, suing bloggers. The company founded in 2010 as a holding company which partners with newspapers and print media in order to obtain standing to sue bloggers for copyright infringement. Print media has been losing its a large share of news media to internet based news sites and bloggers for years. Bloggers often get their news from print media that also post online. They use the material from the print media directly on their blogs, often through blog quotes (Yes, I do this too, duh…) Print media is upset because online media is using their material and taking from their share at the same time. The problem is most of the time it is perfectly legal, ethical, legitimate, and (guess what) newspapers do it as well.
Here is the scenario, say a blogger uses a quote from a newspaper. The newspaper is upset because they have been losing their share of the media. The newspaper partners with Righthaven in order to sue the bloggers for copyright infringement.
Righthaven has had these deals with many print media outlets, and have been using them to sue countless bloggers in the process called copyright trolling. Copyright trolling is the term used when a company asserts their copyright through lawsuits or threats of lawsuits in order to make money through litigation. In this case, Righthaven is owned by a lawyer and the lawsuits are processed through the lawyer’s firm. The whole purpose is to get settlements and judgments, and to earn money for the lawyer who happens to own the holding company.
There is a catch, in general, if you lose a lawsuit at the outset, you often have to pay the defendant the cost of defending the suit. This is exactly what happened with Righthaven. Several of the cases were dismissed under the “Fair Use” defense for copyright, and Righthaven was slapped with “costs”.
Now Righthaven has filed for bankruptcy protection due to the large amounts of judgments against them. From VegasInc.com.
After U.S. District Judge Philip Pro in Las Vegas dismissed Righthaven’s suit against Hoehn this summer on both fair use and standing grounds, he also ordered Righthaven to pay his $34,045.50 in legal fees to Randazza Legal Group of Las Vegas….
The writ of execution signed Tuesday covers not only the original $34,045 in fees, but nearly $30,000 more in fees racked up by Randazza Legal Group in trying to get Righthaven to pay the first $34,045.
The entire writ, which includes a small amount of interest, is for $63,720.80.
A message for comment was placed with Righthaven on the writ.
Based on its past practice, Righthaven is likely to fight execution of the writ with another court appeal — though it hasn’t taken the bankruptcy option off the table.
Unethical conduct, and bad lawyering are a very costly combination. The lawyer should have done better research on standing and the very basic concept of “fair use” before initiating a lawsuit.
My advice for bloggers remains, use a minimal amount of the original work, make sure that a majority of the work is your own, and you should be fine.
Disclaimer: It is difficult to dispense comprehensive legal advice on the internet. If you find the information on this site interesting and insightful, great. But before you rely on any of this advice, please consult a legal professional with the specific details of your case or controversy.
Interesting Video: Advocacy Group on Amazon Laws
Stand with Main Street is an issue advocacy organization supported by brick-and-mortar retail associations, whose purpose is to end what they call the “internet sales tax loophole”. They have recently posted this video, which is their take on the impact of the loophole, and why they favor so called “Amazon Laws”.
I agree that it seems unfair that internet retailers seem to be able to by-pass state sales tax. The issue is not fairness, the issue is constitutionality. The question has always been whether or not the laws are constitutional on their face. Men must govern themselves by their wit, commerce must always be governed by the rule of law.
My only other issue with the internet sales tax loophole is the means by which they attempt to solve the problem. Amazon laws manipulative by their very nature. The net result is not only does the state lose, but companies that are savvy enough to affiliate with Amazon also lose.
You can decide for yourself
James Skyles
