Despite all the hoopla, this week’s copyright decision in Viacom v. YouTube (link on Scribd) was predicatable – a decision in the opposition direction would have been a shocker.  Viacom accused YouTube (owned by Google) of massive copyright infringement.  The court dismissed the case on summary judgment in favor of YouTube.

Of course, there is no question that copyright infringement is taking place on YouTube every instant of the day.  The court noted that video is being uploaded to YouTube at the rate of 24 hours per minute.  My calculator tells me that this is over 12.6 million hours of video per year.  It’s no secret that people are uploading copyright material at a fantastic rate – a search of YouTube will find that almost any popular song can be located.  it’s a simple matter to download the clip (either video of just audio), and share it with friends or on peer-to-peer networks.   YouTube “ground zero” for online copyright infringement.

However, as I’ve noted in the past, the Digital Millenium Copyright Act – the DMCA – is a federal law that protects publishers such as YouTube as long as they follow the DMCA’s “notice and take-down” procedures (aka “whack-a-mole”), which YouTube has faithfully done.  Thus, YouTube was able to claim that it followed “the letter of the law” and therefore its conduct fell within this statutory safe harbor.

Southern District of New York Federal District Court Judge Louis L. Stanton rejected Viacom’s argument that YouTube was aware of, and ignored, massive copyright infringement by YouTube users.  The DMCA, the judge held, does not permit Viacom to establish liability based on “a general awareness that there are infringements.”   The DMCA requires specific knowledge, and when YouTube had that knowledge (usually based on notice from Viacom), it “took down” the copyrighted work.

The atmospherics of the case were also helpful to YouTube.  Unlike music sharing sites like Grokster, which were shown to have been aware of infringement but turned a blind eye to it (See Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005)), there were very few “smoking gun” emails uncovered by Viacom in discovery, so YouTube was able to credibly argue that it was not encouraging or turning a blind eye to infringement.

All of this is not to say that Viacom’s equitable argument is without significant force.  YouTube (and other online service providers like it) are aware that their sites are a vehicle for user-uploaded infringements.  The district court observed that Viacom’s submissions were sufficient for a jury to find that the defendants “not only were generally aware of, but welcomed, copyright-infringing material being placed on their website. Such material was attractive to users, whose increased usage enhanced defendants’ income from advertisements ….”

Viacom may be right to question whether this is a proper allocation of responsibility for copyright enforcement. Under the law, the website operator “need not monitor or seek out facts indicating [infringing] activity,” forcing the copyright owner to monitor the site and constantly inform the operator of the location of  infringing works.  If a popular but infringing video is taken down as a result of such a “take down” notice, it may pop-up again moments later after being upload by a different (or even the same) user, forcing another take-down notice – hence the “whack-a-mole” analogy.   Who should carry the burden of policing this behavior?  The DMCA, a statute enacted long before the advent of YouTube, shifts most of this burden to the copyrights owners, in this case Viacom.

Viacom announced that intends to appeal the ruling, but I give it little chance of success.  Perhaps Viacom thinks that if a Court of Appeals affirms the decision it will give Viacom and other right holders some leverage to argue for a legislative change, but I give that little chance of success as well.

Worthy commentary by Eric Goldman, Evan Brown and Larry Downs.

Oh yeah, and the Mark Cuban thing …. here.

I’ve written before about how generous juries in the federal courts in the Eastern District of Texas (EdTX) are to patent plaintiffs. (link).  After I wrote about this a year ago there was a feeling that this trend might be reversing itself. However, Johnson & Johnson’s $1.6 billion judgment against Abbott and i4i’s $200 million verdict against Microsoft last summer put an end to those thoughts.

So, when Apple, Sirius XM and others were recently sued for patent infringement in EdTX they quite naturally looked for a way out.  Massachusetts, they told the Texas district court, was a far better choice, particularly when you considered the fact that that the patent owner, a non-practicing entity, had set up a Texas company shortly before filing suit, and located its business in the offices of its Texas lawyers.

But, it’s not that easy.

After the EdTX trial court refused to transfer the case to Massachusetts, Apple and its co-defendants filed a “mandamus” with the Federal Circuit.  Mandamus is a rare procedural tool.  Its a way to ask a court (typically an appellate court) to take an action that isn’t really an appeal (because the there is no final judgment), and no specific statute authority authorizing interlocutory appeal. I think it fair to say that fewer than one in a hundred lawyers has ever filed a “writ of mandamus,” (more likely fewer than one in five hundred).

However, Apple was desperate.  And it had a good argument, or so you would think.  Clearly, the plaintiff in this case set up the Texas corporation for one reason only: to establish venue in Texas.  One would think that even if the Texas court refused to transfer the case out of the state, the CAFC would see the unfairness in this tactic. Sadly, for Apple, this was not to be the case.  The district court denied the motion to transfer, and the Federal Circuit upheld this decision on appeal, stating:

To be sure, the status of Personal Audio, LLC, as a Texas corporation is not entitled to significant weight, inasmuch as the company’s presence in Texas appears to be both recent and ephemeral—its office is apparently the office of its Texas litigation counsel, and it appears not to have any employees in Texas. Nonetheless, the petitioners have not made a compelling showing that Massachusetts is a more convenient forum, particularly in light of the fact that none of the defendants is headquartered there. The district court also addressed and rejected the petitioners’ claim that Massachusetts would be a more convenient forum for prospective witnesses in the case, and we are not prepared to hold that the court’s conclusion in that regard was plainly incorrect. In sum, the petitioners have failed to satisfy the demanding standard required to justify the issuance of a writ of mandamus.

Link on Scribd.

Nice post title, eh?  Mass MoCA is the Massachusetts Museum of Contemporary Art Foundation a contemporary art museum in North Adams, MA.  Christoph Büchell is a Swiss “installation artist.”  Think very large, very avant-garde.  The New York Times describes his work “dense, fraught creations, which compress masses of material and objects into historically charged labyrinthine environments through which viewers walk, climb and crawl.”   Wow.  Sounds just right for good old, left-leaning western Mass.  Not.

VARA is the Visual Artists Rights Act, a section of the U.S. Copyright Statute that gives grants artists “moral rights.”   For example, part of the law provides that the author of a “visual work” has -

the right to prevent the use of his or her name as the author of the work of visual art in the event of a distortion, mutilation, or other modification of the work which would be prejudicial to his or her honor or reputation

The First Circuit held that the Museum violated this right when, after installation of a work that called for, among other things, according to the Times, “a burnt-out fuselage of a 737 airliner” it displayed the work without the artist’s consent.   That is, the artist stormed off after artistic differences with the museum, and  museum prepared to present the work, entitled “Training Ground for Democracy,” like or not.  Büchel sued under VARA, lost in U.S. District Court, but prevailed in the First Circuit, which is (I suppose) more sympathetic to moral rights than U.S. District Court Judge Ponsor had been.

This was a rare chance for the First Circuit to be the first federal circuit court to issue a decision under VARA, and the court’s 60 page decision, mostly in favor of Buchel, is linked in full directly below.

Mass Museum v. Buchel

My partner Joe Laferrera has been incredibly active in connection with the Massachusetts Data Security Regulations, which took effect on March 1, 2010 after multiple delays (initial deadline was January 1, 2009; second deadline May 1, 2009; third deadline January 1, 2010).

Among other things, Joe has co-chaired the Boston Bar Association Privacy Committee last year and this, and organized what seems like countless programs on the regulations.  He has also spoken to legal and business groups around the country on the topic (example of presentation materials here, and White Paper here).

Here is the Client Advisory he wrote, and that we published, on the long-awaited “D-Day”:

Massachusetts Data Protection Regs Advisory March 2010

U.S. Federal District Court Judge William Young has issued a lengthy decision, awarding $2.7 million in damages to the estates of three people murdered by James J. Bulger, Stephen J.

Flemmi, and their associates.  Judge Young describes the story as “harrowing,” which may be an understatement.

The key defendant in this case is the U.S. Government, which will foot the bill if the decision survives appeal.

Here are some quotes, pulled from the opinion, which is linked in all of its gory detail at the bottom of this post.  Judge Young:inst

Despite years of legal wrangling and an extensive factual
record, at its core this is a very simple case. Federal Bureau
of Investigation (“FBI”) agents actively protected a group of
murderers from apprehension and prosecution in order to use them as informants against La Cosa Nostra. The agents did this over a span of nearly twenty years, despite being on notice that their informants were killers and would, and indeed did, continue to murder. . . .

The FBI’s relationship with Flemmi dates back to 1964,
when FBI agent H. Paul Rico opened Flemmi as an informant. Bulger was opened as an informant in 1971. Their recruitment as informants was not an accident. The FBI had made the prosecution of organized crime and La Cosa Nostra its top priority.  To that end, J. Edgar Hoover himself inaugurated the Top Echelon Criminal Informant Program on June 21, 1961. Top echelon informants were defined as those “that would be able to provide high-level information on a major scale.”  Both Flemmi and Bulger were designated as top echelon informants.

[The first victim, Louis Litif, murdered by Bulger, April 1980].

As to the manner of Litif’s murder, the statement to the FBI of the deceased Brian Halloran, establishes that Litif was lured to the Triple O bar where Bulger and an associate ambushed him. The autopsy report as well as expert testimony show that Litif was stabbed dozens of times with an ice-pick-like implement before he was shot in the back of the neck.  Certain of the puncture wounds perforated Litif’s liver, a wound thought to cause exquisite agony.

[The second victim, Debra Davis, Flemmi’s girlfriend of 10 years, September 1981].

Flemmi had Davis murdered because after their lengthy liaison, Davis showed an inclination to get on with her life (without Flemmi) and had displayed an interest in another man.  Flemmi himself testified that it was Bulger who wanted Davis murdered because he was jealous of Flemmi and Davis, and feared she knew of Flemmi’s relationship with Connolly. These, however, are the vapid maunderings of a supremely evil old man. Flemmi had Davis murdered for that most common and banal reason underlying male domestic violence against women: Flemmi thought he “controlled” Davis. ….

Flemmi lured Davis to Bulger’s mother’s house in South Boston. Bulger, lying in wait, grabbed her and scissored her neck between his forearms in order to crush her windpipe.  As Flemmi watched, Bulger strangled her. Davis lost consciousness within a few minutes and died.

[Deborah Hussey, daughter of Marion Hussey, girlfriend of Flemmi who had been sexually abused by Flemmi].

Flemmi began living with Marion Hussey, Deborah Hussey’s mother, and Deborah herself when Deborah was still a child. When Deborah was a teenage minor, Flemmi began to abuse her sexually. Likely as a result of this abuse, Hussey led a troubled life, turning to drug abuse and prostitution. In late 1984, Hussey informed her mother of  Flemmi’s abuse. As a result, her mother asked Flemmi to move out of the house.  Deborah Hussey herself was proving an inconvenience to both Flemmi and Bulger.  Hussey was relying on their reputation in South Boston to get her out of scrapes arising from her drug abuse and prostitution. As a result, Flemmi and Bulger killed her.  They murdered her in much the same way they murdered their other victims, by luring her into a house and strangling her. Here again, Bulger grabbed Deborah Hussey from behind and scissored her neck between his forearms to crush her windpipe. Hussey fought desperately for her life and knocked Bulger over. When the two fell to the floor, Bulger jack-knifed his body to work his legs around Hussey’s body to crush her torso. The Court infers Hussey lost consciousness from asphyxiation and died within a few minutes.

*****

Taken together, these related cases present a dark and  cautionary tale. Here the government – our government – stooped so low as simply to disregard its fundamental legal obligation of ensuring “domestic tranquility” to all its citizens equally. Instead, having apparently written these folks off as assorted low-lifes,” it proceeded to frame innocents (e.g., Limone, Tameleo, Greco, Salvati) and knowingly expose other innocents to murder (e.g., Barrett, Donahue, Davis, Hussey). Indeed, in its arrogant hubris the government – our government – undertook to decide which informants would live (Ciulla) and which were expendable (Castucci, Litif, McIntyre, Halloran).

Then, when its perfidy was revealed, the government – our government – sought to treat its failures as nothing more than a public relations issue. First it obstructed at every turn; when that failed, its position was “a few rogue agents,” nothing more. Ignoring the deep-seated institutional failures within the FBI, its rigid  hierarchical internal reporting system, the utter break-down of internal supervision, the bitter enmity its obstruction engendered within the Massachusetts State Police, and the marked continuing distrust its false affidavits have engendered in the judiciary, the government – our government – has never disciplined any high-ranking supervisor or undertaken any comprehensive transparent review or reform.

Nor is the failure limited to a single agency, however important. The arrogant hubris displayed by Rico, Connolly, and Morris, appears to pervade the government – our government – at all levels. How else to explain the conduct of the litigation here? No one gainsays the government its right vigorously to defend the taxpayers who must ultimately pay the judgment. A vigorous defense, however, cannot excuse the obstructionism in the Salemme case, or the litigation misconduct found in McIntyre,   Before me, the government conducted itself with technical expertise, full obedience of the Court’s direct orders – and a striking lack of judgment. Here, the government – our government – seriously argued that the horrifying acts of its agents against our own people fell within their legitimate “discretion,” and that the victims and their families were somehow complicit in their own murders, well knowing no Commonwealth court has ever suggested such a bizarre legal theory. Most repulsive, the government – our government – virtually argued “she was asking for it,” until the Court, remembering that Massachusetts has emphatically rejected this demeaning argument,  warned the government to steer clear.

“There has to be a safe place,” said Judge Richard S. Arnold. “And we have to be it.”  There has to be some place in which “integrity,” “truth,” and “justice” have meaning regardless
of preconceptions, power, or public opinion. Judge Wolf’s 664- page decision in United States v. Salemme, 91 F. Supp. 2d 141 (D. Mass. 1999) spoke truth to power and there was no going back. All these related cases depend in large measure on Judge Wolf’s seminal work. For the people of Massachusetts, in all these related cases Judge Wolf is that “safe place.”

This outcome was not inevitable. Judicial independence is not immutable, even in America. These cases ought to teach us – as perhaps nothing else can – the actual cost of losing the judicial independence so vividly on display in Salemme. Here’s the partial bill: a criminal FBI agent, corrupt to the core, living in honorable retirement on a public pension; a half dozen
unsolved murders; literally dozens of people tortiously injured yet denied justice; two innocent men dying in prison under life sentences hopeless and helpless; others languishing in prison for years, three initially sentenced to death; two murdered young women lying in unmarked and forgotten graves.

Think about that cost.

I do.

Litif v. United States, John Morris and John Connolly

When I wrote about the trial judge’s remittitur order in the Jamie Thomas case last week, I didn’t mention that a legal aspect of remittitur is that the defendant may accept it, or reject it and demand a new trial. I now understand that the defendant in this case has not accepted the judge’s remittitur, and has informed the court that she elects instead to proceed with a new trial. This would be the third trial in this case, since the first was set aside by the judge following verdict.  Obviously, this decision is a matter of principle, not finances, since the cost of the new trial alone will likely exceed the damages offered by the judge. However, this case, like the Tenenbaum case in Boston, is all about principle, and very little about hard, cold cash.

There’s an interesting discussion of remittitur on the Copyrights and Campaigns web site, here.

Massachusetts U.S. District Court William Young has been teaching evidence law for as long as I can recall, even as far back as his pre-federal court days, when he was on the Superior Court bench (Judge Young was appointed to the federal bench in 1985, and had been a Massachusetts Superior Court Judge from 1978 to 1985).

So it comes as a surprise to many when Judge Young admits he made an evidence-related error during a recent patent trial, and that as a result he will order a new trial.

The case is NewRiver, Inc. v. Newkirk Products, Inc. In brief, NewRiver’s patent claimed as an invention a computer-assisted method for manipulating securities information in the SEC EDGAR database to extract only certain information, such as mutual fund prospecti.  After trial the jury held some claims to have been infringed, and others to be invalid as obvious. The issue that has attracted attention is contained in Judge Young’s decision addressing the usual tsunami of post-trial motions for judgment notwithstanding the verdict.

The problem arose in connection with NewKirk’s challenge to the validity of NewRiver’s patent. On this issue Newkirk’s expert testified as follows:

Q: Dr. Szymanski, please read claim 9.

This is the independent claim. It states: A system for providing access to mutual fund compliance information comprising: An obtainment subsystem for acquiring securities information from one or more database sources and for extracting compliance information from at least two documents each comprising compliance information for a particular mutual fund. And the second restriction reads: An accessing subsystem for providing access to extracted compliance information for at least two mutual funds offered to investors by different fund issuers of a computer communication link.

Q: Do you have an opinion as to the validity of that claim?

A: Yes, I do.

Q: And what is your opinion?

A: My opinion that it would be obvious for the person of ordinary skill in the art, this invention would be obvious to the person of ordinary skill in the art.

However, the expert gave no basis for this opinion – he didn’t reference the “prior art” that would support that opinion, and his testimony was “general and conclusory.”

Now the rub.  The Federal Rules of Evidence permit an expert to state his or her conclusion, as the expert did in this example.  Rule 704 and 705 state:

Rule 704 … testimony in the form of an opinion or inference otherwise admissible is not objectionable because it embraces an ultimate issue to be decided by the trier of fact.

Rule 705 … The expert may testify in terms of opinion or inference and give reasons therefor without first testifying to the underlying facts or data, unless the court requires otherwise. The expert may in any event be required to disclose the underlying facts or data on cross-examination.

And, what’s worse, NewRiver didn’t object to this form of testimony.  As a “teacher of evidence” (as Judge Young describes himself in the decision), that should be enough.  However, in the context of a patent case, it was not.  As Judge Young observed, “Federal Circuit case law renders legally inadequate the opinions of qualified experts on the ultimate issues of anticipation, obviousness, and doctrine of equivalents unless the bases therefor are spelled out on the record.”

Even worse (for defendant NewKirk), NewRiver’s failure to object to this “fatally flawed” testimony (or a the “palpably wrong” jury charge premised on it) as the basis for an invalidity challenge (except post-verdict) wasn’t enough to constitute a waiver that would forgive this legal error.

Judge Young is a man of strongly held views, but when he makes a mistake no one is harder on him than he is on himself.  Here is how is resolved to correct this error:

In short, I botched the jury charge.

What of it? argues NewRiver.  In the final analysis, obviousness is matter of law. . . . It is, therefore, rare for a trial judge to vacate a jury verdict on obviousness, having already implicitly ruled that the record is sufficient to support the ultimate finding.

Here, my mistake was more fundamental. I did consider the record sufficient to support the jury’s finding of obviousness. It never occurred to me that patent law trumped the Federal Rules of Evidence on the issue of obviousness. Now, recognizing my error, it is clear that the jury’s verdict cannot stand.

. . . Here, I failed to appreciate the applicable legal framework and thus sent the jury off on a wild goose chase. To disregard their work now and decree a contrary result is to give substance to a good-natured rebuke I once received from a friend, a distinguished British jurist. “You Americans are hypocrites,” he told me. “You praise the jury and do everything you can to keep it from getting in the way.” Not in this Court.

. . .

Upon this botched and murky record, the Court’s duty is clear. . . there must be a new trial before a properly charged jury on the issue of the obviousness vel non of claims 9-11. Likewise, there must be a new trial on the issue of the infringement of claims 9-11 as well. This is only fair since the jury here was a fully empowered and engaged body. It well knew that, as to claims 9-11, it was

awarding the ultimate verdict to NewKirk. To insure the requisite degree of confidence in the overall jury verdict, there must be a new trial both on the issue of the obviousness of claims 9-11 and on the issue of the infringement of those claims by Newkirk.

Of course, the courts rarely care much for expense or inconvenience to the parties, and the fact that the parties here must endure another full trial (no small matter), is beside the point.

Lastly, Judge Young included this comment in a footnote:

Usually, of course, the law of evidence operates in the shadows. It plays no role until an objection is made. Without objection, the proffered evidence is received for its full probative value. See Peterson v. Gaughan,404 F.2d 1375, 1380 (1st Cir.1968) (noting that although appellant had right to move to strike testimony presented in district court that was permeated with hearsay, counsel did not make motion; evidence was therefore received, and counsel had “intelligently relinquished that right”). I can think of but three instances where a judge is expected to intervene sua sponte. These are questions of witness competence, Rule 601 (because no incompetent testimony may be received), application of the rape shield rule, Rule 412(because prompt judicial action is thought necessary to protect the putative victim of sexual assault), and the parol evidence rule in contract actions (because it is a substantive rule of commercial transactions and not part of the shadow law of evidence).

There is now, at least in Judge Young’s court, a third instance where a judge must intervene sua sponte, and that is to ensure that an expert witness testifying on anticipation, obviousness, or the doctrine of equivalents in a patent case state the basis for an opinion on these issues.

Newriver v. Newkirk

Out of more than 30,000 cases filed against downloaders by the record companies only two end-user download cases have gone to trial and judgment: the Tenenbaum case in Boston, and the case against Jammie Thomas-Rassett in Minnesota.

In the second case, the jury awarded the copyright owners $2 million for downloading (and allegedly distributing) 24 songs.  The federal judge to whom the case is assigned has now lowered that amount to $2,250 per song (the legal term of the judge’s action is “remittatur”).

Some quotes from the Thomas-Rassett January 22, 2010 decision:

After long and careful deliberation, the Court . . . remits the damages award to $2,250 per song – three times the statutory minimum. The need for deterrence cannot justify a $2 million verdict for stealing and illegally distributing 24 songs for the sole purpose of obtaining free music. . . . although Plaintiffs were not required to prove their actual damages, statutory damages must still bear some relation to actual damages.

. . .  This reduced award is significant and harsh. It is a higher
award than the Court might have chosen to impose in its sole discretion, but the decision was not entrusted to this Court.

. . . Thomas‐Rasset argues that the ratio of the statutory damages award to actual damages in this case, when measured in songs, is 1:62,015. She bases this calculations on a cost of $1.29 per song online.

. . .  Thomas‐Rasset asserts that, at most, she was a single mother who merely downloaded and shared music when she had already lawfully bought CDs of much of that music and had no commercial motive to infringe.

. . .  The need for deterrence cannot justify a $2 million verdict for stealing and illegally distributing 24 songs for the sole purpose of obtaining free music.

. . .  The Court will not substitute its judgment for the judgment of the jury. Rather, it will remit the award to the maximum amount sustainable by the record, so that the statutory damages award is no longer shocking or monstrous.

It will be interesting to see if this decision has any impact on Judge Nancy Gertner, the federal judge assigned to the Tenenbaum case in Boston.  In that case, the jury awarded $22,500 for each work infringed, and a motion for remittitur is pending.

Here is a link to the full opinion in Thomas-Rasset:

Thomas-Rasset Remittatur Order

A table from Branko Gerovac’s website, Empirical Reality compares the technology areas of Massachusetts and Silicon Valley The two areas are far more alike, on the statistical level, than I had realized -

(* CSA stands for “Combined Statistical Area”)

However, it’s no more accurate to say these two regions are comparable than it is to say that two 175 pound men are comparable – one may be all muscle, the other, well …..

Unfortunately, as Mr. Gerovac details in a number of other posts, Boston is far behind Silicon Valley in innovation, start-ups, and a variety of other key factors central to business development.  Mr. Gerovac quotes from an October 2009 TechCrunch article by Vivek Wadhwa, who wrote as follows (selected quotes):

Ever heard of Route 128? To my surprise, neither have any of my students at Duke or the entrepreneurs I’ve met in Silicon Valley. I’m surprised because it wasn’t so long ago that Silicon Valley was considered a poor cousin of Boston’s tech center—a cluster of technology companies located along this freeway which partially rings the city. Starting in the 1960s and on through the 1980s, Route 128 was, if anything, more closely associated with tech than Silicon Valley. Today few young technology workers even know where Route 128 is located, let alone its importance in the tech world. Silicon Valley has simply left Boston’s tech center behind.

In the 1980’s … if you were betting on one you’d have been wise to bet on Route 128 because of its longer industrial history and proximity to a large number of high quality educational institutions . . . and proximity to Bell Labs and other large corporate research centers. . . . Now, . . . Boston is a distant second nationally to Silicon Valley in technology entrepreneurship. So, what happened to Boston?

A young professor at UC-Berkeley, AnnaLee Saxenian, wrote a book in 1994 which answers this question. At a time when Boston still thought it was the powerhouse of the tech industry, Saxenian declared Boston the loser in the tech race and explained why it would only fall further behind. This book was titled Regional Advantage: Culture and Competition in Silicon Valley and Route 128. It kicked off a firestorm of criticism from the Boston elite. Saxenian also alienated friends at her alma mater, MIT.

She noted that Silicon Valley had an amazing dynamism about it. There were extensive professional networks, job hopping was the norm, information was exchanged openly, and the culture encouraged risk taking. The Silicon Valley ecosystem supported entrepreneurial experimentation and collective learning. In other words, Silicon Valley was a very open network—a giant social networking site working in analog before the concept of such a thing even existed.

This organizational mechanism was in sharp contrast to that of Route 128. Dominated by large, vertically integrated, and secretive minicomputer producers such as DEC, Wang, Prime, and Data General. Technology, skill, and know-how were trapped within the boundaries of the large corporations.

The differences were evident at many levels: venture capitalists in Silicon Valley had deep roots in local networks and were far more nimble than their east coast counterparts; educational institutions and research labs in the West partnered with local startups as well as more established firms, while those in the East worked only with the largest corporations; and the meritocratic openness of Silicon Valley made it a magnet for non-traditional talent and immigrants.

By the mid-1990s the east had missed the shift from minicomputers to personal computers as the flexible Silicon Valley ecosystem sped ahead with innovation across a diversifying range of components and systems going from chips, routers, and application software to ecommerce and search engines. Today Silicon Valley is the leading location for cleantech venture activity, an area widely considered to be the next big value creation engine for the U.S. and the world.

Boston, however, is no slouch. The Route 128 community remains the second biggest in the U.S. in terms of venture funds committed. Boston has powerful research institutions, still, and lots of very strong companies. In some areas, such as biotech, Boston may even rival Silicon Valley. But overall, its pretty clear that the Valley has not only won but is racing further ahead.

Most entrepreneurs and engineers that come to Silicon Valley, come to experience this network and to embrace the culture it has created. That’s why I came, too. Network effects don’t just work for fax machines. But then again, most of them knew that intrinsically. University guys like me need to do a bunch of surveys to figure it out. They voted with their hearts and feet.

Gerovac presents an interesting graph on his site comparing the percentage of tech company founders who established a start-up in the same state in which they received a degree.  California ranks tops at 69%, compared with 29% in Massachusetts (which is below the study average of 45%).

In our firm we’ve been talking informally about this phenomenon for years, and these posts are food for much thought.  Could it be simply that California is a lot softer on noncompete agreements than Massachusetts is?  I’ve always wondered whether it could be something as simple as the weather.

Joel’s last chance before Massachusetts Federal District Court Judge Gertner (“Joel Fights Back”) is his post-judgment motion to set aside or reduce the damages award against him on the grounds that the judgment is unconstitutional – after all, what government would punish a student to the tune of tens of thousands of dollars for a crummy mp3 download he could have purchased for less than a buck?  Ours, of course.

Joel’s Harvard Prof. lawyers filed a motion – punitive and unconstitutional, said they.

The DOJ disagrees.  Quite proper, say they, per brief below.

It’s not for me to say, but I’m thinking that there are some pretty big egos on the defense side of this case.  Nothing wrong with that, of course …..

DOJ Tennenbaum Post-trial Brief