One More Sign World Is Shrinking – eBay is for Suckers

If you live in an economy where officials are corrupt, contracts are hard to enforce, and trust is scarce, everyday transactions are burdensome and time-consuming. If you don’t want to get scammed, you either deal with people you know, people your relatives know, or you deal with repeat players who have an interest in their reputation. Lack of trust makes market small and transaction costs high. The wonderful thing about eBay when it first arrived was that it freed so many people from the tyranny of small markets. eBay provided a marketplace where trust was built on reputation and feedback and the size of markets was only constrained by the cost of shipping. Recently, however, eBay has reengineered its services so that buyer trust is based on a seemingly absolute guarantee that the seller will always lose in any dispute.

No one should be surprised that unscrupulous buyers use eBay to commit fraud on unsuspecting sellers. What surprised me was the extent to which eBay now facilitates this fraud through its “buyer protection program”. In October this year I listed a very slightly used iPhone 6S for sale on eBay and was quite satisfied when it eventually sold for $465. This satisfaction was short-lived, however, as I came to realize that I had been taken in by an eBay scammer.

I shipped the iPhone on October 17 via UPS almost immediately after receiving full payment in my PayPal account. I had the money, so I assumed everything was going to be fine. Everything was not fine. The buyer waited a few days after receiving the package and then fabricated a disagreement claiming that the phone was damaged and not as described. The delay and the his outlandish claims made me suspicious, but I offered to refund 5% of the value of the transaction just to make him go away and preserve my good seller reputation.

The seller immediately rejected my refund offer and made a return request. I am not completely naïve. I don’t accept payment by check or Western Union and I don’t accept returns. So I was pretty surprised to find out that eBay could force me to accept a return request – eBay explained that my options were to refund the buyer and let him keep my phone or approve the return request. Grudgingly, I accepted the return. On November 2, eBay instructed me to refund the buyer when the return was delivered. On November 4, eBay invoiced to me $46.53 for the listing and sale, which I paid.

Occasionally you might read the description “suspicious looking package” in the media wondered what exactly makes a package look suspicious? It looks like this:


On November 14, I received this package from the Ukraine with a customs declaration describing the contents as “phone”. Given that I had shipped the phone to an address in Delaware and that my address on Lake Shore Drive was written as “LK Shr Dr” I was immediately suspicious. The phone that I received to replace my mint condition gold iPhone was a beaten up old Samsung (I didn’t even know Samsung made phones like this – it looks almost exactly like an old Nokia that I had in 2002).


The same day the bogus return arrived, I received an instruction from eBay commanding me to issue a refund. At this point I knew with absolute certainty that there was no way I was going to win this fight. I didn’t understand how but it was obvious that the seller had gamed this through to the end. That he knew how to play the system was evidenced by the fact that his bogus return arrived just one day too late for me to revise my review and warn others not to do business with the user called plasmacompany.

On November 18, more out of curiosity than anything else, I entered into the bizarro world of online dispute resolution and opened up a case with eBay. I explained that the buyer had returned a worthless 10-year-old phone in exchange for the mint condition iPhone 6 I had sold. I offered to provide pictures.

On November 25, eBay “resolved” this case in favor of the buyer with the following explanation.

  • “The item has been delivered to you.” A lie.
  •  “eBay Customer Service is refunding the buyer and debiting your PayPal account for reimbursement.” Actually the money is still in my PayPal account.
  • “We understand how frustrating it is that the items condition changed …” 1. I sincerely doubt that they do understand. 2. “Changed” does not really do it justice when an iPhone 6S magically transforms into a beaten up old Samsung from the early 2000’s. 3. There should be an apostrophe after item (item’s condition).
  • “…  but, unfortunately, we didn’t receive proof that the buyer caused the issue.”  Well, of course eBay did not receive any proof, eBay is entirely uninterested in allowing you to submit proof of buyer fraud.


On November 26 I attempted to appeal this decision. This involves calling eBay, a Kafkaesque experience I can’t honestly recommend. The initial telephone message I received told me that the buyer had appealed and that no action was required of me at this time. Utterly confused, I kept at it until I was able to speaking to an actual person who then explained to me that because eBay does not handle the item directly they have no way of knowing who is telling the truth. A fair point, except that my shipping documents prove that I sent an iPhone (I used UPS pack and ship) and the return documentation simply says “phone” and was shipped from overseas. These two facts alone are incredibly suspicious. The eBay representative offered to connect me with a risk management team, but my call was simply routed back to customer service who transferred me to the appeals department. The notes I took at the time say “this feels like a shell game” and nothing since has altered my view.

I did get to speak to someone in the appeals department eventually and she told me that they could not grant an appeal because they had no proof. But of course, everything about this process is designed so that you have no chance to submit any proof. They did offer that I could report the buyer and that the buyer would be investigated. I did, but I doubt anything will ever come of it.

I had assumed that eBay would simply take the money from my PayPal account, but they don’t seem to have the power to do that. (I upgraded all my passwords after the election at the urging of my more security conscious friends.) So, eBay continues to insist that I pay my “eBay money back guarantee case” and they have helpfully suggested that I should add my reimbursement payment method to my personal information. Hah! Fat chance that I am every letting eBay near my PayPal account again.

eBay maintains that as a seller, I agreed to permit them to make a final decision in their sole discretion on any case the buyer opens with eBay under the eBay money back guarantee policy. I have no recollection of making this agreement, this is not a term I would have agreed to knowingly, and I have seen no evidence that I made such an agreement. I’m beginning to suspect that eBay is not being entirely straightforward here.

The slightly tangential way eBay describes things makes me think that they don’t think I have a legal obligation to defraud myself either. My account balance as of December 2, 2016 was $0, even at the same time that eBay is demanding a payment of $465.26. I tested this by trying to make a payment of $0.01 into my account.


If I really owed them this money, wouldn’t they reflect it in my account balance? Maybe this is just paranoia, but when an organization you used to trust takes the side of the fraudsters and the con-artists you begin to question everything they say.

I did not agree to accept returns for the sale when I listed the item. I don’t recall agreeing to eBay’s unilateral money back guarantee system. I suspect that I never agreed and that eBay is trying to confuse me into paying for a fraudulent refund. eBay is misleading sellers like me who would find a another marketplace rather than participate in one where they will be forced to accept returns and grant refunds in the face of transparent fraudulent activity.

eBay is an enormous company with over $8 billion in revenue a year, so naturally it’s difficult to talk to anyone there who is not a computer (or a human whose responses are so routine and uncomprehending that they may as well be a computer). I figure that if I continue to ignore their demand for payment things might eventually escalate to the point where I get to speak to an actual human.

For the record, the buyer was using the name “plasmacompany” on eBay but according to PayPal he or she is really Vadim Grebenyk ‏( doing business as ITG EXPRESS, with a shipping address of 78 McCullough Dr # 11051, New Castle, DE 19726-2079, United States. According to eBay, the buyer’s name is Dmitriy Dubogray. Same company and address. There may be a real Vadim, or Dmitriy or ITG Express whose names have been appropriated by some fraudster. If so, sorry to drag you into this.

Copyright Trolling in Chicago (17980 IP addresses and counting)

WBEZ ran a story on Thursday, based in part on my research first published in the Iowa Law Review. The story, Why Are So Many People In Northern Illinois Being Sued For Downloading Porn? by Miles Bryan is an excellent overview of a complicated topic.

Focus on Chicago

Although these John Doe lawsuits are a nation-wide phenomenon, Chicago (technically, the Northern District of Illinois) is the leading destination for what many people regard as ‘copyright trolling’. The Northern District of Illinois has accounted for roughly 15% of all copyright John Doe lawsuits nationwide since 2013.

The Northern District of Illinois covers 18 counties across the northern tier of Illinois, with a population of about nine million people. The Southern District of New York which encompasses New York City and the Southern District of California which includes Los Angeles are much larger in terms of population, yet the SDNY has only had 531 John Doe cases in the same period that Chicago has seen 1603. The Southern District of California has seen a mere 165.

Since 2010 (up until June 2016) lawyers in the greater Chicago area (technically the Northern District of Illinois) have filed over 1600 John Doe copyright cases (1603 at last count). This practice is now so common in Chicago that these suits outnumber regular copyright lawsuits by a ratio of more than 4 to 1 (there were 385 regular copyright suits in the same period.)

WBEZ’s Graph based on my data

Because of the way these suits are filed, one lawsuit can sweep in a large number of IP addresses. Based on court records, my conservative estimate of the number of IP addresses involved in one of these suits in the Northern District of Illinois since 2010 is 17,980. Not all of these cases involve pornography, but the vast majority do, 73% in the Northern District of Illinois.

In 2015 alone, Chicago court saw just 48 regular copyright lawsuits filed, and 395 John Doe copyright lawsuits.

John Doe copyright lawsuits accounted for 58% of all copyright cases filed in 2015

Across the entire country, John Doe copyright lawsuits have risen from just under 4% of all copyright filings in 2010 to more than 19% in 2011, 43% in 2012, 46% in 2013, 51% in 2014 and just under 58% in 2015.

One pornography company, Malibu Media accounted for 40% of all federal copyright cases filed in 2014 and 2015. However, data collected for the first four months of 2016 shows that Malibu Media’s influence is declining (it accounts for only a quarter of all federal copyright cases filed in 2016 so far) and that there may be fewer John Doe cases filed this year if current trends continue. Last year there were 2930 cases filed, so far this year there have been only 690. John Doe cases for the year to date account for only 39.5% of all federal copyright cases.

Why Chicago?

One of the questions that Miles asked me to think about is why this phenomenon is so prevalent in Chicago?

The first thing to note is that Chicago is not alone. New Jersey actually had more of these cases in 2015 and the Southern District of New York had only slightly less. The five leading federal districts for john doe copyright cases in 2015 were

  • New Jersey – 386
  • Illinois (ND) – 395
  • New York (SD) – 248
  • Maryland – 194
  • Virginia (ED) – 153

But the Chicago cases involved many more IP addresses (almost 10 times as many!) and thus effected many more people.

Part of the answer to the question of why Chicago is that Chicago is large metro area with a lot of potential targets, so the economies of scale make it attractive to set up shop here. But that does not fully explain it. I think that another import part of the story is that judges in Chicago have not been as hostile to these suits as some judges in New York and Los Angeles.

Judges in the Northern District of Illinois are not exactly thrilled about john doe litigation, however, they has not closed the door to this kind of litigation and they are more tolerant of joining large numbers of IP addresses in a single lawsuit.

Related Publications:

Matthew Sag, IP Litigation in US District Courts: 1994 to 2014, 101 Iowa Law Review 1065-1112 (2016) (download from ssrn) Data updated for 2015  (

Matthew Sag, Copyright Trolling, An Empirical Study, 100 Iowa Law Review 1105-1146 (2015) (download from ssrn)

Is software expressive? Yes, but who cares? #IPSC16

My brief response to some comments at IPSC today re software functionality and expression.

Writing software obviously involves considerable human ingenuity, however, no one buys software to appreciate the expressive attributes of its source code. The difference between software and other forms of written communication can be demonstrated by asking the question, “what makes it good?”

For most works of authorship, there really is no consensus. However, computer scientists and software engineers will inevitably respond that good code is simple, readable, efficient, and well structured. No one says that software should be expressive, moving, that it should speak to the human condition or have emotional resonance. Software is primarily functional and good software is good because it functions well and does things that people want done.

Loyola is hosting the Society for Economic Research on Copyright Issues Annual Meeting Today

The SERCI Annual Congress 2016 is being held at Loyola University Chicago School of Law, Chicago, 7-8th July and is co-hosted by University of Illinois College of Law.

The Society for Economic Research on Copyright Issues or SERCI was established in 2001 to provide a solid academic platform for the application of economic theory to copyright policy.

The complete program is posted online at

My slides for my presentation on empirical studies of copyright litigation are available here.

Getty’s high-resolution competition law complaint against Google in the EU

Getty Images has filed a competition law complaint against Google

I have some initial thoughts as follows:

Image Search vs. High-Resolution Image Search

Google’s rationale for image search in general is that displaying the image is necessary for the user to assess how well the image corresponds to their search. This practice has been litigated at least twice in the U.S. in relation to thumbnail images and has easily passed the test of fair use.

Getty’s complaint is directed more specifically to the creation of high-resolution galleries. Although Google could make a similar argument that you need to see the image in high resolution to properly evaluate it, my view is that this argument is not nearly so compelling. The high resolution display is more expressive and less informational and the potential adverse effect on the copyright owner is greater for that reason and because, as Getty points out once consumers see an image on the Web, they aren’t likely to go to the source and look at it again. Getty argues that Google Images’ creation of high-res galleries of copyrighted content is thus impacting Getty’s own image licensing business; promoting piracy and copyright infringement; and bolstering Google’s monopoly over site traffic, engagement data and ad spend.

[Update: It is worth noting that other design changes may have reduced the flow on traffic from Google Image search see this 2013 Search Engine Land story]

Basically, Getty is worried that it is far too easy to right-click and copy image from Google Image Search and that as a result people won’t click down to Getty’s now site.

Illustration: Right-Click Options On Getty’s Own Press Release

Screen Shot 2016-04-27 at 3.58.51 PM

Is there a copyright case?

Getty is an American company complaining about another American company’s treatment of its copyrighted properties and so it is less than obvious that the complaint would be dealt with in the EU under antitrust law rather than in the US under copyright law. I would need to understand the technology behind the high resolution image display to say whether Getty has a strong case for copyright infringement under U.S. law, but I think there are clear differences between the fair use status of low-resolution thumbnails and the high resolution images available on Google image search today.

Is there a competition law case?

It seems to me that providing high resolution galleries makes it at least marginally less likely that users will click through to the original site. This in turn makes it marginally more likely that users will copy and paste without authorization. But I would note that Google is under no obligation to design its information services in a way that drives traffic to a particular website, or external websites in general. The design of Google image search would make a poor antitrust case in the US but it might go further in the EU because they take a broader view of “abuse of dominance”. The main problem I see is that even if Google image search increases the unauthorized use of images, it probably does not affect the market for licensed images. I think that people looking to license stock footage will go to stock photo sites, but this is an empirical question so we would need to look at how the market actually works.


Getty Images says that, when it first raised concerns about this with Google, it was told to accept Google’s presenting of images in high-res format or opt out of image search. Since its founding, Google has relied on the fact that people can opt out of search to address complaints about the way search is run. Participation in Google image search is voluntary – on an opt out basis – but that does not give Getty, or anyone else, the right to say exactly how they would like the search engine to run. In 2013 Google agreed with the FTC to make changes to the way it scrapes the content of rivals like Yelp. Sites like Yelp can now opt out of having their content scraped without opting out of search entirely. This is probably what Getty is looking for. But the issue for Getty is that it does not compete with Google they way Yelp does, so their case is not as strong.

It’s hard to say how might EU regulators will view Getty’s complaint. It depends on some facts that we don’t have access to at the moment — I have only seen the press release, not the complaint itself. It also depends on whether the EU case against Google has more to do with politics and protectionism than it does with the merits of competition law. If Google settles with the European commission, the settlement might include modifications to the way image search works and that would be a significant win for Getty. From Google’s point of view the worst case scenario is that it would be forced to make a change to image display within the EU. I don’t think Google will change image search in the US unless it thought Getty had a case under American copyright or antitrust law.

CREATIVE DIGITAL ARTS — Event Announcement


“CREATIVE DIGITAL ARTS: Copyrights and Pathways to Success” is a free public event that has organized by faculty at Loyola Law School Chicago, Northwestern Law School and Columbia College and a group of Chicago lawyers and business leaders. The event is on Tuesday, April 26, 2016 from 5-8pm at Columbia College.
The CREATIVE DIGITAL ARTS event will feature photographers, digital strategists, intellectual property attorneys and law professors. Our speakers will address the essentials of copyright law for today’s artists and lessons from working artists and professionals in creative industries. The event will conclude with a pizza reception and a chance for one-on-one Q&A with the speakers.
A link to the online registration and further details are included in the attached flyer (Creative Digital Arts (World IP Day)). Email with questions.

#DMCA512 Comments and Keywords

I downloaded a selection of the longford comments re DMCA Section 512 and ran some basic word searches to try and organize the material. It would be great to someone do this on a more systematic basis! Even better if they tried some topic modeling.

At the end of the day, I am going to have to read most of these, but I am glad I don’t have to read them all!

Comments and key words (2) in Excel. 


Some thoughts on Malibu Media’s recent loss and its implications

(Malibu Media LLC v. Doe, Docket No. 1:13-cv-06312 (N.D. Ill. Sept 04, 2013)

Malibu Media’s case against yet another John Doe defendant was tossed out of court on February 8th by United States Magistrate Judge Geraldine Soat Brown.

Malibu v. Doe, Memorandum, Opinion and Order of Feb 8, 2016 

The defendant in this case prevailed in summary judgement because Malibu was unable to establish that he had ever used Bittorrent or that it’s films had ended up on his hard drive. Malibu had been relying on experts from its technology vendor, but it failed to follow the rules with respect to follow the rules on disclosure of expert witnesses. (See, Fed. R. Civ. P. 26(a)(2)). Malibu also tried to add vital paragraphs containing new opinions to another witness’ original declaration in a manner not permitted by the Federal Rules of Civil Procedure.

On the surface, the loss does not appear to have broad implications for Malibu Media’s campaign against illegal file sharing; after all, it should not be too hard to avoid these particular procedural slip-ups in the future.

Maybe, maybe not?

Malibu is engaged in a litigation campaign of  unprecedented scope — last year Malibu Media alone was responsible for 39% of all copyright litigation in the US. (See  Matthew Sag, IP Litigation in United States District Courts2015 Update (January 5, 2016). Available at SSRN:   John Doe litigation, by Malibu Media and others, made up almost 58% of the federal copyright docket (2930 cases out of 5076) in 2015. Malibu’s recent loss in the Northern District of Illinois illustrates, yet again, how ill suited federal court litigation is to resolving what should be relatively low stakes copyright disputes.

It is time for an entirely new forum to deal with the routine infringements that occur on BitTorrent and similar networks. The Copyright Office has suggested a small claims court for copyright but we probably need something far more targeted.

Shrinking Linking? GS Media BV v Sanoma Media Netherlands

GS Media BV v Sanoma Media Netherlands BV and Others (Case C-160/15) CJEU

In 2014 the European Court of Justice took the opportunity not to break the Internet, but it left open the possibility that it might choose to do so in the future. That future has arrived.


The CJEU addressed the legality of hyperlinking in 2014 in Svensson v. Retriever Sverige AB, Case C‑466/12 (13 February 2014). That case concerned a link to a newspaper article which was in itself was perfectly lawful. The article was in fact posted by the news publisher on its own website.

How could a link to a newspaper article on the newspaper’s own website amount to copyright infringement? The plaintiffs, journalist who wrote the articles and licensed them to the newspaper, argued that a link to a piece of content “communicates” that work “to the public.” Under European copyright law – see Article 3(1) of Directive 2001/29 – “communication to the public” is one of the exclusive rights that belongs to the rightsholder.

The CJEU held in Svensson that “for there to be an ‘act of communication’, it is sufficient … that a work is made available to a public in such a way that the persons forming that public may access it, irrespective of whether they avail themselves of that opportunity.” On that loose definition the provision of clickable links makes a work ‘available’ and, therefore, is an ‘act of communication’.

But not all communications are created equal. The court reasoned that the link was not a communication was not “to the public,” because the hyperlinks provided by Retriever Sverige did not communicate the articles to a “new public.” Specifically the court said that users who navigate to the original newspaper site via the link “must be deemed to be potential recipients of the initial communication”—i.e., the newspaper websites initial voluntary communication to the public— and, therefore, users who follow a link to an open site are “part of the public taken into account by the copyright holders when they authorised the initial communication.”

Svensson v. Retriever Sverige AB, Case C‑466/12 (13 February 2014) Para 26-28

 The public targeted by the initial communication consisted of all potential visitors to the site concerned, since, given that access to the works on that site was not subject to any restrictive measures, all Internet users could therefore have free access to them.

 In those circumstances, it must be held that, where all the users of another site to whom the works at issue have been communicated by means of a clickable link could access those works directly on the site on which they were initially communicated, without the involvement of the manager of that other site, the users of the site managed by the latter must be deemed to be potential recipients of the initial communication and, therefore, as being part of the public taken into account by the copyright holders when they authorised the initial communication.

Therefore, since there is no new public, the authorisation of the copyright holders is not required for a communication to the public such as that in the main proceedings.

In Svensson the European Court of Justice took the opportunity not to break the Internet, but it left open the possibility that it might choose to do so in the future. That future has arrived.

GS Media BV v Sanoma Media Netherlands BV and Others (Case C-160/15)

GS Media BV v Sanoma turns on some fairly simple facts. Playboy magazine in Europe had arranged to take photos of a popular Dutch TV personality. Before the photos appeared in the magazine (in December 2011) they were illegally leaked online. The defendant was not the leaker, it did not host the infringing material, it simply linked to that material. Thus the main question in the case is

GS Media BV v Sanoma Media Netherlands BV and Others (Case C-160/15)

Questions referred. 1(a)   If anyone other than the copyright holder refers by means of a hyperlink on a website controlled by him to a website which is managed by a third party and is accessible to the general internet public, on which the work has been made available without the consent of the rightholder, does that constitute a ‘communication to the public’ within the meaning of Article 3(1) of Directive 2001/29

Depending on the court’s decision, the legality of linking in the European Union may be under threat. It is not that all linking would be illegal or require permission, but a broad ruling in favor of the plaintiff in this case would mean that every link is potential source of copyright infringement unless you know for certain that the material you are linking to is authorized (by the copyright owner) for general public communication.

For additional comments and links, see Matt Schruers And Jakob Kucharczyk, “EU’S Highest Court To Weigh Whether Hyperlinking Will Remain Legal In Europe” Feb. 2, 2016 (Disruptive Competition Project (DisCo))

Patent Reform is Working, Everywhere but the Eastern District of Texas?

Is the American Invents Act working?

Taking a look at the longterm trends in case filings and the number of unique defendants in each suit, it appears that the America Invents Act (“AIA”) corresponds with a significant reduction in the real rate of patent litigation and a leveling off of the nominal rate of patent litigation.

Patent Cases Filed and Estimated Number of Defendants, 1994—2015

Figure 5

However it is worth desegregating the data to compare the Eastern District of Texas to the rest of the United States. If you believe that most what takes place in Eastern District is patent trolling, then it looks like the AIA has not put a serious dent in that activity. The figure below compares the Eastern District of Texas to the rest of the United States in terms of the number of patent lawsuits filed per year (the bars) and also the estimated number of defendants per year (the scatterplot).

Patent Litigation in Eastern District of Texas, All Other Districts Source: Bloomberg Law, 1994–2015.


Bar chart depicts cases filed. Scatterplot depicts estimated number of defendants. Linear fit lines from 1994 to 2011 and 2011 to 2015.

Prior to 2011, the whole country witnessed a significant upward trend in patent suits and patent defendants. The rate of increase was much greater in the Eastern District of Texas, but the trendlines were pointed in the same direction for the district and the rest of the US. The period from 2011 to 2015 saw a marked divergence between the Eastern District of Texas and the rest of the country. In the Eastern District, the number of cases filed increased sharply and the trend (albeit with significant variation) was for the number of defendants to increase as well. In the rest of the US, the trendline for the number of defendants is significantly downward and there also appears to be a decreasing trend in terms of the number of suits filed.

These initial numbers might suggest that the patent reform measures introduced in the AIA have had a significant impact on the extent of patent litigation everywhere but the Eastern District of Texas. Another way to read these figures is as confirmation that the Eastern District of Texas’s concerted efforts at forum selling are continuing to be successful. These explanations are not mutually exlusive. The Eastern District of Texas accounted for just 7.33% of all patent cases filed between 2002 and 2010, but 26% from 2011 to 2015. It accounted for 16.39% of all patent defendants between 2002 and 2010, rising to 28.36% in the 2011-2015 period.

According to this superficial data (no attempt to control for marco-economic factors), etc, it looks like the AIA is having an effect, just not in the Eastern District of Texas.

For an extended discussion of the data used in this post, see my forthcoming article, IP Litigation in United States District Courts: 1994 to 2014 (Iowa Law Review, forthcoming 2016). You can download the underlying data on my website (under the publications+/data sets tab).