Paulo Coehlo, the highly-acclaimed Brazilian novelist behind The Alchemist, has more than 10 million "likes" on his Facebook page and almost 7 million followers on Twitter. A few hours ago, all those social media fans saw Mr. Coehlo share a manifesto on Facebook and Twitter. He also made it the background of his Twitter profile.

Since Mr. Coehlo included his name in big, red font at the bottom of the post, his followers could be forgiven for assuming he had written it. However, the manifesto is actually the copyrighted work of Holstee, a New York City-based lifestyle goods company that describes itself as "pursuing our dream for a sustainable & united planet." 

In prints of the manifesto, the copyright and names of the Holstee founders--David Radparvar, Michael Radparvar and Fabian Pfortmüller--appear at the end original text, in the same spot where Mr. Coehlo, or whoever manages his online presence, inserted his name. The text, which was written in 2009, is an odd choice for copycats considering that it has been viewed more than 80 million times, according to the online shop where you can buy a poster of the manifesto. As Andy Ellwood noted, back in 2011, the Washington Post even called Holstee's work "the New 'Just Do It.'"

After complaints on Twitter, Mr. Coehlo has since deleted the Facebook post--removing his big red name from the bottom and reposting it as "the Holstee manifesto," up top. He also deleted his original tweet and then tweeted it out again as "The HOLSTEE manifesto." Neither of the reposted images include Holstee's copyright.

Mr. Coehlo, who has spoken out against plagiarism in the past, apologized on Twitter to the company, but without an explanation. We've reached out to Holstee and will update the post when we hear back:

@holstee for a period of 3 hr your manifesto was here and in Facebook as it were mine. Already deleted, posted again -and I apologize.

— Paulo Coelho (@paulocoelho) February 11, 2013

Here are the tweets accusing Mr. Coehlo of plagiarism before the mistake was fixed:

Correction: An earlier version of this post stated that Holstee was based in Brooklyn. The company moved its headquarters from Brooklyn to Manhattan in March 2012. Holstee cofounder Michael Radparvar was also listed as Michael Rad. We regret the errors.

(Photo: fanpop.com)

The FTC reportedly won't announce its decision regarding its antitrust investigation until 2013, rather than this week as was originally planned. Hey, might as well not ruin anyone's holiday over this. [Bloomberg]

If you read this, you'll never rent a computer for anything ever again. [Ars Technica]

Prominent techies like Fred Wilson are backing Bloomberg's demand for a gun safety plan. [A VC]

The U.K. now has a special crime unit focused wholly on copyright violators, which means this classic IT Crowd episode is actually coming true. [The Verge]

IBM is pretty sure computers will have "touch, taste, sight, sound and smell" within five years. In related news, IBM is about to learn you can't teach good taste. [Washington Post]

Judge Alsup

Earlier this month, Judge William Alsup issued a demand for both parties in the Google v. Oracle patent dispute: Provide a list of any bloggers, journalists, or other commentators on the payroll. Paid Content reports that the two companies have now filed their responses. Google insists it has not paid anyone for positive coverage, while Oracle admitted to hiring patents blogger Florian Mueller as a "consultant on competition-related matters."

The case itself is mostly done, with Google emerging largely victorious. At this point, the two parties are arguing over whether Oracle has to pay Google's court costs.

Google issued this double-pinky swear:

"Neither Google nor its counsel has paid an author, journalist, commentator or blogger to report or comment on any issues in this case. And neither Google nor its counsel has been involved in any quid pro quo in exchange for coverage of or articles about the issues in this case."

The company is all concerned frowns and upraised palms in the statement, sounding so sorry it can't be more helpful while requesting a little assistance from Judge Alsup in figuring out just what it is His Honor would like to know:

"Rather than flooding the Court with long lists of such individuals or organizations who might have written something about the case, Google outlines below several general categories of individuals and organizations and requests the Court's further guidance as to whether it would be useful for Google to provide more details or attempt to compile a more comprehensive list."

The categories of parties Google admits to showering with cash include university and non-profit organizations; political organizations and trade organizations; Google employees, contractors, and vendors; expert consultants and witnesses for this case, specifically; witnesses who've worked for Google. Any of these good folks might very well have written about the case, Google says, but not at Google's urging. (We can't imagine it's exactly easy to contravene the wishes of the corporation signing one's grant checks, however.)

Oracle, on the other hand, cops to hiring Mr. Mueller (who has written extensively on the case), then goes on the attack:

In contrast, Oracle notes that Google maintains a network of direct and indirect "influencers" to advance Google's intellectual property agenda. This network is extensive, including attorneys, lobbyists, trade associations, academics, and bloggers, and its focus extends beyond pure intellectual property issues to competition/antitrust issues.

All that's underlined in the original document, by the way. The statement goes on to insist that "Google brought this extensive network of influences to help shape public perceptions concerning the positions it was advocating throughout this trial."

While Oracle comes out of this little tiff sounding a little like a paranoiac raving on a street corner, we can't help but notice that Google, with its oh-so-accommodating stance, gives off a faint whiff of Eddie Haskell.

UPDATED: Sounds like Judge Alsup wanted something a little more expansive than disclosures of outright advertorial. He's issued another order, painstakingly outlining how conflicts of interest work and demanding that Google submit a new list. We can't help but hear a note of fury in the document.

Via the Verge:

The August 7 order was not limited to authors “paid . . . to report or comment” or to “quid pro quo” situations. Rather, the order was designed to bring to light authors whose statements about the issues in the case might have been influenced by the receipt of money from Google or Oracle. For example, Oracle has disclosed that it retained a blogger as a consultant.  Even though the payment was for consulting work, the payment might have influenced the blogger’s reports on issues in the civil action.

He wants "all commenters known by Google to have received payments as consultants, contractors, vendors, or employees," by Friday at noon.

Judge Alsup added: "Google suggests that it has paid so many commenters that it will be impossible to list them all. Please simply do your best but the impossible is not required. Oracle managed to do it."

The Google Image results for "porn" are too vile, so here is a "lady flower." (Photo: flickr.com/danseprofane)

Plenty of people have been sued for illegal downloading. But an increasing number of defendants are basically giving plaintiffs the finger, in the form of countersuits. Today TorrentFreak offers up yet another example, that of a put-upon Colorado man who's filed a lengthy countersuit demanding millions in damages and also a public apology in a local newspaper.

Presumably he also faxed the company a handwritten note saying, "And that's what's up."

A bit of background, for those of you who've never had the misfortune of being caught downloading something illegal: While the RIAA and its big-label ilk have backed off of lawsuits as a tactic for fighting illegal downloading, several porn companies are still using that particular stick. Only rather than dragging the case to trial, companies oh-so-kindly offer their prey a chance to settle for just a few thousand dollars, thereby avoiding becoming "that dude who got sued for downloading Anal Sluts Vol. XVIIX." 

Well, Jeff Fantalis wasn't having any of that. He's slapped the company with a 53-page counterclaim, alleging "defamation, the intentional infliction of emotional distress, abuse of process and invasion of privacy." He would like a million dollars in damages for each claim. Go big or go home, we suppose.

In the course of the filing, Mr. Fantalis denies everything in Malibu Media's lawsuit. For starters, tracing illegal downloads to specific IP address is by no means a foolproof method of identifying the actual downloader. He also denies that he has ever seen a pornographic movie in his entire life, which... if you say so, buddy. He even goes far as to suggest that pornography can't even be copyrighted, claiming, according to TorrentFreak, that "explicit porn doesn’t fit the basic principle that copyright should promote 'the progress of science' or 'useful arts.'"

But besides the money, Mr. Fantalis would also like "a public retraction and apology in a local newspaper ad, not smaller than a quarter page." He has a few other requirements, as well:

“…[The advertisement] shall specifically retract the claims of the Complaint, acknowledge that Plaintiff wrongfully brought this lawsuit against the Defendant, state that this lawsuit was groundless, acknowledge that the Defendant had not infringed in any manner against the plaintiff and that Defendant is innocent in this matter, and apologize to the Defendant…”

We've reached out to Mr. Fantalis for comment and will update if we hear anything back.

Frankly, we're just amazed anyone anywhere is still bothering to download pornography. You guys know about YouPorn, right?

Mr. O'Dwyer, right, and Mr. Wales (Photo: Twitter/richardasaurus)

In the two years since U.S. customs and immigration officials came knocking on his dorm room door, Richard O'Dwyer has become something of a representative figure in the fight between Hollywood heavyweights and the Internet.

But a new ally has stepped foward to support the "unlikely poster boy for a culture war." Wikipedia founder Jimmy Wales has decided to intervene on Mr. O'Dwyer's behalf, launching a campaign on Change.org this weekend to stop the U.S. from extraditing him on copyright allegations.

If extradited, Mr. O'Dwyer faces up to ten years in prison. His alleged crime? Copyright violations related to developing a site called TVShack.net, a search engine that linked to online sources to watch TV shows and movies. Mr. Wales is careful to note that TVShack hosted user-submitted links, not copyrighted content. And when Mr. O'Dwyer received requests to remove copyrighted content, he complied.

In fact, as Mr. Wales told The Guardian, Mr. O'Dwyer sounds less like a criminal and more like the next Zuck.

"When I met Richard, he struck me as a clean-cut, geeky kid. Still a university student, he is precisely the kind of person we can imagine launching the next big thing on the internet," Wales wrote in a comment article for the Guardian.

In his petition, addressed to UK Home Secretary Theresa May, Mr. Wales calls Mr. O'Dwyer "the human face of the battle between the content industry and the interests of the general public." Saving Mr. O'Dwyer, he argues, would be tantamount to the next "big victory" for "the public," after successfully defeating SOPA and PIPA.

O'Dwyer is not a US citizen, he's lived in the UK all his life, his site was not hosted there, and most of his users were not from the US. America is trying to prosecute a UK citizen for an alleged crime which took place on UK soil.

The internet as a whole must not tolerate censorship in response to mere allegations of copyright infringement. As citizens we must stand up for our rights online.

The petition already has 29,627 out of the 35,000 signatures Mr. Wales is seeking. Thanks to a well-chosen hoodie, Mr. O'Dwyer may soon have other Internet denizens on his side.

Mr. Diller

The sun was still setting when The Observer rounded the corner under The High Line for IAC's Internet Week closing party, co-hosted by Aereo, a provocative new startup that will allow users to view broadcast content on their computers, smartphones and tablets. Off the drab West Side Highway, the Frank Gehry-designed building shimmered like a landing dock for a space ship--as if the top could twist off and whir its way into the atmosphere. Will Arnett and Wilmer Valderrama walked the red carpet. Dolled-up in pale pink, Allison Williams (the Miranda to Lena Dunham's Carrie) took Barry Diller's elbow as she navigated the crowd.

As the origin myth has it, Mr. Diller’s transformation from a Hollywood mogul to Internet soothsayer for this new digital era started with an Apple PowerBook. “No question that his relationship with his little screen, which is irritating to everybody in the room, has altered his life,” his closest confidante and now wife Diane von Furstenberg told The New Yorker some years back.

It was the early ’90s—right around the time Rupert Murdoch refused to make Mr. Diller a principal at Fox, the fabled fourth network Mr. Diller pioneered when competitors insisted that three would do just fine.

In search of an empire of his own, Mr. Diller embarked on a self-directed innovation tour—PowerBook in hand—visiting MIT’s Media Lab, and meeting with Steve Jobs (biding his time at NeXT Computers between gigs at Apple) and Bill Gates. Looking at the future through his PowerBook–shaped crystal ball, Mr. Diller concluded that a “new video democracy” was on the horizon. As The New Yorker put it, Mr. Diller saw how “the computer screen might become a TV set, and the keyboard would be a mechanism for summoning anything. The speed would be astonishing. A billion bits of information per second would travel over a wire.”

“My god. I’m impressed,” Mr. Diller told The Observer earlier this week, chuckling at his own prescience. “I mean that’s really shocking, at least to me, since I can’t imagine my thinking in ’92 had evolved that far. ’94, yes. But not ’92.”

Over the phone, Mr. Diller sounds not unlike a debonair Darth Vader. There’s a lot of impeccable elocution and heavy breathing. “I haven’t read that story since it was published. I don’t even know if I ever actually read the whole thing,” he offered with the kind of offhand braggadocio one might expect from the man credited with inventing the TV miniseries and the movie of the week at ABC, and greenlighting The Simpsons.

Two decades later, IAC, the corporate salmagundi of Internet companies where Mr. Diller now serves as chairman, recently led a $20.5 million investment round in Aereo.

Using remarkably tiny, thumbnail-size antennas stored in a warehouse in Brooklyn, Aereo is able to live-stream broadcast TV—the adorkable New Girl on Fox, say, or the upcoming London Olympics, which cost NBC $4.4 billion—to any mobile device for just $12 a month. Users can watch the programming as it airs, or record up to 40 hours of content. Aereo won’t say so, but coupled with a Netflix subscription, the new service will enable many users to cut the cord of their cable subscriptions.

“I thought it was fascinating,” Mr. Diller said. “And because I thought it would further develop ‘television’ over the Internet, I was intrigued.” According to Aereo’s CEO Chet Kanojia, Shana Fisher, one of the start-up’s seed investors, first introduced Aereo to IAC, which is a limited partner in her fund, High Line Venture Partners. “Barry immediately gravitated towards it because of his history,” said Mr. Kanojia, who divides his time between Aereo’s headquarters in Long Island City and its engineering base in Boston. “He said, ‘I want to meet this guy.’” He had to be sure, said Mr. Kanojia, that the technology was not “a fantasy.”

Skepticism allayed, Mr. Diller has been helping shine the spotlight on Aereo through everything from his recent congressional testimony on Net neutrality to that celebrity-studded Internet Week party.

Naturally, Mr. Diller’s former colleagues from the broadcast world would like to litigate Aereo out of existence. Less than two weeks after IAC announced its investment in Aereo, 15 plaintiffs, including ABC, NBC, CBS, Fox and even PBS, filed a lawsuit seeking damages for copyright violation and an injunction to stop Aereo from operating, just as they did a similar startup called Ivi.tv last year. Rumor had it Aereo raised $20.5 million expecting a fight, a claim Mr. Kanojia denied. The core dustup involves retransmission fees, a backdoor money stream networks came to depend on after the 1992 Cable Act, which required broadcasters to either declare their channels a “must carry” for distributors like Time Warner and DirectTV or opt for retransmission consent in the form of cash or other considerations. (Aereo argues that its minuscule antennas enable a “private performance” for individuals, absolving it from paying licensing fees.)

New Yorkers were forced to familiarize themselves with “retrans” fees after a dispute between MSG Network and Time Warner Cable resulted in a blackout of Knicks and Rangers games smack in the middle of Linsanity. On an earnings call last month, Time Warner CEO Glenn Britt told analysts he found the Aereo lawsuit “very interesting” and would be watching it closely.

“[Aereo] is the most direct attack on retransmission consent that we’ve seen,” Richard Greenfield, a media analyst for the broker-dealer BTIG, told The Observer. “I think the multichannel distribution world, which would benefit from an end of retrans, is foaming at the mouth for a legal ruling in favor.”

Television incumbents have fought every major technological advancement, from cable TV to the Betamax. But it’s hard to shake the feeling that Mr. Diller’s involvement in Aereo is particularly nettlesome. After all, who would be better poised to introduce broadcast TV on the Internet to the masses than a storied executive who spent the last few years nurturing online video start-ups like CollegeHumor and Vimeo.

Of course, betting that Mr. Diller can replicate the audacity of his network days hasn’t always panned out for prognosticators. He may have seen the future of TV on the Internet, but post-Fox, Mr. Diller landed in the woods of West Chester, Pa., as “king of cubic zirconium” at QVC. Then there was the $1.85 billion bid to one-up Google with Ask Jeeves. One would be more likely to ask Google than Jeeves how that venture fared. But IAC’s stock is on an upswing since Mr. Diller successfully fended off a suit from cowboy billionaire John Malone in 2008 for spinning off properties like Ticketmaster and the Home Shopping Network into their own public companies.

Hearings in the copyright lawsuit, which begin at the end of this month, will determine whether Aereo will add to Mr. Diller’s legacy as an upstart, or end up the next Napster.

“Whatever,” was Mr. Diller’s response to the notion that Aereo’s future might rank on par with his past successes. “I don’t relate things one to the other.”

Mr. Kanojia at the Internet Week party (via Wire Image)

For a product that’s attracted so much legal heat, it’s perhaps fitting that Mr. Kanojia’s inspiration started with a lawsuit, he told The Observer early this month in the Park Avenue outpost of his PR company (Aereo’s Long Island City office is under construction).

Mr. Kanojia, who speaks with a polyglot post-colonial accent shared by many an Indian expat, sat cross-legged in an armchair. His Gérald Genta watch was a jump-hour, a wonkish call-back to his training as an engineer. But like his benefactor, Mr. Kanojia also has ties to the television world he is upending. His former company Navic Networks, which was purchased by Microsoft in 2008, produced a piece of software embedded in cable boxes.

“We would monitor viewers across millions and millions of homes,” he recalled. “What I really saw was a third of the households, give or take, watched broadcast only,” he said. Despite access to 500 channels and DVRs, “80 percent of the households only watched seven or eight channels.”

Then, Mr. Kanojia saw a way to provide those “pulse-of-life” broadcast channels from the cloud in a manner that followed the letter of the law. In 2009, the Supreme Court ruled that Cablevision was within its rights to move its DVR systems to remote servers, rather than have consumers store the programs they chose to record in their individual boxes. “A simple logical extension to me was: this content is broadcast for the consumer, ends up in the public airwaves, is part of the broadcast legacy. So if network DVR is legal why can’t we build a remote network antenna?”

When Aereo launched publicly in March in the New York market, the service billed itself as merely an upgrade on rabbit ears for the Internet era. Because users only access one antenna per viewing session, the company argues it’s a “private performance,” allotted to every citizen in exchange for the broadcaster’s access to the public airwaves.

Network sources view it differently. “They’re stealing the content!” one executive told The Observer. “It’s baloney, it’s a rationalization of pure theft.”

The plaintiffs argue that Aereo is more of a cynical legal ploy than a technological innovation—and that Aereo puts the networks’ very existence in jeopardy by cutting into advertising dollars, retransmission fees and their own ability to monetize the Internet. The case has echoes of a similar argument Jack Valenti, former head of the Motion Picture Association, leveled against the VCR, comparing it to the Boston Strangler. In that landmark Supreme Court trial, referred to as “the Betamax case,” Fred Rogers, he of the cabled cardigans and neighborly wisdom, testified in favor of innovation. “Very frankly, I am opposed to people being programmed by others,” he said. “I just feel that anything that allows a person to be more active in the control of his or her life, in a healthy way, is important.”

But in Aereo’s case, even Mr. Rogers’s own network is siding with the plaintiffs. In filings for the lawsuit, declaration after declaration from studio execs insinuates that Aereo could mean the end of beloved content and the networks’ ability to offer it for free over the airwaves. NBC’s declaration made threatening remarks about Sunday Night Football; PBS, a nonprofit, bemoaned the future of Great Performances.

“I don’t believe that for a second. I’ve heard that literally going back 40 years,” Mr. Diller said. “It used to be argued, by networks—I was at one when I started in the ’70s—that cable was the biggest threat to networks survival. So I don’t think the argument is valid."

Not that it surprised him. “Any incumbent in any area,” he added, will wield “pitchforks to protect their incumbency.” Asked how he would have responded, were he still head of a network, he said, “Exactly as they are. I understand why they would make arguments about diminished programming, because it’s such a populist concept. I just don’t think it’s got any basis in reality.”

Network sources intimate that Mr. Diller, who made his name in programming, should know better. But it’s a sensitive topic. Asked about Aereo at a recent executive breakfast at the Pierre Hotel hosted by The Wall Street Journal, Disney/ABC Television Group president Anne Sweeney curtly declined to comment.

But Mr. Greenfield, the BTIG analyst, sides with Mr. Diller. “This should lead to people watching more television, not less. Advertising should benefit. It does attack retrans, but retrans didn’t even exist in terms of dollars until a few years ago, so I find it hard to believe it would destroy them,” he said. The reason networks cling so desperately to retrans fees is because they represent a growing source of revenue with “no cost attached to it,” Mr. Greenfield added.

Mr. Diller also downplays the effect to networks’ bottom line. “Well, first of all, I don’t think Aereo presages the end of retransmission fees,” he said. “It may affect the absolute amount, but the amount is going to be large regardless of Aereo.”

The real impact, he noted, will be in increased video consumption online. “It will lead to more à la carte viewing, not packaged viewing. And I think that is an alternative many people would like.”

Still, it’s not as though Mr. Diller is entirely devoid of concern for his former colleagues in the broadcast world. “If I felt that they would lose revenue, in a material way, of course I would be sympathetic,” he said, surprising us with a benevolent tone. “I want them to get as much revenue as possible.” After all, he pointed out, IAC is also in the business of content creation. “We make programs we want them to pay for.”

-ntiku@observer.com

A version of this story appeared in the May 23, 2012 issue of The New York Observer. 

Google CEO Larry Page (Google+)

After a partial ruling on the question of copyright infringement, the Oracle v. Google saga continues. But as of yet, there's no answer to the question everyone's asking: Are APIs copyrightable? And if they are, what does that mean for the tech industry?

Background: Oracle claims that, when Google built the Android platform, the company infringed on Java-related copyrights and patents (acquired by Oracle when it bought Sun). This first phase of the case deals specifically with the copyright allegations and, as Wired points out, Judge William Alsup has instructed the jury to assume for the purposes of the trial that APIs can be copyrighted. Mr. Alsup will ultimately have to make that call himself.

Then the jury's response on that copyright question is a mixed bag. On the question of whether Google has "infringed the overall structure, sequence and organization" of the 37 Java API packages at issue, CNET reports the jury returned a unanimous yes. So Google is guilty of using code written by Sun to build the Android platform. But--and this is very important--the jurors were unable to reach a decision whether Google's actions were fair use, which vastly changes the damages question. (That's probably because fair use is a tricky call even in situations like music, with which jurors are likely more familiar than programming languages.) This make the verdict something of a wash, though Oracle is definitely ahead.

Google, meanwhile, has moved for a mistrial, on the grounds the jury can't rule on infringement and ignore the question of fair use. But so far that's not even slowing the trial down. Wired's Caleb Garling reports from the courtroom:

Alsup doesn't mess around. Read verdicts on copyrights. Whamo. On to patent phase. Not even a recess.

— Caleb Garling (@CalebGarling) May 7, 2012

Betabeat offers condolences to the jurors stuck hashing this out, as opposed to ruling the seXXXy Tumblr lawsuit.

Thumbs up to you too, Wired.

Earlier this week, New York Magistrate Judge Gary Brown issued a landmark ruling in one of the many mass-BitTorrent lawsuits for copyright infringement, calling the lawsuit a “waste of judicial resources” for insufficient evidence to identify copyright infringers, reports TorrentFreak.

The copyright holders were launching their claims with just an IP address. The copyright holders use that IP address ask the courts for a subpoena, which they then use to ask Internet service providers to hand over personal details about alleged offenders. 

But Judge Brown points out that the person listed as the account holder by an ISP isn't typically the individual who downloaded the copyrighted material. "Or put differently; an IP-address is not a person," says TorrentFreak.

Other judges have pursued similar arguments, but Judge Brown put a finer point on it:

“Thus, it is no more likely that the subscriber to an IP address carried out a particular computer function – here the purported illegal downloading of a single pornographic film – than to say an individual who pays the telephone bill made a specific telephone call.”

His findings could have a wide-ranging impact. Judge Brown urged other judges to dismiss similar cases in the future.

Ask this guy what happens when you cross the MPAA.

It’s going to take more than the Megaupload takedown to satisfy the copyright Rottweilers at the MPAA. Now they’re determined to convince the legal world that not just hosting, but embedding protected content is a form of direct infringement, says Ars Technica.

At issue: An internet pornography company, Flava Works, discovered its adult wares being shared on the video bookmarking site MyVidster. MyVidster wasn’t hosting the videos; they were merely embedded. Previous precedent suggests that, at worst, this would fall under the harder-to-enforce rules regarding secondary infringement, which carries lighter penalties. But last July, Judge John F. Grady ruled that MyVidster was engaging in a form of direct infringement. Google and Facebook and the Electronic Frontier Foundation quickly filed amicus briefs, calling for an overturn.

That’s where the MPAA jumped in with its own brief supporting the decision and asking that the court draw no distinction between the two acts. The organization, while magnanimously acknowledging that "there is nothing inherently insidious about embedded links," points outs that "this technique is very commonly used to operate infringing internet video sites." The brief continues:

Pirate sites can offer extensive libraries of popular copyrighted content without any hosting costs to store content, bandwidth costs to deliver the content, and of course licensing costs to legitimately acquire the content.

Such a precedent would likely make sites think twice about even allowing embedding. Because who wants to be dragged out of a panic room in the middle of the night?

Who would want to spread rumors about Classic Specs, which sells its stylish glasses at Brooklyn Flea and donates a portion of its proceeds to charity? "Our sales keep growing because we have a great product that people love (and that we hand deliver if you’re nearby) and because we have a very attractive dog as a mascot," Mr. Lipovsky wrote in the stirring letter, which embedded a picture of said pooch.

Mr. Lipovsky suspects that the rumormonger is Warby Parker: the eyeglasses e-vendor, investor darling and customer sensation, that also happens to be based in New York. Why? Because the much-larger Warby had tried to shut Classic down before, he alleged.

The story seemed to have it all: copycats, unfair competition, and underdogs, and it shot up to the top of Hacker News yesterday afternoon, garnering at last count 169 points and 71 comments. "Hipster fight," wrote one commenter. "This whole thing makes me so glad I got LASIK a few years ago," said another.

But what, exactly, is the beef?

Backstory

Classic Specs launched in October, 2010, eight months after Warby Parker, with a strikingly similar website and essentially the same proposition, although Classic Specs has since changed its design. In a $20 billion industry dominated by one player (Luxxotica Group, which owns Lenscrafters, Sunglass Hut, Pearle Vision, etc. as well as brands like Chanel, Prada, Ralph Lauren), these startups make cool, classic frames and sell them online. They both let you try before you buy, and they donate money to charity.

Warby Parker, however, has $13.5 million in funding from firms like SV Angel, Lerer Ventures, and Thrive Capital*  as well as a buzzy national brand.

Classic Specs, which we had never heard of until yesterday, is in the process of trying to raise funding.

Tensions were high from the start.

In the post, Classic Specs cofounder Andrew Lipovsky accused Warby Parker of (1) trying to intimidate his company out of existence by issuing a cease-and-desist letter claiming "unjustified" copyright infringement just two days after Classic Specs launched in beta; and (2) when that failed, badmouthing Classic Specs to potential investors and advisors.

"You’re not the first company on earth to sell eyeglasses (offline or online)," wrote Mr. Lipovsky, who gets more acerbic from there. (He ends, for example, by revealing that he sent an empty box and a cheeky note to the wife of one of the Warby Parker cofounders when she tried to place an order.)

A source close to Warby Parker, naturally, has a very different story to tell.

Picking at Old Wounds

In Mr. Lipovsky's version of events, Warby Parker's 2010 cease-and-desist letter—which alleges that Classic Specs "willfully and deliberately copied a significant portion of the Warby Parker website" and that by selling identical goods (i.e. eyeglasses and frames) constitutes an "unlawful business practice"—is an overreach, to put it mildly.

Warby sent the letter on a Friday. On the following Monday, Mr. Lipovsky told Betabeat, he spoke on the phone with Warby Parker cofounders Neil Blumenthal and David Gilboa. "They said in so many words 'Take down the site, hand over all your inventory, hand over all your profits and shut down the business,'" Mr. Lipovsky said.

Although he didn't mention this in the post, he later told Betabeat by email, "Because we had no idea what they would do next, on Monday the 18th, we temporarily took down the site and made changes out of an abundance of caution (we didn't have any outside funding and couldn't afford any type of BS legal fight..again, it was our first week in business). As soon as we hired our lawyer, the first thing he told us to do was put the site back up because we were definitely in the right. After a day or maybe two the site went back up."

Since then, Mr. Lipovsky said, he hasn't heard from Warby Parker or its legal counsel. But he suspects the startup is behind rumors being spread in New York's tiny investment circles about Classic Specs. "After we gave them the documentation, [potential] investors actually became really, really furious [toward Warby Parker] about the whole situation," said Mr. Lipovsky, who declined to name investors. "The word some of them used was 'pathetic.'"

Competitor or Copycat?

Warby Parker declined to comment. However a source close to the company who spoke to Betabeat yesterday under the condition of anonymity offered a different version of events. Mr. Lipovsky was one of Warby Parker's first customers, even going so far as to email the founders to compliment the service.

But when Classic Specs launched, the source insisted, Mr. Lipovsky copied specific portions as well as the look and feel of the website, which was the impetus for the cease-and-desist letter. The claims in the cease-and-desist letter had nothing to do with copying Warby Parker's business model, the source said.

"The language was copied in many cases verbatim, it wasn’t even a close call, it was exactly the same thing," said the source, who sent us the comparison slides in this post.

And here is where the two versions of the story drastically diverge.

According to the source, Mr. Lipovsky admitted fault and agreed to a settlement after the phone call with Warby Parker's cofounders. "The proof is in the pudding, he took the website down a day later, he admitted that he copied the site, agreed to take site down and not put it back up, and agreed to donate his inventory to charity," the source said.

Betabeat received a purported copy of an email from Warby Parker to Mr. Lipovsky's Gmail account at the time, which says, essentially, thanks for agreeing to settle and we want to put this behind us.

So why didn't Warby Parker go forward with the copyright infringement claim if Classic Specs didn't takedown its site? The source says because once the website went back up the next week, "They had changed one word in each sentence of their copy, which if you’re wondering would make it harder to make an infringement case. They also refunded the money to every one of their customers." If Classic Specs didn't make any money off the products, the source noted, the lawsuit loses merit.

"Warby launched as a cool, young brand," said the source. "You could pay $95 and it also happened to have a social good connected to it. When they launched, there wasn't really anyone else who looked like them in the space. If you launch a company and you put your blood, sweat and tears, in it and a company copies all of the language and the entire thing," you're forced to react.

David vs. Goliath

Mr. Lipovsky responded to those counter-claims by email. "Warby has told several people that we agreed to their terms and settled...I don't remember my exact words, but it was some variation of "no way" (doesn't exactly seem like a settlement to me)," he wrote, adding, "At the same time we took the site down, we refunded customers that had placed orders with us. It was only 9 people, and because customer service is very important to us, we emailed them and let them know we were refunding their money because we didn't want them coming back to a site that was temporarily unavailable. Of course, we still sent them the product they ordered."

"We rewrote sentences either changing the whole sentence or just a word depending on the situation," Mr. Lipovsky added. "Some things we didn't change at all - those are just the standard industry terms for how you talk about certain things in optics. It definitely was not us changing one word in every sentence . . . We were just scared because this was our first week in business and we got this threatening lawyer letter trying to bully us around. Just because they wrote that in an email to us does not mean we agreed to anything period. They were trying to rush that over to us as fast as they could because they knew we didn't have a lawyer yet and hoped that we would foolishly sign it by their artificial deadline."

Not the Only Ones

The final bone of contention between these two? While Warby Parker was out trashing Classic Specs, Mr. Lipovsky alleges—claiming that the younger startup doesn't actually donate to charity, among other things—no one has mentioned that Warby Parker itself was accused of being a copycat.

In the open letter to Warby Parker posted yesterday, Mr. Lipovsky embedded a lawsuit filed against Warby Parker for copyright infringement and unfair competition by a company called Salt Optics.  He added this biting observation:

"It looks like Warby Parker admitted to wrongdoing and settled to at least one of the aforementioned charges…am I right? I for one have never seen these details in any of the many articles about Warby Parker, and it certainly seems to be left out of the “wink wink nudge nudge” that inspired this letter in the first place."

The source close to Warby Parker, however, told Betabeat that the judge dismissed the copyright infringement charges with prejudice, insinuating that Classic Specs was grasping at straws to try to disparage Warby Parker's brand. Update: While the judge's dismissal of the copyright infringement charges are public, Salt Optics filed a joint stipulation to dismiss the case, thus any potential agreement related to other charges in the case, including trade dress infringement, unfair competition, and common law misappropriation is not publicly available. However, we were told Salt Optics agreed to dismiss all the trade dress claims with prejudice as well.

As we've chronicled before, duplication happens constantly on the Internet (and attempts to squash it can have a nasty Streisand effect). We're inclined to see the same takeaway as Hacker News commenter vm, who wrote, "So many companies are copying Warby Parker. Warby was first and at least FOUR other companies copy them, down to the marketing message, branding and products . . . Lesson? Haul-ass once you find product-market fit."

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