Saturday, October 06, 2018

MIRLN --- 16 Sept - 6 Oct 2018 (v21.13)

MIRLN --- 16 Sept - 6 Oct 2018 (v21.13)




MIRLN began in 1997 and I've have published around 250 times, using an evolving, idiosyncratic approach to stories (not too new, not too obvious, etc.), with an idiosyncratic cross-section of readers (steady at about 3000: techies, lawyers, judges, international types, people in the IC, two former US AGs, etc.). This year probably will be MIRLN's last. (With curated Twitter/RSS feeds you may not miss it at all.) It's been fun; thanks for reading!


2018 corporate counsel breach statistics - prepare to groan (RideTheLightning, 17 Sept 2018) - Here's the news in a nutshell: Data breaches of in-house legal departments have doubled in the last year. Assuming that elicited a groan, the source is the 2018 survey by the Association for Corporate Counsel , which reported one-third of in-house counsel offices experienced a data breach in 2017, up from 15 percent in 2016. A related recent ABA Journal article quoted Sterling Miller, general counsel of Marketo Inc., an online marketing technology company: "The possibility that your outside law firm could be breached and your sensitive data stolen is a huge nightmare for in-house lawyers. Outside counsel need to start taking this very seriously. If a breach happens, that law firm is probably no longer working for you and the malpractice claim could be very large." It doesn't really matter whether you are in-house or outside counsel - the odds are that you need to up your security game. That ABA article analyzed the ABA TechReport 2017 and found that "only 26 percent of responding firms had an incident response plan in place to address a security breach, and only two-thirds with 500 lawyers or more had such a plan in place. These plans were not a priority with smaller firms, as 31 percent of firms with 10 to 49 lawyers, 14 percent of firms with two to nine lawyers, and 10 percent of solo practices had such plans."

Roca Labs' anti-review clause violates FTC Act-FTC v. Roca Labs (Eric Goldman, 17 Sept 2018) - Good news: a court ruled that Roca Labs anti-review clause violates the law. It's shocking that Roca Labs chose to defend this practice in court, so it's not surprising that the judge didn't endorse it. Bad news: the court relied on the "unfairness" prong of the FTC Act, and the FTC's unfairness authority can be the basis of FTC overreaching. Good news: the Consumer Review Fairness Act will apply to future cases (this case was initiated before the CRFA's effectiveness), so this topic won't require the FTC to stretch its unfairness authority in the future. Thus, this case reinforces the prevailing wisdom: anti-review clauses are legally toxic; they don't belong in any business' toolkit; and if your contract still contains them, shame on you. * * *

When art created by artificial intelligence sells, who gets paid? (, 17 Sept 2018) - Christie's will auction off an artificial intelligence (AI) artwork for the first time this October, hard on the heels of a pioneering all-AI art exhibition held at New Delhi gallery Nature Morte . While the market is eager to move the work, the field raises questions about ownership, obsolescence, and the art world jobs that algorithms can't do. Many makers of AI art use generative adversarial networks (GANs), technology that allows a computer to study a library of images or sounds, make its own content according to what it has learned, test its own success against the original media, and then try again, improving incrementally through trial and error. The artworks resulting from this back-and-forth between two artificial neural networks-which include prints on paper, videos, and multimedia installations-are often disquietingly lifelike, the flora and fauna of the uncanny valley. Munich-based Mario Klingemann, for instance, trained an algorithm on portraits of Old Masters paintings before exposing it to webcam footage of himself. The process results in a video of melting, many-eyed grotesques that are often compared to the works of Francis Bacon . * * * In press materials for "Gradient Descent," Nature Morte stated that the works are created "entirely by AI in collaboration with artists." Obvious even signed their work with the mathematical equation for the algorithm they used, rather than the collective's name. As much as artists and gallerists may enjoy attributing authorship to AI, and emphasize that they cannot anticipate just what an AI algorithm will produce, legally, there is no doubt as to whether it's the human artist or the AI who owns the finished work. AI is simply a tool artists use, the way a photographer uses a camera or Adobe Photoshop in the creation of their images, says Jessica Fjeld, assistant director of the Cyberlaw Clinic at Harvard Law School. "Humans are deeply involved with every aspect of the creation and training of today's AI technologies, and this will continue to be true tomorrow and for the foreseeable future," Fjeld says. "For me, the far more interesting question is who among these people acquire rights in the outputs, not whether the software itself could have any claim of ownership," she adds.

Congressional Research Service reports now officially publicly available (TechDirt, 18 Sept 2018) - For many, many years we've been writing about the ridiculousness of the Congressional Research Service's reports being kept secret . If you don't know, CRS is a sort of in-house think tank for Congress, that does, careful, thoughtful, non-partisan research on a variety of topics (sometimes tasked by members of Congress, sometimes of its own volition). The reports are usually quite thorough and free of political nonsense. Since the reports are created by the federal government, they are technically in the public domain, but many in Congress (including many who work at CRS itself) have long resisted requests to make those works public. Instead, we were left with relying on members of Congress themselves to occasionally (and selectively) share reports with the public, rather than giving everyone access to the reports. Every year or so, there were efforts made to make all of that research available to the public, and it kept getting rejected . Two years ago, two members of Congress agreed to share all of the reports they had access to with a private site put together by some activists and think tanks, creating , which was a useful step forward . At the very least, we've now had two years to show that, when these reports are made public, the world does not collapse (many people within CRS feared that making the reports public would lead to more political pressure). Earlier this year, in the Consolidated Appropriations Act of 2018 , there was a nice little line item to officially make CRS reports publicly available . And, this week, it has come to pass. As announced by Librarian of Congress Carla Hayden , there is now an official site to find CRS reports at . It appears that the available catalog is still limited, but they're hoping to expand backwards to add older reports to the system (a few quick test searches only shows fairly recent reports). But all new reports will be added to the database.

Philippa Ryan: Developing trust through blockchain (ABA Journal, 19 Sept 2018) - Philippa Ryan thinks a lot about trust. A barrister in Australia, she lectures on the subject, and her PhD thesis focused on the breach of trust and the liability of third parties. So when Ryan heard about trustless relationships enabled by blockchain technology, her interest was piqued. However, when she typed "trustless relationships" into her search engine, she says, "the only thing that came up was an ad for Ashley Madison," the notorious dating website for married people looking to keep infidelity discreet. She deleted her search history. Today, Ryan, a lecturer at the University of Technology Sydney, can find more suitable material online. In fact, she's helping fill the gap by writing and speaking around the world on the subject. With knowledge in law and blockchain, she is a leading member of the International Organization for Standardization technical committee on blockchain and distributed ledger technologies. Being a part of Standards Australia and the committee's secretariat, she says the work intends to produce high-level guidelines for governments and technologists to use when legislating or developing the technology around the globe. "What we will be hoping to support is interoperability" between technical and legal systems, says Ryan, 52, who also leads the smart contracts working group at the ISO alongside a German delegation.

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Walmart is betting on the blockchain to improve food safety (TechCrunch, 24 Sept 2018) - Walmart has been working with IBM on a food safety blockchain solution and today it announced it's requiring that all suppliers of leafy green vegetable for Sam's and Walmart upload their data to the blockchain by September 2019 . Most supply chains are bogged down in manual processes. This makes it difficult and time consuming to track down an issue should one like the E. coli romaine lettuce problem from last spring rear its head. By placing a supply chain on the blockchain, it makes the process more traceable, transparent and fully digital. Each node on the blockchain could represent an entity that has handled the food on the way to the store, making it much easier and faster to see if one of the affected farms sold infected supply to a particular location with much greater precision. * * *

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Blockchains for Business Process Management (Cebe's KIT, 1 Oct 2018) - This title is probably a good way to describe most non-cryptocurrency applications of distributed ledgers, and deserves to be adopted. It is the title of a paper (the full title is " Blockchains for Business Process Management -- Challenges and Opportunities "), co-authored by a record 32 researchers and published in the February 2018 the ACM Transactions on Management Information Systems (TMIS). The authors summarize their conclusions as follows: "The BPM and Information Systems communities have a unique opportunity to help shape this fundamental shift toward a distributed, trustworthy infrastructure to promote interorganizational processes."

Law firms can learn from other industries' missteps on cybersecurity awareness and prevention (ABA Journal, 19 Sept 2018; part of the Digital Dangers series) - Equifax. Yahoo. Anthem. Sony. In the past few years, these companies experienced some of the most significant data breaches to date. And all of these companies found themselves subject to intense worldwide media coverage over their failure to secure their information. The industries affected-from health care to entertainment-know all too well that the struggle to secure data in the digital age never ends. While individual businesses within these industries will continue to find themselves vulnerable to breaches, they have an advantage over law firms. They have been fighting this battle for a long time. The legal industry is lagging well behind when it comes to data security, says Rich Santalesa, a member of the boutique cybersecurity firm SmartEdgeLaw Group and of counsel to the New York City-based Bortstein Legal Group. "Law firms as a whole can learn a lot about cybersecurity by looking at other industries," says Santalesa. "Unfortunately, other industries have had to learn their lessons the hard way-by having breaches that have received media attention." Santalesa says data security involves three different, simultaneous focuses: "the technology, the people you have, and needs of the industry in which you work." In addition, data security can't be a one-size-fits-all situation. The cybersecurity needs of a small law firm will be different than the needs of an international firm, just like the needs of Target are different from the needs of a small retail website. However, all law firms, just like all businesses, must pay close attention to the applicable privacy laws, Santalesa says.

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Cybersecurity: Your ethical obligations outlined by legal tech experts (ABA Journal, 25 Sept 2018) - Data breaches are an everyday event, and legal professionals have a specific obligation to protect themselves and their clients from exposure to these threats. The webinar "Darkest Hour? Shining a Light on Cyber Ethical Obligations," is one in a five-part series sponsored by the ABA Cybersecurity Task Force and supported by "The ABA Cybersecurity Handbook: A Resource for Attorneys, Law Firms, and Business Professionals, Second Edition." The first thing lawyers must know is that it's not usually obvious when a firm has been hacked. "The vast majority of the time, (hackers) are using your stolen credentials, as opposed to breaking through technical walls," said panelist Arlan McMillan, chief security officer at Kirkland & Ellis in Chicago. "Then they act like you in the firm's network, accessing all the files you have access to." Another common threat comes through malware in an email, also known as a phishing attack, where an individual is asked to click on a link or open an attachment that has been weaponized in such a way that the attacker gains access to your computer. Nation-state attackers target private businesses in 21 percent of breaches to steal data to advance their espionage activities or interests. And firm employees often don't realize they've been hacked for weeks or months, and they usually find out after being contacted by the FBI. "This is not an IT issue," McMillan said. "This is a risk management issue about how you protect your data." He recommends five steps to improve a firm's security posture: * * *

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Teaming up on cybersecurity (AttorneyAtWork, 26 Sept 2018) - Cybersecurity, the new "IT" word (see what we did there?) has everyone's attention, from small firm lawyers to the BigLaw front office. It's also the focus of the 2018 College of Law Practice Management (COLPM) Futures Conference, "Cybersecurity: This Way There Be Dragons." The Futures Conference, presented with Suffolk University School of Law, will take place Oct. 25-26 in Boston. While the two-day event is chock-full of useful information, one session in particular caught my attention: "Security as a Team Sport: Collaboration - An Essential Tool and a Security Hole." It raises an interesting question: Can all the departments that make up a law firm advance its cybersecurity efforts? Not just IT, but management, finance, human resources, marketing, PR?

Interplanetary spacecraft (Patently-O, 23 Sept 2018) - Patent application publication US 2017/0259946 A1 * * * I'm looking forward to reading the first office action in this case - pretty cool approach for thinking through how to use a hollowed-out asteroid for a manned interplanetary spaceship. In his IDS, inventor Wayne White includes a set of interesting references - including a citation to the Greg Bear's 1985 SciFi novel EON that included an alien hollowed-out asteroid.

Do laws requiring people to report crimes violate the First Amendment? (Eugene Volokh, 26 Sept 2018) - Generally speaking, Americans don't have a legal duty to report crimes they witness or learn about. We must generally testify when subpoenaed, but we need not ourselves alert the authorities. But some states have enacted statutes requiring such reporting (at least as to certain serious crimes); still more require certain job categories (such as teachers, whether in public or private schools) to report certain crimes. Do these laws violate the First Amendment protection against compelled speech? The Supreme Court has generally said that requiring people to say certain things is presumptively unconstitutional; and it has also held , in some contexts, that "compelled statements of 'fact'" are generally treated the same as "compelled statements of opinion." But requirements to convey facts to the government -- in tax returns, census questionnaires, draft registrations, and a vast range of other contexts, federal and state -- are so commonplace that it's not clear that the Supreme Court means to cast them all in doubt. (Recall that if something is treated as a presumptively unconstitutional speech compulsion, the government may rebut that presumption only by showing that the compulsion is the least burdensome means of serving a compelling government interest ; even if there is a compelling interest in collecting federal and state taxes, conducting the census, and so on, courts have never required a showing that the laws are the least burdensome means.) And indeed, when mandatory crime reporting laws have been challenged, state courts have upheld them, generally concluding that compelled reporting of facts to the government doesn't really trigger the compelled speech doctrine. See State v. Grover (Minn. 1989) ("The statute [which requires reporting of suspected child abuse] does not compel the dissemination of an 'ideological point of view,' but only mandates the reporting of information-a requirement not altogether dissimilar from that imposed by the Internal Revenue Code."); White v. State (Tex. Ct. App. 2001) (taking the same view). But in May of this year, the Second Circuit handed down a decision, Burns v. Martuscello , that suggests the laws are unconstitutional after all. In Burns , prison guards placed Burns in involuntary protective custody because he refused to agree to report on future misbehavior by other prisoners. And this penalty, the court held, violated the First Amendment right not to be compelled to speak, even taking into account prisoners' sharply reduced First Amendment rights:

SEC charges firm with deficient cybersecurity procedures (SEC, 26 Sept 2018) - The Securities and Exchange Commission today announced that a Des Moines-based broker-dealer and investment adviser has agreed to pay $1 million to settle charges related to its failures in cybersecurity policies and procedures surrounding a cyber intrusion that compromised personal information of thousands of customers. The SEC charged Voya Financial Advisors Inc. (VFA) with violating the Safeguards Rule and the Identity Theft Red Flags Rule, which are designed to protect confidential customer information and protect customers from the risk of identity theft. This is the first SEC enforcement action charging violations of the Identity Theft Red Flags Rule. According to the SEC's order, cyber intruders impersonated VFA contractors over a six-day period in 2016 by calling VFA's support line and requesting that the contractors' passwords be reset. The intruders used the new passwords to gain access to the personal information of 5,600 VFA customers. The SEC's order finds that the intruders then used the customer information to create new online customer profiles and obtain unauthorized access to account documents for three customers. The order also finds that VFA's failure to terminate the intruders' access stemmed from weaknesses in its cybersecurity procedures, some of which had been exposed during prior similar fraudulent activity. According to the order, VFA also failed to apply its procedures to the systems used by its independent contractors, who make up the largest part of VFA's workforce. "This case is a reminder to brokers and investment advisers that cybersecurity procedures must be reasonably designed to fit their specific business models," said Robert A. Cohen, Chief of the SEC Enforcement Division's Cyber Unit. "They also must review and update the procedures regularly to respond to changes in the risks they face."

Judging judges - how Gavelytics' judicial analytics are reshaping litigation (Robert Ambrogi, 28 Sept 2018) - What if a lawyer could know how a judge is likely to rule in a case or how heavy is a judge's workload? Rick Merrill was a litigator at a large law firm who became frustrated over his inability to get meaningful information about the judges before whom he appeared. So last year, he launched Gavelytics , a California company that uses analytics and artificial intelligence to analyze docket data and provide lawyers with a range of insights about judges' propensities, workloads and leanings. In this episode of LawNext, I visited Gavelytics' office in Santa Monica, where I sat down with Merrill, now the company's CEO, and Justin Brownstone , VP of sales and litigation counsel, to talk about the product one year after its launch, how lawyers use analytics for strategic and competitive purposes, and how analytics and AI are being used more broadly in law. * * *

New Zealand travellers refusing digital search now face $5000 Customs fine (RNZ, 1 Oct 2018) - Travellers who refuse to hand over their phone or laptop passwords to Customs officials can now be slapped with a $5000 fine. The Customs and Excise Act 2018 - which comes into effect today - sets guidelines around how Customs can carry out "digital strip-searches". Previously, Customs could stop anyone at the border and demand to see their electronic devices. However, the law did not specify that people had to also provide a password. The updated law makes clear that travellers must provide access - whether that be a password, pin-code or fingerprint - but officials would need to have a reasonable suspicion of wrongdoing. "It is a file-by-file [search] on your phone. We're not going into 'the cloud'. We'll examine your phone while it's on flight mode," Customs spokesperson Terry Brown said. If people refused to comply, they could be fined up to $5000 and their device would be seized and forensically searched.

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More on the Five Eyes statement on encryption and backdoors (Bruce Schneier, 1 Oct 2018) - Earlier this month, I wrote about a statement by the Five Eyes countries about encryption and back doors. (Short summary: they like them.) One of the weird things about the statement is that it was clearly written from a law-enforcement perspective, though we normally think of the Five Eyes as a consortium of intelligence agencies. Susan Landau examines the details of the statement, explains what's going on, and why the statement is a lot less than what it might seem.


ICYMI: The Cyber Threat to UK Legal Sector (Nat'l Cyber Security Centre, 19 July 2018) - In common with many other industries, the cyber threat to the UK legal sector is significant and the number of reported incidents has grown substantially over the last few years. According to the 2017 PricewaterhouseCoopers Law Firm survey, 60% of law firms reported an information security incident in the last year, up from 42% in 2014. The financial and reputational impact of cyber attacks on law firms is also significant. The costs arise from the attack itself, the remediation and repairing reputational damage by regaining public trust. The SRA reports that over £11 million of client money was stolen due to cyber crime in 2016-17. There are several factors that make law firms an attractive target for cyber attack - they hold sensitive client information, handle significant funds and are a key enabler in commercial and business transactions. The risk may be greater for law firms that advise particularly sensitive clients or work in locations that are hostile to the UK. For example, firms acting for organisations that engage in work of a controversial nature such as Life Sciences or the energy sector may also be targeted by groups with a political or ideological agenda. The move to offer legal services digitally will not only provide new opportunities but also further avenues for malicious cyber exploitation. The primary threat to the UK legal sector stems from cyber criminals with a financial motive. However, nation states are likely to play an increasingly significant role in cyber attacks at a global level, to gain strategic and economic advantage. There has also been some growth in the hacktivist community targeting law firms to achieve political, economic or ideological ends. The most significant cyber threats that law firms should be aware of are: * * *


(note: link-rot has affected about 50% of these original URLs)

Oregon: Publishing our laws online is a copyright violation (Ars Technica, 16 April 2008) - The State of Oregon takes exception to Web sites that republish the state's Revised Statutes in full, claiming that the statutes contain copyrighted information in the republication causes the state to lose money it needs to continue putting out the official version of the statutes. Oregon's Legislative Counsel, Dexter Johnson, has therefore requested that legal information site Justia remove the information or (preferably) take out a paid license from the state. All citizens are legally presumed to know the law, so claiming copyright over it might seem like an odd position for a state to take; wouldn't massive copying be a goal rather than a problem? But in his letter to Justia, Johnson makes a more nuanced case. While the text of the law is not copyrighted, the "arrangement and subject-matter compilation of Oregon statutory law, the prefatory and explanatory notes, the leadlines and numbering for each statutory section, the tables, index and annotations and other such incidents" are under copyright. A quick visit to the Legislative Counsel's web site shows that Johnson is serious about two things: order forms and copyright. The only items in red on the entire page are a copyright notice that includes "Oregon Laws, the Oregon Revised Statutes, and all specialty publications" and a set of links to order forms for such scintillating works as Landlord and Tenant Laws of Oregon 2008. The state also makes the complete text of its laws available online, and it welcomes sites like Justia to link these up. Republishing them, though, is strongly frowned upon, and Johnson indicates his hope that "it will not be necessary to litigate this matter" (translation: "we are willing to litigate this matter").

French court eviscerates website immunity for user-generated content (Steptoe & Johnson's E-Commerce Law Week, 24 April 2008) - In France, as in the United States, Internet companies are supposed to enjoy legal protection from suits over content provided by third parties. But, if recent U.S. decisions have chipped away at the immunity available to websites under section 230(c)(1) of the Communications Decency Act, a recent French decision has blown a gaping hole in the defenses available under French law. Article 6-I-2 of the French Law for Confidence in the Digital Economy (LCEN) (which mirrors Article 14 of the EU E-Commerce Directive) states that public providers of "communications services" cannot be held liable for "information stored at the request of a recipient of those services" if the provider "did not have actual knowledge of [the] illegal nature" of the information, or if the provider "acted expeditiously to remove the data or make access impossible" after learning of its illegality. But the Paris Court of First Instance held last month that was not immune for hosting a user-submitted link on its service, and was liable as an editor for its putative involvement in the "organization and presentation" of the link and associated headline. This decision extends a trend in which European courts have increasingly been willing to find Internet companies liable for user-generated content. If this trend continues, websites and Internet providers will be looking at major legal problems in Europe.

Saturday, September 15, 2018

MIRLN --- 26 Aug – 15 Sept 2018 (v21.12)

MIRLN --- 26 Aug - 15 Sept 2018 (v21.12) --- by Vince Polley and KnowConnect PLLC



Intel rips up microcode security fix license that banned benchmarking (The Register, 23 Aug 2018) - Intel has backtracked on the license for its latest microcode update that mitigates security vulnerabilities in its processors - after the previous wording outlawed public benchmarking of the chips. The software, released this month , counters the Foreshadow aka L1TF Spectre-related flaws in its CPUs. However, its terms of use and redistribution were problematic. Following The Register 's report on Tuesday that Linux distro Debian decided to withhold packages containing the microcode security fix over concerns about its license, open-source pioneer Bruce Perens out Intelfor trying to gag netizens. Intel's gagging order came in the form of this license clause: "You will not, and will not allow any third party to … publish or provide any Software benchmark or comparison test results." That made it impossible for free-software bastion Debian to push Intel's microcode to its users as a security update. The reason for Intel's insistence on a vow of silence is that - even with the new microcode in place - turning off hyper-threading is necessary to protect virtual machines from attack via Foreshadow - and that move comes with a potential performance hit. Red Hat, which evidently didn't get the memo to shut up about benchmarks, earlier this month noted : "The performance impact when HT is disabled is dependent on many factors. Measured impact ranges from a +30 per cent gain, to -50 per cent loss and beyond. Most HT testing, however, showed losses in the 0-30 per cent range." Predictably, Intel's contractual omertà had the opposite effect and drew attention to the problem. "Performance is so bad on the latest Spectre patch that Intel had to prohibit publishing benchmarks," said Lucas Holt, MidnightBSD project lead, via Twitter. top

Patent office shows new respect for software (Patently-O, 27 Aug 2018) - Software patents and applications are making a quiet comeback under Director Andrei Iancu's leadership of the U.S. Patent and Trademark Office. This is a welcome shift, since thousands of applications have been held captive in the Office in the wake of Supreme Court decisions culminating in Alice v. CLS Bank , 134 S.Ct. 2347 (2014). In the hands of reductionists, the Alice formula for rejection/invalidation was easy to apply. Every invention can be reduced to an abstract idea. Whatever is left can be explained away as "routine" or "conventional." In the last four years, many software patent applications suffered repeated rejection and the ignoble death of abandonment for lack of will or lack of funds. Even when granted, many software patents were mowed down in inter partes review (IPR) in the Patent Trial and Appeal Board (PTAB). The Federal Circuit's February 2018 decision in Berkheimer , 881 F.3d 1360 (citing Alice and other authority), paved the way for recent progress, holding that when there are genuine issues of material fact concerning alleged routineness or conventionality, evidence of the same must be presented before patent claims properly can be invalidated on such grounds. * * * top

Microsoft will soon automatically transcribe video files in OneDrive for Office 365 subscribers (TechCrunch, 28 Aug 2018) - today announced a couple of AI-centric updates for OneDrive and SharePoint users with an Office 365 subscription that bring more of the company's machine learning smarts to its file storage services. The highlight of these announcements is that starting later this year, both services will get automated transcription services for video and audio files. While video is great, it's virtually impossible to find any information in these files without spending a lot of time. And once you've found it, you still have to transcribe it. Microsoft says this new service will handle the transcription automatically and then display the transcript as you're watching the video. The service can handle over 320 file types, so chances are it'll work with your files, too. top

Open internet saves accused copyright infringer from liability (Patently-O, 29 Aug 2018) - Cobbler Nevada, LLC v. Gonzales ( 9th Cir. 2018 ) This copyright lawsuit involves cute Adam Sandler movie titled The Cobbler. In the movie, Sandler's character free-rides off of the experiences of others by using a magical shoe-cobbling machine. The movie copyright holders did not reciprocate that freedom when American Pirates began downloading and distributing the movie through BitTorrent. Cobbler-Nevada was able to trace the Internet Protocol (IP) address associated with the infringing activity and then filed suit in a John Doe lawsuit. Comcast responded to a subpoena in the case with information that the IP address was assigned to its customer Thomas Gonzales. The Copyright holder then amended its complaint to name Gonzales - accusing him of copyright infringement as well as contributory copyright infringement (for failing to secure his internet connection). Note here that Gonzales operates an adult care home and that the internet service was open to residents and visitors. The appeal here focuses on the pleadings and whether the complaint states a claim. In Iqbal , the Supreme Court explained that a complaint must be plausible - allegation of plausible facts that create a plausible "entitlement to relief." Reviewing the allegations here, the 9th Circuit found that the facts alleged against Gonzalez here are "not enough to raise a right to relief above a speculative level." (quoting Twombly ): * * * top

Bitcoin and other cryptocurrencies are useless (The Economist, 30 Aug 2018) - An old saying holds that markets are ruled by either greed or fear. Greed once governed cryptocurrencies. The price of Bitcoin, the best-known, rose from about $900 in December 2016 to $19,000 a year later. Recently, fear has been in charge. Bitcoin's price has fallen back to around $7,000; the prices of other cryptocurrencies, which followed it on the way up, have collapsed, too. No one knows where prices will go from here. Calling the bottom in a speculative mania is as foolish as calling the top. It is particularly hard with cryptocurrencies because, as our Technology Quarterly this week points out, there is no sensible way to reach any particular valuation. It was not supposed to be this way. Bitcoin, the first and still the most popular cryptocurrency, began life as a techno-anarchist project to create an online version of cash, a way for people to transact without the possibility of interference from malicious governments or banks. A decade on, it is barely used for its intended purpose. Users must wrestle with complicated software and give up all the consumer protections they are used to. Few vendors accept it. Security is poor. Other cryptocurrencies are used even less. With few uses to anchor their value, and little in the way of regulation, cryptocurrencies have instead become a focus for speculation. Some people have made fortunes as cryptocurrency prices have zoomed and dived; many early punters have cashed out. Others have lost money. It seems unlikely that this latest boom-bust cycle will be the last. Economists define a currency as something that can be at once a medium of exchange, a store of value and a unit of account. Lack of adoption and loads of volatility mean that cryptocurrencies satisfy none of those criteria. That does not mean they are going to go away (though scrutiny from regulators concerned about the fraud and sharp practice that is rife in the industry may dampen excitement in future). But as things stand there is little reason to think that cryptocurrencies will remain more than an overcomplicated, untrustworthy casino. top

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Marshall Islands warned against adopting digital currency (BBC, 11 Sept 2018) - The Republic of the Marshall Islands has been warned against adopting a digital currency as a second form of legal tender. The International Monetary Fund (IMF) said the country, which consists of hundreds of islands in the Pacific Ocean, should "seriously reconsider". Currently, only the US dollar counts as legal tender in the islands. A law to adopt a digital currency named "Sovereign" alongside the dollar was passed in February. The first virtual coins are due to be issued to members of the public via an initial coin offering (ICO) later this year. However, IMF directors said the potential benefits of the move were much smaller than the potential costs of "economic, reputational and governance risks". "[Marshall Island] authorities should seriously reconsider the issuance of the digital currency as legal tender," wrote the directors in their report, which was first spotted by cryptocurrency news site Coindesk . There is just one domestic commercial bank in the country and it is at risk of losing its only correspondent banking relationship with another bank in the US. top

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FINRA takes down an unregistered cryptocurrency security (TechCrunch, 12 Sept 2018) - FINRA, the non-profit organization that tasks itself with policing the securities industry, is charging Timothy Tilton Ayre of Agawam, Mass. with fraud and unlawful distribution of unregistered cryptocurrency securities. Ayre claimed that users could buy equity in his company, Rocky Mountain Ayre, Inc., buy purchasing HempCoin, a cryptocurrency. From the release : In the complaint, FINRA alleges that, from January 2013 through October 2016, Ayre attempted to lure public investment in his worthless public company, Rocky Mountain Ayre, Inc. (RMTN) by issuing and selling HempCoin - which he publicized as "the first minable coin backed by marketable securities" - and by making fraudulent, positive statements about RMTN's business and finances. RMTN was quoted on the Pink Market of OTC Markets Group and traded over the counter. According to the complaint, FINRA also alleges that in June 2015, Ayre bought the rights to HempCoin and repackaged it as a security backed by RMTN common stock. Ayre marketed HempCoin as "the world's first currency to represent equity ownership" in a publicly traded company and promised investors that each coin was equivalent to 0.10 shares of RMTN common stock. Investors mined more than 81 million HempCoin securities through late 2017 and bought and sold the security on two cryptocurrency exchanges. FINRA charges Ayre with the unlawful distribution of an unregistered security because he never registered HempCoin and no exemption to registration applied. Because FINRA is not a government body its charges are rarely very onerous but, in the case of brokerage fraud, Ayre could face further scrutiny if he tries to sell securities in the future. The company, Rocky Mountain Ayre, seems to be associated with a restaurant and medical marijuana sales operation, although it is unclear what the company actually does. top

FBI fights viral influence campaigns with informational videos (Nextgov, 31 Aug 2018) - With midterm elections fast approaching, the FBI on Thursday released a dozen informational videos detailing ways political campaigns can protect themselves against cyberattacks from foreign powers. The Protected Voices initiative covers a wide range of cybersecurity topics-including software patching, secure communications, password protection and browser safety-that can help campaigns fend off the most common attacks. "Foreign influence operations … are not a new problem," officials said on the site, "but the interconnectedness of the modern world, combined with the anonymity of the Internet, have changed the nature of the threat and how the FBI and its partners must address it." In the videos, FBI personnel explain how foreign actors use phishing emails, public Wi-Fi and insecure routers to infiltrate and disrupt campaigns, and how virtual private networks, cloud services and cyber hygiene principles could mitigate those threats. They stress that anyone who goes online regularly could benefits from such cyber best practices, not just political campaigns. [ Polley : these 5-minute videos are very good, and usable by everybody, not just election campaigns.] top

Court shuts down feds' attempt to expand the 'border search' exception to cover inland GPS monitoring (TechDirt, 6 Sept 2018) - Cyrus Farivar of Ars Technica has put together a hell of a read from a suppression order obtained by defendants in a drug case . It involves a truckload of cheese danishes, cocaine trafficking, and the US government's attempt to apply the "border exception" everywhere in the United States. At the heart of it is a GPS tracking device. The government installed it on a truck driven by suspected drug smugglers when it crossed the Canadian border into the US. It then used that device to track the truck as it traveled down to California. The resulting bust only uncovered some bags of sugar, but a previous stop of the same truck had turned up 194 kilos of cocaine. The defendants in the case have had the evidence suppressed. The ruling [PDF] was handed down late last month. It points to the Supreme Court's 2012 Jones decision , which held that placing GPS devices on vehicles was a search under the Fourth Amendment. Warrants are needed to place the devices. Long-term tracking is also out of the question if warrants aren't obtained. The government argued it didn't need a warrant because it placed the device on the truck at the Canadian border. This would be the " border exception " to the Fourth Amendment -- one carved out by the courts which allows all kinds of warrantless searches to be performed in the name of border security. But the judge doesn't buy this attempt to salvage ill-gotten evidence. The government cites a number of cases involving searches of vehicles performed at the border -- some more invasive than others -- where warrants weren't needed. The court finds these citations unavailing because they don't actually address what happened here: the placement of a GPS device at the border which was subsequently used to track a vehicle as it traveled far beyond the Canadian border. top

Prosecutors charge Russian accused of hacking JP Morgan, Dow Jones (TechCrunch, 10 Sept 2018) - New York prosecutors have extradited a Russian hacker accused of breaking into one of the world's largest banking institutions. Moscow resident Andrei Tiurin, 35, was charged Friday after he was extradited from neighboring Georgia, with the theft of over 80 million records from the bank in 2014. The alleged hacker is said to have been under the direction of Gery Shalon, who was separately indicted a year later following the breach. Tiurin was also charged wire and securities fraud, and aggravated identity theft, racking up the maximum possible prison time to over 80 years. Although the indictment did not name the New York-based financial news agency, The Wall Street Journal previously reported the victim as its parent company Dow Jones , following the following the first round of charges in 2015. Tiurin was also accused of trying to artificially inflate the "price of certain stocks publicly traded in the United States," and obtained "hundreds of millions of dollars in illicit proceeds" from various hacking campaigns. top

Vizio, sued for making creepy smart TVs, will notify customers via the TVs (ArsTechnica, 10 Sept 2018) - In what is likely a first in the industry, Vizio is on the verge of agreeing to display a class-action lawsuit message through its previously sold "Smart TV" televisions as part of a legal settlement. This message is meant to alert customers who bought the TV that they will be party to the forthcoming settlement and likely will get a small amount of money. As Ars has reported previously, the manufacturer has been under scrutiny since a revelation that it was snooping on its customers. The tracking started in February 2014 on both new TVs and previously sold devices that didn't originally ship with ACR software installed. The software periodically appended IP addresses to the collected data and also made it possible for more detailed personal information-including age, sex, income, marital status, household size, education level, home ownership, and home values-to be associated. In a court filing submitted last Wednesday, lawyers for both sides asked the judge to push back approval of the preliminary settlement to October 3. "The Parties are developing a class notice program with direct notification to the class through VIZIO Smart TV displays, which requires testing to make sure any TV notice can be properly displayed and functions as intended," they wrote. "The additional time requested will allow the parties to confirm that the notice program proposed in the motion for preliminary approval is workable and satisfies applicable legal standards." top

In a few days, credit freezes will be fee-free (Krebs on Security, 11 Sept 2018) - Later this month, all of the three major consumer credit bureaus will be required to offer free credit freezes to all Americans and their dependents. Maybe you've been holding off freezing your credit file because your home state currently charges a fee for placing or thawing a credit freeze, or because you believe it's just not worth the hassle. If that accurately describes your views on the matter, this post may well change your mind. * * * top

UK's mass surveillance regime violated human rights law, finds ECHR (TechCrunch, 13 Sept 2018) - In another blow to the UK government's record on bulk data handling for intelligence purposes the European Court of Human Rights (ECHR) has ruled that state surveillance practices violated human rights law. Arguments against the UK intelligence agencies' bulk collection and data sharing practices were heard by the court in November last year . In today's ruling the ECHR has ruled that only some aspects of the UK's surveillance regime violate human rights law. So it's not all bad news for the government - which has faced a barrage of legal actions (and quite a few black marks against its spying practices in recent years) ever since its love affair with mass surveillance was revealed and denounced by NSA whistleblower back in 2013. The judgement reinforces a sense that the government has been seeking to push as close to the legal line as possible on surveillance, and sometimes stepping over it - reinforcing earlier strikes against legislation for not setting tight enough boundaries to surveillance powers, and likely providing additional fuel for fresh challenges. The complaints before the ECHR focused on three different surveillance regimes: 1) The bulk interception of communications (aka 'mass surveillance'); 2) Intelligence sharing with foreign governments; and 3) The obtaining of communications data from communications service providers. * * * top

Security risks of government hacking (Bruce Schneier, 13 Sept 2018) - Some of us -- myself included -- have proposed lawful government hacking as an alternative to backdoors. A new report from the Center of Internet and Society looks at the security risks of allowing government hacking. They include: Disincentive for vulnerability disclosure; Cultivation of a market for surveillance tools; Attackers co-opt hacking tools over which governments have lost control; Attackers learn of vulnerabilities through government use of malware; Government incentives to push for less-secure software and standards; and Government malware affects innocent users. These risks are real, but I think they're much less than mandating backdoors for everyone. From the report's conclusion: Government hacking is often lauded as a solution to the "going dark" problem. It is too dangerous to mandate encryption backdoors, but targeted hacking of endpoints could ensure investigators access to same or similar necessary data with less risk. Vulnerabilities will never affect everyone, contingent as they are on software, network configuration, and patch management. Backdoors, however, mean everybody is vulnerable and a security failure fails catastrophically. In addition, backdoors are often secret, while eventually, vulnerabilities will typically be disclosed and patched. The key to minimizing the risks is to ensure that law enforcement (or whoever) report all vulnerabilities discovered through the normal process, and use them for lawful hacking during the period between reporting and patching. Yes, that's a big ask, but the alternatives are worse. This is the canonical lawful hacking paper [from 2014]. top

How the Times verifies eyewitness videos (Sept 14, 2018) - Was a video of a chemical attack really filmed in Syria? What time of day did an airstrike happen? Which military unit was involved in a shooting in Afghanistan? Is this dramatic image of glowing clouds really showing wildfires in California? These are some of the questions the video team at The New York Times has to answer when reviewing raw eyewitness videos, often posted to social media. It can be a highly challenging process, as misinformation shared through digital social networks is a serious problem for a modern-day newsroom. Visual information in the digital age is easy to manipulate, and even easier to spread. What is thus required for conducting visual investigations based on social media content is a mix of traditional journalistic diligence and cutting-edge internet skills, as can be seen in our recent investigation into the chemical attack in Douma, Syria . The following provides some insight into our video verification process. It is not a comprehensive overview, but highlights some of our most trusted techniques and tools. * * * top


New draft article: "Compelled Decryption and the Privilege Against Self-Incrimination" (Volokh Conspiracy, Orin Kerr, 12 Sept 2018) - I recently posted to SSRN a new draft article, " Compelled Decryption and the Privilege Against Self-Incrimination ," forthcoming in the Texas Law Review . Here's the abstract: This essay considers the Fifth Amendment barrier to orders compelling a suspect to enter in a password to decrypt a locked phone, computer, or file. It argues that a simple rule should apply: An assertion of privilege should be sustained unless the government can independently show that the suspect knows the password. The act of entering in a password is testimonial, but the only implied statement is that the suspect knows the password. When the government can prove this fact independently, the assertion is a foregone conclusion and the Fifth Amendment poses no bar to the enforcement of the order. This rule is both doctrinally correct and sensible policy. It properly reflects the distribution of government power in a digital age when nearly everyone is carrying a device that comes with an extraordinarily powerful lock. As regular readers may note, I've blogged about these issues before. The new draft builds on the themes of my blog posts, elaborating on the argument and offering my responses to several counteraguments. Comments are very welcome, especially critical ones (and especially from techies). top

Ethics of Using Artificial Intelligence to Augment Drafting Legal Documents (David Hricik in TAMU's Journal of Property Law, 2018) - Skynet is not and may never be self-aware, but machines are already doing legal research, drafting legal documents, negotiating disputes such as traffic tickets and divorce schedules, and even drafting patent applications. Machines learn from us, and each other, to augment the ability of lawyers to represent clients - and even to replace lawyers completely. While it also threatens lawyers' jobs, the exponential increase in the capacity of machines to transmit, store, and process data presents the opportunity for lawyers to use these services to provide better, cheaper, or faster legal representation to clients. By way of familiar example, instead of determining whether a precedential opinion remains "good law" by manually going through multiple books - "Shepardizing a case" as an older lawyer would put it - lawyers can use on-line legal services to instantly learn, not just whether an earlier decision has been limited or overruled, but the depth of analysis given to the issue by a later court opinion. Because technology may be able to do some tasks better, or at a lower cost, or both, lawyers should use technology when it will, considering the risks, benefit clients. That obligation requires lawyers to stay "keep abreast of changes in. . . practice, including the benefits and risk associated with relevant technology. . . ." Assessing the benefits and risks of a particular technology obviously requires due diligence into the practical and legal risks of the technology, and comparing that to the benefits it brings to a representation. That assessment requires applying existing ethical rules in a process that can best be analyzed as comprising two stages. The first step requires determining whether the technology does what it is supposed to do in a reasonably competent manner. For example, just as a lawyer could not use a paralegal to use a form to create the first draft of a contract for a client if the paralegal's work was known to be unreliable or unreasonably expensive, a lawyer cannot use an automated contract drafting service with the same shortcomings. The first step, in other words, requires reasonable efforts by the lawyer to determine the competency of the service. If the service does not provide competent assistance, the lawyer obviously cannot use it. The second step requires determining whether a competent service can be used while complying with the ethical obligations of the lawyer, beyond competency. Just as a lawyer must ensure that non-lawyer employees and agents maintain the confidentiality of client information consistent with the lawyer's ethical obligations, he must do so with all services provided by third parties, including automated services. Likewise, lawyers must ensure non-lawyer assistants - even those who are independent contractors hired for a particular matter, and not firm employees - must not have conflicts of interest or violations of other ethical rules. This article focuses on the second step in the due diligence process. top


(note: link-rot has affected about 50% of these original URLs)

Steal this Wi-Fi (Wired, Article by Bruce Schneier, 10 Jan 2008) - Whenever I talk or write about my own security setup, the one thing that surprises people - and attracts the most criticism - is the fact that I run an open wireless network at home. There's no password. There's no encryption. Anyone with wireless capability who can see my network can use it to access the internet. To me, it's basic politeness. Providing internet access to guests is kind of like providing heat and electricity, or a hot cup of tea. But to some observers, it's both wrong and dangerous. top

FTC adopts final Can-Spam rules (Steptoe & Johnson's E-Commerce Law Week, 22 May 2008) - The Federal Trade Commission announced on May 12 that it had approved new rules governing the regulation of commercial email under the CAN-SPAM Act. Most notably, the rules modify the definition of "sender" to address situations where a single email message contains advertisements from multiple parties. In such a situation, if only one person is identified in the "from" line of the commercial email, then this person will generally be considered the "sole sender" of the email and will be exclusively responsible for handling opt-out requests. Moreover, the rules state that a sender may not require a recipient of a commercial email message to pay a fee, provide information other than an email address and opt-out preferences, or take any steps other than sending a reply email or visiting a single webpage in order to opt-out of future emails. The rules become effective July 7, 2008. top

Saturday, August 25, 2018

MIRLN --- 29 July - 25 August 2018 (v21.11)

MIRLN --- 29 July - 25 August 2018 (v21.11) --- by Vince Polley and KnowConnect PLLC



South Carolina requires insurers to have plans safeguarding customer data (ABA Journal, 6 July 2018) - Less than a year from now, insurers doing business in South Carolina will be required to have a "comprehensive information security program" that protects consumer data. As of Jan. 1, 2019, insurers licensed in the state will be required to create and maintain data security standards based on an ongoing risk assessment, oversee third-party service providers, investigate breaches and notify regulators within 72 hours of a cyber event that affects more than 250 state residents. "It provides some consumer protection to further help safeguard that extremely important and private information," said South Carolina Department of Insurance director Ray Farmer after the passage of the Insurance Data Security Act in May, according to the South Carolina Radio Network . "It requires insurance companies to beef up their data security." * * * The law was based on model legislation created by the National Association of Insurance Commissioners, a standards setting body. The committee that drafted the legislation was chaired by Farmer. Maria Sasinoski, an associate at the Pittsburgh office of McGuireWoods LLP, told Bloomberg BNA that insurers like the NAIC model because it will "ward off" a patchwork of different state-level laws. She said that Rhode Island is also considering a version of the legislation. In South Carolina, the law, including its notification requirement, goes into effect Jan. 1, 2019, and insurers will be required to provide written security plans to state regulators starting July 1, 2019. top

- and -

Cyber experts: Attacks inevitable, preparation for law firms essential (ABA Journal, 4 Aug 2018) - After the 9/11 attack on the United States, a national commission that analyzed the tragedy found that the country's national security apparatus failed in two major regards: it showed a lack of imagination for the unthinkable and no unity in communication and cooperation to face the developing terrorist threat. Fast forward 17 years. A panel at the American Bar Association Annual Meeting in Chicago raised concerns Saturday that U.S. businesses -- and law firms particularly -- might be going down a similar pre-9/11 path by failing to comprehend the full threat, vulnerabilities and consequences of cyberattacks from around the globe. The program, Cybersecurity Wake Up Call: The Business You Save May Be Your Own , included two key players in the cybersecurity space during the Obama administration - Rajesh De, former general counsel of the National Security Agency, and Suzanne Spaulding, former undersecretary for National Protection and Programs Directorate in the Department of Homeland Security. Also participating were lawyers Thomas Smedinghoff and moderator Ruth Hill Bro, both members of the ABA Cybersecurity Legal Task Force , which sponsored the 90-minute program. The consensus of the panel was that cyberattacks are inevitable, and that preparation for law firms was necessary not only to avoid the hardware issues but also post-attack consequences. A post-attack communications plan was essential, the panelists said. So is thorough due diligence and planning with vendors and others in the supply chain to avoid legal consequences after a breach. The panelists also explored legal issues related to payments and other issues dealing with "ransomware," the concept of criminals shaking down businesses and others for money and bitcoins through cyber breaches. De noted this is a corporate governance issue, and that there should be a plan when an incident occurs on notifying authorities, deciding whether a payment should be made and how to communicate the situation to stakeholders, including governing boards. "It is always the disclosure issues that tend to trip people up," said De, a partner at Mayer Brown in Washington, D.C. Bro, who co-chairs the task force which recently published a book, " The ABA Cybersecurity Handbook: A Resource for Attorneys, Law Firms and Business Professionals ," reminded the audience that cybersecurity "is a process not a product" requiring persistent vigilance and constant review. She touted the motto of the Boy Scouts: "Be prepared." top

- and -

Ohio enacts law giving affirmative defense to businesses which beef up cybersecurity (Ride The Lightning, 8 Aug 2018) - Columbus Business First reported on August 3 rd that Ohio Governor John Kasich had signed into law a bill that aims to prod businesses to beef up security by giving companies something of a "safe harbor" if they voluntarily invest in better cybersecurity to protect customer information. The Ohio Data Protection Act provides an affirmative legal defense for companies that suffer a data breach who are then sued for not implementing reasonable security protocols. Eligible organizations may rely on conformity to certain cybersecurity frameworks as an affirmative defense against tort claims in data breach litigation. To qualify for this new defense, the organization must implement a written cybersecurity program designed to (1) protect the security and confidentiality of personal information, (2) protect against anticipated threats or hazards to the security or integrity of personal information, and (3) protect against unauthorized access to and acquisition of personal information that is likely to result in a material risk of identity theft or fraud. The scale of the cybersecurity program should be appropriate to the organization based on its size and complexity, the nature and scope of its activities, the sensitivity of the personal information protected under the program, the cost and availability of tools to improve its information security and the resources available to the organization. This is a good recognition that one size does not fit all, but makes conforming to the safe harbor more difficult to establish. * * * top

- and -

NIST Small Business Cybersecurity Act becomes law (Security Week, 16 Aug 2018) - Donald Trump signed the NIST Small Business Cybersecurity Act, S. 770 (formerly known as the MAIN STREET Cybersecurity Act ) into law on Tuesday (August 14, 2018). It requires NIST to "disseminate clear and concise resources to help small business concerns identify, assess, manage, and reduce their cybersecurity risks." The resources to be provided are informational. They must be generally applicable to a wide range of small businesses; vary with the nature and size of small businesses; promote cybersecurity awareness and workplace cybersecurity culture; and include practical application strategies. The resources must further be technology-neutral and compatible with COTS solutions; and as far as possible consistent with international standards and the Stevenson-Wydler Technology Innovation Act of 1980. Use of these resources by small businesses is voluntary. * * * Small businesses, and many large organizations, struggle to comply with the existing NIST Security Framework. "This change sets the stage for greater compliance and readiness from smaller organizations who previously thought that NIST compliance was too costly or complex to obtain," adds Dr. Bret Fund, founder and CEO at SecureSet. The basic problem is small organizations cannot afford extensive cybersecurity resources in-house, while many still believe they will not be a target for cyber attackers. * * * Counterintuitively, small businesses suffer more from a successful attack than do the larger companies. "In fact," suggests Anupam Sahai, Vice President of Product Management at Cavirin, "recent reports shows that smaller businesses lose proportionately more to cyberattacks since they are targeted just as often, and are less able to recover due to less resilient infrastructures." top

5 lessons learned on data breach management after 2 months of GDPR: Friday is calling (Mayer Brown, 25 July 2018) - The GDPR mandates controllers and processors to have technical and organizational measures in place to ensure an appropriate level of security for personal data. They should have the ability to detect, address and report data breaches in a timely manner. Many internal procedures were drafted in anticipation of the entry into force of the GDPR. Now, two months after GDPR Day, here are five lessons learned from data breach management, as, yes, numerous personal data breaches have occurred since then, of which authorities were notified, in pretty significant numbers and in a variety of sectors. * * * [ Polley : Interesting; also notable for quickly conveying some useful lessons. More to come, I'm sure.] top

Welcome to the Quiet Skies (Boston Globe, 28 July 2018) - Federal air marshals have begun following ordinary US citizens not suspected of a crime or on any terrorist watch list and collecting extensive information about their movements and behavior under a new domestic surveillance program that is drawing criticism from within the agency. The previously undisclosed program, called "Quiet Skies," specifically targets travelers who "are not under investigation by any agency and are not in the Terrorist Screening Data Base," according to a Transportation Security Administration bulletin in March. But some air marshals, in interviews and internal communications shared with the Globe, say the program has them tasked with shadowing travelers who appear to pose no real threat - a businesswoman who happened to have traveled through a Mideast hot spot, in one case; a Southwest Airlines flight attendant, in another; a fellow federal law enforcement officer, in a third. It is a time-consuming and costly assignment, they say, which saps their ability to do more vital law enforcement work. Already under Quiet Skies, thousands of unsuspecting Americans have been subjected to targeted airport and inflight surveillance, carried out by small teams of armed, undercover air marshals, government documents show. The teams document whether passengers fidget, use a computer, have a "jump" in their Adam's apple or a "cold penetrating stare," among other behaviors, according to the records. Air marshals note these observations - minute-by-minute - in two separate reports and send this information back to the TSA. All US citizens who enter the country are automatically screened for inclusion in Quiet Skies - their travel patterns and affiliations are checked and their names run against a terrorist watch list and other databases, according to agency documents. top

Fending off cyberattacks in international arbitration (NY Law Journal, 3 Aug 2018) - In the context of ever-escalating data breaches, international arbitration is not immune to cyberattacks. One widely reported cyberattack targeted the Permanent Court of Arbitration in The Hague (PCA) in July 2015, while the court was administering a hearing between the Philippines and China over disputed territorial waters in the South China Sea. During that arbitration, a malicious software originating in China targeted the PCA's website, the Philippines Department of Justice, the law firm representing the Philippines in the arbitration, and anyone visiting a specific page of the PCA devoted to the dispute, allowing the hackers to access classified information. A similar cyberintrusion occurred in 2008 in the case of Libananco Holdings Co. v. Rep. of Turkey (ICSID Case No ARB/06/9) , where, in the course of a separate court-ordered money laundering investigation, the Turkish government intercepted privileged communications and materials that had been exchanged between Libananco and its counsel in connection with the arbitration. It is therefore of no surprise that international arbitration may become a prime target for cybercriminals. This is for various reasons. First , as a neutral forum for the resolution of complex international disputes, international arbitration often involves parties that are themselves prominent targets of cyberattacks such as multinational corporations, governments, state entities, and public figures. Second , in these types of disputes, digital discovery is the norm and inevitably involves the exchange of highly sensitive information such as trade secrets, business plans, and case strategy, which have the potential of influencing politics and moving financial markets. Third , the risk of exposure to cyberattacks is relatively high because of the way international arbitration is conducted. The information collected is typically organized in easily searchable data sets, such as pleadings, witness statements, expert reports, transcripts of hearings, and arbitral deliberation materials, including draft and final awards. Each fixed or portable device (computers, laptops, smartphones, tablets), cloud-based storage (file-sharing platforms, virtual data rooms), and courtroom technology (real-time translations, live e-transcripts, telepresence technologies) is a digital portal allowing for unauthorized access to arbitration-related materials. The fact that the information is hosted and exchanged by a variety of digitally interdependent players such as in-house and outside counsel, government officers and agencies, arbitral institutions and tribunals, experts and witnesses, and other custodians of large electronic information repositories only increases the likelihood that a data breach of one participant will impact all participants. The data custodians involved in the process also tend to sit in different jurisdictions and communicate through various means, including unencrypted email. Therefore, large amounts of information travel around the world in an unsecured way. Even larger amounts of information may be compromised if U.S.-style discovery takes place. top

Videorecording public servants in public (Volokh Conspiracy, 4 Aug 2018) - I think the federal circuit court decisions recognizing a right to videorecord in public places -- decisions that have so far dealt with recording police officers -- are correct: A right to speak must include some right to gather the information needed to speak (what is often labeled the "right to gather news"), and recording what government officials do in public places is important to be able to speak credibly about it. * * * But courts haven't figured out how far this extends, especially when we get beyond recording the police. Here is an interesting 2017 opinion ( People v. Rivas ) from the New York intermediate appellate court; Rivas was convicted of fourth-degree stalking, which punishes anyone who "intentionally, and for no legitimate purpose, engages in a course of conduct directed at a specific person, and knows or reasonably should know that such conduct ... is likely to cause reasonable fear of material harm to the physical health, safety or property of such person," and of first-degree harassment, which punishes anyone who "intentionally and repeatedly harasses another person by following such person in or about a public place or places or by engaging in a course of conduct or by repeatedly committing acts which places such person in reasonable fear of physical injury." * * * top

Legal protection for ethical hackers (Ride The Lightning, 6 Aug 2018) - The Washington Post (sub. req.) reported on August 3 rd about a new project called which is dedicated to providing legal protection to ethical hackers. The site itself says is a collaborative and vendor-agnostic project to standardize best practices around safe harbor for good-faith security research. The project originated with the cybersecurity firm Bugcrowd and a University of California researcher. It aims to protect well-intentioned hackers from legal action when they reveal security vulnerabilities in an organization's networks or software. The project offers companies, academic institutions or even government agencies a standard legal agreement they can post that fundamentally says that it's okay to hack us if you do it in good faith. It tells ethical hackers that they won't get sued or face criminal charges if they find a flaw on an organization's systems and report it responsibly. Laws such as the Computer Fraud and Abuse Act and the Digital Millennium Copyright Act don't contain protections for researchers who disclose bugs, creating a legal gray area discouraging ethical hacking. In recent years, companies have sued or threatened legal action against researchers who have uncovered serious vulnerabilities - sometimes to prevent an embarrassing flaw from being disclosed publicly. In one example last year, the FBI investigated security researchers in Georgia who discovered that millions of voter registration records were publicly accessible on the state's election website. And boy oh boy, was that something that needed to be disclosed! Understandably, researchers are sometimes reluctant to report potentially serious security flaws because they fear the repercussions. offers a template with boilerplate language that spells out in plain terms what security researchers can and can't do if they decide to probe for bugs, and offers them legal safe harbor if they play by the rules. The template is open sourced - anyone is free to use it or modify it. top

The Defense Department has produced the first tools for catching deepfakes (Technology Review, 7 Aug 2018) - The first forensics tools for catching revenge porn and fake news created with AI have been developed through a program run by the US Defense Department. Forensics experts have rushed to find ways of detecting videos synthesized and manipulated using machine learning because the technology makes it far easier to create convincing fake videos that could be used to sow disinformation or harass people. Video trickery involves using a machine-learning technique known as generative modeling, which lets a computer learn from real data before producing fake examples that are statistically similar. A recent twist on this involves having two neural networks, known as generative adversarial networks, work together to produce ever more convincing fakes. The tools for catching deepfakes were developed through a program-run by the US Defense Advanced Research Projects Agency (DARPA)-called Media Forensics . The program was created to automate existing forensics tools, but has recently turned its attention to AI-made forgery. "We've discovered subtle cues in current GAN-manipulated images and videos that allow us to detect the presence of alterations," says Matthew Turek, who runs the Media Forensics program. top

SpiderOak's Warrant Canary died (Bruce Schneier, 8 Aug 2018) - " I have never quite trusted the idea of a warrant canary. But here it seems to have worked. (Presumably, if SpiderOak wanted to replace the warrant canary with a transparency report, they would have written something explaining their decision. To have it simply disappear is what we would expect if SpiderOak were being forced to comply with a US government request for personal data.)"

* * * which leads to the underlying Boing Boing story:

SpiderOak warrant canary to be replaced by 'transparency report' (Boing Boing, 6 August 2018) - SpiderOak is a cloud backup service with a warrant canary : a formal statement that assured users that the company and its operators had never been made to secretly cooperate with the government , law enforcement or other surveilling authority. The canary reportedly disappeared this weekend , then reappeared, along with a statement saying it was being replaced by a " transparency report ."

* * * which leads to:

a 3 August tweet from @SpiderOak, that itself says " the final version of the canary is available at ." In turn, the slightly-convoluted canary includes this language: "On top of this, the canary's effectiveness as a tool has been questioned, the usage of it at other companies is not consistent, and verifying it and keeping track of it is complicated for users." [ Polley : First, I'm struck by Schneier's comment: suggests that canaries can work, if done carefully. Digging into the actual postings by SpiderOak on their Twitter feed suggests a fascinating back-story. Would have been fun being on that legal team. (Sorry for the recursive structure.)] top

Security flaws on Comcast's login page exposed customers' personal information (BuzzFeed, 8 Aug 2018) - Comcast Xfinity inadvertently exposed the partial home addresses and Social Security numbers of more than 26.5 million customers, according to security researcher Ryan Stevenson, who discovered the security flaws. Two previously unreported vulnerabilities in the high-speed internet service provider's online customer portal made it easy for even an unsophisticated hacker to access this sensitive information. After BuzzFeed News reported the findings to Comcast, the company patched the flaws. Spokesperson David McGuire told BuzzFeed News, "We quickly investigated these issues and within hours we blocked both vulnerabilities, eliminating the ability to conduct the actions described by these researchers. We take our customers' security very seriously, and we have no reason to believe these vulnerabilities were ever used against Comcast customers outside of the research described in this report." While Comcast has not found any foul play yet, its review is ongoing. top

The "Arrest and Alleged Charges No Longer Exist -- as If It Never Happened" (Volokh Conspiracy, 8 Aug 2018) - Expungement laws let people who have been arrested-and often even ones who have been convicted-get their records removed from government databases, or sometimes sealed so that some government agencies can access them but the public can't. There's an interesting and important policy debate about whether this should happen, and when it should happen. But the expungement laws do not require private organizations, such as newspapers, to delete information about the arrest or conviction from their archives. (In a few places, they cover private databases of information, sometimes just ones that charge money to remove material from those database; that itself poses First Amendment problems, but those laws are sharply limited and don't purport to cover newspapers.) Nor does an expungement make the original report of the arrest or conviction libelous; it may change what facts the government keeps in its files, or what facts the criminal justice system can later use about the arrest, but it doesn't change reality of the original arrest, and it doesn't bar people from keeping up articles about the arrest. Yet some lawyers' demand letters, unsurprisingly, argue the contrary; here, for instance, is a letter sent in November by New York lawyer Gregg M. Sidoti to the Stillwater (Okla.) News Press about an expungement of a 19-year-old's arrest for public intoxication. * * * top

GCs are flirting with the big four - but they remain wary (Corporate Counsel, 9 Aug 2018) - Within the past couple of months, Adobe Systems Inc . has taken a less traditional path in handling some of its corporate legal work overseas. The company has shifted some matters away from traditional international and regional law firms and hired one of the Big Four accounting firms to take on this work instead. What prompted the switch? According to Lisa Konie, senior director of legal operations for Adobe, it was primarily a predictable alternative fee arrangement . The San Jose, California-based software company pays the firm, which Konie declined to name, an annual fixed fee that depends on the country where the work is being done and the services being provided. "What I don't think a lot of law firms appreciate is that we are held accountable to our CFO," Konie said. "When I come in and tell my CFO that we have 75 percent accountability with billing I come off looking like a rock star." While some companies, like Adobe, are on board with the Big Four, others are hanging back, despite the apparent advantages that these accounting behemoths have over traditional law firms, including more predictable and flexible pricing and Scrooge McDuck-sized bank vaults. Those who remain hesitant say they're still waiting for the Big Four to prove that they offer a better alternative to the traditional firm model. top

Hack causes pacemakers to deliver life-threatening shocks (ArsTechnica, 9 Aug 2018) - Life-saving pacemakers manufactured by Medtronic don't rely on encryption to safeguard firmware updates, a failing that makes it possible for hackers to remotely install malicious wares that threaten patients' lives, security researchers said Thursday. At the Black Hat security conference in Las Vegas, researchers Billy Rios and Jonathan Butts said they first alerted medical device maker Medtronic to the hacking vulnerabilities in January 2017. So far, they said, the proof-of-concept attacks they developed still work. The duo on Thursday demonstrated one hack that compromised a CareLink 2090 programmer , a device doctors use to control pacemakers after they're implanted in patients. Because updates for the programmer aren't delivered over an encrypted HTTPS connection and firmware isn't digitally signed, the researchers were able to force it to run malicious firmware that would be hard for most doctors to detect. From there, the researchers said, the compromised machine could cause implanted pacemakers to make life-threatening changes in therapies, such as increasing the number of shocks delivered to patients. top

West Virginia to offer mobile blockchain voting app for overseas voters in November election (WaPo, 10 Aug 2018) - West Virginia will provide a mobile blockchain voting option, in addition to absentee ballots, for overseas military service members in elections this November, after receiving audit results this week from a pilot program. It will be the first state to offer this technology to improve voting accessibility for deployed members of the military and their families, according to West Virginia's secretary of state. Eligible voters will be able to cast their ballots through a mobile application that uses blockchain technology , which stores data on a decentralized database, meaning there's no owner, allowing for more transparent transactions. Information is stored publicly, but to ensure privacy, West Virginia voters' personal information will remain anonymous. * * * West Virginia is offering blockchain ballots only to overseas military members, and state officials remain wary of advocating the technology for in-state voters or other state elections. "This is a solution to West Virginia's problems [with overseas voters] specifically. We didn't have the money to build a new system or buy a new one that's already created," Kersey said. "I don't know if blockchain is the answer. It was just the answer we found here." top

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The World Bank is getting in on blockchain (CNN, 10 Aug 2018) - The international lender is planning to issue what it says is the world's first global blockchain bond, a notable mainstream endorsement of the emerging technology. Blockchain is best known as the technology underpinning bitcoin and other cryptocurrencies. It serves as a digital record of financial transactions. The World Bank has hired Commonwealth Bank of Australia ( CBAUF ) to manage the bond , which is expected to raise as much as 100 million Australian dollars ($73 million). They have named it the "Blockchain Offered New Debt Instrument," or "bond-i," a nod to Sydney's famous Bondi Beach. The World Bank follows German automaker Daimler, which used blockchain technology to issue a type of German bond in a pilot project last year. Blockchain could hugely streamline the process of issuing bonds, which has been heavily reliant on physical paperwork for the past 200 years, according to James Wall, a senior institutional banking executive at Commonwealth Bank. Moving the process to the blockchain could cut costs and speed up trading for both bond issuers and investors. top

Fax machines may be vulnerable to hackers, new report finds (WaPo, 13 Aug 2018) - The fax ma­chine is wide­ly con­sid­ered to be a di­no­saur of in­ter­of­fice com­mu­ni­ca­tions, but it may also pres­ent a vul­nera­ble point where hack­ers can in­fil­trate an or­gan­i­za­tion's net­work, ac­cord­ing to a new re­port from Israel-based soft­ware com­pany Check Point. The com­pany said that the vul­ner­a­bil­i­ty was iden­ti­fied as a re­sult of re­search in­tend­ed to dis­cover po­ten­tial se­curi­ty risks, and not as the re­sult of any attack. Hack­ers can gain ac­cess to a net­work using the phone line con­nected to a fax ma­chine, which is of­ten con­nected to the rest of an or­gan­i­za­tion's net­work. By send­ing an image file that con­tains ma­li­cious soft­ware over the phone line, hack­ers can take con­trol of the de­vice and ac­cess the rest of the net­work. The re­search­ers were able to do this using only a fax num­ber, which is of­ten wide­ly dis­tri­but­ed by or­gan­i­za­tions on busi­ness cards and websites. top

US court authorizes service by Twitter on WikiLeaks (Volokh Conspiracy, 13 Aug 2018) - Folkman is a leading expert on (among other things) international service of process, a technical but tremendously important field of civil procedure; read his post for more details on this issue, but here's the introduction: The Democratic National Committee has obtained leave of court to serve process on Wikileaks via Twitter in its lawsuit against Russia, Wikileaks, Julian Assange and others. I have written previously about the FSIA [Foreign Sovereign Immunities Act] issue in the case and the issues about serving process on Mr. Assange in the Ecuadoran embassy in London. But serving process on Wikileaks poses difficulties, too. The DNC's motion gives several reasons for seeking leave to serve process by Twitter rather than by a more traditional means. Wikileaks, it says, is an "organization of unknown structure" that has "more of a virtual than a physical presence." It has post office boxes in California and in Australia, but it is unclear to the DNC whether Wikileaks uses them for business. Lawyers who have represented Wikileaks in prior US litigation have said they no longer represent the organization or are not authorized to accept service. And Wikileaks, or someone purporting to act on its behalf, does have an active Twitter presence.... [ Polley : see also DNC serves WikiLeaks with lawsuit via Twitter (CBS, 10 Aug 2018)] top

Hundreds of researchers from Harvard, Yale and Stanford were published in fake academic journals (Motherboard, 14 Aug 2018) - In the so-called " post-truth era ," science seems like one of the last bastions of objective knowledge, but what if science itself were to succumb to fake news? Over the past year, German journalist Svea Eckert and a small team of journalists went undercover to investigate a massive underground network of fake science journals and conferences. In the course of the investigation, which was chronicled in the documentary " Inside the Fake Science Factory ," the team analyzed over 175,000 articles published in predatory journals and found hundreds of papers from academics at leading institutions, as well as substantial amounts of research pushed by pharmaceutical corporations, tobacco companies, and others. Last year, one fake science institution run by a Turkish family was estimated to have earned over $4 million in revenue through conferences and journals. * * * top

Public utility's recording of home energy consumption every 15 minutes is a "search," Seventh Circuit rules (Orin Kerr on Volokh Conspiracy, 17 Aug 2018) - In a fascinating new decision, Naperville Smart Meter Awareness v. City of Naperville, the Seventh Circuit has held that a public utility commits a "search" of a home when it records every 15 minutes how much electricity the utility is providing the home, at least until the smart readers that enable this data collection come into general public use. At the same time, the court says, the utility's search of the home is reasonable and therefore permitted without any cause or suspicion. The Seventh Circuit's analysis relies on Carpenter v. United States for a significant step in its reasoning. Given that, the new decision is an interesting measure of where Fourth Amendment law may be going in the post- Carpenter era. * * * [ Polley : There's much more here, and Prof. Kerr's take on it is interesting, as always.] top


Adler on Why Art Does Not Need Copyright - (MLPB, 1 Aug 2018) - Amy Adler, New York University School of Law, is publishing Why Art Does Not Need Copyright in volume 86 of the George Washington Law Review (2018). Here is the abstract: This Article explores the escalating battles between visual art and copyright law in order to upend the most basic assumptions on which copyright protection for visual art is grounded. It is a foundational premise of intellectual property law that copyright is necessary for the "progress" of the arts. This Article demonstrates that this premise is flatly wrong when it comes to visual art. United States courts and scholars have come to understand copyright law almost universally in utilitarian terms; by this account, the reason we grant copyright to authors is to give them economic incentives to create culturally valuable works. But legal scholars have failed to recognize that their paradigm makes no sense when applied to visual art, one of the highest profile and most hotly contested fields in intellectual property law. This is because scholars have failed to take into account the single most important value for participants in the art market: the norm of authenticity, which renders copyright law superfluous. The fundamental assumption of copyright law - that the copy poses a threat to creativity - is simply not true for visual art. By juxtaposing copyright theory with the reality of the art market, this Article shows why copyright law does not - and cannot - incentivize the creation of visual art. In fact, copyright law, rather than being necessary for art's flourishing, actually impedes it. top

Twenty years of web scraping and the Computer Fraud and Abuse Act (BU Journal of Science and Technology Law, 14 Aug 2018) - Abstract: "Web scraping" is a ubiquitous technique for extracting data from the World Wide Web, done through a computer script that will send tailored queries to websites to retrieve specific pieces of content. The technique has proliferated under the ever-expanding shadow of the Computer Fraud and Abuse Act (CFAA), which, among other things, prohibits obtaining information from a computer by accessing the computer without authorization or exceeding one's authorized access. Unsurprisingly, many litigants have now turned to the CFAA in attempt to police against unwanted web scraping. Yet despite the rise in both web scraping and lawsuits about web scraping, practical advice about the legality of web scraping is hard to come by, and rarely extends beyond a rough combination of "try not to get caught" and "talk to a lawyer." Most often the legal status of scraping is characterized as something just shy of unknowable, or a matter entirely left to the whims of courts, plaintiffs, or prosecutors. Uncertainty does indeed exist in the caselaw, and may stem in part from how courts approach the act of web scraping on a technical level. In the way that courts describe the act of web scraping, they misstate some of the qualities of scraping to suggest that the technique is inherently more invasive or burdensome. The first goal of this piece is to clarify how web scrapers operate, and explain why one should not think of web scraping as being inherently more burdensome or invasive than humans browsing the web. The second goal of this piece is to more fully articulate how courts approach the all-important question of whether a web scraper accesses a website without authorization under the CFAA. I aim to suggest here that there is a fair amount of madness in the caselaw, but not without some method. Specifically, this piece breaks down the twenty years of web scraping litigation (and the sixty-one opinions that this litigation has generated) into four rough phases of thinking around the critical access question. The first runs through the first decade of scraping litigation, and is marked with cases that adopt an expansive interpretation of the CFAA, with the potential to extend to all scrapers so long as a website can point to some mechanism that signaled access was unauthorized. The second, starting in the late 2000s, was marked by a narrowing of the CFAA and a focus more on the code-based controls of scraping, a move that tended to benefit scrapers. In the third phase courts have receded back to a broad view of the CFAA, brought about by the development of a "revocation" theory of unauthorized access. And most recently, spurred in part by the same policy concerns that led courts to initially constrain the CFAA in the first place, courts have begun to rethink this result. The conclusion of this piece identifies the broader questions about the CFAA and web scraping that courts must contend with in order to bring more harmony and comprehension to this area of law. They include how to deal with conflicting instructions on authorization coming different channels on the same website, how the analysis should interact with existing technical protocols that regulate web scraping, including the Robots Exclusion Standard, and what other factors beyond the wishes of the website host should govern application of the CFAA to unwanted web scraping. top


(note: link-rot has affected about 50% of these original URLs)

Offshore hosting firm Havenco lost at sea (The Register, 25 Nov 2008) - Controversial hosting provider HavenCo - which operated from the 'nation' of Sealand, an old naval fort off the coast of Suffolk which was declared a 'sovereign principality' by its quirky owner Roy Bates - has finally gone offline. As of last week, the HavenCo website is gone and the domain is now hosted outside the Sealand subnet. Founded in 2000 by Bates' son and Michael with $1m in seed money, the company initially offered an everything goes-policy along with an offshore fat-pipe data haven. Child pornography, spamming and malicious hacking were strictly prohibited, but with no restrictions on copyright or intellectual property for data hosted on its servers, file-sharing certainly looked like a possibility. Many existing customers had left by 2003. With no investment backing bandwidth never materialised, and the location was vulnerable to DoS attacks. However, what probably scared most potential customers was the fact all internet connectivity went through the UK and that the UK claimed the platform was within its territorial waters. HavenCo was one of many failed business ventures in an attempt to profit from the world's smallest country. A scheme to build a hotel and gambling complex never materalised. Since last year, the principality has been put up for sale. Last year, Swedish bittorrent search site The Pirate Bay said it was in negotiations with Prince Michael of Sealand about purchasing the principality to use it as a base for its own operations, but Bates declared he would never sell the micronation - currently priced at €750m - to a BitTorrent tracker. top

Ohio official sues e-voting vendor for lost votes (Computerworld, 8 August 2008) - Ohio Secretary of State Jennifer Brunner has filed a lawsuit against an electronic-voting machine vendor, saying the vendor should pay damages for dropped votes in the state's March primary election. E-voting machines from Premier Election Solutions, formerly known as Diebold Election Systems, dropped hundreds of votes in 11 Ohio counties during the primary election, as the machine's memory cards were uploaded to vote-counting servers, Brunner's office said. Officials in Brunner's office later discovered the dropped votes in other counties after voting officials in Butler County discovered about 150 dropped votes, said Jeff Ortega, Brunner's assistant director of communications. Brunner's lawsuit, filed in Franklin County Common Pleas Court in Ohio on Wednesday, is a counter claim to an earlier lawsuit filed by Premier. In May, Premier filed a lawsuit against Brunner's office and Cuyahoga County, Ohio, seeking a judgment that Premier did not violate any contracts or warranties. Brunner's lawsuit accuses Premier of not fulfilling its contracts with election officials. The lawsuit also alleges breach of warranty and fraud. Premier e-voting machines are used in half of Ohio's 88 counties. Butler County officials discovered the dropped votes in post-election checks. That set off a statewide investigation, which found dropped votes in 11 other counties, according to information from Brunner's office. Butler County officials sent letters to Premier on April 4 and 9, seeking an explanation for the dropped votes, and on May 16, Premier issued a report, suggesting human error or conflicts with antivirus software were to blame. Brunner and Butler County officials have suggested that the May report and a follow-up issued by Premier lacked evidence that antivirus software caused the problems. A Premier report on May 29 suggested counties disable antivirus software on vote-tabulation servers, but the servers had been certified in Ohio with the antivirus software installed, Brunner said. In December, Brunner's office issued a report questioning the security of touch-screen e-voting machines like those sold by Premier. Machines from Premier and two other vendors had "critical security failures," the report said. top