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IT DEALS SURGE TO HIGHEST LEVEL IN 6 YEARS (FT, 21 Jan 2007) -- Global merger and acquisition levels in the technology sector broke through the €100bn barrier in 2006, for the first time since the height of the dotcom boom in 2000. According to figures published on Monday by PriceWaterhouseCoopers, merger and acquisition values were boosted by 18 mega deals, transactions with a value of more than €1bn. The largest of these was the €11.1bn merger of France’s Alcatel with Lucent Technologies of the US. The number of top level deals was up from 14 in 2005. Aggressive bids from private equity investors also helped boost deal values in 2006. The second largest tech deal of the year was the €7.4bn acquisition of Philips Semiconductor by an investment group fronted by Kohlberg Kravis Roberts. http://www.ft.com/cms/s/96b8ec14-a965-11db-9185-0000779e2340,_i_rssPage=81cea682-52a8-11da-8d05-0000779e2340.html
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SIX WAYS TO PROTECT YOUR SYSTEMS IN A MERGER (ComputerWorld, 16 Jan 2007) -- Mergers and acquisitions present extra challenges for IT network security. Inevitably, a merger combines security organizations with different security philosophies, policies, technologies and needs. “If one company has a policy that all security needs to stay in-house and the other has outsourced its security apparatus, obviously they have a conflict,” says Chris Ellerman, national security practice director at Dimension Data North America. And that presumes that the merging organizations are in the same vertical industries. When the merger crosses verticals, the differences can be even greater and in some cases aren’t completely reconcilable. “I’ve seen mergers that resulted in two divisions permanently operating on different security levels on a single IT backbone due to the requirements of their vertical industries,” Ellerman said. Ellerman offered the following tips for organizations that are either preparing for possible mergers in the coming year or are now involved in a merger process… http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9008080&source=NLT_SEC&nlid=38
TECH FIRMS, RIGHTS GROUPS TO FORM WEB CONDUCT CODE (CNET, 19 Jan 2007) -- Technology companies Microsoft, Google, Yahoo and Vodafone are in talks with human rights and press freedom groups to draw up an Internet code of conduct to protect free speech and privacy of Web users. The parties said in a statement Friday that they aim to produce a code by the end of this year that would counter such trends as the increased jailing of Internet journalists, monitoring of legitimate online activity, and censorship. Talks are being led by the Washington-based Center for Democracy and Technology and San Francisco nonprofit Business for Social Responsibility. They are trying to craft a code to hold companies accountable if they cooperate with governments to suppress free speech or violate human rights. “Technology companies have played a vital role building the economy and providing tools important for democratic reform in developing countries,” said Leslie Harris, executive director of the Center for Democracy and Technology. “But some governments have found ways to turn technology against their citizens--monitoring legitimate online activities and censoring democratic material,” Harris said. http://news.com.com/2100-1025_3-6151708.html
AFTER COURT CHALLENGE TO GOOGLE, BELGIAN NEWSPAPERS TAKE ON YAHOO (SiliconValley.com, 19 Jan 2007) -- A group of Belgian newspapers has asked Yahoo! Inc. to remove links to their archived stories from its Web search service, claiming they infringe copyright laws, their lawyers confirmed Friday. The move follows a legal challenge by the group against Google Inc. that has seen Belgian newspaper content stripped from Google News pending a court ruling expected early this year. In a statement, Yahoo! France insisted it “respects the copyright of content owners” and said it would “respond in an appropriate manner” to the complaint. The legal warning was sent to Yahoo! France by lawyers acting for Copiepresse, a copyright protection group representing 19, mostly French-language, newspapers. They complain that the search engine’s “cached” links offered free access to archived articles that the papers usually sell on a subscription basis. http://www.siliconvalley.com/mld/siliconvalley/business/technology/16499279.htm
GAMBLING SUBPOENAS ON WALL ST. (New York Times, 21 Jan 2007) -- The Justice Department has issued subpoenas to at least four Wall Street investment banks as part of a widening investigation into the multibillion-dollar online gambling industry, according to people briefed on the investigation. The subpoenas were issued to firms that had underwritten the initial public offerings of some of the most popular online gambling sites that operate abroad. The banks involved in the inquiry include HSBC, Credit Suisse, Deutsche Bank and Dresdner Kleinwort, these people said. While online gaming sites like PartyGaming and 888 Holdings operate from Gibraltar and their initial public offerings were held on the London Stock Exchange, companies that do business with them and have large bases in United States have come under scrutiny by regulators in Washington. None of the biggest United States banks like Goldman Sachs or Citigroup underwrote the initial public offerings in London, in part because of the legal ambiguity of the sites; they are illegal in the United States, but still accessible to residents. The subpoenas, earlier reported by The Sunday Times of London, appeared to be part of an indirect but aggressive and far-reaching attack by federal prosecutors on the Internet gambling industry just two weeks before one of its biggest days of the year, the Super Bowl. The prosecutors may be emboldened by a law signed by President Bush last October that explicitly defined the illegality of running an Internet casino. “It appears that the Department of Justice is waging a war of intimidation against Internet gambling,” said I. Nelson Rose, a professor of law at Whittier Law School in Costa Mesa, Calif., who is an expert on Internet gambling law. Another lawyer, Lawrence G. Walters of Altamonte Springs, Fla., said the development was disconcerting because the prevailing wisdom had been that investment in a company that is legal and licensed in its jurisdiction was not grounds for prosecution. But he cautioned that the subpoenas could be part of a government fact-finding effort and might not signal a plan to prosecute banks. http://www.nytimes.com/2007/01/22/business/22gaming.html?ex=1327122000&en=952d8b02cee0a300&ei=5090&partner=rssuserland&emc=rss
ITALIAN COURT RULES DOWNLOADING ISN’T A CRIME IF NOT FOR PROFIT (SiliconValley.com, 22 Jan 2007) -- Italy’s top criminal court has ruled that downloading music, movies and software over the Internet isn’t a crime if profit wasn’t the motivation, though analysts questioned Monday whether the ruling would have much effect on copyright laws. The court’s decision, issued earlier this month but reported over the weekend by the Italian media, overturns earlier convictions against two former Turin Polytechnic Institute students who set up in 1994 a peer-to-peer, file-sharing network that was shut down within months. They were found guilty of illegal duplication and given a one-year sentence, which was reduced to three months on appeal, defense lawyer Carlo Blengino said. The top criminal court in Rome threw out the convictions, ruling that it was not a crime to download computer files from such networks if there was no financial gain. But analysts said violating a copyright, for example by breaking copy-protection technologies in place, remained illegal even if downloading the material had been decriminalized. ``I consider this sentence as a very intermediate step in clarifying what is legal and what is not legal,” said analyst Carlo Alberto Carnevale Maffe, the president of Assodigitale, a think-tank on digital technology. ``This sentence marks an important step in that peer-to-peer per se is not an illegal activity. What stays and remains illegal is copyright infringement by cracking copyright files, and distributing it for commercial purposes.” http://www.siliconvalley.com/mld/siliconvalley/news/editorial/16520198.htm
E-MAIL FROM THE GRAVE? MICROSOFT SEEKS PATENT ON ‘IMMORTAL COMPUTING’ (Seattle PI, 22 Jan 2007) -- In this culture of instant information, some Microsoft Corp. researchers are pursuing a radical notion -- the concept of saving messages for delivery in decades, centuries or more. The project, dubbed “immortal computing,” would let people store digital information in physical artifacts and other forms to be preserved and revealed to future generations, and maybe even to future civilizations. After all, when looking that far in the future, you never know who the end users might be. One scenario the researchers envision: People could store messages to descendants, information about their lives or interactive holograms of themselves for access by visitors at their tombstones or urns. And here’s where the notion of immortality really kicks in: The researchers say the artifacts could be symbolic representations of people, reflecting elements of their personalities. The systems might be set up to take action -- e-mailing birthday greetings to people identified as grandchildren, for example. The previously undisclosed project came to light through a newly surfaced patent application in which the researchers explain some of the concepts they’re exploring. The project seeks to address the fact that large amounts of valuable information are stored on media with limited life spans, in formats that could be rendered obsolete. Consider how quickly floppy disks disappeared. But the researchers aren’t just thinking about the informational legacies of individuals. “Maybe we should start thinking as a civilization about creating our Rosetta stones now, along with lots of information, even going beyond personal memories into civilization memories,” said Eric Horvitz, a Microsoft principal researcher who also is working on the project. http://seattlepi.nwsource.com/business/300636_msftimmortal22.html
APPEALS COURT RULING FAVORS PRIVACY FOR INTERNET USERS (NJ.com, 23 Jan 2007) -- In the first ruling of its kind in New Jersey, a state appeals court said yesterday computer users can expect the personal information they give their Internet provider will be considered private. A three-judge panel said a computer user whose screen name hid her identity has a “legitimate and substantial interest in anonymity.” The court based its decision in a Cape May County computer crime case on the state Constitution, recognizing a right to “informational privacy.” “This is terrific,” said Grayson Barber, a Princeton-based attorney and privacy advocate. She said the appeals court essentially updated a 1967 U.S. Supreme Court ruling that found a person conducting illegal gambling in a closed telephone booth had a right to expect privacy. “What this means is that under the state Constitution law enforcement and Internet service providers cannot just randomly listen in on Internet communications,” Barber said. “They must have some kind of subpoena or warrant before they can gather information to use against somebody.” http://www.nj.com/news/ledger/jersey/index.ssf?/base/news-6/1169534953304830.xml&coll=1 [Editor: This also might affect a body of law that has found lowered/non-existent privacy entitlements to information shared with other third-parties, such as financial institutions. See Steptoe analysis here: http://www.steptoe.com/publications-4221.html]
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PARENTS PREVAIL OVER BIG BROTHER IN FIGHT OVER KIDS’ IDENTITIES (Steptoe & Johnson’s E-Commerce Law Week, 3 Feb 2007) – [A] federal court in Connecticut recently held that parents have a constitutionally protected privacy interest in their children’s identity. In Securities Industry and Financial Markets Association v. Garfield, the court granted the plaintiff Association’s motion for a preliminary injunction barring the Connecticut State Elections Enforcement Commission (SEEC) from posting the names of state contractors’ dependent children to a public website, as required under a Connecticut campaign finance reform law. The court reasoned that the Association was likely to succeed in showing that the required posting of children’s names violated parents’ “fundamental right to privacy” under the U.S. Constitution. While the decision does not directly affect web site operators or e-commerce companies, it does reflect a growing desire by courts to establish some limit to the widespread disclosure of personal information over the Internet. And though limited to the identity of children, the court’s reasoning could be used to justify protection of other information courts deem to be “personal” based on the risk of harm, embarrassment, or just plain “discomfort” that disclosure might cause someone. http://www.steptoe.com/publications-4221.html Case at http://www.steptoe.com/assets/attachments/2841.pdf
NEW NEW YORK RULES ON LAWYER ADVERTISING (ABA e-news, 23 Jan 2007) -- On January 4, 2007, the New York State Unified Court System adopted several amendments to the advertising rules in Canon 2 of the New York Code of Professional Responsibility (hereinafter the Code) that are due to take effect on February 1, 2007. Many of these amendments relate to lawyer advertising on the Internet. A redlined version of Canon 2 showing the amendments is located here: http://www.nysba.org/Content/ContentGroups/Announcements/RedlinedAdvertisingAmendments010407.pdf, and a memorandum produced by the New York State Bar Association highlighting the significant changes is located here: http://www.nysba.org/Content/ContentGroups/Announcements/Advertisingamendmentssynopsis.pdf. At the outset, the new Code sections provide definitions of advertisements and “computer accessed communications.” An advertisement is defined as any public or private communication made by or on behalf of a lawyer or law firm where the primary purpose is the retention of the lawyer or law firm. It specifically exempts communications to existing clients or to other lawyers. A computer accessed communication encompasses: “...any communication made by or on behalf of a law firm that is disseminated through the use of a computer device including but not limited to websites, weblogs, search engines, electronic mail, banner advertisements, pop-up and pop-under advertisements, chat rooms, list servers, instant messaging, or other internet presences and any attachments or links related thereto.” DR 2-101(g) of the Code states that a lawyer shall not use a pop-up or pop-under advertisement in connection with computer accessed communications, other than on the lawyer’s own website or other internet presence or any meta tags (keywords that represent the web page’s content), that would violate a disciplinary rule if displayed. DR 2-101 (k) states that a lawyer must keep copies of all advertisements for three years following its initial dissemination. Any advertisement contained in a computer accessed communication must be retained for one year. “A copy of the contents of any website deemed to be an advertisement ...shall be preserved upon the initial publication of the web site, any major web site redesign, or a meaningful and extensive content change, but in no event less frequently than once every 90 days.” http://www.abanet.org/media/youraba/200701/article10.html
ONLINE NORDIC BANKING THEFT STIRS TALK OF RUSSIAN HACKER (New York Times, 25 Jan 2007) -- Word has started spreading in Sweden about the discovery last week of a $1 million online banking theft traced to a Russian hacker who goes by the sobriquet “the Corpse.” The case opens a window into the dark world of Russian programming and underlines risks in online banking. Nordea Bank, the Scandinavian financial services company involved, emphasized that only customers whose computers were not protected by antivirus programs had become victims. The Swedish police said the virus was distributed with spam e-mail and programmed to infiltrate home computers of customers at several European and American banks. Police officers have arrested Swedish nationals and foreigners who withdrew cash from Nordea branches after making online transfers. The Corpse’s identity is unknown to computer virus specialists. The virus in question, a so-called Trojan horse program, surreptitiously logged keystrokes while banking customers entered their passwords. The police identified the program as a variant of the Haxdoor Trojan. The Corpse is thought to be the author of the original Haxdoor program and several iterations, under names including A311 Death and Nuclear Grabber. Those are offered for sale on a Russian Web site at prices ranging from several hundred dollars to several thousand dollars, depending on the version. Thieves using the program in Sweden defrauded 250 customers of Nordea’s online banking service over a period of 15 months. The bank has compensated its clients. The case has drawn new attention to the bizarre world of Russian hacking. Russia’s weak laws and a strong tradition of scientific education have combined to create a flourishing culture of computer hacking, specialists in the programming industry say. The prevalence of pornography and fraud on the Russian Internet has contributed to the country’s image as a digital Wild West of spammers and hackers. And foiling Western banking security resonates with Russian programmers, technology specialists say. Russian hackers are driven by “curiosity, greed or the desire to prove they are clever,” said Denis Kalinin, chief executive of Rambler, a successful Russian search engine company. This latest version of the Haxdoor Trojan program was activated when a customer typed the bank’s address into a browser. The rogue software then recorded keystrokes to capture passwords. Later, money was transferred to newly opened accounts and cash was withdrawn at bank branches. The Corpse’s site carries a disclaimer in rough English that the programs are to be used “exclusively in the educational purposes.” Questions mailed to the site were not answered on Wednesday. http://www.nytimes.com/2007/01/25/technology/25hack.html?ex=1327381200&en=5699048fce2742b2&ei=5090&partner=rssuserland&emc=rss
FOX SUBPOENAS YOUTUBE AFTER “24” CLIPS POSTED (Hollywood Reporter, 25 Jan 2007) -- 20th Century Fox served YouTube with a subpoena Wednesday demanding the Google-owned viral video site disclose the identity of a user who uploaded copies of entire recent episodes of primetime series “24” and “The Simpsons”. The subpoena, which first came to light on the blog Google Watch (http://googlewatch.eweek.com/index.html), was granted by a judge in U.S. District Court for the Northern District of California after being filed by the News Corp.-owned studio on January 18. It is not yet known whether YouTube has complied with the request. In addition, a second, lesser-known video site, LiveDigital, was also served with a similar subpoena. A Fox spokesman confirmed the subpoena was filed to both YouTube and LiveDigital and served but declined further comment. A spokesman for YouTube declined comment. The “24” episodes in question actually appeared on YouTube prior to their primetime January 14 premiere on the Fox broadcast network, which spread four hourlong episodes of the hit drama over two consecutive nights. Fox became aware the episodes were on YouTube on January 8, according to the subpoena. Filed on the basis of the Digital Millennium Copyright Act, the subpoena includes testimony of Fox Entertainment Group vp Jane Sunderland suggesting Fox has been unable to determine the users’ identities on its own. The uploaded material could cause Fox “irreparable harm”, Sunderland said, but it was not immediately clear if the episodes in question still were posted on the site or perhaps had been removed. http://uk.news.yahoo.com/25012007/80-91/fox-subpoenas-youtube-24-clips-posted.html
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VIACOM TELLS YOUTUBE: HANDS OFF (New York Times, 3 Feb 2007) – In a sign of the growing tension between old-line media and the new Internet behemoths, Viacom, the parent company of MTV and Comedy Central, demanded yesterday that YouTube, the video-sharing Web site owned by Google, remove more than 100,000 clips of its programming. Viacom, along with other major media companies, including the News Corporation and NBC Universal, has become increasingly frustrated with YouTube as it has amassed a vast library of copyrighted clips, placed on the site by its users. While such companies regularly ask YouTube to remove their material, Viacom’s demand, which it disclosed in a statement circulated by e-mail, was the most militant and public move of its kind so far. As it has with the similar request from other companies, Google removed the Viacom clips from the YouTube site yesterday. Google hopes to strike deals that will give it the rights to mainstream programming and also wipe away its potential liability for any violations of copyright law by YouTube so far. Despite intense negotiations in recent months, Google has not been able to announce any such deals with media companies. YouTube is supported by advertising, but in most cases it does not share that revenue with copyright holders. http://www.nytimes.com/2007/02/03/technology/03tube.html?ex=1328158800&en=c8c09534e2252d31&ei=5090&partner=rssuserland&emc=rss and http://www.ft.com/cms/s/0e225e60-b2d6-11db-99ca-0000779e2340,_i_rssPage=81cea682-52a8-11da-8d05-0000779e2340.html
BLOGGER TRIES TO BAIT ‘SECOND LIFE,’ GETS A HUG INSTEAD (SiliconValley.com, 24 Jan 2007) -- A lawyer for the virtual world ``Second Life” has responded to a parody with something that’s quite different from the usual corporate cease-and-desist letter. Vancouver-based blogger Darren Barefoot had put up a one-page site, GetAFirstLife.com, that imitates the look of SecondLife.com but promotes a real-life existence where you can work, reproduce and perish -- all for free. The site purports to answer frequently asked questions such as ``Why can’t I build a dirigible with my mind?” That’s a dig at ``Second Life,” where users with sufficient skill in three-dimensional modeling can build almost anything. The site includes a logo that’s a modified version of Second Life’s logo. With a link, Barefoot invited cease-and-desist letters, the type lawyers often send threatening lawsuits if a site doesn’t pull down objectionable material. Sunday’s note from Ginsu Yoon, a lawyer for San Francisco-based Second Life, started out with the legalese of a standard nastygram -- Internet slang for a cease-and-desist letter -- but went on to say that ``your invitation to submit a cease-and-desist letter is hereby rejected.” Second Life representative Alex Yenni confirmed the note, delivered as a comment on Barefoot’s blog, was authentic. ``Linden Lab objects to any implication that it would employ lawyers incapable of distinguishing such obvious parody,” Yoon wrote. ``Linden Lab is well-known for having strict hiring standards, including a requirement for having a sense of humor, from which our lawyers receive no exception.” The note even gives Barefoot a ``nonexclusive, nontransferable, nonsublicenseable, revocable, limited license” to use the modified logo on T-shirts he sells. http://www.siliconvalley.com/mld/siliconvalley/news/editorial/16536797.htm
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SWEDEN TO SET UP EMBASSY IN SECOND LIFE (The Local, 26 Jan 2007) -- Sweden is to become the first country to establish diplomatic representation in the virtual reality world of Second Life, officials said on Friday. “We are planning to establish a Swedish embassy in Second Life primarily as an information portal for Sweden,” Swedish Institute (SI) director Olle Wästberg told AFP. The embassy would not provide passports or visas but would instruct visitors how to obtain such documents in the real world and act as a link to web-based information about the Scandinavian country. “Second Life allows us to inform people about Sweden and broaden the opportunity for contact with Sweden easily and cheaply,” Wästberg said. The Swedish Institute is an agency of the Swedish foreign ministry tasked with informing the world about Sweden. The ministry fully backed the initiative, he added. http://www.thelocal.se/6219/20070126/
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EBAY BANS AUCTIONS OF VIRTUAL GOODS (CNET, 29 Jan 2007) -- By proactively delisting auctions for property from virtual worlds and online games, eBay may be effectively forcing players who participate in such trades into the hands of giant third-party operations that buy and sell virtual goods. Given that a significant slice of the multi-hundred-million-dollar business took place on eBay until now, the move portends a significant shift in who controls the market for virtual goods. eBay on Monday confirmed its decision to ban auctions for the characters, currency, weapons, attire and accounts of online games such as World of Warcraft, City of Heroes and others. The move was first reported on Slashdot. The ban does not affect the virtual world Second Life. In most cases, publishers of online games include in their terms of service a prohibition on so-called real-money trades (RMTs), in which people buy and sell online games’ virtual assets for real money. Players who violate such rules can be banned. But because eBay has dominated the auction market for RMTs, there’s little question that the short-term winner in this latest circumstance will be sites like the Internet Gaming Entertainment of the world, which control the third-party market. While there is no universally agreed-upon value for the RMT market, it is assumed to be worth somewhere between $250 million and $880 million a year, according to experts. eBay said its decision--which is essentially a move to begin enforcing rules against virtual-item trades already under way--stems from a desire to protect users. http://news.com.com/2100-1043_3-6154372.html
U.S. FACES NEW LOSS IN NET GAMBLING CASE (Reuters, 26 Jan 2007) -- The United States has suffered a new setback in a four-year legal battle with Antigua and Barbuda over U.S. restrictions on Internet gambling, a U.S. trade official said. At issue is an April 2005 World Trade Organization ruling against U.S. prohibitions on online horse-race betting. Since then, the U.S. Congress has passed additional legislation to ban betting over the Internet. Gretchen Hamel, a spokeswoman for the U.S. Trade Representative’s office, confirmed Thursday the press reports that a WTO panel “did not agree with the United States that we had taken the necessary steps to comply” with that ruling. “The panel’s findings issued today involve a narrow issue of federal law” and the United States will have opportunity to submit comments to the WTO before it issues its final, public report in March, Hamel said. Antigua and Barbuda, a Caribbean island nation with few natural resources, has sought to build up an Internet gambling industry to provide jobs to replace those in its declining tourist industry. It argued in a case first brought to the WTO in 2003 that U.S. laws barring the placing of bets across states lines by electronic means violated WTO rules. An April 2005 ruling by the WTO’s Appellate Body, which both sides claimed as vindication, focused on the narrower issue of horse racing, saying that foreign betting operators appeared to suffer discrimination. Antigua and Barbuda complained the United States had not complied with the decision. The WTO agreed in July 2006 to look into the matter, resulting in the ruling on Thursday. http://news.com.com/2100-1028_3-6153682.html
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EU MAY CHALLENGE U.S. ONLINE GAMBLING LAW (Reuters, 30 Jan 2007) -- U.S. restrictions on online gambling may be challenged by the European Union, the bloc’s top financial regulator said on Tuesday. “In my view it is probably a restrictive practice and we might take it up in another fora,” EU Internal Market Commissioner Charlie McCreevy told the European Parliament. The United States was protecting its own gambling industry by stopping foreign companies from entering the online betting sector, McCreevy said. “It’s not my intention to bring forward a harmonised piece of legislation on gambling in the European Union,” McCreevy added. The United States has introduced rules to stop card companies from dealing with foreigners for online bets, McCreevy said. He has launched legal actions against several EU countries to tackle obstacles to foreign competition. http://uk.news.yahoo.com/30012007/80-91/eu-challenge-u-s-online-gambling-law-mccreevy.html
CORPORATE BLOGGING PAYS FOR GM (TechWeb, 26 Jan 2007) -- General Motors’ auto business hasn’t been great of late, but its blogging strategy is paying off handsomely. In 2006, the company’s FastLane blog delivered an estimated $410,470 worth of customer insight and marketing at an approximate cost of $255,675 -- a return on investment of 67% -- according to a newly released report from Forrester Research. Compare that to 2005, when GM’s blog generated an estimated $578,374 worth of information and publicity at an approximate cost of $291,196. That’s a 99% return on investment. Forrester analysts Charlene Li and Chloe Stromberg chose GM as the subject of their case study to demonstrate that companies can and should measure the ROI of blogging. “As blogging becomes more visible -- and expensive in terms of both time and money -- supporting blogging with informal budgets and borrowed resources just won’t cut it,” their report says. “Instead, marketers need to understand how and why blogging will affect their particular businesses, and calculating the ROI of blogging is the process by which marketers can obtain this understanding.” http://news.yahoo.com/s/cmp/20070127/tc_cmp/197001026
VIDEO BLOGGING SPURS NEW BRAND OF POLITICS (Washington Post, 26 Jan 2007) -- The YouTube era of politics, which helped to bring down George Allen (R) in last fall’s U.S. Senate election, has come to the Virginia General Assembly. Upset that Republicans are killing bills without recording the vote, a Democratic operative is trolling the halls of the State Capitol with a video camera to put Republicans on the defensive. The videos are uploaded on blogs or YouTube, a popular Internet video sharing site. On Thursday, after House Republicans killed several proposals to increase the state’s minimum wage in an unrecorded vote, furious Democrats put a video of the proceedings on http://www.assemblyaccess.com, a party blog. Democrats have made changing the hourly wage to $7.25 a key part of their agenda. http://www.washingtonpost.com/wp-dyn/content/article/2007/01/25/AR2007012501891.html
EMPLOYERS WINNING BLOG SUITS -- SO FAR (Law.com, 26 Jan 2007) -- Litigation over employees blogging negatively about their jobs or bosses has been sparse, but most cases so far have come down on the side of the employer. Yet observers predict that a pro-employer trend in litigation won’t stop the growth of legal fights over blogs. The spontaneity and immediacy of computer blogging makes it as appealing as water cooler gossip only with a bigger watering hole, prompting companies to pony up policies controlling the practice. “This is a challenge that has never before been confronted by the corporate environment,” said Jerome Coleman, labor and employment litigator at Nixon Peabody’s New York office. The potential is there to disclose trade secrets, defame the company or create problems with co-workers and discrimination, he said. “But you can’t put an outright ban on blogging,” Coleman added. Although the law is developing in the area, the few court rulings that have come down have been almost exclusively favorable to employers, according to Michael Fox in Ogletree, Deakins, Nash, Smoak & Stewart’s Austin, Texas, office, who has had his own employment law blog for several years, “Employerslawyer.” http://www.law.com/servlet/ContentServer?pagename=OpenMarket/Xcelerate/View&c=LawArticle&cid=1169719347007&live=true&cst=1&pc=0&pa=0&ll=4&ll=2&ll=5&showsummary=0&h=9323E411A07AE264630B2CC8C1C125D9
SECRECY IS AT ISSUE IN SUITS OPPOSING SPY PROGRAM (New York Times, 26 Jan 2007) – The Bush administration has employed extraordinary secrecy in defending the National Security Agency’s highly classified domestic surveillance program from civil lawsuits. Plaintiffs and judges’ clerks cannot see its secret filings. Judges have to make appointments to review them and are not allowed to keep copies. Judges have even been instructed to use computers provided by the Justice Department to compose their decisions. Lawyers suing the government and some legal scholars say the procedures threaten the separation of powers, the adversary system and the lawyer-client privilege. Justice Department officials say the circumstances of the cases, involving a highly classified program, require extraordinary measures. The officials say they have used similar procedures in other cases involving classified materials. In ordinary civil suits, the parties’ submissions are sent to their adversaries and are available to the public in open court files. But in several cases challenging the eavesdropping, Justice Department lawyers have been submitting legal papers not by filing them in court but by placing them in a room at the department. They have filed papers, in other words, with themselves. At the meeting this month, judges on the United States Court of Appeals for the Sixth Circuit asked how the procedures might affect the integrity of the files and the appellate records. Some cases challenging the program, which monitored international communications of people in the United States without court approval, have also involved atypical maneuvering. Soon after one suit challenging the program was filed last year in Oregon, Justice Department lawyers threatened to seize an exhibit from the court file. This month, in the same case, the department sought to inspect and delete files from the computers on which lawyers for the plaintiffs had prepared their legal filings. Nancy S. Marder, a law professor at the Chicago-Kent College of Law and an authority on secrecy in litigation, said the tactics were really extreme and deeply, deeply troubling. In August 2004, the Treasury Department’s Office of Foreign Assets Control, which was investigating an Oregon charity, al-Haramain Islamic Foundation, inadvertently provided a copy of a classified document to a foundation lawyer, Lynne Bernabei. That document indicated, according to court filings, that the government monitored communications between officers of the charity and two of its lawyers without a warrant in spring 2004. Ms. Bernabei circulated the document to two directors of the charity, at least one of them in Saudi Arabia, and to three other lawyers. She discussed them with two more lawyers. A reporter for The Washington Post, David B. Ottaway, also reviewed the document. The full significance of the document was apparently not clear to any recipient, more than a year before The New York Times disclosed the existence of the N.S.A. program in December 2005. The F.B.I. learned of the disclosure almost immediately in August 2004, Judge King said at a court hearing last year, but made no effort to retrieve copies of the document for about six weeks. When it did, everyone it asked apparently returned all copies of the document. In a statement reported in The Post in March, for instance, Mr. Ottaway said he the F.B.I. had told him that the document had “highly sensitive national security information.” In a sworn statement in June, a lawyer who had the document, Asim Ghafoor, said the bureau took custody of his laptop computer “in order that the document might be ‘scrubbed’ from it.” The computer was returned weeks later. In February 2006, the charity and the two lawyers who say they were wiretapped sued to stop the program, requesting financial damages. They attached a copy of the classified document, filing it under seal. They have not said how they came to have a copy. Three weeks later, the lawyers for the foundation received a call from two Justice Department lawyers. The classified document “had not been properly secured,” the lawyers said, according to a letter from the plaintiffs’ lawyers to the judge. As Mr. Eisenberg recalled it, the government lawyers said, “The F.B.I. is on its way to the courthouse to take possession of the document from the judge.” But Judge King, at a hurriedly convened hearing, would not yield it, and asked, “What if I say I will not deliver it to the F.B.I.?” A Justice Department lawyer, Anthony J. Coppolino, gave a measured response, saying: “Your Honor, we obviously don’t want to have any kind of a confrontation with you. But it has to be secured in a proper fashion.” The document was ultimately deposited in a “secure compartmented information facility” at the bureau office in Portland. In the meantime, copies of the document appear to have been sent abroad, and the government concedes that it has made no efforts to contact people overseas who it suspects have them. “It’s probably gone many, many places,” Judge King said of the document at the August hearing. “Who is it secret from?” A Justice Department lawyer, Andrew H. Tannenbaum, replied, “It’s secret from anyone who has not seen it.” He added, “The document must be completely removed from the case, and plaintiffs are not allowed to rely on it to prove their claims.” Judge King wondered aloud about the implications of that position, saying, “There is nothing in the law that requires them to purge their memory.” In a decision in September, Judge King ruled that the plaintiffs were not entitled to review the document again but could rely on their recollections of it. In October, they filed a motion for summary judgment, a routine step in many civil litigations. In a sealed filing, they described the classified document. Government lawyers sent Judge King a letter saying the plaintiffs had “mishandled information contained in the classified document” by, among other actions, preparing filings on their own computers. In a telephone conference on Nov. 1, Judge King appeared unpersuaded. “My problem with your statement,” he told Mr. Tannenbaum, “is that you assume you are absolutely correct in everything you are stating, and I am not sure that you are.” Mr. Boyd of the Justice Department said the government “continues to explore with counsel ways in which the classified information may be properly protected without any intrusion on the attorney-client privilege.” http://www.nytimes.com/2007/01/26/washington/26nsa.html?ex=1327467600&en=252c10a6b678989e&ei=5090&partner=rssuserland&emc=rss
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FBI TURNS TO BROAD NEW WIRETAP METHOD (30 Jan 2007) -- The FBI appears to have adopted an invasive Internet surveillance technique that collects far more data on innocent Americans than previously has been disclosed. Instead of recording only what a particular suspect is doing, agents conducting investigations appear to be assembling the activities of thousands of Internet users at a time into massive databases, according to current and former officials. That database can subsequently be queried for names, e-mail addresses or keywords. Such a technique is broader and potentially more intrusive than the FBI’s Carnivore surveillance system, later renamed DCS1000. It raises concerns similar to those stirred by widespread Internet monitoring that the National Security Agency is said to have done, according to documents that have surfaced in one federal lawsuit, and may stretch the bounds of what’s legally permissible. Call it the vacuum-cleaner approach. It’s employed when police have obtained a court order and an Internet service provider can’t “isolate the particular person or IP address” because of technical constraints, says Paul Ohm, a former trial attorney at the Justice Department’s Computer Crime and Intellectual Property Section. (An Internet Protocol address is a series of digits that can identify an individual computer.) That kind of full-pipe surveillance can record all Internet traffic, including Web browsing--or, optionally, only certain subsets such as all e-mail messages flowing through the network. Interception typically takes place inside an Internet provider’s network at the junction point of a router or network switch. The technique came to light at the Search & Seizure in the Digital Age symposium held at Stanford University’s law school. Ohm, who is now a law professor at the University of Colorado at Boulder, and Richard Downing, a CCIPS assistant deputy chief, discussed it during the symposium. In a telephone conversation afterward, Ohm said that full-pipe recording has become federal agents’ default method for Internet surveillance. “You collect wherever you can on the (network) segment,” he said. “If it happens to be the segment that has a lot of IP addresses, you don’t throw away the other IP addresses. You do that after the fact.” related blog DOJ takes issue with wiretapping story Justice Department spokesman responds to CNET News.com report. “You intercept first and you use whatever filtering, data mining to get at the information about the person you’re trying to monitor,” he added. “What they’re doing is even worse than Carnivore,” said Kevin Bankston, a staff attorney at the Electronic Frontier Foundation who attended the Stanford event. “What they’re doing is intercepting everyone and then choosing their targets.” http://news.com.com/FBI+turns+to+broad+new+wiretap+method/2100-7348_3-6154457.html
VISTA’S LEGAL FINE PRINT RAISES RED FLAGS (Toronto Star, 29 Jan 2007) -- Vista, the latest version of Microsoft’s Windows operating system, makes its long awaited consumer debut tomorrow. The first major upgrade in five years, Vista incorporates a new, sleek look and features a wide array of new functionality, such as better search tools and stronger security. The early reviews have tended to damn the upgrade with faint praise, however, characterizing it as the best, most secure version of Windows, yet one that contains few, if any, revolutionary features. While those reviews have focused chiefly on Vista’s new functionality, for the past few months the legal and technical communities have dug into Vista’s “fine print.” Those communities have raised red flags about Vista’s legal terms and conditions as well as the technical limitations that have been incorporated into the software at the insistence of the motion picture industry. The net effect of these concerns may constitute the real Vista revolution as they point to an unprecedented loss of consumer control over their own personal computers. In the name of shielding consumers from computer viruses and protecting copyright owners from potential infringement, Vista seemingly wrestles control of the “user experience” from the user. Vista’s legal fine print includes extensive provisions granting Microsoft the right to regularly check the legitimacy of the software and holds the prospect of deleting certain programs without the user’s knowledge. During the installation process, users “activate” Vista by associating it with a particular computer or device and transmitting certain hardware information directly to Microsoft. Even after installation, the legal agreement grants Microsoft the right to revalidate the software or to require users to reactivate it should they make changes to their computer components. In addition, it sets significant limits on the ability to copy or transfer the software, prohibiting anything more than a single backup copy and setting strict limits on transferring the software to different devices or users. Vista also incorporates Windows Defender, an anti-virus program that actively scans computers for “spyware, adware, and other potentially unwanted software.” The agreement does not define any of these terms, leaving it to Microsoft to determine what constitutes unwanted software. Once operational, the agreement warns that Windows Defender will, by default, automatically remove software rated “high” or “severe,” even though that may result in other software ceasing to work or mistakenly result in the removal of software that is not unwanted. For greater certainty, the terms and conditions remove any doubt about who is in control by providing that “this agreement only gives you some rights to use the software. Microsoft reserves all other rights.” For those users frustrated by the software’s limitations, Microsoft cautions that “you may not work around any technical limitations in the software.” http://www.thestar.com/Business/article/175801
COURTS TURN TO WIKIPEDIA, BUT SELECTIVELY (New York Times, 29 Jan 2007) -- When a court-appointed special master last year rejected the claim of an Alabama couple that their daughter had suffered seizures after a vaccination, she explained her decision in part by referring to material from articles in Wikipedia, the collaborative online encyclopedia. The reaction from the court above her, the United States Court of Federal Claims, was direct: the materials “culled from the Internet do not — at least on their face — meet” standards of reliability. The court reversed her decision. Oddly, to cite the “pervasive, and for our purposes, disturbing series of disclaimers” concerning the site’s accuracy, the same Court of Federal Claims relied on an article called “Researching With Wikipedia” found — where else? — on Wikipedia. (The family has reached a settlement, their lawyer said.)A simple search of published court decisions shows that Wikipedia is frequently cited by judges around the country, involving serious issues and the bizarre — such as a 2005 tax case before the Tennessee Court of Appeals concerning the definition of “beverage” that involved hundreds of thousands of dollars, and, just this week, a case in Federal District Court in Florida that involved the term “booty music” as played during a wet T-shirt contest. More than 100 judicial rulings have relied on Wikipedia, beginning in 2004, including 13 from circuit courts of appeal, one step below the Supreme Court. (The Supreme Court thus far has never cited Wikipedia.) “Wikipedia is a terrific resource,” said Judge Richard A. Posner of the United States Court of Appeals for the Seventh Circuit, in Chicago. “Partly because it so convenient, it often has been updated recently and is very accurate.” But, he added: “It wouldn’t be right to use it in a critical issue. If the safety of a product is at issue, you wouldn’t look it up in Wikipedia.” Many citations by judges, often in footnotes, are like Judge Posner’s, beside the main judicial point, appear intended to show how hip and contemporary the judge is, reflecting Professor Sunstein’s suspicion, “that law clerks are using Wikipedia a great deal.” The Supreme Court of Iowa cites Wikipedia to explain that “jungle juice” is “the name given to a mix of liquor that is usually served for the sole purpose of becoming intoxicated.” In the Florida case, the court noted that booty music has “a slightly higher dance tempo and occasional sexually explicit lyrical content.” As opposed to these tangential references, Wikipedia has also been used for more significant facts. Such cases include a Brooklyn surrogate court’s definition of the Jewish marriage ceremony and the Iowa Court of Appeals’ declaration that French is the official language of the Republic of Guinea. In 2004, the Court of Appeals for the 11th Circuit, in Georgia, referred to a Wikipedia entry of the Department of Homeland Security’s threat levels in a ruling concerning magnetometer searches of antiwar protesters. In a recent letter to The New York Law Journal, Kenneth H. Ryesky, a tax lawyer who teaches at Queens College and Yeshiva University, took exception to the practice, writing that “citation of an inherently unstable source such as Wikipedia can undermine the foundation not only of the judicial opinion in which Wikipedia is cited, but of the future briefs and judicial opinions which in turn use that judicial opinion as authority.” Recognizing that concern, Lawrence Lessig, a professor at Stanford Law School who frequently writes about technology, said that he favored a system that captures in time online sources like Wikipedia, so that a reader sees the same material that the writer saw. He said he used www.webcitation.org for the online citations in his amicus brief to the Supreme Court in Metro-Goldwyn-Mayer Studios v. Grokster Ltd., which “makes the particular reference a stable reference, and something someone can evaluate.” http://www.nytimes.com/2007/01/29/technology/29wikipedia.html?ex=1327726800&en=92bbe5fe41874778&ei=5090&partner=rssuserland&emc=rss
SONY BMG SETTLES FTC CHARGES OVER ANTI-PIRACY CDS (SiliconValley.comm, 30 Jan 2007) -- U.S. regulators said Tuesday that Sony BMG Music Entertainment agreed to reimburse consumers up to $150 for damage to their computers from CDs with hidden anti-piracy software. According to the Federal Trade Commission, which announced the settlement, Sony BMG’s anti-piracy software limited the devices on which music could be played to those made by Sony Corp., Microsoft Corp. or other Windows-compatible devices. The software also restricted the number of copies of the music that could be made to three, the agency said, and ``exposed consumers to significant security risks and was unreasonably difficult to uninstall.” ``Installations of secret software that create security risks are intrusive and unlawful,” FTC Chairman Deborah Platt Majoras said. The focus of the FTC action is not the limits themselves, Majoras said, but the lack of notification. ``Ordinary experience with CDs would not lead consumers to expect these limits,” she said. ``This was a case about disclosure.” The settlement requires the company to allow consumers to exchange through the end of June the affected CDs purchased before Dec. 31, 2006, and reimburse them up to $150 to repair damage done when they tried to remove the software. It also requires Sony BMG to clearly disclose limitations on consumers’ use of music CDs and prohibits it from installing software without consumer consent. For two years, Sony BMG also must provide an uninstall tool and patches to repair the security vulnerabilities on consumers’ computers and must advertise them on its Web site. The company also is required to publish notices describing the exchange and repair reimbursement programs on its Web site. http://www.siliconvalley.com/mld/siliconvalley/news/editorial/16581257.htm [Editor: There’s a good article on-point in the current issue of the ABA’s Business Law Today: “The ‘Agreement’ That Sparked A Storm”. It’ll be available online after February at http://www.abanet.org/buslaw/blt/.]
NFL TO OFFER SUPER BOWL HIGHLIGHTS ON ITUNES (SiliconValley.com, 30 Jan 2007) -- For the first time ever, football fans will be able to download video highlights of the Super Bowl, and they will be offered exclusively through Apple Inc.’s online iTunes Store. The National Football League said Tuesday it will make highlights from Sunday’s game available for purchase online the following day. The download, in English or Spanish, will cost $1.99 and will be viewable on computers or iPods. A 90-minute video of the NFL’s coverage of the Super Bowl will also be sold for $1.99. http://www.siliconvalley.com/mld/siliconvalley/news/editorial/16583085.htm
NAVIGATING SALES TAX LAWS (Internet.com, 30 Jan 2007) -- According to the U.S. Census Bureau, 33 percent of state revenues come from sales ta. xAnd each year, state and local governments lose billions of dollars of potential revenue due to uncollected tax on online sales — a figure that the Center for Business and Economic Research says could add up to as much as $33.8 billion by 2008. No wonder states are cracking down on online businesses that don’t collect and submit sales tax — and angling for new federal guidelines that would simplify and standardize sales tax rates and collection. Determining whether or not your online business needs to be collecting sales tax from customers can be tricky, however, and the information available online can be intimidating and confusing. (For example, those of you saying, “Hey, what about the Internet Tax Freedom Act?” According to the Act, Internet access charges cannot be taxed, not merchandise sold online to customers in states where you have a physical presence.) To sort out the facts from the fiction, Ecommerce-Guide.com scoured the Web and spoke with the experts. What we discovered could not only potentially save you thousands of dollars in back taxes, interest and penalties, but keep you out of jail. http://www.ecommerce-guide.com/resources/article.php/3656806
GOOGLE MOVES TO DISARM SEARCH ‘BOMBS’ (Washington Post, 30 Jan 2007) -- For many years, Google said it wouldn’t rectify the antics of pranksters who rigged search terms, like having “miserable failure” bring up a White House biography of George W. Bush as a top result on its search engine. But Google last week reversed its position, changing its algorithms to eliminate so-called “Google bombs” that yield political or humorous results. On its blog targeted at Web engineers, Google disclosed that it made changes to minimize the impact of the most popular Google bombs. Too many people started to think the results reflected the company’s political opinion, it said. “We’ve seen a lot of misconceptions. People thought Google was behind these or was endorsing these” Google bombs, said Matt Cutts, the software engineer at Google who posted an explanation of the company’s decision on the Google Webmaster blog. “It’s not the case. Most of these can be considered pranks, and the direct impact on all search results is minuscule. But it is good to correct our search quality.” Because of the changes Google made to its formula, searching for “miserable failure” on Google now pulls up a news story by the BBC about Google bombing as the first result, followed by a Wikipedia entry on the topic and another article in an industry publication. The White House page no longer appears in the top 100 results. The search engine uses many factors to determine the ranking of a Web site in the search results. One factor influencing that ranking is how many other Web sites link to the targeted site, so if many sites use the term “miserable failure” and use it as a link to the White House site, the White House site rises in the rankings. The White House Web page does not contain the words “miserable failure,” but the obscurity of the phrase made it easier to rise quickly in the rankings. Other search engines use similar variations on search technology. Google isn’t the only one affected. Yahoo’s search, for example, still brings up the president’s profile as its top result. George Johnston, a Bellevue, Wash., man who claims to be the architect of the “miserable failure” Google bomb, said he started his campaign in 2003 because it would be “fun” and “easy.” He e-mailed a number of popular bloggers and asked them to use the phrase and create a link to the White House Web site. It quickly took off. “It spawned a whole class of jokes when people understood how easy it was,” Johnston said in an e-mail. “Google bombing as a blogger sport hit its peak in 2004,” then receded as the novelty wore off, he said. http://www.washingtonpost.com/wp-dyn/content/article/2007/01/29/AR2007012901891.html
APPEALS COURT ADJUSTS PRIVACY-AT-WORK RULING WORKERS HAVE RIGHT TO EXPECT SECURE PCS UNLESS GIVEN NOTICE (SFGate.com, 31 Jan 2007) -- A federal appeals court changed course Tuesday and said employees have a right of privacy in the contents of their workplace computers -- but employers who have an established policy of monitoring those computers retain the right to seize the files and turn them over to police. The Ninth U.S. Circuit Court of Appeals revisited its ruling of August in a Montana child pornography case, and again upheld an employee’s conviction for receiving obscene material that his employer found on his computer during a late-night raid. But Tuesday’s ruling set a more employee-friendly precedent for future cases than the August decision, which found that workers had no constitutional privacy rights in computers that their companies owned. Under that ruling, all employers, regardless of established policies, could have taken the computer files and given them to authorities, and police who managed to gain access to the files on their own could also have seized them. Under past Supreme Court rulings, “in the private employer context, employees retain at least some expectation of privacy in their offices,” Judge Diarmuid O’Scannlain, author of the August ruling, said in Tuesday’s decision by the same three-judge panel. He said the employee in this case, Jeffrey Ziegler, had a reasonable belief that his electronic files would be private in a password-protected computer kept in a locked office not shared by co-workers. http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/01/31/MNGK4NS23M1.DTL&feed=rss.news [Editor: Lesson-learned? Make sure you have communicated company policy reserving inspection/monitoring rights; defeat this “expectation” of privacy.]
FIRST SALE DOCTRINE APPLIED TO AUDIOBOOKS (BNA’s Internet Law News, 1 Feb 2007) -- BNA’s Electronic Commerce & Law Report reports that the 6th Circuit Court of Appeals has ruled that a publisher of educational audiobooks who repackaged and resold audiobooks produced by a rival did not infringe the copyrights in the audiobooks. The court held that the first sale doctrine applies to those repackaged copies, rejecting the application of the Record Rental Amendment of 1984, which excludes sound recordings from the reach of the first sale doctrine. The court considered an issue of first impression: whether the record rental exception to copyright’s first sale doctrine applied to all sound recordings, or only sound recordings of musical works.
Case name is Brilliance Audio Inc. v. Haights Cross Commc’ns Inc. Decision at http://caselaw.findlaw.com/data2/circs/6th/051209pv2.pdf
TRADE GROUP GIVES FEDS LOW CYBERSECURITY GRADE (ComputerWorld, 31 Jan 2007) -- The Cyber Security Industry Alliance has given the U.S. government D grades on its cybersecurity efforts in 2006, and renewed its call for Congress to pass a comprehensive data protection law in 2007. The CSIA, a trade group representing cybersecurity vendors, gave the U.S. government D grades in three areas: security of sensitive information, security and reliability of critical infrastructure, and federal government information assurance. “Government needs to take these issues very seriously,” said Liz Gasster, the CSIA’s acting executive director and general counsel. http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9009905&source=rss_topic146 Report at: https://www.csialliance.org/resources/pdfs/CSIA_06Report_07Agenda_US_Govt.pdf
ADWARE FUNDERS FINED FOR MALWARE CONTRIBUTIONS (VNUnet, 31 Jan 2007) – Priceline, Travelocity, and Cingular Wireless have agreed to pay a fine for advertising through an illegal adware application. The companies had purchased advertisements on DirectRevenue, a notorious maker of adware that is the target of a separate lawsuit for fraudulent software installations and serving illegal pop-up ads. The fines of $30,000 to $35,000 settle a lawsuit filed by New York Attorney General Andrew Cuomo. “Advertisers will now be held responsible when their ads end up on consumers’ computers without full notice and consent,” said Cuomo. Companies whose banner ads show up on adware networks often hide behind the premise that they outsourced the media buying to ‘outsiders’. Cuomo warned, however, that he will hold the advertiser responsible nonetheless. Anti-adware activists published a list last year containing the names of 12 vendors that had funded adware operations for a DirectRevenue competitor. Three of the named vendors subsequently cut their ties with the company in question. http://www.vnunet.com/vnunet/news/2173818/adware-funders-fined-supporting
THE TJX SECURITY BREACH. THIS ONE’S DIFFERENT. WAY DIFFERENT. (CIO Magazine, 1 Feb 2007) -- If you haven’t noticed, there is something different about the security breach disclosed last month by TJX Cos. Some Massachusetts banks have linked fraudulent credit card purchases to the security breach at TJX, during which hackers nabbed possibly millions of credit card numbers. Not such a big deal, you say? Well, as far as most security experts I have talked to in the past couple of years have said, matching a specific incident of credit card fraud to a specific security breach incident is unprecedented. Has any bank ever been able to prove that a significant number of fraudulent credit card purchases came from a specific corporate security breach? So far, no. But it is exactly this kind of “connecting the dots” that security experts say needs to happen for companies to begin to take information security more seriously. The Massachusetts Bankers Association (TJX is based in Framingham, Mass.) claims it has connected the dots. A small bank that is an MBA member linked a spike in fraudulent credit card purchases last month to the TJX break in. How did they do it? MBA execs won’t give details and won’t release the name of the bank, but MBA spokesman Bruce Spitzer says that last month that small undisclosed bank noticed 22 incidents of fraudulent credit card purchases on an undisclosed number of their customers’ accounts. That may not sound like a lot, but for the small bank, it represented a big spike in fraudulent purchases. Bank officials contacted the customers and asked if they had shopped at a TJX store. All said they had. Spitzer says the MBA, which has 250 member banks, intends to pursue the recovery of any costs from the fraudulent purchases and says it can directly link the credit card misuse to the TJX breach. If so, that’d be huge. Until now, there has been no smoking gun, and it remains to be seen whether the MBA, or a bank acting on its own, or Visa or Mastercard can make such a connection. http://blogs.cio.com/node/681?source=nlt_cioleader
ARIZONA COURT APPLIES SUMMARY JUDGMENT STANDARD TO EFFORT TO UNMASK WEB POSTERS (Steptoe & Johnson’s E-Commerce Law Week, 1 Feb 2007) -- Following the Delaware Supreme Court’s seminal ruling in Doe v. Cahill, another court has found that a plaintiff “must show that its claim would survive a Motion for Summary Judgment before being entitled to discover the identity of an anonymous speaker through any compulsory discovery process.” In McMann v. Doe, an Arizona trial court found that Massachusetts real estate developer Paul McMann had not made out a prima facie claim, and therefore could not subpoena domain name registrar GoDaddy.com or anonymization service Domains by Proxy, Inc., for the identity of the creator of an allegedly defamatory web site. With Cahill and the Arizona court’s ruling in McMann, these cases suggest that courts may be approaching a consensus that plaintiffs must meet something akin to the “summary judgment standard” before courts will require Internet service providers to disclose the identity of anonymous posters. http://www.steptoe.com/publications-4200.html
‘ELECTRIC SLIDE’ ON SLIPPERY DMCA SLOPE (CNET, 3 Feb 2007) -- The inventor of the “Electric Slide,” an iconic dance created in 1976, is fighting back against what he believes are copyright violations and, more importantly, examples of bad dancing. Kyle Machulis, an engineer at San Francisco’s Linden Lab, said he received a Digital Millennium Copyright Act takedown notice about a video he had shot at a recent convention showing three people doing the Electric Slide. “The creator of the Electric Slide claims to hold a copyright on the dance and is DMCAing every single video on YouTube” that references the dance, Machulis said. He’s also sent licensing demands to The Ellen DeGeneres Show, Machulis added. Indeed, Richard Silver, who filed the copyright for the Electric Slide in 2004, said on one of his Web pages that the DeGeneres Show had been putting up a legal fight as he tried to get compensation for a segment that aired in February 2006 in which actress Teri Hatcher and other dancers performed the popular wedding shuffle. http://news.com.com/2100-1030_3-6156021.html
OFFICIAL QUITS AFTER REMARK ON LAWYERS (New York Times, 3 Feb 2007) -- The senior Pentagon official who set off a controversy last month with remarks suggesting that corporations should consider severing business ties with law firms that represent Guantánamo Bay detainees has resigned. The official, Charles D. Stimson, deputy assistant secretary for detainee affairs, said that it was his decision to resign and that he was not asked to leave by Defense Secretary Robert M. Gates, said Bryan Whitman, a spokesman for the Pentagon. On Jan. 24, the Bar Association of San Francisco requested that the State Bar of California investigate Mr. Stimson for possible violations of California ethics rules, the San Francisco group’s Web site says. The president of the American Bar Association, Karen J. Mathis, said that she could not comment on the resignation, but that by reacting to his comments “the American public reaffirmed its commitment to a core principle of our justice system: that every accused person deserves adequate legal representation.” http://www.nytimes.com/2007/02/03/washington/03gitmo.html?_r=1&oref=slogin
GOOGLE EARTH PROMPTS INDIAN FEARS (BBC, 5 Feb 2007) -- Google is in talks with India about sensitive sites viewable via the Google Earth service. Citing security worries the Indian government has asked Google to reduce the detail in a selection of images. The government is drawing up a list of places it considers sensitive, which is expected to include military bases and government buildings. Many other areas in Google Earth have been blurred by governments keen to stop people seeing sensitive sites. The talks about blurring some locations viewable via Google Earth came out of a meeting between science and technology ministers from the Indian government and the search firm. In a report in the Times of India, the Indian government said that detailed plans of buildings and accurate maps could prove a boon to extremists. India’s fears were first aired in 2005 - soon after the service launched. In “exceptional” circumstances Google said it too would blur images making up the virtual Earth. This has prompted many people to scour Google’s virtual Earth looking for the places where this blurring has occurred. http://news.bbc.co.uk/2/hi/technology/6331033.stm
GERMAN POLICE BARRED FROM SECRETLY SEARCHING COMPUTERS OVER INTERNET (SiliconValley.com, 5 Feb 2007) -- Police cannot secretly search suspects’ computer hard drives over the Internet, a German court ruled Monday. The decision of the Federal Court of Justice in Karlsruhe bars police from using software to search through remote hard drives unless parliament passes a law explicitly allowing the technique. Police, however, still will be allowed to seize evidence from PCs when conducting searches in person. Arguing that stealth searches were indispensable to investigating criminals and terrorists, Interior Minister Wolfgang Schaeuble, the country’s top security official responsible for police, called on the government to seek swift changes in the law. ``It is indispensable for criminal investigators to be able to carry out online searches secretly and with a corresponding order from a judge,” he said in a statement. The decision came in response to a request by the Federal Prosecutor’s Office, which had sought to use Trojan horse programs to investigate a possible terrorist group. Prosecutors argued the legal reasoning used to allow telephone surveillance and other electronic eavesdropping techniques should be applicable to gathering evidence over the Internet. http://www.siliconvalley.com/mld/siliconvalley/news/editorial/16628932.htm
-- and – “TJX to Take 4Q Charge for Computer Hack” http://biz.yahoo.com/ap/070201/tjx_outlook.html?.v=2
FBI FREEZES FUNDS OF ‘VIRTUAL WALLET’ WEB PAYMENT FIRM (The Guardian, 6 Feb 2007) -- The FBI has frozen funds held in customer accounts at Neteller, the “virtual wallet” payment processor, as part of its case against the firm’s two Canadian founders who were last month arrested and charged with racketeering and money laundering. Neteller refused to disclose how much had been frozen but company filings make clear huge sums were flowing between its US customers’ “e-wallets” and online merchants - particularly gambling websites - up until the firm was pressured to close its American operations in the wake of last month’s arrests. Over a six-month period last year the company processed transactions worth $5.1bn (£2.6bn), with about 85% involving US customers. Less than three weeks ago, Neteller said in a statement to the stock exchange: “The funds of US resident customers are held in segregated trust accounts and are fully secure and will be available for withdrawal by customers on demand.” Since then, advice on the group’s website makes clear customer withdrawals have now been blocked. “As a top priority, we are working to resolve all withdrawal issues but in the meantime we continue to maintain these funds in trust on your behalf,” customers are told. “Please check this page regularly for more updates.” http://technology.guardian.co.uk/news/story/0,,2006709,00.html
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CORNELL LAW LIBRARY ANNOUNCES LAUNCH OF LEGAL RESEARCH ENGINE (Cornell, 2 Feb 2007) -- The Cornell Law Library is pleased to announce its new Legal Research Engine This specialized search engine helps users easily find authoritative online legal research guides on every subject. It searches approximately 20 different web sites that either prolifically publish guides, or index and link to guides. Engine at: http://library.lawschool.cornell.edu/guides/researchengine.asp
REPORTERS WITHOUT BORDERS ISSUES 2007 ANNUAL PRESS FREEDOM SURVEY (RSF, 1 Feb 2007) -- The survey, published on 1 February, reports on press freedom in 98 countries and includes the main violations of journalists’ rights in 2006 and regional aspects of media and Internet freedom...The report lists the worst violations in repressive countries, including major culprits North Korea, Eritrea, Cuba and Turkmenistan, but also looks at democracies, where progress needs to be made too,” the organisation says. Report at http://www.rsf.org/IMG/pdf/rapport_en_md-2.pdf
SUPERIOR LEGAL WEB SITES TO WATCH (Law.com, 22 Jan 2007) -- We delve into our browser’s bookmarks this month, to review the recently launched Web sites of interest to individuals in the legal profession. Topic: BLAWG SEARCH: Several sites help you search the content of blogs, but offer no way to limit your search to law-related blogs. A new tool solves this search shortfall by indexing only the content of legal blogs. Called BlawgSearch, it is the creation of Tim Stanley and his team at the Web site design company Justia. (If Stanley’s name sounds familiar, it’s because he was cofounder of the original FindLaw). It launched in November, with an index of some 600 blawgs, and as of this writing, has more than 1,000, with more being added regularly. The site includes a directory of blawgs arranged by categories and locations, as well as a directory of other blawg directories. The site’s front page lists the most popular blawgs, highlights recent blawg posts and highlights a “featured blawger.” Clouds display tags and search terms. Other topics: Supreme Summary, Trail By Mock Jury, Judicial Profiles, Judicial Profiles, Demographic Data, Legal Reporting. http://www.law.com/jsp/legaltechnology/pubArticleLT.jsp?id=1169028148850
RAPID OPEN SOURCE GROWTH PREDICTED (Eversheds.com, 6 Feb 2007) -- A report on open source software (“OSS”) (software which is intended to be freely shared, improved and redistributed by others) has been published by the European Commission. Carried out by UNU-MERIT (a joint research and training centre of United Nations University and Maastricht University), the 300-page report details the economic impact of OSS globally. The report further recommends (a) avoiding penalising OSS in innovation and R&D incentives, public R&D funding and public software procurement (which it sees as often anti-competitive); (b) supporting OSS in pre-competitive research and standardisation; (c) avoiding vendor lock-in in educational systems by teaching students skills, rather than specific applications; (d) encouraging participation in OSS communities; and (e) providing equitable tax treatment for OSS creators. Report at http://ec.europa.eu/enterprise/ict/policy/doc/2006-11-20-flossimpact.pdf
SOURCES:
1. The Filter, a publication of the Berkman Center for Internet & Society at Harvard Law School, http://cyber.law.harvard.edu.
2. Edupage, http://www.educause.edu/pub/edupage/edupage.html.
3. SANS Newsbites, sans@sans.org.
4. NewsScan and Innovation, http://www.newsscan.com.
5. Internet Law & Policy Forum, http://www.ilpf.org.
6. BNA’s Internet Law News, http://ecommercecenter.bna.com.
7. Crypto-Gram, http://www.schneier.com/crypto-gram.html.
8. McGuire Wood’s Technology & Business Articles of Note, http://tinyurl.com/ywsusp
9. Steptoe & Johnson’s E-Commerce Law Week, www.steptoe.com
10. Readers’ submissions, and the editor’s discoveries.
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