(supplemented by related Tweets: http://twitter.com/vpolley #mirln)
· E-Discovery Nightmare Arises on BP’s Horizon
· NATO Warns of Strike Against Cyber Attackers
· After Google Hack, Warnings Pop Up In SEC Filings
o Senior Leaders Becoming Disconnected From Security
· The E-Book Sector
· Knowledge Management In Mergers and Acquisitions
· BP Damage Control Leaks Online
o Using Social Networking as Legal Tool
· EDS Settles Lawsuit over Botched CRM Project for $460 Million
· Irish Data Protection Commissioner Introduces Draft Code of Practice on Breach Notification
o UK’s ICO Will Not Compel Companies to Report Data Losses
· Judge Limits DHS Laptop Border Searches
· Tackling Social Media Problems at Work
o Survey: Social Networking Policies Still Scarce
· Law.gov: Putting Primary Law in the Public Domain
· Do You Own Your Software or Just ‘License’ It?
· Corporations, LLCs, and Electronic Communication
· FTC’s Provocative Discussion Paper on Saving Print Media
· The Enemy Within
· Mass. Court to be Test Pad for Blogs, Tweets
· Supreme Court OKs Search of Policeman’s Text Messages
· Utah Attorney General Mark Shurtleff Uses Twitter To Announce Execution
· Google And Twitter Tell Appeals Court That ‘Hot News’ Doctrine Is Obsolete
· Calif. Justices Say Junk E-Mail Messages Don’t Violate Anti-Spam Law
· ACLU: FBI Used ‘Dragnet’-Style Warrantless Cell Tracking
· Obama Administration Aims to Protect Identities in Cyberspace
· Next Supreme Court Nominee’s Emails Now Searchable Gmail Style
· Tech Champion, Watchdog Heads To Google
· YouTube Gets Decisive Win in Viacom/FAPL Case
· With All It Considers, NPR Music Is Growing
· Study: Open-Source Making Significant Traction in the Enterprise
NEWS | LOOKING BACK | NOTES
E-Discovery Nightmare Arises on BP’s Horizon (Law.com, 5 June 2010) -
The legal strategies for BP and other companies involved in the Deepwater Horizon disaster have yet to be revealed. But one thing is certain. Their in-house legal departments are in the midst of an expensive and Herculean [one calls it Augean] task -- discovery. “All of these organizations are well aware of the need to preserve and collect key information,” said Jim Wagner, CEO of DiscoverReady, a discovery management service. “But few organizations have ever confronted the scale of discovery that they are likely to have to undertake.” The companies are under document hold demands, subpoenas, and other requests from federal agencies, including the Justice Department, which announced this week that it has begun civil and criminal investigations into the massive oil spill in the Gulf of Mexico. They’re also subject to court orders in pending litigation. So the companies’ legal teams are likely sifting through and collecting massive amounts of data in both electronic and paper form, information that may go back decades. There may be physical evidence to collect, which may be have been destroyed. Meanwhile, the companies’ lawyers are also likely dealing with cross-border privacy issues that make the discovery process even more complex. “Welcome to discovery 101 in 2010,” said Laura Kibbe, who helped build Pfizer’s e-discovery system in 2005 as senior counsel. In the 1990s, she was also an in-house attorney at Texaco, where she dealt with the legal aftermath of oil spills. She’s now senior vice president of document review services at Epiq Systems. “Even under the best of circumstances, discovery is a labor-intensive, time-consuming process,” Kibbe said. “And it never goes as fast as government investigators or corporate counsel would like.” Figuring out what data is out there, and who has it, is the first step. That entails conducting interviews with employees and working with IT professionals to see what data can be retrieved and from where. Producing these documents under intense public scrutiny adds one more layer of complexity, legal experts said. The companies will have to be transparent and communicate regularly with government agencies about their processes. That will be key to the companies’ legal defense, and their public image. “Any mistakes they make will be magnified 100 times,” said Craig Carpenter, general counsel of Recommind, an e-discovery software provider. Some documents are easier to get than others. Much of the recent information the government wants about how companies immediately responded to the disaster will be electronic, Kibbe said. But government investigators may also want decades-old paper documents about construction and equipment, such as the now-sunken oil rig. Finding those paper documents will be hard if the people involved are no longer employed at the companies. “Everybody who knows anything about those products is gone,” Kibbe said. There’s also the challenge of getting employees to retain information after document hold notices have been issued. It could be tricky for in-house lawyers if the companies face criminal charges. So-called “bad actors” could delete information that might get them in trouble, said Wendy Curtis, chair of Orrick Herrington & Sutcliff’s e-discovery Working Group. “They need to be cognizant of that level of risk and put steps in place to prevent people from doing that,” she said. To make the task even more arduous, some of the information companies that London-based BP will need could be located overseas in the European Union, where stricter privacy laws make it harder to send information to the U.S. http://www.law.com/jsp/article.jsp?id=1202459271024&rss=newswire
NATO Warns of Strike Against Cyber Attackers (The Times, 6 June 2010) - NATO is considering the use of military force against enemies who launch cyber attacks on its member states. The move follows a series of Russian-linked hacking against Nato members and warnings from intelligence services of the growing threat from China. A team of Nato experts led by Madeleine Albright, the former US secretary of state, has warned that the next attack on a Nato country “may well come down a fibre-optic cable”. A report by Albright’s group said that a cyber attack on the critical infrastructure of a Nato country could equate to an armed attack, justifying retaliation. “A large-scale attack on Nato’s command and control systems or energy grids could possibly lead to collective defence measures under article 5,” the experts said. Article 5 is the cornerstone of the 1949 Nato charter, laying down that “an armed attack” against one or more Nato countries “shall be considered an attack against them all”. NATO is now considering how severe the attack would have to be to justify retaliation, what military force could be used and what targets would be attacked. The organisation’s lawyers say that because the effect of a cyber attack can be similar to an armed assault, there is no need to redraft existing treaties. http://www.timesonline.co.uk/tol/news/world/article7144856.ece
After Google Hack, Warnings Pop Up In SEC Filings (Business Week, 8 June 2010) - Five months after Google was hit by hackers looking to steal its secrets, technology companies are increasingly warning their shareholders that they may be materially affected by hacking attempts designed to take valuable intellectual property. In the past few months Google, Intel, Symantec and Northrop Grumman -- all companies thought to have been targets of a widespread spying operation -- have added new warnings to their U.S. Securities and Exchange Commission filings informing investors of the risks of computer attacks. Google doesn’t talk about the specific attack against its systems, but it now warns shareholders that this type of event is a material risk. “[O]utside parties may attempt to fraudulently induce employees, users, or customers to disclose sensitive information in order to gain access to our data or our users’ or customers’ data,” Google wrote in a section added to its annual financial report in February, a month after it disclosed the hacking incident. In February, Intel disclosed in an SEC filing that it had been targeted by a similar attack in January, and warned investors that the theft of its trade secrets could hurt its bottom line. http://www.businessweek.com/idg/2010-06-08/after-google-hack-warnings-pop-up-in-sec-filings.html
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Senior Leaders Becoming Disconnected From Security (SC Magazine, 21 June 2010) – The boards and senior executives at many organizations are not adequately involved in enterprise privacy and security decisions, according to a report released by researchers at Carnegie Mellon University’s CyLab. In the survey of 66 board members and senior executives at Fortune 100 companies, released last week, none of the respondents said that improving computer and data security is a top board priority, even though 56 percent said improving risk management is, according to the report. The finding suggests that there is a gap in understanding the relationship between IT risks and enterprise risk management, Jody Westby, a CyLab adjunct distinguished fellow and CEO of security risk advisory company Global Cyber Risk, told SCMagazineUS.com on Monday. “Boards are paying attention to risk, but they don’t understand information technology risk, and they need to learn how to exercise governance over the privacy and security of their digital assets,” Westby said. The second annual “Governance of Enterprise Security” report also found that board participation on a number of IT security governance activities is worse than it has been in the past. For example, 61 percent of respondents said they have not reviewed or approved annual privacy and security risk management budgets – up from 40 percent who said the same in 2008, the last time the survey was conducted. Respondents also are reviewing fewer security and privacy reports. http://www.scmagazineus.com/survey-cisos-worried-about-insiders-data-breaches/article/172950/ CMU study/report here: http://www.govinfosecurity.com/external/boards-report.pdf
The E-Book Sector (InsideHigherEd, 8 June 2010) - E-textbooks might be the most-talked about and least-used learning tools in traditional higher education. Campus libraries and e-reader manufacturers are betting on electronic learning materials to overtake traditional textbooks in the foreseeable future, but very few students at traditional institutions are currently using e-textbooks, according to recent surveys. Not so in the world of for-profit online education. Online for-profits such as American Public University System and the University of Phoenix have for years strategically steered students toward e-textbooks in an attempt to shave costs and ensure a more reliable delivery method that, in the context of online education, might seem to make more sense. At Kaplan University’s School of Legal Studies, digital texts account for around 80 percent of assigned reading. At Capella University, e-textbooks are an available and accepted option in nearly all 1,250 courses. In for-profit higher education, more than any other sector, the traditional book is becoming obsolete. Phoenix actually mandates that instructors assign digital materials “whenever feasible” -- a strategic turn the company started to take back in 2003, but which has come to fruition more recently, with so many more materials now available in digital format. At this point, roughly 90 percent of Phoenix’s course content is delivered via e-books or other electronic means -- the only exceptions coming in courses such as art history, where copyright issues surrounding digital renderings of images such as paintings remain a hurdle for e-book publishers, says David Bickford, the vice president of academic affairs at Phoenix. The American Public University System -- which is a private, for-profit university, despite its name -- has also been consciously promoting the use of e-textbooks, resulting in widespread adoption of the new format among students. Of the company’s 400 fully online courses, about 300 assign e-textbooks as the default delivery method (with exceptions for overseas military personnel, who make up a significant proportion of the institution’s enrollment and tend to have irregular Web access). While the institution allows stateside students the option of buying print books, more than 90 percent of students opt for the e-textbook, says Fred Stielow, dean of libraries. Those are staggering adoption rates compared to those at nonprofit online programs and on traditional campuses. Among the respondents to a 2009 Campus Computing Project survey of 182 online programs at nonprofit universities, only 9 percent said e-textbooks were “widely used” at their institutions, while nearly half said electronic versions were “rarely used.” Even fewer brick-and-mortar institutions are deploying e-books in lieu of hard copies, with fewer than 5 percent citing e-book deployment as a key IT priority in the short term, according to another Campus Computing Project survey. And according to data from the Student Monitor, e-textbooks accounted for only 2 percent of all textbook sales last fall. http://www.insidehighered.com/news/2010/06/08/ebooks [related post from InsideHigherEd here: http://www.insidehighered.com/blogs/technology_and_learning/can_symtext_disrupt_the_textbook_market]
Knowledge Management In Mergers and Acquisitions (Nick Milton, 8 June 2010) - Knowledge management delivers maximum value when applied to high value knowledge, to support high value decisions, and in areas where that knowledge is otherwise at risk of being lost. A typical high value area is Mergers and Acquisitions. These are high cost, complex operations, where crucial decisions need to be made very well, and yet happen relatively rarely, so it is easy for tacit knowledge to be lost. People caught up in the high pressure activity can easily forget the detail of how the decisions were made, and fail to pass the knowledge on to future mergers and acquisitions teams. This combination of high value decisions made relatively infrequently, so that human memory alone cannot be relied on as a knowledge store, means that there is great value on documenting the learning for use in future mergers, acquisitions and divestments. http://www.nickmilton.com/2010/06/knowledge-management-in-mergers-and.html [Editor: good-news/bad-news … good: this works; bad: the company here is BP]
BP Damage Control Leaks Online (ABC, 8 June 2010 ) - Be careful where you click, especially if you’re looking for news on the BP oil spill. BP, the very company responsible for the oil spill that is already the worst in U.S. history, has purchased several phrases on search engines such as Google and Yahoo so that the first result that shows up directs information seekers to the company’s official website. A simple Google search of “oil spill” turns up several thousand news results, but the first link, highlighted at the very top of the page, is from BP. “Learn more about how BP is helping,” the link’s tagline reads. A spokesman for the company confirmed to ABC News that it had, in fact, bought these search terms to make information on the spill more accessible to the public. “We have bought search terms on search engines like Google to make it easier for people to find out more about our efforts in the Gulf and make it easier for people to find key links to information on filing claims, reporting oil on the beach and signing up to volunteer,” BP spokesman Toby Odone told ABC News. http://abcnews.go.com/m/screen?id=10835618&pid=4380645 [Hilarious Jon Stewart 7-minute clip: http://www.thedailyshow.com/watch/thu-june-10-2010/the-spilling-fields---bp-ad-campaign]
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Using Social Networking as Legal Tool (WJS, 15 June 2010) - Soon after the Deepwater Horizon drilling rig sank in April, Parker Waichman Alonso LLP turned to the Web in pursuit of law clients. The New York-based plaintiffs’ firm set up websites with names like bigspills.com, oilspillclaims.com and oil-rig-explosions.com, and it filled them with news related to the disaster and invitations for visitors to provide their names and contact information. More than 1,000 people have now completed the forms on the websites, and Parker Waichman, which has 23 lawyers, has filed about a dozen suits related to the oil disaster. Law firms, particularly those that represent plaintiffs, are increasingly devoting resources to developing a presence online, where consumers—and potential clients—congregate. And some of those firms are also creating news sites, such as newsinferno.com andconsumerwarningnetwork.com, with content created by employees. The plaintiffs’ sites disclose that they are affiliated with law firms, but many have the look and feel of community forums or news boards. And they have recently begun to supplant some more traditional marketing methods, such as yellow-page ads and radio and television spots. Like many plaintiffs firms, Parker Waichman also buys search ads and uses Facebook to publicize its sites. It also has 20 technology specialists who handle such tasks as writing copy for its roughly 300 websites. “We are on Twitter, Facebook, MySpace, all the social-networking sites,” said Jerrold Parker, a partner, noting that the firm now spends more than $1 million a year on digital marketing, about a third of its average annual marketing budget. The firm bought Google search ads for a few days after the BP PLC oil disaster to attract users to the law firm. It also added content to boost the sites’ rankings in the search results for terms like “oil spill lawsuit.” http://online.wsj.com/article/SB10001424052748704324304575306581598351428.html
EDS Settles Lawsuit over Botched CRM Project for $460 Million (Computerworld, 9 June 2010) - EDS has agreed to pay a staggering $460 million to settle a long-standing lawsuit brought against it by U.K.-based British Sky Broadcasting Group PLC over a botched Customer Relationship Management project. In a statement released yesterday, Sky said that the two companies had “full and finally” settled the litigation and all claims including those related to damages, litigation costs and interest. Yesterday’s settlement amount includes an interim payment of £270 million that EDS, which is now owned by Hewlett-Packard Co., paid Sky in February. That payment came after a British court in January ruled that EDS had misrepresented facts about its CRM implementation abilities and about how long it would take to complete the job when pitching for the CRM project back in 2000. A spokeswoman for HP today downplayed the settlement and said it had to do with a dispute that originated well before HP acquired EDS. “This matter is now closed, having been settled fully and finally on mutually agreed terms,” she said by e-mail. “We will not be commenting further publicly on this legacy issue.” The size of the EDS settlement amount is more than four times the amount of the original $109 million CRM development contract that EDS signed with Sky Broadcasting in late 2000. Under the contract, EDS was supposed to have helped Sky implement a CRM system to support the broadcaster’s call centers. http://www.computerworld.com/s/article/9177843/EDS_settles_lawsuit_over_botched_CRM_project_for_460M?source=CTWNLE_nlt_dailyam_2010-06-09
Irish Data Protection Commissioner Introduces Draft Code of Practice on Breach Notification (SC Magazine, 10 June 2010) - The theft or loss of personal data relating to more than 100 individuals now has to be reported to the Data Protection Commissioner under a draft code of practice in Ireland. According to the Irish Times, a draft code has been published in response to the recent recommendations of the Data Protection Review group established by Minister for Justice Dermot Ahern. Data Protection Commissioner Billy Hawkes said he had sought to publish the draft as quickly as possible after the review group report ‘to respond to public concern in relation to organisations losing personal data under their control while at the same time not imposing an undue burden on those organisations’. However there is an exception to this law where the data can be considered inaccessible due to proper security. Members of the public have been invited to make observations or submissions on the draft code before Friday 18th June. Brian Honan, founder and head of Ireland’s computer security incident response team and who contributed to the working group, said that he was pleased to see this proposed. He said: “As someone who has been campaigning for mandatory data breach disclosure laws in Ireland for a number of years I am pleased to see the proposed Data Security Breach Code of Practice. I have long argued that organisations need to realise that the data they hold on staff and customers is not theirs but rather has been entrusted to them by those individuals. http://www.scmagazineuk.com/irish-data-protection-commissioner-introduces-draft-code-of-practice-on-breach-notification/article/172079/
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UK’s ICO Will Not Compel Companies to Report Data Losses (V3, 10 June 2010) - The Information Commissioner’s Office (ICO) has no plans to force companies to report data losses, despite the Irish data protection watchdog lobbying its government for such measures. Organisations in the UK are not obliged to tell the ICO about any data losses, although the information watchdog has stressed that expects erring firms to do so, and considers it best practice. The Irish Data Protection Commissioner believes that any organisation that loses data on more than 100 individuals should have to report the incident, but a statement by the ICO has confirmed that it has no intention of calling for a similar system. “Under the Data Protection Act organisations have an obligation to ensure that personal information is held securely. We encourage organisations to advise us as soon as they are aware of a data breach which puts their customers at risk,” the ICO said. http://www.v3.co.uk/v3/news/2264584/ico-tight-lipped-demand-changes
Judge Limits DHS Laptop Border Searches (Wired, 10 June 2010) - A federal judge has ruled that border agents cannot seize a traveler’s laptop, keep it locked up for months, and examine it for contraband files without a warrant half a year later. U.S. District Judge Jeffrey White in the Northern District of California rejected the Obama administration’s argument that no warrant was necessary to look through the electronic files of an American citizen who was returning home from a trip to South Korea. “The court concludes that June search required a warrant,” White ruled on June 2, referring to a search of Andrew Hanson’s computer that took place a year ago. Hanson arrived San Francisco International Airport in January 2009. The Justice Department invoked a novel argument--which White dubbed “unpersuasive”--claiming that while Hanson was able to enter the country, his laptop remained in a kind of legal limbo where the Bill of Rights did not apply. (The Fourth Amendment generally requires a warrant for searches.) “Until merchandise has cleared customs, it may not enter the United States,” assistant U.S. attorney Owen Martikan argued. “The laptop never cleared customs and was maintained in government custody until it was searched...” Eric Chase, an attorney representing Hanson, acknowledged that an immediate search conducted at the border without a warrant is permissible. But police perusal of a hard drive six months later definitely is not, he said when asking the court to toss out the results of the June 2009 search. http://news.cnet.com/8301-13578_3-20007315-38.html
Tackling Social Media Problems at Work (Law.com, 10 June 2010) - Online social media is changing the way people communicate. It’s also blurring the line between work and play as more employees log on to networking sites like Facebook and Twitter, while they’re both on and off the clock. These days, employers are finding it increasingly difficult to limit or stop employees from using social media at work because a growing number of companies use the same sites to promote their products and services. And that’s creating some unique legal challenges in areas from privacy to employment, said outside and in-house counsel at a panel discussion Tuesday titled “The Virtual Water Cooler,” held at the 22nd Annual General Counsel Conference in New York. So they gave their fellow in-house counsel some suggestions from their own experience about how to make sure employees aren’t wasting company time or revealing trade secrets online -- without violating their legal rights or limiting their freedom of expression. In-house lawyers for both The Coca-Cola Company and Sprint Nextel said their companies don’t limit what employees can do online and they don’t monitor employees individually. Coke, for example, just keeps track of which sites are used most frequently companywide. It relies on managers to inform the legal department when an employee is suspected of violating a code of conduct online. Sprint also gives its employees a lot of latitude when it comes to social media, said in-house counsel Kirk Salzmann. In fact, it has an internal program called the “Social Media Ninja,” which encourages employees to become regular promoters of the company on social media sites. “Sprint is becoming a little more sophisticated,” he said. But there are still many legal risks associated with the use of social media, particularly when it comes to hiring, they said. The panelists discouraged companies from systematically using Facebook to weed through potential job candidates. The company could be accused of age, race, or religious discrimination later on. “We pretty much decided not to do it because of that kind of risk,” Johnson said. Elise Bloom, a partner at Proskauer Rose, said that if companies want to do it, they should have one group of people cull the sites for information, and then turn over only relevant information to the people doing the hiring. “There’s not going to be a perfect solution,” she said. http://www.law.com/jsp/article.jsp?id=1202462419508&rss=newswire
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Survey: Social Networking Policies Still Scarce (Network World, 23 June 2010) - Most organizations do not have a social networking policy, despite giving employees unfettered access to the popular web sites, according to a survey conducted by Symantec earlier this month. The survey was an attempt to gauge employee use of social media after a 2010 Symantec report on enterprise security found that enterprises view social media as a threat to security, said Kevin Haley, director of Symantec Security Response. Approximately 50 percent of the 336 respondents to the survey said they access Facebook or YouTube at least once a day, with 16 percent indicating they access the sites between three and five times daily. More than half access the sites for business reasons, according to the research. Another 46 percent said the sites were accessed for personal reasons. “To me the most interesting thing about this is this high level of concern CISOs and CIOs have about social networking, and yet so few of them have really implemented policy or procedures or any kind of blocking,” said Haley. Among organizations who responded, 42 percent said their organization does not block employee access to social media sites, and has no policy in place around social media use. Only 5 percent indicated a complete blocking of the sites at work, a solution that is not really feasible in today’s business environment, said Haley. http://www.networkworld.com/news/2010/062310-survey-social-networking-policies-still.html
Law.gov: Putting Primary Law in the Public Domain (Ambrogi’s blog, 11 June 2010) - Over the past six months, a series of workshops and symposia have explored the so-called Law.gov campaign, an effort to put all U.S. primary legal materials in the public domain. Next week, the series wraps up with a June 15 workshop sponsored by the Center for American Progress (which will be streamed live online) and then two days of events at Harvard’s Berkman Center June 17 and June 18. On this week’s Lawyer2Lawyer podcast, we discuss Law.gov with two people who have been integrally involved in the campaign and who are both pioneers in bringing primary legal materials to the public: Carl Malamud, founder of Public.Resource.Org, and Thomas R. Bruce, director and co-founder of the Legal Information Institute at Cornell University Law School. Listen to the show here or download the MP3. http://www.lawsitesblog.com/2010/06/law-gov-putting-primary-law-in-the-public-domain.html
Do You Own Your Software or Just ‘License’ It? (Law.com, 11 June 2010) - Is the software installed on your computer something you own -- or did you simply buy a “license” to use it? That’s the issue at the heart of Vernor v. Autodesk Inc., a case argued Monday before the 9th U.S. Circuit Court of Appeals that represents a broad challenge to the software industry’s fundamental business model. The dispute originated when plaintiff Craig Vernor, who earns a living selling used items on eBay, acquired several copies of AutoCAD, the 3-D modeling software that is Autodesk’s main product, at an office sale held by an architecture firm. New copies of AutoCAD software typically sell for about $4,000. When Vernor listed those copies for sale on eBay, Autodesk sent the online auction company a takedown notice accusing him of copyright infringement. Vernor responded with a counter-notice to eBay emphasizing that he was reselling legitimate, not pirated, software. Ultimately, after receiving more complaints from Vernor, eBay suspended his account for a month. (Vernor ultimately sold two copies of the secondhand AutoCAD software for about $400 apiece.) Vernor’s next move was to file a pro se declaratory judgment lawsuit in federal district court in Seattle. In his suit, Vernor sought a ruling that his resales of legitimate copies of AutoCAD did not infringe Autodesk’s copyright. Vernor soon got Greg Beck, a litigator at consumer nonprofit Public Citizen, to represent him. In 2008, federal district court judge Richard Jones ruled in Vernor’s favor on summary judgment, and Autodesk appealed that decision. If the 9th Circuit affirms the district court ruling in Vernor’s favor, many standard software licenses -- some form of which cover nearly all consumer software -- could become legally meaningless. Fearful of just that result, a major software industry group, the Software and Information Industry Association, has filed an amicus brief in support of Autodesk’s position. Autodesk general counsel Pascal di Fronzo referred an interview request to Jerry Falk, the Howard Rice partner representing the company in the appeal. Falk explains that if Vernor’s view on software resale is upheld by courts, the business model around which many software makers are built would have to change drastically. That, he says, is because a software vendor generally makes its software available under a “license,” while retaining the right to transfer copies, even after the initial sale. In other words, Autodesk’s position is that its customers are buying a license, and that the actual “ownership” of the copy stays with Autodesk. Falk adds that Autodesk makes copies of its software available to students and educators at much lower prices than what it charges those who use the software commercially. If those copies could be resold without restriction in a secondary market, Falk says, the company wouldn’t be able to offer such discounts. “It’s not at all clear who would benefit” he says. “There’s a substantial body of economic analysis that says all prices would go up, because software companies would end up charging more.” http://www.law.com/jsp/article.jsp?id=1202462605257&rss=newswire
Corporations, LLCs, and Electronic Communication (Law.com, 14 June 2010) - A natural person may do whatever is not forbidden by law, but a corporation may do only what is authorized by law and its charter. To what extent may corporations, the rules for which were developed generally in the 17th century, and limited liability companies, authorized in the 20th century, avail themselves of modern communication methods made available through technological advances? When the governing body, or the “owners,” or both, of an artificial entity consist of multiple individuals, and decisions must be made collectively, consensus must be reached among the several directors, shareholders, members, or managers. Traditional corporate law required the directors to meet face to face, on due notice, and to vote on a proposal after discussion and debate. The face-to-face requirement was similar for shareholders’ meetings, except that unlike a director, a shareholder was permitted to give a proxy to someone else, whether or not a shareholder, to attend the meeting and cast the proxy giver’s vote. By the mid-20th century, when corporations had become a vehicle through which not only large enterprises, but also individuals and small “partnerships” did business, legislatures (New Jersey did so in 1960s) modified the requirement for face-to-face corporate meetings. Both directors and shareholders were authorized to “act” by unanimous written consent. Shareholders were also authorized to act by non-unanimous written consent on notice to all others. Directors’ “meetings” were authorized to be held by means of conference telephone so long as everyone could hear each other. About 20 years ago (coincidentally when legislatures across the nation authorized the formation of LLCs), the use of computers, the internet, and e-mail began to envelop the world with dazzling speed that revolutionized communication. As virtually every large and small business, professional practice, and government function came to utilize (some might say become enslaved by) the computer, clients began to ask their lawyers if business or nonprofit corporations or LLCs could make use of the speed and convenience of electronic communication. Statutes are attempting to keep pace with the developments in technology. In 1988, the New Jersey Business Corporation Act was amended at N.J.S. 14A:5-8 to permit the list of shareholders entitled to vote at a shareholders’ meeting to be displayed on “any equipment which permits the visual display of the information required by this section.” The Committee on Corporate Laws of the ABA Section of Business Law has proposed an amendment to Section 7.5 of the Model Business Corporation Act that would authorize shareholders to participate in any meeting by means of remote communication subject to guidelines and procedures developed by the board of directors. The corporation must implement reasonable measures to verify that the remote participants are shareholders who have the opportunity to communicate and read or hear the proceedings. Recognizing that all features of a face-to-face (whether across the table or seated in an auditorium) meeting cannot be duplicated, the official comment to the proposed amendment states: “While this provision is aimed at approximating as much as possible shareholder participation in person or by proxy, including interacting with management during the meeting, it does not require that all can so participate and interact.” More relevant to New Jersey lawyers and New Jersey corporations is that in January, former Gov. Corzine signed A2879 (L.2009, ch. 176) into law. It amends N.J.S. 14A:1-8 to allow required or permitted notices be given by electronic transmission in addition to the traditional methods of mail and personal delivery. The new statute also adds a new section to the BCA, N.J.S. 14A:1-8.1, which prescribes the circumstances and requirements pursuant to which notices may be given electronically. http://www.law.com/jsp/article.jsp?id=1202462654560&rss=newswire
FTC’s Provocative Discussion Paper on Saving Print Media (CMLP, 14 June 2010) - The Federal Trade Commission—which last year created guidelines to impose ethical standards on bloggers—is now taking on the ambitious task of saving the print media in the Internet era. In preparation for the final in a series of hearings on the future of the news media, the Commission has released a staff report that makes some pretty bold proposals, including legal changes and even government subsidies for traditional media. The final hearing will be held June 15 at the National Press Club in Washington, D.C. The report carefully notes on the first page that “[t]his draft does not represent final conclusions or recommendations by the Commission or FTC staff; it is solely for purposes of discussion.” The Commission issued a subsequent press release to clarify this. The proposals in the report were raised by panelists testifying at the FTC hearings, not generated by the FTC itself. Among the proposals in the report:
· amend the Copyright Act to specifically recognize the “hot news” doctrine, which a few courts have used to protect exclusive news reports and information for a brief period of time after publication;
· amend the Copyright Act to limit or clearly define the fair use doctrine with respect to news aggregators;
· create a government- or privately-run copyright licensing system for the news industry;
· create antitrust exemptions to allow news organizations to create a system for news aggregators and others to pay for the use of online content, and to erect pay walls for online content;
· establish a “journalism” division of the AmeriCorps youth public service program;
· increase government funding for the Corporation for Public Broadcasting;
· establish a national fund for local news, using funds from FCC fees on cell phone users, television and radio broadcast licensees, or Internet service providers, or from taxes on consumer electronics or advertising;
· provide a tax credit to news organizations for every journalist they employ
The Enemy Within (The Atlantic, June 2010) - When the Conficker computer “worm” was unleashed on the world in November 2008, cyber-security experts didn’t know what to make of it. It infiltrated millions of computers around the globe. It constantly checks in with its unknown creators. It uses an encryption code so sophisticated that only a very few people could have deployed it. For the first time ever, the cyber-security elites of the world have joined forces in a high-tech game of cops and robbers, trying to find Conficker’s creators and defeat them. The cops are failing. And now the worm lies there, waiting … http://www.theatlantic.com/magazine/archive/2010/06/the-enemy-within/8098/ [Editor: Terrific story, illustrating our increasing vulnerabilities and criminals’ increasing sophistication.]
Mass. Court to be Test Pad for Blogs, Tweets (Robert Ambrogi, 17 June 2010) - A courtroom in Quincy, Mass., will become a test kitchen for using new media to cover legal proceedings, thanks to a $250,000 Knight News Challenge grant announced today. The grant will go to Order in the Court 2.0, a project spearheaded by John Davidow, executive editor of new media at WBUR in Boston. The project will turn a courtroom in Quincy District Court into a laboratory to help establish best practices for digital coverage that can serve as a model for courts elsewhere. The courtroom will have a designated area for live blogging and the ability to stream court proceedings live to the public. The chief judge of the court has agreed to the project and the project has the support of the Judiciary Media Committee of the Massachusetts Supreme Judicial Court. http://www.lawsitesblog.com/2010/06/mass-court-to-be-test-pad-for-blogs-tweets.html
Supreme Court OKs Search of Policeman’s Text Messages (Law.com, 17 June 2010) - The Supreme Court on Thursday upheld the search of a police officer’s personal, sometimes sexually explicit, messages on a government-owned pager, saying it did not violate his constitutional rights. The Court was unanimous in reversing a federal appeals court ruling that sided with the Ontario, Calif., SWAT team officer. Justice Anthony Kennedy wrote for the Court that the officer, Sgt. Jeff Quon, could not assume “that his messages were in all circumstances immune from scrutiny.” But Kennedy said the Court purposely avoided a broader ruling about employees’ expectations of privacy when using equipment provided by their employers because of rapid and unpredictable changes in technology. Many employers tell workers there is no guarantee of privacy in anything sent over their company- or government-provided computers, cell phones or pagers. Ontario has a similar policy, but a police official also informally told officers that no one would audit their text messages if the officers personally paid for charges above a monthly allowance. The 9th U.S. Circuit Court of Appeals in San Francisco said the informal policy was enough to give the officers a “reasonable expectation of privacy” in their text messages and establish that their constitutional rights had been violated. Kennedy said that it is true that many employers accept or tolerate personal communications on company time and equipment. But he suggested that employees who want to avoid the potential embarrassment of having those communications revealed might “want to purchase and pay for their own” cell phones and other devices. http://www.law.com/jsp/article.jsp?id=1202462775992&rss=newswire Quon decision (17June 2010) - http://www.law.cornell.edu/supct/html/08-1332.ZS.html [Editor: any other result would have been surprising; employers retain logical rights of control and inspection over equipment they own, and remain largely free to (re)set employee privacy expectations.]
Utah Attorney General Mark Shurtleff Uses Twitter To Announce Execution (TechCrunch, 18 June 2010) - A sign of the times, although many may find it distasteful, or much worse: Utah Attorney General Mark Shurtleff used a mobile Twitter client to send out a tweet announcing the impending execution by firing squad of convicted murderer Ronnie Lee Gardner. As the BBC notes, quite a modern way to announce a very old-fashioned death. In total, the AG sent out 3 tweets about the event from his iPhone only a couple of hours ago, the most recent one an all-too-familiar (on Twitter) self-promoting one:
1) A solemn day. Barring a stay by Sup Ct, & with my final nod, Utah will use most extreme power & execute a killer. Mourn his victims. Justice
2) I just gave the go ahead to Corrections Director to proceed with Gardner’s execution. May God grant him the mercy he denied his victims.
3) We will be streaming live my press conference as soon as I’m told Gardner is dead. Watch it at www.attorneygeneral.Utah.gov/live.html http://techcrunch.com/2010/06/18/mark-shurtleff-twitter/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29&utm_content=Google+Reader
Google And Twitter Tell Appeals Court That ‘Hot News’ Doctrine Is Obsolete (TechDirt, 22 June 2010) - It looks like Google and Twitter have decided to weigh in on the closely watched lawsuit between TheFlyOnTheWall.com and Barclays, which has helped bring back the hot news doctrine, which creates an monopoly right on news reporting. This is quite worrisome for a whole variety of reasons, and as the appeals court considers the case, Google and Twitter have filed an amicus brief worrying about the implications of allowing the hot news doctrine to stand: “News reporting always has been a complex ecosystem, where what is ‘news’ is often driven by certain influential news organizations, with others republishing or broadcasting those facts -- all to the benefit of the public,” the companies said in the filing. Google and Twitter argued that upholding the district court’s decision would give those who obtained the news first strong incentives to block others from obtaining the same information.” http://techdirt.com/articles/20100622/0144239913.shtml
Calif. Justices Say Junk E-Mail Messages Don’t Violate Anti-Spam Law (Law.com 22 June 2010) - Those e-mail messages offering good credit rates from several seemingly independent sources? They might be annoying, but they’re not illegal. That’s what the California Supreme Court said in a ruling released Monday (pdf). “We find,” Justice Ming Chin wrote for a unanimous court, “that a single e-mail with an accurate and traceable domain name neither contains nor is accompanied by ‘misrepresented … header information’ ... merely because its domain name ... is ‘random,’ ‘varied,’ ‘garbled’ and ‘nonsensical’ when viewed in conjunction with domain names used in other e-mails. “An e-mail with an accurate and traceable domain name,” he continued, “makes no affirmative representation or statement of fact that is false.” The suit was filed by Craig Kleffman, who accused Vonage Holdings Corp. of violating the state’s anti-spam act by sending him 11 e-mail messages with headers that made each seem as if it came from a different source. The e-mail messages -- headed by such names as urgrtquikz.com and struggletailssite.com -- offered broadband telephone services. But the high court held that even if the messages were intended to bypass computers’ spam filters, they were not misrepresentations. http://www.law.com/jsp/article.jsp?id=1202462896750&rss=newswire
ACLU: FBI Used ‘Dragnet’-Style Warrantless Cell Tracking (CNET, 22 June 2010) - To nab a pair of men accused of robbing banks in Connecticut, court documents show the FBI turned to a novel investigative technique last year: warrantless monitoring of the locations of about 180 different cell phones, court documents show. The FBI obtained a secret order--it has not been made public--commanding nine different telephone companies to provide federal police “with all cell site tracking data and cell site locator information for all incoming and outgoing calls to and from the target numbers.” But because the U.S. Justice Department did not obtain a warrant by proving to a judge that there was probable cause to suspect criminal activity, there’s now a risk that the evidence from the location surveillance may be tossed out of court as illegally obtained. (Here’s a list (PDF) of the phone numbers tracked.) An attorney for Luis Soto, one of two brothers accused of stealing about $90,000 from Webster Bank and New Alliance Bank, asked a Connecticut judge on May 18 to suppress the location information, saying “the government obtained information that could be used to track the movements and locate the whereabouts at specific times of up to 180 people.” On Friday, the ACLU and the Electronic Frontier Foundation submitted a friend-of-the-court brief (PDF) agreeing with the defense. It says: “Because cell site location information implicates an expectation of privacy that society is prepared to recognize as reasonable, the Fourth Amendment requires that the government obtain a warrant based on probable cause prior to collecting this information.” The Obama administration has argued that no search warrants are needed; it says what’s needed is only a 2703(d) order, which requires law enforcement to show that the records are “relevant and material to an ongoing criminal investigation.” Because that standard is easier to meet than that of a search warrant, it’s less privacy-protective. In the Connecticut bank robbery case, the Justice Department has not yet directly replied to Soto’s motion. But earlier papers that prosecutors filed say that “the government selected the numbers in its cell site order by looking at the telephone numbers calling and being called by the known phone numbers at or around the time of each robbery.” “For each call the records provide a cell tower number,” the government’s brief says. “The cell tower number can then be looked up in other certified records, which gives a latitude and longitude for the tower location. Then any publicly available mapping tool (the government has used Google Maps) can be used to find the location of the tower.” In that case, the Obama administration has argued that warrantless tracking is permitted because Americans enjoy no “reasonable expectation of privacy” in their--or at least their cell phones’--whereabouts. U.S. Department of Justice lawyers say that “a customer’s Fourth Amendment rights are not violated when the phone company reveals to the government its own records” that show where a mobile device placed and received calls. http://news.cnet.com/8301-31921_3-20008444-281.html?part=rss&%3Bsubj=news&%3Btag=2547-1_3-0-20&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CnetNewscomMobile+%28CNET+News.com+Front+Door%29&utm_content=My+Yahoo
Obama Administration Aims to Protect Identities in Cyberspace (Nat’l Journal, 22 June 2010) - Information technology geeks, start your engines. The Obama administration on Friday plans to release the latest draft of its strategy for identification and authentication in cyberspace, Howard Schmidt, White House cybersecurity coordinator, said today. The National Strategy for Trusted Identities in Cyberspace, which is expected to recommend changes to privacy laws and set policies for verifying identities during online transactions, will be open for public comment with an aim toward getting Obama’s final approval in the fall, Schmidt said at a cybersecurity conference organized by Symantec. The goal is to strengthen protections against identity theft and online fraud, but to do so in a way that is not disruptive for businesses and consumers, Schmidt said. “We should not have to dramatically change the way we do business,” he added. Schmidt said the administration wants to work with the private sector to develop what he termed an “identity ecosystem.” http://techdailydose.nationaljournal.com/2010/06/obama-administration-aims-to-p.php
Next Supreme Court Nominee’s Emails Now Searchable Gmail Style (ReadWriteWeb, 23 June 2010) - Historical records are hard to look through casually. One solution is being explored in the case of Supreme Court Justice nominee Elena Kagan’s archive of emails sent while working for the Clinton administration. That body of data is now presented in a web-based interface that looks a lot like Gmail and is open to full-text search, thanks to the watchdog Sunlight Foundation. Elena’s Inbox is a thought-provoking project that could inspire future efforts to facilitate citizen evaluation of public records, and Sunlight has open-sourced the code used to build it. As it stands, the microsite is a fun and interesting peek inside the Clinton administration’s day to day operations. It’s hard to imagine any previous political nominee facing this degree of public transparency. Kagan was a legal eagle for Clinton, holding two different positions over five years. In that time, she sent just under five thousand emails. Some of the emails are amusing, others enlightening, others still are both. This is a fun interface for looking through these texts, but the limitations are quickly evident as well. Full text search works well when it’s your own email you’re searching through, but when you don’t know what language someone else uses to discuss certain topics, full text search feels inadequate. If a site like this incorporated collaborative user tagging of emails into topical buckets, that would make it all the more interesting. It would also be in character for the Sunlight Foundation. http://www.readwriteweb.com/archives/elena_kagan_emails.php?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+readwriteweb+%28ReadWriteWeb%29&utm_content=Google+Reader
Tech Champion, Watchdog Heads To Google (CNET, 23 June 2010) - Fred von Lohmann, likely the technology’s sector most recognized legal advocate, has called it quits as senior staff attorney for the Electronic Frontier Foundation. One of Grokster’s lead attorneys in the landmark MGM v. Grokster case, von Lohmann confirmed he is leaving EFF to take a job as Google’s senior copyright counsel. In an e-mail Wednesday, von Lohmann declined to comment further. If you’re a fan of unimpeded innovation, the free distribution of content over the Web, and Internet users’ right to privacy then you should take your hat off to von Lohmann. The way his supporters see it, von Lohmann has toiled to prevent tech start-ups accused of copyright violations from being stomped into jelly by mammoth entertainment conglomerates. Jonathan Zittrain, a Harvard law professor and co-director of Harvard’s Berkman Center for Internet & Society, said von Lohmann reminds him of the fictional Dr. Seuss character, The Lorax, a defender of the environment. It’s like “‘I am the Lorax and I speak for the trees,’” Zittrain said. “To me Fred is somebody who has been in the trenches as a litigator and that means you must take views and stick with them to do battle. Yet, I don’t know him as ideologically inflexible. “It’s rare to see somebody in the trenches that long and adopt and stick by structured positions but who has some flexibility to say ‘What is the right answer here?’” Zittrain continued. “That’s why those that may have had interests implicated by EFF policies and positions may have had reason to fear him but not consider him a foe.” http://news.cnet.com/8301-31001_3-20008586-261.html
YouTube Gets Decisive Win in Viacom/FAPL Case (Eric Goldman, 23 June 2010) - The Viacom v. YouTube case has been noteworthy for numerous reasons. It involves the cherished Internet brands YouTube and Google, it’s been going on forever (see my initial blog post on Viacom’s complaint from March 2007), and it’s generated lots of water cooler talk (see the salacious details from the parties’ summary judgment motions). Now, the case is also noteworthy because it hands YouTube a clean and decisive win on the DMCA 512(c) safe harbor. The ruling basically says that the current industry standard practices of notice-and-takedown for user-caused copyright infringement satisfies the safe harbor. Although this seems like an uncontroversial result when stated like that, the reality is that copyright owners have repeatedly angled to get a better deal than Congress gave them in 512. This case will squelch many of those copyright owner requests to force service providers to go beyond current industry-standard practices. Of course, we have to see how the opinion fares on appeal. The opinion stays above the fray and avoids most of the messy facts from the parties’ voyeuristic filings earlier this year. On the decisive question of what constitutes YouTube’s actual knowledge or red flags awareness of infringement, the court immediately turns to the legislative history. Fortunately for YouTube, the legislative history is replete with defense-favorable statements. Thus, the court summarizes the legislative history by saying its “tenor” requires that service providers have “knowledge of specific and identifiable infringements of particular individual items. Mere knowledge of prevalence of such activity in general is not enough.” Subsequently, the court reinforces that “General knowledge that infringement is ‘ubiquitous’ does not impose a duty on the service provider to monitor or search its service for infringements.” The court supports these conclusions by noting the difficulty service providers have monitoring/policing large databases of UGC and the fact that the notice-and-takedown system worked well in Viacom’s case when it actually submitted notices. The court also favorably cites the ccBill, UMG v. Veoh, Corbis v. Amazon and Tiffany v. eBay cases. By doing so, the court subtly does two things. First, it imports 9th Circuit 512 jurisprudence into a 2nd Circuit-bound court, and second, it imports the 2nd Circuit’s recent secondary trademark liability analysis into a copyright case. Both moves also favored YouTube. The latter is particularly interesting because it seems to accept a notice-and-takedown regime for trademark--not the statutory requirement, but nevertheless the logical implication of Tiffany v. eBay. Perhaps we are seeing some convergence in secondary copyright and secondary trademark infringement cases, despite their different statutory foundations. http://blog.ericgoldman.org/archives/2010/06/youtube_gets_de.htm
With All It Considers, NPR Music Is Growing (NYT, 24 June 2010) - Music has long been part of NPR’s identity, but perhaps never more than in recent years, as its NPR Music Web site has become an increasingly popular outlet for artists and music fans. The site, at www.npr.org/music, features many artists who don’t get heavy airplay on commercial radio, from the soprano Renée Fleming to the jazz musician Fred Hersch. But big-name pop acts get attention too. This month the Web site streamed 45 shows from the Bonnaroo festival, including the sets by the Dave Matthews Band and Tori Amos. More than 40 can still be found on the Web site. And on Wednesday NPR Music went mobile, introducing an iPhone application that provides a platform for the more than 300 pieces of new content — from videos to blog posts, podcasts to live concerts — that are added to the site each month. Music coverage is nothing new to public radio. But Kinsey Wilson, NPR’s general manager of digital media, said that since the music site went live in 2007, its staff has “provided a hub where things can originate,” rather than have music coverage spread across its news and culture desks. Mr. Wilson said that he had been skeptical about including so many genres under one roof — jazz, hip-hop, rock, world and classical — but that he had been proven wrong. The number of people coming to the site continues to increase, to about 1.7 million unique users in May. And the site has plans to expand its coverage of other genres too, especially Latin music. http://www.nytimes.com/2010/06/24/arts/television/24npr.html?scp=1&sq=NPR%20music&st=cse
Study: Open-Source Making Significant Traction in the Enterprise (ReadWriteWeb, 24 June 2010) - Open source software is at an inflection point in the enterprise. According to a survey by Accenture, more than two-thirds of organizations anticipate increases in investments this year. Almost 40% said that they expect to migrate mission-critical software to open-source within the next 12 months. The survey is in line with a market that is validating the use of open-source in the enterprise. This is illustrated by Red Hat's most recent financial results. In the past year, Red Hat's revenues are up 20%. All parts of its business are showing growth with particular strength in middleware. The company signed the largest deal in its history during the last quarter. According to Datamation, Red Hat renewed all of its top 25 deals during the quarter at over 120 percent of their original value. Accenture surveyed 300 blue-chip organizations in both the public and private sector. Half of the respondents are fully committed to open source. The survey further validates Red Hat results in its findings that 88% of all companies that use open-source will increase their investments in 2010. Some of the other findings in the survey:
· In both the United States and the United Kingdom, respondents cited quality and improved reliability as the key benefits to open-source. A total of 70% cited improved reliability and 69% said they are finding better security and bug fixing.
· Cost is a huge driver. Of the respondents, 71 percent sad they believed they could save in software maintenance costs. They also cited savings in total cost of ownership and development costs.
· Companies still don't want to share their own open-source. Less than a third say they do. This may be one of the biggest concerns as open-source goes in-house and not shared with the community. It's this sharing that gives open-source its strength.
· The public sector is lagging in the adoption of open-source.
**** LOOKING BACK - MIRLN TEN YEARS AGO ****
ALL STATES SHOULD HAVE ONLINE VOTING BY 2004 (Newsbytes, 6 November 2000) - A report from Gartner says that all 50 states should offer Internet voting by the time of the 2004 presidential election. However, Gartner’s Christopher Baum says obsolescence may be behind the move online rather than technological innovation. He looked at the buying cycle for mechanical voting machines and found that 35 percent of states and counties were still using voting machines in 1996 that employ a technology invented in the 1890s. The question for governments, Baum says, is whether they should buy expensive voting machines or move voting online. Bill Kimberling, deputy director of the Federal Election Commission’s Office of Election Administration, says a significant majority of states are using direct electronic systems for voting. He says that online voting in 2004 is “wishful thinking” because of security and voter verification issues.
**** NOTES ****
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SOURCES (inter alia):
1. The Filter, a publication of the Berkman Center for Internet & Society at Harvard Law School, http://cyber.law.harvard.edu
2. InsideHigherEd - http://www.insidehighered.com/
3. SANS Newsbites, sans@sans.org
4. NewsScan and Innovation, http://www.newsscan.com
5. BNA’s Internet Law News, http://ecommercecenter.bna.com
6. Crypto-Gram, http://www.schneier.com/crypto-gram.html
7. McGuire Wood’s Technology & Business Articles of Note
8. Steptoe & Johnson’s E-Commerce Law Week
9. Eric Goldman’s Technology and Marketing Law Blog, http://blog.ericgoldman.org/
10. Law.com
11. Readers’ submissions, and the editor’s discoveries.
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