Streaming has challenged downloading as the content consumption mode of choice, and entertainment lobbyists are scrambling to keep pace with the sea of change. The
media industry mainly takes issue with “rogue sites,” (which are often hosted outside of the U.S. and unresponsive to DMCA Takedown Notices), that provide access to streaming copies of infringed works. The industry’s latest failed effort, the PROTECT IP Act (PIPA), would have once again attacked the entire streaming ecosystem:

• suspected infringing sites;
• a broad array of online actors (ISPs, domain name registries, search engines, advertising and payment networks) that point Internet users in their direction;
• users who stream content from sites in question.

The bill was a bipartisan effort that resumed the aims of earlier bills that had stalled after opponents, including Sen. Rob Wyden (D-OR), denounced the bills’ potential to “muzzle free speech, stifle innovation, and economic growth.”

With regards to copyright infringement, Protect IP in its original embodiment would have provided that:

1. Private IP rights holders or the U.S. Attorney General may take action against the registered owner and operators of a site “dedicated to theft of U.S. property,” pursuing a court-ordered preliminary injunction or temporary restraining order under FRCP 65.
2. Within five days of getting notice of a court order, ISPs and search engines must take “technically feasible and reasonable measures” to block access to the site (including DNS blocking). Ad and payment networks would also be required to block financial transactions to and from the site.
3. Online providers are granted immunity from suit if they voluntarily undertake measures to block offshore sites if they have a “reasonable belief” that the site’s main purpose is infringement.
4. Anyone who willfully streams infringing content would be subject to criminal sanctions under 18 U.S.C. § 2319.

The DNS blocking measure was removed after public outcry, but the continuing existence of search blocking and other onerous provisions only sparked more outrage from a growing contingent of concerned Web denizens. Many acknowledged the need to protect valuable intellectual property, but took issue with the ham-fisted solutions put forth by PROTECT IP. The Electronic Frontier Foundation and other critics denounced the bills’ one-sided legislation process, as well as their broad remedies that would have enabled claimants to shut down sites without affording due process to opponents. Protests mounted, culminating on January 18 in a daylong Internet blackout by Reddit, Wikipedia, and more than 7,000 other information providers. Afterwards, one-time supporters of PROTECT IP announced a change of heart – including the bills’ co-sponsors, Sen. Marco Rubio and Rep. Ben Quayle. The protests staved off a preliminary Senate vote on PIPA that had been scheduled for January 24 of this year, and the bills have since been tabled.

Despite the faltering of PROTECT IP, there is no ebb in proposed measures to curb piracy. International debate is churning over a new measure, the Anti-Counterfeiting Trade Agreement (ACTA). The U.S. has already signed onto the treaty, and the treaty will take worldwide effect after six ACTA countries have ratified it. The main ambit of the bill is to bring other countries into alignment with strict anti-counterfeiting provisions already in place in the US and the UK. As secretive negotiations continue, however, potential persists for overbroad remedies and more draconian interpretations. Countries are allowed to construe treaty provisions in accordance with their current rules of law; less permissive countries, such as Morocco, would be expected to have harsher penalties for infringement.  The ACTA is supposed to target “widespread [unlawful] distribution,” but this aim could fall prey to looser interpretations. Looser interpretations would, for example, punish hobby bloggers who make vaguely transformative uses of copywritten expressions (e.g.,LOLcats), or squash low-level file sharers who send a few file bits up into the cloud.

ACTA aside, current methods of IP enforcement have left their Internet imprint. Following the shutdown and indictment of Megaupload, other online file storage sites have curbed their services in fear of similar retribution. As a result, those who seek to reaffirm DMCA safe harbors, maintain the online status quo, or even push for additional freedoms, will need to remain vigilant for the foreseeable future.

Facebook seeks to raise $5 Billion in its initial public stock offering, making it the largest Internet IPO on record.  It is believed that its stock offering will value the company $75 and $100 billion.  Mark Zuckerberg, however, will maintain his control over Facebook with voting power of almost 60 percent of total shares.  Meanwhile, Facebook is coming under a siege of patent lawsuits.  In 2011, Facebook was named as a defendant in 22 patent infringement suits.

Google announced its new privacy policy, which is set to become effective on March 1.  The new policy will allow it to track users’ activities across YouTube, Gmail, its search engine, and nearly all of its other sites.  Users will not be able to opt out, which may trigger more scrutiny from federal regulators.

On January 23, the Supreme Court held that attaching a GPS device to track a vehicle constitutes a search under the Fourth Amendment and requires a warrant.  The ruling is considered a victory for privacy rights in the age of advanced technology, but some argue it was too narrowly reasoned on the basis of the physical intrusion of attaching the device.

Congress indefinitely shelved the controversial antipiracy bills SOPA and PIPA after over 7,000 websites, including Wikipedia and Google protested the bills, handing a crushing blow to the traditional media industry.

Following the shutdown of file-sharing site Megaupload last month and arrest of 7 company employees, Federal prosecutors announced that Megaupload user data would be deleted as early as Thursday (Feb. 2).  However, a nonprofit group stepped in at the last minute, announcing on Wednesday that it would work with data-storage providers to create a website that will allow legitimate Megaupload users retrieve their data.

Over the past three years, students in Columbia Law School’s Lawyering in the Digital Age Clinic have teamed up with the judges at New York City’s Office of Administrative Trials and Hearings and the Legal Aid Society to create a website to help people who had their cars confiscated during an arrest get their cars back.

The NYC Police Department can seize a car during the course of an arrest for a variety of reasons, including driving while intoxicated, drug possession, and weapons possession.  What many car owners and drivers who have had their cars taken away do not know is that there is a process for asking to have the car returned in a civil proceeding even if there is a concurrent criminal trial for the arrest.

The process by which they can do this is called a Krimstock hearing, named after a plaintiff in a class action brought by the Legal Aid Society specifically to challenge the police department’s practice of seizing a car without providing a prompt hearing.

The website provides a comprehensive guide for people who wish to bring a Krimstock hearing case, whether or not they have a lawyer.  It describes car owners’ rights and guides them step-by-step through the entire hearing process, from requesting a hearing to recovering the car from the police impound.   It includes a detailed description of the process, what to prepare, how to settle during a pre-hearing conference if they want to, what to expect during the hearing, and what to do/how to re-schedule if they cannot make their hearing date. There are also videos on different pages of the site made by the OATH judges that serve as special guides through the site.

The Krimstock hearing site can be found at www.law.columbia.edu/krimstock.

About the Clinic

The Lawyering in the Digital Age clinic at Columbia Law School was created more than 10 years ago to explore the impact of technology on law practice and the legal profession. The clinic is taught by Professors Conrad Johnson and Mary Marsh Zulack along with Brian Donnelly, Director of Educational Technology.

The clinic represents an innovative approach to teaching students to engage in effective contemporary legal practice. Student fieldwork projects are done in partnership with public interest organizations and with judges. A common theme for all of the fieldwork is to improve access to justice. Clinic students have collaborated with several Legal Aid and Legal Services organizations to help lawyers integrate technology into their practice.

The clinic has also partnered with judges on all levels of the judiciary in New York.  The Krimstock project with OATH, showcased in this STLR post, is just one example of clinic students helping to make an adjudicative system more accessible and legal
information more available to under-served communities. The clinic students hope that this innovative effort will be a model for using technology to create other resources and tools to provide greater access to justice in other legal arenas.

To learn more about the Lawyering in the Digital Age Clinic, visit here.

The next status conference for AT&T’s embattled T-Mobile merger proposal has been postponed until December 9, due to a scheduling conflict. AT&T and Deutsche Telecom, parent company of T-Mobile, have withdrawn their FCC applications after FCC Chairman, Julius Genachowski, expressed strong doubts that the $39 billion deal would serve the public interest, citing instead the likelihood of job losses and stifled competition.

HTC’s purchase of S3 Graphics Co. may not be as fruitful as originally anticipated. HTC made the $300 acquisition in hopes that Apple would have to license graphics technology or risk patent litigation, but the U.S. International Trade Commission declared last week that Apple’s Macs and iPhones did not infringe on two S3 patents. S3 and HTC still have other outstanding patent disputes with Apple.

Onlookers are turning a critical eye on Zynga as the company gears up for its IPO. Reports have surfaced about the hard-nosed culture of the startup, which has grown to 2,200 employees since its inception in January 2007 and produced social gaming blockbusters such as FarmVille and Words with Friends. In the wake of Groupon’s falling share price, others are concerned about the strength of Zynga’s business model, which requires ongoing development and large marketing budgets to stave off the user boredom.

ShopCity, a website that helps local businesses sell products, has filed a complaint and added to Google’s antitrust worries. ShopCity alleges that the search giant favors its own competing service, Google Places, and pushes ShopCity listings onto later results pages that few web surfers ever check.

Opposition to the proposed Stop Online Piracy Act continues to grow, with more than one million emails and 87,000 phone calls flooding Congress to date. If passed, SOPA would enable the Department of Justice and private rights holders to block access to sites accused of hosting infringing content.

Witnesses in the United States may choose to exercise their right to “plead the Fifth,” or refuse to answer a question because the response could provide self incriminating evidence of an illegal act. But how strong is this right if a prosecutor is already aware of where a witness was, what they saw, what they heard, and in some ways even what they were thinking at any given time on any given day? I do not refer to torture, truth serums, or the recent accomplishment of Berkeley scientists in creating visual pictures from brain waves. Rather, I refer to smart phones and the growing field of “reality mining” or “mobile phone sensing.”

The Progression of Mobile Phone Technology

Mobile phones had a humble beginning in 1973. Unlike modern iterations, the first mobile phone was bulky, difficult to transport, and had but one function; it allowed you to make a phone call. Technology has rapidly progressed from 1973, and today’s smart phones come rich with functionality through the use of embedded sensors. For example, the Apple iPhone comes equipped with an accelerometer, gyroscope, GPS, digital compass, ambient light detection, and dual microphones and cameras. These sensors give the iPhone the ability to speak, listen, locate, give directions, detect movement etc…  The new iPhone4S also responds to natural language queries.

“Mobile phone sensing” makes use of these digital senses to enable smart phones to become even more dynamic. Dartmouth College’s Smartphone Sensing Group
describes it as “turning the everyday smart phone into a cognitive phone by pushing intelligence to the phone and the computing cloud to make inferences about people’s behavior, surroundings and their life patterns.” The practical applications of this field seem enormous:

• Researchers at Dartmouth college describe examples such as 1) using accelerometer data to automatically recognize different activities (e.g., running, walking, standing), 2) combining accelerometer data with location estimates from a phone’s GPS to recognize the mode of transportation such as walking, biking, driving, taking a bus or riding the subway and 3) continuously collecting audio from a phone’s microphone to “classify a diverse set of distinctive sounds associated with a particular context or activity in a person’s life, such as using an automated teller machine, being in a particular coffee shop, having a conversation, listening to music, making coffee, and driving.” Amongst a laundry list of other applications, this data can be translated into suggestions for how to avoid traffic, increase social networking, and for personal health care by tracking your physical activity or the number of times you’ve visited your doctor’s office.
• An Oregon based technology company, Digimarc, has developed an application that uses a mobile phone’s camera and microphone to “detect digital watermarks encoded into magazines, newspapers, packaging and other printed materials, as well as identify songs in music and read QR codes.” Mobile phones can then recognize what it is that a user is looking at or listening to and make personalized suggestions.
• Sandy Pentland (a leader in the field of mobile phone sensing and director of MIT’s Human Dynamics Laboratory) predicts that mobile phone sensing may be able to give clues to diagnosing depression by detecting changes in speech patterns, or using a phones motion sensors to reveal slight changes in gait, potentially acting as an early indicator of ailments such as Parkinson’s disease.

Smart Phone as a Witness

Yet these examples may not be the limit to what mobile phone sensing may be used for in the future. It seems possible that future criminal (or civil) trials may not need live witnesses so long as the sensor data from an accused individual’s smart phone was admissible as evidence. Before a word was said, it could be known where the individual was, who they were with, what they were looking at, listening to, talking about etc… Not just the day that a crime was committed, but days, weeks, or months in the past. These seem to be the personal experiences that individuals were traditionally allowed to protect to avoid self-incrimination.

Conclusion

The Fifth Amendment is concerned with what an individual must be witness to after a crime is committed, rather than before. Ex ante choices such as planning to commit a crime do not bar a person’s right to avoid self-incrimination. Thus a person who purchases a smart phone in order to utilize the advantages of mobile phone sensing (or for whatever other reason) should not diminish their rights under the Constitution. When we look ex post, the experiences that a phone interprets are the users, the senses that it has are digital extensions of the individuals. Those experiences and senses is what the Fifth Amendment is concerned with and should not be allowed as evidence of a person’s guilt.

What is cloud computing? The National Institute for Science and Technology defines cloud computing in richly technical NIST-speak. For reference: “a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.” That’s all pretty inaccessible. What it reduces to, essentially, are the principles of “scaled economics” – that is, law firms outsourcing their data storage needs to avoid expensive hardware upgrades and skim a little from their IT budgets.  One such public warehouse is DropBox; more on Dropbox later.

There it is, then. Law firms have adopted this as a fit cost-cutting strategy and they have done so en masse. The purposes range from e-mail archiving and document management (NetDocuments) to, among other things, payroll processing (ADP). The snowball has been tossed and has already gained formidable velocity. So much for tradition and so much for excess preoccupation with ABA/federal rules; now it’s okay for all to play ball. In a certain respect, law firms are just doing as businesses do. They only think about security in the context of security breach – when a golden laptop goes conspicuously missing, when a staff attorney discovers a keystroke logger, when server data gets compromised and there’s glaring signs of data leakage.  Then, we talk security.

DropBox was highly, highly touted as recently as last year; folks with technical know-how said DropBox was safe for use by law firms handling sensitive legal data. A year ago, this lawyer gave thunderous support for integrating DropBox into legal work. As did this guy: Why DropBox Rocks for Legal Offices. And then, on June 19^th 2011, there was a security breach. For four hours on that fateful Sunday, anyone with a modem could access DropBox-hosted documents; the systems would accept any password. Let that digest for a moment.

A well-credentialed acquaintance of mine once approached me for idea leads on a talk he scheduled to do at a conference entitled “Security in the Cloud.” I was speechless. After having done a bit of diligence, here’s what I’ve got. There is no security—none. The 1s and 0s are tossed off haplessly along in cyberspace. And beyond security, there is additional concern:

• there is, first and foremost, the worst case scenario of the loss of client data, which in turn would damage a firm’s professional reputation and expose it to malpractice liability;
• the bare inability to see or touch documents on a piece of hardware you own;
• the mere fact of having to interface with a third party at all, which represents a barrier between attorneys and their IT department;
• the indirect (and often) limited control of available bandwidth;
• the risk of becoming inadvertently subject to the laws of a foreign jurisdiction, where document storage might be ultimately maintained;
• and finally, waiving the privilege.

What do YOU think? In the humble view of this post’s author: the same principles of “scaled economics” that compel firms to outsource administrative responsibilities are what compel further outsourcing (and cost-cutting) on behalf of these third parties, with little additional accountability. Institutional inertia is a two-way process, and I feel firms ought to be vigilant of ongoing trends in the realm of cloud security – and withhold. At a minimum, whatever auditing standards a firm applies to its policy in-house ought to be extended and applied out-of-house as
well.

In terms of understanding the cloud’s topology, cumulonimbus may just as well be cumulo-“nebulous.” And if DropBox repeats itself soon – you’ll pardon the forced pun – the size of the fallout will just as well be a computational disaster.

Murphy had installed a Greek satellite company’s decoder card in her pub’s satellite TV system, allowing her access to the Greek telecasts of EPL games. As a result, her pub could show live soccer games at three in the afternoon–something other pubs, subscribing to English broadcast rights-holders Sky Sports and ESPN, could not offer. Sky/ESPN are obligated by their license with the EPL to black out EPL games played from 3-5 PM, a practice aimed at keeping fans in the stadiums instead of the bar stools and sofas across England.[1]

In addition to depressing attendance at matches, the use of foreign decoder cards strikes at the very foundation of the EPL’s broadcast business model: using a foreign decoder allows pub owners to get access to their soccer content at a fraction of the cost of domestic decoder. A public display subscription to domestic service costs a pub about $747 per month, whereas a subscription to NOVA (the Greek satellite provider) costs a fraction of that amount, about $184 per month. The ability to charge English subscribers a premium for their own domestic content has allowed the EPL to sell its domestic broadcasting rights for about $1 billion a year.[2]

This week’s ECJ ruling cut to the core of this business model: they ruled that the national law that made the use of such foreign decoder cards illegal was “contrary to EU law” in that it hindered a “completion of the internal market” for goods or services. Publicans like Ms. Murphy can thus no longer be stopped from (or fined for) ordering and using foreign decoders in their satellite receivers. They furthermore ruled that the EPL cannot circumvent these rules by inserting terms into their license agreements which would prevent broadcasters from selling decoders outside of their licensed territory. The scheme by which the EPL and its partners were able to extract a premium from English subscribers, according to the court “cannot be regarded as forming part of the appropriate remuneration” that rights-holders are due. In yet another potential blow to the EPL (and sports leagues throughout Europe), the court said (in what is likely dictum) that the EPL “cannot claim copyright in the Premier League matches themselves, as they cannot be classified as works” within EU copyright law. The ECJ said that only the anthem, on-screen logos, and other visual elements added by the EPL could constitute copyrightable works.

So what is the EPL to do? Its whole raison d’etre is to leverage the value of bundling the broadcast and sponsorship rights to top-flight English soccer and offer them to the highest bidders. The League took some comfort in the ECJ’s finding that the unique visual elements that the EPL tacks onto its broadcasts are subject to copyright protection. As a practical matter, this seems to be rather slight solace: once it is legal for the bartenders to buy and use these decoders in their pubs, preventing them from showing the part of the broadcasts that feature the League anthem or the League’s iconic logo seems like a chore indeed. As a legal matter, it would seem rather illogical for the EPL to be able to circumvent competition law by copyright protection what it cannot get through contract. As soccer commentators are apt to say in a close match, there is still “all to play for,” as the English court on remand might take a more favorable stance on the copyright issue and thus give the EPL the result they seek.

AT&T presented three main points designed to show that the cases by Sprint and
Cellular South should be dismissed. First AT&T argues that because Sprint and Cellular South are competitors—not consumers—in this market, both lack standing to bring an antitrust suit. The economic justification behind enjoining a horizontal merger among competitors, such as AT&T and T-Mobile, is based on the theory that the merger will lead to a more concentrated and less competitive market which will, in turn, lead to higher prices and reduced innovation. AT&T argues that even if the merger were to result in less competition and higher prices—a result AT&T says would not occur—any losses would be felt by consumers not competitors. AT&T goes on to argue that what Sprint and Cellular South are actually concerned about is increased competition from a more efficient unified AT&T/T-Mobile. AT&T argues that antitrust law does not provide any recourse for a competitor’s concern about losses resulting from a rival’s increased efficiency and competitiveness. AT&T also submitted a very powerful piece of evidence against Cellular South in this case. In their motion to dismiss the case, AT&T included an email it received from Hu Meena, CEO of Cellular South. Mr. Meena wrote that if the companies came to an agreement through which Cellular South would build a next generation LTE network in Mississippi which AT&T would use for roaming, and AT&T guaranteed reasonably priced access to its networks for Cellular South’s roaming needs for the next 10 years, Cellular South’s antitrust concerns would be alleviated. AT&T used the email to suggest that Cellular South was exploiting the lawsuit as a way of advancing its own strategic interests.

AT&T’s second point is a response to claims by Sprint and Cellular South that an AT&T/T-Mobile merger will reduce Sprint’s and Cellular South’s access to new wireless devices. Sprint and Cellular South argue that after the merger AT&T will be able to “coerce exclusionary handset deals” from device manufacturers effectively freezing competitors out of the market. AT&T responds that it is well recognized that exclusive handset deals are generally pro-competitive and encourage company differentiation. The only way that exclusive deals hurt competition is when they allow one party to unreasonably deprive another of access to goods. AT&T argues that such an outcome is extremely unlikely in this market as there are a great variety of handset manufacturers who produce many different handset models. Between 2006 and 2010 the number of handset manufacturers that distribute their products in the U.S. market increased from 8 to 21 and these manufacturers produced 302 different models. Therefore, AT&T contends that Sprint and Cellular South failed to provide any factual allegations which indicate they would be frozen out of the handset market.

AT&T’s final point was in response to claims by Sprint and Cellular South that the merger would have an effect on the market for roaming services. AT&T argues that Sprint fails to point to any effect on a market for roaming services in which Sprint is a participant. Sprint does not currently purchase roaming services from either AT&T or T-Mobile, nor would it be possible for them to do so. Sprint’s cell phone network uses CDMA technology which is incompatible with the GSM technology used by AT&T and T-Mobile. Cellular South uses GSM service for less than 3 percent of its customers and fails to show that it would be affected. AT&T goes on to argue that any claims by Sprint or Cellular South which state that the merger would increase the price they pay for Verizon roaming services lack any factual basis. AT&T argues that both Sprint and Cellular South are ignoring the fact that FCC regulations require all mobile wireless carriers to provide roaming on a just, reasonable and non-discriminatory basis.

Regardless of how one feels about the competitive effects of an AT&T/T-Mobile merger on the wireless industry, whether there is anything to gain by allowing Sprint and Cellular South to sue on the back of the DOJ is a separate question. The DOJ and the seven state attorneys general which have joined in the suit (New York, Washington, California, Illinois, Massachusetts, Ohio and Pennsylvania) seem well positioned to represent the welfare of wireless consumers and it is difficult to see what additional benefits would be provided by allowing wireless companies, primarily concerned with the merger’s effects on their own bottom lines, to sue as well. It is now up to Sprint and Cellular South to show why their suits should be allowed.  Oral arguments in the case are schedule for October 24^th.

E-book technology, as provided by Kindle or iBooks, presents particularly significant threats to reader privacy. As noted by the Electronic Frontier Foundation back in December 2009, e-readers have the potential to report back substantial information about their users’ reading habits, including what book you have read, what page you have searched for, how long you viewed it for, and what page you continued onto next. For example, Amazon’s Kindle License Agreement notes that Amazon will be provided with information on not only what books you have bought, but also “annotations, bookmarks, notes, highlights, or similar markings you make using your Kindle.” As such, there has been tremendous concern that such reading records are too easily tracked, and consequently vulnerable to exposure in legal proceedings. These concerns have been played out in recent times, with the North Carolina Department of Revenue demanding that Amazon turn over personally identifiable information linked to specific purchasing records for customers in North Carolina, and Colorado police attempting to subpoena information regarding all book orders ever placed by a suspect at a book store.

Facing these concerns, California recently passed S.B. 602, the Reader Privacy Act, which updates reader privacy laws by ensuring that privacy protections for book purchases are similar to long-established privacy laws for library records. The ACLU, a sponsor of the bill, noted the three prongs of protection to reader privacy associated with this Act:

-          Disclosure to Government: Government entities that seek disclosure of reading records must obtain a court order by showing a compelling interest, as well as an indication that they are using the least intrusive means to achieve this compelling interest. Furthermore, notice must be provided to the reader when the court order is executed, and prior notice must be given to the book seller and provider in order to provide the opportunity to appear and contest.

-          Disclosure to Third Parties: Third parties who seek disclosure in a civil or administrative action must similarly obtain a court order by showing a compelling interest, as well as an indication that they are using the least intrusive means to achieve this interest. For third party disclosures, both the book seller/provider and the reader must be given prior notice and the opportunity to appear and contest before disclosure.

-          Voluntary Disclosure: Reading records may be disclosed when the reader consents or exigent circumstances exist.

Some have questioned whether this law, although noble in intent, is necessary in practice. Mark Giangrande wondered exactly how many prosecutions had taken place where the person’s reading records were allowed into evidence. He noted that the current standard is that, in most cases, the government may not use a person’s reading habits, literary tastes, or political views as evidence against him, on the grounds that such evidence is prejudicial and not necessary to the charges.[1] He notes further that in cases where the reading habits are held relevant to the case, such habits are still considered inadmissible unless the defendant raises that issue.

While Giangrande’s arguments make sense, its retroactive perspective seems to miss the true benefits the law provides when analyzed from a prospective perspective. By establishing a bright line rule rather than a murky standard, California citizens are protected against not only increased litigation to prevent disclosure, but also against their data being released without notice. Businesses also benefit in two ways. First, the standards under which a business has to comply with a subpoena for customer information is clarified. Second, consumers will likely be more comfortable with using e-books, knowing that their personal reading history is protected. Even if the courts ultimately decide that reading habits cannot be admitted as evidence in criminal cases, this law is helpful because it expedites the litigation process.

Yet while the law is a good first step, there are certain limitations to the law. Of course, as a California law and not a federal law, the Reader Privacy Act’s protections are limited. Furthermore, the Act provides protection for the purchase and use of only e-books and books. With the rise of digital media, an increasing number of people acquire information through the internet and blogs. The Reader Privacy Act does not protect users against requests concerning their online history. Finally, the Act provides that “a provider shall not knowingly disclose to any government entity, or be compelled to disclose to any person, private entity, or government entity, any personal information of a user…,” where government entities refer only  to state or local agencies. For the law enforcement provisions, the protections extend only to requests by state law enforcement agencies. Joe Brockmeier notes that this merely means that California police cannot access your reading history, but there is no corresponding protection against federal agencies, even for users in California. As such, while California’s Reader Privacy Act should serve as a model for other states, California cannot afford to rest on its laurels. With technological advances providing increasing concerns regarding individuals’ privacy rights, legal protections must also evolve in a way that alleviates those concerns and mitigates the harmful impacts.

• Sprint is urging the FCC to quickly hold hearings to rule on whether the transfer of spectrum licenses from T-Mobile to AT&T serves the public interest. AT&T’s proposed $39 billion acquisition of T-Mobile is currently under review by the FCC after the US Justice Department sued to block the proposal.

• Senators Blumenthal (CT) and Franken (MN) introduced a bill on Tuesday that would prohibit wireless companies from having contract clauses that require consumers to use binding arbitration rather than suing in the case of a contract dispute.

• On Wednesday, members of the House reviewed the FTC’s recommendations to the Children’s Online Private Protection. The proposed changes would require greater permission from parents of children under the age of 13 before information could be collected from them on the Web.

• Also on Wednesday, Senator Coons (DE) and Kohl (WI) proposed amendments to the pending Currency Exchange Rate Oversight Reform Act of 2011. The amendments would allow private federal civil actions for trade secret infringement and would allow Customs & Border Patrol to share information on suspected counterfeiters with US rights holders.

• Samsung wants courts in France and Italy to prohibit Apple’s iPhone 4S, claiming that the iPhone infringed two of its patents. Samsung and Apple are currently in around 20 patent infringement legal disputes.

• AstraZeneca returned to court this week to defend its US patent on Crestor, a multibillion-dollar cholesterol drug, against generic drug makers who are appealing a decision from the US District Court in Delaware. In June 2010, the court ruled that generic firms failed to prove the patent was invalid because it was obvious.

When probed for the reasoning behind the change, Sony responded that the updated terms were “designed to benefit both the consumer and the company by ensuring that there is adequate time and procedures to resolve disputes.”  The gaming community seems unconvinced.  “Seems to me Sony is spontaneously forcing users to renegotiate their use contract in a decidedly one-sided fashion,” wrote one Slashdot contributor.  “With this new clause, Sony can make a quick buck off its customers without having to worry about ramifications,” another poster lamented.

But is this really the case?  Law and economics principles teach that arbitration clauses can actually be efficient for consumers: if given the choice between arbitrating or filing suit over a defective product (say, for example, an iPod), most consumers would choose arbitration.  Individual suits are expensive and take a long time; most consumers would rather recover quickly through an inexpensive procedure and move on.  Consumers may also prefer products with binding arbitration clauses because they cost less, as manufacturers often build litigation risk into their pricing.

However, it’s unclear whether these principles apply to Sony’s Playstation Network.  Rather than an off-the-shelf consumer product, the Playstation Network is a complex service with a wide range of potential consumer grievances.  Some, such as small service interruptions, could be worth very little to a consumer, while others, such as a massive leakage of sensitive financial data, could be worth a lot.  In these latter cases, consumers might be less willing to settle for an arbitration proceeding and would want the option to sue.  Moreover, because potential grievances are more diverse, it would be harder to design “efficient, streamlined [arbitration] procedures tailored to the type of dispute,” a key advantage of arbitration noted by the Supreme Court in AT&T Mobility v. Concepcion.  Given this, Sony’s new agreement may be more one-sided than its comments let on.

So what if consumers don’t think arbitration is the right answer to potential Playstation Network woes?  Sony allows users to opt out of the waiver by submitting a written request within 30 days.  Numerous gaming blogs have posted alerts with detailed instructions for opting out, but it remains to be seen how many people will notice the alerts or care to respond.

• The FCC has filed its finalized net neutrality rules, set to take effect on November 20. The rules will almost certainly face legal challenges from Verizon and MetroPCS over the extent of the FCC’s jurisdiction.
• David Ignatius writes on legal uncertainty and difficult questions facing the future “rules of war” for drone strikes. The debate has gotten fresh attention over last week’s report that the Obama administration’s legal team is split on the extent of our ability to use lethal force in countries like Yemen and Somalia.
• In contrast to Sprint’s approach to AT&T’s proposed acquisition of T-Mobile, Verizon’s CEO has stepped up and defended the deal as a necessary outcome – “like gravity”.
• Samsung is seeking to ban iPhone 5 sales in South Korea for violating Samsung’s wireless technology related patents. The move comes on the heels of Apple’s latest success in banning Samsung’s Galaxy Tab 10.1 from Germany and an escalating international patent battle between the two tech giants.
• With an eye toward stock market volatility, the troubled GroupOn IPO is back on track with a late October-early November goal for going public.
• Three Boston University researchers have estimated that patent litigation by non-practicing entities, aka “patent trolls”, have cost publicly-traded defendants half a trillion dollars since 1990.

• Last week, the Justice Department filed suit in DC District court to block AT&T’s $39 billion acquisition of T-Mobile, arguing that the merger violates antitrust laws. Sprint has since filed its own lawsuit in DC District court to block the proposed deal.
• The Senate debates the America Invents Act on Patent Reform (H.R.1249). These proposed reforms to the patent system are expected to be passed and signed by President Obama within the next two weeks. Many argue that the new laws will harm small inventors and venture capital funded companies.
• TechCrunch reports on Google CEO Eric Schmidt’s own take on improving the quality of issued patents through crowdsourcing.
• Groupon is considering delaying its initial public offering due to recent public market uncertainty.
• The Electronic Frontier Foundation provides analysis on the recent Capitol Records v. MP3Tunes opinion issued by the New York Southern District.  The court held that file de-duplication on cloud-based music services falls within the safe harbor provisions of the DMCA.  The decision will lead to reduced costs for online music locker service providers.

One of the debates in tort reform is whether there should be agency preemption of lawsuits. Proponents argue that government agencies are charged with studying the products, and promulgating rules, regulations and requirements. Therefore, where manufacturers meet those standards, there should be no space for liability to consumers for product failure.  Additional arguments suggest that the money saved from court administration should instead facilitate improving agency research and function. However, dangerous product failures, such as the all-metal hip implant, highlight many counter-arguments. One such counter-argument is that agencies simply are not equipped to handle the knowledge, research, and development required to provide comprehensive standards and monitoring for the variety of products on the market. For example, the F.D.A. oversees food, prescription drugs, medical devices, tobacco, cosmetics, and veterinary medicine. Another argument claims that lawsuits provide valuable knowledge to manufacturers and agencies, through the relevant discovery, facts, and evidence involved in a case. Furthermore, a lawsuit provides a means for recovery to injured consumers. Additional considerations must also include the consequences of lawsuits on the access, price, and availability, of products, as well as the line drawn as to whether a product is risky enough to enough people to warrant these consequences. Certainly, there are advantages and disadvantages to both sides of the preemption argument. Ultimately, at present, tort law has not embraced agency preemption.

Medical devices add another wrinkle to the process. Surgeons and other medical professionals are involved in offering, recommending and installing all-metal hip replacements. The implications on medical malpractice and the learned intermediary doctrine¹, implicate surgeons’ judgment when it comes to products that are available and have passed standards, yet are the subject of complaints. Some surgeons have stopped using all-metal hips altogether, as there are other models available that combine plastic with metal. However, some all-metal models have not been the source of complaints. Ultimately, these questions come down to whose cost-benefit analysis consumers will rely on, and who we will hold accountable if these decisions prove to be unsatisfying.

1The learned intermediary doctrine provides that a manufacturer can be shielded from liability for failure to warn where the manufacturer adequately warned a learned intermediary, such as a prescribing physician, who is responsible for warning the patient.

But, what can one really do if, for example, your top search results include an out of date, hopelessly inaccurate and embarrassing article from your hometown newspaper? As much guff as Facebook gets for its poor record on privacy protection, an average Facebook user has a relatively powerful set of tools at his or her disposal: you can delete or untag yourself from embarrassing photos, limit who can view your profile, and even delete your profile completely. But, is there anything you can do about embarrassing search results?

In 2010, Hugo Guidotti Russo, a Spanish plastic surgeon, filed a legal complaint with Spain’s privacy regulator, the Agency for Data Protection, asking them to order Google to remove a 1991 article about a malpractice complaint from his top search results. Russo insisted that because he was cleared of wrongdoing and the article did not mention this, it was within his right to privacy to have the search results removed. The agency agreed. Google is fighting the ruling which was recently referred to the European Court of Justice in Luxembourg on the issue of whether the ruling clashed with EU freedom of expression laws.

The case of the Mr. Russo is connected to the larger issue of whether governments should—or could—guarantee individuals a so-called “right to be forgotten.” Though, like most newly recognized rights, the contours are hazy and the terms ambiguous, the right to be forgotten is catching on. In 2009, the French secretary of state launched a campaign for le Doit a l’Oubli (the right to oblivion, though no English translation is quite adequate) that culminated in the adoption of so-called “codes of good practice” by several trade associations, social networks and search engines.  The provisions are themselves broad but somewhat vague: adoptees are obligated to give notice to users about how to exercise their privacy rights, respect an individual’s right to consent to data processing, to receive prior notice of procession and to object to the use of their data. The European Union is currently tossing around some proposed legislation which would give people the right, any time to have all personal information online deleted—though it’s hard to see how this would work in practice. Even in the United States, where courts have been much less willing to allow individuals to assert a general right of privacy against search engines and social networks, the FTC has issued a working paper called “Safeguarding Consumer Privacy in an Era of Fast Transform” which recommends, among other things, that individuals have the right to have inaccurate information about themselves removed from databases.

Critics of the “right to privacy” argue that, in its extreme form, it’s tantamount to suppression of speech—censorship. Most facts and opinions worth writing about–and reading about– are facts and opinions about people.  Individuals have always been able to fight others who publish false information using libel and defamation law, but falsity is not a requirement for a privacy claim. If individuals are empowered to suppress true or arguably true information written about them by third parties under the guise of privacy, the argument goes, our freedom of expression is significantly burdened.  In one infamous case, Wikipedia was sued by two German murderers  demanding that their names be removed from an article about their victim. German law allows criminals’ names to be withheld from association with their crimes after their sentences are over.  The case of German murderers points to another criticism of the right to privacy: practicability. If a German court orders the removal of the names from the article, does it only apply to the German language version of Wikipedia or with a .de web url? Does it apply to any article accessible from Germany? Or only if the servers which host the article are located in Germany? Moreover, does Wikipedia, which can be edited by anyone, have an ongoing obligation to ensure that the ex-con’s names are kept of the site? For a website like Wikipedia, which relies heavily on user donations, and which relies on a relatively small number of editors to maintain their pages, an ongoing obligation to monitor for information about individuals is a heavy burden.

From the perspective of someone with a rare name—say for example, the author of this post (but three out of the first four results are not me!)—the right to delete whatever search results I wanted from Google would certainly be a blessing. That being said, there is a thin and hazy line between what information is truly private—which should be protected—and what information is merely embarrassing or inconvenient, but a legitimate part of the public discourse.

37 CFR 1.56 (Rule 56) establishes that there is a duty to disclose information to the Patent Office. The regulation states that “[e]ach individual associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the Office, which includes a duty to disclose to the Office all information known to that individual to be material to patentability.” The failure to disclose information could result in a later ruling of inequitable conduct and an invalidation of the patent.

In 1998 the Federal Circuit wrote, “inequitable conduct resides in failure to disclose material information… with an intent to deceive.” It is clear that inequitable conduct is made up of two distinct elements and they are: (1) intent; and (2) materiality. These two elements must each be proven by clear and convincing evidence.

Relationship of Office Actions to the Duty to Disclose

A recent question that has been debated among patent prosecutors is whether the duty to disclose material information extends to a duty to disclose the contents of previous office actions from related and/or unrelated patent prosecutions. More practically, patent prosecutors are worried that if they make a decision not to disclose the contents of a previous office action, that failure to disclose will later be used in an allegation of inequitable conduct that could invalidate the patent.

An office action is a response from the examiner at the United States Patent and Trademark Office to a filing by a patent prosecutor in the course of prosecuting a patent. An office action can be an allowance of the claims, a rejection of the claims pursuant to substantive patentability rules, or an objection to the claims pursuant to procedural rules. By its very nature, an office action merely represents the opinions and conclusions of the examiner who sent it and that examiner’s subjective interpretation of patent law and procedure. It is therefore unclear whether office actions fit within the definition of material information.

To answer the question whether office actions must be disclosed, it is therefore necessary to investigate the meaning of “material information” as it is set forth in Rule 56 to determine the extent of the materiality prong of the inequitable conduct test.

Material Information

Is an office action “information”?

Prior to determining whether an office action is material information, it must be determined whether it is information in the first place. As stated above, an office action represents the opinions and conclusions of an examiner at the USPTO based on the facts, arguments, and assertions put forth by the applicant in the patent application and in the prosecution history. It is possible that this definition does not bring office actions within the meaning of information, such that a categorical rule that they need not be disclosed can be established.

However, the language of the regulation and the Manual of Patent Examining Procedure (MPEP) suggests that such a narrow reading of the word “information” should not be endorsed. Rule 56 states that “all information” must be disclosed and it is therefore clear that the regulation is not referring to only prior art. The MPEP says that “the term “information” in Rule 56(a) is intended to be all encompassing.” The MPEP specifically mentions that all information must be disclosed, “regardless of the source.” There is a duty to disclose “information… as to other co-pending United States applications which are “material to patentability.”

The fact that neither the regulation nor the MPEP go into great detail about the meaning of “information” seems to indicate a broad definition of information, particularly when it is modified by the word “all.” This suggests that the “information” requirement will not provide an easy categorical rule as to whether office actions from other patent prosecutions need be disclosed. Rather, an office action from a different patent prosecution probably fits within the meaning of “information” and therefore its materiality must be analyzed in the same way as the materiality of any other information for which there may be a duty to disclose.

Materiality

Once it is established that an office action fits within the meaning of information, the entire disclosure question stems from the definition of materiality provided by the regulation. Rule 56(b) says that information is only material “it is not cumulative to information already of record or being made of record in the application, and (1) [i]t establishes, by itself or in combination with other information, a prima facie case of unpatentability of a claim; or 2) [i]t refutes, or is inconsistent with, a position the applicant takes in: (i) [o]pposing an argument of unpatentability relied on by the Office, or (ii) [a]sserting an argument of patentability.

There are two aspects to the materiality question, which can be referred to as timing and substance. With regard to timing, information is only material if it is not cumulative to information already of record. This means that regardless of the substantive nature of the information, if it has already been disclosed (or at least a way of obtaining it has been disclosed) then there is no duty to disclose it.

Not surprisingly, the majority of the focus of the case law has tended to be about the substantive materiality question addressed in Rule 56(1) and the standard has evolved over time. Early doctrine regarding materiality of information involved three tests that the court laid out in In re Multidistrict Litigation Involving Frost Patent. There was an objective ‘but for’ test, a subjective ‘but for’ test, and a ‘but it may have test’.[1]

More recently, there are two different tests that the CAFC has used in determining whether information is material. Prior to 1992, the courts used a reasonable examiner test, asking whether a reasonable examiner would have deemed the information material. This was based on the language of Rule 56 prior to its being changed in 1992.

In 1992, the language of Rule 56 was amended to its current form, involving a prima facie case of unpatentability. It appeared that the reasonable examiner test was no longer pertinent. However, recently, the court in Digital Control, Inc. v. The Charles Machine Works suggested that the reasonable examiner test was still alive and the prima facie test provides an additional test of materiality.

Is an office action “material”?

Cumulativeness

It is possible that the timing aspect of at least some types of office actions makes them inherently cumulative to information already of record such that the substantive question of materiality need not be addressed. With regard to cumulativeness, it should be noted that there is a potential difference between office actions from parent applications of the application at issue and office actions from unrelated applications. It is likely that in a regular patent application, office actions from other unrelated patent applications fit within the rule and qualify as information known to the individual and they are not cumulative to information already of record. Therefore, because office actions from other unrelated applications are not of record in the present application, there may be a requirement to disclose them, depending on their substantive materiality.

With regard to the question of disclosure in continuing applications of office actions from parent applications and other related applications, it is more questionable whether office actions are not cumulative. MPEP 609.02 says that it is “not necessary for the applicant to submit an information disclosure statement in the continuing application that lists the prior art cited by the examiner in the parent application” and that “the examiner of the continuing application will consider information which has been considered by the Office in the parent application.” Therefore, in the filing of a continuing application, it would appear that the office actions are cumulative to information already of record and the substantive question of materiality need not be addressed.

However, recently, the court in Larson Mfg. Co. of South Dakota, Inc. v. Aluminart Products Ltd. said that office actions from related co-pending patent applications can be material to prosecution. The court emphasized that the knowledge of a potentially different interpretation is clearly information that an examiner would want to have and therefore is material. Therefore, it is important to note that the court seemed to endorse the reasonable examiner test that was kept alive by the Digital Control court and the court seemed to somewhat merge the timing/substance questions in evaluating the materiality of office actions.

It therefore seems apparent that no categorical rule can be derived either with respect to unrelated office actions or with respect to related office actions based on their cumulativeness. Thus, with regard to the question of whether office actions must be disclosed to the PTO, it depends on an evaluation of the substantive nature of the information contained in the office action.

The substantive aspect of office actions

Assuming that the relevant materiality question is whether information creates a prima facie case of unpatentability and that the question of whether a reasonable examiner would want to have the information is still relevant, it seems that there is a requirement to disclose the contents of office actions.

Under the reasonable examiner test, which is still relevant according to the Digital Control court, a reasonable examiner would want to know about office actions from other patent prosecutions and to know about other examiners’ views on the subject matter. With regard to the language of the current Rule 56, an examiner’s opinions and conclusions based on the application, the prosecution history, and the prior art is probably enough to establish a prima facie case of unpatentability.

Furthermore, in 1992 the Federal Circuit in LaBounty Mfg v. U.S. Int’l Trade Comm’n established that there is a duty to err on the side of disclosure in ‘close cases.’ Essentially, when in doubt about whether the information should be disclosed, it is not simply a recommendation that the disclosure should be made but rather there is a duty to disclose. Additionally, disclosing earlier office actions from other prosecution can be used in subsequent litigation to show good faith and negate deceptive intent.

Conclusion

All of this doctrine seems to suggest that there is nothing unique about office actions with respect to the duty to disclose. Office actions are information. They are not necessarily cumulative to information already of record, even in cases of continuing applications. The fact that they consist of an examiner’s opinions and conclusions does not inherently mean that they cannot establish a prima facie case of unpatentability pursuant to Rule 56(1). Therefore, the materiality of previous office actions must be analyzed exactly the same way as all other information with respect to the duty to disclose.

Reactions

The new policy sparked an outcry, especially from librarians.  The protests are visible on the Web, from the Twitter hashtag #hcod to a small Facebook group to the website boycottharpercollins.com, whose sole mission is to promote a boycott of HarperCollins books.  The site reads, “Are we still boycotting HarperCollins?  Yes,” and it contains a page explaining the issue.  Protesters have also advertised “Librarians Against DRM” shirts (DRM stands for Digital Rights Management, which refers to technology employed to limit access to digital content).  Finally, librarians Sarah Houghton-Jan and Andy Woodworth released the eBook User’s Bill of Rights, a list of desired rights that emphasizes access to digital literary content without restrictions.  It also calls unacceptable the eBook licensing arrangements, whereby consumers do not own eBooks but rather purchase a license to access them.

The first news of the twenty-six checkout policy came from Steve Potash, CEO of OverDrive, an eBook distributer that carriers HarperCollins titles.  Potash wrote a letter to customers describing the change in HarperCollins’ policy.  He wrote, “[W]e have been required to accept and accommodate new terms for eBook lending as established by certain publishers” (emphasis in original).  OverDrive has since changed its ordering process to help address the disfavored HarperCollins policy.  OverDrive removed HarperCollins eBooks from their main catalog, instead segregating them in a separate catalog.  Libraries can thus more easily avoid purchasing the short-lived HarperCollins eBooks.

Why the sudden change, and why twenty-six checkouts?

HarperCollins released an open letter to librarians, explaining it’s new policy.  “[S]elling e-books to libraries in perpetuity, if left unchanged, would undermine the emerging e-book eco-system, hurt the growing e-book channel, place additional pressure on physical bookstores, and in the end lead to a decrease in book sales and royalties paid to authors.”  However, it seems that these arguments apply equally well to print books.  In fact, the arguments can be read as arguments against libraries themselves, not restricted to eBooks in libraries.  So what distinguishes eBooks from print books?

One major difference is the ease of copying and distributing eBooks, compared to hard copies.  This aspect of eBooks has already been addressed, as libraries have accepted the one-copy/one-user model.  That model mimics the hard copy reality that only one user can access one copy of a book at any given time.

Another difference is that eBooks are not subject to the usual wear and tear of hard copy books: rips, spine damage, and bent and marked-up pages.  Such wear eventually necessitates a paper book’s replacement.  Potash’s initial letter to customers noted many publishers’ concerns that “a single eBook license to a library may never expire, never wear out, and never need replacement.”  If the greater durability of eBooks is the only concern of publishers, one possible economic remedy is for publishers to set higher prices for eBooks.  In reality, just the opposite is done.  HarperCollins pointed out in its open letter that its eBooks generally cost 20% less than print versions.  Another solution may in fact be to renew eBook licenses periodically, the policy at the heart of the present controversy.  A more reasonable eBook lifespan might assuage the checkout limit opposition.

So is the twenty-six limit reasonable?  Given a two-week circulation period for eBooks, the twenty-six checkout limit amounts to one year of use.  A three-week circulation period leads to 1.5 years of use.  HarperCollins stated that the new policy resulted from many months of examination, but did not detail the decision process.  Librarians from Oklahoma’s Pioneer Library System undertook their own analysis, posting a YouTube video showing their physical inspection of hard copy books.  The video demonstrates that even books with 120 checkouts can still be in good enough condition to circulate.  Accordingly, the HarperCollins one-year circulation limit (based on a two-week circulation period) seems low.  A more agreeable limit might be the equivalent of two or three years of circulation.

The Unique Nature of Digital Content

Electronic media is fundamentally different from hard copies, creating novel challenges for content owners, particularly in the realm of protection.  Digital content can be replicated quickly and distributed.  A single purchased copy can thus wind up in the hands of multiple users simultaneously, flying in the face of Copyright law.  This problem is not unique to eBooks.  Digital movies, music, and computer software all face the same protection nightmares.

One major solution has been to license content rather than sell it.  Licenses enable restrictions on digital content, as was seen in Vernor v. Autodesk, Inc., a case that found that a purchaser of particular software was a licensee, not an owner (based on evaluation of the copyright owner’s explicit grant of a license and the restrictions placed on use and transfer of the software), and thus could not resell the software to another party.  Another pro-license case was ProCD, Inc. v. Zeidenberg, which recognized the validity of a shrink-wrap license, which is a license contained inside the purchased package.  Shrink-wrap licenses frequently accompany software.  Upon opening the package, a user can reject the license agreement by not installing the software and returning it.

Similar to software, eBooks have been licensed, not sold, enabling greater restrictions on eBooks.  The eBook User’s Bill of Rights, mentioned earlier, expressed dissatisfaction with the license arrangements.  Instead, it advocates ownership and application of Copyright’s First Sale doctrine, which permits a valid purchaser to transfer the copyrighted work to another.  If library purchasers were eBook owners instead of licensees, publishers would not be able to impose restrictions, such as caps on the number of circulations.  Publishers are unlikely to capitulate to such library demands, particularly as the eBook business booms among non-library consumers.

Background: Sorrell v. IMS Health

In Sorrell v. IMS Health, plantiffs data-mining firms and PhRMA, an association representing pharmaceutical drug manufacturers, have challenged a Vermont law that prohibits drug manufacturers from using of prescriber records for purposes of marketing. The plaintiffs argue that this restriction on their use of information violates their free speech rights.

The Vermont law attempts to curb marketing uses of prescription records by targeting a common three-part transaction: First, upon filling prescriptions, pharmacies collect information including the prescriber’s name and address, the name, dosage, and quantity of the drug, the date and place the prescription is filled, and the patient’s age and gender. Pharmacies sell this information to data-mining firms who aggregate it to reveal individual physician prescribing patterns.

Second, the data-mining firms “de-identify” the aggregated data by stripping it of patient information and then sell it to drug manufacturers. The extent to which the firms de-identify the data is apparently left to their discretion, since no statute defines what constitutes sufficiently de-identified data.

Third, after purchasing the data, drug manufacturers use it in their marketing efforts. Most notably, manufacturers employ representatives to promote their products during visits with individual physicians, a process known as “detailing.”

The challenged Vermont law seeks to disrupt this transaction by prohibiting pharmacies from selling or using prescription records for any marketing purposes without the express consent of the prescribing physician. Put another way, the law prohibits part one of the transaction described above in order to prevent part three. The law permits pharmacies to continue to transmit the data for non-commercial purposes such as health care research, treatment, and safety-related uses.

Plaintiffs data-mining firms and PhRMA argue that the law restricts commercial speech and therefore violates their First Amendment rights. Vermont, in contrast, argues among other things that the law is not a restriction on speech but merely conduct. Even if it were a restriction on commercial speech, Vermont argues, the law advances three substantial state interests: protecting public health, protecting patient privacy, and containing health care costs.

In November, 2010, the Second Circuit agreed with plaintiffs’ argument and struck down the law. The three judge panel held that the statute restricted commercial speech—not merely conduct—and that it failed to advance the state’s asserted interests in lowering health care costs and protecting public health. The court determined that the state’s stated interest in protecting privacy was “too speculative” to qualify as substantial.

The State’s Interest in Privacy

In rejecting the state’s interest in protecting patient privacy as substantial, the Second Circuit neglected to consider developments in technology and decryption techniques that pose a real and substantial threat to patient privacy. In fact, the state itself neglected these developments and instead argued (.pdf) that allowing marketing uses of prescription data undermined the privacy of the patient-doctor relationship.

In an amicus brief (.pdf) cited by the dissent, the Electronic Privacy Information Center (EPIC) emphasized the importance of the state’s interest in protecting patient privacy in light of recent technological developments. In particular, it explained the various ways in which de-identified data can be easily re-identified, and how this re-identification presents serious risks where medical records are at stake.

In its brief, EPIC describes one method of re-identifying anonymous data known as record linkage, which involves merging two or more databases (e.g. public census data, voting records, etc.). This method has been proven to be very effective at re-identifying individuals from supposedly anonymous data—even from ordinary desktop computers. For example, one privacy researcher employing this method was able to uniquely identify 87% of the US population by utilizing only date of birth, gender, and zip code. The same researcher also re-identified a former governor of Massachusetts’ full medical record by cross-referencing public census data with de-identified health data.

Expanding on its amicus brief for the Second Circuit, EPIC’s recent amicus brief (.pdf) filed at the Supreme Court attacks the data-mining firm IMS Health’s method for encrypting the prescription data. According to the brief, the firm uses a faulty method of encryption, known as MD5.  MD5 has been abandoned not only by its inventor Ron Rivest, who has deemed the method “clearly broken,” but also the Department of Homeland Security, whose Computer Emergency Readiness Team concluded that it was “cryptographically broken and unsuitable for further use.”

The court’s failure to recognize these developments would be more understandable if computer scientists had just discovered the risks re-identification; however, these risks have been well documented for years even in the popular press. In an article published nearly two years ago, The New York Times profiled several individuals whose prescription data had been sold to drug manufacturers without their consent and re-identified so that it could be used for purposes of marketing products directly to them.

In the article, one woman in particular began receiving promotional material for various pregnancy-related products after she bought fertility drugs at a pharmacy in San Diego. Although she was unsuccessful in having a baby, she continued to receive ads for over ten years promoting at first diapers and baby formula and later discounts on family photos and “gifts suitable for an elementary school graduate.” The woman describes the ads as painful reminders of a difficult time in her life: “To just go to the mailbox and get that stuff, time after time after time, it was just awful.”

While digitizing medical records provides several benefits, we must not ignore or underestimate the risks. Although one would like to find assurance in the notion of de-identified or anonymous data, the reality proves more troubling. At the very least, state attempts to protect this sensitive data should be carefully reviewed before being struck down—and an understanding of encryption technology and methods must be part of any meaningful review.

Who is Liable?

There are many theories of liability under which some combination of the medical professionals involved can be held liable.  Technicians may still be liable under a general negligence theory.    Hospitals can be found liable under agency or vicarious liability for the actions of its employees (or apparent employees) and under theories of corporate negligence, which recognize duties such as oversight and adoption of “adequate rules and policies.” See Thompson v. Nason Hospital, 591 A.2d 703.  Furthermore, physicians and nurses have reporting and oversight responsibilities which they may breach especially often where they are involved in reading X-ray scans.

One party that is probably less likely to be liable is the manufacturer.  In order to hold the manufacturer liable in such a case, plaintiffs would have to plead a design defect.  The majority of jurisdictions use a risk-utility analysis—essentially a two-prong balancing test requiring the plaintiff show that a reasonable alternative design would have reduced the plaintiff’s harm and that the defendant’s failure to adopt the reasonable alternative design has rendered the product unsafe. (See Restatement (Third) of Torts: Products Liability § 2(b))  Some courts use a consumer expectation test, where the point is to determine whether the product meets consumers expectations, however, even this standard might prove difficult in an area where consumers probably do not have very evolved or technical expectations.  Furthermore, the Restatement Third advocates an even higher standard for medical devices.  Section 6(c) articulates the standard, “A prescription drug or medical device is not reasonably safe due to defective design if the foreseeable risks of harm posed by the drug or medical device are sufficiently great in relation to its therapeutic benefits that reasonable healthcare providers, knowing of such foreseeable risks and benefits, would not prescribe the drug or medical device for any class of patients.” Id at §6(c).  Such a standard requires a plaintiff so show that the product is essentially of no benefit to any class of patients.  Thus, it would prove difficult to hold manufacturers liable for medical devices that have such wide spread acceptance, use, and benefit.

Preventative Solutions

As the article points out, legislative and institutional solutions are warranted.  State licensing requirements, regulation, and certification of technicians would undoubtedly reduce instances of lack of knowledge and dangerous use of the complicated technology.  Hospital policies that require continuing education, certification, and oversight would likewise contribute to more professional and knowledgeable employees.  Many of these suggestions are part of the Constancy, Accuracy, Responsibility and Excellence in Medical Imaging and Radiation Therapy (CARE) bill, a bill that would institute standards, certification, and education requirements for technicians and other imaging and radiation specialists. However, this bill has become a casualty to the political process.  Unfortunately, this gap in both liability and legislation leaves us uncertain as to whose responsibility it is to fill it.

Under the Patient Protection and Affordable Care Act signed into law last year, physicians and hospitals can receive a financial incentive of up to $63,750 if they switch from paper records to an EMR system. At the same time, starting with 2015 providers will be penalized by being denied a certain percentage of their Medicare and Medicaid collections if they do not switch from paper to electronic records.

Advantages and risks of an easier exchange of information among various medical providers

Especially for providers in a hospital or multi-specialty clinic, the centralized electronic storage of data brought about by the EMR greatly reduces logistical issues. Enhancing and streamlining the data flows ensures that providers can more easily coordinate their care with that of the patients’ other providers. From a financial perspective, a centralized database simplifies the billing of medical services.

The greatly increased flow of information also has its still unresolved issues, however. For example, physicians may receive unsolicited information from insurance companies about the medical condition of their patients that pertain to an unrelated specialty, such as, for example, an orthopedic surgeon who finds out by chance about an endocrinologic condition of one of his patients. Is this physician legally or ethically obligated to contact the patient’s primary care physician in order to ensure that the patient receives the endocrinologic care he needs?

Potentially increased malpractice risk

Many medical providers are concerned that implementing Electronic Health Records may increase rather than decrease their malpractice liability risk. Apart from possible mistakes stemming from the transition to a new and unfamiliar technology, other potential sources of errors are information entered incorrectly, crashes, “bugs” and other technical failures. Furthermore, documentation gaps may arise if the practice uses a combination of paper and electronic records. A recent study in the New England Journal of Medicine revealed that practices that use a combination of paper and electronic records have a higher rate of failure to inform patients of abnormal test results than practices that worked with either only paper or only electronic records. On the plus side, prescribing drugs electronically can reduce errors, as the Electronic Medical Records system analyses the patient’s existing medications and provides specific instructions and warnings to physicians regarding their compatibility with the drug to be prescribed. Also, paper records are often poorly legible – this potential source of error is eliminated by an EMR.

Potential benefits in medical research vs. abuse of data leakage

While EMRs currently are standalone systems used in a single organization, they can be theoretically expanded to cover entire networks of differing entities. That would entail a number of benefits, for example, in the area of medical research: data could be gathered quickly from a large number of patients. On the other hand, wide scale use of individual patient data raises serious privacy concerns. Limiting access to this sensitive medical data to those absolutely necessary (medical providers and billing clerks) is a serious concern. Medical data privacy is regulated by the Health Information Portability and Accountability Act (HIPAA).

Some commentators predict that the interoperability of EMR systems will lead to massive privacy breaches. The unauthorized access to such interconnected data by only one person would enable him or her to abuse a plethora of information.

Current technology does not yet adequately ensure that information will be adequately made anonymous. Insurance companies could potentially use electronic medical records to single out unwanted patients. Especially life insurance companies are very interested in this data.

Summary

Electronic Medical Records provide many convenient features to the medical community: ease of record-keeping and information sharing among various providers, storage of large amounts of data, as well as a better accountability regarding past occurrences. Therefore, despite its many potential drawbacks and unresolved risks, Electronic Medical Records will likely replace paper-based records in the next ten to fifteen years.

Predator Drones: Computations and Casualties

Almost 150 years ago, Herman Melville’s “A Utilitarian View of the Monitor’s Fight” recognized and lamented the dehumanizing efficiency of mechanized warfare, but even after the unprecedented rate of technological development since the Civil War, his description of the Monitor, the Union’s first iron-clad warship, seems hauntingly prescient of the Predator Drones used today in Iraq, Afghanistan and Pakistan:

Deadlier, closer, calm ‘mid storm;
No passion; all went on by crank.
Pivot, and screw,
And calculations…

While much has been said about the ambiguous morality of unmanned drone warfare and its potential for desensitizing violence, a surprisingly low-profile case (now settled) regarding the drones’ allegedly pirated and faulty positioning software exposes a new swathe of legal issues, namely the allocation of liability in the event of system error and/or failure when the machine or software used potentially contributes as much if not more to the decision-making process than the individual using the mechanism. As Melville later describes the “sailors”:

War yet shall be, but the warriors
Are now but operatives…

While the details of the case are hazy (and will remain so since the two parties have recently settled, upon which Netezza was acquired by IBM for $1.7 billion), ISSI alleged that Netezza illegally “hacked”  ISSIs’ Geospatial Toolkit and Extended SQL Toolkit and then packaged them with Netezza’s own data analysis programs, which Netezza sold to the CIA for use in unmanned Predator Drones.

Particularly unsettling is evidence that both companies, and perhaps the CIA itself, knew that the software was faulty and not ready for production, potentially causing the Drones to miss their targets by up to 40 feet. The question then, is, when civilians die because of faulty targeting software, who should be held responsible? The CTO of ISSI expressed concern that his company could be held liable, and this concern at least in part motivated ISSI’s lawsuit to enjoin the use of its software in the drones.

ALADDIN: Letting the Robots Decide

ALADDIN (Autonomous Learning for Decentralized Data and Information Networks), a joint project between the British defense contractor BAE systems and several of the top universities in England (including Oxford), reimagines the decision making process during warfare, disaster relief and other volatile high-risk situations. Essentially, by allowing the various robots or units (fire alarms, etc.) to bargain amongst themselves for resources and to determine various courses of action by comparing each units own data and assessment of the situation, the developers are optimistic that the decision-making process will be more effective than if a group of human beings, with all their notorious inefficiencies and inconsistencies, were to make such decisions.

However, ALADDIN seems to take “responsibility” even further out of human hands, and during war or disaster, decisions may result in the loss of life or other severe harms. If an ALADDIN-like program were to respond automatically, who should be held liable when the program decides on a disagreeable or morally reprehensible course of action? The Royal Academy of Engineering published a report exploring culpability in an automated world, even going so far as considering the idea of blaming a machine. The report ultimately concludes that most importantly, such problems need to be brought into the public forum so that as fully autonomous systems are introduced, society is prepared to handle the ramifications of utilizing such systems.

Google Autonomous Cars: Automatic for the People

Google recently announced that it has successfully developed automated cars. Like the ALADDIN Developers, Google is optimistic that its technology will result in fewer accidents and more efficient transportation overall. Using a wide array of sensors and high-speed data processors, Google claims to have driven 140,000 miles sans driver, with only one accident in which another driver apparently rear-ended Google’s automated vehicle.

While actual wide-scale use of automated driving systems is still a long way off, liability allocation will almost certainly be put in place before driverless vehicles are given the green light, and some practitioners are already exploring who would be held liable in the event of a crash. While product liability will play a large part when the navigation devices or systems fail, the human “driver” may still be held responsible, as any such system will likely contain a human override function in case of emergency or system failure.

The New Health Care Law and Electronic Health Records

The Patient Protection and Affordable Care Act (PPACA), passed by Congress and signed into law by President Barack Obama in March of 2010, calls for new regulations to go into effect in 2012 that will increase the use of electronic health records (Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010).  Summarily, the new law “will institute a series of changes to standardize billing and requires health plans to begin adopting and implementing rules for the secure, confidential, electronic exchange of health information. Using electronic health records will reduce paperwork and administrative burdens, cut costs, reduce medical errors and most importantly, improve the quality of care (The Affordable Care Act – Implementation Timeline).”  Electronic records can be stored electronically and easily shared among health care providers in ways that paper records cannot.  These same benefits also raise concerns about the security of the sensitive information contained in health records.

The liabilities created through the extensive use of electronic health records are far and wide. A variety of events could trigger a potential suit.  The servers where information is stored could be hacked or a laptop containing the information of patients could be stolen.  Suits over patient information that is stolen can be brought under the tort theories of invasion of privacy and breach of confidentiality (E-Health Hazards: Provider Liability and Electronic Health Record Systems, 24 Berkeley Tech L.J. 1523 (1558-60)).  Patient information is also protected by statutes such as the Health and Information Privacy Protection Act (HIPPA) and a variety of state laws (Id. at 1559).

Potential Litigation From the Increased Use of Electronic Health Records

On the receiving end of this litigation would be health care providers who input and store the information.  Intuition is in favor of protecting patients’ privacy at all costs.  This has the potential, however, of an excessive burden on doctors.  The potential number of victims affected by a security breach involving electronic health records is far greater than one involving physical records.  A pocket-size hard drive could easily hold the medical history of a doctor’s entire catalog of patients.  This exposes health care providers to a deluge of lawsuits.  A balance needs to be found between protecting the privacy of patients and protecting doctors or hospitals from an onslaught of lawsuits brought by all of their former patients.  It also would not be far fetched to think that in the event of information being hacked and stolen, liability might extend to the developers and manufacturers of the software and hardware that is used to store the records.

Solutions to Increase Security and Prevent Lawsuits

One idea is to incorporate the liability into malpractice insurance for health care providers.  This should not greatly increase their premiums since the benefits from electronic health records, namely higher quality of care, should work to offset some of the additional costs from the security risks of electronic health records.  Another possibility is to incorporate a cap on the liability that doctors are exposed to through tort reform.  This is unlikely, as tort reform did not make it into PPACA and is an issue that is politically volatile.

In their article, “E-Health Hazards: Provider Liability and Electronic Health Record Systems,” Professors Sharona Hoffman and Andy Podgurski discuss a two part method for protecting patients and health care providers that utilize electronic health records.  The first step is to require that the government heavily regulate electronic health record systems.  This will ensure some aspect of quality control.  Having a high standard for the software and hardware that is used to keep electronic health records will ensure that health care providers use robust and secure tools.   Second, government agencies should develop clinical practice guidelines to ensure that a high standard of care is used across the board when working with electronic health records (Id. at 1562).

The government may also have to implement a public campaign to raise support about the use of electronic health records.  As much as 75% of people are skeptical of how safe their information would be if stored in electronic records.  Despite the worries that arise from the increased use of electronic health records, the benefits that come from increased quality of care demand that electronic health records be adopted quickly in the health care industry.

A common feature of modern human clinical trials is a double-blind placebo test. In such a trial, neither the doctor administering the drug nor the patient knows who is receiving the active drug and who is receiving a placebo. The placebo effect is well documented and commonly understood as a mental expectation response to being told that you are receiving a powerful drug. Patients taking a placebo report a variety of responses: some patients on the placebo report feeling better; some report no response and no side effects; others report that they are feeling worse or only experiencing side effects. Some patients, who are not experiencing side effects, believe they are receiving the placebo tend to drop out of studies. Patient drop out is a serious problem and in response, the “active placebo” was developed.

Active Placebos

An active placebo is a placebo that causes the same side effects as the active drug, but does not treat the patient’s disease. This helps to convince patients that they are receiving the active drug in the trial, and makes them less likely to drop out (but more likely to report side effects and curative effects of the drug).  Active placebos are commonly used in pain trials, giving people symptoms like drowsiness, nausea, or dry mouth.

Patentability under §101

35 U.S.C. §101 requires that a patent be given for any “new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof…” The “useful” requirement of §101 has been used to exclude immoral inventions from patentability. While this category used to include things like gambling machines, today things like suicide machines or a letter bomb would be excluded on an immorality basis. Could an active placebo fail the utility test of §101?

§101 utility requires a practical or specific utility, operability, and a beneficial utility. An active placebo would meet the operability requirement by showing that it did in fact give some people side effects. Presumably, the side effects would have to come from a pharmaceutically active ingredient in the placebo, and not be a result of mental expectation from the patient. The placebo would also pass the practical or specific utility test because it is useful in clinical trials for reducing the likelihood of patient drop out. However, is the active placebo beneficial? It is a device used to trick people into thinking they are taking a curative drug, when in fact the pill does nothing but give them a stomach ache!

The beneficial utility test is a very low bar, and a device that deceives the public may still have a beneficial utility. Here, it may come down to how the claims are written. A composition or compound claim for a drug to induce headaches or nausea would almost certainly be allowed. However, a method claim to tricking patients and taking advantage of the placebo or mental effects of the drug might tip the scales in the other direction. In the European Patent Office, the patent may fail, partly because the EPO expressly allows examiners to consider the morality of an invention, but also because the EPO, under the European Patent Convention, would not grant any method claims filed on an active placebo as being a surgical method.

The use of active placebos presents many regulatory and legal issues that the Bioethics Committee should consider, including patent eligibility. Some other issues involve the informed consent doctrine, the ethics of “do no harm”, and the integrity of clinical trials.  No matter what the committee recommends, they will face a tough decision that could affect many clinical study participants in the future.

Broadband Internet as an Information Service

As noted previously, the FCC derives its authority over communications from the Communications Act of 1934, since amended by the Telecommunications Act of 1996.  Communications in the United States falls into neatly defined statutory definitions under the regulatory umbrage of the Act, e.g., “common carrier services” (Title II), “radio transmissions” (Title III), and “cable services” (Title VI).  47 U.S.C. §151 et seq. It is a fairly ordered and predictable means of regulating communications on its face; however, newly developed technologies often don’t*  fit into these neatly defined statutory categories.  Broadband Internet is one such example.

*According the agency’s, the legislature’s, or the courts’ opinion.

The recent Comcast BitTorrent case limiting the FCC’s jurisdiction over broadband Internet is essentially judicial fallout from the the agency’s March 2002 Cable Modem Order.  Under then Chairman Michael Powell (son of former Secretary of State Powell), the FCC determined that Broadband Internet is an “information service”, not a common carrier “telecommunications service” to be regulated under Title II of the Act, or a “cable service” under Title VI.  See 2002 Cable Modem Order, paras. 31-71.  Commissioner Copps at the time warned about the danger of classifying Cable Modem Services as  “information services” wholesale, subject only to Title I ancillary jurisdiction of the Communications Act, because it would lead to “… playing a game of regulatory musical chairs by moving technologies and services from one statutory definition to another.”  2002 Cable Modem Order (Statement of Commissioner Copps, dissenting.). Those concerns are finally now playing out.

Ancillary jurisdiction: ancillary to what?

The FCC’s decision not to classify broadband Internet as a telecommunications service, and as an information service survived a challenge at the Supreme court.  National Cable & Telecommunications Ass’n v. Brand X Internet Services, 545 U.S. 967 (2005).  In Brand X, the court found that the statutory language of the Communications Act was ambiguous enough for the FCC to be entitled to Chevron deference, when it ruled that broadband Internet should only be subject to Title I ancillary jurisdiction under the Act.  The agency’s interpretation was therefore upheld.  This meant that broadband Internet, then a still nascent industry, was subject to minimal regulations under Title I of the Communications Act.

Ancillary jurisdiction itself rests on a broad statement under Title I of the Communications Act.  Section 4(i) states that “[t]he Commission may perform any and all acts, make such rules and regulations, and issue such orders, not inconsistent with this chapter, as may be necessary in the execution of its functions,” 47 U.S.C. § 154(i).  The great discretion that this provision grants results in a case-by-case determination of whether FCC, testing the limits of its powers under the Act, is subject to constraints imposed by the judiciary.  In the case of broadband Internet, every attempt by the Agency to regulate it would be subject to challenge; those whose interests are at risk from the Agency action are able to challenge first the authority under which the FCC regulates, and also whether the discretion to regulate and adjudicate was taken too far.

Comcast v. FCC: ancillary to nothing

For broadband, the Comcast v. FCC (BitTorrent) case was that scope of discretion determining case.  The dispute came out of Comcast’s 2007 blocking of BitTorrent activity (that took up a disproportionate amount of bandwidth), and defending its policies by echoing the FCC Open Internet Policy that they were only practicing “reasonable network management.”  The ISP would secretly send reset packets (the Internet equivalent to someone intercepting a phone call, pretending to be the person on the other side, saying goodbye and hanging up) to BitTorrent file uploaders, severely hampering their ability to share files.

The FCC eventually made an adjudicatory ruling against Comcast, enjoining them from continuing to block traffic, and requiring them to be more transparent about their network management practices.  2008 Comcast BitTorrent Order, paras. 57-60.  The order, along with strong public backlash (and lawsuits) prompted Comcast to comply with the FCC order.  However, it still challenged the validity of the FCC ruling in court, asserting, inter alia, that the FCC had no jurisdiction to regulate broadband Internet under its ancillary jurisdiction.

A trio of Supreme Court cases** informs the current understanding of ancillary jurisdiction under Title I of the Communications Act.  The holdings have been well summarized into the two-part test that “[t]he Commission . . . may exercise ancillary jurisdiction only when two conditions are satisfied: (1) the Commission’s general jurisdictional grant under Title I covers the regulated subject and (2) the regulations are reasonably ancillary to the Commission’s effective performance of its statutorily mandated responsibilities.”  American Library Association v. FCC, 406 F.3d, 689, 691 (2005). That broadband Internet falls under the general jurisdiction is clear; however, whether FCC has Congressional mandate to regulate broadband Internet depends on the second part of the test.

**United States v. Southwestern Cable Co., 392 U.S. 157 (1968), United States v. Midwest Video Corp., 406 U.S. 649 (1972), and FCC v. Midwest Video Corp., 440 U.S. 689 (1979)

Unfortunately for the FCC, and net neutrality proponents, the D.C. Circuit found that all the bases for ancillary jurisdiction that the Commission argued in the case were, in fact, without support.  The court opined that jurisdiction to regulate broadband Internet under Title I was not given by Congress in the Act, not evident from past FCC policy statements, nor covered in Section 706 on advanced telecommunications services.  The wording of Section 256 “establish[ing] procedures for . . . oversight of coordinated network planning . . . for the effective and efficient interconnection of public telecommunications networks . . .” seemed promising for the FCC, but the Commission’s brief curiously failed to note an important limitation of that section, that “[n]othing in [it] shall be construed as expanding . . . any authority that the Commission otherwise has under law.” 47 U.S.C. § 256.

As the D.C. Circuit enumerated and summarily dismissed the FCC’s increasing tenuous theories of jurisdiction under Section 257, 201, and 623 of the Act, it was clear that the best legal efforts would not be able to salvage ancillary jurisdiction over broadband Internet, when there was no jurisdiction in the first place upon which to find ancillary jurisdiction.  There was only one recourse for the FCC to (rightly or wrongly) reassert regulatory jurisdiction — broadband would have to be redefined under one of the regulated statutory categories of the Act.

The “Nuclear Option” and the “Third Way”

The April 2010 decision forced the Commission to take a hard look at the “nuclear option” — to go back and exercise its general jurisdiction over broadband Internet under the Act, reclassifying it as a “telecommunications service” under Title II.  On the other hand, the FCC promises not to handcuff industry too much by forbearing from heavy handed regulation in a “Third Way.”  Even in the pitched PR battles that accompany high stakes regulation, a “nuclear” option sounds rather drastic, and to use it in a “Third Way” sounds somewhat zen; however, it turns out that the Commission has done both in the past.

Reclassification

Even though the agency has already decided that broadband Internet is an information service regulated under Title I of the Communications Act, overturning old promulgated rules in light of new factual situations is not new.  The Administrative Procedures Act merely requires the agency, when making a rule, to “examine the relevant data and articulate a satisfactory explanation for its action.” Motor Vehicle Manufacturers Association of United States, Inc. v. State Farm Mutual Automobile Ins. Co., 463 U. S. 29, 43 .  And even if a policy is long-standing, it can be overturned.  The agency need not show that the new policies are better than the old; the fact that it is permissible under statute is enough.  See FCC v. Fox Television Stations, Inc., 129 S.Ct. 1800 (2009).   This sets the table for the Commission to re-rule on the classification of broadband Internet under the Act.  See Reclassification NOI, paras. 28-99.

The Commission is indeed laying the groundwork for reclassification, building an administrative record through the Reclassification NOI in June 2010, and a future Notice of Proposed Rulemaking (NPRM).  At the same time, it has girded itself for the PR and political battle yet to come.  The FCC argues on its website that beyond its inherent rulemaking ability, the Supreme Court’s Brand X decision provides a persuasive legal basis for reclassification.  While the majority in the case held that Cable Modem (broadband Internet) service can be properly regulated as an “information service”, they also found that the Commission should receive deference on its classification decision.  Furthermore, Justice Scalia, Souter and Ginsburg opined in dissent the transmission of information and the computing functionality of broadband Internet, should be acknowledged as “separate things[,]”, the former telecommunications, and the latter information.  Brand X at 2715 (2005) (Scalia, J., dissenting). In theory, reclassification satisfies both of these requirements.

Forbearance

But what about the concern that classifying broadband under Title II common carriage rules would impose onerous and burdensome regulations on a still nascent and changing industry?  The agency agrees that it doesn’t want to impose onerous common carrier rules, but at the same time, it doesn’t want big industry players exclude to innovators or competing content.  Imagine what would happen if ISPs were able to block you from Gmail because they wanted you to use/pay for their webmail, or degrade YouTube or other video streaming sites because they want you to pay for a Hulu subscription?

The FCC’s answer to this is a narrowly tailored “Third Way” approach.  It isn’t Title I, but not quite full-on Title II.  The agency explains that it will classify broadband Internet as a ”telecommunications service”, yet forbear from applying many of the Title II common-carrier provisions (only 6 out of 48), as permitted in Section 10 of the Act.  This is similar to what it has done for the mobile phone industry.  Just as importantly, Title II + forbearance establishes a basis on which to assert Title I ancillary jurisdiction over broadband.

Since the Reclassification NOI, various industry members, such as AT&T, have expressed their displeasure with the Commission’s tack, while public advocacy groups such as Free Press and Public Knowledge have praised the possibility of reasserting regulatory authority.  Even former Commissioner Powell has made his opinions on the issue known.

A look ahead

After the recent election results, it appears as if net neutrality laws will sit in legislative purgatory.  A split Congress suggests that no major legislation on broadband is on the horizon, and that any action on telecommunications will only come on the agency level.  In the absence of congressional action, the FCC still has a lot of room to maneuver — the Third Way will likely be the Commission’s way forward.

On the other hand, the election results seem to rein in the FCC’s authority, even if only politically.  The election has been used as political fodder by pundits and political actors as a sign of the public’s opinion on the Open Internet Rules.  There are claims that net neutrality supporters were big losers in their recent election bids, and warnings from some to the agency not to further pursue its regulatory goals.  When the next Congressional session convenes, the House Committees will be reversed, and experienced and savvy lawmakers, such as Rick Boucher, Chair of the Communications, Technology and the Internet Subcommittee will be replaced.  Perhaps in response to these pressures, the most recent November FCC Agenda shows no signs of further moves on the Open Internet rulemaking front.

But despite the adverse political environment, there are rumors that the FCC will forge on with its plan for the Internet.  The Commission may decide that it simply cannot stand by through two years of legislative inaction while the Internet continues to evolve.  Already, we have seen great shifts in the way that broadband Internet is consumed in recent years.  While BitTorrent was the big net neutrality newsmaker back in 2006, players such as NetFlix (whose streams can comprise up to an astonishing 20% of all U.S. Internet traffic, at certain points in the day) have jumped into the fray, advocating for a strengthening of net neutrality.  Would the Open Internet Rules essentially be subsidizing NetFlix’ business model?

It is speculated in some news sources that FCC Chairman Genachowski plans to introduce a vote on the Open Internet Rules in the month and a half before the current lame-duck session of Congress ends.  At the same time, telecom companies beginning to compromise on net neutrality issues have received criticism from free-market politicians on the other side of the political spectrum.  The battle lines are beginning to blur, as stakeholders align more clearly, not with a certain side, but with their own economic and civic interests.

As we engage the world more through the Internet, telecom issues will have an increasing impact over Americans’ day-to-day lives.  Cable companies and phone companies want to avoid being commoditized as “dumb pipes,” and accordingly, lobbying in Washington on telecom legislation has become increasingly active.  Public interest groups are becoming increasingly wary of these interests, as companies continue to exert influence over the political process.  They will all be watching regulatory actions very closely as Congress sits tight in the constantly and rapidly changing technology landscape — and so should you.

UPDATE:

Immediately following the FCC Open Commission meeting on November 30, 2010, the Chairman’s office circulated an internal agenda for the December Open Commission Meeting.  It contains a Draft Open Internet Order (Final Rulemaking) that will be voted on December 21, 2010.  Chairman Genachowski has issued remarks on December 1 addressing the contents of the Open Internet Order, and Commissioners Copps, McDowell, Clyburn, and Baker weighed in with remarks of their own.  It seems as if the reclassification issue will be dropped, but it will be hard to say with certainty, until the Final Order is issued.  Instant reaction to the Draft Order can be found here.

Recently, the Federal Trade Commission terminated its inquiry into Google’s “accidental” collection of Internet users’ personal data through its Street View vehicles after Google promised to improve its privacy efforts and delete the data. As you may recall, the investigation began after the FTC learned that Google’s Street View vehicles had been taking more than just pictures—the cars had also inadvertently collected and stored “payload” data, including passwords and email messages that were available over unsecured Wi-Fi networks.

Although critics are crying foul on the FTC, others are commending its decision. They argue that Google did nothing wrong, and that users transmitting their information over unsecured networks cannot expect privacy.

While this argument is certainly reasonable, another point (among many) should be made: Google disappointed not only unreasonable expectations of privacy, but also perfectly reasonable expectations. When a Street View car sets out to acquire information, we expect it to take pictures and chart streets. We do not expect it to record login information and emails—whether transmitted over secured networks or not. Likewise, when any company performs a service or sells a product, the public has certain expectations about the kinds of information it will collect and store. When companies ignore these expectations, the public rightly gets nervous.

Despite its decision to let Google off the hook, the FTC recently affirmed the role of consumer expectations in privacy policy. During a recent speech (.pdf) in New York, Commissioner Julie Brill discussed the FTC’s recent efforts to “re-think” privacy in the digital age. Its research started by conducting a series of public roundtable discussions to gauge consumer expectations and attitudes about privacy.

Judging from Brill’s remarks, the FTC’s new approach will be a needed improvement. Unlike its previous approaches, the agency’s new approach will be centered on consumer expectations. Such an approach is necessary in today’s technologically advanced economy, which depends on the routine exchange of information. By focusing on the unexpected uses of information, rather than the expected uses, the new approach will better protect the privacy of consumers while still accommodating the marketplace.

Privacy, Previously

According to Brill, the FTC’s latest privacy approach will be its third. The FTC’s first approach, starting in the mid-1990’s, used a “notice and choice” model. Under this model, the agency called for businesses to provide consumers with notice and choice about how their personally identifiable information would be used.

Despite its good intentions, this model has resulted in long and complex privacy policy statements that seem to be aimed at shielding websites from liability rather than informing consumers, according to Brill. By flooding consumers with every conceivable use of their information, companies are able to discreetly obscure unexpected and potentially harmful uses of information. With its focus on consumer expectations, the FTC’s new approach will hopefully discourage sprawling privacy policy statements in favor of clear, concise notices of unexpected uses of information.

In the early 2000s, the agency shifted to a “harm based” model, which is still in place today. Under this model, according to Brill, the agency focuses on harmful privacy practices and the risks of privacy-related consumer injuries. The harm based approach focuses on areas such as data security and data breaches, identity theft, children’s privacy, spam, and spyware.

According to Brill, the harm based model focuses too heavily on quantifiable harms and neglects other real but intangible harms. Such harms include those resulting from exposure of sensitive information such as information regarding religion, sexual orientation, or medical conditions. By allowing consumers themselves to define what constitutes harm, the FTC’s new approach can alleviate this problem. An approach informed by the public’s attitudes will likely recognize a broader range of potential harms—both tangible and intangible.

Privacy Now

Although we still await specifics about the FTC’s privacy report, Brill describes three issues it will address. First, it will promote proactive “privacy by design.” Privacy by design limits data collection to uses that are truly necessary, and implements reasonable procedures to ensure data security and accuracy. Second, the report will address transparency and encourage shorter and more consistent privacy notices, with the goal of allowing customers to compare privacy policies. Third, the report will address consumer choice and meaningful notice. Brill expressed her support for “streamlining” notices and focusing on “‘unexpected’ uses of consumer data, rather than on uses that consumers reasonably expect, such as giving their address to a shipping company in connection with an online product order.”

While we await the final details of the FTC report, at the very least, we can commend its concern with consumer expectations and its focus on unexpected uses of information in particular. Although consumer expectations are fluid and can be difficult to define, any effective privacy approach in our rapidly changing environment must be flexible enough to accommodate changing norms and technologies.

Two questions are before the Supreme Court: (1) whether the First Amendment bars a state from restricting the sale of violent video games to minors, and (2) under a strict scrutiny standard of review, must a state, before prohibiting the sale of games to minors, demonstrate a direct causal link between violent video games and physical and psychological harm to minors?  This post focuses on the first question.

Provisions of the California Law

The California law prohibits the sale of violent video games to a minor, defined as any person less than 18 years of age.   Violators are liable up to $1,000.  The law further requires violent video games in California to be labeled with an “18” sized at least two inches square on the front of the package.

The law defines violent video games as those games “in which the range of options available to a player includes killing, maiming, dismembering, or sexually assaulting an image of a human being,” if the depiction of such acts (1)(a) “appeals to a deviant or morbid interest of minors,” (b) is patently offensive to community standards for content suitable for minors, and (c) causes the game “to lack serious literary, artistic, political, or scientific value for minors,” or (2) if the depiction entails virtual infliction of serious injury to human-like characters in a manner that is “especially heinous, cruel, or depraved in that it involves torture or serious physical abuse to the victim.”

Why the Ban?

Setting characters on fire; shooting and dismembering them; playing fetch with a dog and dismembered body parts.  These are some of the options available in Postal 2, a video game that has become emblematic of extreme gaming violence.  Indeed, Postal 2 was mentioned more than once during oral arguments as an example of a game whose sale would be regulated under the California ban.  But what pushed California to regulate violent video games?

The main rationale for the ban was, and continues to be, the prevention of psychological harm to children.  Indeed, California State Senator Leland Yee, who holds a doctorate in Child Psychology, authored the law.  The legislative history shows that when proposing the bill, Yee cited psychological studies on the issue and highlighted the greater impressionability of children.  However, the 9th Circuit, pointing out flaws in methodology of the studies and establishment of correlation but not causation, held that “the evidence presented by the State [did] not support the Legislature’s purported interest in preventing psychological or neurological harm.”  Video Software Dealers Ass’n v. Schwarzenegger, 556 F.3d 950, 964 (9th Cir. 2009).

Proponents of the law also maintain that industry self-regulation is unsuccessful.  This criticism refers to the Entertainment Software Rating Board (ESRB), an organization formed by a video game industry trade organization, to rate games and enforce advertising guidelines.  The law’s supporters argue that the voluntary rating system is insufficient.  When the bill was drafted, Senator Yee cited statistics from a Federal Trade Commission (FTC) July 2004 report, “Marketing Violent Entertainment to Children,” to illustrate that the ESRB system was not perfect in stopping sales of adult-rated games to minors.  For instance, the study reported that in a mystery shopping test 69% of minors were able to purchase M-rated (mature) games.

However, opponents of the ban reference the same FTC series of studies to demonstrate the overall effectiveness of the voluntary rating system.  The FTC recognizes that the video game industry’s self-regulatory code surpasses both the movie and music industries’ codes in preventing minors from obtaining adult-rated content.  Even more, the studies show that the ESRB system has increased in effectiveness over the past decade.  The latest FTC follow-up report, released in December 2009, found that video game retailers sold M-rated games to only 20% of minors.  This figure is down from 85% in 2000.

The First Amendment: “Congress shall make no law…abridging the freedom of speech.”

At oral arguments the Justices grappled with the application of the First Amendment.  Should exceptions be made for violent video games?  In an effort to resolve the question affirmatively, the state of California drew parallels to obscenity regulations.  The Court previously has asserted, “Obscenity is not within the area of protected speech or press.”  Ginsberg v. New York, 390 U.S. 629, 635 (1968).  In Ginsburg the Court upheld a New York law that forbade the sale to minors of obscene materials, defined as materials depicting nudity.  It reaffirmed that “the power of the state to control the conduct of children reaches beyond the scope of its authority over adults.”  Id. at 639, quoting Prince v. Massachusetts, 321 U.S. 158, 170 (1944).

Nevertheless, carving out an exception to the First Amendment for violent video games would be a novel extension of First Amendment doctrine.  Justice Scalia split with the other conservative Justices on this issue, voicing concern that the American people never understood the First Amendment to apply as such.  He stated, “[I]t was always understood that the freedom of speech did not include obscenity. It has never been understood that the freedom of speech did not include portrayals of violence.”  Justice Alito rejected this historical analysis on the grounds that video games are a new medium.

The Justices and attorneys employed other analogies to help clarify the ambit of the First Amendment.  Justice Ginsburg inquired as to why the law stopped at video games, leaving other media such as comic books and films unaddressed.  The response from the state of California was that greater harm comes from the interactive nature of videogames, where the player carries out the violent acts as opposed to observing them passively.

Justice Sotomayor asked how this case differs from United States v. Stevens, decided this past April, in which the Court, applying the First Amendment, struck down a federal law making it a crime to sell videos depicting animal cruelty, including dogfights.  In that case the Court declined to recognize a new category of speech outside of First Amendment protection.  Sotomayor, referring to the decision in Stevens, recalled that the Court, when addressing regulations of speech, does not analyze a category of speech for potential low value but instead looks to a tradition of regulation.  As Scalia pointed out, there is no tradition of regulating portrayals of violence.

In light of the principles recently espoused in Stevens, the Supreme Court is unlikely to create an exception to the First Amendment that allows regulation of depictions of violence.  Indeed, the state of California does not request such a categorical exclusion.  Instead, California argues that for minors only, violent video games should not be granted First Amendment protection.  The possibility of such an exception is not automatically foreclosed.  The Court voted to hear this case after handing down the decision in Stevens, the timing of which suggests that Stevens will not be immediately dispositive in the case sub judice.  Because the Court has previously recognized different standards for regulating the conduct of children, it is not unforeseeable that the Court might elect to carve out a First Amendment exception for speech as it reaches children.  Nevertheless, as exemplified by Ginsburg, past regulations of speech that applied to minors dealt with obscenity, an already unprotected category of speech.  Even if it were restricted to its influence on minors, a ban on depictions of violence would be a new regulation on formerly free speech.

A Quick Note on Strict Scrutiny of the California Law

If the Court does not create an exception to the First Amendment, the California law, because it infringes on a fundamental right, must be examined under strict scrutiny.  To satisfy this standard of review, California must demonstrate that the law is narrowly tailored to achieving a compelling government interest.

California’s stated objective is to protect the physical and psychological welfare of minors, as well as their ethical and moral development.  The 9th Circuit, however, was unconvinced by California’s evidence that there was a material harm for the state to address.

Also at issue is the means California employed to address the alleged harm.  Assuming a compelling government interest exists, opponents of the law argue that it is not the least restrictive means of addressing the sale of violent video games to minors and therefore not narrowly tailored.  They point to success of the ESRB self-regulatory system, as well as parental controls that serve to restrict minors’ access to violent content.  So long as less restrictive means of achieving California’s objective are identified, the law is unlikely to pass strict scrutiny.

The Final Stage

As advances in video game graphics enabled increasingly realistic depictions of human-like characters and worlds like our own, the critics of violent video games became more numerous and more outspoken.  California is not alone in attempting to regulate the sale of violent video games to minors.  Similar laws were passed in Illinois, Michigan, and Washington, as well as the cities of Indianapolis, Indiana and St. Louis, Missouri, although the courts have struck down these laws as violations of the First Amendment.  Now that the Supreme Court has taken up the issue, we must ask ourselves — have we reached the final stage?

The new system incorporates five additional metrics along with the two that are currently used to measure the quality of patent examination.  The current system measures the quality of the action describing the final disposition of the application, either in an allowance or a final rejection, and the quality of actions taken during the course of examination.  The new system additionally measures (1) the quality of the examiner’s initial search for prior art, (2) the use of best examination practices in the first action on the merits, (3) trends in compact and efficient examination as reflected in aggregate USPTO data, (4) the perceptions of applicants and practitioners as measured by surveys, and (5) the perceptions of examiners as measured by surveys.

First Things First

The new metrics focusing on the initial work of examiners appear to be an improvement over the current system for at least two reasons.  First, they coincide with the USPTO’s new count system for examiner production levels.  This count system was implemented in February 2010 and awards examiners more credit for their initial actions taken on applications relative to credit received for subsequent actions.  The count system was designed to decrease redundancy in subsequent actions, encourage quicker resolution of issues with applications, and spur earlier identification of patentable subject matter.  The newly added metrics should assess the effectiveness of this count system by determining compliance with the best practices associated with initial actions.  Since examiners are receiving relatively more credit for first actions than for subsequent actions, it makes sense to keep closer tabs on their initial work.  The effects of the new count system may also be analyzed by measuring the degree to which global USPTO data is indicative of compact prosecution.

A second improvement of the new metrics for examiners’ initial work is their linking of searches at the USPTO with the work product of other patent offices, such as the European Patent Office (EPO) and the Japan Patent Office (JPO).  In evaluating examiners’ use of this work product, the initial search metric relies on two factors: the proper consideration of a search report from another office as well as examiners’ notation of searching other offices for actions taken on related cases.  Work completed by other offices is a valuable resource to examiners in the U.S., and this metric should indicate how often examiners are taking advantage of this resource.  This is especially important since one study has shown that examiners rarely rely on applicant-submitted art in making rejections.

The People Have Spoken…

The new metrics involving surveys will provide subjective perceptions of quality and should encourage the participation of the public and the examining corps in identifying the best practices of patent examination.  The external quality survey addresses issues such as the availability and responsiveness of examiners to applicants’ requests as well as the overall examination quality.  The internal quality survey addresses the effectiveness of tools and training available to examiners and the degree to which applicants facilitated high-quality examination.

The USPTO will report the results of each metric as well as aggregate data used in their calculations periodically on the agency’s website.  The new quality measurement system does not attempt to alter patentability standards, nor is it used as the USPTO’s internal quality review of examiners.  However, it should serve to better educate and enable participants in the patent process to comply with existing standards and improve the overall quality of patent examination.

According to a Bundle.com study, Americans spend an average of 72 minutes a day behind the wheel. Imagine the increased productivity and general welfare if that time could be spent on other tasks, such as doing work, checking email, making calls, or even sleeping. Having to spend less time keeping one’s eyes on the road and hands on a steering wheel will free up time for life’s greater pleasures.

That day may not be far away. Google has recently test-driven seven artificial intelligence-powered cars over more than 140,000 miles on California roads, including highways and Lombard Street, which is famous for its turns and steepness. For the testing, Google had two people aboard: one technician and one person in the driver’s seat ready to take over the controls if necessary. So far, the only accident occurred when another vehicle rear-ended a Google car at a red light.

It is not difficult to picture the enormous impact that self-driving cars will have on society. When the technology fully develops, it will revolutionize the way we live in the same way that television, the Internet, and cell phones have. As Google engineers have pointed out, robots react faster than humans, have 360-degree perception, and do not suffer from problems affecting human drivers that frequently result in accidents, such as distraction, drowsiness, and intoxication. On Google’s official blog, engineer Sebastian Thrun estimates that the technology can reduce traffic-related fatalities in half, a figure that I believe to be very modest when we think about the cars’ true potential.

The Route

As Kenneth Anderson notes, the real potential of autonomous cars will only be realized if we outlaw all manual driving and every car on the road drives itself. Cars would then be able to travel safely with less distance between them, which, according to Markoff’s New York Times article, would double road capacity. If a system of artificial intelligence-powered cars makes accidents a thing of the past, we will be able to use lighter materials in car manufacturing, both cutting resource consumption in the car manufacturing process, as well as increasing fuel efficiency.

Such a scenario will not be feasible if there are even a small number of human-driven cars left on the road, or even if autonomous cars include the ability to manually take over the controls. An autonomous car will still be at the mercy of its physical limitations and the constraints of the road system, and will have difficulty avoiding accidents if it shares a congested road with reckless drivers. Another problem is that computerized cars will likely employ very passive driving systems designed to avoid accidents under all circumstances. Aggressive human drivers would be able to take advantage of passive computer drivers all day.

How feasible is a system of exclusively self-driven cars? The technology will not likely be the problem. We already have cars that can parallel park with limited input from the driver, as well as cars that brake on their own if a crash is imminent. Additionally, driving can be fairly easily broken down into various algorithms and functions, as the main variables involved are predictable: lanes of standard widths and traffic lights that change in predictable intervals. Currently, the only truly unpredictable element is the behavior of other drivers which would be much more foreseeable once computers take control.

The greatest barriers to such a system might very well be legal in nature. One such barrier is liability. In a system of robot-driven cars where people are free to do other things while their cars transport them from place to place, such as checking email or napping, who should bear accident liability? Since the benefit of such technology is to allow drivers to perform other tasks while in the car, placing accident liability on them would be counterproductive. Putting liability on the technology companies might discourage the innovation needed to fully develop the technology in the first place. On the other hand, if the technology works like it is supposed to, crashes should become a rare occurrence, reducing such a burden. Another possibility is that insurance companies will bear liability.

A second issue that comes up is whether the government should be able to outlaw something as fundamental to our society as driving cars. Americans have loved their cars for decades. Many of us know people who beam with joy after a car purchase and enjoy the freedom associated with taking a car for a spin on an open road. There will undoubtedly be drivers with squeaky-clean driving records who will claim that their driving poses no threat to everyone else. There will also be people who will distrust having a computer take over their driving, especially since the consequences of a malfunction might include serious injury and death. Some may even claim that their driving is a form of expression, and that a ban violates their First Amendment rights.

However, I think the government will ultimately prevail. Congress can look to the Commerce Clause for a Constitutional source of authority in passing legislation requiring use of self-driving cars on roads. Is there a countervailing fundamental right being infringed? Ever since The Passenger Cases, the Supreme Court has recognized a basic right to interstate travel and laws prohibiting or burdening interstate travel must meet strict scrutiny. Nevertheless, it does not appear that mandating use of self-driving cars would substantially burden this right. Airplanes, trains, and perhaps even self-driving buses will still be available as modes of transportation. Furthermore, since self-driving cars will ostensibly be safer, they can be built in such a way as to accommodate the much lower likelihood of accidents, driving car prices down. This lower likelihood of accidents would drive insurance premiums down as well. Moreover, better fuel efficiency means less spending at the pump.

The Destination

Judging from Google’s promising test runs, it appears that it is not a matter of if but when a self-driving car will become available to consumers. When that day comes, we should be ready to hurdle the legal issues that pose the greatest barrier to a system of autonomous cars. Once we implement such a system, the benefits will be nothing short of extraordinary.

How does today’s victim of cyberbullying escape? The simple answer is that for some there is no escape. Even worse, New York courts continue to fail to acknowledge that the computer, in the hands of today’s youth, should be recognized under the law as a “dangerous instrument” with foreseeable consequences.

New York courts fail to recognize the threat of cyberbullying

In the recent New York Supreme Court case Finkel v. Dauber the plaintiff alleged defamation against fellow children and negligent entrustment against their parents. The complaint arose out of an instance of cyberbullying where the defendant children posted a series of derogatory comments about the plaintiff in a private Facebook group. The court granted summary judgment to the defendants and dismissed the complaint on both grounds.

First, in regards to the claim of defamation the court found that the plaintiff did not state a cognizable cause of action because the comments, while troubling, were so outrageous that “they do not constitute statements of fact” under the standard for defamation in New York. Second, the court refused the claim against the defendant parents for negligent entrustment  stating that “there is no cause of action for negligent supervision of a child, absent an allegation that the parent entrusted the child with a dangerous instrument which caused harm to a third party.” Furthermore, the court cites the New York Court of Appeals case Rios v. Smith, which states that liability for negligent entrustment “is limited to circumstances where a parent’s conduct creates a particularized danger to third persons that is plainly foreseeable.”

After expounding these rules the court then states that “To declare a computer a dangerous instrument in the hands of teenagers in an age of ubiquitous computer ownership would create an exception that would engulf the rule against parental liability.”

I find that the court’s reasoning that a computer cannot be categorized as a “dangerous instrument” merely because of its “ubiquitous” status not only avoids the logical extension of the term “dangerous instrument” to computers under New York statutory definition, but also demonstrates a lack of recognition of the dangerous potential that computers and technology have and the urgent need for a civil remedy.

First, New York Penal Law § 10.00 (13) defines the term “dangerous instrument” to include “any instrument, article or substance, including a ‘vehicle’.” In the context of this statutory definition, it would seem reasonable to argue that teenage “computer use” is “no more ubiquitous” than teenage “vehicle use.” Thus, by way of analogy how can the New York court avoid the application of the term “dangerous instrument” to the computer(s) used to perpetuate the cyberbullying in Finkel v. Dauber? Furthermore, a recent New York Appellate Division case, People v. Mateo, affirmed a determination that a pit bull terrier constituted a “dangerous instrument” under the definition of New York Penal Law § 10.00 (13). Again, it seems reasonable that in the context of the Finkel v. Dauber court’s reasoning teenage “computer use” is not significantly more “ubiquitous” than teenage “dog ownership.” However, moving beyond the semantics of the court’s interpretation of the term “dangerous instrument”, what is most troublesome about the Finkel v. Dauber decision is the lack of recognition of how computers and technology used as instruments of bullying are not only “dangerous instruments,” but that for many reasons they may likely pose a uniquely greater danger to today’s youth.

The unique danger of cyberbullying

Why is cyberbullying uniquely dangerous? At first thought it may seem counterintuitive that cyberbullying could be more detrimental than what happens on a traditional playground. After all, emails and text messages are just words and a cyber bully obviously has no ability to lay a physical hand on his or her intended victim. However, research in the field suggests that this assumption is likely incorrect and that the circumstances that technology creates that can make cyberbullying more detrimental to its victims.

Andre Sourander, a professor at Turku University, notes in his study published in the Archives of General Psychiatry “traditional bullying typically occurs on schoolgrounds, so victims are safe at least within their homes. With Cyberbullying, victims are accessible 24 hours a day, seven days a week. There is no time when messages cannot be left on mobile telephones or sent via e-mail.” Furthermore, according to Sameer Hinduja, co-director of the Cyberbullying Research Center, the fact that technology allows a “connected” bully to attack his or her victim remotely may actually encourage bullies to continue the conduct because of the inherent “disconnect” between bullies and their victims. Mr. Hinduja is quoted as saying, “Behind a keyboard or the textpad of their phone, and physically distant from the victim, emboldens [cyber bullies] and frees them from normal constraints on their behavior such as their conscience, morals, social norms, and the law.”

Thus, these expert comments make it appear that cyberbullying is not just “modern bullying” that should be brushed off by adults as the same as the bullying experienced in their younger years. Rather, it is something distinctly more dangerous. The technology is not just the means by which it is inflicted, but rather the technology itself makes cyberbullying a significantly greater threat.

The future?

Regardless of how courts and legislatures choose to deal with cyberbullying, the technology that makes it possible is certainly here to stay, and it is critical for parents and educators to be aware of and prepared to deal with cyberbullying. We must understand that the consequences of not doing so can result in real tragedy.  In this context it is important to remember that parents and educators are not powerless to combat cyberbullying. Organizations like the U.S. Department of Health Resources and Services Administration and the Cyberbullying Research Center provide tips for what adults can do to prevent and deal with cyberbullying.

Interestingly, while technology may be responsible for this evolution of bullying, it may also provide an excellent tool to combat it. There are numerous software and hardware products available that provide simple and cost effective ways for parents and educators to monitor computer use. These products can show parents everything their child sends and receives over the internet. While some may be hesitant to monitor their child’s every Internet move, both parents and educators need to recognize that as responsible adults it should be a duty to know what children are using the computer for. We must identify both victims and bullies alike in order to prevent tragedy and give our youth the guidance to stay connected in a responsible way.

What is Net Neutrality, and Who Gets to Define It?

Generally speaking, Net Neutrality is the aspirational principle “… that all Internet traffic should be treated equally.” (Wikipedia).  President Obama himself has explicitly supported this idea, both back in 2008 on the campaign trail, and more recently.  It has been variously been described by commentators as “… the fundamental principle that preserves the free and open Internet[,]” and a government takeover of press and media freedoms.

But without details to give the term real-world effect, the concept of “net neutrality” becomes ill-defined and infinitely malleable, fitting into any of the myriad narratives presented to the public.  It is certainly conceivable that net neutrality regulations can be the First Amendment issue of our time — a bedrock principle that will allow the Internet to become an equal-access, unfettered marketplace of ideas.  At the same time, that same equality, for others, only represents an excuse for a new Orwellian government-imposed censorship scheme.  Will net neutrality enable technological innovation, or stifle it?  The answers to these policy debates lies at the confluence of technology, economics, and politics, the implementational (or non-implementational) details of which will ultimately be written into the law.

The FCC Definition: The Open Internet Rules

The details of implementing Net Neutrality regulations lie with the Federal Communications Commission (FCC), which was created and vested with the power to regulate telecommunications by the Communications Act of 1933, since amended by the Telecommunications Act of 1996.

In 2007, the STLR blog commented on the current state of the law relating to Net Neutrality; since then, we have had an administration change, the issue has been brought from academic and technology policy circles into the mainstream, and agency action as well the legal landscape have progressed greatly.  However, the form and substance of future net neutrality regulations remain uncertain.

The FCC has dubbed its own flavor of Net Neutrality the “Open Internet Principles”, which were first made public in 2005.  While this statement of policy objectives has no legal implications, it was intended to pronounce a set of guiding principles for FCC rule-making — to give the public and the telecom industry more certainty in its business decisions going forward as the FCC continues to regulate.  (Telecommunications is conducive to natural monopolies, and is heavily regulated under the Communications Act under common-carrier principles, similar to utilities and railroads.)  In October 2009, The FCC made waves in the telecommunications industry when it released a Notice of Proposed Rule Making (NPRM) to collect public comments and build up an administrative law record before codifying the former Open Internet principles as rules that carry the legal force of Federal Regulations.  The Open Internet principles have been redrafted, and expanded to a list of the following six rules:

1. Content. Subject to reasonable network management, a provider of broadband Internet access service may not prevent any of its users from sending or receiving the lawful content of the user’s choice over the Internet.

2. Applications and services. Subject to reasonable network management, a provider of broadband Internet access service may not prevent any of its users from running the lawful applications or using the lawful services of the user’s choice.

3. Devices. Subject to reasonable network management, a provider of broadband Internet access service may not prevent any of its users from connecting to and using on its network the user’s choice of lawful devices that do not harm the network.

4. Competitive Options. Subject to reasonable network management, a provider of broadband Internet access service may not deprive any of its users of the user’s entitlement to competition among network providers, application providers, service providers and content providers.

5. Nondiscrimination. Subject to reasonable network management, a provider of broadband Internet access service must treat lawful content, applications and services in a nondiscriminatory manner.

6. Transparency. Subject to reasonable network management, a provider of broadband Internet access service must disclose such information concerning network management and other practices as is reasonably required for users and content, application and service providers to enjoy the protections specified in this part.

See National Broadband Plan at 58; Open Internet NPRM paras. 88-132.

While the first four rules (mandating lawful applications, services and content to be freely available to Internet users) track the intent of the original 2005 Open Internet principles quite closely, they did not speak to what is at issue for many Net Neutrality advocates and detractors today — the ability of ISPs to shape traffic (prioritize certain services or websites over others), or to degrade certain bandwidth consumptive, or business-model changing applications such as BitTorrent or Skype.  This is where the most contentious of the two new rules, the fifth non-discrimination rule, comes in.  It prohibits discrimination of lawful connections and content, directly the call for Internet Service Providers (ISPs) to treat all lawful sites and services “equally.”

The Devil is in the (Lack of) Details

The language of the proposed rules has been subject to much scrutiny.  The qualifying terms “subject to reasonable network management” that preface each of the proposed Open Internet rules leaves much room for agency discretion in composing the rules.  At its greatest extent, the non-discrimination rule is, as Susan Crawford, President Obama’s former special assistant for science, technology, and innovation and Cardozo Law School professor describes, a total lack of differentiation of treatment between data sent over the network.  All content and applications will be treated equally on a first-come, first-serve basis, regardless of the type of data, its originator, or its content.  In practice, however, many Internet providers prioritize some forms of network traffic, though the network management tactics are not as egregious as degrading a service or application to the point of unusability, or blocking it altogether, as Comcast did with BitTorrent in 2006.

Indeed, where on the spectrum a line can be drawn to separate “reasonable” and “unreasonable” network management is not yet clear.  That evaluation will certainly be subject to technological change as much as it is to agency rulings and adjudicatory precedent.  The current FCC proceeding contains public comments on what the Open Internet rules should be that run the gamut of possibilities.  The FCC continues to seek public comments on the NPRM, but has not promulgated any rules at this point.

D.C. Circuit: Broadband Internet Cannot Be Regulated as Telecommunications

Further complicating the FCC rule-making authority is an April 2010 decision of the D.C. Circuit which ruled that the “broadband Internet access service” that the FCC seeks to regulate in the Open Internet NPRM is beyond the agency’s jurisdiction to regulate telecommunications services.  See Comcast Corp. v. F.C.C., 600 F.3d 642 (2010).

This surprising decision has catalyzed a slew of agency and industry actions.  Not long after the Comcast decision, the FCC proposed reclassification of broadband Internet to define it as a telecommunications service subject to common carrier regulations but practicing regulatory forbearance in a “third way”.  The approach draws legal support for reclassification of broadband Internet services from Justice Scalia’s dissent in a curious 6-3 Supreme Court decision that counted Justices Souter and Ginsburg as Justice Scalia’s allies in the minority. See Reclassification NOI, paras. 28-99, Nat’l Cable & Telecomm. Ass’n v. Brand X Internet Services, 545 U.S. 967 (2005).

The Commission also held closed door meetings with telecommunications and technology giants such as Verizon, Comcast, Google and AT&T, allegedly attempting to bring them to a compromise on draft legislation on Net Neutrality to submit to Congress.  These secret meetings excluded public interest and advocacy groups, which prompted advocacy group Free Press to decry the FCC’s actions in full page ads in the Washington Post.  Eventually, FCC Chairman Genachowski canceled the closed door meetings, after the talks broke down.

Concurrently, the terms of a separate and secret Net Neutrality deal between Google and Verizon were being dickered out (even while they were participating during the closed door FCC meetings), with Verizon guaranteeing non-discrimination over wireline broadband networks, and Google conceding to allow a discrimination exception for next generation (e.g. 3G and better) wireless broadband networks.  Most recently, draft legislation that works as a legislative end-around for FCC’s proposed rules was leaked from the office of Rep. Waxman (D-CA).

And the high drama of regulating the multi-billion dollar telecom industry continues.

The tumult at the Federal Communications Commission this past year has resulted in largely the same regulatory uncertainty and business-as-usual for the large telcos; they are careful not to overstep their bounds of what is perceived as “reasonable network management” and provide fodder for the FCC to gain a stronger public mandate to impose Open Internet Rules.  Whereas this blog’s 2007 article spoke at length about the battle over the Open Internet, it is clear that it has turned into a protracted war on the litigation, lobbying, and public relations fronts by all parties involved.  Whether it be the government, technology companies with conflicting interests, or public advocacy groups, there will be much more input and action from Congress, the Courts, and the FCC to come yet.

Connecting Legislation Back to Politics

So now, we come back to the latest battle in the Net Neutrality fight — the Nov. 2nd midterm elections.  In fact, the likely result of the election has already had an impact.  The recently leaked Net Neutrality bill acts against the Democrat-led FCC’s attempt to reclassify broadband Internet and bring it back under the ambit of the FCC’s jurisdiction.  The FCC will find itself in an increasingly hostile political environment, as rejuvenated Republicans in Congress push for less Open Internet regulations that they contend would hurt the economy at a critical time.  The FCC may be hesitant to regulate for fear of legislative overrule and repudiation.

It is difficult to know exactly the eventual fate of the proposed Open Internet rules and the ability of the FCC to regulate broadband Internet in the future.  Looking forward, I plan to post about the complex machinations that provide legal context to the current regulatory framework for broadband Internet, and the legislative implications of the mid-term election results.  With the number of powerful interests and the amount of money at stake, it won’t be easy to foretell what’s to come for Net Neutrality in the coming months and years.  But, if there is one thing for certain, it is that the Net Neutrality discussion will be around for some time to come!

The First Sale Doctrine

The first sale doctrine was established by the Supreme Court in Bobbs-Merrill Co. v. Straus where a book publisher printed the following note on its copyright page: “The price of this book at retail is $1 net. No dealer is licensed to sell it at a less [sic] price and a sale at a less [sic] price will be treated as an infringement of the copyright.” The Supreme Court held that, under existing copyright law, copyright holders have the exclusive right of distribution over the “first sale” of their works, but further distributions are outside of their control.  The first sale doctrine was later codified in the Copyright Act.

As a legal principle, first sale strikes a balance between the rights of copyright holder and the rights of the owner of a copy of said material. The doctrine also embodies the general principle in property law that unreasonable constraints on alienation (gifting, selling, etc.) are void.

First sale also promotes the value of free access to information by making out of print copyrighted works widely available and lowering prices through the existence of secondary markets.

Many copyright owners justifiably dislike the first sale doctrine because it prevents them from maintaining a monopoly on their copyrighted works, and it enables secondary markets which tend to drive down prices.

The Vernor Decision and the Sale/License Distinction

The essential facts of Vernor are straightforward. Vernor purchased used software at a garage sale and attempted to sell it on eBay. The copyright holder, Autodesk, filed several DMCA take-down notices with eBay. After some back and forth, Vernor brought a declaratory action in Federal District Court to establish that his resale was protected by first sale doctrine.

The primary legal issue was whether the transfer of Autodesk’s software to the customer who had sold it to Vernor constituted a sale or a licensing. This is the legal hook: if all that was transferred was license, the “first sale” has not occurred and the doctrine does not apply.

The licensee/owner distinction was not clear law prior to Vernor. The District Court in Vernor, determining that there were conflicting precedents on point, applied the 9th Circuit case United States v. Wise and found that the critical factor in the sale/license distinction was whether the purchaser had a right to possess the copyrighted work perpetually or whether he was required to return it to the copyright holder. The court found the right to perpetual possession and thus held that Vernor was covered by the first-sale doctrine.

On appeal, the 9th Circuit held that the license/ownership distinction depended on only three factors: (1) whether the copyright owner specifies that a user is granted a license (2) whether the copyright owner significantly restricts the user’s ability to transfer the software (3) whether the copyright owner imposes notable use restrictions. Applying this test to Autodesk, the court found that the transfer in question was a mere transfer of license and, thus, that Vernor was not protected by the first sale doctrine.

Criticism of the Vernor Test

The problem with the Vernor test is clear: a copyright holder can completely avoid the first sale doctrine by using the term “license” coupled with the “significant” transfer and use restrictions. Thus, under Vernor the application of first sale doctrine depends solely on the discretion of the copyright holder and what “magic words” he chooses to place in the license agreement.

The Vernor test completely undermines the first sale doctrine and all of its underlying policies. First sale is meant to balance between the rights of copyright owners and the rights of owners of copies; Vernor undermines that balance by making its applicability contingent on a copyright holder’s preference. Under the Vernor test, if Bobbs-Merrill Co. had written its note slightly differently, referring to the purchaser as a licensee, and imposing more use and transfer restrictions, the case would have come out the other way—an absolutely preposterous result.

And finally, Vernor effectively negates the principle against unreasonable restrictions on alienation as they apply to copyrightable works. A copyright holder only has to write the “magic words” in a licensing agreement to prevent resale. Thus, there is little standing in the way of copyright holders from unilaterally destroying secondary markets—the used software, book, DVD, CD and videogame market—and maintaining a monopoly on its work.

Currently, the plaintiffs in Vernor are petitioning for an en banc rehearing in the 9th Circuit. If denied, they will likely take it to the Supreme Court. Vernor as it stands today has the potential to fundamentally change not only the legal relevance of the first sale doctrine, but the entire economic, social and legal landscape for copyrightable works.

FDA approval for rBST and labeling policy
In 1987, Monsanto submitted to the FDA a new animal drug application for Posilac, a synthetic growth hormone that increases milk production in dairy cows (also known as an rBST or rBG). It took Monsanto over 6 years to bring rBST to market, and Monsanto supplemented the application with studies and reports documenting the safety and effectiveness of the drug. After reviewing those materials, the FDA approved Monsanto’s application for the use of Posilac in 1993. In January 1994, a Congressional task force concluded that the FDA’s position was adequately supported.

In addition to approving rBST for public use, the FDA had to determine whether milk from rBST treated cows should be labeled differently than regular milk. Besides enforcing requirements necessary to ensure that the labeling is not false of misleading, the FDA is prohibited from placing some additional requirements on labeling—the agency cannot require labeling based solely on differences in the production processes of identical foods. After an extensive agency investigation outlined above, the FDA found that there was no material difference between milk from rBST-treated cows and milk from non-rBST-treated cows, and accordingly it could not impose additional labeling requirements.

The standard for determining if two foods are the same is a materiality standard. Materiality relates to nutritional, organoleptic, or functional characteristics of the food. In general, the FDA has not found that foods from genetically modified organisms are different than their conventional counterparts. Therefore, the FDA could not require any additional labeling of rBST milk. This decision was specifically upheld in Stauber v. Shalala, when the Wisconsin district court determined that absent evidence of a material difference between milk from rBST-treated cows and non-rBST-treated cows, the FDA could not create any additional labeling requirements. Later, the FDA advised that milk from untreated cows could be labeled as such, but recommended the inclusion as a disclaimer that accompanying the statement “from cows not treated with rbST” with the statement that “No significant difference has been shown between milk derived from rbST-treated and non-rbST-treated cows.”

6th circuit finds rBST milk “materially different”
In International Dairy Foods Association v. Boggs, the 6th Circuit determined that Ohio’s 2008 law prohibiting the labeling of milk from non-rBST treated cows was unconstitutional under the 1st amendment. The court based this decision in part on its finding that the two milks were different, thus overruling the FDA’s prior determination. The court cites three reasons milk produced by rbST-treated cows is different: increased levels of the hormone IGF-1, a period of milk with lower nutritional quality during each lactation, and increased somatic cell counts in the milk. The court further noted that higher somatic cell counts indicate milk is poor quality and will turn sour more quickly.

The 6th circuit’s willingness to overturn the FDA’s determination could have important implications for other genetically modified foods on the market and those looking to enter the market, including genetically modified salmon. Companies spend enormous amounts of resources convincing the agency and the public that their products are safe to eat, have no environmental harms, and are overall the “same” as conventional foods. In fact, producers of genetically modified foods encourage labeling restrictions so that consumers cannot tell from the label which foods are genetically modified and which are not. The argument goes that since the FDA says the two types of food are materially the same, consumers should not be told that they are different in any way. Telling a consumer that a product is made from “cows not treated with rBST” creates an impression that milk from treated cows is worse, and thereby creates confusion.

As demonstrated by the Ohio case, specific regulations in each state can be the target of suits by consumers or producers of conventional foods. Companies will now need to continuously manage public and scientific opinion of their food products. In fact, genetically modified food producers will need to decide if they even want to pursue labeling requirements, when doing so could force them to defend the FDA’s materiality determination in 50 separate suits.

Grady’s Theory, Roughly
While Grady’s paper is an explanation of the role of compliance error in the economic theory of negligence, a central concern is the role of technology in generating liability for its negligent use.  The article seeks to explain why negligent accidents still occur in a regime which has a well-established and well-accepted theory of negligence – the Learned Hand formula – which prescribes precautions to take to avoid liability.

Grady’s answer lies in the concept of compliance error, whereby courts hold defendants liable for every missed instance of an efficient precaution – that is a precaution prescribed by the Learned Hand formula.  Courts in most cases require 100% compliance, and therefore impose strict liability for the use of the precaution.  Hence, Grady identifies a “pocket of strict liability.”  He writes, “In reality the pocket of strict liability comes from making people liable when they have not achieved perfect consistency.  Actors are found negligent for committing efficient ‘compliance errors.’  Economically, this is a form of strict liability because it is a liability that attaches to social-wealth maximizing behavior.” Id. at 987-8.  Technology establishes the precaution for which courts have required perfect compliance in order to escape liability for negligence.  A short example may clarify the distinction: a commercial airline installs a radar system by which it should escape negligence, but the airplane crashes into another airplane. Is this a failure to take the required precaution? Or is it a momentary failure to monitor the precaution (radar screen)? The former is a negligent failure; the latter, a compliance error.

The Technology Life Cycle
Grady emphasizes, “Far from indicating flaws in the system, this is a normal and usual relationship when technology progresses…the paramount purpose of the negligence system is to regulate compliance error in the use of technology.  It is therefore natural that advances in technology tend to increase the number of claims.” Id at 912.  Certainly, technology has redefined the role of the law in the regulation of human and industry behavior.  One such aspect of this role is the requirement and regulation of technology to enhance safety, such as the radar discussed above.  However, Grady also identifies a further natural evolution, that of technology itself.  He writes,

“There is a technology life cycle.  Think of the introduction of the airplane.  In the beginning, res ipsa cases were weak because the technology was so ambitious that the rate of unavoidable accident was high relative to the rate of compliance error.  Then radar was invented, reducing the rate of unavoidable accident, but creating an entirely new opportunity for compliance error when the pilot failed to check the monitor.  In this second stage, technology increased the number of negligence claims and the strength of res ipsa claims.  In the last stage res ipsa cases again weaken as the computer-monitored radar reduces the rate of compliance error more than it reduces the rate of unavoidable accident.  At present, most technological advance seems to occur in the second stage in which res ipsa cases become stronger.” Id. at 911.

Here is where we see the marked difference between 1994 and 2010, the emergence of the third stage of technology.  Grady’s notion of the third stage of technology seems to be one where technology is monitoring the technology, reducing the rate of human compliance error.  Take for example the car Google recently tested on the roads of San Francisco – the car that drives itself.  Such an innovation would replace the potential for compliance error as technology, capable of 100% compliance, replaces human involvement.  However, as the New York Times article points out, there are various legal issues associated with a car that drives itself.  One of which is, who bears the fault of an accident?  I think such fault/causation issues would lead to product liability claims, not just because of the role of the product in the activity, but also because of the deeper pockets of the manufacturers.

Furthermore, I would suggest that the replacement of negligence claims with product liability claims is an inherent feature in the evolution of technology to the third stage.  This would probably be a preferable regime, as manufacturers are often the parties better able to spread costs, improve products, and inform consumers.  On the issue of technological development and liability, I think Grady got it right: stage 3 technology will be the era of improved safety, innovation, and less negligence liability. Instead, liability will be moved up the chain of distribution to the manufacturers, and the realm of product liability will take over.

Google and ITA merger: for better or worse?
On the heels of AdMob was Google’s merger with ITA Software in July of this year. ITA Software is the innovator of the QPX technology, travel search giants such as Kayak, Orbitz, and Expedia all utilize integrated QPX platforms in their air travel search and pricing services.  ITA’s dominance in GDS, or global distribution systems, which serve to link ticket bookers such as airline passengers and travel agencies to the booking systems of travel suppliers such as airlines, will prove to be a valuable asset as Google decides how it will use the software to develop and implement its own flight search tools, which is exactly what has travel search giants and not-so-giants alike up in arms.

While some industry analysts are applauding Google’s entrée into the market, anticipating that it will stimulate the otherwise stagnating field of travel search technology, many more are skeptical, and increasingly alarmed, about the impending deterioration in competition and the threat it poses to other GDS’s.  Robert Birge, chief marketing officer of Kayak, commented: “There are legitimate concerns…about what that deal could mean to competition in the market and how it could affect consumer choice.”  He echoes the sentiments of a growing number of travel site competitors and consumers, and it seems that the U.S. Department of Justice is picking up on the concerns.

The DOJ steps in
Google is alleged to be in violation of the Sherman and Clayton Acts, which make many monopolies or attempts to monopolize a market illegal. The essential premise of the allegations is that Google is attempting to monopolize varying related markets- by acquiring ITA’s specialized technology, it has the potential to use its dominance in web search to become dominant in travel search.

Google announced in late August that they had received a “second request” for information from the DOJ as part of the regulatory review of the acquisition.

The DOJ’s process of review for deals such as the acquisition in question consists of a preliminary “waiting period” review, lasting approximately a month.  During this time the DOJ can ask for voluntary divulgence of information and hold discussions with the companies. At the conclusion of this phase, the DOJ decides whether to give the deal the green light or look into it further during a “second request” stage.

Violating vertical boundaries
So what’s the big deal?  Should we be concerned that Google is leveraging its cutting edge engineering capabilities to enter different but related markets?  That might depend on how you define separate markets. If you contemplate that video-sharing technology, digitized book-scanning and indexing, and travel data aggregation to be related enough to online search, then Google is arguably just doing variations on a theme of its specialty.  But, if you’re beginning to think that Google is getting into a lot of things it doesn’t normally do, you might think it is merging with complements; that is, it’s not buying up competitors so much as it’s absorbing entities further upstream or downstream in the supply chain.

Whereas Google currently scans and indexes travel search information that it acquires from Kayak or Orbitz and display it as a one-box result, with the new ITA software Google can feasibly create its own travel data aggregation platform and be able to offer the same services as Kayak or Orbitz but as a Google product.  This can be a troubling prospect to say, a small travel search site which sees this deal as Google invading and dominating their niche industry.  But proponents of Google, and certain lines of antitrust theories, contend that Google shouldn’t be punished for its well-earned successes—if not for its technological savvy leading to the creation of such services as Google Books, we may not have the many sophisticated products Google offers (mostly free of charge) and continues to create.

What does this mean for consumers?
The purpose of antitrust law is not to impede competitive efficiency, which typically benefits consumers by producing better products and lower prices.  Having previously worked in-house at a technology company, I observe a certain cognitive dissonance: when a company does too well or becomes dominant in its field, we are quick to suspect that bad intentions and certain misconduct are the culprits for such success.  But in my personal experience, it’s common, if not the norm, that companies which fare well do so because they are giving users better choices, higher quality, and lower prices.  It’s difficult for a private company to convince consumers that it has their welfare and best interests in mind—but that is exactly how a company gains respect and earns loyalty from discriminating customers.  Why is it exactly that we use Gmail, Chrome, and Scholar?  Because they’re useful and easy to use.  If Google can develop a better way to aggregate and disseminate travel data, that would be useful, too.  So why should we stop them?

• The Copyright Office released its latest group of exceptions to the Digital Millenium Copyright Act’s anti-circumvention provision. Wired and cnet news report on the exception for jailbreaking mobile phones.

• Also in DMCA news, Ars Technica discusses the Fifth Circuit decision that bypassing technological protections to access software for a fair use does not violate the DMCA anti-circumvention provision.

• The Supreme Court ruled on patentable subject matter in Bilski v. Kappos. Cnet, The MTTLR Blog, and IP Watchdog give their takes on the decision.

• Patent Docs reports on the memo issued by the USPTO to its examiners in the wake of Bilski. In a similar vein, Patently-O takes a look at the first post-Bilski test cases.

• The case between Joel Tenenbaum and the RIAA has taken another turn as U.S. District Judge Nancy Gertner slashed the jury verdict by 90%, calling it “unconstitutionally excessive.” See the coverage from Wired and Eric Goldman.

• Holman’s Biotech IP Blog looked at the recent limits that the EU Court of Justice has placed on patent protection for gene sequences.

• IP Watchdog has some thoughts on the early stages of a multi-billion dollar lawsuit filed against PayPal by XPRT Ventures, Inc.

• Authorities in San Mateo, California, contemplate filing criminal charges in connection with the sale of an Apple prototype (of a new iPhone), lost by and possibly stolen from an Apple software engineer and bought for $5,000 by the website Gizmodo.com, the New York Times reports.

• From the San Francisco Chronicle: citing a desire to help fight censorship, Google has launched a tool that discloses requests the company receives from governments for content removal and user data.

• India’s new copyright proposals, which include both fines and jail time for offenders, are still not strict enough for the RIAA, MPAA, and other organizations that lobby for greater intellectual property enforcement, Ars Technica explains.

• From CNET, a summary of the recent Supreme Court decision declaring unconstitutional a law banning Internet videos of animal cruelty, while leaving open the possibility that a narrower law would be permissible.

• A new study funded by net neutrality opponents claims that the FCC’s proposed net neutrality rules would cost the telecommunications industry over 340,000 jobs in the next ten years, PC World reports.

• PatentlyO notes that the Supreme Court has decided to hear a case on international copyright exhaustion, and gives a summary of the case.

• Also from PatentlyO, links to videos of patent attorney Kevin Noonan defending genetic patents on 60 Minutes and the Colbert Report.

Smart document generation

If giving legal advice is one of the two core skills of legal practitioners, the other is drafting legal documents. No matter what area of the law you practice in, you will need to generate a brief, a lease, a will, a contract, a certificate of incorporation—you name it. It is no surprise therefore that ever since PCs were first introduced into law firms, lawyers have been looking for ways of using them to make generating documents faster and easier. Word processors helped, and precedent data banks did too, but the Holy Grail in this field is a system that can generate a complete, airtight first draft of the required legal document at the click of a mouse. The idea of software that can generate standardized legal documents is not new. Software packages that produce documents on the basis of certain specified inputs have been on the market for some time. They range from simple electronic forms or automated cut-and-paste to sophisticated software that can draw on internal definitions and even do a measure of logic checking.[1] Most law firms nowadays have in place systems of varying degrees of sophistication to avoid re-inventing the wheel each time a legal document is needed.

The Semantic Web promises to take the evolution of document generation further—much further. Advanced functionality such as checking the internal consistency of a document, or checking for compliance with a specified body of rules can be achieved by a non-semantic application built for that purpose. But where semantic applications will really break ahead of the pack is in their ability to draw on a web of structured online legal data and in their interoperability. Being able to access pre-existing taxonomies and rules will facilitate the task of developers, as much of the “logic” an application needs to process will already have been formalized and tested by a broad, collaborative community.

Furthermore, because the task of developing those taxonomies and applying them to data is an ongoing process, less effort will be needed by individual developers to keep applications up-to-date. Suppose a semantic application checks for consistency of the document with a certain body of rules. If a relevant statute is amended, or a court decision clarifies the interpretation of a given rule, there is no need for developers to update the code of the application to implement the amendments. Whatever authoritative online source of legal rules the application draws on can be updated, and all applications drawing on that source will stay abreast of the latest law, without needing to download an update. Another advantage of using smart data is that generating documents would involve more than just producing a human-readable document. The end product would not be a simple text file. Rather, as we have seen, the document could include metadata encoded in accordance with open, machine-readable standards, referencing online taxonomies and rules that give meaning to the data. This means that any other application, whether proprietary or otherwise, which uses those open standards, will be able to process that metadata, and understand the structure and content of the document. The Semantic Web guarantees interoperability by default, and avoids the problem of “smart” documents that are only smart to users who own a particular proprietary application.

Executable semantic contracts

If the content of the contract is machine-readable, parts of it may also be machine-executable: if applications can determine the rights and obligations of the parties to such a “semantic contract,” there is no reason why they could not also process payments, notify the parties when notice of renewal is due, renew the contract on specified conditions, etc. In addition to the efficiencies gained in generating the contracts on the lawyer’s side, semantic documents could yield huge gains on the client side. Rather than manually going through each agreement to determine who owes what to whom, when, and on what conditions, semantic contracts could be fed into software that will do this processing automatically.[2] With this technology, therefore, the law firm gets to cut the costs of production (and therefore, eventually, the cost of the service), while the client gets an enhanced product that enables it to cut its costs. Expect demand for semantic contracts and the applications that generate them.

Plain English vs. metadata

As we have seen, there are limits to the extent to which the plain-English meaning of legal propositions can be translated into formal rules. However, the considerations relating to these limitations are somewhat different in the case of contracts, because of their nature as private legislation between the parties. Here, rather than translating pre-existing laws, the parties are free to choose to draft their agreements using formalized terms and rules that lend themselves to automated analysis and processing. This raises the question of the relationship between the plain-English meaning of the contract (along with the plain-English laws that govern it) and the possibly divergent machine-readable meaning encoded in the metadata. Conceptually, a contract is an agreement between the parties, and the written contract is simply a memorandum or record of that agreement. The rules of contractual interpretation are concerned with ascertaining what rights and obligations the parties have consented to undertake. If I consent to be bound by a semantic contract, am I consenting to be bound by the plain-English terms only, or would the metadata, and the taxonomies the metadata refers to, also guide the interpretation of the agreement?

To put it another way, if I enter into a semantic contract, and the execution of the machine-executable parts of that contract is not what I expected on the basis of the plain English-wording of the contract, has the contract been breached? Suppose that there is no problem with the application that does the executing, but rather that the divergence is caused by differences between the logical implications of the semantic concepts used in the metadata on the one hand, and the positive laws as understood by lawyers and applied by judges on the other. The conservative answer is that the execution and the metadata that enables it are entirely distinct from the contract itself, and machine-execution is ultimately no different from a human agent performing the contract, properly or improperly. But the contrary viewpoint is that what semantic metadata does is to incorporate meaning by reference to definitions and rules external to the data itself. Is that so different from incorporation by reference in contract law, for example by referring to terms and conditions on the back of a parking ticket, or including Incoterms in international trade contracts? Why should the metadata not influence our interpretation of the contract?

Meaning vs. meaning

There are deeper questions at issue here, relating to the fundamental differences between machine-executable computer code and legal norms. The kind of “meaning” encoded using Semantic Web standards is deeply different from the kind of “meaning” you and I express when speaking about the law, or the kind expressed by law-makers in creating the law. I will leave these difficult questions hanging for now, but I will hazard to predict that, as machine-executable contracts gain currency and the idea of automated determination and processing of legal obligations becomes commonplace, those fundamental differences between code and law will begin to blur.

[2] See Siegel, p. 190.

What can you do with the Semantic Web that you can’t do without it?

The Semantic Web is a powerful way of structuring data and giving it a precise, machine-readable meaning. The most obvious and immediate benefit of semantic technologies is in organizing large quantities of information in a particular domain to make it easier to retrieve and analyze. This is reflected in the contexts in which these technologies have already been deployed, such as organizing large online databases of content (e.g. bbc.co.uk, see here); or facilitating the exchange and analysis of research data (e.g. drug research, see here). Given the problem of legal information expansion discussed in the first post in this series, using semantic taxonomies and rules to organize the vast universe of legal data is clearly a promising area.[1]

In this post I will go beyond merely identifying the benefits of better structured data. Rather, I want to consider what really distinguishes the Semantic Web from rival technologies by asking: what can you do with the Semantic Web that you can’t do without it? In attempting to answer this question, I will focus on two kinds of application of the Semantic Web which promise to deliver not just enhanced performance, but may even transform the nature of the legal service involved: semantic legal query systems and, in the next part, smart legal documents.

Lawyers as optimum retrieval intermediaries

One of the core tasks performed by lawyers is giving legal advice. Schematically, what lawyers do in carrying out this task is to:

1. identify rules in a vast corpus of laws that are relevant to a given legal query;
2. interpret their legal meaning, often by considering how different rules interact and how they have been interpreted in the past; and
3. consider how those rules apply to the specific query.

What distinguishes lawyers from the man on the street and what justifies both their holding a license to practice and their charging sizable fees for their services, is their (theoretically) superior ability to carry out each of these tasks. To quote the oft-repeated wisdom, the difference between a lawyer and a layman is not that the lawyer knows the law, but that he knows where to find it. I might add that the lawyer also knows whether there are legal rules for a given problem; how different rules interact (which rules preempt or modify other rules); how to check if a law is still in force or a precedent still good law; how to find an authoritative scholarly interpretation; and perhaps most importantly, the lawyer will have a wide experience through of different factual situations and contexts. In this sense, in the delivery of legal advice, a lawyer acts as an intermediary who ensures optimal retrieval of legal knowledge on behalf of his client.[2]

Semantic legal queries

We have seen how lawyers use search engines and commercial databases to deal with step 1 (identify) much more efficiently than was possible in the days of hard-copy statutes and law reports. However, even though researchers started working on expert legal systems as far back the 1970s (see here), in practice, steps 2 (interpretation) and 3 (applying the law to the query) are still largely carried out by the lawyer. This process is aided by technology only to the extent that the identification step 1 is repeated in sourcing secondary materials to guide interpretation and application of the rules. The smarter data generated on the Semantic Web will enable applications to dig deeper into steps 2 and 3.

Leveraging the higher degree of organization of legal data and the possibility of drawing inferences from the data, a semantic legal query system should be able to do more than merely retrieve information based on keywords selected by a human agent. In a world of perfect formalization, an application could carry out the interpretation and the application steps autonomously. But even in the absence of perfection, it is not unrealistic to suggest that within a few years, if enough smart legal data is available on the web, semantic legal query systems will be able to retrieve not just keyword-relevant documents but all or most of the information necessary to carry out steps 2 and 3. The application will know where to find the law (online); it will analyze the structure of the query and scour available data to determine whether there are applicable rules; it will determine what those rules are and suggest how they interact (perhaps retrieving the rules that govern the interaction); it will check whether the rules are up-to-date and retrieve any amendments or qualifications; and it will search for similar fact patterns, precedents and FAQ entries to clarify the application of the rules.

There are at least two major reasons semantic solutions have more potential than rival technologies to achieve these kinds of results. The first relates to the formal structure of Semantic Web standards: because the use of semantic metadata ensures that items of data have a precise meaning, semantic applications can make reliable inferences on the basis of the data. You need certainty to make inferences, because each step amplifies the uncertainty. Take this syllogism: Oracle is a Delaware Corporation; all Delaware Corporations are legal persons; therefore Oracle is a legal person. Now imagine each proposition in the syllogism is the result of a “best guess” data analysis process (e.g. through statistical analysis): There is a 90% percent chance that Oracle is a Delaware Corporation; there is a 90% chance that all Delaware Corporations are legal persons; therefore there is a 81% (90% of 90%) chance that Oracle is a legal person. This uncertainty compounds with each step, so beyond a few steps, any non-marginal uncertainty is fatal.

With the Semantic Web, if your query specifies a defined entity, the application will know precisely what you are referring to. In principle all instances of that object on the Semantic Web will refer to the same (online) definition, which specifies its properties and its relation to other entities. The second reason for the superiority of semantic applications relates to the openness of Semantic Web standards: the widespread adoption of standards for tagging and organizing legal data will ensure that more structured legal information is available than could possibly be achieved by a single provider of proprietary systems.

DIY and FAQs

An application that can deliver a page full of the kind of information described above will go a long way in assisting lawyers in carrying out steps 2 and 3 of legal advice delivery. In fact, if the application is good enough, it may even make the lawyer’s input redundant. How much additional specialist knowledge do you really need if all of the relevant information is right before you? Many consumers of legal services are happy to resort to “DIY” legal advice rather than incurring the costs of professional legal services. Online FAQs and other legal resources have proven popular as means of sourcing legal information without consulting a lawyer directly (often made available by legal professionals as a kind of loss leader to attract potential clients). Individual resources are inevitably limited in content, but in the aggregate the free World Wide Web (i.e. excluding subscription websites) is a fairly comprehensive source of legal information. The problem for the untrained is in finding relevant information and distinguishing the accurate and up-to-date sources from the incorrect and out-of-date. A semantic legal query application that enables laymen to access comprehensive, up-to-date legal information in response to their queries would satisfy much of the demand for simpler legal advice, reducing the demand for competing professional advice—if priced right. Even though these applications may not rival good lawyers in the quality of the service, not all consumers of legal services are concerned with getting the best quality. Good-enough might well do.

More than machines

Of course, many, if not all, lawyers would strongly resist being described as “optimum information retrieval” machines. Most would see their role as going well beyond merely delivering statements of what the law is to their clients. Rather, they are in the business of delivering solutions, offering advice on how to deal with certain situations, how to handle particular disputes, how to structure transactions, etc. Yet it is undeniable that lawyers, especially junior lawyers, spend much of their time searching for relevant information and assimilating it into bespoke legal advice. What the technological possibilities outlined in this post suggest is that simpler legal advice can likely be significantly automated, while for more complex queries, Semantic Web-based applications could considerably enhance fee-earner productivity in producing legal advice.

(Coming soon: Part 5 – Legal Documents.)

[2] See discussion of “optimum retrieval” in Part 1 of this series.

Not if the email has been “in electronic storage” for more than 180 days, under the 1986 Stored Communications Act (18 U.S.C. Section 2703). The Stored Communications Act (SCA) is Title II of the Electronic Communications Privacy Act (ECPA).  In contrast, that same Act states that a warrant is required for disclosures of emails that have been stored for 180 days or less.

A Recent Battle Over Email Through Webmail

How to apply the SCA to emails stored by webmail providers was the central issue in a court battle pitting several tech company heavyweights and privacy advocates against the U.S. Department of Justice.  In December of 2009, the DOJ requested and received an order from a magistrate judge that Yahoo turn over emails in specified accounts stored for less than 181 days—without a search warrant.  The DOJ’s rationale? The emails had already been read by the recipient, and thus did not count as being in “electronic storage” within the meaning of the SCA.

Yahoo refused to comply with the magistrate judge’s order. The DOJ filed a motion to compel the production of the emails in March (PDF). Yahoo’s response brief (PDF) contested the DOJ’s interpretation of “storage” and accused the DOJ of trying to overturn years of precedent in an effort to gut Fourth Amendment protections for emails.

Yahoo was not alone in its battle. Google and a coalition of digital privacy groups came to its defense, filing an amicus brief (PDF) arguing that the Fourth Amendment protects email just as much as private conversations and written papers, and supporting Yahoo’s interpretation of “electronic storage” within the meaning of the SCA.

The Government Backs Off… For Now

The fight was just coming to a head when it ended abruptly. The DOJ withdrew its motion to compel the production of the emails (PDF)—without, however, backing down from its interpretation of the law. This means that the argument may not be truly over, but may simply have been postponed. Although Yahoo briefly expressed its pleasure over the new development, the digital privacy groups (for instance, the Electronic Frontier Foundation) are less pleased because the withdrawal delayed resolution of a contentious issue. Adding to their consternation: they thought they were going to win.  Precedent indicates that the resolution the DOJ’s withdrawal delayed may have been favorable to email users and companies like Yahoo, and less than favorable to the DOJ. Although Yahoo won this short-term victory, the government’s withdrawal means that Yahoo and Google and their users will likely face similar issues very soon.

“Electronic Storage” and Cloud Computing

Yahoo, in its response to the DOJ’s motion to compel, relied on the 2003 9^th Circuit case Theofel v. Farey-Jones (PDF) which plainly stated that opened emails fell within the SCA’s definition of “electronic storage.” For the purposes of SCA § 2701(a)(1), a communication is in “electronic storage” if it is stored temporarily and incidentally to transmission or if it is stored “for purposes of backup protection” (SCA § 2510(17)). In Theofel, the 9^th Circuit did not decide the question of whether opened emails were stored incidentally to transmission, but held that regardless of that issue, opened emails were stored for purposes of backup protection. Accordingly they are in “electronic storage” within the plain meaning of the SCA. Yahoo argued that not only are the opened emails stored for purposes of backup protection, but that the court should also consider them to be stored incidentally to transmission. Relying on the plain meaning of the SCA provisions, Yahoo argued that whether an email was opened or not was irrelevant to its classification as “electronic storage” and consequent protection under the SCA.

The DOJ, by contrast, argued that Theofel was an erroneous decision and that the 9^th Circuit was disregarding the structure and legislative history of the SCA. In particular, the DOJ argued that the protection for backup storage only applied to copies made by a service provider in case of system failure. Since opened email does not fall into this category, it is not in “electronic storage” for the purposes of the SCA, but instead falls into the category of communications held by a “remote computing service”—in this case, Yahoo.  The SCA, passed in the days before common use of webmail, does not have warrant requirements for such communications (see section 2703(a), regarding communications in “electronic storage,” compared with section 2073(b), discussing communications held by a “remote computing service”).

The SCA’s distinction between “electronic storage” and storage by a “remote computing service” suggests that much of the information stored by web users will have very little statutory privacy protection in the era of cloud computing, as more and more personal data is stored remotely. That is probably why the amici brief by Google and various digital privacy groups, in addition to supporting Yahoo’s interpretation of the SCA, also argued that the emails were protected under the Fourth Amendment—regardless of whether the SCA’s protections extend to them or not.

Fourth Amendment and Email

Citing a line of cases beginning with Katz v. United States, a Supreme Court decision from 1967 holding that governmental eavesdropping on phone conversations is a Fourth Amendment violation, the amici brief argued that email users have a “reasonable expectation of privacy” (a prerequisite to Fourth Amendment claims) for the contents of emails stored with a webmail provider. The argument was supported by analogy to conversations in person and over the phone (which are intangible, yet constitutionally protected), sealed postal mail (private for Fourth Amendment purposes even though carried by a third party) and the contents of hotel rooms (private even though the room is owned by a third party).

Possible Future Developments

Despite all these fine-tuned legal arguments, all of these parties will have to wait for a final conclusion on whether opening an email makes it less protected and whether email is as constitutionally protected as a phone conversation. However, Google and the digital privacy organizations behind the amici brief—along with Microsoft, AT&T, AOL, Loopt, and others—have joined forces to advocate federal laws that would render moot all of this analysis by changing the SCA so that police will need a search warrant to access emails even if they are stored “in the cloud.” Describing the issue as one of “digital due process,” the coalition argues that the 1986 attitude to “remote computing services” has become obsolete and that privacy protections need updating in the current era.

The fact that most of this diverse coalition banded together to support Yahoo’s case so quickly after it was announced (it was announced on March 30^th and the amici brief was filed on April 13^th) suggests that the coalition may have regarded the Yahoo case as the initial test run for its legal strategy. The DOJ’s withdrawal can be taken as a sign of uncertainty in its position, or at least unwillingness to argue it unless strictly necessary. However, the DOJ’s lack of any concession on this issue shows that it has by no means given up the possibility of pursuing this battle in later cases, which means that we will likely see giants like Google, Microsoft, and AT&T clash with the federal government over email privacy in the future.

• Ephemeral Law takes a look at the court documents in Microsoft’s challenge to the Waledac botnet, which it describes as on the “cutting edge of legal efforts to shut down hacking operations.”

• The Wall Street Journal reports that the US Department of Justice is stepping up its antitrust investigation into technology firms’ “no-poach” policy and salary fixing.

• Eric Goldman reports on a decision of the California Court of Appeals rejecting an argument that a California statute prohibiting eavesdropping precluded admitting Yahoo! chat logs in evidence.

• Why the anti-commons aren’t so tragic, from Patent Docs.

• The MTTLR Blog writes about falsely-convicted victims of DNA forensics errors.

• Wired: a new malware scam threatens BitTorrent with copyright infringement suits.

• Spicy-IP blogs about BioPiracy – the practice of mining the traditional knowledge of indigenous communities for biological and medicinal patents – in Africa.

• Feature from The Register: the Russian Association of Electronic Communications promises to crack down on spam and cybercrime.

• British Election special: the mother of British hacker Gary McKinnon, who was at the heart of a recent UK-US extradition battle, has announced that she will run against Chancellor Jack Straw in the upcoming parliamentary elections, from bbc.co.uk.

The Case: FCC v. Comcast

The FCC based its legal argument on its 2005 “Internet Policy Statement” (PDF), which declared (among other things) that internet users had the right to freely access the internet content of their choice, subject to the requirements of “reasonable network management.” Comcast, the FCC argued, had violated the Internet Policy Statement by its traffic discrimination against BitTorrent, which did not fall within “reasonable network management.”

Comcast countered by arguing that the FCC had no right to regulate its network management in any way. The Internet Policy Statement was a set of guidelines, not rules, and the FCC admitted its unenforceability within the statement itself. Until the FCC makes the “Policy Statement” an active, binding policy, Comcast argued, the agency had no authority to enforce its rules.

The FCC, in response to sharp questions from the court about the source of its authority and asking which particular statute Comcast had violated, claimed that its “ancillary” power to implement its Congress-granted authority gave it the right to regulate Comcast. This ancillary power comes from Title I of the 1934 Communications Act, which gives the FCC to promulgate regulations “reasonably ancillary” to the agency’s specific duties outlined elsewhere in the Act.

The court did not buy this argument. In its opinion (PDF), the court stated that “ancillary” jurisdiction was not free-floating but had to be related to an explicit statutory grant of power. Finding no express Congressional permission for the FCC to regulate Comcast’s network management, the court threw out the FCC’s order.

The Larger Issue

The FCC’s fight for “net neutrality” is a part of its stated general agenda to make the internet easily accessible to every American. Through its proposed National Broadband Plan (NBP), submitted to Congress on March 16^th, 2010, it intends to make high-speed internet “the country’s dominant communication network.”

Aspects of the NBP include a subsidy for ISPs in rural parts of the country, auctioning broadband spectrum to wireless providers, a “digital literacy corps” to help Americans learn online skills, up to $16 billion for a public safety network to coordinate first responders to disasters and crises, a goal of having 100 million households with 100 megabit-per-second internet access (contrasted with the current average of three to four megabits-per-second) by 2020, and reduction of phone subsidies in favor of internet subsidies.

The FCC faces push-back from the television industry in particular, which is currently using parts of the over-the-air spectrum that, under the NBP, may be auctioned off for broadband use. The FCC already fought and won a similar battle with the enforced end of analog transmissions of TV signals—the spectrum used for over-the-air analog transmission was reclaimed (and all analog TV signals replaced with digital ones) and auctioned off.

What will likely happen next?

The FCC’s public reaction to the recent federal court decision has been unabashed and undismayed. In its release on April 8^th announcing its 2010 Broadband Action Agenda (PDF), an elaboration on the specifics of the NBP, the FCC Chairman Julius Genachowski declared, “The court decision earlier this week does not change our broadband policy goals, or the ultimate authority of the FCC to act to achieve those goals. The court did not question the FCC’s goals; it merely invalidated one technical, legal mechanism for broadband policy chosen by prior Commissions.” The announcement then lists those goals and the steps the FCC proposes to implement them. Ars Technica explains some of the FCC’s plans here.

The FCC may also have another legal option available to protect net neutrality specifically, in addition to implementing the NBP. University of Michigan law professor Susan Crawford persuasively argues that the FCC can easily acquire the legal authority to enforce net neutrality.  In an op-ed column for the New York Times, Professor Crawford points out that the recent federal court decision rests upon the labeling of ISPs as “information services” rather than “telecommunications services.”  Until 2002, the internet was considered a telecommunications service. But under the George W. Bush administration the FCC re-labeled high-speed internet providers as providers of “information services” because they offered services other than internet connection (like e-mail and web-hosting).

Why does this re-labeling matter? Because the Communications Act gives the FCC the authority to regulate “common carriers,” which includes “telecommunications services” and does not include “information services.” Since the FCC is in charge of this labeling process (which is how it changed the label from “telecommunications services” to “information services” in the first place), it is legally empowered to reverse its own decision and simply change the label back to “telecommunications services”—provided that it can offer a good reason for doing so. Professor Crawford argues that the reason for reversing the reclassification is obvious, because people buy internet services based on speed and price, and not because of the extra services some high-speed providers offer (such as e-mail).

At this point the FCC has not declared any intention of undoing the Bush administration-era re-labeling of high-speed internet.  Its legal authority to do so, however, presents an intriguing possible twist in this ongoing battle.

To any aspiring Twitter-ers: signing up for Twitter is free and pretty easy.  You can read more about it on Wikipedia or on Twitter’s About page.

• The British Parliament has approved a law authorizing temporary suspension of internet access for those accused of repeated copyright infringement, reports the New York Times. Opponents of the law, such as the Open Rights Group, promise to turn this into an election issue in Great Britain.

• Canadian company Wi-Lan has filed suit in the Eastern District of Texas against 19 high-tech companies—including heavyweights Apple, Dell, Motorola, Acer, and others—for allegedly violating its Bluetooth patents, reports Business Week.

• From Wired: a U.S District Court judge has given a lawyer a 30-day sentence for contempt of court for encouraging people to flood the judge’s e-mail account, to persuade him to side with the lawyer’s client in a civil suit. The 7th Circuit Court of Appeals is now reviewing whether the judge had the authority to impose a contempt sentence for conduct outside the physical courtroom.

• The U.S. Court of Appeals for the District of Columbia overturned a 30 year computer ban for a sex offender, saying that the ban is “substantively unreasonable” and “aggressively interferes with the goal of rehabilitation,” reports Wired’s Threat Level.

• The Electronic Frontier Foundation applauds the 2nd Circuit’s decision in Tiffany vs. eBay, finding the online auction company not liable for contributory trademark infringement on the basis of users selling items in Tiffany’s signature blue boxes, but the digital rights organization worries about the lack of a statutory “put back” procedure in trademark law.

• The New York Times has a detailed article explaining China’s internet censorship methods.

• After a federal court held that the FCC cannot impose network neutrality on ISPs (as PC World discusses), the FCC declared its intention to pursue its National Broadband Plan nevertheless. CNET reports that the FCC considers the court’s ruling to have forbidden one technical mechanism for achieving the FCC’s goals, but not the goals themselves.

• From eWeek: an Arkansas woman faces misdemeanor charges for posting slanderous messages on her teenage son’s Facebook account.

• The US Court of Appeals for the Federal Circuit has found that Google’s AdWords program does not infringe the patent for a bidding system determining pricing for ads on search results, Ars Technica reports.

• Mexico may disconnect millions of people’s cell phones for failure to register their identities with the government via text message. This is part of an attempt to fight crime by regulating cell phone use, Reuters reports.

A machine-readable version of the law?

David Siegel, an entrepreneur and early blogger, recently published a book entitled Pull, The Power of the Semantic Web to Transform Your Business, the first “business” book about the Semantic Web. Siegel devotes one chapter to exploring the possible impact of the Semantic Web on the law and lawyers. An enthusiastic backer of the new technology, Siegel sees huge potential for the Semantic Web to transform the work of lawyers. He believes that work on legal taxonomies and formalized rules may result in “a set of semantic rules that can then serve as the machine-readable version of the law.”[1] This is the kind of structured legal data that would make the intelligent legal queries outlined above possible. It raises the question of the future utility of lawyers in a world where much of what they now do can be performed by computer applications. Why go to a lawyer if you can get an authoritative, complete and up-to-date statement of the law online? If the law can be fully specified as a formalized set of machine-readable rules, would we even need lawyers and judges, or could they be replaced with computers and Semantic engineers of the law?

A note of caution

I ought to sound a note of caution at this point. The idea of reformulating all of the rules of law as a formal system, with precise classifications of entities and rules governing their interactions, has been tried before. Most students of the law will, at some point in their studies, come across discussions of the German Civil Code (the BGB), which was drafted over a century ago with precisely that aim in mind. It failed. The law has proven too malleable, too changeable, and too subjective a system to codify with mathematical rigor. There is little reason to believe that the Semantic Web will succeed where others have failed, at least in the foreseeable future. Few fields of human activity are as centrally focused on interpretation of often conflicting texts, and as acutely concerned with the ambiguity of human language, as the law. Though the law may be a body of rules, those rules are not of the clear-cut variety that easily lend themselves to formalization.

How smart does “smart” need to be?

That does not mean, however, that the taxonomies and rules of the Semantic Web are useless when it comes to the law. Difficult exercises of interpretation may be required in deciding “hard cases” and creative thinking may be needed in handling more complex, high-level legal issues, but much of the daily practice of the law is far less complex or ambiguous. Is a high level of legal expertise really required in producing a first draft of simple terms and conditions or a memo setting out routine advice? The parameters of these kinds of tasks should be relatively easy to formalize. And even if the semantic formalization of the law were less than perfect, a system that understands the structure of legal queries and can achieve near-optimum retrieval could vastly increase the efficiency of legal researchers. [Unknown A1]

Again, taxonomies and rules need not be all-encompassing to be useful. The Semantic Web is not the latest incarnation of pie-in-the-sky artificial intelligence. At the heart of the SemanticWeb is the task of developing dictionaries of concepts and rules to make data smarter, and that is a task that can be done piecemeal. Making data smarter does not have to mean encoding all of the subtleties of human language into the data. If an area of legal practice is concerned with a reasonably small set of clearly defined rules, much of the relevant law may be susceptible to being translated into machine-readable standards. Consider an area of regulatory compliance such as food labeling, which involves rules prescribing particular information formats and content, lists of words that must, can, or cannot be used under certain conditions, and similarly well-defined rules. Translating most of these into a “machine readable version of the law” that could serve as the basis for automated compliance-checking systems hardly seems unrealistic. What about other, less straightforward areas of the law? Even where the area evades complete formalization, as will often be the case, semantic applications may significantly enhance the productivity of fee-earners by dealing with routine, low-skill work while leaving the subtler points of law to the flesh-and-blood professional. So, what kinds of application might achieve these efficiency gains?

(Coming soon: Part 4 – Smart documents and semantic contracts)

What is the Semantic Web?

The Semantic Web is a way of making data smart. The idea is, rather than building smart applications that can analyze “dumb” data, you make the data smart in the first place. The problem with dumb data is that the ability of applications to make sense of human language is limited. Currently, the information in most web pages and text documents is “human language,” encoded in data formats that tell computers nothing about their meaning. What the standards that make up the core of the Semantic Web do is to provide data formats that can be used to make the meaning of information explicit.

Dumb data vs. smart data

So how is this done? What differentiates smart data from dumb data? If you view the source code of this web page (try it – it’s in View > Source in Explorer; View > Page Source in Firefox, View > View Source in Safari), you will see some text and a lot of “tags” between angled brackets, such as “<p>” and “<div id=‘header’>.” This is HTML, the mark-up language in which most information currently on the World Wide Web is encoded. It tells your browser how to display the text and images, and where to redirect when you click on a link – but not much else. Information encoded in plain HTML is dumb data. Let’s consider an example. In HTML, you might have the following text:

<p>Sun is a subsidiary of Oracle.</p>

The HTML tells your browser that text enclosed between the opening tag “<p>” and the closing tag “</p>” should be displayed as a single paragraph, and nothing more. A simple search engine might hit on this sentence even if I intended to search for the “sun,” as in the sun in the sky, or an “oracle,” as in the Oracle of Delphi. An application with advanced language-processing abilities might be able to deduce from the absence of an article (“a” or “the”) that “Sun” and “Oracle” are names. It might also deduce from the mention of “subsidiary” that the sentence in fact refers to names of corporations. In the current state of technology, this is likely to be a hit-and-miss process.

Making data smart

The idea behind the Semantic Web is to attach machine-readable metadata (data about data) to information that can be interpreted by any Semantic Web application. To better understand what this involves, imagine a mark-up language that enables you to specify what the things being referred to are. Imagine that this mark-up language enabled you to add tags to your data to specify things like:

<item this is a corporation> Sun </item>

<item this is a legal relationship between two corporations> is a subsidiary of </item>

<item this is a corporation> Oracle </item>

Even better, imagine that, rather than just labeling things, you could refer to a source of information on the web that tells you more about each of these things, e.g.:

<item see http://www.dbpedia.org/resource/Oracle_Corporation> Oracle </item>

The link referred to is a “resource” – a bundle of data available online that describes something. This resource contains data, encoded in a machine-readable format, which might state that Oracle is a Delaware corporation, that it is headquartered in Redwood City, California, that the current CEO is Larry Ellison, etc.

Now let’s take this one step further, and imagine that, when that “Oracle” resource states that Oracle is a “Delaware corporation,” it in turn refers to an online resource that defines the term “Delaware corporation.” That definition might specify that a Delaware corporation is a kind of legal person, that it should have a certificate of incorporation, bylaws, a board of directors, etc. Of course, these statements would also be machine-readable, and could in turn refer to other resources (defining “legal person,” “certificate of incorporation,” “board of directors,” etc.).

Classifications and rules

Where does it all end? It ends with “thing.” That is, a “corporation” is a “legal person,” which is a kind of “person,” which is a kind of “thing.” A “certificate of incorporation” is a “legal document,” which is a kind of “document,” which is a kind of “thing.” Everything is a thing, and so every “resource” is a kind of thing, which fits into a classification of things (a taxonomy). One of the most important aspects of the Semantic Webs is defining taxonomies of different kinds of things using machine-readable formats. There is no need for a single, all-encompassing taxonomy which defines every possible thing: partial taxonomies can define a few terms by referring to other taxonomies, and all of these interlinked taxonomies ultimately refer to the most general standards (remember, this can be done because they are all online).

The Semantic Web also goes beyond mere classifications, allowing you to specify rules for each kind of thing. For example, you could specify that a “director” of a “Delaware corporation” can be a natural person, but cannot be a legal person. You could specify that the property (predicate) of “having a subsidiary” must have a corporation as its subject and another, different corporation as its object.

The foregoing does not purport to be a technical exposition of the Semantic Web, but I hope you get the idea. The core of the Semantic Web is a set of precisely defined standards that can be used to make data smarter by making explicit the underlying structure of the information.[1] Online classifications and rules enable applications to identify and analyze the data in much greater depth and with much greater precision than existing alternative technologies.

The state of the technology

Not all of the pieces of the system outlined above are in place. The basic standards of the Semantic Web, including the Resource Description Framework (RDF) and the Web Ontology Language (OWL), are by now reasonably mature and stable standards. However, there is still a good deal of work to be done and problems to be ironed out before the vision of the Semantic Web is fully made a reality (see here and here). Nevertheless, an increasing number of big names have been adopting Semantic Web standards to structure their data (New York Times, recovery.gov, BBC, Thomson Reuters). Identifying the real-world future implications of the Semantic Web is no longer science fiction, even for the legal industry.

(Next up: Part 3 – A Machine Readable Version of the Law?)

• The Southern District of New York’s decision in Association for Molecular Pathology and ACLU v. USPTO and Myriad (the “gene patents case”) handed down last Monday, has generated a lot of commentary this week. Here’s a selection: reports from Wired and On the Edges of Science and Law; IP Watchdog describes the ruling as “inane”; Patent Docs gives more detail on the patents at issue; Patently O thinks the Federal Circuit is likely to reverse the decision; and Holman’s Biotech IP Blog takes the investor’s perspective.

• British science writer Simon Singh (of Fermat’s Last Theorem, The Code Book and Big Bang fame) wins libel case brought against him by the British Chiropractic Association, from The Guardian.

• Jonathan Zittrain’s The Future of the Internet and How to Stop It comments on the iPhone developer license agreement, disclosed through a Freedom of Information Act request.

• From OutLaw, Google, Microsoft, eBay et al call for U.S. privacy law update.

• Salt Lake City jury rejects “copyright troll’s” claim to Unix - Wired reports.

• The European and FCC antitrust complaints against Google are not about Microsoft, opines The Register.

• US criticizes Australian internet filtering plan, from E-Commerce Times.

The problem: too much data

There are currently over 25 billion web pages on the World Wide Web. In fact, that figure covers only the indexable web, so those 25 billion pages may be only the tip of the iceberg (see this paper on the “deep web”). Looking beyond the web to total production of information, a study by International Data Corp carried out in 2008 predicts that 1,200 exabytes of data will be generated in 2010 (cited by The Economist here). To put this in perspective, note that one byte of information is a sequence of eight bits – a sequence of eight digits which can be either one or zero. One exabyte is 1,000,000,000,000,000,000 bytes (10¹⁸), or one billion gigabytes. The text of this blog post, in plain text format, takes up about 13,000 bytes. The challenge of identifying and retrieving relevant data in this ever-expanding universe of information is growing in step with the volume of the information itself. Achieving what Richard Susskind calls “information satisfaction” – getting the information you want, and only the information you want – in the face of this exponential expansion is an increasingly daunting task. This is even more true of the challenge of achieving “optimum retrieval” – for a given query, being confident that the single best document has been returned. Google’s “I’m feeling lucky” option may sometimes be surprisingly accurate, but not with any reliable degree of certainty.

Too much legal data

The problem of too much data will be familiar to law students, associates, and anyone else who has carried out legal research. The volume of legislation, case law, commentary on the law, and the like is no exception to the current phenomenon of information expansion. “Googling it” can provide a good first stab at some legal problems, but no lawyer who fears malpractice suits would rely exclusively on results from a general search engine. Commercial legal databases provide more structured and authoritative databanks of legal information, but they are expensive, difficult to use for the untrained, and the search is still conducted mostly by means of citations and keywords. Whether legal sources are identified by a search engine or using a commercial database, the actual task of analyzing and interpreting the texts is conducted by the lawyer – not the machine.

If I want to ascertain, say, what information I must provide in the certificate of incorporation of a Delaware Corporation, I can search “Delaware corporation law,” click through the link that looks most relevant, scan the text (perhaps with the help of the “find” function), identify the relevant section, and read through it to draw up a list of the requirements. If I am especially diligent, I might also check case law in a commercial database to see if judicial decisions have added to or qualified these requirements. Now imagine that, instead of proceeding by keyword searches and “manual” analysis, I could simply enter the query “What information must be provided in the certificate of incorporation of a Delaware Corporation?” and the search engine returned a complete, authoritative list of all of the requirements, along with any qualifications or additions made by the case law. That, in a nutshell, is the promise of the Semantic Web.

(Next up: Part 2 – What is the Semantic Web?)

Gottfried, of course, made these statements for the sake of comedy and in no way intended anyone to believe them.  Popular talk show host Glenn Beck, however, has been accused of using a similar rhetorical technique in attacking those with whom he does not agree.  The tactic involves coming up with a wild accusation and then suggesting that the accused party’s failure to prove its falsehood is proof of its veracity (see here for an example.)

In September of last year, a user from the Fark.com forums decided to create a parody website turning Beck’s method back on him and asked why he has not denied that he raped and murdered a young girl in 1990.  The trouble came, however, when the site was registered under the domain name “glennbeckrapedandmurderedayoungirlin1990.com.”  Within a few days, Beck’s lawyers fired off a complaint to the World Intellectual Property Organization asking that the domain name be cancelled because of potential for confusion with Beck’s trademarks.

That news has since passed and Beck lost his case.  After the WIPO decision explaining that the website was permissible parody, the domain owners nonetheless gave control to Glenn Beck and there is no longer any content at that domain (although the same content is now hosted here. )

Defamation by Domain Name?

A more interesting question than the trademark dispute, I think, was raised in an Ars Technica posting discussing the controversy.  In that post, Ars Technica quoted Public Citizen attorney Paul Levy who explained that there was a significant chance for a defamation claim based solely on the domain name. Levy said that the domain name could be actionable if the statement is false and stated with actual malice.  Certainly, the statement is false. Glenn Beck did not rape or kill anyone in 1990 (but why hasn’t he called me to deny it?), and it’s possible a court could find the statement was made with the malice requisite for a successful defamation claim.

The problem here is whether a court should regard a domain name standing alone as statement.  There have not yet been any cases that find defamation based solely on a domain name.  But in PETA v. Doughney, 113 F.Supp.2d 915, the People for the Ethical Treatment of Animals sued a man who had registered the domain “peta.org” and created a parody site entitled “People Eating Tasty Animals.” The Eastern District of Virginia held that the defendant’s domain name could not be protected by a parody defense because the domain name did not simultaneously project two antithetical ideas. The court refused to consider the domain name in context of the entire site and instead analyzed it independently. The Fourth Circuit affirmed the decision.

While Peta v. Doughney was a trademark case and considered under the Anticybersquatting Consumer Protection Act, if a court were to apply a similar analysis to a hypothetical defamation suit arising from glennbeckrapedandmurederedayounggirlin1990.com, then it would very likely be considered a defamatory statement. But would this make sense?

A Domain Name Should Not Be Considered In Isolation

In my opinion, although there does not seem to be well-established law on this point, courts should not consider domain names in isolation. A domain name is a way of signaling the origin of a website or allowing people to view the content associated with the domain name. Domain names are not generally posted as free-standing statements, but are almost invariably linked to a description or preview of the web page’s content. Even those people who type the domain name directly into their browser’s address bar would almost certainly have an idea of the site’s content before they type it in.

So how could an otherwise defamatory statement made only through a domain name and clearly identified as false in the content of the web page cause any actionable harm? If in real life a domain name is not used independently from the site’s content, or knowledge of the content, then it should not independently give rise to a defamation claim.

To illustrate the point, take this purely fictional example. Suppose I registered “joesmithrobstheelderly.com” and create a site with a header stating “Joe Smith does not rob the elderly, but why won’t he deny the rumors? A parody website.” To a person reading the domain name alone, it would appear that I am stating that Joe Smith does, in fact, rob senior citizens. Equally clear to a person reading just a few sentences of the website, however, is that the domain name is not an independent statement, and that Joe Smith does not rob senior citizens. Under reasoning paralleling Peta v. Dougney, I could be found liable for defamation even though in context of site it is abundantly clear that I am not asserting the domain name as an independent statement.

In the context of web sites, courts should analyze the respective components in the manner in which they are generally understood. A domain name is not generally understood as a statement of fact, but as a locator for the content on a web site. A defamatory statement in a domain name that is not refuted by the site’s content would reasonably give rise to a defamation claim because in context it is still defamatory. If reading the domain name in context makes it clear, however, that the domain name is not a statement being asserted as truth, then there should be no potential for defamation liability. If someone does register “kylebarnettmakesunfoundedassertionsabouttrademarklaw.org,” I promise not to sue. So long as the truth is clear in context.

• The working text of the Anti-Counterfeiting Trade Agreement has been released. See Wired and The Register coverage of the story, and our post on the draft treaty here.

• The Federal Circuit rules on patent dispute Applera Corp v. Illumina, Inc. on the basis of Californian employment law, writes Patent Docs.

• Holman’s Biotech IP Blog discusses the patent law implications of the Federal Circuit’s ruling in Ariad v. Eli Lilly.

• Less than two months after hacker Max Vision was sentenced to thirteen years, the sentencing record is broken again as TJX hacker gets twenty years, from Wired.

• Ephemerallaw asks whether it is worth chasing cybercrooks (see our recent post on cybercrime here).

• The European Court of Justice rules in favor of Google in a challenge to its practice of selling trademarked keywords for its adwords paid results service to competitors. The Stanford Center for Internet and Society and the E-Commerce Times report.

• The Register reports that a twenty-five-year-old Frenchman has been arrested on suspicion of hacking President Obama’s Twitter account.

• Early in 2009, a settlement between Ireland’s leading internet service provider and four record companies looked set to put in place the world’s first three-strikes-you’re-out copyright violation rule. Tech law blogger TJ McIntyre reports on the latest.

• Spicy IP discusses proposed amendments to the Copyright Act and digital rights managements in India.

The issue of international cooperation in the fight against cybercrime will be on the table at the Twelfth United Nations Congress on Crime Prevention and Criminal Justice, due to take place in Salvador, Brazil, from April 12-19, 2010 (see introduction and draft agenda here). The main theme of the Congress will be “comprehensive strategies for global challenges: crime prevention and criminal justice systems and their development in a changing world.” The Secretariat of the United Nations Office on Drugs and Crime (UNODC), in a working paper prepared in anticipation of the Congress, has suggested that “the development of a global convention against cybercrime should be given careful and favourable consideration” (see report by heise.de (in German),  Google translation here). Four regional preparatory meetings were held in advance of the Congress and, as the UNODC’s working paper notes, calls were made at all four for the development of an international convention to tackle cybercrime. The Latin American and Caribbean countries were strongly in favor, noting “the imperative need to develop an international convention on cybercrime” (see Latin American and Caribbean Regional Meeting Report, at para. 41). Will 2010 see the launch of negotiations for a UN Convention on Cybercrime?

A Transnational Problem

In its working paper, the UNODC notes that cybercrime is to a large degree transnational in nature. Issues of national sovereignty can impede criminal investigations in the absence of active cooperation between law enforcement agencies of the jurisdictions involved. The speed at which cybercriminals can inflict harm and move on to evade detection also puts enforcement agencies under heavy time pressures, making the need for international cooperation all the more pressing. The UNODC identifies legislative convergence as crucial to effective cooperation. This is because many countries base mutual legal assistance on the principle of dual criminality, which requires that the offense in question be punishable in both jurisdictions. Divergence in legislation can therefore undermine effective enforcement. Where a particular jurisdiction lacks comprehensive cybercrime legislation or enforces it poorly, it may turn into a safe haven for cybercriminals. This kind of divergence can only be tackled by concerted efforts to harmonize legal standards and enhance cooperation between jurisdictions.

Already On the Job: the Council of Europe’s Convention on Cybercrime

Currently, the leading international convention on cybercrime is the Council of Europe’s Convention on Cybercrime, which was signed in Budapest in 2001 and entered into force in 2004. The Council of Europe, which is not an organ of the European Union, was founded in 1949 to promote human rights, democracy and the rule of law in Europe (see Wikipedia entry here). It current has forty-seven members, including the twenty-seven members of the European Union and Russia. As at December 2009, the Convention on Cybercrime had been signed by forty-six states and ratified by twenty-six (i.e. approved in accordance with domestic constitutional requirements and thus rendered enforceable). Though the Convention was drafted under the aegis of the Council of Europe, it is open to signature by non-members. Four non-members participated in the negotiations of the treaty and signed it (the United States, Canada, Japan and South Africa), and one non-member has ratified it (the United States). The Convention is not, therefore, strictly a regional agreement. Yet the fact that it has only been ratified by one non-European state suggests that it cannot at present be described as a global convention.

The Convention lists a number of crimes which signatories are required to implement in their domestic law, including hacking, child pornography offenses, and certain offenses related to intellectual property violations. It also sets out a number of procedural mechanisms which signatories must put in place, including granting the power to law enforcement authorities to compel Internet Service Providers to monitor a person’s online activities. Chapter III calls upon signatories to cooperate to the widest extent possible in the investigation and prosecution of cybercrime offenses (see the Electronic Privacy Information Center’s summary of the Convention and other resources here).

The Convention on Cybercrime: Can it Become a Global Standard?

The Council of Europe’s Convention on Cybercrime has now been in force for more than five years and has the widest coverage of any international agreement dealing with cybercrime (estimated to cover one third of current internet users). As we have seen, signature is open to countries which are not members of the Council of Europe, and four non-European countries have signed it already. Could the existing Convention on Cybercrime provide a global standard? If so, should the upcoming conference focus on generating the momentum for wider signature and ratification of the Council of Europe Convention?

In his Contribution to the upcoming Congress, the Secretary General of the Council of Europe, Thorbjørn Jagland, notes that the Convention on Cybercrime provides a “clear and comprehensive solution” and has received strong support from the Asia-Pacific Economic Cooperation, the European Union, Interpol and the Organization of American States, among others. Mr. Jagland concedes that it is understandable that, for political reasons, countries may be reluctant to accede to a treaty which they have not participated in drafting. He notes, however, that accession to the Convention guarantees a signatory membership of the Cybercrime Convention Committee and thus involvement in any further development of the treaty. Another downside of launching negotiations on a new, global convention is that it could have the effect of suspending the implementation of legislative reform already underway. Mr. Jagland further questions whether consensus could be reached within the framework of the UN on the kind of procedural law and cooperation measures which the current Convention provides.

Criticism

The Secretary General of the International Telecommunication Union (a branch of the UN), Hamadoun Touré, is reported to be critical of proposals to adopt the Convention as a global standard. The Convention was drafted mostly by and for European states, and is also now somewhat outdated  (see heise.de report here (in German), and Google translation here). Russia, which is a member of the Council of Europe but has not signed the Convention, reportedly backs Mr. Touré’s position. Brazil considered signing the Convention, but then declined to do so, voicing reservations about certain aspects of the Convention, including the provisions relating to the criminalization of intellectual property infringements (see here).

These reservations about the Convention on Cybercrime suggest that negotiating a new UN Convention could prove difficult: globally, there is clearly a divergence of views regarding the appropriate global standards. Furthermore, the procedural and cooperation commitments under the Convention could be difficult to scale up to a global level. The issues these commitments can give rise to are illustrated by the domestic criticisms directed at the government of the United States when it adopted the Convention. For example, it was alleged that the Convention could have the effect of requiring the United States to enforce foreign laws curbing free speech or to monitor the communications of political dissidents on behalf of foreign governments (see Ars Technica report here). Spurious as some of the criticisms may have been, it can be anticipated that attempting to reach a consensus on these matters in a global forum would be fraught with difficulty. Can crucial players such as the Russian Federation or the People’s Republic of China, which are widely suspected of sponsoring various forms of cyberattack for political purposes, be expected to agree to high standards of international cooperation in investigating and prosecution cybercrime? (See, e.g., the 2007 distributed denial of service attacks on Estonia, or the China-based attacks on Google). The UN has a long history of divisions between developed and developing countries, and the Brazilian reservations regarding intellectual property offenses suggest that these divisions could play out once again in negotiations on cybercrime.

A Global Solution Is Needed

Cybercrime does not only affect developed economies: there are now more internet users in developing countries than in developing countries, and one study suggests that emerging economies may be particularly at risk from cybercrime (see here). It is clear that effectively combating cybercrime will require global cooperation, involving a much broader group of countries than the current signatories of the Council of Europe’s Convention on Cybercrime. This will undoubtedly prove a challenge: going back to the drawing board to draft a global convention from scratch could involve years of diplomatic wrangling that may never bear fruit. Given that the existing Convention has proven reasonably effective and that signatories have gained valuable experience in implementing it, it seems wasteful to ignore it. Yet seeking to make the Council of Europe Convention a global standard in its current form is likely to prove no less controversial, as it would likely be seen as being thrust upon countries which have had no say in drafting it. But the Council of Europe has recognized that the nearly ten-year-old treaty could do with being updated, and it is already open to signature to non-members. Perhaps the upcoming Congress could provide an opportunity to suggest updating the Convention on Cybercrime with a view to extending its membership, building on what it has already achieved while addressing the concerns of non-members.

• The Department of State’s annual Human Rights Report turns the spotlight on internet freedom in China and Iran, from ZDNet Government.

• The US District Court in Delaware stays the patent litigations between Apple and Nokia, pending decisions by the International Trade Commission, says The Register.

• A California appeals court rules that cyberbullying threats are not protected free speech, reports Wired.

• Also from Wired, the Supreme Court agrees to review a Ninth Circuit decision on privacy rights in the context of background checks on government workers.

• The FCC announces that it will recommend the sale of 500 megahertz of spectrum to meet the needs of mobile broadband users, from the Washington Post.

• Programmers in trouble over financial misdeeds: two programmers who developed code for Madoff are charged with fraud (The New York Times, The Register) and the Securities Exchange Commission files a complaint against a one-man Russian investment company for hacking into online portfolios to “pump and dump” stocks (Switched, Wired).

• From E-Commerce Times: TiVo wins its long running patent infringement case against digital video recorder rivals.

• Spicy IP reports that Brazil seems set to invoke WTO intellectual property cross-retaliation provisions for the first time, against the US.

• The European Parliament threatens to bring a legal challenge against the European Commission if it fails to disclose details of the Anti-Counterfeiting Trade Agreement (ACTA), writes Outlaw (see our post on the controversial treaty here).

• Also from Outlaw: Net Neutrality in the UK: Ofcom to probe broadband providers’ management of web traffic.

• The New York Times explains that television providers, including TimeWarner and Verizon, are petitioning the Federal Communications Commission (FCC) to change TV retransmission rules so that stations (like ABC or CBS) have less leverage over TV providers.

• The FCC is also asking people to test their broadband speeds at its website, Wired reports, to evaluate whether American telecommunications companies are keeping their promises about broadband speed and accessibility.

• Business Week reports that the Business Software Alliance (representing Microsoft and Symantec, among others) is getting increasingly angry over China’s piracy policies.

• From the E-Commerce Times: The Federal Trade Commission is concerned about the potential unfair competitive advantage
• Google would gain by its proposed acquisition of the mobile ad network AdMob, and may ultimately refuse to allow the acquisition to go forward.

• The Chinese Minister of Industry and Information Technology Li Yizhong warned Google to comply with China’s censorship laws, CNET reports.

• From Out-Law: the USTPO has affirmed the validity of Amazon’s amended version of its “one-click” patent, a patent for the technology for buying products online with one click of a web page button, which many sharply criticized as being too obvious to patent.

• Also from Out-Law: there is push-back from companies and activists against the proposed UK amendment to the Digital Economy Bill that would allow courts to order ISPs to block websites accused of hosting copyright-infringing content.

Content Which Falls Under Fair Use Is Not Infringing

One of the elements that Lenz had to prove for her 512(f) claim was that Universal knowingly asked YouTube to take down a video that was not infringing. In its brief, Universal tries to claim that this can never happen when it argued that “because fair use is a defense to an otherwise infringing use, Universal could not – under any analysis – have made any misrepresentations (knowing or otherwise) when it notified YouTube that Plaintiff had incorporated “Let’s Go Crazy” into her video without authorization from the copyright owner.”

To understand this difference, it’s helpful to look at criminal law. Defenses to crimes tend to fall into two different categories: “I didn’t do it” or “I did it, but I had to.” One helpful analogy is to look at a self-defense argument in the case of murder. You are still admitting that you killed someone and that that is wrong, but you are also arguing that it should be excused for some other reason (generally that the person you killed was threatening you).

Similarly, Universal is arguing that each and every post that uses infringing content in any way, even those ways explicitly identified by the statute as fair uses, are infringements on copyright. They claim that fair use is an affirmative defense (the self-defense of copyright) which may excuse the infringement after the fact, but which does not change the legal status of the original use.

It is easy to see why Universal would seek such a ruling. If this were the case, Universal or any other copyright owner would not need to take any care when sending out takedown notices to ensure that the use was infringing. It could simply send out notices as it chooses and potentially rely even further upon automated processes to do so.

Fortunately, the judge pointed out, both in this decision and a prior one, that this seems to be clearly wrong. In the prior order, Judge Fogel states that “if copyright owners are immune from liability by virtue of ownership alone, then to a large extent Section 512(f) is superfluous.” This is clearly the correct decision. After all, fair use is even defined in the statute as non-infringing: “Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work…is not an infringement of copyright.”

No Requirement of Monetary Harm, But Must Prove Proximate Cause

This latest decision focused heavily on a discussion of what damages are available to a plaintiff in a case like this. Both parties put forward competing interpretations of the language of 512(f). The relevant language states that a party in violation of the section “shall be liable for any damages, including costs and attorneys’ fees, incurred by the alleged infringer, by any copyright owner or copyright owner’s authorized licensee, or by a service provider, who is injured by such misrepresentation, as the result of the service provider relying upon such misrepresentation in removing or disabling access to the material or activity claimed to be infringing, or in replacing the removed material or ceasing to disable access to it.”

Lenz argued that the phrase “any damages” should be interpreted to mean “any harm whatsoever” and points out that this language is broader than the “actual damages” language used in other areas of Title 17. Universal contested this reading, stating that the “actual damages” languages was meant as a contrast to statutory damages, not as a form of limitation.  Universal instead argued that, by analogy to common law fraudulent misrepresentation, damages should be limited to economic harm. It also further argued that the misrepresentation must be the proximate cause of the harm, due to the “as the result of” language in the passage above.

Judge Fogel’s decision ultimately draws from arguments put forward by both sides.  He agrees with Lenz on the issue of what damages may be considered, stating that “requiring a plaintiff…to demonstrate in addition not only that she suffered damages but also that those damages were economic and substantial would vitiate the deterrent effect of the statute.” The impact of this decision may be enormous. It’s likely that most plaintiffs who might suit under this section would be just like Stephanie Lenz: individuals whose personal videos were removed. There’s not likely to be economic harm suffered by such a plaintiff, and Fogel’s decision opens the way for such a plaintiff to sue and still recover for other harm, such as the harm to their First Amendment rights. As one of Lenz’s lawyers stated, “what’s important here is that someone who’s had their speech chilled can move forward and bring a lawsuit under 512(f).”

However, Fogel’s decision did place a significant burden upon such plaintiffs when he subsequently found that such damages “must be proximately caused by the misrepresentation of the copyright owner to the service provider and the service provider’s reliance on the misrepresentation.”  He pointed out that were this not the case, plaintiffs could show they have suffered harm merely by filing a suit and thereby incurring costs and fees.

The biggest constraint this puts on plaintiffs is that Judge Fogel interpreted this proximate cause requirement (combined with the fee shifting provisions already in place in 17 U.S.C. § 505) to mean that plaintiffs cannot recover attorney’s fees from after the litigation commences, since those fees are not proximately caused by the misrepresentation. This may end up taking the teeth away from 512(f), as most plaintiffs will not want to bear the brunt of their attorney’s fees when bringing such claims, especially since without monetary harm, their recovery is likely to be relatively low.

Now What?

While it’s unclear what larger impact this decision will have, it has already raised ordinary people’s awareness about the ways in which the provisions of the DMCA could impact their lives and demonstrated first hand what you can do if you experience a takedown. Statistics on YouTube currently indicate that the video has received over a million views and over a thousand comments, which demonstrates the degree to which people have been interested in this controversy. Stephanie Lenz herself seems to have become an activist in this area. Her personal blog indicates that this case has caused her to become interested and explore other topics affecting free speech and fair use. Though Stephanie Lenz may have suffered few monetary damages, it’s easy to see from her writings that she feels the harm to her speech rights very keenly.

HeLa’s Immortal Cell Lines

The development of “immortal” cell lines led to major improvements in research and experimentation; unlike most cells, these cells do not die of old age.  Immortal cell lines are significant because of their ability to grow indefinitely and to survive being divided and shared; these traits allow scientists to engage in more productive research.  Scientists created the first immortal cell line, dubbed HeLa, almost 60 years ago, in the 1950s.  Since then, scientists have used HeLa cells to develop the polio vaccine, as well as drugs that treat Parkinson’s disease and leukemia.  Scientists even sent cells from the line into space to aid in research on the effects of zero gravity on human tissue.  Overall, scientists have produced more than two thousand pounds of these cells, the sales of which have generated millions in profits.

The Personal Side to the Story

Recently, renewed interest in this cell line has focused on its origin rather than its results.  In this case, scientists named HeLa cells after the patient in whom they first found them: Henrietta Lacks.  Lacks suffered from a particularly virulent strain of cervical cancer and, after unsuccessful radium treatment, died in 1951 at Johns Hopkins Hospital, Maryland.  Without Lacks’ knowledge or consent, her doctor shared a sample of her tumors with a researcher, Dr. George Gey, intent on developing an immortal cell line.  With Lacks’ tumor cells, the researcher succeeded in making the line that led to medical advancements and high profits.

This behind-the-back cellular research and development story has recently become the subject of controversy.  “Tissue rights” scholars now question whether or not patients should retain any control over cells removed from their body.  Currently, cells be bought and sold without the patients’ permission, but tissue rights advocates suggest that these often-unwitting donors deserve a share in the profits their cells eventually reap.

Complicating the issue is the fact that some believe Henrietta Lacks’ story to primarily be a “case of a black woman whose body had been exploited by white scientists.”  The contrast between her children and grandchildren’s continued poverty and the vast profits made from commercializing the HeLa cell line heightens the feeling that the scientists responsible cheated Lacks and her family.  Also troubling is the fact that researchers continued to collect genetic material for the purposes of HeLa cell development from these family members long after Lacks died, under the guise of routine cancer screening diagnostics.

Legal Complications

Given the current state of the law, the Henrietta Lackses of the world have a hard argument to make if they believe they deserve a share of the profits.  In a similar case in the 1980s, researchers removed the spleen of John Moore as part of his leukemia treatment.  Recognizing the unique scientific and financial potential of Moore’s particular cancerous cells, his doctor promptly developed a cell line from the extracted lymphocytes, patented the line, and licensed it for hundreds of thousands of dollars.  The doctor also gathered samples of Moore’s blood and other tissue on future visits; he told Moore’s that his continued health depended upon such testing but did not reveal that he was keeping the samples to aid in his research.  The resulting cell line, Mo, now has a market value of around $3 billion.

When Moore discovered these lucrative results he sued for his share of the profits. The California Supreme Court, however, rejected his suit, holding that Moore did not have a property interest in the cell line developed by his doctor and that his rights to privacy and dignity were sufficiently protected by the doctrine of informed consent.  The court also pointed out that certain laws seem designed to prevent patients from retaining their organs after their removal.  The court did concede, however, that the doctor’s financial motives should have been disclosed to Moore.

The current regime is one where tissue or cell samples removed from a person’s body are tissues or cell samples in which that person has no property rights.  Today, patients who undergo surgery often sign forms that specify whether any removed tissue may be used for research purposes.

Looking Ahead

The nagging feeling that scientists and doctors treated Henrietta Lacks and John Moore unfairly remains.  It can be unsettling to know that doctors have hundreds of thousands of dollars worth of incentives to operate on or take samples from their patients.  Moreover, as Lacks’ family knows, once tissues have been excised from our bodies, the feeling that they are part of us can remain; the immortal HeLa cell line will always be Henrietta Lacks to her family.

Among the companies targeted for criticism are Google, Amazon, McAfee, Yahoo, eBay, Microsoft, Apple and Verizon. These hearings may mark the beginnings of legal changes that could require information and communications technology companies to protect users’ rights overseas. The potential legal ramifications of these changes are unclear at present, though they are the subject of heated debates, as we will see below.

The Senate Hearings

U.S. Senator Dick Durbin of Illinois chaired a hearing before the Judiciary Subcommittee on Human Rights and the Law on Tuesday March 2^nd to review the practices of information technology companies in countries that restrict free access to the internet.

Senator Durbin sent letters to thirty companies requesting information on their business practices in China and other countries that censor the internet. The senator also encouraged companies to join the Global Network Initiative (GNI), a group of corporations, academics, human rights groups, investors and others committed to protecting internet users’ rights to freedom and privacy according to a specific code of conduct. (As of now, only the original three member corporations have joined the GNI, which is discussed further in the section below. ) The GNI submitted a written statement for the hearing, available here, which stresses the need for more communication between companies in the information and communications technology sector in order to identify important human rights issues. The GNI also affirmed its view that there is a strong need for more corporations to join the GNI and commit to its principles.

Testifying at the hearing were Michael Posner (Assistant Secretary of Human Rights, Democracy and Labor at the State Department), Daniel Weitzner (with the National Telecommunications and Information Administration of the Department of Commerce), Nicole Wong (Google’s Vice President and Deputy General Counsel), Rebecca MacKinnon (Visiting Fellow at Princeton University’s Center for Information Technology Policy and a drafter of the Global Network Initiative), and Omid Memarian (an Iranian blogger living in the U.S. since his release from detention by the Iranian security services in 2004).

Mr. Memarian testified about how his website was shut down—not by the Iranian government, but by his American domain and host provider, because of restrictions on transactions with Iran. He discussed how such restrictions and sanctions prevent Iranian dissidents from downloading software (including, for example, Google Chrome) and publishing their opinions. He also made several suggestions about how the U.S. government and American corporations could provide technologies that would help promote internet freedom in Iran, and further argued that a freer Iran would greatly help the security of the region.

Nicole Wong’s testimony reviewed Google’s recent problems with China and affirmed Google’s unwillingness to keep censoring search results for Chinese users. She stated that Google would “reconsider [their] approach” in China if the situation worsened after more monitoring. Beyond restating Google’s decision to stop censoring search results in China, she did not commit to any concrete action. However, she discussed various strategies that governments could use to combat censorship. She also analyzed the issue from an economic perspective, elaborating on the damaging effects of internet restrictions on both the “host” country and on foreign companies.

Rebecca MacKinnon testified about authoritarian regimes’ exploitation of the internet to cement their power and suppress dissent. Ms. MacKinnon discussed and countered the view, popular in the 1990s, that the internet by its nature would elude and eventually defeat authoritarianism. It was then widely believed that no government could truly stop the spread of information over the internet. The internet, the theory went, would be an invaluable and unstoppable weapon in the hands of dissidents.

Contrary to predictions, as China and Iran in particular have demonstrated, authoritarian governments have adapted to and co-opted the internet. Filtering, deletion of content by internet companies, cyber-attacks, politically motivated law enforcement, and device-level controls are the major techniques a government may use to control the spread of potentially threatening information over the internet.

Mr. Posner and Mr. Weitzner made general comments in support of internet users’ liberties and of using business regulation to promote free exchange.

The Corporations’ Response

The point of the hearings, as suggested by Senator Durbin’s letters to the various companies, was to highlight the role corporations can play in either reinforcing or undermining government surveillance and control of the internet. Senator Durbin’s opening remarks discussed how pressure from U.S. companies and the government influenced the Chinese government to back down from its decision to require all computers sold in China to include filtering and information-gathering software. Ms. Mackinnon also discussed ways in which corporations could fight internet censorship, from locating servers outside the territories of authoritarian countries to refusing to comply with informal demands from governments to creating surveillance-circumvention technologies.

However, only three corporations in the sector have committed to the GNI code of conduct: Google, Microsoft, and Yahoo. Whether these companies will adhere to the code of conduct is uncertain, as the New York Times points out.

Additionally, AT&T, Skype, and McAfee have committed to discuss joining GNI.  Facebook and Twitter were invited to send representatives to the hearings but declined. Senator Durbin expressed his disappointment in this unenthusiastic but probably inevitable response.  Without legal pressure, it is unlikely that corporations will take actions against their own self-interest by defying laws in countries where they do business.

Possible Legal Consequences

At this time, enactment of any new legislation is far off. The bulk of lawmakers’ attention is focused on exhorting companies to voluntarily comply with GNI standards.

However, many have made legislative proposals and suggestions. For instance, Rebecca MacKinnon has argued for legal changes allowing targets of state repression to sue U.S. companies who turned over information on them. Additionally, Senator Durbin is working on legislation to compel companies to either defy censorship overseas or face civil or criminal penalties at home, the St. Louis Post-Dispatch and PC Magazine report. He has not stated what actions would trigger these penalties under the hypothetical bill. However, this is not a new idea: some activists have been proposing the Global Online Freedom Act (GOFA) for years, as the Guardian reports, which would make it illegal for a U.S. company to provide information or technology aiding restriction of internet services. Brendan Ballou, who blogs on Harvard Law Professor Jonathan Zittrain’s website, analyzes some aspects and limitations of the GOFA here.

Criminal or civil penalties in the U.S. may simply present U.S. companies with the following calculation: will defying the U.S. law cost them more or less than circumventing internet restrictions in China or Iran? The efficacy of such a bill is questionable. It may present some companies with a difficult choice: they must either violate the law at home, or abroad. Furthermore, many of the technologies that make internet-restriction possible were developed in U.S. and European countries at the behest of their governments, to aid in lawful surveillance in those countries. Nokia Siemens made this point in response to a European Parliament resolution condemning its technological aid to the Iranian government and calling for a ban on surveillance technology exports to certain countries, as Ars Technica reports.  This suggests that the scope of the bill will have to be very clearly defined if it is to differentiate between surveillance carried out in the most repressive countries and surveillance in western democracies.

• Out-Law reports on a US District Court for the Northern District of California case that clarifies how damages for groundless claims of copyright infringement should be determined.

• Apple is suing HTC over infringement of its user interface patents, but it’s really Google it’s after, says IP Watchdog.

• RealNetworks drops its appeal against a ruling declaring that its DVD-copying software violated the DMCA – Wired reports.

• Is it the car or the driver’s fault? Toyota recall casts doubts on driver’s conviction, says Autoblog.

• BusinessWeek reports that Google is pushing for the U.S. to take a WTO action against China over internet censorship (and see our recent post on the subject here).

• Are you liable if you forward a defamatory e-mail with introductory comments? Eric Goldman reports on a recent California appeals case.

• The E-Commerce Times wonders whether Microsoft is behind Google’s recent antitrust troubles.

• Netflix is being sued for its deal to delay the availability of Warner Brothers DVDs, reports the New York Daily News.

• Out-Law opines that the convictions of Google executives in Italy is not just about Italian law – the problem is with the EU directives Italy implements (see our post on the case here).

• Is that really Yao Ming’s Twitter page?  Twitter is testing out a new verified account feature for celebrities.  See our old post on Twitter-squatting here.

Ragbag security legislation

The bill is a ragbag of security-related provisions, spanning a diverse range of issues such as online identity theft, video surveillance, stadium violence, and dangerous driving. The law apparently also authorizes the French authorities to use malware to obtain evidence on criminal suspects, for example by covertly uploading software to their PCs to log their keyboard inputs. While the express purpose of the bill is to set out the framework for the operations of law enforcement agencies for the next five years, it focuses particularly on the technical means that can be employed by the police and judges.[2]

The provision that has proven most controversial is draft article 4, which provides for the filtering, on the authority of ministerial orders, of websites hosting child pornography. The 312 to 214 vote in favor by the Assemblée is unlikely to mark the end of the controversy, as the upper house, the Sénat (Senate) has yet to debate and approve the law. This post considers the text of the provision and the debates surrounding it, before comparing the proposal to similar proposals and existing filtering systems around the world.

Filtering by ministerial order

Draft article 4 is explicitly targeted at, and limited to, the “requirements of the fight against images or representations of minors” prohibited by the Code Pénal (Criminal Code), i.e. child pornography. There is no leeway under the current wording of the article for blocking sites other than those which provide access to child pornography. In terms of procedure, as pointed out by the Ministry of the Interior’s press release on the law, “the rule is simple: the Minister for the Interior communicates to ISPs a blacklist of sites and online content to be blocked, and it is the ISPs who prevent access to those sites and content from computers located in France.”

Legislative Debates

Article 4 was one of the main points of contention in the legislative debates over the bill. According to Le Monde, the (right wing) majority accused the left, which opposed the bill, of turning a blind eye to the kind of materials easily available online. The left, on the other hand, protested against the “diabolization” of the internet, a hostility which Green députée (Representative) Martine Billard sees as rooted in the government’s frustration with its inability to control the internet. The opposition further attacked the bill on the grounds that it fails to address either the victims of the crimes at issue or those who create the images, but rather focuses only on the means of transmission.

Procedural Safeguard

One crucial amendment to the bill was introduced during the debates in the Assemblée Nationale by député Lionel Tardy, a member of the majority UMP party. The amendment requires the approval of a judge before the ministerial order to block a given site can be put into effect. According to Le Monde, the bill sponsors expressed their reservations regarding this amendment (and in particular its potential to slow down the enforcement procedure), but in the end chose not to oppose it. This decision may have been based on a recognition of the validity of the opinion of the Commission des Lois (Law Commission), which was of the view that the absence of this procedural safeguard could lead to the law being struck down as unconstitutional (as happened to the HADOPI law last year).

Criticism

None of the critics of LOPPSI argue that child pornography ought not to be fiercely cracked down on. Rather, a leading theme of criticism of the bill is a concern that, by enshrining a ministerial power to order the blocking of internet sites, LOPPSI lays the foundations for a system of internet filtering that could easily outgrow its original purpose. French cybercrime expert Guillaume Lovet (quoted here), notes that the legislation gives the French government a “foot in the door,” and observes that it reflects a growing international trend of “legislate first, address accountability later.”

Blogger Jean-Michel Planche notes that, if the law is passed, the internet will become the first infrastructure network (e.g. roads, electricity, gas, postal services) to come under the control of the Ministry of the Interior, and wonders what implications this may have as the internet’s role as a platform for all kinds of social and economic exchanges grows.

A number of critics have also questioned the effectiveness of the bill, remarking that this type of ISP-level filtering would do little to prevent the determined and tech-savvy from accessing offending websites, for example through virtual private networks (VPNs) (see e.g. this online LOPPSI forum).

International trends

The explanatory notes to LOPPSI mention the fact that “neighboring democracies” such as Denmark, the Netherlands, Norway, Sweden and the United Kingdom have put in place technical measures enabling the blocking of access to specified sites from within their territories (though these have not been formalized in LOPPSI-like legislation; Le Monde provides a useful map which identifies various countries around the world which have adopted targeted filtering of child pornography sites). The experience of filtering in these countries is not encouraging with regard to the accountability of blacklisting systems.

The blacklists maintained by a number of countries, including Denmark, Norway, Australia and Thailand, have been leaked through Wikileaks over the last few years. The Thai government’s blacklist, aimed at child pornography, allegedly included 1,203 political sites which were thought to criticize the Thai king, in breach of Thailand’s strict lèse majesté laws (see ZeroPaid post here). But even in the case of western democracies, blacklists have been accused of being open to abuse: Forbes reported that the blacklist compiled by the Australian Communications and Media Authority, which is meant to target child pornography and terrorist websites, was found to include the websites of a tour operator and a Queensland dentist’s practice. The U.K. filtering system came under fire in 2008 when it was found that six major British ISPs had blocked access to a Wikipedia page which contained an image reproducing a controversial Scorpions album cover (see report from The Register).

An interesting contrast to LOPPSI is the fate of a recent German filtering proposal, the Gesetz zur Erschwerung des Zugangs zu kinderpornographischen Inhalten in Kommunikationsnetzen (Law on the Restriction of Access to Child Pornography Content in Communication Networks), which was initially approved in the summer of last year by the German lower house, the Bundestag (see Deutsche Welle report). Unlike the French bill, the German law would not have blocked access to the offending sites but would have thrown up a warning page displaying a large red stop sign. The stop sign would notify web users of the nature of the content they were seeking to access, but nevertheless allow the users to proceed if they so choose. The proposal met with considerable public opposition, including an online petition signed by more than 130,000 people (the biggest online petition in Germany to date). Elections in September 2009 resulted in changes to the governing coalition, and the liberal FDP made it clear, during the talks that led to it joining the government, that it would not support the filtering provisions. The filtering strategy was formally dropped on Feburary 8, 2010, in favor of a policy targeted at deleting offending websites rather than blocking them (see Opennet report).

Conclusions

Looking at the wording of article 4 of LOPPSI alone, the concerns of some of the bill’s critics may seem overblown. Few dispute the pressing need to fight the dissemination of child pornography online. Even if ISP-level filtering is unlikely to deter the most resourceful seekers of such content, what limiting effect it does have must surely be welcomed. Regarding the criticism that the bill focuses only on intermediaries, it is clear that other legislation targets the creators of child pornography. Furthermore, in many areas of law enforcement, targeting intermediaries often proves to be the most effective means of achieving effective enforcement. Regarding blacklists, there is a valid argument that releasing the blacklist publicly could compromise the aim of suppressing access to the sites concerned, as it would provide potential offenders with an “address book” of prohibited sites, which the more tech-savvy could then easily access. However, the patchy record even of liberal democracies suggests a strong need for accountability mechanisms in the administration of any kind of blacklist system. In this respect, the amendment introduced by Mr. Tardy is a welcome and necessary procedural safeguard. Nevertheless, there is little doubt that its sufficiency, and indeed the legitimacy of any kind of filtering strategy, will be much debated as LOPPSI makes its way through the French legislative process.

[2] Note that French criminal judges can be much more intimately involved in investigation and evidence gathering than their common law counterparts.

This article focuses on one of, and perhaps the most important of, these issues: ownership in a virtual world.

The New Frontier

The parameters of what constitutes an MMORPG  are ill-defined, and the category itself houses a nearly innumerable listing of sub-genres distinguished only by arcane and often community-constructed differences. It is safe, however, to assume that the core elements an MMORPG revolve around player choice; MMORPGs invariably allow creation of a personalized and unique identity or avatar, in-game item collection or creation, and social interaction on a grand scale. MMORPGs of this type are popular – Activision Blizzard’s MMO, World of Warcraft, boasts millions of subscribers – and they are myriad. They have working economies and currencies complete with, through the magic of “gold farming” (paying people to earn in-game money on one’s behalf), exchange rates into Yen, Dollars, and Euros.

As the above suggests, the cornerstone of any online gaming experience is identity, here a construct roughly defined by the juxtaposition of a player’s quasi-physical avatar (referred to thus because of its bridging function between the virtual and the real, the player model a graphical representation anchoring an online identity to the game space) with their online actions, reputation, and inventory. The current regime seems generally satisfied with persistent developer control of that identity; after all, this provides a simple solution to policing and enforcing terms of use in the form of the wholly justifiable at-will banning and account termination that follows from such an ownership structure. EULAs (end user license agreements) serve as the legal backbone to this, relying upon contract law to essentially codify the status quo in a game-by-game fashion.

Scholars, however, are beginning to question the continued durability of such an arrangement. The most immediately pressing crack in the developer-control dam is perhaps also the most tangible: ownership rights with respect to items acquired. While nearly all MMORPGs offer a selection of “things to do,” including occupations, “player vs. player” (or “PvP” as it is colloquially known) sport and combat, and attending holiday events, the clearest and most developed method of character progression, and therefore the most elemental piece of the identity jigsaw, is the acquisition of items, or “loot.”

The Importance of Loot

Why is loot so important? The answer to this becomes obvious once one realizes that a newly looted shield provides more than a cosmetic improvement. Indeed, it provides more than even a boost to a player character’s statistics; it directly contributes to the uniqueness of that player’s identity. It is a status symbol, a way to differentiate, a trophy, an accomplishment. Loot is critical to the experience, critical to what constitutes “living” in the virtual landscape. While unchecked materialism is often subjected to derision in the physical world, such materialism currently serves as the very foundation of the virtual.

Loot and the law

Legally, however, this loot is essentially unprotected. A developer or administrator (a super-identity charged with keeping order in the virtual world) can strip a player’s inventory at-will, loot can be “ninja’d” (stolen off of an enemy’s corpse by a group member without going through previously agreed upon loot sharing procedures), and guild banks (shared storage spaces for online groups) can be emptied by unscrupulous guild leaders. There are literally no repercussions outside of reputational loss to any of these actions. Generally, if something you have “owned” is taken from you, however unjustly, the legal system will not provide a remedy.

This is the way things are, but is this the way things should be? Consider that it can take hours to organize and lead a dungeon adventure, and such organization often includes the formation of what are, basically, oral contracts with respect to responsibilities, loot sharing, and more. Additionally, it often takes days of in-game time for each individual member of that group to prepare. Each must progress through multiple phases of “gearing up” (acquiring preliminary items and armor), “leveling up” (improving a character’s abilities through completion of various objectives), and meta-gaming (educating oneself on game mechanics and enemy strategies). Players indirectly pay for the items they acquire using real money, via both subscription fees and the up-front purchase price of the game. Some scholars believe that these very characteristics, comparable to easy-to-understand real-world concepts like “paying for something” or “earning something,” may justify fashioning legal protections akin to those found in real-life property and contract cases.

Beyond the fundamental fairness concerns raised above, there are also questions of practicality plaguing proponents of developer-control. While EULAs can – and currently do – regulate player-to-developer interactions, there is no institutional framework in place to handle looting rights with respect to player-to-player scenarios. Without a background set of legal principles governing loot control, the resolution of loot disputes either depends upon a developer’s arbitrary, unguided, and procedurally insecure case-by-case judgment (the typical “solution” provided by EULA attempts to regulate player-to-player disputes, arbitrary because said EULA logically cannot preemptively codify answers to every possible dispute) or, as is more often the case, does not occur at all. Individual contracting with every potential player in the virtual world is, for obvious reasons, impossible.

Yet, simply extending real-world property rights into the virtual domain may not be the best solution. For example, characteristics fundamentally unique to their virtual nature, such as the collective use of a single avatar by groups or the possession of multiple avatars by an individual, may preclude the direct application of real-life rights to these online identities. Moreover, legal approaches too restrictive or too reminiscent of the real-world may undermine the escapism that most gamers find so initially captivating, and may apply pressure on potential developers to create games in other genres (or not at all). Players have made various stabs at solving these problems themselves, e.g., through creative use of reputational loss and pseudo-currencies, often nicknamed “Dragon Kill Points” or DKP, divvied out by agreement and based upon participation and good behavior. Unfortunately, these systems are limited by their inability to deal with actors unwilling to submit to continued group scrutiny. Taken to their logical conclusion, these systems can thus encourage the proliferation of insulated groups, fostering elitism and undermining the spirit of the online gaming community.

What can be done?

Virtual worlds are facing old problems but require new solutions. Thankfully, it is precisely in the uniqueness of these worlds where such solutions may be found. Indeed, the intrinsic mutual exclusivity of these realms vis-à-vis the real world and other virtual worlds lends them an experimental quality. Can these virtual worlds be used to test out new legal rules and regimes? With significantly more limited ramifications than those sure to follow from adopting broad reforms or innovations in the real world, as well as millions of players ready to serve as test subjects, the answer may be yes.

For additional reading: New York Law School: State of Play Volume 49 (a collection of scholarly articles by legal experts discussing the developing state of the virtual landscape)

• The Pentagon will now allow troops access to online social media like Twitter, YouTube, and MySpace, Business Weekly reports.

• The Federal Energy Regulatory Commission has given Google a license to trade energy on the wholesale market, as The Register reports.

• Notifications of website privacy policies do not appear to actually protect online privacy, the New York Times observes.

• From Computer Weekly: Pentagon hacker Gary McKinnon will have a new court date to determine whether he should be extradited from the United Kingdom to the U.S.A.

• BBC: Italy convicts Google executives for allowing the posting of a video of the harassment of an autistic teenager (see our earlier post on the case here, and Google’s official response here).

• All Facebook: Facebook gets a patent on its news feed.

• From CNET: Google’s Street View map photos do not conform to European Union privacy standards.

• A federal judge in Alexandria, Virginia, gives Microsoft a victory by ordering the deactivation of hundreds of e-mail addresses allegedly linked to spammers, reports the Wall St. Journal.

Last year, we published his article, The Devil in the Details: A Critique of KSR’s Unwarranted Reinterpretation of “Person Having Ordinary Skill”.  It has since been selected for inclusion in the Patent Law Review, an annual anthology published by West, as one of the best patent articles published in the last year.

Congratulations Professor Dzeguze!

• As it launches its cloud computing platform, Azure, Microsoft calls for federal regulation to clarify many of the open legal questions surrounding cloud computing, says the MTTLR Blog.

• Ten years after it applies, TiVo is granted patent for season pass subscriptions, writes Gizmodo (see our recent post on TiVo’s patent battle with Microsoft here).

• INFO/LAW recommends a Paul Ohm paper arguing that statistical techniques are eroding the effectiveness of anonymization of data, with great implications for privacy law.

• The Third Circuit revives the hopes of Mr. and Mrs. Boring, who sued Google in trespass after a Google Street View car drove down their private driveway, writes Eric Goldman.

• Ephemerallaw reports on the looming compliance deadline for the Massachusetts Data Security Law.

• Rob Tiller of Red Hat argues for calling a troll a troll at Opensource.com’s law channel.

• Mashable reports that the U.S. Department of Justice and the European Commission have given the go-ahead to the Microsoft-Yahoo deal that will see Yahoo’s search engine powered by Bing technology.

• The controversy surrounding Google’s Buzz is not confined to the U.S. (see our post): the Canadian Office of the Privacy Commissioner is also taking a look, says CBC News.

• Further afield, Indian IP blog Spicy IP considers whether the Indian Reprographic Rights Organisation (IRRO) might challenge the Google Books settlement, on the basis on India’s stricter “fair use” standard.

• It’s not just China: European security and rights watchdog, the Organization for Security and Co-Operation in Europe, calls on Turkey to reform or abolish its restrictive internet law.

• And also in Europe, Out-Law gives a round-up of just-decided and upcoming litigation involving trademarks and keywords.

Opting in vs. opting out, and the difficulties of opting out

Google automatically enrolled all Gmail users into Buzz without permission, rather than giving them the choice to opt in. Users could opt out after the automatic enrollment, but they could not avoid enrollment in the first place. And Google initially made things difficult and confusing for users who wished to opt out. The “turn off Buzz” button at the bottom of the Gmail inbox screen did not actually turn off Buzz unless the user deleted her Google profile and blocked her followers, as CNET reported. This initially confused many users although, as CNET explains here, Google has now made disabling Buzz much easier in response to complaints.

The cause of the outcry

One major cause for complaint was the way Google took users’ private e-mail address list and made them public in Buzz. The outrage over Google’s action highlights one of the few clear public-private boundary expectations that exist in online communications: we do not expect our e-mail communications or contacts to be known to our personal acquaintances.  On Facebook, those we have “friended” can generally see each other. But in e-mail, we do not expect each of our e-mail contacts to be made aware of each other simply because they’re in the same address book.  The myriad personal implications of this are obvious.  For example, people do not necessarily want their former significant others to know the e-mail addresses of their current partners. The consequences of this privacy breach can be severe: one blogger found her address book exposed to her abusive ex-boyfriend, as the New York Times reported. Furthermore, as the Times went on to explain, dissidents under authoritarian regimes have reason to fear their contacts being made available to any casual governmental monitor.

As Ars Technica commented, these problems arose directly from Google’s attempt to use information given by its users in a private context (e-mail) by linking it to a public service. Furthermore, Google also took public information (public Picasa Web Albums and Google Reader shared items) and connected it to users’ Buzz account. This made it likelier that the users’ Buzz contacts would see the albums or Reader items. Google defended this by saying the information was public anyway, but linking users’ public information to their social networking account still has consequences. Information that is not hidden behind a password may still be unknown to a user’s personal acquaintances, and the user may wish to keep it that way.  While technically Google “it was public already” defense may have some legal merit, it did not incur any good will from its users by failing to seek their permission on this issue.

Google’s response

Google has apologized and begun rolling back some of Buzz’s problematic features. Google got rid of the automatic creation of a Buzz contact list from users’ email accounts, made it easier to disable Buzz, and no longer automatically connects public Picasa Web Albums and Google Reader shared items to Buzz accounts. The response was both rapid and dramatic, which is a point in Google’s favor in the eyes of many complainants. However, because of the circumstances that made such a response necessary, Google’s critics are still not entirely satisfied.  

The legal repercussions

Google may have to face a class-action suit in federal court in San Jose, CA, the San Francisco Chronicle reports. Plaintiff Eva Hibnick of Florida is seeking to file the suit on behalf of all Gmail users whose account information was automatically linked to Buzz. The complaint accuses Google of unlawfully sharing personal information without permission, as ABC explains. The plaintiff seeks injunctive relief from similar actions in the future, as well as unspecified monetary damages.

Furthermore, the Electronic Privacy Information Center (EPIC) calls Google’s response inadequate, reports Digital Media Wire. EPIC argues that Google Buzz should be opt-in, rather than opt-out. Google’s most recent changes have made it much easier for users to opt out of Buzz, but they still must opt out. Additionally, EPIC argues that Buzz should not have access to Gmail address books. EPIC has also filed a request with the Federal Trade Commission to investigate Google Buzz.

The Electronic Frontier Foundation has also sharply criticized Google Buzz. The EFF’s arguments go beyond the immediate impact of the Buzz features and suggest that courts should be more skeptical of the Google Books settlement. As the EFF points out, a BBC report suggests that Google did not properly test Buzz before launching it. As Google tries to finalize its Books settlement, as the BBC reports, the problematic Buzz launch suggests Google might use Books information for its own competitive advantage in the same way it used Gmail information. The EFF argues that the Buzz incident highlights the need for Google to make “firm enforceable commitments to protecting user privacy.”

The future

Buzz might be doing better than one might anticipate given the uproar. The New York Times reports that Google claims “tens of millions of people” tried Buzz in the first two days after its launch. Google competitors Microsoft (as MediaBistro reports) and Yahoo, meanwhile, are naturally pooh-poohing Buzz’s prospects. But one thing is clear. Google might get away with asking for forgiveness rather than permission while dealing with Google Books and other copyright law issues, but taking that cavalier approach to personal information is a different matter, even in an age of decreasing privacy. Google may be dealing with both the public relations fallout and the legal consequences of the Buzz launch for a long time.

Flash, owned and distributed by Adobe, is an extremely popular method to add animation and interactivity to web pages, used by over 85% of top websites.  Anyone who has visited YouTube, Hulu, or the vast majority of media rich websites has enjoyed the benefits of Flash.  Not surprisingly, many iPhone users are already demanding Flash.  Adobe reported that in December 2009 there were seven million attempts to download Flash from iPhones and iPod Touches.

With such a high level of demand, why would Apple refuse to adopt Flash on the iPad, a device well equipped to handle the technical requirements of Flash?  Well known entrepreneur Mark Cuban claims “[t]he reason is obvious. No flash, far less streaming over 3G… Less bandwidth consumed means AT&T can offer a great price on the 3G data service.”  A recent article in the Wall Street Journal offered a different explanation: “Flash would let users freely obtain the kinds of features they can only get now at the Apple App Store.”  In other words, Flash would allow users to watch videos and play games in a world outside of Apple’s control and revenue stream.

As word spread that the iPad would lack Flash, bloggers began to question Apple’s claim that the device would be the “best way to experience the internet.”  Some predict that the iPad’s closely controlled software environment could have a chilling effect on innovation.  Unlike traditional operating systems, the iPad and iPhone operating system forces all software downloads through the App Store, giving Apple significant control over how the devices are used.  Reflecting these concerns, Adobe reacted to Apple’s decision by stating that “[w]e strongly believe the Web should remain an open environment with consistent access to content and applications regardless of your viewing device.”

Normally, one would expect Apple to support Flash due to simple market forces, the argument being that without Flash, fewer people would buy the iPad, thus harming Apple’s profits.  Here, however, Apple is likely more profitable by excluding Flash in order to promote the App Store.  The absurdity of this situation begs the question of whether Apple’s decision is lawful and what might be done to intervene.

Net Neutrality Concerns

Traditionally, net neutrality has been discussed in the context of broadband providers attempting to restrict information exchanged by its networks.  An example would be a cable internet company curbing P2P traffic to save on bandwidth expenses.  Proponents of net neutrality rules argue that legislation or regulation is necessary to stop such limitations.  These rules are generally opposed by telecom providers but supported by consumers and web companies offering high bandwidth music, movies, and games.

Without delving into the merits of the debate, it is sufficient to state that the Obama administration supports net neutrality, prompting the FCC to propose new rules which would expand the scope of net neutrality for both wired and wireless providers.  While still in the rulemaking process, these rules could be codified by the FCC within the next few weeks.

Perhaps the most important new rule would require broadband providers to “treat lawful content, applications, and services in a nondiscriminatory manner.”  This broad provision provides exceptions in order to manage network congestion and prohibit unlawful content.  Under the plain meaning of this rule, Apple’s decision to exclude Flash content in favor of its officially sanctioned apps might very well be prohibited.

Apple may contend that the lack of Flash is a legitimate effort to manage AT&T’s network congestion.   This argument seems weak, however, because Flash requires no more bandwidth than many popular apps, such as the YouTube app and many newly approved voice over 3G apps.  It seems likely that the lack of Flash is really just a way to promote the App Store, making it difficult for Apple to fit this decision within the network management exception.  Even if it were trying to limit network congestion, network neutrality would demand a nondiscriminatory approach, such as offering tiered data plans or prohibiting all high bandwidth functions from the 3G network.

While the FCC has clear authority over wireless networks, it’s not entirely clear that it could mandate software requirements for mobile browsers.  Apple might argue that since it is not a broadband provider, these net neutrality rules should not apply to it.

Still, the FCC seems more than willing to get involved in this arena.  Last fall the FCC inquired into the rejection of the Google Voice app, which caused quite a bit of bad press for Apple.  The inquiry included broad questions about Apple’s method of approving apps.  Given the FCC’s general interest in the app approval process, it is not farfetched for the FCC to inquire about how Apple decides to reject standards in its web browser.

Officially, the FCC’s inquiry into the Google Voice rejection was part of ongoing proceedings into wireless open access and handset exclusivity.  However, it didn’t take a formal FCC ruling for Apple and AT&T to change course and allow voice over 3G apps.  A similar FCC inquiry in this instance might call enough attention to the matter that Apple would relent and decide to allow Flash without the need for formal proceedings.

It will be interesting to see if the FCC decides to get involved in this situation.  Given its recent focus on net neutrality and its willingness to question Apple’s activities, some sort of action in this instance would not be surprising.  Involvement would show that the FCC is serious about making the net a truly open place, even on wireless networks.

• Wired reports on Max Ray Vision’s thirteen-year sentence for hacking – the longest yet in U.S. legal history.

• The District Court for the Western District of Washington dismisses a lawsuit alleging that Microsoft misled its customers by representing anti-piracy code as a critical security update. ComputerWorld reports.

• The E-Commerce Times looks into codec licensing issues and what it means for the development of the next generation of HTML.

• The Register says Google’s recent take-down of six popular music blogs is further demonstration that the U.S. Digital Millennium Copyright Act is a “ridiculously blunt instrument.”

• Out-Law reports on a UK Court of Appeal ruling upholding two convictions for publishing racially inflammatory material, rejecting the defendants’ argument that English law should not apply because the content was hosted on servers located in the U.S.

• Patently-O examines the expanding jurisprudence of the Federal Circuit.

• The Wall Street Journal Law Blog asks if India is setting the bar too high for patent protection eligibility, especially for pharmaceuticals.

• Patent Docs writes a series of posts debating gene patenting.

• Law Technology News reviews recent case law for online defamation claims against anonymous defendants.

• The Electronic Frontier Foundation (which just turned 20 – happy birthday, EFF!) is fighting to suppress evidence gathered by law enforcement from a suspect’s iPhone without a warrant.

• The New York State Bar Association warns against the ethical pitfalls of social networking, reports Law Technology News.

• Dr. Dre is suing Death Row Records over unpaid royalties and sale of digital copies of “The Chronic” without the proper rights, says Billboard.

• The New York Times discusses the outrage over Google Buzz’s consequences for privacy.

• Can software licensing agreements prevent people from selling their copies of software? The Electronic Frontier Foundation, Public Knowledge, and other organizations have filed an amicus brief urging an answer of “no” to this question in a case before the Ninth Circuit.

In December 2008, seven veterans with PTSD brought a class action suit in federal court alleging that the VA had incorrectly evaluated their claims for long-term disability benefits.  The alleged mis-evaluation resulted in some claims receiving low disability ratings (leading to lower payments) and others being denied entirely. The court has since ordered that notice of the class certification and pending action be mailed to approximately 4,300 service members who were discharged from service because of their PTSD and then denied long-term disability benefits. This litigation comes just a year after an internal VA email surfaced wherein an employee suggested to the agency that the it should “avoid giving a diagnosis of post-traumatic stress disorder for veterans and instead consider giving a diagnosis that might result in a lower disability payment.” This controversy aside, this litigation illuminates a vulnerability which makes the disability claims of these veterans particularly susceptible to attack – psychological disorders that lack an identifiable basis in hard science are difficult to objectively verify and evaluate.

New Developments in Diagnostic Technology May Prove to be the Weapons that Veterans Need to Fortify Their Position

According to the National Institute of Mental Health, PTSD is a recognized psychological disorder that may arise in an individual after he or she witnesses or experiences a dangerous event.  Such events include combat, physical/sexual assault or abuse, an accident or a disaster. As a result of witnessing or experiencing the trauma, the individual with PSTD may relive it through flashbacks or nightmares. In addition, individuals with PTSD will present with a range of avoidance tendencies (e.g. feeling emotionally numb or avoiding reminders of the event) and hyper-arousal (e.g. being easily startled or feeling “on edge”). Until now, PTSD has been traditionally diagnosed by identifying these categorical symptoms in a given individual for a certain period of time after the occurrence of the traumatic event. Though the diagnosis is guided by the DSM-IV, it has been regarded by some as essentially a “crap shoot”. In particular, because the presentation of symptoms, the timeline for the onset of the disorder, and the degrees of impairment can vary widely patient to patient, diagnosing PTSD with a sniper-like precision can be a difficult task for clinical practitioners. The imprecision of diagnosis is compounded by the fact that no biological markers (or biomarkers) exist for PTSD, meaning that they cannot be verified and evaluated objectively like other diseases, such as cancer.

Recently, however, Dr. Apostolos Georgopoulos (a researcher at the Minneapolis VA Medical Center and professor at the University of Minnesota) discovered, using magnetoencephalography (MEG) technology, a functional neural “biomarker” in veterans with PTSD. MEG is a brain imaging technology that measures the magnetic field generated by neurons when they fire.  Because individuals with PTSD showed distinct synchronous neural firing patterns in the brains, Dr. Georgopoulous was able to use the technology to identify the functional neural pathway, and thereby distinguish between the brains of individuals with PTSD and the brains of healthy individuals. Remarkably, using MEG technology – which is non-invasive and harmless – Dr. Georgopoulous was able to identify the brains of PTSD subjects with an accuracy rate of 90% (also see this Journal of Neural Engineering paper, available for 30 days after publication). The innovative use of MEG technology coupled with synchronous neural interactions testing shows promise as a diagnostic method for PTSD.

Despite Upgraded Arsenal, Veteran Litigation May Come Down to a Battle of the Experts

Despite this new development, the veteran class action suit will likely come down to a battle of the experts. The strict standards for admitting novel scientific evidence set out by Daubert and its progeny are likely to be significant obstacles to plaintiff’s counsel. Under Daubert, in order to admit novel scientific evidence, a party must show that the evidence is not only relevant, but reliable. In determining whether scientific evidence is reliable, a party must prove that it was derived from valid scientific methodology. Proving the validity of scientific methodology requires a showing that the scientific theory or technique at issue be refutable or falsifiable, respectively, and subjected to peer review. Where empirical testing is at issue, Daubert requires that the party disclose the known or potential error rate of the technique as well as the existence and maintenance of standards and controls concerning its operation. Lastly, the party must prove that the theory or technique is generally accepted within the relevant scientific community.

In this case, the scientific research at issue is not only novel, but infant. This research is the very first of its kind, and as such, the scientific conclusions we can drawn there from are limited and likely conservative. Because Dr. Georgopoulous’ research focused on individuals who were already diagnosed as having PTSD, we cannot conclude that MEG imaging would be a scientifically valid way to diagnose the disorder. Further, while the research indicates that it is possible to identify PTSD-brains from non-PTSD brains, we cannot conclude that this possibility translates into an ability to distinguish PTSD-brains from brains impacted by other psychological or neuropsychological disorders. Lastly, this research does not indicate whether the brain scan would be effective as a diagnostic tool for recovered individuals who are no longer symptomatic. Thus, because this field of neuroscience is still in its infancy, it is inherently unreliable and it will not likely be able to withstand a Daubert challenge.

But, even if the scientific findings were admitted, their utility in evidence would be limited. Thus far, the use of MEG technology to detect PTSD has only been shown to confirm a diagnosis of PTSD; it does not indicate the severity of the individual’s condition. Therefore, in order to prove that a given veteran’s PTSD is qualitatively severe enough to warrant the high disability rating (which would in turn trigger a veteran’s entitlement to long-term benefits), the plaintiffs would need to supplement these findings with psychological expert testimony to meet their burden of proof.

Authorizing infringement

In a nearly two hundred-page judgment, Justice Dennis Cowdroy found that the applicant companies had succeeded in proving that users of iiNet’s services had “made available online,” “electronically transmitted,” and “copied” certain films. However, the applicants had failed to show that iiNet had “authorized” those infringements. The case centered around the use by iiNet’s customers of the peer-to-peer BitTorrent protocol to share movie files, in breach of the studios’ copyrights. The critical issue in the case was whether iiNet, by failing to take any steps to stop infringing conduct, authorized the copyright infringement by its users. Under Australian copyright law, authorizing the infringement of copyright by another is itself treated as an infringement.

Three step reasoning

There were three main steps to Justice Cowdroy’s reasoning:

1. He found that, though iiNet had knowledge of the infringements and did not act to stop them, this did not lead to a finding of authorization. Under the Australian law of authorization, there is a distinction between providing the “means” of infringement, and providing a “precondition” for infringement. Justice Cowdroy distinguished the present facts from earlier cases, including a 2005 Federal Court ruling in a case brought against the licensors of the Kazaa file-sharing software. In the Kazaa case, the software provided the “means” for infringement, whereas in the case of internet services, there did “not appear to be any way to infringe the applicants’ copyright from the mere use of the internet.” Here, the means of infringements at issue was the BitTorrent system, which iiNet had no control over.
2. AFACT had pushed for iiNet to implement a system of notification, suspension, and termination of infringing customers, but the judge found that this would not have been a “reasonable step” for the purposes of Section 101(1A)(a) of the Copyright Act 1968. This section provides that, in determining whether a person has authorized infringement, a court must consider, among other things, (a) the extent of the person’s power to prevent the infringement; (b) the nature of any relationship existing between that person and the infringer; and (c) whether the person took “any other resonable to steps to prevent or avoid” the infringement. The judge noted that “[t]he applicants appear to premise their submissions on a somewhat binary view of the world whereby failure to do all that is requested and possible to co-operate with copyright owners to stop infringement occurring, constitutes approval of copyright infringement. Such view is not the law. It is possible to be neutral. It is possible to prefer one’s own interests to those of the copyright owners.” (para. 504). iiNet could therefore not be held to be authorizing the infringements on the basis that they had failed to adopt a system such as the one urged by the applicants.
3. iiNet could not be seen as sanctioning, approving or countenancing copyright infringement, as it had done no more than to provide an internet service to its customers. In the Kazaa case the respondents intended copyright infringements to occur, and the software was deliberately structured to achieve this result. By contrast, in this case there was no evidence that iiNet “favored” infringement in its provision of access to the internet.

A disappointing ruling

The judge noted that the applicants would be disappointed by the ruling, as it was clear that infringement of their copyrights was occuring on a large scale, worldwide (para. 19). Yet this fact did not compel him to find authorization of infringement merely because “something must be done.” Australian law recognizes no positive obligation to protect the copyright of others, and the judge found that iiNet provides a legitimate communication service which is neither intended nor designed to infringe copyright (para.20). Justice Cowdroy is also reported to have remarked that “[i]f the ISPs become responsible for the acts of their customers, essentially they become this giant and very cheap mechanism for anyone with any sort of legal claim.”

The battle may not be over, however, as reports from before the ruling was issued suggest that AFACT may appeal the decision to the High Court of Australia, which could take another two years.

ISP liability in the United States

In the United States, secondary liability for copyright is dealt with as a matter of vicarious or contributory infringement, rather than “authorization” (though the concepts involved are similar). However, ISPs are protected from copyright infringement claims by Section 512(a) of the Copyright Act, which provides that service providers will not be liable for “infringement of copyright by reason of the provider’s transmitting, routing, or providing connections for, material through a system or network controller or operated by or for the service provider.” This section provides strong protection for ISPs, and likely explains why a case such as the one brought against iiNet in Australia has not been brought against a U.S. ISP.

• Freedom to Tinker conducts a “census” of files shared through BitTorrent, finding 99% of them to infringe copyright.

• From Business Week: a Pittsburgh couple is suing Google for trespass because Google posted pictures of their residence, including their pool and driveway.

• Italy will hold YouTube liable for uploads that infringe copyright or are libelous, Ars Technica reports, which would eliminate “safe harbor” rules that protect websites with user-generated content in the U.S. and the E.U (see our post on the Italian case against Google for failure to take down an offensive video here).

• The Washington Post reports that the National Security Agency will help Google determine the source of the cyber-attacks Google suffered a month ago, an alliance that raises concerns among civil liberties and digital privacy advocates. The Electronic Privacy Information Center filed a Freedom of Information Act request with the NSA for records of its relationship with Google.

• The Justice Department considers the Google Books settlement to be improved but still flawed even after the latest revisions, the New York Times reports. The D.O.J. stated its continued dissatisfaction with the antitrust and intellectual property implications of the settlement. See Ars Technica for a detailed explanation.

• Wired asks: do American high school and junior high students have online free speech rights? If so, to what extent? Current rulings leave the answer to that question unclear.

• From Ars Technica: senators and representatives are unhappy with the proposed merger between Comcast and NBC Universal. At the Senate and House hearings on Thursday February 4th, several members of Congress expressed worry and skepticism over the merger’s implications for competition and consumers’ interests.

• The Authors Guild says its favorable attitude to the Google Books settlement was a deliberate contrast to the Recording Industry Association of America’s (RIAA’s) aggressive approach to copyright enforcement, Wired reports.

Timeline

The first trial took place in 2007. A jury found that Thomas-Rasset (then simply Thomas) had “willfully” infringed and held her liable for $222,000 in damages. That figure came from a penalty of $9,250 per song, out of the $150,000 per song maximum permitted by the Copyright Act .

Thomas was granted a retrial because of a jury instruction that making a copyrighted file “available” was sufficient to show infringement. Federal Judge Michael Davis, who presided over the first trial, came to believe after appeal that his jury instructions were incompatible with Eighth Circuit precedent. Citing National Car Rental System, Inc. v. Computer Associates International, Inc. (8^th Cir. 1993), Judge Davis decided that the plaintiff had to show that defendant actually shared a file with a third party, rather than simply making the file available for sharing.

In the second trial in 2009, Judge Davis set aside a jury award of $1.92 million, calling it “monstrous” and pointing out that Thomas-Rasset did not make a monetary profit from her infringement. Davis reduced the damages to $54,000, allowing the parties to accept the award or proceed to a third trial.

The RIAA not only accepted the damages, but reduced them further in a settlement offer of $25,000. The RIAA’s terms allowed Thomas-Rasset to pay the award in installments to a fund for musicians. As a condition for the settlement, the RIAA said the judge would have to vacate his remittur (reduction) of the jury award.

Thomas-Rasset’s lawyers have announced her intention to reject this and any other settlement offer that requires her to pay damages. The RIAA’s deadline for accepting the offer was last Friday, January 29^th.

Issues

The major issue raised in this case is the constitutionality of the awards against Thomas-Rasset—and, by implication, future file-sharers like her. She intends to challenge the constitutionality of not only the $1.92 million jury award in the second trial, but also the judge’s reduced award. Even the reduced award, her lawyers contend, is unconstitutionally excessive: it is 2,250 times the usual $1 price of a downloaded song.

The RIAA is adamantly opposed to any finding that the judge’s awarded damages are unconstitutional. Moreover, the RIAA is trying to vacate the judge’s remittur because it is keen to prevent any precedent allowing judges to reduce jury awards in copyright infringement cases. That is why the vacature (making the original judgment legally void) of the remittur was the sole—and firm—condition of its settlement offer. For its absolute insistence on this point, the RIAA has been accused of bullying. Joe Sibley, one of Thomas-Rasset’s attorneys, recently described the situation as the RIAA trying to “scare” people into paying “exorbitant” damages. Nevertheless, the RIAA continues its attempt to vacate the remittur and thus keep the legal door open for million-dollar damages awards in file-sharing cases.

This trial raises another issue, namely what exactly it takes to prove infringement against a particular individual. Proving that songs were shared from a particular computer or IP address is often simple. However, proving that a particular user of that computer was the infringer is a different matter. Here, the files were shared from Thomas-Rasset’s password-protected computer at her IP address, using a username she had used for a number of years. The two juries evidently found this compelling evidence of Thomas-Rasset’s guilt, although Thomas-Rasset’s lawyers argued that anyone could have used the computer and username in question. Judge Davis was not convinced by and did not approve of Thomas-Rasset’s attempts to suggest that her children or ex-boyfriend infringed using her computer. The defense lawyers argued that alternative explanations were possible, and that MAC and IP addresses (identifiers for a particular computer that are transmitted during file-sharing) can be spoofed, though they offered no evidence that this had happened here.

Possible Future Developments

Wired recently described the RIAA as “winding down” its lawsuit campaign against file-sharers and shifting its efforts to getting internet access to infringers cut off. But there are still loose ends. Thomas-Rasset insists on going to a third trial rather than accepting a settlement. Therefore, it is still unclear whether there will be the precedent of a judge setting aside a jury award in a copyright infringement case will stand. That will depend on the outcome of the third trial.  Additionally, Thomas-Rasset’s challenge to the constitutionality of the judge’s award is still unresolved.

Furthermore, a second infringement case with a U.S. defendant also went to trial in July 2009: the recording industry’s suit against Joel Tenenbaum. The jury held Tenenbaum liable for $22,500 per song; since he was found to have infringed 30 songs, this amounted to $675,000 in damages. The judge finalized the jury award in December 2009. Like Thomas-Rasset, Tenenbaum is challenging the award’s constitutionality. Anyone who has ever shared a song using BitTorrent, Kazaa, or LimeWire should probably pay attention to what happens next.

As Core Business Fades, TiVo is Turning to IP Licensing

People love their DVRs.  More specifically, they love their TiVo DVRs.  TiVo was one of the first DVR providers (RIP Replay TV and one-click commercial skipping) and holds broad pioneer patents.  It’s a practicing plaintiff, not a naked patent troll.  And despite some gripes, its products have consistently won accolades for usability, especially compared to competitors’ DVRs.

TiVo was the first company to deliver on the promise of easy-to-use time-shifted television.  But TiVo has been a victim of the success of its own technology.  It has languished for the last decade as cable and satellite companies deployed their own (usually mediocre, occasionally execrable) set-top box DVR recorders to a captive customer base.  TiVo’s subscriber base is way off its highs.  Its third quarter 2009 revenues were an anemic $56.9 million.  And TiVo’s share price has been flat for a decade, hovering around $1 billion market cap.

But while TiVo’s own products and services founder, its IP posture is increasingly puissant.  TiVo has partnerships with DirecTV, Comcast, Cox, and Virgin Media, and has patent licensing agreements with Pioneer, Sony, and Toshiba.  In its second incarnation as an IP holding company, TiVo wants to get patent licensing rents from all of the players in the DVR/set-top box market.  However, those revenue streams aren’t as profitable as having a larger base of customers: TiVo averages 93¢ a month from licensed subscribers and $7.65 from its own customers.  To survive, it needs to bend the DVR market to its will and get all of the major players to join its harem of captive patent licensees.

TiVo Does Patent Trolling Right

TiVo is in a uniquely sympathetic position as a practicing pioneer facing seemingly undeserved losses at the hands of patent infringers.  As a result, TiVo has been spectacularly successful in a grueling six-year patent fight with EchoStar and Dish Network.

TiVo’s legal Death Star is U.S Patent No. 6,233,389 (“Multimedia time warping system”), issued on May 15, 2001.  The ‘389 patent covers fundamental DVR technologies for recording video from TV.  TiVo scored an initial $73.9 million win and permanent injunction against EchoStar for infringement of the ‘389 patent by EchoStar’s Dish Network DVR.  On appeal at the Federal Circuit, the case was argued by appellate heavyweights Seth Waxman and Donald Dunner, and the lower court verdict was upheld.  Then, TiVo got $200 million more in damages, contempt sanctions, and attorney fees for violation of the injunction when EchoStar unsuccessfully attempted to design around the patent.  TiVo pegs the total litigation revenues from EchoStar at $400 million plus attorney fees.

The ‘389 patent has also been upheld on ex parte re-examination by the PTO, and is now on its second re-examination.  Although the PTO has preliminarily rejected two important claims in an office action, TiVo characterizes the rejection as simply a procedural matter pending full re-examination; indeed, in the prior reexamination, claims were initially held invalid and then ultimately upheld.

If TiVo comes out of the second reexamination with the ‘389 patent mostly intact, it will have a gold-plated patent that has been repeatedly validated in District Court, the Federal Circuit, and the PTO.  The patent will be a license for TiVo to print money, and will form the keystone of TiVo’s strategy to extract licensing revenues from the entire DVR industry.

A Challenger Appears

Perhaps sensing blood, TiVo opened a new litigation front by suing AT&T and Verizon in the Eastern District of Texas on August 26, 2009, alleging that AT&T’s U-verse service infringed on TiVo’s DVR patents.  This dragged Microsoft into the DVR wars: AT&T uses Microsoft’s Mediaroom system in its U-Verse TV service.  If TiVo were able to crush AT&T like it whelmed EchoStar, the U-Verse venture could be in jeopardy – a permanent injunction is still a normal remedy in patent litigation for practicing plaintiffs, even post-eBay v. MercExchange.

Microsoft intervened in the case and separately sued TiVo on January 19, 2010, for infringing a different set of DVR patents.  Microsoft’s complaint alleges infringement of U.S. Patents No. 6,008,803 (“System for displaying programming information”) and 6,055,314 (“System and method for secure purchase and delivery of video content programs”).  Microsoft admits it is asserting these two patents to force a settlement with a cross-licensing agreement: “We remain open to resolving this situation through an intellectual property licensing agreement, and we have initiated discussions to engage TiVo in negotiations”.

Should TiVo be concerned about Microsoft’s patents?  Are they enough to force TiVo to the table?

From an admittedly cursory look, they are about as threatening as a limp noodle.  Neither of the patents has been tested in court.  The PTO patent application system is ex parte; patents issue without being tested adversarially.  Although there is a presumption of patent validity once issued, the presumption may be overcome in court in a variety of ways.

The ‘803 Patent

The ‘803 patent (“System for displaying programming information”) was filed on August 7, 1998 and issued December 28, 1999.

It immediately loses brownie points for mentioning the “information superhighway” in a non-ironic manner in the specification.  It also misspells “information” “informaton” in Claim 1.  We’re not off to a very good start!

Claims 1-21, 23, and 25-32 cover sundry variations on two- or three-pane information displays, all clearly anticipated in the prior art by myriad computer displays dating from the dawn of windowing systems (or even from text displays).

Claims 22 and 24 are where the meat is.  Claim 22 claims a “system” with an “information display” and a “category display.”    Claim 24 claims “[t]he system recited in claim 22, wherein each of the information tiles comprises at least a program name, program date and start time, and program channel.”  Claim 24 is the only claim mentioning TV programming data.  As there are innumerable prior art information displays with generic data in a format that would anticipate the other claims, Claim 24 is the only claim that could realistically be asserted against TiVo.

Even if there is no prior art with TV programming data displayed in a format like Claim 24 (doubtful), the ‘803 patent faces other enforcement obstacles.  An exact prior art reference will invalidate a patent for lack of novelty.  But even if there is no exact single prior art reference that practices the claim, two or more prior art references may be combined to void a patent for obviousness.  Here, a prior art reference teaching the compilation and organization of TV programming data (e.g. TV Guide magazine) can be combined with the prior art screen data formats to show that Claim 24 was obvious and therefore not patentable.

Even if the ‘803 patent survives what will surely be a searching obviousness inquiry, it may encounter an issue of patentable subject matter under the currently-valid (pending a Supreme Court decision expected in Spring 2010) machine-or-transformation test articulated by the Federal Circuit in In re Bilski.

§ 101 of the Patent Act enumerates four types of statutory (that is, eligible) subject matter: processes, machines, manufactures, and compositions of matter.  Claims are supposed to indicate in their preamble what category they fall under.  Generally, “system” is susceptible to interpretation as a machine or as a process.  If the claimed system doesn’t clearly describe a machine or apparatus, then it may be interpreted as a process claim.  A process must be implemented with a particular machine or transform an article from one thing or state to another.  Clearly, there is no transformation happening in Claim 24.  Is there a particular machine?  The claim language may be too vague – there is no context for “category display” or “information display.”  Furthermore, reference to a generic computer or set-top box may be insufficient.

The ‘314 Patent

The ‘314 patent (“System and method for secure purchase and delivery of video content programs”) was filed on March 22, 1996, and issued April 25, 2000.

On its face, the ‘314 patent appears to be on much more solid ground than the ‘803 patent.  It’s bigger: 74 claims.  It actually appears to deal with technology!  There are method, device, and several varieties of system claims: “video content delivery system,” “interactive entertainment network system,” “system for purchasing video content programs,” etc.  Overall, the patent covers video decryption technologies for set-top boxes.  It has a bit tacked on at the end concerning the use of the encrypted network to purchase video-on-demand.  Without having more technical knowledge of TiVo’s encryption setup it’s hard to get a feel for how well the claims map to TiVo’s devices.  The analysis is on shakier ground here due to the increased complexity of the ‘314 patent.  However, a few issues do stand out.

Claims 27-33, covering an “integrated circuit card for use in decryption of video content programs” or “a video decryption device” arguably cover the now-standard cable TV decryption standard CableCARD.  The CableCARD decryption approach for digital cable was a product of the Telecommunications Act of 1996, and has been blessed by the FCC.  TiVo DVRs use it.  To the extent that TiVo infringes because it implements support for CableCARD, it may have a claim that the CableCARD system pre-empts the ‘314 patent – not because CableCARD is prior art, but because it is a specific technological industry mandate from a regulatory agency and should therefore not become a vector for a patent infringement suit.

Claims 34-41 are method (process) claims.  Claim 34 is the only independent claim.  The rest are dependent on 34.  Unfortunately for Microsoft, Claim 34 (“method for delivering video content programs”) appears to violate the rule of BMC v. Paymentech: a single entity must directly or vicariously (i.e. by ordering a minion) carry out all of the steps of a process claim in order to infringe.  Claim 34 describes a series of operations involving encrypted video streams, including 1) encrypting and decrypting a program key, 2) encrypting and decrypting the video stream, and 3) transmission of an encrypted video stream.  But TiVo doesn’t transmit video from the cable company: the cable company does.  And consumers typically lease their CableCARD from the cable company; any decryption that the card performed couldn’t be attributed to TiVo.  On the other hand, if TiVo stores data encrypted on hard disk and uses a non-CableCARD means of decrypting it prior to viewing, it may arguably infringe.

Claims 43-53, covering the purchase of  video streams, again run into the Paymentech issue because the claim steps purport to cover both the actions of the video purchaser (i.e. the viewer) and the “video merchant” (e.g. Amazon, Netflix, etc.).

A few, more broadly written claims (e.g. Claim 42 and 54-58) appear to recognize this limitation.  These claims only cover decryption of a video data stream.  However, their extremely wide claim scope may run into prior art novelty anticipation from other TV decryption technologies – of which there are many.

Is Microsoft’s Suit Credible?

The ‘803 patent is clearly a non-starter, but it’s much harder to evaluate the ‘314 patent.  Neither patent has been tested in court, so they’ll initially have discounted bargaining weight compared to the battle-tested, blood-spattered ‘389 patent.  If the ‘314 patent proves valid, it may be enough to parry TiVo’s attack on U-Verse, which, with barely 2 million subscribers, is nowhere near the mother lode that EchoStar was.  This wouldn’t affect TiVo’s ability to take on other targets (Time Warner may be especially tempting), but it may blunt the strong momentum that TiVo has built up with its string of EchoStar victories.

• Ephemerallaw assess the chances of Microsoft being sued for the Internet Explorer 6 vulnerability involved in the hacks recently suffered by Google, Adobe and other major companies.

• Billboard.biz reports that search engine Baidu, Google’s arch-rival in China, has won a piracy case brought by the International Federation of the Phonographic Industry for linking to illegal music downloads.

• As Apple launches its latest handheld device, Erblawg reports on Apple’s battle again Fujitsu for the “iPad” trademark.

• The US District Court for the North District of Georgia upholds the forum selection clause in the Facebook User Agreement in copyright infringment suit, writes Eric Goldman on the Technology & Marketing Law Blog.

• Keeping with Facebook, OUT-Law reports that the Canadian Privacy Commissioner is investigating Facebook’s reponse to its earlier investigation into the social networking site’s privacy policy. See also the New York Times advice on the three Facebook settings every user should check now.

• The European competition watchdog has finally cleared Oracle’s $7.4bn purchase of Sun Microsystems, reports the Financial Times (See our post on the backstory here).

• And on a related note, Microsoft warns Google that it is likely to come up against the EU Commissions over anti-trust issues sooner or later, reports E-Commerce Times.

• Californians with medical marijuana prescriptions can now carry any amount of pot, rules the California Supreme Court. Report by Court House News.

Google’s recent announcement that it is no longer willing to censor content on its China-based search engine, google.cn, has once again highlighted the difficulties U.S.-based online service providers face in the Chinese market. The reason given by Google for the move was a “highly sophisticated and targeted attack on [its] corporate infrastructure originating from China,” which was apparently aimed at accessing the gmail accounts of Chinese human rights activists. Though this has little to do with international trade or the World Trade Organization (WTO), a number of commentators have attributed much of Google’s loss of patience with the Chinese government as stemming from the government’s pattern of using of internet filtering and blocking against foreign service providers. Foreign Policy suggests that the Chinese government is using its “Great Firewall” as an instrument of online protectionism, by systematically excluding foreign providers in favor of domestic services. Thus, Google’s search engine is being edged out by Baidu, Facebook by Ren Ren Wang and Kai Xin Wang, Youtube by Tudou and Youku, and so on.

Professor Tim Wu of Columbia University first made the case in a 2006 paper that there may be good grounds under WTO law to challenge certain aspects of internet filtering. The argument has since gained currency. In 2007, the California First Amendment Coalition (CFAC) drafted a briefing (pdf), alleging that China “is actively preventing U.S. internet companies from doing business in China while at the same time promoting Chinese internet companies engaged in the same or similar activities,” and setting out the legal basis for a claim. In February 2009, The European Parliament also adopted a resolution regretting “the increasingly abusive recourse to censorship in respect of online services and products which operates as a disguised trade barrier.”

What form would a trade challenge take? There may be a case under the General Agreement on Tariffs and Trade (GATT) (pdf), which covers trade in goods, with respect to digital content products (primarily in relation to audiovisual content), but the arguments most relevant to search engines and social networking services are those that arise under the General Agreement on Trade in Services (GATS) (pdf). While the GATT has been around since 1947 and provides relatively strong protections for free trade in goods, the GATS, which was signed in 1994, is widely perceived as a weaker instrument – and also one which is comparatively untested. One of the crucial structural differences between the GATT and the GATS is that the GATT applies to all categories of goods except those a Member (i.e. a signatory state) specifically excludes, whereas the GATS works on the basis of “positive lists”: Members assume obligations by making specific sectoral commitments (which may be limited and subject to conditions). Thus, for example, a Member might accept GATS obligations in relation to the cross-border supply of data processing services, but make no similar commitments in relation to financial services.

The applicability of GATS to online services such as Google’s search engine or Facebook’s social networking site is not a straightforward matter, as China’s commitments were formulated on the basis of a classification of services which was drafted at a time when the internet was still in its infancy. As Wu shows in his paper, there is a good case to be made that those categories could be interpreted as covering a range of online services. He also notes that paradoxically, despite having some of the most comprehensive internet regulations in the world, China has undertaken very significant commitments in the relevant sectors.

On the assumption that relevant online services, such as search engines and social networking sites, are covered by China’s sectoral commitments, what kind of arguments could be mounted under the GATS?

• Article III imposes on Members obligations of transparency, including a requirement to publish promptly all relevant measures of general application which may affect the operation of the GATS. The administration and technical details of the Chinese internet filtering system are notoriously opaque, and Article III could perhaps be invoked to compel the Chinese authorities to be more open about how the system works, and in particular how decisions to block particular sites are made.

• Article VI requires Members to ensure that, in relation to services for which specific commitments have been made, all measures of general application are administered in a reasonable, objective and impartial manner. There may be reason to doubt that filtering policies are administered on the basis of objective and impartial criteria, and it seems that there is little “due process” in decisions to block particular websites, which Article VI may be interpreted to require.

• Article XVI was invoked, with partial success, by Antigua against the United States in the U.S. – Gambling WTO case, which concerned US laws prohibiting the provision of online gambling services. Article XVI obliges a Member to provide market access to foreign providers in those sectors for which the Member has made sectoral commitments. One of the difficulties in invoking this provision is that the measures which it prohibits are quantitative in nature: Members cannot impose limitations on the number of service providers, on the total value of services, on the total number of operations, etc. In U.S. – Gambling, the WTO Panel, which was subsequently upheld by the WTO Appellate Body on this point, found that the U.S. ban on gambling services amounted to a “zero-quota,” and was effectively a quantitative measure in violation of Art. XVI. In the case of Chinese internet filtering, this argument may prove harder to advance, as filtering, though disruptive, would not appear to impose a total ban on any particular category of online services. Even where specific services are blocked, this affects particular service providers, and would not appear to amount to a quantative restriction.

• Article XVII sets out the national treatment obligation under the GATS. National treatment requires that Members accord services and service suppliers of other Members treatment no less favorable than it affords to domestic like services and service suppliers. It is clear that domestic suppliers of online services in China are also subject to filtering and onerous content monitoring obligations. Yet, for the purposes of the GATS, what matters is the de facto effect of these measures. If foreign websites are affected differently, for example, by being slowed down by filtering at the link between the Chinese internet and the outside world (as suggested by the CFAC’s Peter Scheer here), or being blocked even though similar domestic services are not (as appears to be the case with Facebook), then an argument could be made that China has modified “the conditions of competition” in favor of domestic services suppliers, contrary to Art. XVII.

One of the thorniest issues in a challenge to the Chinese internet filtering would be the applicability of the General Exceptions provided in Article XIV. Unless the measure at issue constitutes a means of unjustifiable discrimination, the GATS cannot be invoked to prevent the adoption of measures which are “necessary to protect public morals or to maintain public order” (among other justifications). Supposing that an argument could be made on the basis of one or more of the articles mentioned above, the Chinese government would undoubtedly seek to rely on Article XIV. This would compel the WTO Panel or Appellate Body to pronounce on whether internet censorship can or cannot be justified on grounds of public morals or public order. By international standards, it would seem clear that some measure of censorship is justified: governments around the world filter certain types of content, such as child pornography or content which incites racial or religious violence. Yet, even where a Member shows justification under an Article XIV general exception, the claimant Member may nevertheless prevail by showing that, though the measure was justified, there exists a reasonably available alternative which is less trade-restrictive. There is no doubt that Chinese internet filtering is a good deal more restrictive than the international norm (though this may be changing). The competence of the WTO is firmly rooted in “trade,” and ruling on this issue would in all likelihood drag it into more controversial territory.

It seems that there is a reasonably good case to be made that the Great Firewall of China is effectively being used as a trade barrier, and susceptible to challenge under the WTO framework. Yet the political fall-out that bringing such a claim would generate should not be under-estimated. Trade tensions between the U.S. and China are already simmering, as evidenced by last year’s U.S. safeguard measures adopted on Chinese-made tires and the Chinese anti-dumping and anti-subsidy investigations into certain “Detroit Three” vehicles launched shortly after. Striking directly at the internet censorship system, which the Chinese government sees as vital to national political stability, would undoubtedly amount to a declaration of trade war. In fact striking at the political heart of another Member’s system would be a move unprecedented in the history of the GATT and the WTO. In the wake of the Google announcement, the English-language Chinese publication, the Global Times (often described as voicing the more stridently nationalistic end of the Chinese official line) has already denounced U.S. attempts at “imposing” a freer flow of information as a form of “information imperialism.” There is a deep historical distrust in China of “Unequal Treaties” imposed by Western powers, and it could be that a WTO claim would compromise China’s future commitment to the WTO system itself, as well as causing deep and lasting resentment. Hilary Clinton’s speech of last week on internet freedom suggests that the U.S. government is still committed to dialogue and a negotiated solution. Yet, merely knowing that WTO law provides grounds for a statable claim could prove a significant bargaining chip in negotiations, which might at least result in the toning down of some of the more discriminatory aspects of Chinese internet filtering policy.

• More on Google and China: U.S. Secretary of State Hillary Clinton condemned countries that use cyberattacks, reports the New York Times. Meanwhile, from the Wall Street Journal, Google affirmed its commitment both to remaining in China and to ceasing censorship of its search results.

• The company Legal River has released online Terms of Service and Privacy Policy Generators for entrepreneurs and small businesses to use to minimize legal costs, reports the New York Times.

• Want to use web pages as evidence? Law.com describes the risks and steps to take.

• From the Nieman Journalism Lab: Amazon has changed its Kindle policy to allow some publishers and authors to opt out of its digital rights management (DRM) provisions.

• A federal judge in Atlanta dumped $268,000 of e-discovery costs on the losing plaintiff in a patent infringement case, reports Law.com.

• Do you want to have a virtual appointment with your surgeon? The New York Times reports on the legal and ethical issues arising from the profusion of online medical advice.

• Also from Law.com: Patent-holding company FotoMedia is trying to have its infringement suits against many photo-sharing sites stayed or dismissed without prejudice, so that it can re-file at a later date. This attempt came after almost all FotoMedia’s patent claims disappeared after re-examination by the USTPO. Defendants Scripps Network and Zazzle.com want to fight the case to prevent later re-filing.

• From Gizmodo: Verizon cuts off service to alleged music- and movie-pirates.

• Twitter is a source of evidence for a murder charge, reports the New York Daily News.  But could those tweets be copyrighted?  Law.com’s Law Technology News weighs in.

• The Electronic Frontier Foundation provides a good, link-heavy analysis of the unanswered questions surrounding Google’s decision to stop censoring their Chinese services.

• For some reason, Psystar keeps fighting Apple, posts Gizmodo.

• Custom and Border Protection’s laptop searches may have gone too far, as revealed in a series of Freedom of Information Act requests for documents, reports Gizmodo.  EFF is looking for potential plaintiffs.

• The Wall Street Journal Law Blog analyzes how advances in medical science have impacted the rights of surrogate mothers.

• IBM gets the more U.S. patents than any other company for the 17th consecutive year, says MSN’s Moneycentral.  But Microsoft’s much smaller patent portfolio is worth more, reports The 271 Patent Blog.

• The Prior Art offers a fascinating look into the jury’s decision in i4i v Microsoft, complete with juror interviews.

• Chief U.S. District Judge Vaughn Walker in San Francisco decided to allow showing the trial challenging California’s Proposition 8 on YouTube, reports the San Francisco Chronicle.  The Wall Street Journal Law Blog questions whether that’s a good thing.

• Patent Librarian notes that Wikipedia citations in patent applications are up 59%, but Patently-O puts that increase in perspective.

• A report commissioned by the French government recommends taxing Google on their online advertising revenues in France to help fund legal outlets to buy media hurt by online piracy, reports the Mercury News.  President Sarkozy supports the measure, says PC World.

• The Wall Street Journal reports that Philip K. Dick’s estate claims Google infringed on its intellectual property by using the name “Nexus One” for the new Google-branded phone.  It brings to mind this recent post by Seth Godin.

• The Electronic Frontier Foundation responds to Bono’s recent New York Times Op-Ed, in which the musician / global icon lamented media piracy and suggested digital tracking be used to help criminal enforcement.

• Law.com provides an insightful guide to mining web 2.0 as a source of evidence.

• The Colorado Department of Transportation created an iPhone app to tell users if they’re too drunk to drive, the latest in a series of state efforts “to reach out to the Twitter-iPhone-Facebook generation,” according to the Wall Street Journal.

• The Ninth Circuit Court of Appeals affirmed [decision, pdf] a district court ruling that tasers should only be used in limited circumstances, as they pose a greater threat to their targets than other non-lethal police weapons.  The San Jose Mercury News reports on the suit that originated from a city police officer using a stun gun on a San Jose State student.

• Broadcom agreed to settle the securities fraud class action against it, says the Wall Street Journal Law Blog.

• The L.A. Times reports that the California Science Center has been sued for canceling a showing of film attacking Darwinian evolution and promoting intelligent design.

• Blizzard helps police make a drug arrest of a suspect tracked by his World of Warcraft account, posts kokomo perspective.

• Clever or illegal?  How online retailer Amazon escapes paying sales tax (and saves you from it as well), from Gizmodo.

• South Korea pardons former chairman of Samsung… a second time.  From the Wall Street Journal.

• Your text messages just got a little safer: The Times reports the Ohio Supreme Court has decided a warrant is needed to search a cell phone.

• Obama picks Howard Schmidt as the Chief of Cybersecurity, from the New York Times.

• A modern day Catch Me If You Can: An escaped criminal taunts police with Facebook updates, from Gizmodo.  (Also see this updated link.)

• The Court of Appeals for the Federal Circuit upholds an injunction against Microsoft, requiring it to stop selling certain versions of Word. From the IT World of Canada.

• Verizon defends its $350 smartphone early termination fee to the FCC.  From Gizmodo.

• Microsoft sued over “Bing” name for trademark infringement… by a tiny business in St. Louis.  CNet’s Technically Incorrect reports.

• Against all odds, Psystar claims it will be back, Gizmodo reports.

• An in-the-closet lesbian mother of two sues Netflix for releasing her movie preferences, reports Wired’s Threat Level.

• Google’s controversial Google Book Search program runs into more legal trouble, this time in France.  From the New York Times.

TXED: Favored Home of Patent Claimants

The Eastern District of Texas is unique among the 94 federal district courts.  Over the past decade the district, 200 miles east of Dallas, has become an epicenter of patent litigation in the United States.  The rise of the Eastern District under the guidance of Judge John Ward has been well-documented, and is not a coincidence: Judge Ward very intentionally built his district’s reputation as being trial friendly—or, to listen to his critics, plaintiff and patent-troll friendly.  By expediting trials and deferring to plaintiff-favoring juries, among other factors, the judges of the Eastern District made their court a favorite destination of forum-shopping plaintiffs with patent claims.

The forum shopping has not been unwelcome—the flood of patent cases filed in Marshall has brought added prestige to the four E.D. Tex. judges and has been an economic boon to the community.  For patent attorneys and parties to suits brought there, the judges’ familiarity with and expertise in patent law has made litigation more predictable.  The result has been analogous to Delaware’s rise in the area of corporate law, with a similar mix of criticism and praise.

Now, however, the Federal Circuit has threatened the primacy of the Eastern District of Texas for patent litigation.  The Federal Circuit’s writ of mandamus on Thursday was its third this year directing the Eastern District to vacate a decision denying venue change and transfer venue to the district requested by the defendant.  As in In Re Genentech and In Re Hoffmann-La Roche (the latter decided just three weeks ago), the C.A.F.C. in In Re Nintendo said it was “clear and indisputable” that the Eastern District misapplied the Fifth Circuit’s framework for considering venue change under 28 U.S.C. § 1404(a) and abused its discretion by refusing the requested transfer motion.

Venue Change after TS Tech

All three cases follow from the C.A.F.C.’s decision in In Re TS Tech.  That case was appealed from Lear Corp. v. TS Tech, in which TS Tech moved for transfer for venue from EDTX to the Southern District of Ohio.  TS Tech argued that OHSD was the more appropriate venue because the physical and documentary evidence was mainly located in Ohio and the key witnesses all lived in Ohio, Michigan, and Canada.  TS Tech’s only alleged connection to Texas was that it sold some of its products there, as it did nationwide.  Judge Ward denied the motion for transfer, giving significant deference to the plaintiff’s choice of venue and saying that the sale of TS Tech’s products in the district gave the local citizens a “substantial interest” in the litigation.

The Federal Circuit disagreed.  In a landmark decision that cited no substantive patent law, the court decided the matter on largely procedural grounds.  In the Fifth Circuit, a motion for venue change should be granted when the proposed venue would be “clearly more convenient” than the venue chosen by the plaintiff, a determination made by weighing the eight “public” and “private” forum non conveniens factors from In re Volkswagen.  The Federal Circuit said Judge Ward’s misapplication of the factors was so great as to produce a “patently erroneously result”—the standard for a writ of mandamus.

The Federal Circuit identified four “key errors” made by the Eastern District.  First, the district court gave too much weight to the plaintiff’s choice of venue—Judge Ward treated the plaintiff’s choice as a ninth forum non conveniens factor to be weighed in the Volkswagen analysis.  The plaintiff’s choice actually only shifts the burden onto the moving party to prove, using the eight factors, that its proposed venue is “clearly more convenient” than the original venue—the plaintiff’s preference should not be given any weight in itself.  Second, the district court “completely disregarded” precedent in assessing the cost of attendance for witnesses.  The cost and inconvenience of having key witnesses travel over 100 miles to a venue should be considered, and “the factor of inconvenience to witnesses increases in direct relationship to the additional distance to be traveled.”  Even though all the key witnesses would have had to travel approximately 900 miles further with the case in Texas, the district court said it “was not persuaded to give great weight” to the inconvenience.  The Federal Circuit said this was clearly erroneous, and found this factor to weigh significantly for transfer.

Third, the district court purposefully discounted the relevance of all the physical and documentary evidence being much closer to the proposed venue, and none of the evidence being in Texas.  Judge Ward’s decision said that “the increased ease or storage and transportation” makes the factor assessing relative ease of access to sources of proof “much less significant.”  The Federal Circuit noted that this interpretation was directly contrary to Fifth Circuit precedent, which indicates that modern ability to store, transport, and electronically view evidence does not neutralize this FNC factor.  Finally, the district court disregarded Fifth Circuit precedent as to “the public interest in having localized interests decided at home,” finding a local interest in the outcome of the case because some of the defendant’s products had been sold within the borders of the Eastern District.  The Federal Circuit said the district court’s application of this factor had been “unequivocally rejected” by the Fifth Circuit.  This factor only weighs against transfer when there is a local connection to the case that is greater than in the proposed venue—here, because the defendant’s products were sold nationwide, there was no more connection to the case in Marshall, Texas than there was in any other federal district.

In Re Nintendo

Much of the Federal Circuit’s analysis in Nintendo was identical to its analysis in TS Tech, Genentech, and Hoffmann-La Roche.  The court said a “stark contrast in relevance, convenience, and fairness between the two venues” existed in Nintendo “as in” those other three cases, and the court “has held and holds again in this instance that in a case featuring most witnesses and evidence closer to the transferee venue with few or no convenience factors favoring the venue chosen by the plaintiff, the trial court should grant a motion to transfer” (emphasis added).

The Federal Circuit identified the same four errors in FNC-factor analysis in Nintendo as it did in TS Tech, reiterating that the plaintiff preference is not a factor to be considered, and restating the importance of the cost and inconvenience of additional travel to get to Texas for witnesses, the physical location of evidence, and the lack of local connection to the case.  The Federal Circuit was also unimpressed by an argument by the district court that because key witnesses were located in Japan, Washington, and New York, the Eastern District could serve as a “centralized location” for the case.  The Federal Circuit rejected that claim (as it had in Genentech), and noted that to even make this “hypothesized” argument the district court included minor satellite offices of the parties in its analysis that probably should not have been considered.  Accordingly, the court ruled that “the district court clearly abused its discretion in denying transfer from a venue with no meaningful ties to the case.”

Future application

The factors motivating the Federal Circuit’s conclusion could easily apply to a significant number of cases brought in the Marshall courthouse.  The Eastern District of Texas’ centrality to the world of patent litigation has been questioned precisely because it is rarely convenient for witnesses to get there, the source of the case’s evidence, or locally connected to the issue at trial.  In TS Tech, Genentech, Hoffmann-La Roche, and now Nintendo, the Federal Circuit has made clear that in such cases, the district court should grant venue-transfer motions to more convenient districts.  Often, the only stated reason to have the trial in the Marshall courthouse is the plaintiff’s preference or possibly its neutral, central location between the actual places witnesses or evidence are to be found.  The Federal Circuit has made clear that these considerations are categorically insufficient to outweigh the three problem factors.  A forum-shopping plaintiff—or an EDTX judge protecting the relevance of the district—has significantly less ground on which to defend a denial of motion transfer after Nintendo.

Though the quartet of mandamus cases could represent a dramatic blow to the EDTX’s plaintiff-friendly reputation, it’s yet to be seen if TS Tech will result in a “wave of transfers of actions” from the Texas district.  One reason to believe the change will be moderate is In Re Telular Corp., in which a motion for a writ of mandamus on the same bases as the defendants in TS Tech and Nintendo was denied by the Federal Circuit.  Judge Moore emphasized that even if the Federal Circuit disagreed with the district court ruling, for a writ of mandamus he must defer to the lower court unless “it is clear that the facts and circumstances are without any basis for a judgment of discretion.”  The decision noted that unlike in those cases where the Federal Circuit had recently granted writs for transfer, the venue proposed by Telular was not clearly more convenient than the Eastern District.  In the other cases, the key witnesses and evidence were unequivocally closer to the proposed venue; here, two key witnesses would potentially be more inconvenienced traveling to the proposed venue, and some evidence would potentially be more costly to send to the proposed venue.  Additionally, Telular waited five months after the district court’s denial of transfer to motion for the writ; Judge Moore noted that although “remedy by mandamus is at law, its allowance is controlled by equitable principles,” so Telular’s delay weighed against granting the writ.  Together, these two aspects of Telular led to the Federal Circuit’s conclusion that mandamus was not appropriate.

Game over?

The conclusion for patent litigators on the defense side should be one of cautious optimism.  The four writs of mandamus coming from the Federal Circuit since December 2008 gives defendants hoping to avoid the plaintiff-friendly district a last resort assurance against the clearest cases of forum-shopping.  Moreover, the language of the decisions indicates that the Federal Circuit might be sending a message to the Texas judges to scale back their efforts to boost the importance of their district.  On the other hand, Telular shows that the Federal Circuit still gives deference to the district courts to make rational decisions regarding change of venue motions.

The issue going forward will be how the judges of TXED react to the Federal Circuit’s five mandamus rulings.  Will they continue to guard the district’s importance and err on the side of rejecting transfer motions?  Or will they hedge against further mandamus writs or reversals on appeal by more willingly transferring cases out of the district—and send with them the district’s unique position?  Future analysts might look back to December 2009 and see that Nintendo marked the end of the game for the Eastern District of Texas.

• The New York Times discusses the increasingly complex battle over e-book publishing rights.

• True/Slant reports on Facebook CEO Mark Zuckerberg’s glitch with his social network’s new privacy settings, and asks whether the changes might violate FTC regulations.

• Misbehaving in the jury box: jurors researching on Wikipedia led to an overturned murder conviction, and jurors friending each other on Facebook is the subject of mistrial challenge, reports the ABA Journal.

• Former state representative and convicted pederast Ted Klaudt claims his name is covered by “common law copyright” and says news organizations that use it in coverage have to pay him $500,000 in licensing fees, blogs The Legal Satyricon.  That’s TED KLAUDT making the claim.  TED KLAUDT.

• Wired’s Threat Level reports on a new hacker application that deletes traces of illegal computer activity when it detects a commonly used suite of police forensic tools beginning to run.  If it doesn’t work perfectly, this could be a godsend for prosecutors looking to indict on obstruction of justice charges.

• Microsoft dips its toes a little deeper into open-source waters with Moonlight 2, the Linux version of its web application framework Silverlight.  With the new version, Microsoft extends its Patent Covenant to End Users of Moonlight to users who get the framework from any third-party, including distributors like Red Hat or Ubuntu.

• Apple-Psystar, the final chapter, on Gizmodo.

• Fake Steve Jobs rallies iPhone users to DoS attack AT&T today, reports Gizmodo.

• The FTC sues chipmaker Intel for antitrust violations, everyone reports.

• Europe drops its antitrust case against Microsoft after the software giant agreed to offer consumers a choice of web browsers installed with copies of Windows, says the New York Times.

• Video sharing site Vimeo is sued by Capitol Records over user-posted lip dubs, reports NewTeeVee.

• The Supreme Court will review employers’ access to employees’ text messages on company-owned mobile devices, reports the Wall Street Journal.

• Judges and Facebook – Is it ok to be FB friends with lawyers?  The Florida Judicial Ethics Advisory Committee says no, reports the New York Times.

• Michael Arrington and Crunchpad sues JooJoo for the joint tablet venture that so publicly went wrong, says Gizmodo.

• The Environmental Protection Agency announces that greenhouse gases pose a danger to human health and environment.  New federal and possibly international regulation are expected to follow, according to the New York Times.

• Who will protect us from the robot invasion?  Maybe lawyers will, a pair of scholars at Stanford University tells the San Francisco Chronicle.

• The legal implications of new technology aren’t all covered in intellectual property classes – Andrew Breitbart’s Big Government blog looks at the possible use of eminent domain to take the “wind rights” of farmers and build green-friendly windmills.

• Text messages are the new “digital lipstick on the collar” and are increasingly showing up as critical evidence in divorce cases, writes the New York Times.

• The EU drops its antitrust case against memory-maker Rambus in exchange for concessions, according to the Associated Press.

• A federal judge finalizes a $675,000 verdict against a Boston University student for sharing 30 copyrighted songs online, Wired’s Threat Level reports.

• Apple countersues Nokia for patent infringement – this is getting ugly, says All Things Digital’s Digital Daily.

• A payroll and credit card payment processing company’s failure to protect itself from massive data breach was not grounds for a securities fraud case by shareholders.  Law.com discusses the New Jersey District Court ruling.

The American legal profession is not generally known for adopting new technology, setting up open access to laws and legal procedures, or offering things for free.  Internet culture is the opposite: fervently experimental, open, and free/shared whenever possible.  Private intersections of the two have fallen on a continuum, from closed and expensive like Lexis/Westlaw, to open and free like the new Google Scholar (see our analysis of Google Scholar here).  One of the latest innovations in open access to previously closed legal information is RECAP, a project of Princeton’s Center for Information Technology Policy.  Created by computer scientists with a policy tilt—not J.D.s—RECAP takes aim at PACER, the online service for accessing federal court records.  RECAP threatens to unravel PACER’s paid-access system in the name of “hastening the day when court records would be freely available to the general public via the Internet.”

PACER

PACER, which stands for Public Access to Court Electronic Records, “is an electronic public access service that allows users to obtain case and docket information from Federal Appellate, District and Bankruptcy courts, and the U.S. Party/Case Index via the Internet.”   Started as a pilot program in 1989 (PACER chronology pdf), PACER allows registered parties to access public court documents from most federal courts, and is popular—even essential—for many attorneys litigating in federal court.  It is not a single database – each participating federal court operates its own document database, and PACER provides centralized registration, billing, and technical support.

PACER is funded by fees collected from users.  Users pay eight cents per page for records accessed through PACER—primarily pdfs of court papers, and also search results and document lists.  PACER’s fee structure is mandated by Congress, originally in 1988 and reapproved most recently in the E-Government Act of 2002.  There are exceptions to the eight cent charge; for example, “written opinions” by judges “that set … forth a reasoned explanation for a court’s decision” are available for free, and the maximum charge for any single document is capped at 30 pages ($2.10).  Additionally, courts may exempt users from paying fees “in order to avoid unreasonable burdens and to promote public access to such information.”  However, “exemption of PACER fees will only apply in the jurisdiction that issued the order,” so to receive a fee exemption applying to all documents accessible through PACER would necessitate petitioning each of the federal courts separately.

Though ahead of the internet-curve at the time of its inception, PACER has come under fire for its “cumbersome” interface and its continued use of fees in an age of increasingly free access to all sorts of information online.   Critics argue that in America’s common-law system, court documents and decisions form the substance of the law itself, and that PACER’s fees restrict access to what should be universally available for free.  Moreover, PACER collects more money in fees than are needed to run its servers and maintain the system—$150 million more, as of 2008—which undermines any claim that eliminating PACER’s fees would eliminate PACER itself.  There have been calls for legislative change to open up access to PACER (among other repositories of government data), but little movement toward actual change – especially since federal funding would have to replace the fees used to keep PACER operational.  Without any such changes, the information in PACER remains closed off—not all of its documents make it onto Westlaw or Lexis, and almost none of them will be caught in Google Scholar’s new legal net.  There have been efforts to pay for and share large sweeps of data from PACER, but they have been necessarily incomplete.

RECAP

Enter the technological, crowdsourced solution: RECAP.  A project from Princeton’s Center for Information Technology Policy, RECAP—with the motto “Turning PACER Around” explaining the backwards name—opens up access to the centralized documents by targeting users of the system instead of  exclusively pushing for legislative policy changes.  RECAP is a Firefox browser plugin that activates when a user logs into PACER.  It then has two functions: RECAP automatically detects any documents the user accesses and uploads copies to the Internet Archive, and it alerts the user if any of the documents listed on the current PACER screen are available in the archive.  RECAP also creates clickable links to the free, archived documents that appear on the page along with the PACER links.  Thus RECAP users collectively share the documents they access from PACER and each document need only be paid for once to be free for everyone thereafter.

Wait… are they allowed to do that?

Though RECAP’s copy-and-upload function might ring copyright infringement alarm bells, the system was designed to open access to legal documents without violating any laws.  With regard to copying and sharing documents written by the court, 17 U.S.C. 105 precludes material by the federal government from receiving copyright protection, saying “Copyright protection under this title is not available for any work of the United States Government.”  RECAP doesn’t only facilitate sharing government works, however; it also works on the briefs, motions, and exhibits submitted by litigation parties.  That material does not fall under 17 U.S.C. 105’s exemption, and thus is subject to copyright protection at its creation.  CITP suggests that RECAP should still be protected from liability under the doctrine of fair use, which allows uses of copyrighted works without permission for things like commentary, news reporting, and research.  However, this is far from a settled point of law—even the posting of briefs by traditional legal research companies Lexis and Westlaw has been called into question.

CITP acknowledges this, and says it would like to “establish [the] precedent” that “citizens . . . have the freedom to share public court documents” without copyright liability.  If challenged on copyright grounds, CITP’s fair use defense might not be so robust: though popularly championed among netizen activists, fair use as a doctrine has been weakened over the years, and it provides its strongest defense with regard to private, partial, transformative works.  RECAP provides public, total, and exact copies of the material in question, though its decidedly non-commercial nature would likely weigh in RECAP’s favor.  CITP’s better defense might be a claim of implied license—arguing that the act of submitting a brief or exhibit to a court implies permission for it to be copied into the public record and then further copied and distributed by commercial and non-commercial organizations as a means of disseminating the common law.

In addition to considering copyright law when designing RECAP, CITP also made sure use of RECAP would not violate PACER’s prohibition (PACER policy pdf) on “any attempt to collect data from PACER in a manner which avoids billing.”  To that end, CITP points out that “RECAP users pay for every document they download from PACER, just like any other user . . . RECAP simply gives users a second option: to easily share documents directly with one another.”  The Administrative Office of the U.S. Courts has tacitly endorsed this distinction in its Notice for Fee Exempt PACER Customers, in which it notified fee exempt users that they are not allowed to use RECAP because of additional restrictions on transfers of data by that class of users.  Ordinary, paying users are not subject to the limitation, which the Administrative Office has confirmed in response to direct inquiry.  RECAP may threaten PACER’s long-term fee collection model, but it is not likely to face any significant, unique legal challenges.

Turning PACER around

As part of a trend toward opening access to American common law, RECAP’s place at the heart or the periphery of the movement remains to be seen.   Like any crowdsourcing application, RECAP’s usefulness increases as more people use it.  Yet PACER’s prime users are large, bill-paying law firms, which tend to be wary about adopting new technology and have little incentive to contribute documents they paid for to a free database.

“Success” for RECAP may not be mainstream adoption, however.  Merely by creating the working plugin and calling attention to the problem of restricted access to court documents, CITP has advanced the cause of reforming and opening up access to PACER.  That alone is “Turning PACER around.”

By Rajiv Batra.

• Patent Docs reviews Senator Patrick Leahy’s proposals for patent reform.

• Third Circuit gives “Spam filter ate my filing notice” excuse a second chance, from the Technology & Marketing Blog.

• EFF sues to find out how the government spies on us using social networks; Indiana University students makes a Freedom of Information request to find out much the big telcos charge the government to spy on their networks, says Wired.

• The New York Times opines in favor of the Empire State’s decision to collect sales tax on online purchases from out-of-state retailers delivered in New York.

• Lazy IP enforcement leads to prosecution of the wrong guy, who makes a big deal out of it, says Ars Technica.

• FTC isn’t done with Intel yet, now looking into anticompetitive behavior with regard to Nvidia, reports BusinessWeek.

• Google to end free access to subscription news, blogs Gizmodo.

• And for an international perspective: BioTechBlog reports on IP and the biotech industry in India.

“Most entertaining video”

The case relates to the uploading to Google Video of a mobile-phone video showing an autistic high school student being bullied by his classmates. The video was allegedly uploaded to  the Italian-language Google Video on September 8, 2006, and not removed until November 7. According to the prosecutors, the video appeared in the site’s “most entertaining videos” section, ranked as the twenty-ninth most viewed. The video was only taken down after Down-syndrome advocacy group Vivi Down appealed to the Italian authorities, who in turn demanded that Google take down the video (it would appear that though the victim was in fact autistic and did not have Down Syndrome, Vivi Down’s involvement was prompted by derogatory references to Down Syndrome in the offending video). According to Google, it did everything that was required of it under the applicable laws, and removed the video within hours of being notified. The four Turin youths involved in the bullying were subsequently tracked down (with the help of Google), and sentenced to one year community service with a center for children with Down syndrome.

Google: ISP, content provider, or something else?

The issue of knowledge appears to be precisely what the Milanese prosecutors are focusing on: they argue that Google must have known of the existence of the video well before November 7. According to their submissions, in light of comments posted to Google Video voicing outrage at the video, “[i]t is reasonable to imagine that comments like this were followed by requests by these same people that the video be removed” (quoted in the New York Times article). If it were indeed the case that Google had actual knowledge of the video (which they vigorously deny),  and delayed in taking it down, then a finding of liability would not be particularly inconsistent with ISP liability laws on either side of the Atlantic.

Calls for filtering?

• U.S. says butt out: U.S. Senators criticize EU Commission over delay of Oracle-Sun deal.  (See our deal cheat sheet here.)

• Verizon stakes its claim as the nation’s most ironic network: A week after a court called its “There’s a Map For That” advertisements “sneaky,” but not misleading (catch up here), Verizon has pushed the National Advertising Division of the Council of Better Business to ask Sprint to drop its claim that it is the “most dependable 3G network.”

• Not to be outdone by Verizon, AT&T, and Sprint, Canadian telcos are suing each other over false advertising too.

• A boutique Texas IP firm is reaching out to owners of Xbox 360 owners whose consoles have been banned from Microsoft’s Xbox Live service with hopes of filing a class action suit against the tech giant.

• News Corp’s Ruport Murdoch may make a deal to make the media conglomerate’s content exclusively searchable by Microsoft’s Bing search engine, but antitrust concerns loom.

• The new Google-TiVo deal probably won’t violate your privacy, says PC World.

• The “Godfather of Spam” has been sentenced to 51 months in prison.

• A Kentucky man’s claim that the government has been spying on his every living moment is “patently unsubstantial,” according to the D.C. Circuit.  Wired’s Threat Level reports and links the full decision, in which the court likens “the particular combination of sloth, fanaticism, inanity and technical genius alleged” to stories of “little green men.”