Dotsucks Sucks. Is The New gTLD Fair Criticism Or Extortion? Steps You Should Take Now.

 We have babbled on about generic top level domain names ("gTLD") in this little blog (See here and here).  We told you what you needed to do to prevent your company name becoming a XXX site.  We talked about how ICANN was going to auction off the rights to any new domain name that you could think of and plunk down $185,000 to obtain the rights to act as a registrar.

In a prior defensive move, you already have bought up all the regular domain names (e.g. .com, .net, .org) that have your company name combined with disparaging terms (e.g. "Walmartsucks.com").  Just when you thought it was OK to relax, along comes a new set of problems for you to deal with in regard to your domain names.

Vox Populi applied for and obtained the rights to be registrar for the new gTLD .sucks.  So, instead of you having to worry about the combination of your name with "sucks" in the original set of domain names, now the problem arises with having your name appended to a website with the .sucks domain (e.g. "Walmart.sucks").  Should you care?  I don't know.  Maybe.  If our limited experience with the internet has taught us anything, it is that vocal, dissatisfied clients or customers are going to find a way to spout their venom, justified or otherwise, somewhere on the interwebs.  Yelp, Pissedconsumer.com or a number of others provide them that forum.  So maybe this is just another minor inconvenience and might actually be a badge of honor for some companies.  However, it does present the chance for one place to be a major clearing house for criticism for larger companies.

The method of marketing the .sucks domain has elicited some criticism in and of itself.  According to the .sucks website, during the "Sunrise Period", which began March 30, 2015 and continues until May 29, 2015, if you have a registered trademark, you can get dibs on the .sucks domain for your own use (or non-use) for $2499 initially and $2499 annually thereafter.  Chump change for most large corporations but significant for others.  If you are a risk taker, you can wait it out and after June 1, other options are available and the prices drop significantly.  However, you are threatened with the possibility that Vox Populi will grant the .sucks domain name to certain consumer advocacy groups and the price will be subsidized (i.e. free).  So, do you feel lucky, punk?  Do you?

Fifteen Things That Could Maybe Happen In 2015 In Law and Technology.

In keeping with the BuzzFeed nature of blogging and the proud tradition of procrastination irretrievably associated with this blog, we will fearlessly predict fifteen things that might, could, should occur during calendar 2015, even though well over one-sixth of the year has already passed us by. So after consulting my Magic Eight Ball®, Ouija® board and Googling® “things that might occur during 2015”, here goes:

1. If I hadn’t procrastinated, I would have predicted that Ross Ulbricht, a/k/a Dread Pirate Roberts, d/b/a Silk Road would be convicted and I would have had at least one prediction be accurate. However, since that occurred before I got off my keyboard and wrote this, I will just predict that he will appeal and some of his convictions will be reversed and/or he will strike a plea bargain to reduce the amount of jail time that he faces. He’s such a young guy that he will still have plenty of time to get into other trouble when he gets out.


2. Sixty percent (60%) of all websites and addresses will experience a hack or attempted hack.  This is not a stretch, as this has been the average over the past few years.  The cost of responding to a breach will exceed $200 per record in the U.S.  On average, each person in the U.S. will receive two notifications of breaches and 33% will take no action after receipt.  The three states that don't have breach notification laws (Alabama, New Mexico and South Dakota) will pass some version.  President Obama will suggest a national breach notification standard.  Republicans will threaten to shut down the Department of Defense if he does anything by executive action.  Congress will take no action.  President Obama will make a statement favoring oxygen.  Eight Republicans will suffocate.


3. The Supreme Court of the United States, after failing to rip insurance from 8 million people because of a typo, will grant certiorari to the Google/Oracle kerfuffle over APIs and we will be left with the spectacle of having some people who were born before telephones were prevalent (although younger than the Rolling Stones) try to determine whether interfaces will be subject to copyright.


4. The internet of things (“IoT”) will be the most hyped buzzword and will be attached to everything that has a wireless internet connection or that is hardwired into the internet and will include your refrigerator, air conditioner, automobile, FitBit, phone and clothing. The most intimate details of your life will reside on the cloud (the most hyped buzzword of a few years ago) and will be hacked and someone in Kazakhstan will know whether you need to buy more mayonnaise.


5. Big Data will be another over hyped concept and will be applied to any amalgamation of large data bases. Algorithms to sort this data and apply it will be developed so that advertisements for mayonnaise will come up on your browser after the hack described in 4 above.


6. Another result of big data amalgamation and parsing will result in the ability to do much more genome sequencing. More and more data will be available about genetic traits and inherited characteristics. Methods of manipulating those traits will begin to be developed. Designer babies will become a possibility. The use of steroids, amphetamines and other performance enhancing drugs will become obsolete in the future as children that have been “optimized” for athletic success will reach the age of competition and X-Men-like debates will dominate sports talk radio. The furor over Barry Bonds will seem quaint.


7. New methods of security for personal devices and premises will be developed and more widely used. One of these will be finger vein authentication, which will be safer, easier and more portable than fingerprints, retina scans or other methods. The NRA will object because identifying someone’s trigger finger will definitely be the next step in Obama’s nullification of the Second Amendment.


8. There will be a rise in personal biometric services.  Devices such as socks, shirts and wristbands and implants will constantly measure a person's physical characteristics and transmit the data to a smart phone and then to a medical provider.  There will be an automated response telling the patient to eat less mayonnaise.  The hacker in Kazakhstan will already know that.


9. An actor or actress will license their digital likeness rights to a movie studio where the studio will be able to use the likeness in a computer generated image without the actor participating in the filming at all. Just think of a young Mel Gibson and Danny Glover doing Lethal Weapons Number ad infinitum. I can only imagine the conditions of the licensing agreement regarding the personal conduct of the actor post license signing. Morals clauses, prohibition against drunken anti-Semitism and racism and good behavior clauses will be rampant.


10. There will be an accident involving two self-driving, autonomous cars involving personal injury. Personal injury plaintiff’s lawyers will sue all the programmers in sight. Programmers will have to begin carrying collision and liability insurance if they want to produce such cars.


11. New cryptocurrencies will emerge to compete with Bitcoin, even the several million that can’t be found after Mt. Gox lost them. None of them will catch on much because you still need a central government and an army to enforce the value of an arbitrary currency (which all are).


12. Artificial intelligence will blur the line between humans, robots and computers. More and more machines will pass the Turing Test. This blurring will bring the concept of the movie “Her” closer to reality.


13. TOR will take a hit because of NSA infiltration and detection. Something will emerge to take its place and the battle will begin again.

14.  Cyber-ransom, a subset of hacking, will become a bigger problem.  

15.  Several cases involving the warrantless searching of cell phones of arrested people will begin to wind their way through the appeals courts.  Since the holding that a warrant was needed, police will try to find ways to chip away at that requirement.  The issue will be resolved in the 2016 term of SCOTUS.

None of these predictions are particularly Kreskin-worthy and will not fill us with awe and wonder even if they come true.  However, think how amazing these would be if we had made them just 10 years ago. We truly live in interesting times.

14 Technology Law Things About 2014 That I Should Have Written About Over 14 Days Ago.

It’s been over a fortnight (I love saying fortnight) since 2014 expired and every other blogger has penned a recap of something(s) that occurred during 2014. So, it seems appropriate that this little procrastinating blog would get around to that now. So, without further ado (I’m not sure there was any prior ado), here are fourteen law/technology stories about 2014 that I could find without doing too much research. Some of these are important, some are slightly amusing and some are just to get the number up to fourteen. You can make your own assessment.

1. The first Twitter libel ("Twibel") suit went to trial. A former attorney for Courtney Love sued Ms. Love for tweeting that the attorney was “bought off”. The court decided that was not defamatory. You may remember from your law school days about libel “per se”, i.e. if you wrote that someone had committed a crime or immoral acts, was unable to perform their profession, had a “loathsome” disease or was dishonest in business you could recover without proving actual malice or specific injury. It seems to me that about 75% of all tweets fit this definition.

2. The Supreme Court ruled that police must obtain a warrant before searching a cell phone of someone they arrested. Prior to this, police has maintained that a cellphone was like anything else in the possession of an arrestee (e.g. wallet, address book, pocket litter) and consequently no warrant was needed.

3. A coding error was found in OpenSSL, encryption software that was supposed to keep transactions secure. This error, named “Heartbleed”, caused millions of people, companies and sites to have to change their passwords.

4. Bitcoin and other cryptocurrencies continued to have a rocky ride. Executives of Bitcoin companies were arrested for activities through Silk Road (see number 6 below). One of the companies had received funding from the Winklevoss twins. Dedicated readers of this blog will remember our fondness for the Winklevi.

5. Mt. Gox, the largest Bitcoin exchange, filed for bankruptcy. Mt. Gox had somehow lost 774,000 bitcoins (about 6% of all bitcoins in existence) due to theft, technical problems or perhaps merely leaving them out in the rain. Incidentally, Mt. Gox got its name because its original business was operating an exchange for “Magic The Gathering” cards, hence Magic The Gathering Exchange. I mean, what did you expect?

6. The alleged proprietor of Silk Road, Ross Ulbricht, was scheduled for trial. This former resident of Westlake Hills, Austin, Texas had his communication capabilities curtailed while in jail for fear that witnesses would be rubbed out before they could witness. That’s some Corleone stuff, for sure. Now, Mr. Ulbricht is claiming that he was not the masterdude behind the nefarious doings of the Dread Pirate Roberts, but that it was the CEO of Mt. Gox (see 5 above). If you wrote a script like this, no one would use it because it’s too farfetched. As a sterling example of the advantages of capitalism, several creative business people, including the marketing geniuses at Silk Road 2.0, rushed to fill the void left after the arrest of the Dread Pirate Roberts and to address the need for illicit drugs and murder for hire through the dark web.

7 through 12. The Year In Hacking: (i) The cyber division of the Chinese People’s Liberation Army was charged with hacking into the networks of Westinghouse and U.S. Steel, among others; (ii) Chinese hackers also breached the network of the U.S. Gov’s Office of Personnel Management and targeted information from employees applying for top security clearances; (iii) Sony Pictures was hacked by North Korea (maybe) hackers, which resulted in a movie called “The Interview” getting a lot more publicity that it deserved and Charlize Theron getting paid an amount equal to her male contemporaries, so it wasn’t all bad. How could you not pay one of the most desirable people (have you seen that perfume commercial?!) on the planet anything she asked? (iv) A glitch in Apple’s picture storing service along with weak passwords and not so secure security questions allowed most of us (don’t say you didn’t look, too) to see a lot of celebrity nude selfies; and (v) eBay was hacked and lost the personal records of 233 million users.

13. While technically falling within the realm of hacking, a disturbing tactic became more prominent during 2014. This technique, called cyber-ransom or ransomware, manifests itself by having a hacker obtain control over your network and threatening either to release the information, not allow the owner to use its own network or to destroy all the information in the network unless a ransom is paid. Domino’s pizza in Europe was asked for $40,000 to avoid having information in their network released. The release never happened and it is unclear as to whether Domino’s paid the ransom within 30 minutes. A company named Code Spaces was put out of business when it refused to pay a ransom and a vindictive hacker destroyed so much of its information that it had to close.

14. The Supreme Court of the United States was asked in 2014 to grant certiorari to hear the Google v. Oracle suit involving the ability to copyright interfaces. Recently, SCOTUS has asked the Solicitor General of the U.S. to file a brief regarding the advisability of granting cert. No decision of whether the court will hear this case has occurred yet.

2014 was rife with collisions occurring at the intersection of the law and technology. 2015 is likely to be just as debris strewn.

Hey! We Have A NDA. They Can't Do That, Can They?

 Consider this very common tableau: Two companies want to discuss doing business together, as in manufacturing something or joint development of software.  They sign a preliminary non-disclosure agreement that says that anything they give to each other in furtherance of the discussion must be kept confidential.  Information is exchanged, manufacturing is commenced and several months later the manufacturing party stops manufacturing the product for the other party and starts selling their own competing product.  Party 1 (the designing and  disclosing party) has the other party dead to rights under the NDA, right?  After all, Party 2 (the receiving and manufacturing party) is selling a product using information they received from Party 1.  A federal court in Illinois says: "Not so fast, my friend".  How can this happen?

nClosures designed a metal case for iPads.  Block and nClosures entered into a non-disclosure agreement that had the following language: 

"The Parties … agree that the Confidential Information received from the other Party shall be used solely for the purposes of engaging in the Discussions and evaluating the Objective (the “Permitted Purposes”). Except for such Permitted Purposes, such information shall not be used, either directly or indirectly, by the Receiving Party for any other purpose… ."

Block began production of the iPad cases as designed by nClosures.  Several months later Block terminated its relationship with nClosure and began manufacturing iPad cases of its own design.  Lawsuits ensued.

One of the counts raised by nClosure was for breach of the contract to keep its stuff confidential.  A lower court granted a summary judgment for Block and the summary judgment was affirmed upon appeal.

The courts reasoned that even though Block had agreed to keep certain information confidential, the parties had never entered into a subsequent contract for the manufacture (even though several drafts were exchanged and an oral agreement as to price had been reached), nClosure had never required anyone else (Block employees, consultants, third party designers, previous manufacturers, etc.) to sign a confidentiality agreement, had not kept its design on secured computers or under lock and key and had therefore not taken reasonable steps to protect the information.  Therefore, nClosure could not enforce the confidentiality agreement.

This case may be cited for the proposition that even though you have an original confidentiality agreement in place, at least in Illinois you had better take subsequent and further steps much like those required to protect trade secrets (see here, here and here) or the other party will not be required to keep stuff confidential even though they agreed to do so.

Alarming? A little bit.  It seems to mean that confidentiality agreements in Illinois can only be used to protect information that qualifies as a trade secret.  While that is a prime reason for the use of such agreements, I'm pretty sure most people thought that non-disclosure agreements had broader application than that.

Lessons learned?  Follow up the initial (i.e. "dating") confidentiality agreement with a more comprehensive (i.e. "marriage" agreement ) and get similar non-disclosure and non-use agreements from everybody else that will see your crown jewels.  Also, physically protect the information with locks, key cards, walls, safes, etc. and have a documented program in place that has all the elements for trade secret protection.

Remember this the next time somebody bitches about the over-lawyering surrounding confidentiality.  Your business could be at stake.

 

Google Wants SCOTUS To Call "No Copyright" On APIs. 77 Computer Mavens Agree.

 This is another update on a previous post.  We have written several times about the seesaw battle between Google and Oracle relating to the single issue of whether interfaces ("APIs") can be protected by copyright.  Oracle won the last round, which held that "Yes, Indeedy.  Copyrights are just peachy for interfaces.  However, we don't know whether the use is 'fair use'."  Yeah, I'm paraphrasing a bit but that's the gist.

Google has applied to the Supreme Court of the U.S. for a writ of certiorari.  If the Court grants such a writ, it merely means they will hear the case, not how they will rule.  The Electronic Frontier Foundation has filed an amicus curiae brief supporting the application for the writ and indicating how it is their position that it would be disastrous if the present ruling were to remain in effect.  Seventy-seven computer scientists, engineers and pioneers signed on to the amici brief.   Pay no attention to the fact that over 20% of the 77 are presently a Google "employee, consultant and/or director".  That may not have affected their position at all.

In any event, perhaps the Supremes will get around to this after they have decided whether a typo can cause several million people to go without health insurance or whether you can marry someone configured just like you.  Stay tuned.

Update On The Dark Net Rising.

 Yesterday, we chronicled the plight of Silk Road 2, a dark web site whose proprietor was arrested recently.  Today, we find out that this was a part of a much larger bust, labeled "Operation Onymous" by the Feds, Interpol and other cooperating agencies.  The marketing geniuses at the FBI used "onymous" because it was coined as a word in 1775 to mean the opposite of "anonymous".

In any event, apparently 17 people have been arrested and 451 domains of the .onion variety (so called because they are accessed through The Onion Router 'TOR' browser [see paragraph below before clicking on this link]) have been seized including the aforementioned Silk Road 2 and others named Cloud 9, Hydra, Pandora, Blue Sky, Topix, Flugsvamp, Cannabis Road and Black Market.  Some of those that they didn't get are Agora, Evolution and Andromeda.

There have been rumblings that the authorities have found a flaw in TOR that allows them to circumvent its supposed anonymity and that anybody that had downloaded TOR was suspect.  So, now you can decide whether to click on the link above.

Silk Road Redux-The Dark Net Rises (And Falls).

 This little blog had previously discussed the very interesting tale of Silk Road, an e-Bay kind of market place for much stuff that is not sold (openly) in polite society.  As indicated in that post, the proprietor of that start up has been arrested and awaits trial.

Since nature abhors a vacuum, another site had arisen to take it place and was very creatively named "Silk Road 2.0".  There was even forum chatter indicating the hand off of the control from the "Dread Pirate Roberts" to "Defcon".  I say "was" because the 2.0 site has met the same fate as the original.  The FBI has arrested a gentleman named Blake Benthall in San Francisco and charged him with multiple nefarious deeds all connected with the transaction of business in illegal drugs, fake IDs and money laundering and all connected with Silk Road 2.0.  You can read the very detailed affidavit of the agent and the criminal complaint against Mr. Benthall here.  A gentleman named Blake Benthall has Facebook, Twitter and LinkedIn accounts that may or may not be the same gentleman.  There is little to indicate such a connection except the interest in Bitcoins, the medium of  exchange for Silk Road and the fact that his Twitter account puts him in the same place that the FBI physically observed him to be in several instances.  Once again, this is unfortunate because if this is the Mr. Benthall involved, he, like Ross Ulbricht before him, seems like a cool dude.

One More Reason For Parents To Freak Out About Facebook: They Might Be Liable For What Their Kids Put On There!

 As if it weren't enough that all good 'Muricans had to be very afraid of The Ebola, ISIL, the repeal of the Second Amendment by Executive Order, being able to get affordable health insurance or having other people be able to marry their choice of mates, now they have to be afraid of being liable for texts or for libelous stuff that their offspring cut and paste on the Facebook.

A Georgia court, in a cast styled Boston et al v. Athearn et al, has held that there may be a question of fact sufficient to survive a motion for summary judgment in a case involving parents being sued for the Facebook shenanigans of their offspring.

It seems that Dustin (13 at the time) and Melissa created a fake Facebook page ostensibly for one of their classmates, Alex.  Dustin used a computer supplied by his parents and the family internet account to do this.  Dustin and Melissa posted altered and unflattering pictures of Alex and used the account to do status updates suggesting that Alex had racist views and was gay.  The impish scalawags also used the fake account to post comments on other classmates' Facebook pages that were graphically sexual, racist or suggested that Alex was taking drugs for a mental condition.  Kids will be kids, amirite?

Alex's parents contacted the school and Dustin admitted his transgressions.  His parents learned of this in May of 2011 and grounded Dustin for a week.  However, his parents did nothing to cause the fake account to be taken down and Alex's parents sued them in April of 2012, alleging, inter alia, that they were negligent in failing to supervise or control their child.   

Dustin's parents filed a motion for summary judgment, claiming that as a matter of law, they were not liable because the actions that led to this took place before they were aware of it and therefore it was not foreseeable.

The Court held that there was a question of fact in that a jury might find that the failure to take any action to remove the offending material for several months after finding out about it was the proximate cause of some of Alex's injuries.  The Court therefore denied a portion of the motion for summary judgment.

It should be noted that this does not mean that the parents are liable, only that the question may be allowed to go to a jury and not dismissed early by the Court.  So, stay tuned to see how deep in the doghouse Dustin gets and whether he gets written out of the will.

Homeland Security Gets Kansas City Panties In A Knot.

You might know that it would take an article on unmentionables to get me back on the blog horse. Well, thanks DHS, for just such a push. It is reported that Homeland Security raided a Kansas City store and confiscated several dozen pairs of panties with the Kansas City Royals trademark on them.

OK, several questions: (i) Panties?; (ii) Homeland Security?; and (iii) Why Kansas City and not my Cardinals in the World Series? Oh, and what does this have to do with law and technology? More on that later.

First, Panties? A Kansas City shop had hand drawn the KC logo and a crown and printed them on ladies panties. Apparently, it was too similar to the actual Kansas City logo and this brought down the wrath of Major League Baseball, which manifested itself in a raid by a division of Homeland Security set up to police intellectual property right infringements. In the past this has sometimes been handled on a local basis by interdictions on the part of local or state police on tee shirt sales at concerts or illegal use of music in bars. However, apparently this is now a national security matter.

You may ask if counterfeit drawers are of such importance that it justifies a diversion of resources such as this. I might ask the same thing. DHS has a division set up to police this type of thing, primarily at the behest of the movie industry. It would have made more sense if the panties were Ebola laden or carried the ISIL logo. Anyway, a word to the wise. If panties can be confiscated, it is apparent that software or hardware and bio-medical equipment or compounds, whether carrying a trademark or not, could become subject to this treatment. That's when technology and law intersect and you don't want to be in that collision.

Interfaces ("APIs") Are Subject To Copyright. No, They're Not! Are Too! Courts Continue To Muddy Up The Water.

There are a mere 37 pieces of computer code that are the subject of this face off between the tech titans, Oracle and Google.  We have followed this case since its inception and you can review the history here, here and here.

In the latest installment, Oracle appealed a lower court ruling that held that application programming interfaces ("APIs") were not subject to copyright.  We thought that the issue might be settled.  Not so fast, my friend.  A three judge panel in the United Court of Appeals for the Federal Circuit has reversed and held that such APIs are indeed subject to copyright protection and the only question is whether Google's use is allowed under the "fair use" exception.  The panel remanded the case to the lower court for a determination of the possibility of such fair use.

After reading the very detailed opinion, the main facts to be gleaned are there was 7,000 lines of code involved, there were 37 different interfaces and the opinion is 69 pages in length.  There is much good discussion regarding the application of copyright law to interfaces and the fair use doctrine.  You should read it.  The law the court cites is extensive but some quibble with the application of such law.  Given past performance, the odds are even that the result will change on appeal.