February 24, 2006
RIM Still Running For the Time Being
The first stories are in, and the bottom line is that Judge James R. Spencer did not impose an injunction at this time. According to the New York Times, Judge Spencer said he would rule on damages before he would rule about a shutdown. The Judge is quoted as saying "I am absolutely surprised that you have left this incredibly important and significant decision to the court. I have always thought that this decision, in the end, was a business decision." CNET quotes the judge as saying "In plain words, the case should have been settled, but it hasn't, so I have to deal with that reality."
The hearing lasted about four hours with lawyers for RIM, NTP, and the government making arguments. NTP asked that damages be recalculated to $126 million from the $23 million initially awarded four years ago as well as an injunction that would have shut down RIM's U.S. service. RIM argued against the injunction noting the disruption to government and other essential services. NTP has allowed for government users to be exempt from any injunction, but RIM has always said it was difficult to distinguish between corporate and government users. (What, these things don't have unique identifiers?-ed.)
In the backdrop of this, the U.S. Patent Office issued its final rejection on a second of the five patents that are in dispute. Judge Spencer has said that the parallel proceedings have no effect on his consideration as these rulings are not final. They can go to an administrative appeal and then to the Circuit Court for the Federal Appeals, and possibly the Supreme Court before becoming final. As this process could take years, there is no reason to stay current proceedings until the outcome is final.
Prior to the hearing, NTP ripped into the patent appeal process, accusing RIM of lobbying the Patent Office with speeding up a normally glacier-like reconsideration. NTP pointed to the fact that one of RIM's lobbyists is a former high ranking patent official.
RIM has said that it has a work-around if forced to shut down services using NTP technology, but aside from saying that, no one but RIM knows what it is and how it works. There is no indication as to how painful it would be for company and customer to implement that work-around. Treos anyone?
February 23, 2006
Blackberry Case Coming to a Head
Mark your calendars, as the Blackberry federal court hearing takes place tomorrow. In the backdrop is the US Patent Office giving a final rejection to one of the NTP patents at issue, and the judge rejecting a government request to take into consideration how a Blackberry shutdown would affect the operation of government.
More on this as the news breaks.
Data Theft Defendant Sentenced
The Washington Post is reporting that Scott Levine of Boca Raton, Florida, was sentenced for the theft of 4,789 computer files from Acxiom. That company collects demographic information for large corporations. According to the story, the case involved over 1 billion individual records.
Levine stole records that included names, telephone numbers, street addresses and email addresses. Levine had some access to the Acxiom database as the owner of Snipermail, a company that does mass marketing email. The government said that he had used decryption software to go beyond his authorized access to steal the data.
The judge had previously ordered restitution in the amount of $249,752 but said he would revise the figure after reviewing the presentencing report. The government claims the data is worth $58 million. Levine's lawyer stated that the data was worth only $50,000. One defense witness testified that the data was purchasable on a budget of $50,000 or less.
This is interesting for two reasons. One is that with over 1 billion records at issue, the U.S. population is just under 300 million, which means there is a lot of data collected. The second reason is the statement by the defense witness that this staggering amount of information could be bought for as little as $50,000. That's pocket change for large corporations, and easily within reach of small businesses. Remember the days when Lotus was heavily criticized for attempting to sell a CD-ROM with names and addresses of American households in the late 1980's? The outcry stopped that product, but apparently not the industry. How times have changed.
Levine got 8 years, by the way. The Post story is here.
Microsoft Posts Its Reponse to the EU in Antitrust Case
Microsoft has taken the unusual step of posting its response to the European Union which was filed in Brussels on February 15th. The European Union has said that Microsoft has not been forthcoming with documentation that would allow rivals to connect to Windows servers. Microsoft was to have complied by December 15th, 2005 or face fines up $2.4 million per day. The deadline for a response was extended to February 15th and Microsoft had asked for an additional extension, which was denied.
Microsoft at one time had offered to publish the source code for the parts of Windows Server in question. The EU rejected that offer as akin to giving ingredients without giving the recipe. The EU noted at the time that it never asked Microsoft to provide the source code as part of the antitrust case. Even the monitor approved by both Microsoft and the Commission called Microsoft's documentation less than useful. In the postings, Microsoft published two studies made by independent experts who countered that view, but did not make their names public.
Should the European Commission impose the fine, it would be retroactive to the December 15th date. If fines ran through today, the total would be about $168 million and counting. The original antitrust order is still on appeal.
February 22, 2006
Google Loses Copyright Suit Over Porn Images
Perfect 10, a company that served images of nude women for a fee, sued Google because of its picture search, alleging that Google allowed individuals access to its pictures for free, U.S. District Judge A. Howard Martz agreed with Perfect 10 and said he planned to issue a preliminary injunction against Google forbidding them from displaying Perfect 10 images. Perfect 10 also wanted damages from Google for every web site to which it linked that contained Perfect 10 content. The judge did not buy that argument and distinguished Google from a file-sharing network.
One of the points that led the judge to issue the injunction is that Google's image search was available through telecommunication options such as cell phones. Perfect 10 had licensed content for cell phones with Fonestarz media in the U.K. On that basis, what might have been fair use in some contexts clearly became a replacement for a paid service.
Major P2P Server Shut Down in Europe
Razorback 2, the biggest and very popular server of the eDonkey peer to peer network was shut down according to the Motion Picture Association. The server transferred copyrighted movies and music between users. Swiss police arrested the operator while Belgian police on a magistrate's order seized the server at an Internet hosting center near Brussels.
How Many Versions of Vista Are There?
Microsoft posted a page at its web site (since removed) that listed the various editions of Windows Vista to be released. Microsoft has since stated that the page was premature and the line-up incomplete.
The editions listed at the time included Windows Starter 2007, Windows Vista Enterprise, Windows Vista Home Basic. Windows Vista Home Premium, Windows Vista Ultimate, Windows Vista Business, Windows Visa Home Basic N, and Windows Vista Business N. The latter two are without Media Player to satisfy requirements in the European Union. No pricing was announced.
PC Pro has more details.
February 21, 2006
Federal Court Dismisses Laptop Security Case
A case that has received little attention may have some fairly large implications for the banking industry. Stacey Lawton Guin was a customer of Brazos Higher Education Service, a student loan provider. An employee of Brazos, John Wright, worked from home analyzing loan portfolios. Brazos supplied Wright with a laptop that contained personal information about Brazos customers. At some point, Wright's home was burglarized and the laptop was stolen. Despite attempts to track and recover the computer, it remains lost. Brazos notified its customers about the breach in privacy based on the lost data.
Guin sued Brazos on the grounds that under the Gramm-Leach-Bliley Act, the company should have routinely encrypted the data as a privacy protection. U.S. District Judge Richard Kyle for the District of Minnesota granted summary judgment in favor of Brazos. Judge Kyle noted that the law does not require encryption, and that Wright's house was in a relatively low crime area. He also said that the act does not prohibit anyone from working in a home office with sensitive data.
Google's Other China Challenge
Google is under attack from Chinese sources as not having the proper Internet Content Provider (ICP)license to to business in China through its Google.cn web site. The Beijing News noted that the Ministry of Information Industry became concerned enough to investigate, and the China Business Times said outright that Google did not have the license.
Google, for its part, responded that the license is in order and that it's held by a partner, Ganji.com. Under Chinese law, foreign investors are prohibited from obtaining such a license. Many other U.S. companies use similar partnerships to do business.
Sci-Tech Today has the story.
February 20, 2006
Kazaa Appeal Goes Forward Down Under
Sharman Networks, operators of the Kazaa service, began their appeal this week of a September ruling in Australian Federal Court that found them guilty of encouraging users to infringe on copyrights. The Sydney Morning Herald is reporting that Sharman has cut off Kazaa access to all Australian users pending the appeal. Music Industry Piracy Investigations (MIPI) is also appealing five points they lost against Sharman in the original hearing. The full bench of the Federal Court has set aside five days to hear the appeals.
Homeland Secrity Department Threatens to Ban Rootkits
Since Sony's DRM was found to include rootkit technology, the firestorm erupted as to the appropriateness of using this tool to protect content. After all, this is the invention, more or less, of hackers. Rootkits conceal files from the operating system and hence spyware and virus detection software. Virus writers took advantage of Sony's blunder once the mechanics of their DRM scheme became public. Sony, of course, was forced by lawsuits and bad publicity to remove the rootkit technology from their products and the recall existing discs that contained the installation software. That episode is over, but the rootkit dilemma remains.
Now comes the Department of Homeland Security suggesting that the government could ban the use of rootkits if industry continues to use them. HHS is concerned that rootkit technology could leave consumer machines vulnerable to attack. The potential to increase identity theft and disrupt the online economy is pretty high. According to various news stories, HHS officials met with Sony and blasted them for using this software scheme. No legislation is introduced yet. That could change if industry, particularly the entertainment industry, doesn't get the message.
February 19, 2006
The Litigation Implications of the Google Subpoena
The latest action in the government's attempt to uphold the Child Online Protection Act (COPA) comes in a filing by the American Civil Liberties Union in the Northern District of California. The ACLU is fighting the government's attempts to get massive amounts of data from Google as it has from Yahoo!, AOL, and Microsoft. The government seeks the data to introduce statistical information that would show that web filters are not as effective as COPA would be in keeping harmful material away from children.
The ACLU is the plaintiff in the main suit being tried in Philadelphia. There, the courts have granted and upheld an injunction forbidding the government from enforcing the law. The Supreme Court also upheld the injunction but allowed that the issue should go to trial as technology has changed since the lower court faced the issue.
The brief is divided into two sections. The first challenges the government request by saying that the government has not shown how the information would help their case, or how the material is to by analyzed. The second part says that if the motion to compel is granted, then the ACLU will be back to seek even more detailed discovery such as information as to how the search engine works, how many urls are in the database, and other information in order to place any government assertions in context. The organization stresses that it has no desire to seek this information from Google unless the government relies on this information.
Although the brief never mentioned this, there is the prospect that if the government uses their information booty from the other three search engines, you can believe that the ACLU will be serving subpoenas to get the same contextual information. This could lead to some interesting business consequences, most of them likely unintended when this whole litigation started.