IP & Technology Blog

Pay Attention to the Expiration Date

In various types of technology contracts, you often have change orders or separate scope of work agreements (“SOW”), which ultimately refer to or amend some sort of Master Service Agreement (“MSA”). These documents are typically “contracts” however they are often limited in scope and detail as they generally just pertain to the discreet, specific project at hand. Much of the legal verbiage regarding the actual rights and obligations of the parties to the contract are contained in the MSA.

Are End-User Agreements for Tangible Products on the Horizon?

Recently, Google received substantial press related to the Terms of Service associated with its new “Google Glass” product offering. For the uninitiated, Google Glass is a $1,500 fashion-challenged eyeglass frame that incorporates a tiny, electronic display screen, visible only to the wearer, beaming texts, search results, maps, and assorted other digital content straight to that wearer’s right eyeball. Google is convinced that it is the next New Thing, so much so that the Terms of Service all eager, early Glass adopters must accept incorporate what may be the next New Thing in tangible product sales – restrictive covenants.

Paying Someone to Take Your Property

When companies contract out to vendors for services, it is commonplace for the vendor to provide at least an initial draft of the agreement under which the services are to be performed. In most cases, these agreements are slanted to protect the interests of the vendor. This often creates a problem when the services contracted for are artistic or creative in nature (including software development).

Five Key Provisions to Consider When Negotiating Software Licenses

The form and structure of software licenses and use agreements have changed substantially over the past ten years. From the advent of estate or enterprise-based licensing models to software-as-a-service (SaaS), licenses and agreements come in a variety of forms to address a wide range of circumstances. Although the terms and forms change for these agreements, the following key provisions remain more-or-less consistent across all types:

Technical Challenges Associated with “Hosting” Restrictions in License Agreements

Most software publishers put limits on (or under some circumstances simply prohibit) the use of their products in connection with solutions delivered over the Internet to third-party end users. The license terms imposing such restrictions often can be difficult to interpret (as discussed previously). However, even in cases where the controlling language is relatively clear, it can remain difficult for CIOs to determine how to accurately and correctly track "hosted" deployments and "non-hosted" deployments for licensing purposes.

IT Procurement Negotiations – The Importance of Setting Expectations

Negotiation of product and services contracts should include more than just the business terms, but many times the "standard terms and conditions" or "boilerplate" is glossed over by the vendor and ignored by the procurement team. For IT-related products and services, it is the language in these "boilerplate" provisions that often control which party shoulders the principal risks associated with the transaction-particularly the data privacy and security, intellectual property infringement, and confidentiality risks-so negotiation of all of the language contained in the vendor's contracts is critical.

Top Five Important Provisions In Technology Vendor Agreements

Although technology spending has made up a significant chunk of company’s yearly budgets for some time, many organizations have been slow to develop the expertise necessary to review and negotiate the associated technology agreements—and I’m talking about both the customers and the vendors. Many of these agreements appear to be based on outdated templates that were customized by someone with an incomplete understanding of the unique risks associated with the technology, the industry trends with respect to specific provisions, or the law.

Tips to Improve the Enforceability of Click-Wrap License Agreements

A very significant portion of Internet commerce today depends on the use and enforceability of “click-wrap” license and service agreements – legal terms that typically are presented to a customer during the service-ordering or software-installation process and that usually do not allow for any negotiation or modifications by the customer. Click-wrap agreements represent the evolution of “shrink-wrap” agreements, which for many years have been attached to the packaging of software products purchased in stores. As with shrink-wrap terms, the use of click-wrap agreements is not surprising, given the fact that most consumers of software or other products and services delivered over the Internet do not want or expect to sign more traditional contracts in order to use those products and services.

Virtualization Rights Under The Enrollment For Core Infrastructure

We have previously examined the Enrollment for Core Infrastructure (ECI) program, a relatively recent “add-on” under the Microsoft Enterprise Agreement. ECI provides for volume licensing of Core Infrastructure Server Suite (CIS Suite), a server operating systems and management software bundle. ECI offers three flavors of the CIS on a per-processor basis: Standard, Enterprise, and Datacenter. The main benefit of the ECI aside from its potential costs savings is the simplification of server licensing for virtualization.

Written SPLA Licensing Procedures Can Be Helpful Assets During an Audit

The Microsoft Services Provider License Agreement (SPLA), together with the Business Agreement (MBA) or Businesses and Services Agreement (MBSA) to which it almost always is attached, is a complex set of legal documents that demand careful consideration in order to avoid unnecessary licensing exposure. However, many businesses that license Microsoft products under a SPLA (typically in order to provide hosted software services to their customers over the Internet) often do not pay adequate attention to all of the restrictions and obligations contained in those agreements. All too often, in the event of an audit, such past inattention to these issues can result in substantial penalties for non-compliance.

Enterprise Software Licensing vs. Self-Hosting – Top Three Things to Remember

Most business managers looking to license software in a large organization are interested in two key goals: cost reduction and flexibility. Cost reduction is an obvious goal. Flexibility is another matter, however. Retail licensing for large enterprises usually is a non-starter – retail licenses generally are more expensive per seat, are more difficult to track against software installations, and require a company to accurately forecast its software needs into the future, with a large up-front capital expenditure. Therefore, at a certain size, many companies start looking for alternatives, and those alternatives (for Microsoft products, at least) often take the form of either an Enterprise Agreement (EA) or a "self-hosting" solution under a Services Provider License Agreement (SPLA). Here are some of the most important things to keep in mind when trying to decide between them:

Pros and Cons of Auto-Entrolling New Affiliates Under an Enterprise Agreement

The basics of Microsoft Enterprise Agreements have been covered here many times before, but in order to understand the subject of post-EA acquisitions, it is helpful to revisit the most fundamental of EA basics: under the Microsoft EA, an organization is required to license a specific desktop bundle across all Qualified Users or Desktops in the Enterprise. So, during the term of an EA, the Enrolled Affiliate is required to pay for a license for all new Qualified Desktops or Users added to the Enterprise. For some companies, increases in Qualified Users or Desktops are due simply to workforce growth. However, for enterprise-level organizations, many increases in Qualified Users or Desktops may come from business-unit or entity acquisitions.

SPLA in a Supply Chain – Three Important Concerns to Keep in Mind

Many businesses use the rights granted under a Services Provider License Agreement (SPLA) to deliver hosted software solutions or, optionally, rental hardware to their customers. Many other businesses also would like to use a base licensing agreement with Microsoft – like a SPLA – in order to equip resellers or other business partners in a supply chain to deliver hosted solutions or other services to customers with whom those partners have the primary business relationship. SPLA can work under those circumstances, but there are a few very important points to keep in mind:

Cost-Effective SQL Server Client Licensing Can Be A Difficult Target To Hit

Most business owners are familiar with the “traditional” server-plus-client licensing scheme for many Microsoft server software products, such as Windows Server operating systems, Exchange messaging software and SQL Server database software. That is, you purchase one license permitting the installation and operation of the software on a server, and then, in addition, you purchase client access licenses (CALs) in sufficient quantity to allow devices or users on the network to access and use that software. Many business owners also are familiar with the processor-based licensing option for SQL Server, where you purchase a (much more expensive) license for each physical processor running on the server where the software is installed, but then acquire the right to have an unlimited number of users or devices access and use the software. However, determining when it makes sense to move from server + CAL to processor-based licensing is no easy trick, especially as IT environments start increasing in size.

The Risks of IBM Sub-Capacity Licensing

I am an intellectual property attorney specializing in defending end-users in software audit matters including those initiated by IBM. We get hired by targets of IBM audits to facilitate the flow of information and protect the client's interest in the audit process. The most significant compliance claims we have encountered arise under Virtualization Capacity (Sub-Capacity) License terms in IBM's Passport Advantage Licensing offering. According to IBM, Sub-Capacity licensing "allows flexible software licensing using advanced virtualization capabilities such as shared processor pools, micro-partitioning, virtual machines and dynamic reallocation of resources." Sub Capacity Licensing is very attractive in data center environments because "it enables customers to license software for only the processor core capacity available to the partition hosting the IBM software." Although very attractive, Sub-Capacity licensing can create very significant legal liability under two common fact patterns.

SQL Server Licensing Perils: Free and Paid Components

Correct licensing for Microsoft SQL Server database software can be a complex undertaking, and in light of the prices charged for certain kinds of SQL Server licenses, it also is an undertaking where mistakes can be extremely costly.

Avoid Risks Associated with Software Licensed Through ISVs

Independent software vendors (ISVs) constitute a diverse group of businesses whose core business model typically consists of utilizing third-party software infrastructure and development platforms (such as Microsoft SQL Server or IBM WebSphere Application Server) to create targeted solutions for their customers. ISVs have become a fixture in today’s marketplace for information technology solutions, and most large software companies have programs and licensing models specifically intended for use by ISVs. However, while the return on investment for ISV-delivered solutions is very high in many cases, it is critical for potential ISV customers to be aware of opportunities for legal exposure that can arise when one company’s software products are licensed through in independent vendor.

Nokia Launches Second Suit Against Apple for Patent Infringement

Nokia announced on March 29 that it was filing a new round of patent-infringement complaints against Apple for allegedly infringing on patents incorporated in the majority of Apple's cellular phones, portable music players, tablets, and computers. These new complaints follow a string of similar actions filed against Apple in U.S. federal court and in the United States International Trade Commission related to dozens of patents held by Nokia for technologies use in mobile communications devices. It also follows a March 25 ruling by the ITC that Apple had not infringed other patents in claims previously brought to its attention. According to Keli Johnson, an attorney with Scott & Scott, LLP: "While it seems to be busy throwing every available claim at the wall to see what sticks, it is important to keep in mind the fact that the stakes here are very high. Apple and Nokia currently are closely matched in the marketplace, and if Nokia successfully proves patent infringement and wins an injunction preventing Apple from using the technologies at issue, Nokia may see significantly increased market share as a result of the competitive edge." For more information, please contact Ms. Johnson at 800-596-6176 or KJohnson@scottandscottllp.com.

Judge Grants Sony Right to Subpoena IP Addresses

A federal magistrate for the Northern District of California granted Sony the right to subpoena information from Google, YouTube, and Twitter consisting of the IP addresses of users who visited web pages operated by an alleged hacker of Sony's PlayStation 3 gaming console. Sony claims that George Hotz, a 21 year-old New Jersey resident, has distributed instructions and other files that allow users to gain control over, or jailbreak, their PlayStation 3 consoles. Sony is claiming that the distribution of these materials constitutes a violation of the Digital Millennium Copyright Act. "The subpoenas permitting Sony to collect the account names and IP addresses of every individual that accessed Hotz's jailbreaking files and instructions may raise the eyebrows of many of us concerned with Internet privacy issues, but it is important to understand that this information is to be used by Sony solely to show that Hotz distributed the instructions and that venue for the lawsuit is proper in the court where it was filed," says Andrew Martin, technology and new media attorney with Scott & Scott, LLP. "Sony and the defendant entered into a confidentiality agreement regarding the subpoenas, and that agreement is intended to prevent Sony from using any of the subpoenaed information for any other purposes, such as pursuing legal action against the downloaders." For more information, contact Mr. Martin at 800-596-6176 or amartin@scottandscottllp.com.

New Guidance for Trademark Infringement Based on Search Keywords

On March 8, the Ninth Circuit Court of Appeals issued new guidance for cases involving claims of trademark infringement based on the use of registered marks as Internet search keywords. In its opinion (a copy of which is available here), the Ninth Circuit held that trial courts must evaluate such disputes holistically and not based on any rigid set of factors. Earlier in the case, the trial court had applied the so-called "Internet troika" - a set of three analytical factors including (1) the similarity of the competing marks at issue, (2) the relatedness of the competing goods or services at issue, and (3) the competing parties' simultaneous use of the Web as a marketing channel - to find that the defendant's use of the plaintiff's marks as paid search keywords constituted trademark infringement. The Ninth Circuit specifically rejected that approach, holding instead that the appropriate analytical factors will depend on the facts and context of each case. "This is the latest in a series of appellate decisions reflecting the courts' attempts to provide legal guidance on a very dynamic kind of trademark dispute," says Christopher Barnett, a trademark attorney with Scott & Scott, LLP. "Internet marketing in general - and search engine optimization in particular - can carry with it a diverse set of legal risks, the scope of which may be difficult to predict, as this case demonstrates." For more information, please contact Mr. Barnett at 800-596-6176 or cbarnett@scottandscottllp.com.

FTC Report Raises Concerns Regarding 'Patent Trolls'

In a 300-page report issued on March 7, the FTC has undertaken the task of trying to evaluate the effects of patent-enforcement remedies on the IP marketplace, especially the effects of so-called "patent trolls" - companies whose business models center on purchasing patents and then enforcing them against infringers. The report (a copy of which is available here) is based on information gathered during a series of hearings that commenced in December 2008, and it includes a number of recommendations intended to align patent-protection mechanisms with the public's interest in innovation and competition. Those recommendations include:

Senate Creates New Subcommittee on Privacy and Technology

On February 14, Senate Judiciary Committee Chairman Patrick Leahy announced the creation of a new subcommittee called Privacy, Technology and the Law, which will be chaired by Senator Al Franken. Among other things, the committee will oversee laws and policies that govern the collection, protection, use and dissemination of commercial information by the private sector. During the announcement, Senator Franken spoke of a desire to ensure Americans can "reap the rewards of new technologies while also protecting Americans' right to privacy." "Privacy legislation and litigation will continue to lead legal news for 2011," says Andrew Martin, a technology and new media attorney with Scott & Scott, LLP. "This new subcommittee is the latest in a series of reactionary measures related to privacy concerns arising as a result of the recent explosion in social media use. It is high time for careful consideration of online privacy issues." For more information, please contact Mr. Martin at 800-596-6176 or amartin@scottandscottllp.com.

Motorola Hit With Trademark Lawsuit on Launch of Xoom

The day before the much-hyped, February 24 launch of its new Xoom tablet, Motorola was sued for trademark infringement by Xoom Corporation - an online payment processor - in the U.S. District Court for the Northern District of California. A copy of the complaint is available here. Xoom is seeking a permanent injunction against Motorola's alleged infringement of the XOOM® trademark along with damages (including treble damages) allegedly incurred as a result of Motorola's activities. "This case appears to involve a calculated risk by Motorola," says Christopher Barnett, a trademark attorney with Scott & Scott, LLP. "Even if it was previously unaware of Xoom's business, Motorola likely knew about Xoom's trademark from an early stage (Xoom owns the www.xoom.com domain name, for example). When Motorola applied to register its XOOM™ trademark with the USPTO, none of Xoom's registrations were identified as obstacles to registration. However, Motorola nevertheless must have been expecting a challenge from Xoom in the form of an opposition proceeding or a lawsuit. It appears to believe that there is sufficient dissimilarity between the products and services associated with the competing marks that its use of the term will be allowed to move forward." For more information, please contact Mr. Barnett at 800-596-6176 or cbarnett@scottandscottllp.com.

University of Texas Sues Car Wash for Trademark Infringement

In a complaint filed on February 16, the Board of Regents of the University of Texas have alleged that an Austin-area car wash business' replica of the iconic UT tower constitutes an infringement of UT's rights in three trademarks consisting of various depictions of the tower. (A copy of the complaint, with pictures, is available here.) The car wash owner reportedly spent approximately $3 million designing and building his 60-foot replica of the famous 300-foot tower, but he apparently did not expect that undertaking would implicate intellectual property rights held by UT. "This case presents a good example of how trademark disputes can arise from unexpected sources," says Christopher Barnett, a trademark attorney with Scott & Scott, LLP. "High-value projects incorporating pre-existing works in any form need to be accompanied by some measure of due diligence regarding third-party rights. However, UT's likelihood-of-confusion claims seem to be somewhat misplaced, in light of the fact that it is doubtful the defendant is offering educational services at the car wash. It will be interesting to see if the university amends its complaint to emphasize a trademark-dilution theory of liability. For more information, please contact Mr. Barnett at 800-596-6176 or cbarnett@scottandscottllp.com.

Tech Companies Concerned Over Washington State Software Legislation

On April 4, the Washington state legislature passed a bill making it a violation of the state’s unfair competition laws for a business to sell products in Washington “while using stolen or misappropriated information technology in its business operations,” provided that the business first receives notice of the alleged misappropriation. The law applies regardless of whether the theft or misappropriation takes place inside the state or even inside the USA – if a company based in China engages in software piracy in China, the Washington law still affects the sale of goods inside the state.

Facebook Promotions May Be Easy to Develop, but They Can Create Legal Liability

In December of 2010, Facebook relaxed the rules on creating and implementing promotions designed to drive user “Likes” to company Pages. It did so in part due to the marketing industry’s recognition that the value for each Like to a company Facebook page can be calculated in real dollars. For example, Sycapse, a social media management company, conducted a study that calculated the average value of a Facebook Like to be over $70 of extra spending by each user on the company’s goods or services. To capitalize on this interest in the platform, Facebook eased the process to set up a promotion from a technical perspective and no longer requires companies to obtain specific approval from Facebook for each promotion run on its platform. Despite this lowered bar to entry, companies and social media managers should take note that although Facebook relaxed its internal rules, each promotion still should be evaluated carefully in light of various state and federal laws that may be implicated when running this type of promotion.

Limewire Copyright-Litigation Woes Continue

In 2010, music-sharing website Limewire shut down amid allegations that it facilitated copyright infringement. Subsequently, a lawsuit brought by more than 30 music publishers was filed and settled under confidential terms. However, Limewire is still facing a lawsuit brought by 13 record companies, including Atlantic, Elektra, Interscope, Motown, Sony BMG, Virgin, and Warner Brothers, which is set for trial in May. (Music publishers and recording companies are able to pursue separate copyright-infringement claims based on the fact that they hold different rights -- the copyright in the composition for the former and the copyright in the actual sound recording for the latter.)

New Media Risks and Brand Management

All companies understand the value of building and protecting a brand, but most do a poor job of protecting it against the risks posed by the ever-increasing power and influence of new media. Three of the most prevalent ways that new media can be used to tarnish a company’s brand are: 1) establishment of gripe sites; 2) social media use by current employees; and 3) social media use by former employees. Gripe sites are websites erected specifically to complain about or criticize a brand, and typically use URL addresses similar to the brand they are criticizing. Once a gripe site is established, organizations often encounter what may be insurmountable difficulty in shutting the sites down. For employees, both current and former, carefully drafted policies and employment agreements may be helpful in mitigating new-media risks. According to Andrew Martin, an attorney with Scott & Scott, LLP: “Instead of attacking gripe sites after the fact, the better option often is to try to register gripe-oriented domain names to stop others from setting up the negative sites. In addition, organizations should implement acceptable Internet use policies that curb new-media abuses by current employees, and they also should consider the possibility of post-termination incentives to prevent former employees from posting harmful content to the web.” For more information on how to protect your company from online brand attacks, please contact Mr. Martin at 800-596-6176 or amartin@scottandscottllp.com.

Patent Reform Approved by Senate Judiciary Committee

On February 3, the Senate Judiciary Committee voted to approve S. 23, the Patent Reform Act of 2011. The bill would include a number of provisions to address the review of patents after they are granted by the U.S. Patent & Trademark Office. The bill does not include any new law related to “business method patents,” which the U.S. Supreme Court refused to invalidate in its 2010 opinion in the Bilski v. Kappos case. However, senators on both sides of the aisle on the committee have voiced strong objections to that kind of patent and have indicated that they are ready to introduce either amendments or new legislation to curb (or prohibit) the availability of such patents. The House has yet to introduce complementary patent-reform legislation. “IP stakeholders and practitioners have been waiting for years for reforms to the nation’s patent laws,” says Christopher Barnett, an attorney with Scott & Scott, LLP. “The patent prosecution process is notoriously slow and cumbersome, and the system is weighted down with claims related to patents that arguably do not relate to the kinds of technologies that should be considered patentable. It will be very interesting to see if both houses of Congress can manage to agree on meaningful legislation that the President is willing to sign.” For more information, please contact Mr. Barnett at 800-596-6178 or cbarnett@scottandscottllp.com.

Ford Sues Ferrari over F-150® Trademark

Ford Motor Company has filed a trademark-infringement lawsuit against Ferrari North America based on the latter’s promotion of the “F150,” a new Formula 1 race car. In its February 9 complaint, Ford claims that Ferrari’s use of F150 is likely to dilute its well-known F-150® trademark, which it uses in connection with its line of light trucks, and to cause confusion regarding the source of Ferrari’s products. A copy of the complaint is available here. Ferrari has responded with a February 10 press release, in which it confirms that it has no intention of using the F150 mark for any production vehicle and that, going forward, it will refer to the car only using its full name: “Ferrari F150th Italia.” “Ford certainly has an obligation to protect its valuable brands, but litigation here is premature,” says Christopher Barnett, a trademark attorney with Scott & Scott, LLP. “Ford’s claims of dilution and, especially, likelihood of confusion seem to be weak. Especially in light of Ferrari’s apparent willingness to compromise with regard to future references to the car, it would have made more sense to seek a mutually beneficial agreement, such as one allowing Ford to use the Formula 1 reference to the benefit of its truck line. Then again, Ferrari is owned by Fiat – a controlling shareholder of Chrysler – which may make that sort of agreement problematic.” For more information, please contact Mr. Barnett at 800-596-6176 or cbarnett@scottandscottllp.com.

Considering an Asset Purchase? Due Diligence is More than Reviewing a Checklist.

Every savvy business owner understands the importance of due diligence when engaging in an M&A transaction, but the Third Circuit issued a ruling that serves to underscore the point that due diligence must be accompanied by a thoughtful risk assessment exercise. On January 21st, 2011, the Third Circuit ruled that a buyer who purchases a seller’s assets may be liable for the seller’s late contributions to certain benefit plans. Einhorn v. M.L. Ruberton Construction Co., No. 09-4204 (3d. Cir. 2011). The court reasoned that interest in federal labor law policy is more important than common-law, “successor-liability” doctrines that normally shield buyers from a seller’s liabilities (unless the buyer is merely a re-organization of the seller).

Unauthorized Employee Use of Company Information Under the Computer Fraud and Abuse Act

In 1986, Congress passed the Computer Fraud and Abuse Act, or CFAA, which established criminal liabilities for unauthorized access to information stored on a protected computer. Since that time, the CFAA has been amended to keep up with new privacy concerns and, in some cases, civil liability has been attached. The typical CFAA claim is asserted by a party against an unrelated entity accused of stealing computer files for personal gain. However, in cases where a company is seeking to prosecute one of its own employees for accessing protected files, the meaning of the phrase “without authorization,” an element of any CFAA claim, is hotly contested.

E-discovery Risks in Social Media Use for Companies

Many companies today have their own company Facebook Pages, Twitter accounts or blogs. It is estimated that 4 out of 5 companies with more than 100 employees will utilize social media platforms to communicate with their current customers and to market to potential ones. These companies understand the value of participating in the online marketplace. What is not widely understood, however, is that companies are obligated to store and maintain social media communications as “electronically stored information” or ESI in the same way as they are obligated to store e-mail or written communications. Courts require companies to have document retention policies in place to allow the companies to access and produce such ESI during the discovery phase in the case of litigation.

Federal Judge Upholds USPTO's Suspension of Lawyer

The United States District Court for the District of Columbia affirmed on January 4 the U.S. Patent and Trademark Office's five-year suspension of an attorney. The USPTO excluded attorney John Halvonik of Rockville, Maryland from practicing before the USPTO for five years on a finding that Halvonik violated a number of provisions of the USPTO's Code of Professional Responsibility, which includes disciplinary rules governing conduct of attorneys practicing before the Office. The USPTO found that Halvonik committed multiple willful and egregious acts of professional misconduct in violation of the Code, including commingling client and personal funds, failing to promptly refund client fees that had not been earned, and neglecting to prosecute client matters in a timely manner. "Attorneys must be careful to abide by the rules of professional conduct of their state bar and any agency or office before which they practice," says Julie Machal-Fulks, partner at Scott & Scott, LLP. "The USPTO received complaints about Halvonik and thereafter concluded he had engaged in misconduct." For more information, please contact Ms. Machal-Fulks at 800-596-6176 or jfulks@scottandscottllp.com.

USPTO Announces Discussion Forum for Rules Comments

The U.S. Patent & Trademark Office recently announced the implementation of new, online discussion tools designed to give IP owners and practitioners an opportunity to provide public comment on how the USPTO can update and improve the Manual of Patent Examining Procedure (MPEP) and Trademark Manual of Examining Procedure (TMEP). The Office also recently announced that it would be maintaining an index of all electronic forms available through the Trademark Electronic Application System (TEAS). Previously, in order to determine the forms available online, it was necessary to drill down through several categories of filings. "The USPTO continues to demonstrate a commitment to transparency and to minimization of bureaucratic inefficiency," says Christopher Barnett, a trademark attorney with Scott & Scott, LLP. "Practitioners should find both of these new resources to be useful tools, and I expect that each should help to facilitate positive developments for the prosecution of registrations at the USPTO." For more information, please contact Mr. Barnett at 800-596-6176, or at cbarnett@scottandscottllp.com.

Intel and Nvidia Resolve Patent Dispute With License Agreement

A patent infringement battle between Intel and Nvidia started in 2009 when the chip maker sued Nvidia regarding a chipset license agreement between the two companies that allegedly was not valid for Intel's then-current and future generation CPUs with integrated memory controllers. Nvidia responded, alleging that the suit was part of Intel's plan to push competitors out of the market. The two companies have resolved their dispute with a $1.5 billion software license agreement in which each party will license some of its technology to the other. Intel and Nvidia will gain access to parts of each others' patent portfolios (excluding Intel x86 designs and flash memory). "Software license agreements are excellent tools for helping companies with valuable software products resolve a dispute and find a mutually beneficial arrangement," says Scott & Scott, LLP managing partner Robert Scott. "License agreements need to be carefully negotiated documents in order to allow companies to leverage their intellectual property and gain access to technology previously out of reach or deemed too costly to develop independently." For more information, please contact Mr. Scott at 800-596-6176 or rjscott@scottandscottllp.com.

Department of Justice May Block Google Acquisition of ITA

The Justice Department is considering anti-trust and anti-competition litigation against Google following its deal to acquire ITA Software Inc. ITA powers airline booking web sites, such as Kayak.com, Hotwire.com, American Airlines, and Continental Airlines. Although no formal decision has been made to challenge this deal, some critics argue that it effectively would allow Google to control the online travel industry. "Google needs to demonstrate that this acquisition will not give it an unfair competitive advantage over its rivals," says Keli Johnson, an attorney at Scott & Scott, LLP. "If the Justice Department pursues anti-trust litigation, Google may not be allowed to acquire ITA." For more information, please contact Ms. Johnson at 800-596-6176 or KJohnson@scottandscottllp.com.

Working On A License Agreement? Don’t Skimp On The License.

If you are working on a license agreement, don’t forget to carefully define what is and is not included within the scope of the license. “Scope creep” has the potential to contaminate the parties’ understanding of what the license includes and to damage the parties’ relationship. License agreements almost always include provisions to protect the parties, to provide for indemnity, to define appropriate limitations of liability, to set the extent of any warranties, and to set rules and effects of termination, but the license provision itself often receives inadequate attention.

Match.com Sued in Potential Class Action Lawsuit

On December 30, 2010 Dallas-based Match.com was sued in the U.S. District Court for the Northern District of Texas by a group of individual plaintiffs seeking class-action certification. In the complaint, the plaintiffs allege breach of contract and negligent misrepresentation against Match.com based on their claims that the dating website contains “thousands of fake and fraudulent profiles” and that some of those profiles were “placed by third-parties for illegitimate and unlawful purposes.” The complaint alleges that Match.com “makes little to no effort to vet, police, or remove these profiles and thereby permits, condones, and acquiesces in their posting.”

NLRB Complaint is a Warning to Companies Policing Social Media Use

Early this month, the National Labor Relations Board (NLRB) issued a press release regarding a complaint issued by the Board’s Hartford regional office against a company that terminated an employee who “posted negative remarks about her supervisor on her Facebook page.” The NLRB contends that, among other things, the company’s Internet use policy contained provisions prohibiting employees from engaging in protected concerted activity—a violation of Sections 7 and 8(a)(1) of the National Labor Relations Act (NLRA).

Corporations Increasingly Confronting Social Media Concerns

No one questions the prevalence and increasing reliance on social media from a corporate perspective. Earlier this year, PR firm Burson-Marsteller released a study of 100 of the top Fortune 500 companies and found that upwards of 75% of the companies use blogs, YouTube, Facebook or Twitter to communicate with their clients or stakeholders. Personal use of social media sites continues to rise as well, with the Pew Internet & American Life Project finding social networking use by users 18-24 at 86%, while use by users 50-64 at a surprising 42%. Along with this increased use come rising concerns of privacy issues on social media sites. One has to look no further than two of the Internet’s behemoths, Facebook and Google, to understand the privacy risks associated with social media.

DOJ Asked to Investigate Oracle’s Hardware Maintenance Policies

Many businesses that partner with Oracle to resell its server hardware or to host software solutions built on Oracle platforms are familiar with that company’s sometimes complex licensing rules. Many companies also are familiar with the fact that “complexity,” as applied to those rules, often could be replaced by “unreasonable” or even “draconian.” One industry group recently fired what could be the opening salvo against Oracle in an effort to attack some of those rules as being anticompetitive and in violation of U.S. antitrust law.

BlueCross BlueShield Hit with Price-Fixing Lawsuit

On October 29, 2010, health insurance giant BlueCross BlueShield’s Michigan unit was sued for illegal price-fixing under the Sherman Act by Michigan plaintiffs seeking class-action certification. A copy of the complaint is available here. In their complaint, the plaintiffs allege that BCBS forced hospitals to include “most favored nation” or “MFN” clauses in their provider contracts, under which the hospitals allegedly agreed to charge other commercial insurers either at least as much as – or more than – they charged BCBS for the same services, thereby giving BCBS a competitive advantage in the marketplace. BCBS Michigan also is facing an antitrust lawsuit filed by the U.S. Department of Justice based on essentially the same set of facts.

Buying and Selling Software on eBay is Risky Business

A recent 9th Circuit ruling overrules a series of trial court results from the U.S. District Court for the Western District of Washington and reiterates the dangers of buying and selling software on eBay and other resale websites. Typically, the “first-sale doctrine” provides that the exclusive right of distribution granted to the owner of a copyrighted work extends only to the first sale of the work. Once the work has been sold, the new owner may resell the work without fear of copyright infringement. In addition, the “essential-step” defense provides that the owner of a copy of software does not infringe copyrights if the new copy is created as an essential step in using the software on a computer (for example, when copying software to a computer’s memory). However, in Vernor v. Autodesk Inc., 2010 WL 3516435 (9th Cir. Sept. 10, 2010), the court ruled that the first-sale doctrine and essential-step defense do not apply to software that is merely licensed rather than sold.

Using Social Networking Sites in Commercial or Legal Contexts Can Be Hazardous

Social networking web sites have become an emerging conduit for small companies to recruit and conduct business. However, while some companies find this to be a successful means to expand business opportunities, others, such as Mark One Financial, have discovered that use of social networking for some purposes carries risks. Mark One attempted to collect debt from a Florida individual who had fallen behind on auto payments by contacting her friends and family members on Facebook. It is now facing a lawsuit for abuse and harassing attempts to collect debt, including a request for an injunction against using Facebook as a means to contact its clients.

Considering the Cloud? Don’t Overlook the SLA

Listening to a discussion about “cloud computing” may make listeners’ ears cringe because of a sensitivity brought on by the unending cloud media hype, but computing in the cloud soon will be as mainstream as e-mail (coincidentally, one of the first successful cloud offerings). The hype is fueled by pro-cloud commentators, vehemently promoting the cloud panacea, battling it out with cloud naysayers who warn that a move to the cloud is fraught with too much risk for serious consideration. I think both sides are right. An investment in the cloud can yield a tangible cost savings on upfront set-up and ongoing maintenance costs for companies. Additionally, the on-demand aspect of cloud architecture means that companies quickly can adapt to opportunities for growth and can tighten their belts when demand for their services and products shrinks. But cloud detractors are not mere panic mongers—there is significant risk lurking in the cloud. Happily, most companies can have it both ways by focusing on a document, frequently overlooked, that is a shield against many cloud-based risks—the Service Level Agreement or “SLA”.

Texas Attorney General Investigating Google

The Texas Attorney General’s Office is investigating whether Google violated antitrust laws with its search rank methods. The inquiry reportedly focuses on whether and to what extent Google manipulates search results to place certain links closer to the top of the results list in order to stifle competition. A good search result ranking often translates into instant commercial success for many businesses while a lower ranking may contribute to a business’ failure.

Lawsuits Against Gripe Sites Can Backfire

Web sites catering to online reviews of businesses – including sites dedicated to reviewing (some might say attacking) only one business – have created public relations nightmares for many businesses. In some cases, the targeted businesses perceive the content of the gripe sites to be defamatory or infringing of the target’s intellectual property rights. However, while it may tempting to threaten legal action against these sites, companies are learning that such action may cost more than it achieves and may risk further bad publicity as a result of so-called oppressive prosecution. A good example is the recent case of Career Agents Network, Inc. v. CareerAgentsNetwork.Biz.

Cloud Computing Vendors Attempt to Avoid Liability

Both state and federal governments are seeking ways to ensure citizens’ personal information is secure and remains private, but the laws vary wildly and are sometimes frustratingly complex. For businesses, it is not always clear which laws, if any, the business is subject to. Once applicability of the law to a business is determined, the process of evaluating compliance of IT systems and policies can be time-consuming.

Victory for Consumers: Library of Congress and 5th Circuit Clarify Exceptions to DMCA

The Library of Congress and the 5th Circuit Court of appeals both recently made significant strides in expanding and clarifying the exceptions to the anti-circumvention provisions of the Digital Millennium Copyright Act (“DMCA”).

Beware “Document Soup” Software Licensing

On July 22, 2010, software publisher AccuSoft sued Northrop Grumman Systems in federal court for breach of contract, copyright infringement and trademark infringement related to Northrop’s use of AccuSoft’s ImageGear and ImageTransport software. Northrop allegedly used and integrated AccuSoft’s products in the development of a paperless records information system it developed for the U.S. military. According to AccuSoft, Northrop failed, in particular, and in violation of applicable software license agreements, to provide the required periodic reporting regarding the number of end-user licenses for the AccuSoft products that Northrop had distributed. AccuSoft did not specify a damages claim in its complaint, though it did state that the unauthorized software distributions number in the “hundreds of thousands,” meaning that a decision in its favor potentially could entail a multi-million dollar penalty against Northrop.

Facebook Ruling - Social Media and e-Discovery

On May 26, 2010, in the case of Crispin v. Christian Audigier, Inc. (C.D. Cal. Case No. No. CV 09-09509), Judge Margaret Morrow of the U.S. District Court of Central California issued a ruling in a copyright suit concerning, in part, the discoverability of private messages sent between users on MySpace and Facebook. This decision marks one of the first examinations of the applicability of federal e-discovery rules to social media site content. In her decision, the judge reversed a magistrate judge’s finding that private messages sent between users over social networking sites are public communications and quashed subpoenas that had been issued in an attempt to obtain copies of those messages.

When Your Brand is Attacked Online, The Author May Be the Only Liable Party

The United States District Court of New Jersey recently issued an opinion in a defamation action regarding an author’s post to a USENET group. The plaintiff, Charles Novins, an attorney in New Jersey, sent a letter to the defendant, Kevin Cannon, in early 2009 demanding Cannon retract his post to a USENET group in which Cannon accused Novins of, among other things, hiring drug addicts at his firm. After apparently not receiving the relief requested in his letter, Novins filed suit against Cannon along with a host of other defendants. The defendants moved to dismiss under the argument that the U.S. Communications Decency Act (“CDA”) immunizes everyone involved in content delivery with the exception of the “information content provider,” who was, in this case, the post’s author. The court agreed and dismissed the lawsuit.

E-Discovery Oversight Emphasized in Pension Committee v. BofA Securities

In January of this year, Judge Scheindlin issued another important e-discovery opinion in Pension Committee of the University of Montreal Pension Plan, et al. v. Banc of America Securities, LLC, et al.As you may know, Judge Scheindlin authored Zubulake, a series of seminal e-discovery opinions in 2004. In Pension Committee, the judge took the opportunity to follow up on her Zubulake decision by highlighting common e-discovery mistakes and the harsh penalties that result from them.

E-Discovery Lessons from Pension Committee v. BofA Securities Case - Part I

Part 1- Litigation Hold PolicySenior managers, in-house counsel and litigators take note: last month a new set of e-discovery guidelines emerged. Judge Shira Scheindlin, author of the definitive electronic discovery opinions in the Zubulake case six years ago, has issued another soon-to-be classic opinion in Pension Committee of the Univ. of Montreal Pension Plan, et al., v. Bank of America Securities, LLC, et al., 05 Civ. 9016 (SAS) (S.D.N.Y. Jan. 15, 2010) Amended Opinion and Order. Judge Scheindlin dubbed her decision in Pension Committee, “Zubulake Revisited: Six Years Later,” and in it, set out some examples of common mistakes companies make with respect to records management and e-discovery.

Managed Service Providers Could Damage Chances for Corporate Sale

Managed service providers (MSP) should carefully review their subscriber contracts to confirm the contracts do not weaken the MSP’s marketability if the MSP owner wants to sell the business. A managed services agreement that allows the subscriber to cancel the agreement at any time and with no penalty will devalue the MSP because the MSP will not have a guaranteed revenue stream. With no guaranteed revenue, potential buyers will be less interested in purchasing the MSP.

Businesses Should Not Wait to Implement Solid e-Discovery Practices

Although the proposed e-discovery legislation in New York State has yet to be implemented, a decision of the New York Supreme Court, New York County Commercial Division should cause all New York State Court practitioners to take note that e-discovery practice is already upon them. Justice Charles E. Ramos, in Einstein v. 357 LLC, 2009 N.Y. Slip Op. 3261 (N.Y. Cty. 2009), dispensed with the “we have produced what we could find” electronically stored information (ESI) defense by slapping the offending party with an adverse inference sanction. An adverse inference sanction allows the jury to presume that the lost evidence would have contradicted that party’s position at trial. The effect of such an instruction is devastating.

E-Discovery Bill Predicted to Transform New York Civil Litigation

New York Assemblyman Mark Weprin has sponsored Assembly Bill A-06000, to implement e-discovery rules in Article 31 of the Civil Practice Laws and Rules that will apply in all civil cases. He predicts that, as was the situation when similar obligations were incorporated into the Federal Rules of Civil Procedure just a few years ago, there will be a sea-change as to the manner in which civil cases are litigated in the New York Courts.

Alleged Discovery Misconduct = Racketeering Enterprise?

As an attorney who represents businesses with regard to the document retention and electronic discovery, and who has obtained discovery sanctions in a Federal RICO case against the adverse party, I followed with great interest recent events where allegations by a former in house counsel involved in an employment dispute spawned the filing of RICO cases against Toyota and certain of its officers and employees that were thereafter voluntarily discontinued.

Enforceability of Non-Compete Clauses May Be Questionable

Many businesses understandably want to prevent their employees from leaving their jobs and seeking employment with competitors. The reasons may vary, but the desire typically stems from concern regarding company secrets falling into the hands of those who could use them to do the most damage to the bottom line. It is therefore common to see employment contracts that prohibit an employee either from competing directly with his or her former employer or from joining a competing company.

Compliance with Anti-Trust Laws

It is a fundamental tenet of American capitalism that businesses seek to grow and corner a market in an industry. However, there is a fine line between successfully dominating a trade and running afoul of the Sherman Act, which prohibits attempts to monopolize trade or commerce among the states.

Mortgage Tracking System (MERS) Called Into Question

The Supreme Court of Kansas, in the recent decision Landmark National Bank v. Kesler, (--- P.3d ----, 2009 WL 2633640), has called into question the validity of MERS, the mortgage tracking system that currently services an estimated 60 million loans. MERS, (Mortgage Electronic Registration System), was established by Fannie Mae, Freddie Mac, and the mortgage industry in 1997 to record loan assignments electronically. The stated purpose of MERS is to reduce the costs associated with the mortgage banking industry by avoiding the costly statutory requirements of recording each mortgage note transaction in the county land record. It purports to do this by registering MERS as the nominee of the lender and servicer in the county land records, thereby allowing the note to be traded behind the scenes without the need to register each transaction.

FTC Amends Guidelines to Regulate Astroturfing

For the first time in 29 years, the Federal Trade Commission is amending its guidelines to crack down on false reviews of products posted online, otherwise known as “astroturfing.” This type of marketing includes false reviews, testimonials and comments about products in exchange for some form of payment to the reviewer. Microsoft is one of many companies believed to engage in astroturfing as a tool to promote its products.

Musicians Need to Understand Their Contracts

The music business offers seemingly limitless opportunities for hard-working musicians. However, the business side of a music career presents musicians with many opportunities to damage their career before it gains momentum. Musicians are confronted with myriad contracts controlling every relationship involving the movement of funds or control of copyrights, trademarks, master tapes, and other valuable assets. Understanding contracts and the terms in the contracts is critical to advancing and protecting a career in music.

Are we Heading for a Patchwork Quilt of State Laws on Retail Price Maintenance?

Effective October 1, 2009, companies doing business in Maryland are subject to a new state law that re-imposes a blanket ban on vertical retail price maintenance (RPM) agreements. The ban highlights the challenge many manufacturers will face in coming years in assessing current or contemplated policies intended to control the ways in which their authorized resellers market their products.

How High Can Damages Go for Unlicensed Software Use?

Recent, high-profile damages awards in the two online-music-sharing copyright lawsuits that have gone to trial – involving defendants Joel Tenenbaum in Massachusetts and Jammie Thomas-Rasset in Minnesota – leave unanswered questions regarding just how high copyright damages can go in copyright actions under other circumstances.

Supreme Court Rules that Federally Chartered Banks Not Protected from State Regulation

The U.S. Supreme Court recently issued what is, for those operating and interested in the banking industry, a landmark holding in the matter of Cuomo v. Clearing House Ass'n, L.L.C. (June 29, 2009), on appeal from the Second Circuit in a matter that originated in New York.

Chicago Resident Sued Over Twitter Post

A Chicago resident’s use of Twitter, the online social networking service, has prompted the resident’s former realty management company to file a lawsuit against the resident. Horizon Group Management LLC (“Horizon”) filed a libel lawsuit Monday, July 27, 2009 against former tenant Amanda Bonnen alleging a Twitter post she “maliciously and wrongfully” published contained false and defamatory information regarding Horizon and her former apartment.

Domain Name Not Tangible Property

In Palacio del Mar Homeowners Assn., Inc. v. McMahon, — Cal.Rptr.3d —, 2009 WL 1668294 (Cal. App. 4 Dist. June 16, 2009), the court found that a domain name was not tangible personal property capable of being turned over in a judgment recovery action. Palacio obtained a $40,000 judgment against McMahon and Palacio demanded a domain name McMahon allegedly owned in satisfaction of the judgment. A turnover order was sought and issued pursuant to section 708.205 of West’s Annotated California Code of Civil Procedure authorizing the court to order the judgment debtor's interest in the property in the possession or under the control of the judgment debtor to be applied toward the satisfaction of the money judgment.

Overreaching Service Contracts Can Backfire

Many business’ natural inclination is to draft service contracts to vigorously and comprehensive protect the business’ interests over those of its customers or other third parties. However, in the effort to maximize contractual protections, it is often possible to overreach and to end up with a document in which protective measures are determined to be unenforceable or, perhaps worse, in which certain overprotective measures negatively affect the enforceability of other provisions.

Source Code Escrow Is a Vital Part to Technology Transactions

Businesses entering into development or licensing agreements for business-critical software must face the issue of what happens if one party becomes insolvent or unable to fulfill its contract obligations at some point during the period of performance. Especially for the party that has engaged the services of an outside software developer or vendor, the cost of the other party’s insolvency, absent adequate protections, can be significant:

Additional Concerns Relevant to Price Maintenance Agreements

Businesses reviewing their price maintenance agreements (PMAs) for compliance with anti-trust law should do more than assess whether their agreements would be treated as “horizontal” or “vertical” by a reviewing court.

Horizontal and Vertical Price Maintenance Agreements

Many product manufacturers understandably want to be able to exercise some control over the prices at which their products are sold to consumers. For manufacturers that produce and sell all of their new merchandise internally, price control is a non-issue, because pricing decisions may be revised at little more than the flip of a switch. However, this is a comparatively rare scenario.

Google Facing Trademark Litigation Over Android

Businesses launching new lines of products or services must be prepared to conduct a review of those products or services, along with their associated marketing plans, against existing IP uses and registrations prior to launch. Failure to do so in the presence of competing IP can prove to be, at best, a costly distraction or, at worst, the end of the business line and the basis for civil penalties.

Loan Workouts-Skyrocketing Numbers of Commercial Lender-Borrower Disputes

Before the current world-wide credit crunch that has garnered so much media attention, commercial developers, investors and guarantors in disputes with their lenders almost always had in common that either an unexpected market down-turn or other adverse financial circumstance placed the borrower in a position of defaulting on its payment obligations with its lender.

Using an Oracle Server Worksheet to Respond to Oracle Licensing Inquiries

If your business receives an inquiry from Oracle requesting that you complete an Oracle Server Worksheet, you should proceed with caution. Answering the question without consulting a licensing expert and carefully evaluating the relevant license agreements can result in increased licensing fees, possible audits, and penalties.

Government Issues Fraud Alert: Con Artists using Credit Crisis to Take Advantage of People Seeking Loans

In an article titled Credit Crunch Fuels Rise in Loan Schemes, published in the Wall Street Journal on July 1, 2008, and republished here, http://www.filife.com/stories/credit-crunch-fuels-rise-in-loan-schemes, it is reported that Federal regulators including the Federal Deposit Insurance Corp., the Department of Justice and State Attorney Generals are warning that con artists are using the credit crisis to take advantage of people looking for loans.

Complications May Arise Enforcing Copyrights in Forms or Templates

However, many content developers rightly – and some successfully – seek to protect works that, at first glance, may appear to consist of blank forms in the context of spreadsheets or other media useful to a particular industry. Success here depends on whether the forms, as the CFR says, “in themselves convey information.” One recent case from the U.S. District Court for the Southern District of Florida provides guidance.

What Exactly Does the DMCA Protect?

Many iPhone users are well aware of the technical countermeasures pre-loaded on the devices that prevent users from installing software applications not approved by Apple – behavior commonly referred to as “jailbreaking” (though, the term can have different meanings in other contexts).

Legal Considerations in Software IP Disputes -Factual Copying and Substantial Similarity

Once the question of who owns the software is established, the copyright owner must be able to prove that the alleged infringer copied the works at issue. Factual copying may be proved by direct or circumstantial evidence, but in most cases a copyright owner must rely on circumstantial evidence.

Legal Considerations in Software IP Issues -Damages

Software copyright plaintiffs typically seek both permanent injunctive relief as well as damages. Recovery of statutory damages under 17 U.S.C. § 504 often hinges on whether the copyrights claimed to have been infringed before or after discovery of the alleged infringement.

Considerations in Software License Pricing

Software developers intending to license their products at a profit eventually must address the question of how they intend to price their licenses. The answer to the question typically depends on being able to balance a number of profit-oriented and customer-oriented factors.

Scope of DMCA Safe Harbor Clarified

In UMG Recordings, Inc. v. Veoh Networks, Inc., the U.S. District Court for the Central District of California specifically addressed Section 512(c) of the DMCA, which sets forth the circumstances under which service providers can escape liability for copyright infringement “by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider.”

Sued in Marshall, Texas? What Are The Odds of Getting the Case Transferred?

The quaint little town of Marshall, Texas has been the venue of many mega-verdicts involving patent infringement, securities fraud and related federal claims against corporate defendants that could legitimately say that the benefits they derive from doing business there are insubstantial. These verdicts have created a perception amongst the Plaintiffs’ bar that litigating in that Court creates a strategic advantage because of the jury pool. While some commentators have suggested that the way to prevent what they see as forum shopping is to change the law to require a more significant connection between the venue and the place where the events took place, this has not yet occurred.

Cisco GPL Lawsuit Could Generate Legal Guidance for Open Source

A lawsuit filed in the U.S. District Court for the Southern District of New York by the Free Software Foundation (FSF) against Cisco Systems has the potential to generate important legal guidance regarding the enforceability of open source software licenses.

Trademark Trial and Appeal Board Affirms Rejection of “GRUNGE” Mark

The Trademark Trial and Appeal Board (TTAB) recently affirmed the rejection of the mark GRUNGE for clothing and related accessories. In re Grapevine Intellectual Properties, LLC, Serial No. 77141442 (December 18, 2008) [not precedential]. The examining attorney issued a final refusal on the ground that, when used in connection with the identified goods, the mark was merely descriptive. An image of the mark appears below.

“The Secret” May Lie in Good Contracts

Creative professionals and the businesses they work with both owe it to themselves to ensure that they carefully define their relationships – and resulting intellectual property rights – in written agreements. Drew Heriot, a writer, director and editor who collaborated with Rhonda Byrne in the creation of “The Secret” – a popular self-help DVD – learned this lesson the hard way and has sought to enforce the rights he claims in The Secret in a lawsuit pending in the U.S. District Court for the Northern District of Illinois.

Civil Litigation Frenzy Over Madoff Investment Scheme-Pursuing the Deepest Pockets

While there is no course on the subject in law school, it is good common sense in litigation for an aggrieved plaintiff to seek as many “deep pockets” as possible to sue. With the namesake of the firm indicted for what he reportedly admitted was a massive “Ponzi” scheme that had been ongoing for a long time, Bernie Madoff is not likely to be the defendant with the deepest pockets.

Reliance on Other Sources No Guarantee against Spoliation Sanctions

It is not advisable to base the non-retention of relevant documents or records during or in contemplation of litigation on an argument that the information in those records – or even exact copies of those records – have been made available from other sources than those identified in a discovery request.

Ninth Circuit Clarifies Implied Licenses

In Asset Marketing Systems, Inc. v. Gagnon, 542 F.3d 748 (9th Cir. 2008), the Ninth Circuit recently clarified the law of implied licensing. Kevin Gagnon began his relationship with AMS as an independent contractor creating software programs for AMS, a field marketing organization offering sales and marketing support to insurance marketing entities. The Ninth Circuit found that Gagnon granted an unlimited and non-exclusive license to AMS to retain, use, and modify the computer software and that because AMS paid Gagnon, the license was irrevocable.

When Do Internet Ratings Constitute Business Defamation?

On August 25, 2008, 7Search.com, a pay-per-click search engine operator, sued antivirus software publisher McAfee in federal court in the Northern District of Illinois for including 7Search.com’s website among sites that McAfee has given a “red” rating on its SiteAdvisor service. McAfee gives red ratings to sites that it believes to be likely sources of malicious software. In its complaint, 7Search alleged that it has not made any software available for download since 2003. 7Search further alleges that the McAfee rating has discouraged users from visiting the site, and it seeks monetary damages and a court-ordered “green” rating based on McAfee’s alleged violation of the Lanham Act, the Illinois' Consumer Fraud and Deceptive Business Practices Act, and other state laws pertaining to business defamation, trade disparagement, and unfair competition.

Washington Supreme Court Affirms Lower Court’s Rejection of AT&T Arbitration Clause

Michael McKee, a resident of Washington state, filed a class action against AT&T alleging AT&T assessed city utility surchages and other usurious late fees. The trial court found the dispute resolution provision of AT&T’s Consumer Services Agreement unconscionable and denied its motion to compel arbitration. AT&T Appealed. The Court of Appeals, Division Three, certified the case to the Washington Supreme Court.

Don’t Forget the Boilerplate

Businesses seeking partnerships or investment capital related to the development of new products must be diligent in ensuring that any trade secrets or other intellectual property at issue in the transaction is disclosed only according to clear, definite terms and remains protected both during and after the deal. A case pending in the U.S. District Court for the Northern District of Illinois highlights the difficulties that businesses may face when one or both of the parties allow a deal to move forward with less-than-explicit paperwork.

Minimum Advertised Pricing (MAP) for E-Commerce

Minimum Advertised Pricing (MAP) policies prohibit resellers or dealers from advertising a manufacturer’s products below a certain minimum price. The primary purpose for implementing a MAP program is to promote fair competition across the manufacturer’s affiliate and dealer channels. MAP programs are critically important to manufacturers who sell their products on the internet in light of the extremely low costs of advertising in pay-per click, shopping comparison, and auction sites. Despite the value of MAP programs, significant legal concerns exist regarding establishment and enforcement of minimum advertised pricing policies for e-commerce companies.

Copyright Infringement Claim Available for Open Source Software

The Federal Circuit has held that software developers may still sue for copyright infringement when they release their software into the “open source” software community. In Jacobsen v. Katzer, 2008 WL 3395772 (Fed. Cir. 2008), the court made it clear that when open source licenses place conditions on the use and copying of software, the holder of the copyright on the software may pursue a claim for copyright infringement.

No Claim for Conversion of Trade Secrets

A federal district court has recently ruled that a plaintiff may not assert a claim for conversion of trade secrets. Applying Texas law, the court in XPEL Technologies Corp. v. American Filter Film Distributors, Inc., 2008 WL 3540345 (W.D. Tex. 2008), held that a conversion claim may only be asserted when physical property is involved. This holding is in conflict with a 21-year-old Texas appellate decision recognizing such a claim.

Important Provisions in Open-Source Software License Agreements

Open-Source software can provide businesses with an opportunity to acquire software for little or no monetary cost. However, businesses should carefully examine the license agreements accompanying the open-source software they incorporate into their business products.

Facebook.com Pursues Alleged Foreign Trade Dress Infringers

A complaint filed recently by Facebook.com in the U.S. District Court for the Northern District of California highlights some of the difficulties that Internet-based IP owners can face from others who would misappropriate their content. In the complaint (which spans 114 pages, including attachments), Facebook alleges that a German entity, StudiVZ Ltd., its parent and its affiliates misappropriated Facebook’s trade dress in the popular social networking site by setting up various, unauthorized, similar sites in German and other European languages that copy the look and feel of Facebook.

In Copyright Litigation, Availability of Attorney’s Fees Awards Can Cut Both Ways

A recent opinion written by Judge Richard Posner for the 7th Circuit highlights the importance of carefully considering some of the risks of loss for plaintiffs in proceeding with a copyright infringement lawsuit.

For Trademark Infringement Claims, Success May Hinge on Commercial Use

It is natural for the owner of a trademark want to seek some sort of redress when another person or entity uses that mark in the URL or the content of a web site, especially when that site competes with or criticizes the owner. However, relief from such use may be unavailable under the Lanham Act when it is not possible to show commercial intent behind the use, and a recent 10th Circuit opinion suggests that the standard to prove commercial intent may be higher than some would expect.

Trademark Law and the Naked Cowboy

The Naked Cowboy (a/k/a Robert Burck), a New York icon, is usually in the news for his well-known antics as a street performer. But the Naked Cowboy recently made some trademark law in a battle with Mars, Inc. and its Blue M & M. In Burck v. Mars, Inc., 2008 WL 2485524 (S.D.N.Y. 2008), the court recognized Burck’s trademark rights in the name and likeness of “The Naked Cowboy” but also allowed Mars to raise a defense of parody even though the parody was being used in part for advertising purposes.

Digital Reproduction May not Violate Copyright

Personal Names as Trademarks

RAM is Ordered in E-Discovery Dispute

On May 29, 2007, the U.S. District Court for the Central District of California, Magistrate Judge Chooljian, found that a computer’s RAM (random access memory), is a tangible document that can be stored and must be turned over in a lawsuit. Because this order prohibits the Web Site from tossing RAM relevant data, it has potential to effect the way future litigants prepare for E-Discovery. It should be noted, however, that this order is currently stayed pending appeal.

Minimum Resale Price Maintenance to be Evaluated Under the Rule of Reason

On the last day of the Supreme Court’s 2006 term, the Court published its 5-4 decision in Leegin Creative Leather Products, Inc. v. PSKS, Inc.. Leegin raises an important issue related to retail sales agreements and violation of the Sherman Act.

How High is Too High for Copyright Fines?

Businesses accused of software “piracy” by publishers or trade associations usually are most concerned about their potential exposure in copyright fines, should their dispute proceed to litigation. A recent Sixth Circuit case suggests that statutory damages awards in such cases legally can reach levels that may represent windfalls for prevailing plaintiffs, far outstripping the amount of their actual damages.

The Fair Information Practice Principles

The Fair Information Practice Principles (the “Principles”) were first enumerated by the U.S. Department of Health, Education, and Welfare in 1973. In the 30 years since the principles were formulated, they have become the basis for many privacy laws in the United States, Canada, Europe, and other parts of the world. The Principles are designed to provide a framework for the collection and use of personal information.

Making Intellectual Property an Effective Part of Your Due Diligence

A comprehensive due diligence search must include a thorough search of the company’s intellectual property, including its licensed assets, such as computer software. A company’s intellectual property is essential to valuing a company, and identifying strengths, weaknesses, and exposure to potential liabilities. Indeed, the intellectual property should be evaluated before negotiations begin.

Does the Constitution Protect the Privacy of Your E-mails?

A recent decision by the United States Court of Appeals Sixth Circuit Court of Appeals prohibited the government from secretly accessing the contents of your e-mails . . . or did it? In Warshak v. United States, the Sixth Circuit affirmed an injunction prohibiting the federal government from using an order under the Stored Communications Act to get the contents of “personal e-mail” held by an ISP unless the government either provides notice and an opportunity to be heard or else makes a fact-specific showing that the account holder maintained no reasonable expectation of privacy “with respect to the ISP.”

It’s Now Easier to Enforce Out-of-State and International Judgments in Texas

Companies concerned about being sued in one jurisdiction and having the judgment enforced in another should pay attention to a recent Texas appellate decision making it easier to enforce out-of-state judgments in Texas courts. With more businesses finding themselves doing business in more jurisdictions, both in the United States and internationally, and courts having become more willing to exercise jurisdiction based on Internet contacts, this issue has become increasingly important.

Intellectual Property Enforcement or Witch-hunt?

Recently, the Coalition Against Counterfeiting and Piracy (CACP), a group consisting of heavy-hitting IP stakeholders, such as the Recording Industry Association of America, the Business Software Alliance (BSA), the Software and Information Industry Association (SIIA), and the U.S. Chamber of Commerce, announced its intent to push for rapid improvements in what it perceives to be universally lax enforcement of U.S. laws protecting IP rights.

Dark Arts and Bright Lines: A Trade Secrets Primer

Most protections afforded to intellectual property (IP) are available only after the property is in the public realm. For instance, trademarks must be used in commerce to identify products and services offered to consumers. Creators of original works generally must publish or register those works before they may enjoy any meaningful copyright protections. More significantly, prospective patent holders must not only submit their inventions to the scrutiny of the patent process, ultimately resulting in a publicly accessible record of every last detail concerning that invention's construction and use, they also must be willing to see their exclusive rights in that invention vanish upon the expiration of the patent.

“Battle of the Handbags” Continues – Louis Vuitton Sues Home Shopping Network

Louis Vuitton is once again making headlines by aggressively seeking to protect its valuable trademark and reputation. Louis Vuitton recently filed suit in U.S District Court for the Middle District of Florida in Tampa, Florida alleging trademark infringement by the Home Shopping Network (“HSN”).

U.S. Supreme Court: Notice of Appeal Deadlines Cannot be Extended by Courts

A recent U.S. Supreme Court decision sends a strong message – if you intend to appeal a decision, don’t wait around. If you miss the deadline, even a federal court won’t be able to fix the problem. In Bowles v. Russell, 2007 WL 1702870 (U.S. 2007), the Supreme Court held that federal district courts do not have the power to extend the deadline for filing a notice of appeal beyond the time period established in the Federal Rules of Civil Procedure.

Eleventh Circuit to Review Deceptive Practices Ruling Against NASD

The Eleventh Circuit has decided to review en banc a ruling refusing to grant immunity to the NASD on the grounds that it was a self-regulating agency. A Florida lawyer named Steven Weissman purchased a substantial amount of Worldcom stock in trust for his minor children. That stock is now virtually worthless.

Calculating Potential Damages Exposure for Patent Infringement Just Got Harder

Companies attempting to measure their potential exposure for patent infringement should review a recent decision by the Federal Circuit. Business often calculate their exposure based on the concept of a “reasonable royalty,” and look at the terms on which the patent holder has previously licensed the technology. Such an established royalty is usually the best measure of potential exposure. In a case addressing the issue of damages in a patent infringement case involving the burgeoning field of genetically modified crop seeds, the Federal Circuit has expanded the definition of what constitutes a reasonable royalty.

Significant New Remedies Proposed for U.S. Copyright Law

On May 14, 2007, the office of the U.S. Attorney General transmitted a legislative proposal to U.S. House Speaker Nancy Pelosi that would represent one of the most significant overhauls of federal copyright law in recent years. Most of the proposal’s provisions work to expand the scope of the statute and include more tools to combat criminal copyright violations.

Supreme Court to Decide if Parties Can Agree to Judicial Review of an Arbitration Award

The United States Supreme Court has recently agreed to address the question of whether parties may contractually agree to alter the standard for reviewing arbitration awards. Because so many business contracts, software licenses, and other agreements now include provisions requiring the parties to submit their dispute to binding arbitration instead of filing a lawsuit, business should pay careful attention to this case, as the court’s decision will have significant implications.

Effective Use of Local Rules and Rocket Docket Forums Can Reduce Litigation Costs

It is no secret that patent litigation is a costly endeavor. It can price small defendants out of being able to defend themselves on the merits and can likewise be the prohibitive factor when small plaintiffs want to enforce their claims. For the small or mid-sized company, the amount at issue many times simply does not justify the high-cost and high-risk of patent litigation.

Communications Decency Act Protects Service Providers From State Intellectual Property Claims

The Ninth Circuit has recently clarified the scope of immunity for internet services provides under the Communications Decency Act. That statute contains an immunity provision, stating that that “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

The New Standard of Care: Data Encryption on Portable Devices

Approximately 60 percent of PDAs and 59 percent of laptops contain unprotected sensitive or confidential information. Almost half of businesses surveyed by the Ponemon Institute indicated that they would never be able to determine the actual information that they lost.

Recent Federal Government Data Breaches

Private businesses are not the only victims of theft relating to confidential information. In the largest security breach on record involving Social Security numbers, a U.S. Department of Veteran’s Affairs employee violated agency policy and took a laptop containing the sensitive personal information of 26.5 million veterans discharged after 1975. Burglars stole the laptop from the employee’s home.

Reading the Tea Leaves: Predicting the Ultimate Course of Federal Privacy Legislation

Currently, businesses responding to a breach of their customers’ personal information must consult a patchwork of state laws to determine what steps they are required take to mitigate the damage, including whether and to what extent they must notify those customers that their information may have been compromised.

Texas Businesses Should Follow Six Factors to Establish that the Business’s Information is a Trade Secret

Defeating Suits Against NASD Dealer Firms by Former Employees Regarding Content of U-5 Termination Notice

The NASD requires its member firms to complete and file a U-5 termination notice whenever employment ceases, and in the case of an involuntary separation from employment, to disclose the reasons for the discharge of that employee. See NASD By-laws, Art. IV, § 3(a). Some of the reasons listed by member companies on the U-5 forms have included the employee’s refusal to cooperate with the compliance department, suspicion of fraud or suspicion of other misconduct. This report stays with the former employee throughout their career and could substantially impair their ability to gain employment at another NASD member firm.

Seventh Circuit Issues Opinion on Trade Secrets and Injunctions

A recent Seventh Circuit decision sends the clear message that companies should take precautions to secure their trade secrets by limiting the availability of the information to those who need to know it and by protecting information that is not readily available to the public. Judge Posner delivered the opinion in American Family Mutual Insurance Co. v. Bonnie L. Roth, 2007 WL 1309403 (7th Cir. 2007). The defendants had been insurance agents for the plaintiff.

Northern District’s Local Patent Rules Serve as Cautionary Warning to Future Patent Litigants in the Forum of Need for Additional Careful Case Preparation

Patent holders contemplating patent litigation in the Northern District should carefully prepare their complaint, taking every available opportunity to carefully and thoroughly analyze infringement contentions prior to filing. They should additionally take every opportunity to reevaluate and update those contentions throughout the course of the litigation. The reason is the Northern District’s newly-adopted local patent rules.

Decisions Granting Patent Infringement Injunctive Relief Subject to Remand

The Supreme Court’s 2006 decision in eBay, Inc. v. MercExchange, LLC, 126 S. Ct. 1837 (2006), continues to reverberate, with the Federal Circuit applying it just last month to vacate and remand a permanent injunction granted under the previous “general rule” of patent cases. Under that rule, courts would issue injunctions against patent infringement absent circumstances justifying the denial of injunctive relief. In <em>eBay</em>, the Supreme Court held that it is inappropriate to automatically issue an injunction following a finding of patent infringement.

Avoiding Waiver of Attorney-Client Privilege By Not Placing Advice “At Issue”

Litigants regularly seek advice from counsel before settling or declining to settle a claim or a case. If that litigant subsequently seeks to recover the amount paid from a third party, such as an insurance company in a breach of contract action or under an indemnification agreement, is the attorney-client privilege waived? Proponents of waiver argue that access to the adversary’s work product and communications are critical to the getting to the question of reasonableness or intent of the opponent.

Avoiding Jurisdiction Based on Internet Contacts

Businesses haled into a Texas court should be able to argue, based on the Texas Supreme Court’s decision in Moki Mac River Expeditions v. Drugg, 2007 WL 623805 (Tex. 2007), that even if they did have contacts with Texas, such as e-mail communications or a website, the connection between those contacts and the subject matter of the plaintiff’s claim is too attenuated to support an exercise of personal jurisdiction. While many courts have seemed eager to exercise long arm jurisdiction on the basis of websites and other internet contacts, the Texas Supreme Court has bucked this trend by placing some strong new limitations on when it will be appropriate to exercise jurisdiction over an out-of-state business based on such contacts.

Paper Records and Information Security

JP Morgan Chase recently received an unwanted reminder that information security demands attention to more than just the data residing on network hard drives and digital media. “Protestors” from the Service Employees International Union (“SEIU”) filmed themselves sifting through trash in dumpsters outside several New York City Chase Bank branch locations and apparently finding numerous, un-shredded customer financial statements in trash bags awaiting pickup. (The SEIU has been in a dispute with Chase regarding the bank’s use of non-union security employees.) The video quickly achieved notoriety after being posted on YouTube.com here.

Supreme Court Issues Two New Patent Decisions - Part II – KSR International Co. v. Teleflex, Inc., 127 S.Ct. 1727 (2007)

The Supreme Court unanimously rejected the Federal Circuit’s strict application of the teaching-suggestion-motivation (“TSM”) test for obviousness – making it easier to invalidate patents on obviousness grounds.Teleflex sued KSR for patent infringement. Teleflex held the exclusive license to the patent entitled “Adjustable Pedal Assembly With Electronic Throttle Control.” KSR International Co. v. Teleflex, Inc., 127 S.Ct. 1727, 1734 (2007).

California Appellate Deadlines in Limited Jurisdiction Cases

The deadlines for filing a notice of appeal in limited jurisdiction civil cases have been clarified by the amendments to the California Rules of Court that took effect at the beginning of 2007. In limited civil cases, decisions are appealed to the appellate division of the superior court and not to the Court of Appeal. If you want to appeal a judgment in a limited civil case, you need to be aware that the deadlines for appealing a decision in a limited civil case are significantly shorter than in unlimited civil cases.

What Lessons Can a Company Learn from the SCO Litigation?

It is no surprise that the open source software community has been shaken by the litigation begun by SCO. To begin with, Caldera Systems, the corporate entity now doing business as SCO, originated as an open source company whose only product was based on Linux. Therefore, the open source software community feels betrayed by a company whose interests it once shared and supported.

Using Insurance Coverage to Mitigate Risks Associated with Data Breaches

Many commercial liability policies do not provide coverage for data security breaches. However, some insurance providers are offering businesses new types of coverage specifically designed to assist with the new risks associated with technology, including costs associated with data breaches. Initially, many corporate identity or security breach insurance policies will defray the costs associated with investigating the breach to determine whether state laws require notification of the breach. Additionally, the insurance coverage will provide assistance to pay for the costs associated with breach notification requirements.

State Class Action Litigation Related to Privacy Breaches

Although the Privacy Act does not apply to private businesses, entities whose data has been breached, like Ernst & Young and General Electric, must ensure that they comply with the relevant state security breach notification statutes. Thirty-four states already have security breach notification laws in effect. If a company suspects that its data has been breached, it is critical for the company to determine which state breach notification laws apply to its data breach, and it must comply with the specific terms of each of the notification laws.

Class Certification Denied by New York Court of Appeals in State Anti-trust Action

Article 9 of the New York Civil Practice Law and Rules (CPLR) governs class actions. CPLR 901(b) provides that a suit that seeks to collect on a liability imposed by statute that is in the nature of a penalty may not be maintained as a class action. Notwithstanding 901(b), where the enabling legislation creating the statutory remedy authorizes a class action, maintenance of such a suit is permissible.

Northern District of Texas Issues Local Patent Rules

The Eastern District of Texas originally claimed fame partially through its implementation of its original local patent rules. Patterned after the local patent rules of districts like the Northern District of California with heavy intellectual property dockets, and the original “rocket docket” in the Eastern District of Virginia, the Eastern District of Texas used the patent rules to speed up its patent trials, as well as its civil case docket in general. Typically complex, drawn-out affairs, patent litigation suddenly became streamlined in a Texas federal court located in the tiny Texas town of Marshall, drawing national attention.

PCI Standards in New Texas Legislation

Increasingly, generally-accepted industry standards and best practices seem to be saving our legislators much of the detail work when it comes to enacting laws pertaining to technical or otherwise complex fields. For instance, we know that the internal control framework disseminated by the Committee of Sponsoring Organizations of the Treadway Commission (thankfully, generally shortened to “COSO”) is identified by name by the U.S. Securities and Exchange Commission as a standard that businesses may use to achieve compliance with the rigorous internal control evaluation and disclosure requirements contained in the Sarbanes-Oxley Act of 2002 and related regulations.

Supreme Court Issues Two New Patent Decisions

The question presented to the Supreme Court was whether Microsoft’s liability would extend to computers made in another country when loaded with Windows software copied abroad from a master disk or electronic transmission dispatched by Microsoft from the United States?

Supreme Court Grants Summary Judgment Based on Video Evidence

The Supreme Court’s decision in Scott v. Harris, 2007 WL 1237851 (U.S. 2007), may give appellate courts more freedom to decide issues on summary judgment that might previously have been left for resolution by juries. The factual scenario in Scott v. Harris would have made a fascinating episode of “Cops.” A Georgia county deputy attempted to pull over Harris after clocking him at 73 miles per hour in a 55 mile per hour zone.

Trade Secrets And Blogging: Are Your Employees Inadvertently Giving Away Your Trade Secrets?

Many companies allow their employees to blog during work, or off work, about work, and work related issues. Companies should be aware that their employees may be tempted to blog about subjects that include trade secrets. For instance, on their own time, employees may blog about what they do at work, what they are inventing at work, who their company’s customers are, how the company attracts customers, and other proprietary and confidential information.

An Overview of ISO 19770-1 Processes – Part 3 of 3

My last two entries discussed, respectively, the ISO 19770-1 Organizational Management Processes and Core Processes for SAM. Last in the series is the “Primary Process Interfaces for SAM” subset, which consists of processes specifically related to management and review of the software lifecycle itself. As such, it is designed to align SAM requirements with lifecycle processes specified in ISO 12207 (defining tasks required for developing and maintaining software) and ISO 20000 (defining tasks required for effective service management).

Other Ideas for Protecting Employee Privacy Rights in Personal Information Stored on Business Computers

The issue of employee privacy rights in data stored on an employer’s computer is a difficult one. If an employee displayed framed family photos on her desk, an employer would not refuse to turn those photos over to the employee upon termination. These days, the employee is just as likely to keep such photos as jpegs or gifs on her PC at work, along with many other types of personal information, from correspondence to recipes.

Can You Protect Employee Privacy Rights While Protecting Company Security?

The New York Court of Appeals’ decision in Thyroff recognizing a conversion claim based on a company preventing a former employee from accessing personal information stored on the company’s computer certainly presents some difficult privacy issues for businesses, who already face enough potential legal troubles when terminating employees.

Second Circuit Sets Out Market Criteria for Recovery of Attorneys’ Fees under Federal Fee Shifting Provisions.

In an April 24, 2007 opinion written by Chief Judge Walker of the United States Court of Appeals for the Second Circuit in Arbor Hills Concerned Citizens Neighborhood Assoc. v. Cty of Albany, et al., the Court agreed that the District Court placed undue reliance on the “forum rule” for determining attorneys’ fee awards on Federal statutory claims.

Jurisdictional Issues Arising in the Global Compliance Arena

It is sometimes difficult to predict what laws will apply to a particular compliance issue. For instance, in Section 814 of the Patriot Act, the U.S. Congress extended the jurisdiction of its federal law enforcement officers to include crimes that do not occur in the U.S. or have any victims in the U.S. It could be argued that “[e]very nation has the right to extend the scope of its law beyond its borders to protect the rights and property of its own nationals.”

Defending Trademark Infringement Claims – Use In Commerce

To show that a mark is used in commerce, a plaintiff must prove that the mark “is used or displayed in the sale or advertising of services and the service are rendered in commerce.” 15 U.S.C. § 1127(2). The issue in internet marketing cases is whether using a mark to generate search-result links and sponsored links is considered use “in commerce.”

Defending Cybersquatting Claims – Unrelated Goods

In order to win under Anti-Cybersquatting statute, a plaintiff must prove the defendant (a) had a “bad faith intent to profit from the mark,” and (b) registered or uses a domain name that is “identical or confusingly similar” to the mark in question. 15 U.S.C. § 1125(d)(1)(A)(i)-(ii). Much of this turns on whether the defendant operates in the same goods as the plaintiff.

What is open source software?

On the highest level, open source is the principle to allow free access to the intellectual property of the design of products to promote creativity. The term is now most often associated with software.

What is Spoilation and How Can the Outcome of the Case Be Effected When a Party Spoils Electronic Evidence?

The word spoil or spoiled is commonly used in non-litigation contexts. Food spoils if it needs to be refrigerated and is not. Paint spoils if the can if left open. In the litigation context, a spoliator is a party that failed to preserve evidence that was demanded in litigation or fails to preserve relevant evidence for litigation that is reasonably contemplated.

Form of Production of Electronic Information in Federal Litigation

The adversary demanding the production of electronic information is now authorized to specify the manner in which the information is produced. Fed R. Civ P 34(b). The manner of production demanded by the adversary may not correspond with the format in which the data is maintained.

Privacy and Data Security Act of 2007

Since February 2005, approximately 100 million records containing personal information have been subject to a security breach. More than 30 states have considered and adopted security and privacy legislation requiring businesses to notify consumers if a breach in security results in the possibility of identity theft. The state provisions are not uniform, and are often difficult to reconcile. Companies experiencing security breaches involving customers in many states may be confused regarding their breach notification obligations.

An Overview of ISO 19770-1 Processes – Part 2 of 3

The ISO 19770-1 Core SAM Processes are divided into three process subsets: (1) those pertaining to SAM Inventory Processes, which include processes specific to software asset verification, inventory management, and control; (2) those pertaining to SAM Verification and Compliance Processes, which include processes specific to software asset record verification and security compliance, software licensing compliance, and conformance verification; and (3) those pertaining to Operations Management and Interfaces for SAM, which include processes specific to the management of third-party relationships and contracts, finances, service levels, and IT security.

An Overview of ISO 19770-1 Processes – Part 1 of 3

However, just because software asset management (“SAM”) is a challenge does not mean that business may be (or should want to be) excused from rising to it. Considering the high costs associated not only with software licensing but also with the effort that must be spent to “fix” software-related problems when they occur, businesses simply cannot afford to have ineffective (not to mention missing) SAM tools at their disposal.

It Pays to Read Your EULA

PC Pitstop buried a clause in their EULA that offered the reward to anyone who sent a message to the enclosed email address. The point was to prove that people rarely, if ever, read their software licenses. They were right – four months and 3,000 downloads later, one sharp-eyed end user finally wrote in and claimed the $1,000 prize.

New E Discovery Rules Create Obligations and Pose Risks

Until December of 2006, the Federal Rules of Civil Procedure related to production of documents in a civil case made no mention at all of electronically stored information. The scope of Rule 34 has now been expanded to include electronic evidence:

When should a company seek a software patent rather than copyright protection for software?

The primary benefit of a software patent is the broad protection provided by the patent laws. An owner of a software patent may prevent all others from making, using, or selling the patented invention. In connection with software, an issued software patent may prevent others from utilizing a certain algorithm without permission, or may prevent others from creating software programs that perform a function in a certain way.

Battle of the Handbags - Louis Vuitton v. Dooney & Bourke

Texas Workforce Commission Decisions Have Res Judicata Effect

Data Brokers Settle with FTC

Data brokers Reed Elsevier and Seisint have agreed to conduct biennial audits of its data protection procedures for 20 years as part of a settlement with the FTC. Businesses that find themselves under the FTC's scrutiny and choose to settle data privacy allegations may have to eventually assume the expense of conducting costly audits for as long as 20 years.

Record Companies Ordered to Pay Attorney's Fees

FTC Deadline for Commenting on Behavioral Advertising Guidelines Extended Until April 11

Businesses that use behavioral marketing and advertising techniques may consider reviewing and commenting on the Federal Trade Commission’s (“FTC”) proposed guidelines. The guidelines are designed to provide consumers with more visibility into the behavioral advertising process, which the FTC recognizes can be very valuable.The FTC’s guidelines are designed to address four primary concerns: - greater transparency and consumer control; - the need to prevent criminals from accessing data collected for behavioral advertising; - ensuring that companies keep their privacy promises when changing their privacy policies; - the collection of sensitive data, like medical records or children’s activities, for behavioral advertising.

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