The Emergence or Downfall of Bitcoin?

POSTED BY Kevin Tan

Bitcoin, a cryptocurrency, emerged in 2009 which gives its network participants the ability to make transactions free of any transactional fees that banks and credit card companies would usually require. Furthermore, using bitcoins for international purchases would not subject the parties to the country’s laws or to its regulations. The use of bitcoins has appealed to many small businesses and restaurants worldwide. There are also some established large firms that have accepted bitcoins such as Overstock.com, the Sacramento Kings, Zynga, and Virgin Galactic, among several others. Bitcoins can be bought and sold for many different currencies worldwide from individuals and companies alike.

Bitcoin users do not have to reveal their names. All that is needed is their account number. Because of this fact and the fact that all parties involved are not subject to the conventional transactional fees, to government regulation, or to its laws, Bitcoin users have used bitcoins for various criminal activities: money laundering, Ponzi schemes, purchasing stolen goods, guns, and drugs, among many others. Believing that most of these transactions were done on the server called the Silk Road, the FBI has stepped in by seizing nearly 30,000 bitcoins (currently valued at $25 million) from the server. Having found that these bitcoins were the proceeds of crime, District Judge Oetken announced for the forfeiture of these coins.

In his press release, United States District Attorney Bhara supported Oetken’s holding because it furthered the government’s role in taking out “the profit of crime and signal to those who would turn to the dark web for illicit activity.” Although the holding does support this view, it is very difficult to claim that all activities done on that server were illegal. It is still unclear what sorts of transactions were done here. Furthermore, the money that was left there were there at the end of the transaction- the government did not prove that these coins were to be used to commit a crime or to further a crime. The holding suggests that the government could take money from anyone so long as the money were from the proceeds of crime. This is equivalent to stating that the government could take money from girl scouts for selling their girl scout cookies to a drug dealer because the money obtained from the drug dealer were from the proceeds of selling drugs. This doesn’t sound right.

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The Potential Unintended Consequences of Fee Shifting after the Supreme Court Decisions in Octane Fitness and Highmark

POSTED BY Andrew Beckerman-Rodau | Professor of Law & Co-Director of the Suffolk University Law School IP Concentration, e-mail: arodau@suffolk.edu), website: www.lawprofessor.org


Yesterday (April 29, 2014) the U.S. Supreme Court handed down two unanimous decisions in the Octane Fitness case and the Highmark case. Both cases addressed the standard for awarding attorney fees in patent infringement cases to the prevailing party in accordance with the patent law statute which provides that a “court in exceptional cases may award reasonable attorney fees to the prevailing party.”

Prior to these cases the U.S. Court of Appeals for the Federal Circuit made it very difficult for U.S. District Courts to award attorney fees in patent cases. The Supreme Court decisions make it significantly easier for district court judges to award attorney fees. The decisions put patent law more in synch with other areas of law by placing the discretion to award attorney fees with the district court judge; And, in limiting the standard for the Court of Appeals for the Federal Circuit to review and reverse a district court judge’s discretionary decision to deny or allow attorney fees. The Federal Circuit will now be required to allow the district court’s decision to stand unless it is shown on appeal that the district court judge abused his or her discretion in deciding to award or deny attorney fees. This is a high standard that will typically prevent the Federal Circuit from reversing the district court’s decision in most cases.

These Supreme Court cases have been heralded by some who think it will improve the patent system by preventing or reducing patent infringement suits by non-practicing entities that neither make nor sell any products. Such entities – often derogatorily referred to as “patent trolls” – will be less likely, according to some people, to bring patent infringement suits if they face the potential of paying attorney fees for the other party.

I think these cases will be unlikely to significantly impact patent trolls because the business model for many trolls is only based on threatening to bring lawsuits as a tactic for forcing settlements rather than actually bringing law suits.

More significantly, these decisions are likely to have some unintended consequences. For example, a patent on a key technology developed by a tech startup may be the only thing preventing a large established company from “stealing” the technology. Having a patent levels the playing field. It has also spawned patent attorneys who are willing to handle patent infringement suits for small startups on a contingency basis. The monetary risk in bringing an infringement is substantial with attorney fees often being in the millions of dollars. Making it easier for judges to award attorney fees to the prevailing party increases the risk calculus and may actually deter many tech startups from bringing an infringement action. It is also likely to make it more difficult to find a patent attorney willing to handle a case on contingency in light of the increased monetary risk. Ultimately, this may benefit large established companies who have sufficient resources so that the potential risk of paying attorney fees if they lose will not be a deterrent to bringing actions. This might also make it more difficult for smaller tech startups to raise money and that could reduce technological advances which is the opposite of the goal of patent law.

Is King, the Candy Crush Creator, Taking It a Step Too Far?

POSTED BY Nicole Cocozza

Everyone seems to be addicted to the popular game, Candy Crush Saga (“Candy Crush”). King.com Ltd. (“King”) is the creator of the trendy game that has captured an audience of all ages since the release of the game in April of 2012. The game can be accessed on Facebook or on any smartphone by downloading the app. The goal of the game is to match three candies on a game board filled with different colored candies, which may contain some obstacles, in order to get to the next level. Over the past year, Candy Crush had over 90 million daily players, who spent over $1.5 billion last year. King’s number one selling game has led the company to attempt to protect its intellectual property rights by filing an application to register the terms “candy” and “saga” as a trademark in the United States.

The filing of the application by King to protect the words “candy” and saga” has led to an uproar in the gaming community. King wants the trademark to be approved in a broad range of categories such as: software, entertainment, clothing and accessories. The International Game Developers Association said in a blog that King’s filing was “overreaching” and stood “in the opposition to the values of openness and co-operation we support industry wide.” However, King responds through a letter that there is nothing unusual in seeking to register a commonly used word as a trademark, citing registrations by others for such words as “Time,” “Apple,” “Money,” and “Sun.[1]“ Should Candy Crush be able to receive the same protection over such simplistic words?

The purpose of a trademark is to provide protection to a recognizable sign, design, or expression in order to identify a specific product or service from others. The purpose of a trademark makes the debate over whether King is overreaching its power by filing for trademark protection not a simple problem to solve. Candy Crush has had a significant amount of success over the past two years and is still continuing to prosper. King is aware that it is not attempting to control the word “candy,” but rather is trying to prevent others from taking advantage of the company’s success.

The idea of King applying for an application to protect “candy” and “saga” does not seem unrealistic. Apple was successful when it filed a trademark for the word “Apple.” “Candy”, like “Apple,” is a successful product and is continuing to be successful in the market today. Also, future lawsuits may arise and without trademark protection, King will be at a huge risk. So, why shouldn’t Candy Crush be able to protect words like “candy” and “saga?” Well, registering the term “candy” and “saga” could lead to a monopoly in the gaming world. The purpose of an open market is to allow for businesses to be creative and innovative in developing games, competing for market share with other companies. Competition is protected across most industries and highly valued in order to encourage business growth and reasonable pricing.

Overall, the filing by King to register the term “candy” and “saga” as a U.S. trademark has led to a heated debate in the gaming world. The words “candy” and “saga” are common words used everyday and are similar to words that already have trademarks such as “Times” and “Apple.” The idea of King being successful in registering the two terms invokes fear in gaming competitors. No matter the outcome of King’s trademark attempt, Candy Crush will still remain addictive to its players.

[1] See An Open Letter On Intellectual Property (Jan. 27 2014) archived at http://perma.cc/NGT6-VM93 (explaining King’s intellectual property debate in applying for an application to protect the words “candy” and “saga”).

New Partnership Raises Privacy Concerns

POSTED BY Kayla Morency

On February 19, 2014, Facebook publicly announced that it was acquiring one of the world’s most popular and fastest growing mobile phone messaging applications, WhatsApp, for an astounding $19 billion in cash and stock. In particular, the app is widely known around the globe due in part to its easy accessibility and user-friendly capabilities but also in part to its consumer base of 450 million that is gaining about one million users every day. As a result, Facebook formed the partnership with the fairly new startup in order to boost its popularity among the younger crowd.

The application’s unique capabilities help explain why the company is attractive to a younger audience, thus contributing to its enormous success. In particular, WhatsApp serves as a cross-platform mobile messaging app, so that its customers can send and receive free SMS and MMS text messages from several different types of phones, including the iPhone, Android, Blackberry, Windows Phone, and Nokia. These messages are sent using the phone’s existing data plan for web browsing and email, so there is no additional cost to the user, aside from the nominal membership fee. Furthermore, the app also enables users to create groups, so that multiple friends can communicate at once while sending unlimited pictures, audio, and video messages. These features motivated Facebook to enter into a partnership with the startup in order to become the leader in the market for messaging and to attract younger users of social media.

However, in the immediate aftermath of Facebook’s press release, WhatsApp’s users expressed serious concerns that their personal data would be shared with advertisers. As a result, WhatsApp stated on its blog that it had no intention of changing any of its business practices in light of Facebook’s acquisition. Moreover, WhatsApp insisted that the company would remain autonomous and operate independently, so that users could still enjoy their services for its nominal 99-cent yearly fee. However, even after CEO Jan Koum’s promises, users remain skeptical and believe that after a while advertisements will interrupt their mobile messaging.

Aside from this is the concern of many federal and governmental institutions, which are considering the merger in light of worldwide data regulation and restrictions. For example, Schleswig-Holstein’s data protector commissioner, Thilo Weichert, acknowledged that German data protection laws strictly regulate the possibility of merging WhatsApp user data with Facebook user data. In particular, the Telemedia Act and the Federal Data Protection Act both purport that data stored for one purpose cannot be used for another; however, no similar restrictions exist in the United States. Weichert also expressed fear that the merger of personal information would be exploited for advertising purposes, which is the same concern for consumers. Weichert’s expert opinion suggested that these users are rightfully concerned seeing as though many of them moved away from Facebook in favor of a more privacy-friendly alternative, such as WhatsApp.

Despite CEO Jan Koum’s and Facebook’s repeated assurances that WhatsApp would operate independently and honor its current privacy and security policies, it is still too early to gauge the implications of this deal. Since a significant amount of WhatsApp users are located in Europe, there is likely going to be more detailed investigations by the European authorities, including Germany. However, CEO Jan Koum was quick to remind the public that WhatsApp’s respect for privacy is considered tantamount to the company and that the company was predicated on the idea that users need to share very little personal data. For example, information such as the user’s name, email address, birthday, place of employment, etc. is not collected or stored by WhatsApp, and the company adamantly stated that it has no plans to change their mode of operations in the future. Furthermore, in support of Koum’s assurances, the company recently added a new privacy option that allows users to limit the visibility of their information from being seen by the public.

Although many individuals and governmental officials have expressed their concerns about Facebook’s acquisition of WhatsApp, the strategy seems logical considering that WhatsApp’s popularity is driven by its unobtrusiveness in its users’ lives. As a result, consumers appreciate the minimal fee in exchange for the comforting reminder that the company is not earning its money by exploiting its users’ personal information. Even though there is no guarantee that WhatsApp will maintain its identity, Facebook’s Mark Zuckerberg acknowledged that it is the app’s unique features and attributes that Facebook hopes to capitalize on, rather than alter, in order to retain its position as a social media and messaging mogul.

 

Netflix Refuses ISP Restrictions

POSTED BY Alex Zamenhof

Earlier this month, Netflix and Comcast announced a special arrangement that the two have entered into: namely, that Netflix streaming will be faster for people who have Comcast as their ISP. In a recent article, I found a fantastic description that breaks down exactly how video traffic on the internet works:

“Video traffic on the Internet, like the service that Netflix runs, is very sensitive to delays. As a result the Internet is built in such a way that content is distributed throughout the network in what’s known as content delivery networks, or CDNs. These services strategically place servers throughout the Internet and then they cache certain content, like streaming video, on these servers, so that when customers request a particular video it can easily and quickly be delivered to them. This reduces overall traffic on what’s known as the Internet backbone. And it results in a more efficient use of network resources. It also greatly improves performance and quality of service.”

Netflix has already built its own CDN (Content Delivery Network). The idea behind this is that Netflix would not have to pay a third party to provide its service to an ISP. However, big ISPs believe that Netflix should have to pay for the requisite increase in service necessary to stream effectively. While Netflix is trying to cut out the middle-man, the big ISPs are aiming to charge Netflix just as if it were a CDN itself. How do they achieve this? By dropping not so subtle hints that should Netflix refuse their offers of deals, then Netflix streaming may experience a slower connection on their servers.

This is tantamount to extortion in my book. Netflix is stepping on the toes of big ISPs, and they recognize this. With Comcast’s imminent merger with Time Warner, the ISP provider is slated to become the biggest provider in the US, owning some 30% of the market. Aside from antitrust issues, which are already being lobbed, it creates problems for emerging services like Netflix, Hulu, and Amazon who are all on the verge of premiering their own video streaming services, networks, or other similar things that have historically been the sole ground of the ISPs.

Netflix has made the logical statement that users who stream using Netflix’s own CDN experience significantly better viewing – a fact that is not in dispute by ISPs. This is now the critical juncture, where either Netflix tries to stand up for itself, or gets amalgamated into one or more of the existing ISPs.  Unfortunately, because Netflix is on top of its game in the streaming world, it is true that ISPs must spend more money to upgrade their servers to keep pace with Netflix – therefore, it does make sense that those ISPs want a portion of the pie in exchange for upgrading their servers. I believe that in the near future, we will either see one or two ISPs dominate, or a whole host of choices: perhaps Netflix, Amazon, Hulu, Facebook, etc. will begin to pioneer their own subscription services to compete with the big ISPs. This would put the US more in line with other nations around the world, where there are a multitude of choices, rather than just a few big names.

How Natural is All Natural?

POSTED BY Kayla Morency

In the 1970’s, biologists began experimenting with genetics and biotechnology, which ultimately resulted in genetically engineered DNA.  This new process involved the crossbreeding of various animal, plant, viral, and bacterial genes, which would not naturally occur in the environment.  In fact, the first patented genetically modified organism (GMO) was used by General Electric to consume oil in the event of large spills.  However, only a few individuals ever imagined that GMOs would later become a common ingredient in most food products, and by the late twentieth century, the genetically modified food crop began to appear on grocery store shelves.  These genetically modified food crops became increasingly popular in the marketplace, because the GMO capabilities provide accelerated growth rates, increased resistance to pathogens, and longer shelf lives.  Although this new food source has become a common ingredient in most processed foods, the scientific community and the public are becoming increasingly concerned about the health consequences this phenomenon poses.  However, unlike the European Union, which has taken a more skeptical approach to this technology, the U.S. remains one of the few industrialized nations that does not require GMO labeling of consumer goods.  Nevertheless, the U.S. is starting to see the people mobilize and demand that they be fully informed on the products they are purchasing and consuming.

Even though the U.S. is starting to see a shift in public attitudes away from consumer ignorance towards consumer awareness, there has not been any significant progress requiring GMO products be labeled as such.  There has been very limited legislative action taken, and although several states are in the process of considering GMO labeling bills, individuals are finding other ways to demand government action.

Recently, a federal consumer fraud class action suit was filed against one of the largest processed food manufacturers, Frito-Lay.  Several purchasers of Frito-Lay products allege that the company failed to provide truthful and accurate information by using GMO ingredients under the guise “All Natural.”  While the company pledged that their products contained all natural ingredients, it failed to acknowledge that the products also contained genetically modified corn and genetically modified soy.  As a result, consumers contend that Frito-Lay violated state and several federal fraud and consumer deception laws.  Although Frito-Lay remains a subsidiary of PepsiCo, another leading manufacturer of processed foods, the class action suit has been dismissed with respect to the parent company, because there was no evidence to suggest it participated in the advertising campaign; meanwhile, Frito-Lay will be compelled to defend against the use of GMO products.  Even though PepsiCo uses genetically modified sweeteners in its products, unlike Frito-Lay, it adhered to existing U.S. policies by simply not labeling them.

As the political arena currently stands, there are a number of potential implications that this suit may have on the future of the food industry.  For example, the Food and Drug Administration (FDA) has yet to clearly define the term “natural” when incorporated into food labels.  Therefore, many individuals are hopeful that this suit and others pending will put enough pressure on the FDA to address this largely contested issue.  In addition, advocacy groups, such as the Non-GMO Project and the Right to Know GMO, continue to generate public concern among consumers through advertising campaigns and mobilize voters in support of over a dozen pending mandatory GMO labeling statutes.  Many are hopeful that consumer pressure, even in the form of litigation, will motivate legislatures to pass mandatory GMO labeling statutes, making these consumer fraud suits obsolete.  However, until then, support for mandatory labeling statutes and boycotts of non-GMO products appears to be on the rise.

The Beginning of a New Era for Law Librarians – Out With the Old, In With the New

POSTED BY Travis Bortz

In a legal world that some perceive to be in a tailspin amidst a less than thriving economy, effectiveness and efficiency have become very important.  As law firms search for new ways to operate more leanly, the question arises whether or not there is a demand for law librarians.  Law librarians have been in the forefront of cost-cutting measures since 2008. Although it can be argued that law librarians are a wealth of knowledge and a valuable resources, as technology continues to transcend the industry it is becoming more transparent their demand is minimal.

However, over the past five years law librarians have viably searched for ways to maintain their importance in the legal profession; most notably leaving traditional roles consisting of on-demand research and moving towards the support of true knowledge management.  How law librarians are to change their roles into the “new normal” in a digital world calls for questioning, rethinking, and reimagining the goals and opportunities to satisfy the demands in the technology first business climate.

Physical law libraries have begun to downsize as most documents, books, and content in general have moved to digital versus paper format. “The new business mantra is: Libraries are a service, not a place.” Understanding it is imperative the importance of selling their service/product coupled with the ability to successfully market their value to firms/attorneys that provides an effective and efficient solution law librarians have been successfully transitioning and catering to the new demands of attorneys and law firms.  As law librarians continue to transition into new and innovative roles within the legal world the position of Chief Knowledge Officer has become a position within firms.

The gap between technology and information professionals is becoming narrower and the development of the new law librarian is in full swing. The vision of the new law librarian will create the following new roles: intranet content development, creation of expertise databases, database development and maintenance, taxonomy, develop controlled vocabulary, legal project management, search engine optimization, business and competitive intelligence, development and maintenance of social networking tools, portal knowledge support services, and cost recovery.

With new roles, librarians can create virtual communities that support attorney’s research needs. They can design databases that can aid in readily tracking the correct parties to serve as witnesses, alumni, outside counsel, etc.  They can overcome the considerable pain point for digital content, the absence of a taxonomical structure, by simplifying the retrieval of the firm’s intellectual capital.  They can utilize their knowledge and insight to In addition, there are few within a law firm that are more capable of providing information in a crunch then law librarians, thus they provide the competitive edge and insight firms seek.

As the profession transcends, the new law librarian has evolved. Today, librarians both enhance the support provided to attorneys and further the business of law; a new efficient and economical approach.