Copyright law in the U.S. was created in 1790, edited in 1831, updated in 1909 for “motion pictures,” and extended to unpublished works in 1976. Which means, according to the current Register of Copyright Maria Pallante, who leads the U.S. Copyright Office, that it is high time for an update.

“We always love it when law is brought up to speed with technology,” Josh Mendelsohn of Silicon Valley’s political advocacy organization Engine.is. “Hopefully we’ll get some some good legislation out of it.”

The review is welcomed by those looking for more freedom and less corporate control over the very stuff of our culture: digital content.

“This is great news for groups like my own, the EFF, and Public Knowledge,” Sina Khanifar, who led the White House cellphone unlocking petition drive and sees this as an opportunity to address the DMCA at the same time. “We’ll be pushing strongly for comprehensive Section 1201 reform via a grassroots campaign at FixtheDMCA.org. The DMCA’s unintended consequences on our rights to modify and repair the electronics we buy, and to remix and make fair use of copyright content could easily be fixed as part of a larger Copyright reform act.”

Whether that actually happens is subject to long months of debate and discussion. But Rep. Goodlatte said in a press release that “there is little doubt” the current copyright system is challenged by new technology, and that a wide review of copyright laws — and related enforcement mechanisms — is needed.

That’s precisely what Pallante, who had testified before the House Judiciary Committee last month, said in a recent lecture on the state of copyright law. She also addressed the need for reviewing the DMCA and its application. Corporations have used the DMCA to take down links, because the DMCA says that content-sharing and social services are responsible for the content their users post.

“The next great copyright act must … serve the public interest,” she wrote. “It must confirm and rationalize … the ability of authors and their licensees to control and exploit their creative works, whether content is distributed on the street or streamed from the cloud.”

The public interest part sounds hopeful to those who want greater freedom for users when it comes to digital content and digital devices — not so much the control and exploitation bits. But those two sides, of course, will form the basis of the battleground.

“We know the movie and music industries have been spending lots of resources on this,” Engine’s Mendelsohn told me, referencing two combatants likely to be on the control side at the coming hearings. “But we in the tech community have spent a lot of time on this as well, and now we are part of the process.”

“There is much work to be done,” Rep. Goodlatte said.

Indeed.

photo credit: opensourceway via photopin cc

IsAnybodyDown published galleries of nude photos, including identifying features, names, and cities.

Florida is one of the first states to take definitive action against revenge porn. The House subcommittee unanimously voted in favor of a bill that would make posting revenge porn a felony punishable by up to five years in prison and a $5,000 fine.

Despite the fact that revenge porn is a pervasive and alarming problem, the practice still exists in a legal grey area. Revenge porn refers to the act of ex-lovers uploading illicit photos to the Internet. The images are often accompanied by personal identification information, and done without the subject’s consent. This is not technically illegal because the photos may be considered the photographer’s intellectual property, and the line between invasion of privacy and free speech is a thin one. Furthermore, operators of these sites claim they are not responsible for user-submitted content due to the Communications Decency Act, and content is often submitted anonymously.

House Bill 787 “prohibits knowing use of [content] that depicts nudity and contains any of depicted individual’s personal identification information or counterfeit or fictitious information purporting to be such personal identification information, without first obtaining depicted person’s written consent.”

Victims can currently make claims against their harassers through civil channels, but this bill would make revenge porn a criminal act. It recognizes “contextual consent,” which means that while a person may allow photographing or filming in one context, they would not allow it in another. For example, a girlfriend who lets her boyfriend take a nude photo in the privacy of her home is not consenting to having that photo published on the Internet a year later with links to her social media profiles. Other provisions of the proposal include enhanced penalties for violations involving victims under 16 years of age and targets perpetrators who live outside of Florida but post content involving in-state residents.

However, some say the Bill is not specific enough. In an interview with Salon, Mary Anne Franks, a law professor at the University of Miami, said that while the recognition of “contextual consent” is good, the law is both too broad and too narrow. On the one hand, it applies to any image that depicts nudity, which could include someone standing next to a nude statute. On the other hand, the law is too narrow because it does “not apply to depictions of graphic sexual activity unless certain parts of the body are visible.” Franks cited a case where a man posted a picture of himself ejaculating on his sleeping girlfriend’s face, which does not violate the law.

Revenge porn and its criminalization have recieved national attention over the past week as a group of lawyers, bloggers, and activists work to bring down “IsAnybodyDown,” one of the most well-known revenge porn sites, which features photos of hundreds of people. In March, CBS Denver reported that the federal government may launch a formal investigation into the site after several underage victims filed copyright registration certificates in Colorado with intent to sue. These class action suits, while they can have an impact, are slow to move and do not have the immediacy of a criminal case. The man behind IsAnybodyDown, Craig Brittain, has twice closed down his site after coming under scrutiny and transferred the content to a new site to frustrate the authorities.

Revenge porn sites have existed for a decade, and yet little progress has been made to address the problem. San Francisco attorney Erica Johnstone told VentureBeat’s Christina Farr that when she first started handling cases like these, they were individual cases of an ex seeking revenge. Now, there are more examples of hacking and extortion, such as a scheme that charges victims hundreds of dollars to remove them from the site. Additionally, the rise of camera phones and sexting mean that people can be photographed without their knowledge.

The Florida bill provides an effective date of October 1, 2013. Representative Tom Goodson authored the bill, with support from the Brevard Country Chief’s Association, State Attorney Phil Archer, Attorney General Pam Bondi, and the Florida Sherrif’s Association. The bill followed a report of a young woman in Brevard County who had nude photos, her name, email address, and hometown posted without her consent, and when she went to the Sheriff’s department for help, was told it was not a crime.

Photo credit: Screenshot

California State Assemblymember Bonnie Lowenthal (D-Long Beach) has introduced the “Right to Know Act 2013,” which would force businesses to tell consumers what personal data they have and with whom they’re sharing. The bill follows lobbying efforts from privacy groups the Electronic Frontier Foundation and the American Civil Liberties Union of Northern California.

“This bill would instead require any business that has a customer’s personal information, as defined, to provide at no charge, within 30 days of the customer’s specified request, a copy of that information to the customer as well as the names and contact information for all third parties with which the business has shared the information during the previous 12 months, regardless of any business relationship with the customer,” reads a portion of the act.

Privacy and data ownership is a hot-button issue within the tech community. Companies ranging from giants like Facebook and Google to small e-commerce startups gather information about user activity and sell them to data brokers or advertising networks to create better-targeted advertising. Many consumers are be uncertain of privacy policies, unaware that their behavior is being tracked, and/or are unsure how to prevent it.

In a blog post supporting the Right to Know Act, the EFF wrote: ”Let’s face it: Most of us have no idea how companies are gathering and sharing our personal data. Colossal data brokers are sucking up personal facts about Americans from sources they refuse to disclose. Digital giants like Facebook are teaming up with data brokers in unsettling new ways. Privacy policies for companies are difficult to read at best and can change in a heartbeat. And even savvy users are unlikely to fend off the snooping eyes of online trackers working to build profiles of our interests and web histories. … The new proposal brings California’s outdated transparency law into the digital age, making it possible for California consumers to request an accounting of all the ways their personal information is being trafficked.”

But “big data” means big money these days. Tech companies can use data to optimize their business strategies, create revenue streams, and attract advertisers (not to mention the lucrative companies that act as data brokers). Chances are the tech community won’t react kindly to this proposal. However, the EFF said that this bill is about transparency and access rather than restrictions, and it does not limit or restrict data sales. Google and Facebook have not yet responded to requests for comment.

The European Union has supported its citizens rights to submit a request to acquire data with its Data Protection Directive. In January 2012, the European Commission met with strong resistance after drafting the General Data Protection Regulation, which said all foreign companies processing data of EU residents had to comply with their regulations. Yesterday, data-protection authorities from Britan, Germany, France, Italy, Spain, and the Netherlands launched a joint action against Google after a five-month investigation which found that Google failed to give users information about how their personal data was being used across multiple platforms.

California has a long history of consumer protection laws, but the tech industry is an important part of state’s economy and has sway over legislative decisions. Do people have the right to “habeus data?” Or do businesses have the right to do what they want with the information users give them? Read A.B. 1291.

Photo Credit: http://www.asmdc.org/members/a70/photo-gallery

In an amicus brief (embedded in full below), a couple hundred companies have signed on in support of marriage equality. The brief is being presented to the Supreme Court, which is debating DOMA, the Defense of Marriage Act, in the bellwether case United States v. Windsor*.

Some of the tech companies involved include (in alphabetical order) Akamai, Cisco, eBay, Facebook, Gilt Groupe, Google, Intel, Intuit, Microsoft, Oracle, Orbitz, Qualcomm, Twitter, Xerox, and Zynga. The city and county of San Francisco has also signed on to the brief.

What business do a bunch of corporations have getting involved in a highly personal political debate?

They’re glad you asked. In the brief, the amici** write that “the burden of DOMA’s dual regime is keenly felt by organizations that conduct operations or do business in jurisdictions that authorize or recognize marriage between two people of the same sex. … Far from creating uniformity, DOMA obliges employers to treat an employee married to someone of the same sex and an employee married to someone of a different sex unequally.”

DOMA, the brief continues, requires companies to treat their employees unequally when it comes to benefits for health care, child care, retirement, and more. And in competitive hiring environments, that kind of inequality is bad for tech companies in particular.

The brief also called DOMA-mandated tax issues “discriminatory,” brought up issues surrounding 401(k) plans and married couples, and touched on the difficulties in bringing in non-U.S.-born employees and their same-sex spouses on working visas.

And in states where same-sex marriages are legally recognized, employers shoulder the burden of treating the same employee very differently for federal and state purposes, including benefits and taxes. “Confusion abounds, and even sophisticated employers struggle,” the brief reads.

“Employees of Yale University, for example, learned in January 2011 that the university had failed to withhold taxes for the imputed value of spousal healthcare coverage in 2010, and that these amounts would be deducted from their paychecks in 2011.”

The result has been hiring consultants, figuring out complicated workarounds, and doing infinite legal tapdances — and still ending up with policies and practices that discriminate against employees.

“DOMA conscripts amici to become the face of its mandate that two separate castes of married persons be identified and separately treated,” the brief continues.

“We must treat one employee less favorably, or at minimum differently, when each is as lawfully married as the other. We must do all of this in states, counties, and cities that prohibit workplace discrimination on the basis of sexual orientation and demand equal treatment of all married individuals. This conscription has harmful consequences.”

Those consequences include legislation from individual employees, overall lower morale in the workplace, and a negation of some company’s missions and ethics statements.

“Our principles reflect, in the truest sense, our business judgment,” the brief concludes. “By force of law, DOMA rescinds that judgment and directs that we renounce these principles or, worse yet, betray them.”

We’ll have in-depth follow-up stories in a few hours. Stay tuned.

*United States v. Windsor is an appellate case scheduled to begin oral arguments before the Supreme Court on March 27. The case involves two New York women, Edie Windsor and Thea Spyer, who married in Canada after a 40-year relationship. When Spyer died in 2009, Windsor was required to pay $363,000 in estate taxes, which would have been waived if their marriage had been legally recognized.

**Amici and its singular form, amicus, refer to the “friend of the court” status of these parties; amicus briefs are filed by parties not directly involved in the lawsuit or legislation at hand.

Image credit: Shutterstock

If you’re trying to understand how existing intellectual property law applies to 3D printing, let me save you some time: It’s a complete mess.

From top to bottom, 3D printing raises more legal questions than it answers. There are lots of companies making 3D printing hardware, even more companies offering online repositories of 3D designs, plenty of services that will print things for you, and almost zero precedent for disputes among them. From a legal standpoint, 3D printing is the Wild West.

While that may sound liberating for such a young industry, it’s also potentially dangerous. There’s a very real chance that the lack of any regulation could be replaced with bad regulation. And that could have some dire effects on the whole industry.

“Copyright precedents are created one case at a time, and eventually they can lead to the accretion of copyright expansion in a way that was never intended,” Public Knowledge attorney Michael Weinberg said.

Bad laws, Weinberg says, emerge out of a basic misunderstanding of how industries work. And for a young technology like 3D printing, misunderstandings are going to be common.

How bad could it get? Consider a law that would force companies like MakerBot and 3D Systems to shell out a percentage of their sales to offset the piracy factor, with the money going into a fund to compensate makers of plastic toys, like Mattel and Disney. Or a law that required 3D services to adopt software that limits the number of times 3D design files (STLs, etc) can be printed or which printers can print them.

For people who are excited about free, unfettered access to 3D printer technology, those are some scary possibilities. But Weinberg is convinced that 3D printers, on the whole, will come out all right.

“These are general-purpose machines, and the companies that make them are fairly well-protected,” he said.

Copying, printing, infringing

Right now there are quite a few sites that act as repositories for 3D designs. MakerBot’s Thingiverse, Shapeways, and i.materialise all invite people to upload their designs and share them with (or sell them to) others.

But once you let people upload their own files, you expose yourself to all of the risks that come with that freedom, such as files that infringe on copyrights. (Consider all of those Yoda figures that Star Wars fans like to put on Thingiverse, for example.)

One 3D-printed interpretation of the Penrose triangle. (Source:Thingiverse)

These sites handle copyright concerns the same way YouTube does: Copyright holders post takedown notices, and the hosting sites, as protected “safe havens” under the Digital Millennium Copyright Act (DMCA), cover their butts by taking the infringing files down. Simple enough.

Sometimes the process is a bit more complicated, though. Thingiverse hit a major milestone in February 2011, when it got its very first takedown request. The complaint came from Ulrich Schwanitz, a designer who claimed that a Thingiverse user had uploaded “his” design to the site without his permission. The problem? The design in question was a model of the Penrose Triangle, created in 1934.

Community response to Schwanitz’s claims was, suffice it to say, not glowing (“Ulrich Schwanitz is an ass,” a Thingiverse commenter eloquently quipped), and Schwanitz eventually dropped his infringement claims and donated the design to the public domain.

Another example: Earlier this month, 3DLT, a 3D design marketplace, posted designs on its site without the permission of the design owner. 3DLT eventually blamed the problem on sample listings that went live before they were supposed to, but the damage was already done: 3DLT was forced to give a public apology and reaffirm its commitment to protecting the intellectual property of all designers — not just its own.

“3DLT is committed to providing a consumer-friendly, 3D design marketplace where creative assets are safely protected and designers are properly compensated for their intellectual property,” the company said in a statement to VentureBeat.

But while Thingiverse and 3DLT are already dealing with IP issues, Todd Grimm, president of consulting firm T. A. Grimm & Associates, says that the concerns over 3D printing are, at this point, overstated.

“That future of consumers making their own designs and firing up their personal 3D printers to pirate objects is years, or even decades away,” he said.

Unlike most people who pay attention to 3D printing, Grimm isn’t convinced about the technology’s short-term potential to disrupt, say, the kids toys or spare car parts industries. And neither, he says, are the industries themselves.

“Honestly, most companies may not even be afraid of it. They’re really not thinking of this now,” he said.

The pirates discover 3D printing

Companies may not be paying close attention, but the days when physical objects can be pirated as easily as Weezer songs are coming, and the Pirate Bay is already pushing things along.

A slow start for 3D-printed piracy.

Last year the torrent site launched its “physibles” category, which hosts STL designs that 3D printer users can print out. Right now the category only houses a hundred or so files, and they’re limited to things like gun parts, Guy Fawkes masks, and printable copies of records like Pink Floyd’s “The Dark Side of the Moon.” The early days of pirated objects are, well, subdued.

It won’t always be this way, of course, and it’s only a matter of time until the piracy of physical objects will be as common as the piracy of music and movies is today.

How will companies handle this? That depends on how well they adjust to the realities of  IP law.

Public Knowledge’s Michael Weinberg says one of the big challenges for all object industries will be to collectively recognize the realities of intellectual property as it relates to both digital and physical objects. The first step? Realizing that IP law is nowhere near as robust as we think it is.

“People assume that everything they sell is protected by IP, but that’s often not the case with physical things,” Weinberg said.

“Companies are going to have to recognize when they have legit claims and when they won’t — and most of the time, they won’t,” he added.

This is something established industries won’t like to hear, of course and, if history is any indication, most of them will react by firing their legal teams in all directions.

Weinberg, however, hopes that they won’t. The music and movie industries have already shown us what happens when fear drives ligation: Lots of people get sued, lots of money gets spent, and no one really has much to show for it.

Instead of suing the 3D printing industry, smart companies of the future are going to figure out how to profit from it. 

“Prosecutors do not acknowledge nuance,” Watt told me today. “They turn everything into a very clear-cut moral issue, where everything is nicely packaged into a premeditated act.”

Swartz, of course, downloaded almost 5 million academic articles from JSTOR, a nonprofit that provides access to academic journals. It was probably illegal, although JSTOR decided not to pursue legal action. Heymann did, however, and very aggressively. Swartz, who had a history of depression, committed suicide just five days ago.

“If you look at the sorts of cases that [Heymann] prosecutes, he does seem to very much enjoy being the first one to accomplish something in a legal sense,” Watt said. “He seems to push the envelope … and I have certainly heard the word ‘bully’ used to describe Heyman. It was a common label.”

That’s something that legal activist Lawrence Lessig highlighted on his blog post about Swartz’s suicide as well.

Watt was convicted of helping a criminal group steal 40 million credit cards from TJX and various retailers after creating a data-sniffing software tool for his best friend. According to Watt, he wasn’t in the conspiracy and didn’t know exactly how his software would be used; he just shared it, as is common in the hacker/cracker community. And he didn’t receive any of the ill-gotten gains.

“I acknowledge I’m a much less sympathetic character, simply because of the company I kept,” says Watt, a fitness addict who now runs a sports supplement store but is still negotiating with his probation officer over whether he can use computers. “What I do know is that in both cases you have actions taken by the defendants which are not in any way criminal … and actions which are not overtly criminal need to precipitate a much more nuanced investigation, and a much more appropriate sentence.”

When it comes to Aaron Swartz’s case, Watt says that prosecutors used the same damage and punishment matrix they had used for him. Based on the number of files and the calculated damages, Swartz was facing half a lifetime in jail and a million-dollar fine.

“But if you look at Aaron’s history, any reasonable person would assume he was not going to sell this information … he wanted to free this information,” Watt told me. “And yet you have this insinuation that he might have wanted to profit from it.”

When Heymann spoke in court about Watt, he highlighted Watt’s supposed “sociopathic tendencies” by finding quotes from Mike Tyson and the movie Fight Club on Watt’s MySpace page, he told me, insinuating that Watt had created his data-sniffing code as part of an attempt to “bring down the end of the country’s financial institutions.” Then, in closing comments, Watt says that Heymann said that he was “not someone to feel sorry for,” had enjoyed a “privileged background,” and that “his parents had read to him as a child.”

That kind of take-no-prisoners prosecution, Watt feels, contributed to Swartz’s suicide. And it’s something that doesn’t advance the pursuit of justice.

“In both situations there was a very compelling case that nothing illegal had been done,” Watt said to me. “To face those sorts of overwhelming odds … it’s just not justice.”

Watt, who will be speaking about his experiences with the law in April at Infiltrate 2013 in Miami, says the waiting is the hardest part.

“When I think of the stress that Aaron was feeling … that was absolutely the most psychologically debilitating time of the process,” he says. “It’s worse than being behind bars: You’re in limbo, you’re unable to work, and you’re financially hamstrung.”

Jonathan James, one of the other hackers investigated in the TJX investigation for which Watt did time, committed suicide, leaving a note that said in part:

I have no faith in the ‘justice’ system. Perhaps my actions today, and this letter, will send a stronger message to the public. Either way, I have lost control over this situation, and this is my only way to regain control.

There is a petition up on WhiteHouse.gov to fire Assistant U.S. Attorney Steve Heymann. It currently has 7,969 signatures and says:

We should not destroy the lives of human beings for crimes against computer systems that harm no one and provide no benefit to the perpetrator. Such actions should be treated as forms of protest and civil disobedience. To prosecute these actions the same as rapes and murders is a savage abuse of the criminal justice system which continues to destroy the lives of peaceful, productive members of society.

Photo credit: RageSoss/Flickr

Many startups spend more than $10,000 on legal bills over the course of their first year. For a bootstrapped startups, that can amount to more than 25 percent of the company’s startup capital.

Starting up your company should not put such a dent in your early capital. Here are a few tips that can help entrepreneurs save thousands of dollars while still getting high quality legal services.

Use smaller firms, solo practitioners, and virtual services

Most of the time, finding the right lawyer is not easy. You might have to look up and call ten different lawyers and get price quotes. Many times, this means just getting hourly quotes as opposed to a firm idea of much something will cost. Often, entrepreneurs get fed up searching and make a selection out of frustration or go with a referral from a friend, which can still lead to overpaying. This is especially true when you need a la carte legal services, such as drafting an agreement or reviewing a document.

Finding the right attorney in our experience comes down to two basic understandings:

1. Independent and boutique lawyers can be just as effective as big law firms for 90 percent of your legal needs; and
2. Having a local lawyer is not as important as you think (i.e. virtual lawyering is where the puck is headed).

Smaller law firms and independent practitioners can be just as good as the big law firms. In fact, many of the lawyers who start their own practices came from these bigger firms. Relying on online reviews or social media connections can help you to assess quality of these small outfits which lack brand recognition. This is why online reviews are becoming so important. The one downside of using smaller outfits is that not everything is under one roof. You may need to work with several lawyers to service all of your needs, but you will save bundles.

Experience can include local experience, if that is important for you. For most business issues (outside of real estate and landlord/tenant lawyers), most lawyers doing business in the same state as your company will suffice. An increasing number of businesses are working with lawyers virtually from other cities in their state, choosing to do everything via email and phone.

We have seen around 60 percent of the entrepreneurs we work with have no preference for local lawyers because their rates more cost effective than San Francisco or Silicon Valley firms’. Thanks to virtual lawyering, cost effective and high-quality legal services are becoming more available from non-local lawyers.

Get it done right the first time

Some of the most expensive legal work is correcting work that was not done correctly the first time. More often than not, this occurs when using a document automation and filing service. Talk to any startup lawyer, and they will tell you they spend 15 percent of their time (or more) correcting the mistakes made by such services, most notably in company formation.

It is not because these services are bad services. They are actually good at doing a few things very well, but their services are limited and leave out requisite steps in critical processes that usually require a lawyer to complete. If you choose to use one of these services, make sure you do all your homework and know every single step that must be taken or the most important part of the documents you are automating. Otherwise, you will be paying 10x what you saved initially by using one of these services.

Take care of legal stuff sooner than later

There are most certainly legal tasks that you can and probably delay. I typically do not recommend forming a company until one has a product or a real team working on a product close to being released. Most of the time, however, the right time to take legal action is now.

One of the most common things we see is when entrepreneurs start operating their business without doing a trademark search and even getting a trademark. Only after operating their business for months do they realize there is another company with a similar name in a similar industry, or worse yet, they get a cease and desist letter. The costs to rebrand can be extreme.

Another common example is having contractors join a company. In the haste of getting people started, so many entrepreneurs do not put an agreement between the company and contractor in place. This formality gets put off and then before you know it, you have a dispute with a contractor and they take off with code or do not complete the work you paid them for — both costly results.

When faced with saving money, entrepreneurs have blazed the trails in finding ways to get high quality and cost effective services. Legal services are no exception and we should expect the industry to change dramatically over the next 10 years. By finding the right lawyers and avoiding some common mistakes, you can help save your startup valuable capital needed for the most important thing, growing your company.

Matt Faustman is co-founder and CEO of UpCounsel, a site for finding and hiring legal counsel. Prior to UpCounsel, Faustman worked as a startup attorney in Silicon Valley helping consumer and enterprise internet companies get started and grow.

Top image courtesy of Gunnar Pippel, Shutterstock

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Jurify has an ambitious goal to improve access to legal research and convince non-lawyers and lawyers alike to offload their expertise into a database of free or cheap information. And it’s launching today.

Think of it as a Wikipedia for the law. By crowdsourcing the curation and information-gathering process, the startup plans to slash subscription fees for legal research.

The founders, Erik and Nicole Lopez (husband and wife, who are both graduates of law school), don’t buy into the evil lawyer stereotype. In fact, they are hedging their careers on the community’s willingness to improve access to justice. Nicole is a former attorney and left her steady job in January 2011. They developed the site on evenings and weekends for several years and launched the beta this October.

On the site, attorneys are rewarded with recognition through direct attribution as well as placement in a practice-specific list of the top attorneys. “Jurify gives content creators more bang for their buck in the form of potential business and a boost to their careers,” said Nicole, the company’s COO.

To ensure that information is factually accurate, submissions will be vetted by credible attorneys — “they aren’t compensated with money but with recognition,” added Erik.

The Lopezes plan to deliver this legal information to lawyers and the public-at-large at little or no cost. It is organized by topic (“according to the way that people think,” the founders explained) and is designed to make sense of the abundant legal resources that are already available on the web from statutes, regulations, cases, white papers, and articles.

To succeed, the founders will need to reach a critical mass of users. It seems somewhat implausible that a lawyer, or any professional for that matter, would donate their time and hard-earned expertise to a research project. However, lawyers from the growing number of small practices may get on board if it proves to be a means to reach potential clients.

In addition, the founding team have tapped into their network to sign-up members from prestigious law firms, such as Baker & McKenzie, Jones Day, Wilson, Sonsini, Weil Gotshal, and Kirkland & Ellis. According to the founders, lawyers from Silicon Valley tech behemoths like Oracle and Yahoo will also offer their expertise — no doubt, the information they provide will prove useful to entrepreneurs.

This isn’t the first attempt to disrupt the legal research space. Premium services LexisNexis and Westlaw dominate the market, but are highly expensive, deeply technical, and are not often used by non-lawyers. The information on these sites has been extensively reviewed by armies of well-paid attorneys.

Legal-tech companies like AttorneyFee, which is slowly dismantling the monopoly of the white-shoe law firms, LegalZoom and RocketLawyer, both online legal document providers, are paving the way for young startups in this space. With a goal to democratize the law, Jurify, BriefMine and MyRight have all launched in the past three months.

However, as VentureBeat reported, the market is a tough nut to crack. Venture capital funding is scarce, and few founders have the legal and technology domain expertise that is typically required.

Jurify, a Dallas-based company, has raised a small funding found from angel investors based in Chicago.

Image via Shutterstock

It may sound like a lot, especially with your pinky finger nestled next to your lips. But it’s $700 million too little, says Apple.

Apple won the billion dollar-judgment in late August when the U.S. District Court jury found Samsung guilty of willful patent infringement after just 21 hours of deliberation. The number was always going to rise due to that “willful” word, which can result in tripled damages.

But according to a Reuters report of a court filing late yesterday, Apple has decided to seek only $700 million more. Oh, that and a complete and permanent ban on the importation of infringing Samsung smartphones.

Apple had initially requested $2.5 billion, and it could have asked for a tripling of the $1 billion that was actually awarded. When paired with the fact that Apple filed with the court late on Friday — bound to be missed by most journalists — the $700 million would seem to indicate that Apple is sensitive to public opinion about patents, lawsuits, and competition by law versus competition in the market.

Especially when the permanent ban would cover more than 20 Samsung devices and could possible be extended to Samsung’s flagship Galaxy S3 as well. That would be a massive blow — and frankly would likely earn Apple more negative publicity than any size of court fine.

Samsung, of course, disagrees with the entire verdict and filed a motion in response, this one asking the court for a new trial. Essentially, Samsung also called the court unfair, saying that “the Court’s constraints on trial time, witnesses and exhibits … prevented Samsung from presenting a full and fair case.”

Samsung also recently struck out at Apple in another courtroom, attaching the iPhone 5 to an existing lawsuit.

At some point you would hope that Apple, Samsung, and Google (whose Android mobile operating system is, of course, central to this entire dispute) could sit down and negotiate a lasting settlement.

Because thermonuclear war — or even a ever-escalating cold war — doesn’t really serve anyone well.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Consider yourself preemptively re-served, Apple.

Samsung really, really wants everyone to know, even before the iPhone 5 hits the streets, that it is not yet attaching but is definitely planning to attach the iPhone 5 to its long-running court battle in U.S. District Court of Northern California.

At least Samsung had the good grace to wait until the phone was announced, unlike one Chinese company.

No, this is not the court battle it lost. This is another legal fight with Apple, which started in April of this year and is not scheduled to go to trial until March 2014.

This battle involves eight patents on data transfer, media syncing, touch screen technology, and more. Last night Samsung amended its complaint to include the iPhone 5:

“Samsung anticipates that it will file, in the near future, a motion to amend its infringement contentions to add the iPhone 5 as an accused product. On September 12, 2012, Apple announced that it will release the iPhone 5 on September 21, 2012. Based on information currently available, Samsung expects that the iPhone 5 will infringe the asserted Samsung patents-in-suit in the same way as the other accused iPhone models. Samsung plans to file a motion to amend its infringement contentions to address the iPhone 5 as soon as it has had a reasonable opportunity to analyze the device. Because Samsung believes the accused functionality of the iPhone 5 will be similar to the accused functionality of other accused Apple products, Samsung does not believe that amendment of its infringement contentions should affect the case schedule.”

There was no huge need to file last night, which makes me suspect that the timing of the announcement is part of Samsung’s campaign to disrupt Apple’s massive pre-sales ramp-up to iPhone 5 sales.

The iPhone broke all records in pre-selling two million units in its first 24 hours on sale. Fans — not necessarily of the saner sort — are already camping out for it, and U.S. sales alone could hit 50 million.

This court battle may be Samsung’s best bet to win against Apple after its billion-dollar failure, as two of the patents are FRAND patents. In other words, they are standards-essential, which theoretically means that no cellular communications device could be made without infringing on them.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

On the eve of their patent trial’s closing arguments, the chief executives of Apple and Samsung spoke with one another — as the judge ordered them to — but failed to come to an agreement.

Apple CEO Tim Cook and Samsung CEO Kwon Oh Hyun met one final time last week. It was all for naught.

“The CEOs did speak … [but] there was no resolution,” according to Samsung lawyer Kevin Johnson, as reported by CNet today.

The two companies are currently locked in a highly-publicized legal battle over intellectual properties related to mobile devices. Basically, Apple claims that Samsung’s Galaxy Tabs/phones (and other devices) are ripping off the iPad/iPhone. Samsung naturally denies those claims and argues that Apple is actually ripping off some of its own wireless technology patents. Aside from unleashing numerous prototypes, the trial has amounted to both sides arguing over what’s different about each other’s rectangle-screened devices.

Judge Lucy Koh, the presiding judge in the Apple-Samsung patent trial, had asked the two sides to speak with one another in a last-minute effort to avoid the potentially unpredictable outcome of the jury trial.

“I don’t mean to waste their time,” Koh said last week, referring to the jury.

Then, Koh said later, “It’s time for peace. If you could have your CEOs have one last conversation, I’d appreciate it.”

In other words: You kids, solve your own problems!

Koh has proven to be one of the most entertainingly direct jurists we’ve had the pleasure of reporting on in a long time. As this trial has gone on, it seems clear her patience with the two warring factions has been wearing thin. We’ve collected some of Koh’s best quotes, so check those out.

Closing arguments in the trial are scheduled for tomorrow. VentureBeat will be reporting live from the San Jose courthouse.

Via CNet

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Samsung’s Galaxy is bigger, lighter, and has a plastic back. Apple’s iPhone 4s is smaller, heavier, and has a glassy/metallic back. But these differences didn’t stop Susan Kare, the designer of the original Mac icon set, from confusing the two.

And it happened while she was comparing the two smartphones when prepping for her expert witness testimony for the Apple-Samsung lawsuit.

Kare helped create the iconic look and feel of the original Mac. So she should know a thing or two about design … and she should be adept at reading a design language … the hard-to-define but very real visual personality of a product or brand.

And yet she confused the two products, according to her testimony today in court.

Presumably, Kare was fooled by the home screen on some of the older Samsung models, where the design language is indeed somewhat similar to Apple’s iOS:

Source: http://www.blogsolute.com/root-samsung-galaxy-s-i9000-tool/9858/ and http://www.christiananimereviews.com/guides/enablejapanesekeyboard-iphone-itouch.php

iPhone vs Samsung

Similarities include a top bar for utility icons and time, an icon grid four across and potentially five down, and of course the home icons at the bottom, resting on a shelf or different colored background.

Newer Samsung Galaxy S3s, on the other hand, are almost always portrayed in official Samsung promo shots with only a few icons and fewer obvious similarities:

Testimony like Kare’s is dangerous for Samsung since the jury may, according to intellectual property expert Peter Toren, simply eyeball the two options when making a decision:

While design patents are litigated far less frequently than utility patents, and many companies do not even seek design patent protection, infringement of a design patent may be far easier for a jury to understand. A design patent protects only the ornamental appearance of an invention, not its utilitarian features. The general test for infringement for a design patent is relatively simple: Does the alleged infringer’s product design appear substantially the same as the patentee’s design?

While a patentee can buttress its evidence of the similarity of designs through the testimony, for example, of industry observers, consumers, and business partners, jurors can use their own eyes for a side-by-side comparison and decide for themselves if the products look substantially the same. It certainly does not depend on understanding highly complex technical matters.

The implication that Apple lawyers are doubtless attempting to insinuate in the jury’s mind: If a designer cannot tell the difference herself … how can the average person?

Of course, Samsung may well feel that Kare originally worked for Apple may have some influence on her impressions.

Image credit: Yuri Arcours/ShutterStock

In a Silicon Valley court today, Apple and Samsung are facing off in one of the most significant trials of the extensive iOS-Android legal battles. Apple is seeking damages in the billions for, primarily, what it says is patent infringement on its style and design. In return, Samsung is suing Apple over patents that it says infringe on Samsung inventions that are essential to the operation of a mobile phone.

Meanwhile, the two combatants can’t even agree on where to sit.

Since some experts believe that 85 percent of cases are won or lost in jury selection, the process is notoriously challenging. Lawyers from both sides will be seeking any evidence of bias in an attempt to stack the jury with as many favorable members for their clients as possible, while blocking any who might side with their opponents.

One problem for Samsung is location. The Korean company is fighting Apple on its home turf, in Silicon Valley. Apple is an iconic company in the U.S., but especially in the tech-centric San Francisco area. How this will affect potential jurors is an open question.

And lawyers for both sides will have to wrestle with questions such as whether iPhone use makes a jury member more likely to believe Apple, like Apple, or favor Apple. Or, conversely, if Android use might predispose jury members to side with Samsung.

Since smartphones are so personal, it’s a difficult question. Battle lines could already be drawn in jurors’ minds, because for many, they have already made a decision for one platform and against another.

A possible solution?

Only feature phone users need apply. Which would mean, of course, that people who know the least about modern smartphones would decide one of the most key cases between the two companies that make almost half of all smartphones sold globally.

It’ll be a difficult case, lasting at least four weeks.

But perhaps not as difficult as finding 10 jury members in San Francisco who don’t use smartphones.

Image credits: Apple, Samsung

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Neither Apple nor Samsung can agree on what their rival’s patents are worth. That was the outcome of a last-minute court-ordered discussion chief executive Tim Cook and his Korean counterpart held last week, Reuters reported this morning.

Just days from the July 30 start of a patent infringement trial in California’s court, Apple says Samsung’s patents are overpriced, while the South Korean tablet and smartphone maker thinks its patent portfolio is stronger than the iPad maker’s.

The two parties held an earlier negotiating conference in May with similar results, the news service reports.  The value of each company’s patents is at the heart of next week’s trial set for a San Jose, Calif. federal courthouse.  Samsung wants to license patents from Apple at the so-called “fair and reasonable” terms, yet believes Apple is more willing to sue competitors than offer agreeable licensing fees.

For its part, Apple has a number of patents related to tablet gestures and design factors.

For months, Apple and Samsung have wrangled in courtroom skirmishes. In the latest episode, Apple won a split decision from a German court that ruled Samsung’s Galaxy 10.1N is unlike the iPad enough that sales can continue. However, the South Korean’s smaller Galaxy 7.7 ban in Germany was effectively increased to sales across all EU states.

Photo via Shutterstock

The former photography giant has almost struck out with its bid to prove that Apple infringes on image-preview technologies that the bankrupt century-old company says it invented.

• Strike one: January 2011, the ITC rules Apple does not infringe Kodak’s patents
• Strike two: July 2012, the ITC upholds its ruling
• Strike three? Kodak sounds like it is going to swing again, saying “We are confident that its validity will ultimately be upheld.”

You can’t fault a company for trying, I suppose. But from Kodak’s responses to its last two legal setbacks in patent cases against Apple, it seems the company believes its future is utterly dependent on siphoning a billion dollars or so out of Cupertino.

And, in fact, it may very well be.

The Rochester, NY company is bankrupt and no longer producing cameras. Selling its patent portfolio, which includes more than 1,000 digital imaging patents, was going to be its salvation.

Those patents will be worth less, however, if they are not enforceable. Or if key industry profit-takers like Apple don’t license them. Even companies that are currently paying royalties might start to think twice, now that Apple has twice escaped Kodak’s legal noose.

According to Kodak, the patent is in one of the two groups of patents it is currently trying to sell. And the company says it has generated over $3 billion in revenue from licensors such as LG, Samsung, and Nokia.

According to the NY Times, however, Apple claims that because of a contract for joint research in the 1990s, it actually owns the technology Kodak is suing it for infringing.

Kodak was seeking damages in excess of $1 billion.

Image credit: Terence Mendoza/ShutterStock

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

When is being uncool cool? For Samsung, it’s when it gets you out of a potentially nasty legal battle with Apple.

U.K. Judge Colin Birss ruled today that Samsung’s Galaxy Tab Android tablets don’t infringe on the iPad because they’re simply not as hip, Bloomberg reports.

The Galaxy Tabs “do not have the same understated and extreme simplicity which is possessed by the Apple design,” Birss said. “They are not as cool.”

More specifically, Birss said the Samsung slates were clearly different from the iPad because they were thinner and sported “unusual details” on the back. Indeed, it’s hard to mistake an iPad for the Galaxy Tab if you have it in your hands, or can look at them from all angles.

Last week, Apple won a preliminary injunction against Samsung over sales of the Galaxy Tab 10.1 in the U.S.

The news, obviously, is a double-edged sword for Samsung. While it no longer has to worry about fighting with Apple over the Galaxy Tab’s design, it’s also a very public declaration that Samsung’s tablets lack something special.

This ruling won’t affect Samsung’s sales, but in the vicious high school mentality of gadget geeks, it’s a dig that won’t be forgotten anytime soon.

Design is determining the winners in everything mobile. The most successful players are focusing on one thing: How to make products, services, and devices as compelling and delightful as possible — visually and experientially. MobileBeat 2012, taking place July 10-11 in San Francisco, is assembling the most elite minds to debate how UI/UX is transforming every aspect of the mobile economy, and where the opportunities lie. Register here.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

You can once again forget about bankrupt Chinese company Proview. Apple has finally settled its long-running iPad trademark dispute with the company for $60 million, Bloomberg reports.

Apple purchased rights to the iPad name in China from Proview’s Taiwanese arm in 2009  for a mere $55,000, but it quickly became apparent that deal wasn’t completely kosher.

Here’s where it gets confusing: Proview Shenzen sued Apple earlier this year, claiming that its Taiwanese subsidiary couldn’t sell Apple the Chinese iPad trademark. A Hong Kong court later sided with Apple, but that didn’t stop Proview from angling for ways to stop iPad sales in China (which led to iPads being pulled from some store shelves for a short time).

In May, Proview International rejected Apple’s earlier settlement offer, claiming that the amount was too low. The $60 million settlement was well below the $400 million Proview was angling for, but the company likely couldn’t afford dragging out this legal battle any further.

For Apple, $60 million is a small price to pay to move on from this dispute. China has become an increasingly important market for Apple, with its revenues there tripling last quarter to $7.9 billion.

Design is determining the winners in everything mobile. The most successful players are focusing on one thing: How to make products, services, and devices as compelling and delightful as possible – visually, and experientially. MobileBeat 2012, July 10-11 in San Francisco , is assembling the most elite minds to debate how UI/UX is transforming every aspect of the mobile economy, and where the opportunities lie. Register here.

In the convoluted case of the botched Facebook IPO, the story goes that the social network’s underwriters, with guidance from a Facebook executive, reduced their 2012 earnings estimates, shared that material information with a few, preferred investors, and let institutional and retail investors take the hit as Facebook’s stock value tanked.

So about those revisions to Facebook’s earnings estimates — just how bad are they? Pretty disconcerting, if you ask financial data company PrivCo CEO Sam Hamadeh. “These are enormously material changes in financial forecasts.”

According to the projected numbers of four banks, as shared with Reuters by an anonymous investor, Facebook could report 5.45 to 7.28 percent less revenue in the second quarter of 2012 and 3.61 to 6.13 percent less revenue for the full year than originally anticipated. The underwriters also reportedly reduced Facebook’s 2013 earnings per share estimates by has much as 7.35 percent.

The reduced figures, as shown in the table below, dramatically change the valuation of the company, Hamadeh said.

“The reduction to Facebook’s forecasts of this magnitude — reducing the revenue growth rate by over 6 percentage points — is so material that it should absolutely have been disclosed in a revised S-1 filing before the IPO pricing,” he said. “The combined net effect for Facebook in this case of both the reduction in the financials and the valuation multiple would have lowered Facebook’s valuation by at least one third.”

Facebook did file a revised S-1 on May 9, which spelled out that mobile was an even greater risk than originally stated. However, that warning, which stated that Facebook’s daily active users (DAUs) on mobile are increasing more rapidly than the number of ads it delivers, did not come with Q2 2012 or full year 2012 earnings estimates.

Morgan Stanley’s original full year 2012 revenue projection for Facebook was $5.036 billion, according to the Reuters report, or 35.74 percent year-over-year growth. By changing its forecast to $4.854 billion, the underwriter is predicting that Facebook will only grow revenue by 30.84 percent this year, which changes the perceived value of the company and the share price at which investors would be comfortable buying Facebook stock.

For comparison, Facebook’s revenue grew 88 percent year-over-year to $3.71 billion in 2011.

Bottom line? The accusation is that Morgan Stanley, Bank of America, JPMorgan, and Goldman Sachs shared their revenue revisions with their top investors, but regular institutional investors and retail investors weren’t provided with the additional guidance. Instead, these folks were left with Facebook’s May 9 S-1 amendment, which was woefully short on hard data.

Now, the legal question at hand is whether Facebook hid “a severe and pronounced reduction” in revenue from investors. For its part, Morgan Stanley is standing by its actions. A spokesperson said the following in a statement shared with VentureBeat:

Morgan Stanley followed the same procedures for the Facebook offering that it follows for all IPOs. These procedures are in compliance with all applicable regulations.

After Facebook released a revised S-1 filing on May 9th providing additional guidance with respect to business trends, a copy of the amendment was forwarded to all of MS’s institutional and retail investors and the amendment was widely publicized in the press at the time.

In response to the information about business trends, a significant number of research analysts in the syndicate who were participating in investor education reduced their earnings views to reflect their estimate of the impact of the new information. These revised views were taken into account in the pricing of the IPO.

Facebook publicly reported that it made $205 million in net income on $1.06 billion in the first quarter of 2012. The social network’s pre-IPO earnings report was a disappointment considering that it brought in 6 percent less revenue than it did in the previous quarter.

Facebook closed at $32 a share on the NASDAQ Wednesday, which is up from Tuesday’s close but down almost 16 percent from its $38 starting price and nearly 24 percent off its $42 opening.

Facebook declined to comment on this story.

I left the hearing feeling depressed.

Government leaders — at least some of those present — actually seemed to believe they could, through legislation and spending, increase entrepreneurship and innovation. They asked questions such as: What legislation can we enact to build innovation ecosystems, facilitate mentorship, and teach entrepreneurship? They didn’t seem to understand that these are things entrepreneurs do—not governments.

Governments routinely build science parks, provide subsidies to chosen industries and set up investment funds — all in an effort to spark economic growth. But hardly any of these efforts bear fruit. After the recent financial meltdown, our government also bailed out banks in the hope that the massive subsidies would trickle down to small businesses. But that didn’t happen either.

During the hearing, Landrieu made some insightful comments about the importance of mentorship. When entrepreneurs have good mentors, their odds of success are greatly improved, if only because they can learn from the experiences of others. But she then went on to ask how the government could facilitate mentoring and how it can provide incentives for people to help others, ultimately turning more small businesses into big businesses.

If only things were this simple.

All mentors are not created equal. Entrepreneurs don’t need help from just anyone that comes along. They need to find others that complement their skills, understand their markets and their challenges and are willing to help them. How can the government possibly do this type of matchmaking?

Instead, government should streamline the laws and significantly reduce the red tape which holds small businesses back. They must provide rule of law with clear regulations and the freedom to take risks and innovate. They must create a healthy financial system so that risk financing is available for startups. They need to ensure that the workforce is highly educated, keeps its skills current and that businesses can hire the workers they need.

As Sen. Jerry Moran (R-Kan.) pointed out, there is a global war for talent underway, which the U.S. is at risk of losing. He also mentioned that, with the current tax laws inhibiting the repatriation of money earned abroad, companies are keeping large amounts of cash overseas. These factors, combined, add up to a double loss for the economy.

“It seems to me to be perhaps the most important issue we face in being able to grow our economy,” said Moran of the global talent war. He went on, saying, “We get caught in this immigration…all-encompassing kind of conversation and the politics never seem to allow us to do what, at least I think, the vast majority of policy makers in Washington, D.C. either know we should do or, if told the facts, would easily reach the conclusion that we need to do this.”

Landrieu responded saying, “There’s also an issue of people being educated in the United States themselves — born in the United States, educated in the United States — and giving them an equal opportunity to compete against those born elsewhere.”

Her response left me stunned. Instead of providing unqualified support for skilled immigration, she seemed to hedge, echoing the protectionist sentiments that are preventing a political compromise on skilled immigration. The most effective and least expensive boost our government could give our economy is to fix the problem of skilled immigration and to let foreign entrepreneurs start their businesses in the U.S. If the Senate committee was indeed serious about boosting entrepreneurship and helping American businesses, it would resolve this issue and not dance around it.

In short, government should do what it does best: govern. Let’s have our political leaders spend their energy on fixing the constipated political system, strengthen infrastructure and education, and enact legislation to boost skilled immigration. It should let entrepreneurs build their own networks and teach each other about entrepreneurship. If it does, I have no doubt that the economic recovery we are longing for will follow.

Washington Post columnist Vivek Wadhwa is a visiting scholar at the School of Information at UC-Berkeley, director of research for the Center for Entrepreneurship and Research Commercialization at the Pratt School of Engineering at Duke University, and senior research associate for the Labor and Worklife Program at Harvard Law School.

Copyright 2012, WashingtonPost

Capitol Building image via ShutterStock

“Clio provides small and medium law firms help to run their firms, doing everything from billing to staying on top of clients’ activity,” Clio chief executive Jack Newton told VentureBeat in an interview, “Clio allows lawyers to securely community with their clients with having to compromise the security of the message.”

Clio aims to manage entire law firms and individual practices with project management tools, secure file storage, task management tools, and billing systems. The service also puts a lot of focus on secure collaboration, meaning when lawyers and their clients need to share information they can do so with a secure connection that can’t be easily hacked. By using the cloud, Clio not only keeps project management costs low for lawyers, but it can also offer file storage systems and internal networks that are more secure than small law firms could afford to implement themselves.

“We’ve been very proactive on educating our clients about security and implementing best in class security measures so our clients can rest assured their data safe,” said Newton.

Clio plans to use the funding to further market its services to reach more law firms and individual law practices. It will also focus on global expansion into Europe and Australia.

“We’ll be investing in sales and marketing to get the word out about Clio and investing heavily in product development,” Newton told VentureBeat.

Clio was founded in 2007 and is based in Vancouver, Canada with 50 employees. The company has raised $7 million dollars overall from Acton Capital Partners, Point Nine Capital, and private investors.

Gavel with cash image via Shutterstock

While technology has pushed growing number of U.S. citizens to watch movies through a streaming video service instead of going to a video store, the privacy laws for video rentals haven’t changed in over two decades. The new house bill aims to change that — allowing movie streaming services like Netflix to take advantage of social media features.

Congress passed the Video Privacy Protection Act (VPPA) in 1988 after Supreme Court nominee Robert Bork’s video rental records were published in a news publication. At the time, the law seemed to make sense because a person’s video rental history does have the potential to affect public opinion about that person — especially when running for public office or being nominated for a public position.

“There’s a greater consumer benefit in clarifying an issue that is affecting privacy. The original VPPA… was hastily written and (came) before any of the social aspects of the Internet even existed,” Netflix Vice President of Corporate Communication Steve Swasey told VentureBeat.

The new bill, which still needs approval by the Senate, allows consumers to give a one-time consent to release their rental data. Such a measure will allow streaming media service Netflix to finally take advantage of social features on social media network Facebook’s open graph platform. Netflix subscribers in Canada and Latin America already have access to the Facebook integration, which lets users see what streaming videos their Facebook friends have been watching.

“The [Facebook features] are available in 44 of the 45 countries Netflix operates in.” Swasey said. “The one country it’s not available in happens to be the United States of America.”

VentureBeat guest contributor and Shanghai-based lawyer Greg Pilarowski wrote a column in July comparing Xunlei’s media download business to the peer-to-peer file sharing technologies used by Napster and Grokster, both now defunct thanks to their facilitation of rampant copyright violation. He points out that 234 copyright-infringement cases were brought against Xunlei in China in 2009 and 2010. Pilarowski’s column also appeared on the New York Times’ website.

Rob Schmitz at American Public Media news program Marketplace also discussed Xunlei’s copyright issues.

U.S. Representative Scott Garrett, who oversees the Congressional Finance Committee, then wrote a letter to SEC chairman Mary Schapiro on November 10 pointing out, among other things, the U.S. copyrights that Xunlei is likely violating. Garrett’s letter cites Pilarowski’s column in the Times.

Garrett asks several pointed questions, the crux of which is this one: “Does the Commission have a standing policy regarding the approval of foreign companies to be listed on U.S. exchanges where there is evidence that a company’s business model is likely to be in violation of U.S. law?”

We’ve received a copy of Rep. Garrett’s letter, which we’re embedding here as a Scribd document.

Sources close to the matter tell us the trial, which was previously scheduled to begin on October 31, had to be put off because of the judge’s full schedule, which includes a particularly thorny gang trial.

Also, the U.S. Patent and Trademark Office (USPTO) is still in the process of reexamining the patents and claims in question.

While many of us do not imagine the lawsuit will actually end in a trial but rather, as many corporate disputes do, in a settlement, the judge in the case had already ordered three mediation hearings. A Google spokesperson told VentureBeat today that all of those hearings have already taken place, and, as he said, “Nothing was settled.”

Google has been shown to be open to the idea of settling out of court. However, the search-focused company may actually be at some degree of fault — the operative word being “may.” And if Oracle can wrest prohibitive licensing fees out of Android sales, it might make a significant dent in the OS’s profit margins.

We asked our Google source whether the Android operating system itself was in danger of, at worst, coming to a premature close, as many consumers have worried throughout the initial findings of this lawsuit.

“Absolutely not. There’s no indication that Android is under threat,” said the Googler.

“From a consumer standpoint, consumers should not be concerned about losing their Android phone. But they should be concerned with the way in which Oracle is taking a platform they supported for years [the Java programming language] and is now trying to capitalize on our success.”

Oracle has owned and maintained the open-source Java language since its acquisition of former Java owner Sun two years ago. However, Android is also Java-based and has roundly crushed the Oracle-owned Java ME mobile OS. As you can imagine, that hasn’t gone over too well with Oracle, and the resulting lawsuit has raised massive questions about how intellectual property law comes into play when open-source software is on the line.

“We’re actively pushing back on Oracle to preserve choice in the marketplace in the long term,” said the Google rep, who repeated Google’s well-known intentions about keeping the Android operating system open-source.

Related articles

• Google’s patent plot thickens with new Microsoft lawsuit against Motorola Mobility (venturebeat.com)
• Google ups its Android patent defense with Motorola purchase (venturebeat.com)
• Sun Was Close to Licensing Java Patents to Google for $28M (pcworld.com)
• Oracle v Google: Ellison, Schmidt, and Page to take witness stand over Android (guardian.co.uk)

Confused about the difference between trademark and copyright? Don’t be. It’s a mad, mad world, and even Oracle is getting it mixed up, in its suit against Google.

Sun v. Microsoft

Ten years ago, when Sun sued Microsoft over Java, Sun alleged trademark infringement because Microsoft was not implementing Java according to Sun’s specification. Microsoft had entered into a license agreement with Sun — promising to follow the specification. When Microsoft deviated from the specification, Sun rightly claimed breach of contract and trademark infringement. Sun sought an injunction against Microsoft to stop using the Java logo and to remove the incompatible Microsoft code from the market. Sun ultimately prevailed, and received a large settlement, in part due to Microsoft’s anticompetitive conduct over Java.

Attorney David Boies is familiar with the Java issues in the Microsoft antitrust case. According to Boies’s biography, he served as Special Trial Counsel for the United States Department of Justice in its antitrust suit against Microsoft. At the conclusion of that antitrust suit, U.S. District Court Judge Jackson found that Microsoft took actions “with the sole purpose of making it difficult for developers to write Java applications … that would allow them to be ported.”

Oracle v. Google

Boies now represents Oracle (which has since acquired Sun, including its rights to Java) in its case against Google for patent and copyright infringement of Java. He surely knows the differences between the issues in the prior lawsuits. Unlike Microsoft, Google never licensed Java from Sun. It never agreed with Sun to implement the Java specification, and it doesn’t call its product Java. It calls it Android and Android is not a candidate for an antitrust case. In fact, the Microsoft .NET Framework and Java are the two dominant middleware platforms.

In court pleadings, Oracle constantly argues that Google breaks the “write once, run anywhere” promise of Java.

“Google undermined the compatibility of Java. It took the APIs it wanted, to attract developers to Android and gain market share quickly, and left those it did not — fragmenting Java and its “write once, run anywhere” promise.”

“Oracle has been harmed because Google fragmented the Java APIs, severely undercutting Java’s “write once, run anywhere” promise.”

“Google’s fragmentation of Java has violated the “write once, run anywhere” creed.”

“Google has significantly harmed the value of the APIs by fragmenting Java and undercutting its “write once, run anywhere” capability.

The problem for Oracle is that Google made no license promise, and doesn’t need to worry about Oracle’s “write once, run anywhere” registered trademark because that trademark has nothing to do with Android, any more than Objective C has anything to do with C#.

Moreover, Oracle is suing Google for copyright infringement, not trademark infringement. Oracle never alleged any Java trademark claims, only harm by “fragmentation” of the Java “write once, run anywhere promise” and “creed.” But promise, creed and fragmentation are not copyright claims, they relate to trademarks. It’s a nice example of the adage that “if you repeat something often enough, people will believe it’s true.” Accordingly, on September 15, 2011, Judge William Alsup in his order regarding summary judgement says:

Android allegedly supports some, but not all, of the APIs defined for the Java platform… This so-called fragmentation undermines the “write once, run anywhere” concept underlying the Java system and supposedly damages Oracle by decreasing Java’s appeal to software developers.

Trademarks v. Copyrights

Google could have long ago pointed out that Oracle is alleging trademark harm using copyright infringement claims. But why should Google help Oracle plead correctly? Google never agreed to the “write once, run anywhere” promise (in any license) from which Oracle claims to have suffered harm. Google calls its software Android, not Java. While Oracle could have argued that Google has confused the market by making references to Java in Android marketing and documentation, Oracle cannot now amend the complaint with a trademark infringement cause of action. It’s too late.

Google has already prevailed on the key issue of non-copyrightability of API names. In his partial summary judgement order of September 15, 2011, Judge Alsup held that “the names of the Java language API files, packages, classes, and methods are not protectable as a matter of law.” Oracle has its work cut out, because it will have to explain to a trial jury that even though the names of the Java files, packages, classes and methods are not protectable, Oracle somehow has a substantial copyright claim to snippets of code, declarations, and the arrangement of the specification.

Oracle is not giving up however, and the API copyright issue isn’t the whole lawsuit. Oracle is also claiming patent infringement, and there are still questions of fact and law about the scope of Google’s alleged copying. But those don’t relate to the “write-once, run anywhere” promise from which Oracle claims to have suffered harm.

Nevertheless, Oracle’s latest alleged copyright damages and lost profits estimate is still in the neighborhood of a whopping $800 million.

So don’t feel bad if you don’t understand the difference between trademark and copyright. A lot of fine people get it mixed up too.

John Koenig is the founder of Compute Media and developer of “The Patent Studio”. You can follow him on Twitter at @johnkoenig.

Top image via Ioan Sameli/Flickr.

The bill, introduced Thursday, and called the Personal Data Protection and Breach Accountability Act of 2011, aims to protect a citizens’ personal information online.

Democratic Connecticut senator Richard Blumenthal, who sponsored the bill, said many of the more recent security breaches (like Sony’s Playstation Online fiasco) were very preventable.

Only companies that store data online for over 10,000 people would be affected by the bill. If passed, the bill would require those companies to follow a set of guidelines to ensure all the personal data they store is sufficiently protected. Those that don’t follow the guidelines would be at risk of racking up hefty fines from the government.

Should the bill pass, customers who entrust their personal information online would be able to sue companies in charge of that data in the event of a preventable security breach.

I don’t know that a bill like this is necessary. Companies are already suffer plenty of losses — both money and credibility — when data breaches occur. Ultimately if a company doesn’t care about its consumers’ personal privacy, it likely won’t stay in business long.

The new law, which went into effect August 28, prohibits teachers from becoming friends with their students on giant social network Facebook.

Last week, the Missouri State Teachers Association (MSTA) filed a suit that argues the law infringes on educators’ first amendment rights of free speech, association and religion. It asked the courts to prevent implementation of a statute in the law regarding social media until its constitutionality was decided.

After finding that teachers in Missouri use social media as one of their primary forms of communication, Cole County Circuit Judge Jon Beetem granted the MSTA a 180-injunction ending February 20, 2012. The judge noted that the new law clearly prohibits communication between a student’s parents and teachers. He also said “the statute would have a chilling effect on speech,” according to a court document (PDF).

Under the ruling, teachers won’t face legal action or disciplinary action for using non-work related social media — meaning, for now, teachers can interact with students on Facebook pages, connect as “friends” and message each other.

Having reported on several accounts of inappropriate teacher-student relationships as a local education beat reporter, I can see why there would be a knee-jerk reaction to ban all student and teach interaction over social networks. But, I can also understand why the state teacher’s union acted against the law. If social media is one of the few avenues teachers can reach their students to further their education, they understandably don’t want to give it up because of a few bad eggs who broke the law.

via ZDnet

HTC is claiming patent violations for the U.S. sale of iPods, iPads, iPhones, Mac computers and more. The wording of the suit would indicate that HTC ostensibly wants to stop Apple from importing these devices (they’re manufactured in China) and selling them in the U.S. HTC is also demanding a sizable chunk of change for damages: compensatory damages, triple damages for willful infringement and more.

Realistically, however, the suit is merely defense against Apple’s long-waged patent lawsuit against HTC.

“We are taking this action against Apple to protect our intellectual property, our industry partners, and most importantly our customers that use HTC phones,” said HTC general counsel Grace Lei in an emailed statement.

“This is the third case before the ITC in which Apple is infringing our intellectual property. Apple needs to stop its infringement of our patented inventions in its products.”

The patents in question involve Wi-Fi capability that enables wirelessly networking multiple devices and processor communication technology that weaves PDA and cell phone features together to create “a true smartphone experience,” said HTC. The patents at issue are U.S. Patent Nos. 7,417,944, and 7,672,219 and 7,765,414.

The legal battle began last spring. In March 2010, Apple first filed a complaint against HTC, claiming the OEM had been “infringing on 20 Apple patents related to the iPhone’s user interface, underlying architecture and hardware.” This suit was accompanied by some anti-IP theft rhetoric from Steve Jobs.

The Apple-instigated suit targeted pretty much every HTC mobile phone on the market at the time, and some of the patents named had only been issued the month before. Apple was seeking a permanent injunction on the sale of HTC phones in the U.S., which clearly hasn’t happened yet.

A couple of months later, HTC fired back with a complaint to the International Trade Commission to stop the sale of iPhones, iPods and iPads, saying these items infringed on HTC‘s intellectual property.

The lawsuits continued, and last month, Apple gained some ground when a judge ruled that HTC had infringed on two of the original 20 patents. HTC appealed, and we’ll find out the outcome of that particular battle on or around December 6, 2011.

Just days after the original decision was handed down, HTC stated it was willing to negotiate with Apple to settle the lawsuits once and for all. As HTC CFO Winston Yung said at the time, “We are open to all sorts of solutions, as long as the solution and the terms are fair and reasonable. On and off we’ve had discussions with Apple, even before the initial determination came out.”

Apparently, Apple wasn’t amenable to such negotiations, so out come the patent guns once again.

According to this new suit, which was filed in the U.S. District Court in Delaware, HTC acquired the patents in question in 2008 and 2010. The case is HTC Corp v. Apple Inc, U.S. District Court, District of Delaware, No. 11-00715.

A judge issued a preliminary injunction in an ongoing case between Zediva and the MPAA, ruling that Zediva’s business is one big copyright violation.

A Zediva spokesperson told VentureBeat, “Today’s ruling represents a setback for the hundreds of thousands of consumers looking for an alternative to Hollywood-controlled online movie services. Zediva intends to appeal and will keep fighting for consumers’ right to watch a DVD they’ve rented, whether that rental is at the corner store or by mail or over the Internet.”

Zediva launched with the idea that it could operate a physical DVD rental business, just like a Blockbuster or the hard-copy side of Netflix’s business. However, instead of sending the DVDs from a brick-and-mortar retail store, Zediva streamed the DVD content over the Internet.

Why exploit such a loophole? Physical DVD rental stores don’t have to negotiate licensing fees with film and television makers; video-on-demand services do. Video-on-demand businesses are required by the MPAA to provide a high-quality viewing experience to users and to take certain piracy-prevention measures. Also, video-on-demand services have to agree to “exclusivity periods,” wherein the copyright holder (a.k.a. film studio) licenses the works to be shown on cable TV but not online. By setting itself up as a physical DVD rental shop, Zediva skirted these fees and restrictions — at least in the short term.

Testing the strength and flexibility of this particular loophole might have seemed like a faster, cheaper way of starting a new company at the time. But even at the startup’s launch, we noted it would be “just a matter of time” before film studios tried to put a stop to the company. Predictably, the MPAA came after Zediva with a lawsuit back in April, a mere month after the launch.

In its original complaint, the MPAA stated, “The DVD ‘rental’ label is a sham… Zediva’s mischaracterization of itself is a gimmick it hopes will enable it to evade the law and stream movies in violation of the studios’ exclusive right.”

In his decision, U.S. District Judge John Walter wrote that not only does Zediva infringe on movie studios’ copyright; the startup is also making things harder for legitimate video-on-demand startups that have taken a lot of time and paid their dues (literally) to operate their businesses.

“[Zediva] threatens the development of a successful and lawful video-on-demand market and, in particular, the growing Internet-based video-on-demand market,” Walter wrote. “The presence of Defendants’ service in this market threatens to confuse consumers about video-on-demand products, and to create incorrect but lasting impressions with consumers about what constitutes lawful video-on-demand exploitation of Plaintiffs’ copyrighted works.”

A Zediva spokesperson told VentureBeat the startup has been working on its DVD-streaming technology for two years. Zediva closed its first round of funding shortly before its launch.

Image courtesy of christianspenceranderson.

Many patent law experts are suggesting the move was intended to give Google a bit more leverage in its ongoing litigation around the Android operating system. Since last summer, Google has been embroiled in a legal tangle with Oracle, a terrifying mammoth in the patent department, and the IBM purchase is just one in a string of patent-buying attempts in recent months.

The company has a lot of catching up to do now that it’s waging war in Oracle’s patent-studded minefield. Google lags behind most huge enterprise tech companies when it comes to patents. With the new IBM patents, Google now holds around 2,000. Microsoft and Oracle are estimated to control around 20,000 patents each. And IBM itself still actively controls more than 26,000 patents in the U.S. and 40,000 worldwide.

“The problem for Google is that their kind of innovation is just not the one that the patent system tends to reward most generously,” patent law expert Florian Mueller told VentureBeat. “If you build online services that people like to use, it’s not necessarily due to patentable inventions.”

However, when going into battle with a company like Oracle, a stockpile of patents can be a useful thing. “Countersuits are the usual response to patent infringement lawsuits between large companies,” said Mueller, who has written extensively about the patents. “Google has definitely intensified its patent-shopping activities since Oracle’s lawsuit… It was probably very frustrating for Google not to be able to countersue Oracle.”

But Google denies any such machinations. A spokesperson from the company told VentureBeat, “Bad software patent litigation is a wasteful war that no one will win… Like many tech companies, at times we’ll acquire patents that are relevant to our business needs.”

The statement about “bad software patent litigation” sounds a bit defensive coming from a company that’s been on the unfortunate end of so many patent claims. It’s been sued for alleged (and sometimes proven) patent infringement in a range of products, including, to name but a few, Checkout, mobile/social tools, enhanced hyperlink behaviors, the use of Linux in its server platform, AdSense, mobile technologies, the Chromebook, geolocation, Google Book Search… need we continue?

Some of these suits are doubtless the evil work of patent trolls with much time and little true intellectual property of their own; however, some of the claims have been proven to be legitimate by the courts. By contrast, Google has rarely been on the offensive when it comes to patent litigation.

Whether a couple thousand patents will be useful to Google in its current spate of Android-related suits is still a largely unanswerable question. “There are dozens of Android lawsuits,” said Mueller, “and they won’t be able to make all of that litigation go away quickly… It’s difficult to predict the outcome, but should we see a settlement that’s favorable to Google, then the IBM patent deal could have played a role in it.”

The law makes it a crime to “transmit or display an image” that could “frighten, intimidate or cause emotional distress” to anyone who views it — which is about as ridiculous as making it illegal to open your eyes for fear of seeing something you don’t like.

Violators found guilty could get up to a year in jail and $2,500 in fines. What’s worse, the law can be applied to anyone who finds the image offensive, not just the person the image was directed to.

The law itself is actually a revision of pre-existing legislation that criminalizes the act of making phone calls, sending emails or other general communication that the sender reasonably knew would cause “emotional distress” to the recipient.

Aside from the over reaching nature of the legislation, it’s likely to come under heavy fire from activists who will be quick to point out the questionable violations the law has to first amendment rights.

Photo via Josh Pope