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Power to the People: Social Media Technologies Mediating Corporate Social Governance

The measure of effectiveness of a CEO and its executive board has always been the degree to which the business is achieving its purpose. Whether in Canada, the U.S., Europe or Asia, an executive board’s purpose should be to increase shareholder value, a purpose that is best accomplished by serving the needs of various stakeholders. Somewhere in the pyramid of stakeholders is the consumer or client, whose likes, favorites, and preferences must be met with quality personalized products and services that deliver high competitive value. In an interconnected global knowledge economy, this has meant listening to what consumers are saying online through social media platforms like Facebook and Twitter, and engaging in two-way conversations to respond in real-time to consumer demands.

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HHS Announces Settlement with Idaho Hospice for Data Breach Involving Fewer than 500 Individuals

On January 2, 2013 The Department of Health and Human Services (“HHS”) announced that it had entered into a Resolution Agreement with Hospice of North Idaho (“HONI”) to settle alleged HIPAA violations resulting from the theft of an unencrypted laptop computer containing the electronic personal health information of 441 patients.  This is the first HHS settlement involving the breach of protected health information (“PHI”) involving fewer than 500 individuals

After being notified by HONI of the stolen laptop, the HHS Office Civil Rights (“OCR”) conducted an investigation and concluded the following: 

  • HONI did not conduct an accurate and thorough risk analysis as required by the HIPAA Security Rule, especially with respect to an evaluation of the likelihood and impact of potential risks to the confidentiality of electronic PHI maintained in and transmitted by portable devices.  
  • HONI did not have in place police or procedures to address the security of PHI stored or transmitted in portable electronic devices. 

 In entering into the Resolution Agreement, HONI agreed to pay $50,000 and enter into two-year corrective action plan with HHS.  A copy of the Resolution Agreement can be found at:  http://www.hhs.gov.privacy/hipaa/enforcement/examples/honi-agreement.pdf.

 Although this case is unique in that it is the first settlement by HHS of a data breach involving fewer than 500 individuals, the facts that gave rise to the action by HHS are all too familiar.  The breach resulted from the theft of an unencrypted laptop and HHS was troubled by the provider’s alleged lack of a risk analysis and appropriate policies and procedures to protect PHI stored in or transmitted by portable electronic devices.  In this era of increased HIPAA enforcement, covered entities and business associates must remain vigilant in their HIPAA compliance efforts.  This includes, without limitation, (i) conducting thorough risk assessments, (ii) developing and updating robust HIPAA policies and procedures, and (iii) conducting ongoing HIPAA training and awareness programs with all staff.   In essence, affected entities must create what OCR has often referred to as a “culture of compliance.”  Moreover, emphasis should be placed on the use and safeguards of portable electronic devices, which, as in this case, are frequently at the center of a data breach.

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The Queen v. Cole: Privacy Protection for Employer-Issued Equipment in Canada

The recent decision The Queen v. Cole by the Supreme Court of Canada touches upon interesting issues regarding information privacy in the digital age.

The facts are simple. An information technologist working at the same high school as Mr. Cole, a teacher, remotely accessed Cole’s history of internet access and one of his drives and found a hidden file which contained nude photographs of a student. The photographs and internet file were copied onto a disc and given to the police, which determined that a search warrant was unnecessary. Cole was subsequently charged with possession of child pornography and fraudulently obtaining data from another computer hard drive. The trial judge excluded the computer material under Sections 8 and 24(2) of the Charter. In overturning the decision, the summary conviction appeal court found no breach of Section 8. This decision was set aside by the Ontario Court of Appeal, which concluded that the evidence of the disc containing the temporary internet files and the laptop computer and its mirror image was excluded. A 6-1 majority ruling by the Supreme Court concluded that the police infringed upon Cole’s rights but upheld the Court of Appeals’ finding that the evidence should not have been excluded from trial.

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The Ethics of “Friending”

We would like to thank our colleague, Jordan Fox for his invaluable assistance in researching and drafting this article. Jordan is an associate in Cozen O’Connor’s Commercial Litigation Department in Philadelphia and can be reached at jfox@cozen.com. In turn, Tom Wilkinson currently serves as President of the Pennsylvania Bar Association and is co-editor of the Pennsylvania Ethics Handbook, a comprehensive review of the rules of conduct governing lawyers, with extensive citations to case decisions and ethics opinions addressing all aspects of lawyer-client relationships. Tom can be reached at twilkinson@cozen.com.

Thanks guys!

Rick

As users constantly update their Facebook and other social networking profiles, they may be unwittingly doing something else as well: creating a cache of evidence for a future adversary to use against them in discovery and at trial.  Trial courts have increasingly allowed parties to discover the private portions of social networking sites when doing so would likely lead to the disclosure of admissible evidence.[1]  In the common scenario, a party observes information on the public portion of their adversary’s profiles that tends to undercut that adversary’s claims—such as pictures of a plaintiff skiing after claiming to have devastating injuries—and present such information to the court as the “factual predicate” that establishes the potential relevance of the private profile.[2]  While most courts will not allow a party to simply conduct a “fishing expedition” into their adversary’s private digital lives, nor will they declare such information categorically undiscoverable.[3]

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Planet Mars, Curiosity, and Data Security

For those captivated by recent events in astronomy, parallels can be drawn between the recent landing of NASA’s rover Curiosity on planet Mars and the public discourse on data security in Canada. With the distinction that one is effectively equipped with the right budget and tools to achieve its actual objective, both have come a very long way, both have managed to blaze through layers of clouds, both seek to secure ingredients essential to life, and both are now aimlessly wandering about unchartered territories.

A decisive factor in Barrack Obama’s 2008 political campaign was the extensive use of individual, thin sliced consumer data to send highly tailored messages to gain political support. Within 13 years, Google has become the most valuable brand in the world through the aggregation of vast amounts of data including search data, or data held in Gmail accounts. This information is then used to create an advertising cruise missile, which is much more efficient than the old method of pattern bombing.

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State Privacy Laws Evolve While Congress Campaigns

New legislation governing data breaches and privacy issues is popping up in states across the country. Most recently,  Connecticut, Vermont, and Illinois have enacted new laws in these areas.

Connecticut

At long last, the proposed legislation requiring a data breach to be reported has become law in Connecticut.  Section 369-701b was unable to move its way through the 2012 General Session of the Connecticut Legislature, but it was recently passed as part of the Connecticut General Assembly’s Special Session as an attachment of the Budget Bill.

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Human Error: The Greatest Risk and Root Cause of Data Security

Whether discussing data encryption, network security, or internal data privacy management practices and policies, the most sophisticated IT security protocols, the most learned team of specialists, and the most compliant of data management practices and policies cannot escape, prevent, or remedy what many businesses and organizations have rightly labeled as the root cause of data security failures: human error. While they tend to possess greater network security than smaller organizations, the risk of human error should be of particular a concern to medium and large size organizations whose internal controls over data and employees are inevitably diluted by their size and numbers.

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Past the Point of No Return: Jones v. Tsige and the “New” Tort of Invasion of Privacy in Canada

Jeremy Bentham used to refer to the common law as the “dog law”. As he explains it, “whenever your dog does anything you want to break him of, you wait till he does it, and then beat him for it. This is the way you make laws for your dog: and this is the way the judges make law for you and me.”

Insofar as the tort of invasion of privacy in Canada is concerned, Jeremy Bentham was arguably right. Aside from the province of Quebec, which is governed by a civil law system, and a few other provinces in Canada which have benefited from a statutorily enacted tort of invasion of privacy, lower Courts have been divided over the existence of a free-standing tort of invasion of privacy at common law. The recent decision Jones v. Tsige (2012) by the Ontario Court of Appeal is the first to confirm that what used to be an embryonic tort of invasion of privacy is now alive and well in Canada

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Agreement between the US, NATO, and Australia on Cyber Security

The US and Australia have a longstanding agreement to back each other up in case of physical enemy attack, but now have moved that agreement to the arena of cyber-attack as well. With Australia’s history of cyber-attacks well known, such as an attack two years ago that brought down Australia’s Parliament’s website, the country cannot afford to ignore cyber security any longer.

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Cyber-security in a Hyperconnected World

The cyber-attacks recently launched by six individuals from the group Anonymous, an international hacktivist collective, against 13 Quebec government and police websites are but a fleeting glimpse of a much broader problem associated with the cyber world, most of which remains largely unseen. Succinctly stated, the cyber-attacks were a response to the Quebec Liberal party’s constitutionally questionable Bill 78 that was recently passed as a response to the student crisis sparked three months ago over the government’s planned 75% tuition increase. That six individual were arrested by law enforcement agencies and charged with mischief, conspiracy, and unlawful use of a computer should hardly be reassuring.

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Insurers: Assert Your Subrogation Rights

The following column was first published in the second issue of Advisen’s Cyber Liability Journal (here). I will republish my future columns in coming months. In the meantime, you can subscribe to the Journal at http://corner.advisen.com/journals.html (here).

Rick

It is axiomatic to say that insurance products evolve. Indeed, like virtually every organic structure, its development, growth and nimbleness are necessary to meet the progress of maturing, service-based economies. Hence, the advent of cyber/tech/privacy liability (CTP) insurance.

At present, there are over 25 markets selling some type of CTP coverage. Many insurers sell standalone products. Others bolt on new coverage parts to their existing products. Still others add endorsements that attempt to extend coverage to address an existing client’s business model.

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Will SEC Guidance Awaken Private Companies To Cyber Insurance Needs?

The following article was first published in Advisen’s inaugural Cyber Liability Journal (here) as my first regular column. The second Journal was published today and is available from Advisen at http://corner.advisen.com/journals.html (here). I will republish my second column in the coming days.

Rick

Many who underwrite or broker insurance, or practice law in the cyber/technology/privacy (“CTP”) realm migrated to this emerging area from the directors and officers liability regime. At the same time, it did not take a crystal ball to recognize that it was only a matter of time before CTP and D&O found a commonality.  And that time is now.

Virtually every public and private company is reliant on computer networks and electronic data. It’s a way of life in the 21st Century. And there’s no going back. Yet with reliance comes risk. It seems we read about significant CTP breaches involving large, multinational companies almost on a weekly basis.  CTP breaches have become a well-recognized risk of doing business.  Estimates project that over 10 percent of us already have been hacked or had their identities stolen. I am among them.

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From First To First – Maryland Governor Signs New Social Media Law

Thanks to my colleague Mike Schmidt, who published the following post on his own blog, Social Media Employment Law Blog.

Rick

It is amazing how fast a legislative body can act when it wants to. Just last week, Governor Martin O’Malley of Maryland signed the country’s first law restricting employers’ ability to demand social media account information from applicants and employees. Maryland was the first to propose this type of law, and is now the first to enact it.

The Maryland law takes effect on October 12, 2012, and contains the following highlights:

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The Implications of a Cyberattack on Your Securities Portfolio: You May Want to Read Your Holdings’ 10-Ks

falling moneySo, you think that a corporate cyberattack has nothing to do with you? If so, think again. Indeed, to the extent you own stock or securities, the value of your holdings could be at risk in the event of a cyberattack. I’ve said it before and I’ll say it again: Cybersecurity is an economic issue. See here.

Take, for example, Intel (INTC). In the “Risks” section of its 2009 10-K, the company disclosed in a tersely worded statement that its networks had been the victims of “sophisticated” attacks. Kudos to Intel for making this disclosure, which predated the October 2011 publication of the SEC Guidance addressing public companies’ cyber risks and exposures (discussed here and elsewhere, including in the March 2012 edition of the Advisen Cyber Journal. Please feel free to contact me for details on how to obtain this must-read issue and subscribe. Advisen has done a masterful job, as it does with all of its publications). As will be discussed in my next post, a significant number of public companies still have not complied with their cyber risk and cyber exposure reporting “obligations” under the SEC Guidance.

As to Intel, the subject 10-K listed several noteworthy risks. The most intriguing stated that “We may be subject to intellectual property theft or misuse, which could result in third-party claims and harm our business and results of operations.” Intel’s disclosure continued that “[w]e regularly face attempts by others to gain unauthorized access through the Internet to our information technology systems by, for example, masquerading as authorized users or surreptitious introduction of software….These attempts, which might be the result of industrial or other espionage, or actions by hackers seeking to harm the company, its products, or end users, are sometimes successful.”

The adverse economic impact of a cyber-related disclosure is not theoretical, either. Indeed, in the immediate wake of the News Corp./News of the World cell phone hacking scandal in mid-2011, News Corp’s market cap reportedly fell by over 15%, valued at approximately $7 billion, in less than a week. Not surprisingly, News Corp was sued shortly thereafter in a series of securities fraud class actions, which remain pending.

While cyber risks and exposures may or may not have an impact on a stock’s trading price, their potential impact can not be ignored. Google (GOOG) is another example. As previously discussed here, Google has been the subject of cyberattacks which it claims were precipitated by the Chinese government. The import of this development can not be understated, as it created tensions between the U.S. and Chinese governments and even made it into Intel’s SEC filing. For private citizens, however, perhaps the greatest implication of the Google cyberintrusions is the arguable effect that they had on Google’s price per share. On January 12, 2010, when the intrusion was publicly disclosed, Google shares fell 1.7% to $590.48. By April 25, 2010 Google’s shares were trading at $544.99, another roughly 8% price drop. Can these losses be directly linked to the breach of Google’s security systems? Put differently, can a possible link be dismissed? That’s for shareholders and others to decide.

So, what does this all mean? At a minimum, it suggests that the economic implications of a cyber event can be wide ranging, from the simple cost of fixing a security gap to a major hit to a brands’ reputation (remember News of the World? After 168 years of tremendous success globally, it ceased publishing on July 10, 2011 as a direct result of the hacking scandal), all the way to claims arising from the theft of consumer’s personal and financial information. Such an intrusion into the systems of retailer T.J. Maxx (TJX) lead TJX to settle with regulators, states, consumers and others and set a settlement/remediation reserve of over $100 million.

In the end, it is clear that just as consumers need to be vigilant about monitoring their personal and financial information to protect themselves from identity theft and the like, investors too must regularly track their holdings to protect their portfolios and assets. As to the companies whose information and systems are at risk, the need for both D&O and cyber insurance is patently obvious, and is as important as the protection of their intellectual property, consumer information and other non-public data. Risk management, information protection and insurance go hand in hand. And we’re here to make sure everyone recognizes the correlation.

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What Underwriters Don’t Know Can Cost Them…Dearly

j0282993The occurrence and frequency of cyber breaches are not as transparent as one might expect.  Or hope, for that matter.  To the contrary, the FBI’s chief cyber crimes investigator recently admitted that “thousands” of cyber crimes have gone unreported due to companies’ fears about the impact of adverse publicity on their reputations and bottom lines.

According to Shawn Henry, assistant director of the FBI’s Cyber Division, hackers regularly access computer security systems and steal millions of dollars and credit card numbers without such incidents ever being publicly reported.  Indeed, Mr. Henry has acknowledged that “[o]f the thousands of cases that we’ve investigated, the public knows about a handful…There are million-dollar cases that nobody knows about.”

And the problem is not limited to Fortune 500 and other large companies such as TJX and Heartland, which have voluntarily disclosed cyber intrusions.  Indeed, the incidence of cyber attacks on such companies is growing marginally or even shrinking, as these entities implement more complex security systems.  The more frequent target has become medium-sized and small companies which do not have the resources or perhaps the ability or interest to enhance their cyber protections.  The same goes for private citizens whose personal wealth and, equally troublesome, personal secrets may be at risk as their personally identifiable information is wrongfully retrieved and then used to access their bank and other investment accounts.  Needless to say, no one wants to admit they’ve been hit or that their resources have been stolen.  The stigma alone is a major deterrent to such public disclosures. (“Hey Joe… guess what… I was just robbed of $10 million!! And, they learned that I’ve been cheating on my spouse for the past ten years… How about that!!!”).

For cyber insurers, a prospective policyholder’s unwillingness to disclose such intrusions can be a major problem, both from an underwriting and claims perspective.  As always, the key is proper detailed due diligence up-front.  Underwriters can not take for granted that they would or should know about an intrusion at a potential account.  They must ask the right questions, require the proper warranties, and “pull back the curtain” to ensure that the risks they take on are just that – risks – rather than cyber intrusions waiting to happen.  “Penny-wise, pound foolish” is particularly apt.  Spend the time and money to vet your proposed accounts.  The cost of a claim or related coverage litigation will dwarf the expense of a thorough underwriting investigation.  Unlike the availability of insurance, that is a guarantee.

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UPDATE: Whose Account Is It Still?

The following article was first published by our colleague Michael Schmidt on his blog, Social Media Employment Law Blog. It is part of our continuing effort to keep Cyberinquirer readers on top of decisions relevant to Social Media in the context of litigation. Thanks for the reprint, Mike.

Two weeks ago, I discussed the California case of PhoneDog v. Kravitz, where an employee, who used a company Twitter account as part of his job duties, left the company and continued to use the same Twitter account and tweet to the same followers. The (former) employee claimed that he had the right to continue tweeting, and PhoneDog responded that he was barking up the wrong tree (best I could do at the moment). As I mentioned in my last post, the court had denied the employee’s attempt to dismiss the entire case at inception, and allowed the company to amend its complaint to provide more specificity on some of its claims. Time for an update.

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Access to Insured’s Social Media Accounts: No Friend Request Necessary

The following article, written by my colleague Nicole Moody, first appeared in the Chicago Daily Law Bulletin. Thanks to Nicole for allowing us to republish it here.

Rick Bortnick

Many of us have been there. Sipping our morning coffee, signing into our Facebook accounts, waiting to see what notifications will greet us. We are intrigued to see that we have a friend request.  Who could it be? An acquaintance from the past? A new colleague who we met at work? Whoever it is, we know that by accepting the request we will be granted access into this individual’s life and will know more about them in five minutes than we would know in a lifetime of small talk.

Due to the use of usernames and passwords, there is a belief that information shared on Facebook is confidential unless publicly shared. However, courts around the country are now addressing just how private this information really is.

In cases nationwide, litigants are asking courts to grant unfettered access to other parties’ Facebook or other social media accounts. Inevitably, in the age of status updates and hashtags, poking and friending, the lines between public and private information have become blurred. This trend has become increasingly prevalent in the insurance industry as insurance companies have realized the usefulness of social media in litigation. 

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Whose Account Is It Anyway?

The following article was first published by our colleague Michael Schmidt on his blog, Social Media Employment Law Blog. It is part of our continuing effort to keep Cyberinquirer readers on top of decisions relevant to Social Media in the context of litigation. Thanks for the reprint, Mike.

What would you do if your employee continued to use your company’s Twitter account after he stopped working for you?

What if your (former) employee claimed that he, not your company, actually owned the rights to the Twitter followers?

Ever thought about it?

I have posted several times about how social media has not created new causes of action, but rather has provided a new application for traditional claims. One of the areas that I surmised would develop in time was the interplay between social media and post-employment competition and trade secret rights. According to two new decisions, that time has apparently come.

In PhoneDog v. Kravitz (Northern District of California), the company gave its employee (Kravitz) use of a Twitter account as part of his employment. Kravitz tweeted information to promote the company’s services, and generated approximately 17,000 followers. Kravitz left the company, and, while he changed the account “handle”, he continued to use the same account to tweet to the same followers. PhoneDog sued Kravitz for continuing to use the Twitter account, claiming that the “compilation of subscribers and the password used to access the account” constituted company trade secrets. Valuing each of the 17,000 followers at $2.50, the company sought damages of $340,000 for “stealing” each of those followers for 8 months.

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The Coverage Question

We are grateful to the rapidly-growing number of Cyberinquirer readers who continue to submit substantive content for publication. This truly is an industry blog, and we strive to present alternative points of view from all quarters. 

The following article was authored by Gregg A. Rapoport, Esq., and David Lam, CISSP, CPP. Attorney Rapoport has represented policyholders in coverage litigation for over 20 years as part of a broad business litigation practice based in Pasadena, California. Mr. Lam is vice president of the Los Angeles Information Systems Security Association and has over 20 years of experience as an IT and information security professional and author. This article was first published by RIMS, and we appreciate Messrs. Rapoport and Lam offering it for republication here.

Rick Bortnick

As they confront the sobering question of whether their networks and the data they carry are fully secure, today’s “C-level” executives are becoming fluent in once-esoteric information security terms. Many have reached the conclusion that no matter the size of their IT and security budgets, there is no foolproof system for securing the confidentiality, integrity and availability of their data. Company networks remain vulnerable to attacks even if they adhere to industry best practices and run best-of-breed firewalls.

To address these security challenges, companies are relying on their risk managers to evaluate the applicability of existing insurance coverage to data breach incidents, and to assess the value of transferring some of the uncovered financial risk to one of the carriers now offering cyber-risk insurance policies. As the market for these products matures, premiums have come down significantly and policy limits have increased.

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New Cybersecurity Disclosure Guidance for Public Companies: Focusing Attention, Raising Questions

As regular Cyberinquirer readers know, on October 12, 2011, the SEC’s Division of Corporate Finance published “suggested” Guidance on public companies’ disclosures of their cyber risks and exposures. I published a personal perspective on the implications of the Guidance in an October 29, 2011 post (here). Since then, our friend John Doernberg of William Gallagher Associates in Boston has written an excellent, thoughtful article which adopts a more technical approach. As many of you may know, John is a Vice President at William Gallagher and focuses on privacy, information security and risk management issues. Before becoming an insurance broker in 1995, John practiced law at leading firms in New York and Boston. The following article first appeared at John’s own site, http://blog.wgains.com/?s=Doernberg, and is being republished here with his permission. Thanks John!

Rick Bortnick

Increased corporate reliance on computer networks and electronic data has brought a corresponding increase in risks associated with breaches of their security. Such breaches have become more frequent and severe. With these Guidelines, the Division has indicated that public companies and their advisors should focus greater attention on how disclosure obligations under the federal securities laws may be affected by the potential financial and operational impact of cybersecurity breaches.

The Guidelines note that cybersecurity breaches (generically referred to as cyber incidents) can be malicious (cyber-attacks) or unintentional. The Guidelines provide something of a rogue’s gallery of cyber malice: the gaining of unauthorized access to steal or corrupt sensitive data or to disrupt operations, denial of service attacks, sophisticated electronic circumvention of network security, and social engineering techniques such as phishing to extract passwords or other information that will enable the gaining of access.

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Securities Law and Cyber Disclosures… Perfect Together…Especially for Cyber and Tech Underwriters and Brokers. And Me

Its not often that worlds collide or that interests converge into one amorphous epiphany. But that’s exactly what happened to me recently, when the Division of Corporate Finance (DCF) of the U.S. Securities and Exchange Commission (SEC) issued a Disclosure Guidance identifying the types of information public companies should consider disclosing about cyber risks and events that could impact their financial statements. Now, the DCF has cautioned that the Disclosure Guidance only represents its own views and “is not a rule, regulation, or statement of the Securities and Exchange Commission.” The DCF also emphasizes right up front that ”the Commission has neither approved nor disapproved its content.” Yeah, right. YOU be an officer or director or officer of a company that does not “comply” with the DCF’s  ”recommendations.”

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Tenth Circuit “Dishes Out” Important Opinion Addressing The Scope Of Advertising Injury Coverage For Patent Infringement Claims

On October 17, 2011, the U.S. Court of Appeals for the Tenth Circuit issued a much-anticipated decision addressing the scope of “Advertising Injury” (“AI”) coverage for patent infringement claimsDish Network Corp. v. Arch Specialty Ins. Co., No. 10-1445, __ F.3d __ , 2011 U.S. App. LEXIS 20955 (10th Cir. 2011), rev’g, 734 F. Supp. 2d 1173 (D. Colo. 2010).  The court, applying Colorado law, reversed a decision from the District of Colorado in which that court granted summary judgment to the insurers.  In the underlying action, the plaintiff alleged that Dish Network Corp. (“Dish”) had infringed one or more of twenty-three patents by “making, using, offering to sell, and/or selling . . . automated telephone systems, including . . . the Dish Network customer service telephone system, that allow[s] Dish’s customers to perform pay-per-view ordering and customer service functions over the telephone.”  The Tenth Circuit concluded that the record was unclear about how Dish actually used the technologies at issue, but that some of the patent-holder’s most well-known innovations involved interactive call processing. 

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INTRODUCTION TO CANADA’S PIPEDA PRIVACY LEGISLATION

I. Overview

Canada’s privacy regime can be described as a web of legislation at both the federal and provincial/territorial level. Some commentators express concern that this web has become tangled, lacks uniformity and actually undermines the predictability and consistency that, in their view, would exist under a single (federal) privacy regime. Canada has two primary privacy statutes: the Privacy Act and the Personal Information Protection and Electronic Documents Act (“PIPEDA”). The Privacy Act, R.S.C. 1985, c. P-21 (Can.), took effect on July 1, 1983, and imposed certain privacy rights obligations on approximately 250 federal government departments and agencies by limiting the use and disclosure of personal information. The Privacy Act also gives individuals the right to access and, if necessary, correct personal information held by governmental organizations subject to the Act.

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Asia-Pacific Cyber Law Risks and Developments

I.                    Introduction

The Internet facilitates the widespread and instantaneous flow of information across international borders.  While the advent of this method of transnational communication has truly created a “global economy,” at the same time, it has engendered problems for companies and their insurers which seek to assess risk and implement information safeguards, particularly in the face of divergent data privacy laws which vary from region to region or may not even exist in certain jurisdictions.  The Asia-Pacific region typifies such a lack of uniformity.  At the same time, the emerging economies in this rapidly growing part of the world have generated promising targets for computer hackers. 

75% of Asia-Pacific enterprises have experienced cyber attacks in the past 12 months.  Perhaps not surprisingly, a 2010 study by Symantec reported that almost half of all Asia-Pacific-based businesses (and 67% in Singapore) ranked cyber risk and information security as their top concern—more so than natural disasters, terrorism, and traditional crime combined.  Cyber attacks and data breaches are on the radar of CEOs and risk managers for good reason: the average cost for a large company to remediate a data breach in Australia increased to nearly $2 million in 2010, which is slightly up from 2009.  See Ponemon Institute/Symantec 2010 Annual Study: Australian Cost of a Data Breach (May 2011).  Notwithstanding the prevalence of such attacks, it is far more likely that a cyber security program is managed as a part of a company’s traditional business risks, with traditional coverages being contorted to cover various components of cyber risk (i.e. property loss, liability to third-parties, business interruption, etc.), rather than by way of a dedicated cyber-specific insurance program.  Still, in light of recent developments, it is virtually certain that companies soon will begin looking to transfer such risk via more efficient and targeted technology insurance forms and policies.   

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Ensuring Discovery Compliance: Sanctions Relating to Past, Present, and Future Adverse Parties

First published on September 22, 2011 at e-Discovery Law Review
Monetary sanctions, attorneys fees, and adverse inference jury instructions are the more common type of sanctions imposed on litigants for the spoliation of evidence, or not producing relevant documents. Recently, however, a court has increased the severity and impact of sanctions by applying them not only to current litigation, but also to a party’s future litigation, with the effects lingering for years to come.

The Underlying Suit

“Any competent electronic discovery effort would have located this email.” These words were written in an opinion by a United States District Judge in the Eastern District of Texas in Green v. Blitz U.S.A., Inc., No. 2:07-CV-372 (E.D. Tex., Mar. 1, 2011) Green involved a product liability suit in which the requirement of a flame arrester was in dispute. The jury returned a defense verdict, and the plaintiff collected a low settlement amount as part of a high-low settlement agreement. During discovery in a subsequent case with the same defendant and plaintiff’s counsel, counsel learned of documents that were not produced in Green. The plaintiff then filed a motion for sanctions against the defendant in Green and a motion to re-open the Green case. While the court denied the motion to re-open because the statute of limitations had expired, the court did impose sanctions for the discovery abuse.

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Class Actions: To Certify or Not Certify. It Depends…

A recent Ninth Circuit opinion on class certification demonstrates both the potentially fact-intensive nature of class action “typicality” issues and the importance of substantive law in determining whether common issues predominate over individual issues.

In Stearns v. Ticketmaster Corp., the Ninth Circuit Court of Appeals reviewed several decisions denying class certification to various plaintiffs challenging an allegedly deceptive internet scheme involving Ticketmaster and its one-time affiliate, Entertainment Publications, Inc. (“EPI”). At issue is a link on Ticketmaster’s website to EPI’s Entertainment Rewards program, which allows members paying a monthly fee to download printable coupons.

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Best Buy “Geeks” Out, Accusing Others of Trademark Infringement

In addition to being a trademark geek, I could be accurately accused of also being a tech geek. A “geek” is someone who loves using, and helping other people use, technology to help simplify his or her life. Best Buy, capitalizing on this endearing term for electronic lovers, created the Geek Squad, a tech support service. Their distinctive orange and black cars marked with their trademarked logo can be called out to provide in-home support or they are just a phone call away to help you with your technological needs.

There’s not too many other words other than geek that convey the nerdy type of people who love technology, but Best Buy is taking action against others who use “geek” for this purpose in their slogans.  In a recent lawsuit against Newegg.com, Best Buy claimed trademark infringement over Newegg’s slogan “Geek On,” saying that the similarity between the motto, in addition to using orange and black in their logo, breaches their rights.  And this is neither the first, nor the last, time that Best Buy will sue companies over this issue.

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Discovery in the Age of Cloud Computing

During the last decade, individuals and business have changed the way they manage their data by moving this data management offsite – otherwise known as cloud computing. This differs from the old model of information management that, more or less, mirrored the pre-computing era, meaning that an employee’s file might be kept in a cabinet in a Human Resources (“HR”) office or stored on a company’s in-house server. With cloud computing, however, that same employee file may be stored hundreds or thousands of miles away from the HR officer who needs to review it – or the IT officer tasked with preserving that data for potential litigation.

As discussed more fully in Rick Bortnick’s prior posts (here and here), cloud computing outsources data and software management, migrating it from the local to the global by providing instant access over the internet. According to the National Institute of Standards and Technology, cloud computing has five primary characteristics: (1) “on-demand self-service,” or the ability to call up stored data or capabilities as needed; (2) broad network access through a variety of platforms; (3) pooling resources providing “location independence”; (4) “rapid elasticity” in the distribution of computing capabilities, and (5) “measured service,” or service-appropriate control and optimization by the cloud system manager rather than the local user. It is the pooling of resources and the measured service managed by third-parties that pose the greatest risks during e-discovery.
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Cyber Liability Insurance for Universities: Incentivizing Best Practices as a Condition to Coverage (a.k.a “Reverse Underwriting”)

Computer hacking is a constantly evolving and growing threat.  While recent high-profile network security breaches at companies such as Epsilon and Sony (with crisis management and other costs estimated to range from $1 billion to multiples thereof in the case of Sony) have helped raise awareness about the need to adequately protect personal identifiable information, the problem has existed for decades. 

Yet the situation has only recently begun to receive proper attention from the media, government officials, businesses, and certain segments of the insurance industry.  Of course, the cost of a security breach may have something to do with that.  According to a study from Marsh and the Ponemon Institute, the typical data breach in FY 2010 resulted in companies and their insurers have to pay an average of $7.2 million to deal with and remedy the situation. 

One particularly alluring target for hackers has been educational institutions.  While schools and universities may not immediately appear to be obvious targets, the statistics confirm that attacks against educational institutions are on the rise. 

In 2007, educational institutions accounted for 25% of all reported data breaches.  This number jumped to 33% in 2008.  See Sarah Stephens & Shannan Fort, Cyber Liability & Higher Education, Aon Professional Risk Solutions White Paper (December 2008) Read the rest of this entry »

“Anonymous” Hacks PlayStation Network and Sony Feels the Pain

Security is, I would say, our top priority because for all the exciting things you will be able to do with computers – organizing your lives, staying in touch with people, being creative – if we don’t solve these security problems, then people will hold back.  
  
If anyone still harbors the notion that video games are simple distractions from the age of Pong, they haven’t seen the latest statistics. One of the most popular games released last year, “Call of Duty: Black Ops”, generated $650 million in the first five days of sales and exceeded $1 billion in record time. The achievement put the game in the company of Michael Jackson’s “Thriller” album and James Cameron’s movie “Titanic.”  As a whole, the video game industry has been valued at over $100 billion.  That massive size and scope makes the impact of a cyber attack all the more devastating.
 

Privacy In The Face Of Search Warrants

On January 20, 2011, a federal class action lawsuit was filed against MySpace in the United States District Court for the Eastern District of New York. If successful, this new lawsuit could have dramatic implications for social networking sites and their users. Either way, it provides another opportunity to make a couple of privacy-related points for employers.

The MySpace lawsuit was filed on behalf of all former and current users of MySpace, who seek damages for the alleged improper and voluntary disclosure of personal and private information and data in response to foreign court search warrants without the knowledge or authorization of the MySpace users. The class alleges that search warrants issued by state judges for certain information have no force and effect when they are issued to MySpace’s California headquarters from other states, but that MySpace nevertheless provided responsive information and data voluntarily.

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Bloggers Beware: Righthaven’s got its eye on you…

Whether you own a website where you allow blogs and comments to be posted, or if you are the blogger/poster, listen up. 

For those of you who haven’t heard of Righthaven LLC, they are to the blogging world what editors are to the Law Review world…cite-checking and anti-plagiarism “proponents” (let’s call ‘em that, for argument’s sake).  Righthaven’s been making quite a splash and has gained popularity among news chains since its coming into existence in the spring of 2010.  According to David Kravets’ article, “Righthaven Expands Troll Operation With Newspaper Giant[1], Righthaven has filed over 180 lawsuits and has settled over 70 of them already.  Its major suppliers of copyrighted material include Stephens Media (owners of Las Vegas Review-Journal), MediaNews Group (owners of San Jose Mercury News and the Denver Post), and WEHCO Media (owners of Arkansas Democrat-Gazette and Chattanooga Times Free Fress), to name a few.[2] Owned by Net Sortie Systems LLC and SI Content Monitor LLC, Righthaven is the brain-child of Las Vegas-based IP attorney, Steven Gibson.[3] Righthaven’s clients assign their rights in the content to Righthaven, who then sues for copyright infringement.[4] 

In order to analyze the problems faced by the parties to such lawsuits, we’ll have to discuss the U.S. Copyright Act, as well as the Digital Millennium Copyright Act (“DMCA”).

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Google Subpoena Information – Gmail, AdSense, AdWords and More

We wrote to Google and asked what information was required to subpoena Gmail in order to determine the identity of an email customer. Google’s response is below:

Dear Ms. Pengelley:

The information requested relates to services offered by Google Inc., a U.S. company organized and operating in the U.S., and governed by U.S. laws.  As such, we ask that your request be directed to Google Inc. – Attn: Legal Department, and communicated through the proper legal channel.  Please direct further communications to Google Inc. – Attn: Legal Department – at 1600 Amphitheatre Parkway, Mountain View, California, 94043, US, Fax: + 1 650.469.0622, or by email at lis-global@google.com.

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Woman Who Sued Yahoo for Linking Her to Viagra ‘Loses Her Appeal’

This is a story about Beverly Stayart and her efforts to sue Yahoo! and other search engines for linking her name to online content that she felt was offensive.

 Although this lawsuit is rather striking, the case record does not reveal any particularly striking or unusual facts about Beverly, herself.

She is not a celebrity, or at least, was not one when she started this litigation. She has an M.B.A. from the University of Chicago, she has written a few papers about genealogy research that appear on the internet, and she is passionate about the environment. She is interested in the plight of wild horses, wolves and baby seals and has vigorously protested against their mistreatment. She has published two poems about baby seals on a Danish website.

Like many people, Beverly was curious about what she would find when she put her name into Yahoo’s search engine. To her chagrin, upon running a search of her name in 2008, she discovered that in addition to the expected search results, Yahoo! returned results that linked her name to online pharmaceutical companies promoting sexual dysfunction drugs Viagra, Cialis and Levitra, pornographic websites that contained spyware, and links that directed her to other websites promoting “sexual escapades”.

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It’s a Bird…It’s a Plane…It’s a…Cyber Guardian?

Fifty years ago, a superhero leaped tall buildings in a single bound and used x-ray vision to catch evil criminals.   Today, some of the world’s most threatening criminals are computer hackers.  Superman may not be able to save us from cataclysmic cyber attacks, but we can rest a little easier knowing seven cyber guardians are holding keys to one of society’s most valuable commodities—the internet.  

ICAAN, the Internet Corporation for Assigned Names and Numbers, has provided “keys” to the internet to seven members of the global community. As discussed in prior posts, ICAAN is a non-profit watchdog group that helped establish Domain Name System Security Extensions,  or DNSSEC.   The DNSSEC—which just became enabled this year— is a critical security technology that lies at the core of the internet’s global addressing system.  It protects the very heart of the internet by ensuring that users reach the intended web address.

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Invasions of Privacy In The Cyber Sphere: Who’s Watching And What They Know About You

Google, Facebook, Twitter, Foursquare—millions of Americans, including myself, depend on these cyber sites as their gateway to information and communication in the outside world.  What we may not realize, or choose to ignore for convenience’s sake, is that this gateway lies on a two-way street. The information that we seek using websites such as Google and what we communicate on Facebook and Twitter provide companies with vital data to better market their products to us.  This use of information is referred to as “data mining. ”

An example of data mining can be seen in the advertisements that pop up on the side of your Facebook home page.  Such ads are often relevant to the information posted on your “Profile” page, such as advertisements promoting products from your college alma mater. 

At the outset, data mining seems like a win-win situation for both the consumer and the seller—the consumer is marketed with a product in which they are seemingly interested and the company has utilized its advertising budget in an informed, cost-effective manner.  At the same time, however, the threat of an invasion of privacy is real and has the attention of members of Congress and federal officials to create legislation regulating the way in which, and the extent to which, our personal information is shared with third parties. 

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Old Claims Still Exist in New Social Media Context

One of the difficult things to predict with regard to the use of social media in the employment setting continues to be the extent to which traditional legal claims apply equally to new social media outlets.   We continue to advise employers that it is imperative to ensure that care is also taken to create policies and train employees on the use of social media in and out of the office setting, and not to let the informality and ease of the Internet lull employers into a false sense of security.   On July 22, 2010, a New York Supreme Court Judge applied the tort of defamation to statements on Facebook in a case that offers an important message to employers.

The case of Finkel v. Dauber (New York Supreme Court, Nassau County) centered on statements posted by a Facebook group known as “90 Cents Short of a Dollar.” Plaintiff alleged that she was defamed by the group’s postings that stated “unbeknownst to many, [plaintiff] acquired AIDS while on a cruise to Africa” and then “persisted to screw a baboon which caused the epidemic to spread.”   The postings further defamed plaintiff, she alleged, by stating “[w]hile in Africa she was seen fucking a horse.”   And other intelligent banter.

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Concurrent CGL and E&O Coverage for “Spyware?” Yes, Says the Eighth Circuit

On July 23, 2010, the United States Court of Appeals for the Eighth Circuit issued an important decision in Eyeblaster, Inc. v. Federal Ins. Co., 2010, U.S. App. LEXIS 15152, No. Civ. A. 08-3640, finding concurrent coverage under both a General Liability (“CGL”) insurance policy and a separate Information and Network Technology Errors and Omissions Liability (“E&O”) policy in circumstances where an online marketing company installed software on a consumer’s computer system, allegedly corrupting the computer’s software operating system.

Eyeblaster Inc. (“Eyeblaster”), the policyholder, is a company that creates, delivers and manages online interactive advertising. For the period December 5, 2006, to December 5, 2007, it was insured under two concurrent policies issued by Federal Insurance Company (“Federal”): (1) a CGL policy covering occurrences which cause damage to tangible property, and (2) an E&O policy which covered claims for financial loss caused by a wrongful act in connection with a product’s failure to perform its intended function or serve its intended purpose, resulting in damage to intangible property. As to the latter policy, intangible property included software, data and other electronic information. Both policies were “duty to defend” forms.

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The White House’s “Progress” Report on Cybersecurity: There’s A Long Road Ahead

Lest one question the severity of the evolving challenges in our rapidly growing cyber world, President Obama has crystallized it succinctly: (1) “cyber threat is one of the most serious economic and national security challenges we face as a nation;” and (2) “America’s economic prosperity in the 21st century will depend on cybersecurity.” In other words, President Obama has declared cybersecurity to be a national security priority.

While that’s obviously good news, the follow-up question is “how are we doing in meeting the associated demands?” Regrettably, not so well, it seems.

Speaking before cybersecurity and privacy experts from government, law enforcement, the private sector, academia and privacy and civil liberties groups, President Obama, Homeland Security Secretary Janet Napolitano, Commerce Secretary Gary Locke, Cyber Coordinator Howard Schmidt and other Administration officials uniformly acknowledged that far more work needs to be done to protect digital communications and information infrastructure and make it more difficult and costly for cybercrimimals.

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Divorce: Isn’t There An App For That?

“A lawyer is never entirely comfortable with a friendly divorce, anymore than a good mortician wants to finish his job and then have the patient sit up on the table.”  Jean Kerr

A new company out of Dallas, DivorceApps.com, is selling applications aimed at helping people navigate the legal waters of divorce. A Texas family lawyer, Michelle May O’Neil, started the company in March of this year. Two apps currently are for sale on iphones at a cost of $9.99 USD.  Applications that are currently available online are described as follows:

(1) Cost and Prep Application: A system that 1) tracks the information that will be required either by legal counsel or the other side of the case and 2) helps the user track the costs of divorce. For example, the “Divorce Cost” portion of the application provides a scroll down list of categories that enables the user to gain a better understanding of the costs of divorce. The “Scroll Down” component of the application allows the user to scroll through the categories of information to determine the documents and information that will be applicable to their case.

(2) Estate Divider Application: The “Estate Divider” is a system that purports to allow a user to work through the overall division of their Estate. The user can:

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Immigration Enforcement’s New Target: Counterfeit Movies and Shows

Apparently feeling that they’ve resolved the longstanding issue of illegal immigration and can move on to the next crisis, Immigration and Customs Enforcement (“ICE”) and the U.S. Justice Department have identified a new enemy in their ongoing stuggle to protect truth, justice and the American way: Internet sites that sell counterfeit goods and pirated movies.

Indeed, just this month, government officials announced that they have shut down nine websites as part of their newly announced initiative, “Operation In Our Sites,” which is intended to protect Hollywood’s intellectual property. Officials estimated that nearly 7 million pirated movies and shows per month were downloaded from the offending websites.

The announcement was held on a soundstage at The Walt Disney Studios in Burbank, CA. Neither Johnny Depp nor Captain Hook reportedly was present.

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Credit Card Hackers’ Favorite Target…Hotels.

We’ve all heard the story of the clerk at the local gas station who was double-swiping credit cards in order to make fraudulent copies. Online banking, restaurants, clothing retailers…every industry is potentially a target. Yet the industry that was the subject of more credit card thefts than any other sector in 2009?  Hotels.

To the point, SpiderLabs (an affiliate of Trustwave, a data-security consulting firm) has published a study which reports that 38% of the credit card hacking events in 2009 involved the hospitality industry.  Over one-third of all thefts of credit card numbers occurred at hotels. Much to my surprise, given the wealth of reporting on the subject, the financial services industry lagged well behind at a comparatively minor 19%. Retail followed at 14.2% while restaurants and bars were fourth at 13%.

I guess I shouldn’t have been surprised, though, as my own credit card number was stolen several years back while i was staying at a business travelers’ hotel in New York City. I had gone to the City for a Cinco de Mayo event sponsored by a major international insurer. Several days later, I received a call from my credit card company asking if I had bought gasoline on Long Island or a $5000 television at a big box retailer. While I do buy gasoline, I hadn’t been on Long Island. And while I certainly would have loved a $5000 television (or, for economy’s sake, something less pricey), I hadn’t bought that either. The conclusion was simple: my credit card number had been stolen when I used it at the New York hotel.

So, why hotels? According to security analysts, they’re generally easy targets. The large chain hotels may employ sophisticated security technology or other protections. Or they may not. In either case, how about smaller or private owned, non-chain hotels? The next time you check into a hotel, ask what security methods they use to protect credit card information. You probably won’t like the answer. The credit card number that you provide at check-in may sit in a folder or a file maintained right at the front desk. Who would prevent someone from simply lifting the file? Especially in the middle of the night. The single desk clerk on overnight duty?

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It’s All About Meme, Dancing Babies, Getting Rickrolled, “The Ring” and Reasons Why You Perhaps Shouldn’t Post that Hilarious Video of Your Drunken College Buddy on YouTube

I was recently introduced to a great new Scrabble word: “meme”. According to wikipedia, my source for all things “e-”, a meme, in reference to the Internet, is ‘the propagation of a digital file or hyperlink’ that contains content consisting of a saying or joke, a rumor, an altered or original image, a complete website, a video clip or animation, or an offbeat news story, among many other possibilities. In other words, an Internet meme is an inside joke that is shared between a large number of Internet users.

Internet memes have a tendency to evolve and spread extremely swiftly, sometimes going in and out of popularity in just days. They are spread organically, voluntarily, and peer to peer, rather than by compulsion, predetermined path, or completely automated means. The term ‘meme’ can refer to the content that spreads from user to user, the idea behind the content, or the phenomenon of its spread.

Ally McBeal fans may now appreciate the reference to the dancing ‘oogachucka’  baby. In an effort to be a bit more up-to-date in my meme references, I’ve embedded some of them, below.  If you’re seeing them for the first time, you may experience the ‘lightbulb effect’ – that is, you’ll actually get the joke behind certain late night comedy skits that just didn’t seem all that funny.

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Pulling the Plug on Cyberbullies: Should Schools be Responsible for Sticks and Stones Thrown in Cyberspace?

His name is Ghyslain Raza, but you may know of him as “Star Wars Kid”, a portly 15-year-old student at a Quebec private high school who had filmed himself wielding a mock light saber, pretending to be a Star Wars character in combat. The two-minute video was supposed to be private, but he left it lying around at his school where three students, who did not know the teenager, came across the video, posted it on the Internet on April 14, 2003, adding a message inviting people to make insulting remarks about the clip.

Unfortunately for him, it wasn’t just his friends who found the footage so amusing. The video went ‘viral’. One Web log that posted the video was allegedly downloaded 1.1 million times, and by October 2004 one Internet site dedicated to the video had recorded 76 million visits. According to UK marketing firm The Viral Factory, it became the most downloaded video of 2006. So mortified was the teenager that he dropped out of school and finished the semester at a psychiatric ward. According to the student, “It was simply unbearable, totally. It was impossible to attend class.”  More than 35 other revised versions of the video clip, created by other people, have found their way to the Internet, with additional sound and visual effects.

This is an extreme but far from unique example of the devastation wrought by cyber-bullying, the term given to internet conduct in which students harass other students by e-mail and on the internet. Given the potentially devastating consequences of cyberbullying, should schools have the power to discipline their students engaging in this form of harmful conduct?

A major issue confronting school boards is that cyberbullying usually does not take place at school, although its effects can later reverberate among students during school hours. Students may post offensive material from home, or other times outside of school hours, but the targets are fellow classmates. Is it appropriate for a school board to discipline a student for posting such material simply because the postings are being accessed by other students at school or target other students?  At the same time, with power comes responsibility – if school boards have the power to discipline students for their behavior outside of school, are schools then to be mandated with the responsibility to essentially monitor and censor the world-wide web? Just how far should a school board’s jurisdiction extend regarding inappropriate off-school student e-conduct?

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How YouTube “Thinks” About Copyright

In this short video, Margaret Gould Stewart, YouTube’s head of user experience, talks about how YouTube works with copyright holders and creators to foster (at the best of times) a creative ecosystem where everybody wins.

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Two New Online Resources For IP Information: “WIPO GOLD” And USPTO

Within the last week, two separate intellectual property search engines were launched, each of which has the potential to significantly palliate searches for patents, trademarks and other IP. http://www.wipo.int/wipogold/en/

Specifically, on June 1, 2010, the World Intellectual Property Organization (“WIPO”) introduced a free online public resource, “WIPO GOLD”  which aims to facilitate universal access to IP information. It promises “quick and easy access to a broad collection of searchable IP data and tools relating to, for example, technology, brands, domain names, designs, statistics, WIPO standards, IP classification systems and IP laws and treaties..” The site also includes a helpful translation option, should users wish to search results in a language other than the default, English. The news report can be viewed here: http://www.wipo.int/pressroom/en/articles/2010/article_0018.html

Meanwhile, the United States Patent and Trademark Office (USPTO) separately announced on June 2, 2010 that it has entered into a “no-cost, two-year agreement with Google to make bulk electronic patent and trademark public data available to the public in bulk form.” Under the agreement, USPTO will provide Google with “existing bulk, electronic files, which Google will host without modification for the public free of charge.” Examples of searchable items include: patent grants and applications; trademark applications and Trial and Appeal Board (TTAB) proceedings; and patent classification information. The USPTO and Google also will work together to make additional data available in the future, such as patent and trademark file histories and related data, the office said. The bulk data can be accessed at http://www.google.com/googlebooks/uspto.html.

In other words, as technology moves forward, so too does the ability to research and guard intellectual property ownership and interests… at least in the Western Hemisphere and other WIPO member countries. Now, if only the remainder of the world could come together to unify owners’ capabilities to globally protect their IP rights.

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The Proof is in the Posting: How Social Media is Changing the Law

A man and a lion were arguing about who was best, each one seeking evidence in support of his claim. They came to a tombstone on which a man was shown in the act of strangling a lion, and the man offered this picture as evidence. The lion replied, “It was a man who painted this; if a lion had painted it, you would instead see a lion strangling a man. But let’s look at some real evidence instead.” The lion then brought the man to the amphitheater and showed him so he could see with his own eyes just how a lion strangles a man. The lion then concluded, “A pretty picture is not proof: Facts are the only real evidence!”

The moral of the story has indeed changed since the times of Aesop, at least in today’s courtroom. Social networking websites such as Facebook, MySpace, and Twitter invite attorneys and their clients into a lion’s den of pictures and postings, creating a haven for evidentiary consequences that can be unexpected obstacles if attorneys are unprepared to counter them.

INTRODUCTION

With claims such as “Facebook is a great place to keep in touch with friends,” “Using Twitter is going to change the way you [stay] in touch,” and “MySpace lets you meet your friends’ friends,” social networking websites are, admittedly, enticing. This article surveys recent evidentiary issues involving these sites across multiple practice areas and counsels how to avoid some of the adverse rulings discussed herein.

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Wake Up and Smell the Threats: Two Recent Examples of Why Municipalities Need Cyber Insurance

Odd as it may seem to those of us who live and breathe cyber, tech and privacy insurance, I have heard anecdotally of municipal authorities who profess that their cities and towns do not need to incur the expense of buying these products. “Why do we need them? We don’t operate on the internet,” they reportedly have said.

Well, my response is “why don’t you think you need them?” Do you maintain a bank account? Do you store personally identifiable information about private citizens, whether in your property records, police files, tax databases or otherwise? Are your employees able to access your municipality’s computer systems remotely? Is it really possible that every single piece of information you maintain is recorded on paper and nothing is stored on a mainframe, whether located on- or off-site? Come on. Its 2010. That’s virtually impossible, isn’t it? Haven’t you read my December 23, 2009 post No One is Immune. Even Government Entities Need Cyber/Tech Insurance?

Since that posting, additional municipalities have suffered cyber attacks and been the subject of cyber lawsuits.

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Does the Internet Create Unfair Jury Trials?

Jurors are not supposed to look at media coverage of the case during a trial since their verdicts are supposed to based on the evidence presented in a trial, rather than media reports. But can they really resist taking a sneak peek on the Internet?

In February of 2010, the U.K.’s Ministry of Justice released a very interesting report, titled “Are Juries Fair?“, by Professor Cheryl Thomas.  Among other things, the study examined jurors’ use of the Internet to look up information about their cases in both long, high profile cases and standard cases lasting less than two weeks, with little media coverage. The report found:

  • All jurors who looked for information about their case during the trial looked for it on the Internet, as opposed to television, newspapers or some other source. (Well, okay, so this one wasn’t exactly a big surprise…).
  • More jurors said they “saw” information on the Internet than admitted to “looking for it” on the Internet. Since they were doing something that a  judge should have told them that they were not supposed to do, this may explain why jurors were more likely to say the saw reports on the Internet than said they looked for it. (See? Lawyers aren’t the only people in the courtroom who resort to semantics….). But just what are the figures?

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But I’m Innocent, I Swear! This Website Proves It!

Who would have thought a comment as innocent as “Just walked into work at Cozen O’Connor-Toronto…so much work to get done” could potentially cause you so much trouble? 

I came across an article this weekend by Tracy Staedter, titled “I’m Not Home: Please Rob Me”. Ready to become paranoid?  Read the article – it’s short and to the point.  Ever send out Evites?  How about prior tweets, MySpace posts, etc. inviting people to your place and including an address?   Bingo!  Better pack up and move quick! 

The website causing havoc is www.PleaseRobMe.com.  Check it out…make sure you aren’t on the site…then check again after every time you tweet, post, etc.  Do you have the time to constantly check?  Probably not.  Should you?  Probably.  It may make you paranoid, but then again, shouldn’t you be?  But should the creators of the website be blamed – legally, morally, ethically?  Should they be held accountable for what you put out into the public realm?  Can you sue for violation of your privacy rights?  Do you really have an expectation of privacy in any of those posts?  In an age where MySpace, Friendster and other social networking sites regularly have their records subpoenaed, why should anyone think that anything they post will be “private”?  What piqued my curiosity even more was how this website could apply in the criminal or tort law application.  Can this website be used to substantiate or corroborate an accused’s alibi – “Your Honor, look!  I have proof that I wasn’t in the city when the crime occurred…I tweeted that I would be in Los Angeles!”  Look, my knowledge of Canadian (or U.S., for that matter) Criminal Law/Procedure does not extend further than the 800 or so pages of textbooks I read while in law school.  But surely this website can be put to more use than just what the creators intended.  So long as a proper foundation is laid, and the purported evidence is relevant, it may be admitted, right?  Something to definitely consider as a defense attorney. 

The creators of the website claim the site is supposed to help us…to open our eyes to the evil out in the world.  Call me crazy, but perhaps a simple email addressed to me would have been more appreciated…though it leaves one wondering if such a logical course of action would have been as effective.

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