Articles Posted in Technology

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In general, online privacy falls under two categories. First, is personal privacy.  Second, is corporate privacy.  For example, corporate privacy concerns the protection of corporate data (e.g., electronic communications) from retrieval or interception by unauthorized parties. Security is important for the protection of trade secrets, proprietary information, and privileged communications. The failure to maintain confidentiality can result in a loss of “trade secret” status. The relevant law is 18 U.S.C. §§ 1831 et seq. (e.g., economic espionage and theft of trade secrets). Also, the waiver of the attorney-client privilege and work-product protection come into play during litigation.

The Economic Espionage Act was the first federal criminal law protecting trade secrets. It provides penalties such as prison terms of up to 15 years and fines of up to $5,000,000. It expands the trade secret definition by including all types of business and financial information.

Trade secret owners face an unfair position when it comes to online publication of their trade secrets. One option is to obtain preliminary injunctions. However, the Supreme Court has cautioned against using the Prior Restraint Doctrine where its effectiveness would be questionable (e.g., jurisdictional enforceability concerns). The other option are registering patents, trademarks, copyrights or implementing preventive technologies.

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The Internet of Things (“IoT”) is the next evolution and is making a remarkable impact on technology and our way of life. In fact, the availability of an omnipresent network connectivity has fostered the widespread use of smart devices.

Devices are now able to communicate with each other through embedded sensors that are linked by wired and wireless networks. For example, they include thermostats, automobiles, or pills that permit a physician to monitor the patient’s health.

Technology has allowed us to detect and monitor changes in the physical status of connected devices (e.g., RFID, sensors) in real-time. Technology advancements allow networks and objects they connect to become more intelligent. The factors that are currently driving growth, include, development of smart cities, smart cars, and smart homes, enhanced connectivity infrastructures, and a connected cultures.

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Electronic discovery (a/k/a “eDiscovery”) is the process of identifying, locating, preserving, collecting, preparing, reviewing, and producing electronically stored information in the context of the legal process. Electronically stored information (“ESI”) includes anything that can be stored in electronic form on a computer or other media device. A computer is defined as “an electronic, magnetic, optical, electrochemical, or other high speed data processing device performing logical, arithmetic, or storage functions (e.g., desktop, laptop, smart phones, tablets, CDs, DVDs, flash drives, backup tapes, voice mail, servers, and access control systems).

What Are the Issues That Arise During Electronic Discovery?

The following issues may arise during the course of electronic discovery:  First, the attorney-client privilege and work-product doctrine play a key role.  The attorney-client privilege protects the confidentiality of communications between an attorney and his/her client.  The work-product doctrine prevents a party from discovering documents that are prepared in anticipation of litigation.

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Online banking is an electronic payment system that enables customers of a financial institution to conduct financial transactions on the web.   In today’s high-tech world, online banking fraud is committed on a daily basis.  As such, sometimes customers may not be liable for certain unauthorized online transactions, subject to the terms and conditions of the bank’s service agreement.  Online banking fraud is to defraud a financial institution or obtain money or other property under the custody of a financial institution by false pretenses.  A related issue includes financial identity theft.   So, financial institutions use encryption technology (e.g., secure socket layer – a/k/a “SSL”) to prevent unauthorized access to data.

In general, the customer must notify bank within 60 days after receiving a periodic statement pursuant to 15 U.SC. § 1693f.  Under 15 U.S.C. § 1693g(b), the burden of proof of consumer liability is on the bank.  So, in order to establish a customer’s liability, the bank must prove the transfer was authorized.  In case of a violation, the bank may be subject to civil liability under 15 U.S.C. § 1693m.

What Are the Common Methods Used to Defraud Customers?

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Pay-per-click (“PPC”) advertising is a profitable online service that search engines, such as Google, Yahoo, or Microsoft, provide their customers. Now recently, PPC fraud has developed and caused loss of revenues for businesses and advertisers.   PPC fraud occurs when someone or a program clicks on a company’s advertisement without intending to view the website or buy anything.

Many companies have filed lawsuits against search engines, claiming that they have breached the terms and conditions of their contracts. These companies have alleged that the search engines, acting as the intermediaries, that published their online advertisements improperly charged them for fraudulent clicks. Two questions can be raised by these implications. First, how should a chargeable click be defined within the advertising contract? Second, does a search engine have any duty to protect advertisers from fraudulent clicks?

What is PPC Advertising?

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In recent years, global positioning system (“GPS”) technology has increased in usage on various GPS-enabled devices (e.g., cars, smartcards, handheld computers, and cell phones).  This technology brings value to its users, however, it has caused a significant decrease in privacy. Private and public organizations are able to collect and use the information for different purposes. For example, private organizations may collect data for marketing. Naturally, there are proponents who argue for governmental or non-governmental collection and use of information for different reasons (e.g., national security, emergencies). There are also proponents who argue that the collection and use of information leads to abuse (e.g., unauthorized access, invasion of privacy). Therefore, we need clear and uniform legal standards to control when anyone can collect and use information about an individual.

At this time, there is no law that restricts the government’s collection or use of GPS tracking information against individuals. However, some states have enacted legislation that restricts the commercial use of GPS. The Fourth Amendment limits the use of GPS technology, but its protection from unreasonable search and seizure is less effective due to recent technology advancements.

The main issue is privacy.  In today’s highly-technological world, most individuals carry their cell phones all the time. So, wireless network providers (a/k/a cell phone carriers) are able to track the individual’s movements. On a side note, GPS technology has been used to save lives in emergencies. The Federal Communications Commission (“FCC”) mandates wireless network providers to submit the cell phone location for emergency 911 calls (“E911”) that have been made from cell phones. The law on this issue is relatively clear. It permits cell phone carriers to provide information to third parties (e.g., FBI, NSA, or Police) for E911 emergency calls only. However, they need the cell phone owner’s consent in any other situation.

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In recent times, e-residencies (a/k/a “electronic residency”) have become a trend in some European societies. For example, the Republic of Estonia implemented this concept into its banking systems in order to permit people to manage their funds in an electronic environment. According to the Information System Authority, in 2001, the first nation-wide ID-card was introduced as the primary identity document for Estonian citizens both in the real and digital world. It is possible to attach a digital signature to the ID-card that constitutes a handwritten signature.

The Republic of Estonia is operating on the cutting-edge of technology. It has created an electronic state (“e-State”) where almost all transactions are completed by using technology. For example, Estonians developed Skype. The government permits its citizens to start a business online, pay taxes online, administer schools online, and pay their car park fees by mobile phone. It seems that their logistics transcend most societies. However, their achievements have not been without problems. In 2007, a cyberattack took place against its government’s websites and data communication networks.

What are the legal ramifications?

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The best advertising directs a company’s message directly to the customer.  Direct telephone marketing is an effective way to accomplish this kind of advertising.  However, the Telephone Consumer Protect Act (“TCPA”) now restricts how businesses can engage in direct telephone marketing.  But, there are many other ways companies can directly reach consumers—i.e., text messages, emails, and instant messages. These kinds of communications may not violate the law against direct telephone marketing.  Is your company looking for more effective marketing? Are you unsure how you can advertise directly to customers’ devices?  If so, then recent interpretations of the TCPA may allow your business to advertise directly to customer devices.

What Is the TCPA?

The TCPA was enacted in 1991 to restrict telemarketing and the use of automated telephone calls for the purpose of marketing. The law makes it unlawful “to make any call using any automatic telephone dialing system (“ATDS”) . . . to any service for which the party is charged for the call.” An ATDS means equipment, which has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator, and to dial such numbers.  A recent case has helped limit the definition of an ATDS.  In Marks v. Crunch San Diego, LLC, a district court in California held that text message marketing may not be an ATDS, and therefore is in compliance with the TCPA.

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Peer-to-peer networks have provided an invaluable service that allows users to share information and data around the world. These networks became popular for media sharing, culminating in the infamous Napster scandal. Many are aware of the copyright issues that arise with the use of peer-to-peer media sharing. However, there are other cyber-crime issues that users may expose themselves to when using these networks. Peer-to-peer networks may be used in a variety of legal ways, but users must protect themselves from cyber crime prevalent over these networks. Are you developing or using a peer-to-peer network? If so, then you should be aware of the cyber crimes that you may be exposed to or unintentionally committing.

What is a Peer-to-Peer Network?

A peer-to-peer network is created when two or more computers connect and share resources without going through a separate server.  Typically, peer-to-peer networks are accessed through free software that allows the user to find and download files on another user’s computer.  The traditional computer network uses a client and server model, in which the client computers store and access data on a dedicated server. Peer-to-peer networks move away from the dedicated server. So, each computer is a client and a server. This empowers each user to access and share information directly instead of through a central hub. These networks also provide users with more control. Users can decide to which computers to connect, what files to share, and how many system resources to devote to the network.  Users have many controls over a peer-to-peer network.  However, the average user may expose himself to committing and being the victim of cyber crimes if he does not know how to control the network settings.

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The writing is on the wall.  The future of television and media consumption is moving away from network channels and physical sales to an “On-Demand Internet” streaming model.  This trend has already begun with millennials.  Millennials, as a group, do not subscribe to cable television or purchase music. Instead, services like Netflix, Hulu, and SoundCloud provide Millennials with On-Demand access to television shows, movies, and music. Television networks and traditional media companies must adjust to this new trend. This issue recently came to a head in the Supreme Court’s decision in ABC v. Aereo. The Court’s decision, while resolving the immediate issue in the case, has caused a problem in the larger scheme of things. The decision has put a new spin on how the Court applies the Transmit Clause of the Copyright Act of 1976. If you provide digital media content through Internet streaming or access content through the cloud, then the Aereo decision could affect you.

What Was the Issue In ABC v. Aereo?

Aereo is a company that provides a small device that a user can connect to a computer for a monthly fee. The device allows the user to pick up network television broadcast signals and stream them directly to the user’s computer.  ABC and other network broadcasters sued Aereo for copyright infringement. The issue in the case was whether Aereo’s device fits under the definitions of performance and public transmission within the Transmit Clause of the Copyright Act of 1976.  The Transmit Clause describes the exclusive right to “transmit or otherwise communicate a performance . . . of the [copyrighted] work . . . to the public by means of a device or process . . .”  The Court held that Aereo did transmit ABC’s performance and that the transmission was to the public.  Therefore, Aereo infringed upon ABC’s copyrights.

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