Articles Posted in Technology

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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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Since the 1930s, the act of publicly raising money for a startup business has been outlawed. Now, with the implementation of the Jumpstart Our Business Startups Act (“JOBS Act”), in 2012, public crowdfunding is legal and encouraged. Startup companies are no longer confined in the resources and opportunities available to raise capital. Private companies can now publicly advertise that they are raising capital and collect investment funds through online crowdfunding services. The JOBS Act allows for two different ways in which a company can utilize this new crowdfunding opportunity. Is your startup looking for an infusion of capital? Are you considering crowdfunding as an option? If so, then you must understand how Title II and Title III of the JOBS Act apply to your startup.

What is Title II?

Title II of the JOBS Act now allows a private company to solicit and advertise investment opportunities to the general public. But, Congress left it up to the Securities and Exchange Commission (“SEC”) to regulate the rules. The SEC has changed Rule 506 of the Securities Act of 1933 to allow for this new public advertising provided that, “the issuer takes reasonable steps to verify that the investors are accredited investors.” Rule 501 defines accredited investor in three different ways: (1) an individual whose net worth or joint net worth with a spouse exceeds $1 million; (2) an individual with an annual income more than $200,000; or (3) a joint annual income with a spouse over $300,000. In addition, issuers must previously file with the SEC that they are claiming this new public solicitation exemption. The penalty for not following these requirements is being banned from fundraising for a year.

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It seems that entrepreneurs do not simply want to capitalize on local markets anymore.  An international impact is achievable with the connections available through internet and technology (e.g., e-commerce).  A startup company can now achieve that international presence by utilizing cryptocurrencies and crypto-crowdfunding.  Using cryptocurrencies allows a company to do business in any country without worrying about foreign exchange fees or limitations.  Crypto-crowdfunding can help a new company raise capital by creating its own currency in exchange for real money or other cryptocurrency. Are you starting an online business and want an international presence? Do you want to raise money fast for your new company? If so, then cryptocurrencies and crypto-crowdfunding may be helpful.

What is Cryptocurrency?

Cryptocurrency is digital or virtual currency that uses cryptography as its security. These currencies are not issued by central banks, and therefore, immune from government intervention and manipulation. Because there is no government intervention into these crypto-markets, many national cyrptocurrencies are beginning to emerge. European countries with struggling central banks and economies are experiencing the emergence of national cryptcurrencies, such as Spaincoin in Spain and Aphroditecoin in Cyprus. These currencies are easily traded and provide entrepreneurs with the ability to circumvent foreign exchange controls. Whether these currencies are privately started or nationally motivated, they can connect people anywhere in the world while keeping governments out of the picture.

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As mobile technology improves, we all do more on our mobile devices—e.g., banking, shopping, and gaming are just a few examples.  The Wall Street Journal estimates the mobile apps market as a $25 billion industry.  New businesses and entrepreneurs may want to jump into this growing market. When new developers enter the market they must consider the privacy rights of users.  The law protects consumers and their privacy from intrusion, and there are even stricter guidelines for apps used by children.  Are you interested in starting a mobile app business?  Are you ready to begin marketing your new mobile app?  If so, then there are steps you must take to ensure you are in compliance with the law and respecting the privacy rights of your customers.

What Is a Mobile Application?

A mobile application is software that can be downloaded and accessed using a mobile device, such as a smartphone or tablet. Apps can be paid or free.  Developers of free apps usually make a profit through advertisements, in-app purchases, and/or paid versions that offer more features than a free trial or “lite” version. Further, apps may collect data from the user.  Apps can access a user’s contacts, call logs, internet data, calendar, and device location.  Usually, this data is collected so that the app can perform what it is designed to do, such as make a bank transfer or direct the user to a destination through GPS.  Data collection must conform to consumer protection guidelines and developers will be held responsible to those guidelines.

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Today, most companies are dependent on technology and their computer systems, and there are entities whose primary focus is to hack into these systems. On the other hand, a company might experience an internal breach of its network system, which causes the unauthorized release of sensitive information. Any breach into or out of these systems could be catastrophic. The computer network for a company may contain important data, intellectual property, and consumer information. All industries are susceptible to a data breach. To help protect against these risks, companies must insure themselves with the correct policy. Traditional insurance policies may not be enough to cover all the risks. In recent years, insurance companies have begun to issue specific cybersecurity policies. What kinds of claims are covered under these cybersecurity insurance policies? How can an insurance company ensure that it is mitigating its own risks in underwriting a cyber policy? If you are concerned with these questions, then the effectiveness and scope of these cybersecurity policies is relevant to your company.

What Is Cybersecurity Insurance?

Cybersecurity insurance is an insurance policy that helps mitigate the risks posed by incidents such as “data breaches, business interruptions, and network damages.” The market for this kind of policy is still in development, and insurance companies and consumers are unsure how far reaching the policy protections are. Department of Homeland Security has stated that a more developed cybersecurity insurance market would lead to fewer successful cyber attacks—i.e., by implementing preventive measures in conjunction with policies and lowering premium prices based on the level self-protection. There are steps that companies and individuals can take to reduce their risk level to a cyber attack, and these steps may actually help prevent attacks. Preventive measures can at least lower the risk an insurance company must take in underwriting a cyber policy.

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In recent years, every aspect of our lives has become dominated by technology—and now people are beginning to wear their technology. For example, Google has released Google Glass, a wearable computer in the form of glasses. Samsung has released the Galaxy Gear smart watch, a device that one wears as a watch and functions as a phone. This new technology is creating a class of its own—“wearable technology” or “wearable computing.”  By utilizing this technology, a person can walk on the street wearing glasses or a watch while recording the images and sounds around him. Are you concerned with being recorded without notice? Do you want a person to be able to gather your personal information in an instant with facial recognition software? If these issues concern you, then wearable computing is relevant to your privacy rights.

What is Wearable Computing?

Wearable computing describes a class of computer-powered devices that can be worn by a user. There are many kinds of wearable computing devices, and some raise few concerns because they are as simple as a step counter or a heart rate monitor. Other devices can perform the same functions as a smartphone, but in a much more discrete manner. The more advanced wearable devices can take pictures, record video and sound, and respond to voice commands to read text messages, emails, and surf the web. Probably the most well-known and discussed technology, Google Glass, has been subject to criticism. If someone wears a Google Glass and looks at you, your first thought might be that you are being recorded or investigated.  In fact, some restaurants and bars in San Francisco have already banned this device because of their customers’ privacy concerns. Even with the concerns over privacy, this technology is likely to become even more pervasive.

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Computers are learning to do it all—even surf the Web. These computers, or programs, explore the World Wide Web, gathering information and processes for use in other forums. This technology, which is known as “web scraping” may also threaten website and consumer privacy concerns. Indeed, websites have a proprietary interest in their content and others are not authorized to access and reuse this information. Consumer information that is available online is not necessarily available for any use.  As such, web scraping has become a concern as regulators attempt to outline the parameters. Do you operate a website? Are you a consumer with personal information available over the Internet—such as your name, address, salary, or work history?  Do you have an interest in gathering information from various sites for your personal use? Do you wish to revise your terms of service in light of these advancements? If so, web scraping is relevant to your business and privacy concerns.

What Is Web Scraping?

Web scraping is the process of using computer software to extract information from websites. Usually, this type of software simulates web browsing that is performed by a human. This technique is used to automatically gather information from various websites. This is an effective tool in several fields such as online price comparisons. Often, the aggregate website will have agreements with other websites allowing web scraping to gather pricing data. Additionally, web developers often use this technique to copy website content and reuse it when designing a new site. However, this process can also be used in ways that press against privacy concerns. For example, web scraping can be used to gather a consumer’s personal information. This includes contact information, personal websites, and professional histories. Web scraping can also gather an online user’s comments on discussion boards. All such information is valuable to businesses that want to know how consumers feel about their products or services. Web scraping has increased drastically over the last few years. In 2013, web scraping made up 23% of all online browsing traffic.

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Where you visit online seems to say a lot about you. Online privacy has been in the spotlight recently, as consumers come to terms with the reality that their online tracks define who they are to marketers and government agencies.  By studying this data, third parties can paint a picture about consumers—i.e., where they go, what they do, their preferences, and even any illegal conduct.  Now, data brokers can also compile and study large bodies of data to find patterns in behavior. While this carries huge potential for technological advancement, it also comes with greater threats to consumer privacy.

What Is Data Mining?

Data mining is the intricate process whereby data brokers collect, store, and study large sets of data for patterns.  The data includes everything from shopping habits, healthcare records, online practices, and public records (e.g., court and property records). This data is then used in a variety of fields, including intelligence gathering, statistics, database systems, and machine learning. Usually, data mining is used to compile lists for targeted marketing purposes—such as lists of diabetics, smokers, and political affiliations. However, recent reports indicate that data mining has been used to compile more personal lists—rape victims, addicts, and AIDS victims. The U.S. government has used data mining in various surveillance projects. These projects were ultimately terminated because of rising concerns that they violate the Fourth Amendment protection against unreasonable searches and seizures. It is most shocking that the subjects never know they are victims to data mining. At a glance, most of these categories seem harmless. However, the underlying threat is that data brokers conduct mining projects without notifying consumers and without obtaining consent.

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