Articles Posted in Technology

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In September 2013, California’s legislature enacted a new “Do Not Track” law–Assembly Bill 370 (“AB-370”)–that requires websites to disclose their practice of tracking consumers’ personal identification information. The new law may be the first step towards universal anti-tracking standards, which will provide greater protection over the Internet for online users and their personal information. According to the executive director of the Center for Digital Democracy, Jeff Chester, at the very least the new law is a signal to websites that political bodies are mobilizing to protect online consumer privacy.

What Are the Provisions of California’s “Do Not Track” Law?

Under AB-370, any website that collects personal information from online users will have a duty to disclose the specifics of their tracking behavior to consumers. The “Do Not Track” legislation requires that websites inform consumers their protocol for responding to do not track signals (“DNT signals”). For instance, consumers who use Mozilla Firefox have the option to request that the browser not track the users’ personal information. However, Mozilla is still under no legal obligation to follow this request. AB-370 also addresses any practices that allow third parties and sites to access and use consumers’ personal information. Specifically, the new law requires websites to disclose whether they grant third-party access to personal information the website has gathered from online users. This law does not prohibit websites from continuing to track personal information, or grant access to this information to third parties. Instead, the law aims to improve disclosure standards, so that consumers are better informed of how their online activities can affect access to their personal information.

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The answer to many questions is an online search away. However, online searches are not free of all consequences. Indeed, search engines can track and store a user’s search history and even sell this personal information to third parties for profit. What someone types into a search bar then becomes part of a permanent link tied to that Internet Protocol (“IP”) address. This certainly raises several concerns regarding online and individual privacy. In a highly digitized era, this affects anyone with Internet access, a computer, and even a cellphone.

What are the Main Concerns of Search Engine Privacy?

Search engines track personal information using users’ search history, including a user’s IP address, search terms, name, and location. Websites, such as Google and Yahoo, can then use this information for their marketing, or they can sell users’ search history to marketing firms. Online search history generates an impression of the user, which the public can then use to its advantage–e.g., for criminal investigations, employment opportunities, and to fuel personal disputes. Public opinion in this area strongly disfavors this level of surveillance. As a result, websites have begun to compete in terms of which search engine provides the greater privacy protection. Efforts to improve search engine privacy consider, among other standards, how long a search engine stores user information, how a search engine deletes such information, whether the search engine engages in behavioral targeting (i.e. whether a site uses search history to provide targeted advertisements), and whether the search engine uses profile information to manipulate advertisements. Based on a recent survey by CNet, only Ask.com does not record search terms. Outside the circle of the large search engines, sites such as ixquick.com allege that they do not record IP addresses when users conduct searches through their website. According to the survey, Google also does not engage in behavioral targeting.

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Online sales markets are in a state of expansion as more consumers continue to conduct their purchases online. Indeed, the topic of an Internet sales tax has been in debate in the California Legislature for some time. And now, with the possibility that the federal government may pass the Marketplace Fairness Act of 2013, online sales taxes could change across the country. If you are a consumer who makes purchase online, or a business that conducts sales online, the California Internet sales tax provisions apply to you. Please contact us today to speak with an attorney who can help explain how changing tax requirements could affect your online transactions.

What Is California’s Online Sales Tax Now?

Currently, the standard tax rule in California, and across America, is that online retailers must collect sales tax from customers who are located in states where the online retailer maintains a “physical presence.” Online retailers maintain a physical presence in states where they have a warehouse, a store, a corporate office, or a sales representative. In states where online retailers do not collect an online sales tax, customers nonetheless have a duty to report and pay a sales tax on online purchases. In this case, the tax is a “use tax,” not a “sales tax.” However, these standards differ between each state and for federal taxes. The federal government has also been considering the Marketplace Fairness Act of 2013, which would allow businesses to collect taxes on sales in individual states, regardless of where the seller is located. However, any businesses that are not physically located in a state and make less than $1 million a year would not be required to follow this tax schedule. This law would also require states to reform their current sales tax laws to make online sales tax collection simpler. For California, this new law will not make a substantial difference because the largest online sellers, such as Amazon, already maintain a physical presence in California. Therefore, California online shoppers already pay an online sales tax for most of their online purchases.

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A business’s trade secrets are an essential component of its foundation, growth, and development. A trade secret is any sort of confidential and proprietary information that a company seeks to protect from unauthorized access.  For example, a trade secret, includes a formula, pattern, compilation, program, device, method, technique, or process (e.g., computer algorithm).  By definition, a trade secret is only valuable so long as it remains a secret.   In recent years, as businesses conduct more transactions over cyberspace, there is a higher probability of trade secret theft or loss. However, the constantly changing nature of cyberspace, and the anonymity users enjoy over the Internet, make protecting trade secrets a complex issue.

What is the Threat to Trade Secrets in Cyberspace?

Trade secrets in cyberspace, which involve software and digital information, can be misappropriated or wrongfully taken and used without detection.  It is also known as “cybertheft.”  For example, an online user has the capacity to view and distribute trade secrets without detection within minutes.   Online message boards allow users to post trade secrets over the web anonymously.  By concealing their identity, it is possible to steal a trade secret without detection.  Indeed, the courts continue to issue decisions that recognize individual privacy rights in digital trade secret misappropriation cases, preventing the trade secret owner from seeking legal remedies. Furthermore, in the past, trade secret theft was intended to secure an economic advantage between competing companies. However, recent cases, such as Ford Motor Co. v. Lane, illustrate that trade secrets are vulnerable to dissatisfied employees who distribute trade secrets only to harm an employer.  On a side note, hackers may even steal and distribute trade secrets simply to show off their technical skills.

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In the aftermath of the Snowden scandal, and an on-going concern for cyber-surveillance practices, the United States Congress and the American people are increasingly concerned that their online privacy is at risk. The government continues to wrestle with the possibility of including mandatory data retention standards for Internet Service Providers (“ISPs”). While this poses a serious threat to individual privacy, supporters of data retention argue that these standards are essential to national and personal safety.

What Is Data Retention?

Data retention is the practice of ISPs monitoring and storing information tied to an IP address, including, but not limited to, browsing history. ISPs that also provide email services may store email logs, but not the content of those emails. ISPs also have the capacity to identify which third-party email service providers are tied to an IP address. Law enforcement agencies could require ISPs to turn over this information in the course of a criminal investigation. PRISM, the National Security Agency’s avenue of access to online data, is similar to traditional data retention practices, except that PRISM targets cloud-based services. Currently, there are no mandatory data retention policies in America. However, governmental pressures and international influences may be pushing America to join Europe in its data retention practices. In March 2013, James Sensenbrenner, Republican House representative from Wisconsin and the author of the Patriot Act, argued that America should adopt ISP data retention laws similar to those in Europe. Indeed, the Justice Department has fully supported data retention policies. The Justice Department argues that the lack of data retention policies dramatically hinders law enforcement efforts. However, regardless of whether the government implements policies requiring ISPs to store personal data, ISPs currently maintain the freedom to monitor and track online activity. Indeed, Time Warner currently retains user data for six months, and Verizon retains data for eighteen months. Then, under the Stored Communications Act, which is codified under 18 U.S.C. § 2701 et seq., the government may access this data.

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A federal court recently issued a decision establishing that “abstract ideas” do not enjoy patent protection. In Accenture Global Services, et al. v. Guidewire Software, Inc. the United States District Court for District of Delaware found that a patent for computer software for insurance-related businesses was invalid. Therefore, Accenture did not enjoy exclusive patent-holder rights for the software. Do you own patents that relate to the software industry? Are you looking to secure and protect your exclusive patents rights for an invention? At the Law Offices of Salar Atrizadeh, an attorney with experience and knowledge in the changing field of patent law can help explain the latest developments in this area to protect your intellectual property interests.

What Is Patent Law?

According to Article I, Section 8 of the United States Constitution, Congress has the power to regulate “science and useful arts” by granting exclusive rights for such inventions and creations. Under this constitutional authority, Congress enacted Title 35 of the United States Code as the federal body relating to patents. A “patent” is a set of exclusive rights granted by the United States Patent and Trademark Office to an inventor for a limited period of time. In return, the inventor makes the underlying patented invention available to the public, which promotes intellectual growth and new developments.

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In January 2012, the European Union (“EU”) introduced a draft regulation that would make it more difficult for companies within the EU to gather personal data from consumers. In the wake of recent developments that the National Security Agency has been involved in questionable surveillance practices in the United States, the European Union is certainly taking steps to provide greater individual privacy protections.

What Are the Terms of the New EU Personal Data Directive?

The right to privacy is an important component of the European Convention on Human Rights, a highly developed area of law in Europe. According to the new regulation, institutions may only access personal data if the purpose for gathering the personal data falls within three categories. First, a company or agency may collect and process personal data if the individual is first informed. For example, among other preliminary requirements, the individual must initially be aware of the purpose for gathering personal data. Germany’s chancellor, Angela Merkel, has urged the EU to adopt additional restrictions to require internet companies to reveal details about the companies they will be sharing personal data with. Next, a company or agency may collect personal data if the data is “adequate, relevant and not excessive” in relation to the purpose for the collection. Additional restrictions may apply if the data is more personal, such as when the data goes to religious beliefs, political affiliations, sexual orientation, or racial association. Finally, personal data may be gathered and processed for a “legitimate purpose.” However, this is a very narrow category and the reasoning behind the data collection must be very specific. As an added safeguard, any data collected within the EU may only be transferred to countries outside the EU if those countries provide substantial levels of personal privacy protection as well. This requirement would pose an obstacle for social media websites, such as Facebook, that exist across the world and gather information from users to share with companies that operate under different privacy-protection standards.

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In recent times, the threat of privacy invasions has spread far beyond domestic governmental agencies, but to also include foreign and international governments. Do you travel outside of the United States? Do you travel with electronic devices, such as a cellphone or laptop? Do these devices hold any sensitive information, such as passwords or confidential communications? If yes, then your electronic privacy may be compromised when you travel abroad.

What Is the Threat to Privacy Abroad?

The simple truth is that border patrol agents in countries around the world take data from cellphones, laptops, and other electronic devices as tourists cross their borders. This data can include, but is certainly not limited to, passwords, files, and emails. Although, this is a common practice around the world, most tourists have no idea that their personal information becomes increasingly more vulnerable to invasions of privacy when they leave the United States. Indeed, the threat extends to hotels that may extract information from electronic devices through their free wireless systems.

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On August 14, 2013, the FBI confirmed its investigation regarding a sextortion case involving several women, including the recently-crowned Miss Teen USA, Cassidy Wolf. While the FBI did not release any information regarding the investigation or potential suspects, they did say the investigation has been going on for several months. Do you store personal information and photographs on your computer? Do you or your children use computers with webcam capabilities? If so, you might be at risk for cyber-stalking and sextortion. At the Law Offices of Salar Atrizadeh, an attorney with experience and knowledge in the most recent cyberspace law can help you learn how to protect yourself against cyber attacks such as these.

What Is the Extent of the Sextortion Threat In the Community?

Cassidy Wolf had said in an interview that she had received an email from an anonymous source who claimed to have nude pictures of her. The anonymous source then attempted to extort her, threatening to make the pictures public otherwise. Apparently, a hacker was able to break into Cassidy Wolf’s computer, turn on her webcam, and take pictures of her. For Miss Wolf, this controversy came after the hacker cyber-stalked her through her computer.

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Patent law reform has recently moved to the forefront of the federal legislation calendar as the country calls on Congress to protect inventors and consumers from intellectual property trolls (“IP trolls”). IP trolls may also be known as patent assertion entities. These IP trolls include individuals or entities that do not necessarily generate innovations themselves, but rather buy and hold patents, copyrights, or trademarks. Then, the IP trolls instigate infringement litigation against parties who use the otherwise idle intellectual property. Are you in litigation against an IP troll for alleged infringement? Do you have a non-active patent that may interest IP trolls? At the Law Offices of Salar Atrizadeh, an attorney with experience and knowledge in intellectual property law and infringement litigation can help you understand your legal rights and remedies.

What Are the Negative Effects of Intellectual Property Trolls?

IP trolls target idle intellectual property and file lawsuits, which the majority of consumers find to be frivolous and unjustified (i.e. lacking any merit or good-faith cause to sue). Recently, President Obama signed the America Invents Act (“AIA”) into law in an effort to protect against such frivolous litigation. The AIA is the first attempt by the federal government to curtail intellectual property claims by such IP trolls. For example, the AIA requires that IP trolls file individual actions for infringement, rather than a single action against multiple defendants. This requirement will substantially increase the cost of litigation for IP trolls, and, perhaps hinder them entirely. Indeed, some cases may reach extremely high litigation costs. For example, MPHJ Technology Investments, LLC, a Texas-based patent-licensing company, recently sued consumers for scanning any document to send by email. MPHJ sent consumers letters demanding $1,200 to cover the cost of wrongfully scanning documents, which they claim to be a patented process calling for royalties (i.e., payments to the patent holder for using the patented technology). Otherwise, MPHJ threatened the consumers with litigation. A complaint filed in a Vermont state court aims to protect consumers from such patent troll litigation in the first lawsuit of this kind.

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