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In New York Times Co. v. Sullivan, 376 U.S. 254 (1964), the United States Supreme Court ruled that the First Amendment limits common-law defamation claims brought by public officials. The Court held that to recover for publication of a defamatory falsehood, a public official must prove that the challenged statement was “of and concerning” the public official plaintiff, that the statement was false, and that the defendant acted with “actual malice.” The Court defined “actual malice” as publication with knowledge that the statement was false or with reckless disregard of whether the statement was false or not.

Later, the Supreme Court extended the standard announced in New York Times Co. v. Sullivan to defamation cases brought by “public figures.” Public figures include individuals who voluntarily inject themselves into public controversy, as well as those who are involuntarily thrust into the limelight, even if only with respect to a particular activity or incident.

A private-figure defamation plaintiff can recover damages based on the defendant’s negligence (or a more speech-protective standard, under the law of some states). In no instance, however, can a private-figure plaintiff recover damages for defamation without a showing of fault amounting to, at least, negligence. Any lesser standard, the Supreme Court concluded, would unduly burden free speech. Gertz v. Robert Welch, Inc., 418 U.S. 323, 347 (1974). And, at least when the speech relates to an issue of public concern, a private-figure plaintiff must bear the burden of proving falsity; the defendant speaker is not obligated to prove the truth of the challenged statements. Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767, 768 (1986).

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In the recent years, politically-motivated hackers have made sensitive information available to bloggers and mainstream media at unprecedented rates. For example, Wikileaks released leaked Afghan war logs and government diplomatic cables. Anonymous individual hacked and released emails from the computer security firm HBGary. A college student gained access to and released emails from Sarah Palin’s Yahoo account. LulzSec hacked into and publicly released confidential data belonging to Sony and others. Most recently, the Antisec movement hacked into over 70 police departments and released confidential emails and other files.

A this time, some important questions to ask ourselves would be as follows:

1. What are some applicable legal issues when publishing information obtained by hackers?

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The United States government recently filed suit against 17 financial companies, including, but not limited to, the largest domestic banks, for selling Fannie Mae and Freddie Mac mortgage-backed securities worth billions of dollars that turned bad when the housing market collapsed.

Bank of America Corp., Citigroup Inc., JP Morgan Chase & Co., and Goldman Sachs Group Inc. were some of the financial firms which were targeted by the lawsuits. Also, European banks including the Royal Bank of Scotland, Barclays Bank, and Credit Suisse were also included in the recent lawsuit.

These complaints were filed by the Federal Housing Finance Agency. This agency oversees Fannie and Freddie which purchase mortgage loans and securities issued by lenders. The total price of the mortgage-backed securities sold to Fannie and Freddie equals $196 billion.

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Facebook Inc., which is currently considered the world’s largest social network, plans more acquisitions so to improve its site design, keep services more reliable and advance its mobile features to compete with Twitter and Google which are active in the same arenas.

Facebook’s director of corporate development, Vaughan Smith stated that, the company aims to make approximately 20 purchases in year 2011 which is up from 10 last year and one in 2009.

It is important for our blog readers to know that Facebook obtains income from advertising and takes certain commission when software developers sell virtual goods on its website. As we know, Facebook is a closely-held company and it does not disclose its financials. Based on my research, the company is seeking to generate $2 billion or more in earnings before interest, taxes, depreciation and amortization in 2011.

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In April 2010, David Kernell faced trial for “hacking” into then-Alaskan Governor Sarah Palin’s personal email account.

In November 12, 2010, David Kernell was indicted (i.e., a grand jury believed there was sufficient evidence to place him on trial on federal charges). Thereafter, a jury convicted him of two charges. First, computer fraud. Second, obstruction of justice. David Kernell’s defense was that his conduct was a prank. However, the jury was not pursuaded and he was sentenced to one year and one day in federal prison with a recommendation to spend his time in a halfway house.

This case is illustrative of the types of crimes an email hacker may face including: (1) Wire Fraud; (2) Computer Fraud; (3) Identity Theft; and (4) Obstruction of Justice.

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A rise in attacks by hackers in 2011 is showing limits of an older generation of security software from Symantec Corp. (www.symantec.com) and McAfee Inc. (www.mcafee.com) and is placing pressure on these high-tech companies to upgrade products.

These and similar companies are seeking to keep up with cloud computing and the growth of workers plugging mobile devices into networks. According to Johannes Ullrich, a researcher at the SANS Technology Institute (www.sans.edu), none of the recent attacks tied to hacker groups such as Anonymous and Lulz Security could have been repelled by traditional antivirus programs or firewall software.

George Kurtz, who is the current chief technology officer at McAfee, now part of Intel Corp. (www.intel.com), expressed his concern by comparing the current predicament to a “security Armageddon” which is also of great concern for end users and customers.

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Mall owners are harnessing digital technology to stem an erosion in their tenant base by online retailing and to promote shopper attendance to their centers.

Hammerson which is a leading European real estate company in London, United Kingdom (http://www.hammerson.com) plans to use a system which tracks shoppers to its malls by using signals from their mobile phones. Australia’s Westfield Group, Ltd. (http://www.westfield.com) plans to set up a virtual mall. Also, the Simon Property Group, Inc. (SPG) of Indianapolis (http://www.simon.com) and Paris-based Unibail-Rodamco SE (UL), are seeking to encourage consumers to add new smartphone applications.

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On July 20, 2011, according to the leaders of the Senate Armed Services Committee, the Defense Department has failed to deliver to Congress a report on cyber warfare policies which may clarify the legal authorities and rules of engagement to be used in the event of a cyber attack.

Senators Carl Levin, a Michigan Democrat, and John McCain, an Arizona Republican, in a letter to Defense Secretary Leon Panetta wrote as follows:

“The continued failure to address and define the policies and legal authorities necessary for the Pentagon to operate in the cyberspace domain remains a significant gap in our national security that must be addressed.”

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Google, Inc., which is currently the world’s largest Internet search company, lost its bid to seal legal documents in a patent-infringement lawsuit filed sometime in 2010 by Oracle, Corp. (ORCL). Google’s attempt to seek protection of portions of a transcript related to expert witnesses under the attorney-client privilege was futile.

The United States District Court stated that:

The document is “an incomplete draft of an e-mail message” and “never was sent to anyone.” Thus, the document is not a communication of any type, much less a communication protected by the attorney-client privilege.”

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Apple, Inc. (AAPL)’s patent complaint which seeks to block imports of Samsung Electronics Co.’s Galaxy S mobile phone and Galaxy Tab computer will be reviewed by the International Trade Commission (ITC). See also http://www.usitc.gov
The ITC, which is a quasi-judicial agency in Washington, D.C., arbitrates such trade disputes and announced on August 1, 2011 that it has instituted an investigation. The commission, which may take between 15-18 months to complete the review, has the authority to block imports of products which infringe upon United States patents.

See more on www.bloomberg.com