Killer Robots on the Horizon for Weapons Technology

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With advances in technology and artificial intelligence, the development of fully autonomous weapons has become closer to reality. Lethal Autonomous Weapons Systems (LAWS), more commonly known as “killer robots,” are different from the drones utilized by the military today in that they will be capable of selecting and engaging targets independently. The concern over the potential ramifications of LAWS has led to an international discussion which is riddled with moral undertones; the prospect of giving a robot the “choice” and power to kill seems wrong to humanitarian rights groups. The effect LAWS could have on military operations is astounding: with autonomous robots in play there is a reasonable possibility of completely removed and emotionless combat. The fear is that these killer robots will be able to make the ultimate decision regarding who lives and dies. The use of LAWS will undoubtedly affect international relations and pose a serious challenge for international law. There is a debate about whether killer robots will even be permitted in warfare, due to possible compliance issues with the international obligations set forth in the UN Charter and the Geneva Convention. As of now, LAWS are not being utilized in the field since they are not yet completely operational, but the United Nations is seeking to anticipate the potential issues and address the problem before the situation spirals and a race to the bottom ensues. The United Nations met in May to consider the potential social and legal implications of killer robots, and one major legal issue is liability. There is some ambiguity regarding who will be held liable if a robot “commits” a war crime or human rights violation. Should the manufacturer be held liable? The military commander? The programmer? The robot itself? Would an autonomous robot even qualify for personhood in a liability context? International humanitarian and human rights law demands that responsibility be determined should research continue and LAWS come to fruition. This is a complicated question given that while the seemingly obvious answer would be the military commander (absent some sort of product defect, in which case the manufacturer or programmer would be liable), the commander does not have complete control over the robot. LAWS will theoretically be able to identify and engage targets based on an algorithm that was created by a programmer. So if the robot screws up and kills a civilian, is it the programmer’s fault due to a glitch in the code or the commander’s fault for not carefully monitoring the robot’s activities and catching the mistake? 117 States are parties to the Convention on Certain Conventional Weapons, which was created to restrict the use of certain types of weapons that may affect civilians indiscriminately, an umbrella that killer robots certainly fit beneath. The addition of LAWS to the banned weapons covered by the Convention may prove to be critical in preventing a race to the bottom among countries with the technological capability of producing killer robots. The outcome of the UN’s Geneva discussions will be reviewed at the formal conference of the Convention on Certain Conventional Weapons later this month, where states will discuss possible next steps on autonomous weapons.

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December 18th, 2014 at 5:20 pm

Posted in Commentary

Regulate High Frequency Trading?

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The recent financial crisis has led to heightened scrutiny across the financial markets.  After the markets collapsed in 2008 there were calls for increased regulation of the financial markets, which led to the passage of the Dodd Frank Act.  Despite the increased scrutiny and regulation, not every aspect of the financial markets is sufficiently covered and grey areas exist where it is unclear how the law will affect certain practices. One such practice is that of high-frequency trading. High-frequency trading is the use of sophisticated technological tools and computer algorithms to rapidly trade securities.  High-frequency trading uses proprietary trading strategies carried out by computers to move in and out of positions in seconds or fractions of a second.  It is said that this form of trading benefits the markets by moving supply and demand among long-term investors quickly and efficiently thereby reducing volatility and increasing liquidity. However, opponents of high-frequency trading have identified numerous perceived problems associated with the practice.  One such problem is that securities exchanges have been selling access to market data to high-frequency traders in such a way that they have access to the information a very short period of time before other investors.  Opponents claim that high-frequency traders then use this information to improperly influence the financial markets – at the expense of other investors that lack this “earlier” access to the market data provided by the exchanges. The trouble in attempting to root out any potential violations associated with these problems lies in the current regulatory scheme governing the financial markets.  For example, the SEC has the power under §11A(c) of the Securities and Exchange Act of 1934 to adopt rules relating to “distribution or publication” of financial information applicable to exchanges.  However, in order to prove fraud on the part of the high-frequency traders the government must prove intent to artificially affect stock prices or to defraud others.  Further, exchanges enjoy special regulatory status that shields them from certain legal challenges – they are self-regulators, which means they are protected from liability for damages that clients suffer as a result of their actions. Thus, the current regulatory state governing high-frequency trading poses potential difficulties in rooting out “real” violations of the law in this domain, but too much regulation will likely serve to deter investors from partaking in high-frequency trading, and thus destroy the value added by this practice.  It will be interesting to see how the law is shaped and/or adapts to these challenges in the future.

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December 8th, 2014 at 7:10 pm

Posted in MTTLR Journal

CVSG Filed in Commil: Is This Yet Another “Fundamental Misunderstanding” of Patent Law by the Federal Circuit?

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On June 2nd, the Supreme Court unanimously reversed the Federal Circuit’s decision in Limelight Networks, Inc. v. Akamai Technologies, Inc. The Court found a defendant could not be held liable for induced infringement of a patent under 35 U.S.C. §271(b) where there has been no infringement under §271(a). In the opinion, the Court had some harsh words for the Federal Circuit. The Court was uncertain why, despite the “simple truth” that liability for inducement must be predicated on direct infringement (to which all parties and the Federal Circuit agreed), the Federal Circuit nonetheless continued its analysis. Ultimately, the Court felt that “the Federal Circuit’s analysis fundamentally misunderstands” method patent infringement.  The amicus brief filed by the Government on October 16th in Cisco Systems, Inc. v. Commil USA, LLC suggests that if and when the Court considers the case, it might reject the Federal Circuit’s decision with comparable vigor. Commil alleged that Cisco both directly infringed and induced infringement of its method patent for hand-offs of mobile devices between base stations in a wireless network system. During the district court trial (the second, the first being reversed after an attempt to unfairly prejudice the jury by counsel for Cisco), the jury found for Commil on both issues and awarded $63.7 million in damages (with an additional $10.3 million awarded by the court for prejudgment interest and costs). On appeal, Cisco argued that the jury instruction on the claim of induced infringement used the language of negligence as opposed to instructing the jury on the higher scienter requirement the Court has adopted for induced infringement cases. Of greater importance, the Federal Circuit held that Cisco should have been able to admit evidence of its good-faith belief that the patent was invalid which bears upon the “willful knowledge” scienter requirement. As it is “axiomatic that one cannot infringe an invalid patent,” the court reasoned that a “good-faith belief of invalidity” could negate the requisite “specific” intent for induced infringement. The Federal Circuit’s support for this new defense was hardly unanimous. Judge Newman, in dissent, argued that the majority’s holding was “contrary to the principles of tort liability, codified in [§271(b)].” A subsequent petition to grant rehearing en banc was denied by a 6-5 vote in the face of two additional dissents. All five dissenting judges, led by Judge Reyna, argued that the defense is “without foundation in law and precedent.” The Government’s brief in support of granting certiorari on the issue of the good-faith defense asserted a similar position. As with the dissenting judges, the Government took issue with the good-faith defense as being “inconsistent with the text, structure, and the purposes of the relevant Patent Act provisions.” Firstly, the Government argued that patent invalidity and non-infringement of the patent are separate defenses under the Patent Act. “The validity of the patent is not an element of direct infringement” so they argued that any belief that the patent is invalid is “irrelevant” to direct infringement. Direct infringement is a strict-liability tort, so the only defense is simply that no direct infringement occurred (i.e. non-infringement). The brief was particularly concerned with the “axiomatic” proposition that one cannot infringe an invalid patent: it noted that one of the authors of the original Patent Act described the very assertion as a “nonsense statement.” An actual finding of invalidity would preclude liability for infringement, direct or induced, and not “negate the fact of infringement.” Furthermore, infringement is understood as practicing the actions which the granted patent allegedly protects, whether or not that grant should have been made by the PTO. Even if the inducer subjectively believes that the patent is invalid, inducing the conduct amounts to inducing infringement. Finally, the Government affirmed the belief held by the Federal Circuit dissenting judges that this defense would “fundamentally change” inducement suits, and not necessarily in a manner favorable to patent holders attempting to enforce their rights. Recognizing that some amount of direct patent infringement (perhaps 20 or 30 percent) cannot be enforced in a practical manner, Congress made the policy decision to allow for an induced infringement cause of action in order to provide some recourse in these situations. Recognizing that all defendants may now “quickly obtain an ‘opinion of counsel’ to support a claim of good-faith belief in invalidity,” the Government sees the potential that this defense may “substantially undermine” a primary purpose of §271(b). Amidst a clear opposition by almost half of the Federal Circuit and the US government, on top of the existing and explicit lack of trust the Supreme Court has in the Federal Circuit’s understanding of method patents (the type allegedly infringed in Commil), it would be surprising if the Court denied cert. on this issue. If the misunderstanding here is as fundamental as in Limelight (as those in opposition present it to be), the Court may soon be forcefully overruling another Federal Circuit inducement decision.

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December 3rd, 2014 at 7:01 pm

Posted in Cases,Technology

“We Don’t Care”? Maybe Kanye should…

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140 characters may not seem like enough room to really say something of value. But if Kanye West is saying something, it can be worth a lot more than one may expect. Etsy seller “supervelma” has hand-stitched popular tweets from the rapper Kanye West onto fabric, framed them, and is currently selling them for $45 each on the online craft retailer Etsy. Understandably, West may be upset that someone else is profiting off of his hard-earned Twitter notoriety, but does he have a remedy? Copyright is the traditional form of protection for works of art. Having a registered copyright can prevent others from reproducing the work, making a derivative piece of art based on your original work, or further diluting the value of your work by displaying it. West could argue a claim of copyright infringement, however he may encounter difficulty proving that a tweet can actually receive copyright protection. Many tweets simply state facts—which cannot be protected by copyrights—or link to news articles, whose headlines are generally found to be insufficiently creative to warrant copyright protection. It is also debatable whether a tweet like, “Fur pillows are hard to actually sleep on” meets the de minimis requirement of creativity that a copyrighted work must have. Most copyright experts agree that there is not a bright line rule about whether tweets can gain copyright protection; a copyrightable tweet would certainly be the exception rather than the norm because of the observational nature of Twitter. West—a professional wordsmith—might be able to make a stronger argument than most that his tweets go beyond mere observations, and are artistic expressions that might even make it into future albums. Viewing his tweets as strings of song lyrics may convince a judge that his entire Twitter history, or at least some of his more introspective and personal tweets, would warrant the protective shield of a copyright. Even without a copyright, West would likely prevail because of the use of his name and “likeness”—in the form of a hand-stitched avatar on the cloth. Most states have held that people are entitled to a “right of publicity,” which recognizes a property right in the commercial value of a person’s identity. The commercial value of the name Kanye West, and the public image he has developed, is clearly what is driving the market for these embroideries. While “supervelma” does offer customers the chance to custom order whatever tweets they would like, West’s tweets are what gained the recognition of popular website Buzzfeed and undoubtedly drove up business. West certainly has grounds to seek an injunction to stop “supervelma” from continuing to produce these items, and depending on the state statute regarding remedies he could also sue to recover for any damages and may even be able to get exemplary damages if a jury felt they were appropriate. Public figures should be aware that the same media making them more available to fans can also provide more material for appropriation, and it may be worthwhile to increase their monitoring of retail websites like Etsy, Amazon, and eBay for unauthorized products.

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December 1st, 2014 at 1:44 pm

Posted in Commentary,Technology

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The Broader Benefit of Benefit Corporations

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Ello, an ad-free social network, recently closed another round of venture funding, raising $5.5M. Exciting right? Another social media start-up getting some Series A funding. While $5.5M is surely nothing to sneeze at, perhaps the more interesting feature of this next stage of Ello's life is that it's registered itself as a public benefit corporation, enshrining in its corporate charter as a "public benefit" that it will never show ads or sell user data. To date, 27 states have enacted legislation recognizing "Benefit corporations," entities that give directors legal protection to pursue social and environmental goals over maximizing investor returns. According to benefitcorp.net, a defining characteristic of benefit corporations is that "they are required to create a material positive impact on society and the environment." One of the largest early adopters of the benefit corporation form was outdoor clothing and gear company Patagonia. In doing so, Patagonia sought a structure that would prevent shareholders from suing it in the pursuit of costly environment initiatives, such as donations to environmental organizations and support of renewable energy sources, that allowed it to serve the welfare of the global community. Warby Parker, with its initiatives ranging from staying carbon neutral, to providing lost cost eyewear to those in need, and even sponsoring a local Little League team, similarly sought the insulation of its directors through the benefit corporation structure. In both examples, the benefit corporation produces a direct, measurable and concrete positive impact on their communities and the environment. Ello's election to benefit corporation status brings with it a tweak to what we've seen so far. Even though Ello has registered as a public benefit corporation, their mission is in many ways fundamentally different from more well-known predecessors. Whereas Patagonia and Warby Parker have employed the benefit corporation as a way to protect their support of immediate and material benefits to the public good outside of the scope of their direct relationship with their consumers, Ello seems to have stretched the breadth of the defining characteristic of benefit corporations to protect what it believes to be the intrinsic value of its product. Is protecting users from ads a public benefit in kind with what we've seen from Patagonia and Warby Parker? In allowing Ello to register as a benefit corporation, Delaware state law seems not to see a distinction. Whatever the limits of the definition of public benefits, one thing Ello has shown about benefit corporations is how useful they can be in insulating directors from investor interference. Whether or not Ello's mission can truly be said to be in pursuit of the public good, they have succeeded in securing the pursuit of their vision. In effect then, perhaps it makes more sense to refer to Ello as a "mission" corporation, protecting the discretionary judgment of it leadership beyond its fiduciary duties to investors, than a benefit corporation. To all of the entrepreneurs of the world, be aware of this broader benefit.

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November 25th, 2014 at 10:37 pm

SOPIPA: A first step towards national standards for student data protection

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In recent years, school districts have begun incorporating computers and tablets in the classroom to instantly deliver personalized content and interactive technologies to enhance student learning.  However, the increasing use of technology in classrooms coupled with the expanding market for targeted advertising has sparked major concerns over third-party collection and use of student data. Children are particularly vulnerable because, unlike adults who generally understand the implications of consumer privacy policies, children are unable to give any sort of meaningful consent to the type of collection scheme utilized by education technology companies.  While the federal law does offer some protection to the online privacy of children, these laws were written before the information era of smartphones and cloud storage. On Sept. 29, California became the first state to pass a sweeping law that protects the use of student educational data by third-party vendors.  The Student Online Personal Information Protection Act (SOPIPA) prohibits online education service companies from selling and/or using student data for purposes of targeted advertising.  Specifically, it prohibits the use of "information, including persistent unique identifiers, created or gathered by the operator's site, service, or application, to amass a profile about a K-12 student, except in furtherance of K-12 school purposes."  The law also requires online service providers to implement security procedures to protect student data and requires that these providers delete data at the request of a school. In response to SOPIPA, certain key industry players signed onto a pledge to adopt similar student data protections nationwide.  By signing the pledge, the participating companies publicly promise not to sell information or conduct targeted advertising using data obtained from K-12 students. This pledge is not legally binding, but does leave the participating companies open to enforcement actions by the Federal Trade Commission.  Notably, Google refused to sign the Pledge, despite that fact that SOPIPA was pushed through largely in response to breaking news that Google was scanning student emails for advertising purposes. According to social media attorney Bradley Shear, “Google's refusal to sign the industry backed pledge appears to be an acknowledgement that if it signs the Pledge it will be in violation of Article 5 of the FTC Act regarding unfair and deceptive trade practices.” A lack of federal standards allows companies like Google to continue questionable data collection practices.  The lack of federal standards also makes compliance with SOPIPA and other state-implemented privacy laws extremely difficult for online education companies that provide services in multiple states. While SOPIPA has the potential to serve as a template for federal reform, there are some ambiguities in the law that should be addressed.  First, it is unclear what is encapsulated by the phrase “K-12 school purposes.”  Should it be read narrowly to cover services used solely for instructional and educational purposes or more broadly to cover products used for administrative functions like storing student records?  Arguably, the provision could be interpreted to include social media sites that have some educational connection but are not exclusively used for K-12 purposes.  Furthermore, because SOPIPA does not include any user control provisions, a school might elect to retain student records for educational analytics purposes for an unlimited amount of time.  In addition to clarifying the definition of K-12 purposes, federal legislation should consider including such user control provisions in order to give students and parents some ability to decide how their data is collected, used, and stored. Regardless of these ambiguities, SOPIPA represents an admirable first step towards establishing national standards for student data protection.  

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November 24th, 2014 at 1:18 pm

Posted in Commentary

Is Electronic Dance Music Illegal?

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Bad news for music fans: Girl Talk is illegal[1], according to language put forward by the Sixth Circuit. This language applies to all “mash-up” artists and “sample artists” that use clips from other artist’s songs without permission. According to a 2008 New York Times, “Girl Talk’s music is a lawsuit waiting to happen.” Yet, to this date, not even one of the hundreds of artists sampled by Girl Talk has brought a lawsuit against him. Meanwhile, Girl Talk is paid handsomely to tour all around the world and even has his own day named after him in Pittsburgh. Girl Talk takes different elements from many diverse styles and decades of music—for example, a Rolling Stones guitar riff, an 80’s electronic drum beat, and an early 2000’s rap verse—and mashes them all into his own modern symphony. A four-minute Girl Talk track may have over thirty different artists on it. Girl Talk has released six albums, all of which you can download for free off of http://illegal-art.net/girltalk/. As one site put it “Girl Talk’s album Feed the Animals, which uses over 300 samples, would have never been made if he felt the need to do it legally.” Requiring that mash-up acquire licenses for all of his sound clips would eliminate mash-ups as a style of music. This all begs the question—is Girl Talk legally obligated to pay for licensing fees for all of the artists he samples? Or morally obligated? The answer may be different for each of these questions, according to some legal scholars. Some agree that the law, as it currently stands, bans mash-ups, but advocate for an alternative system of licensing for sampling due to the harshness of the Bridgeport decision. Girl Talk himself has always cited Fair Use as a protection for his art, which is a four-factored test which comes from the 1976 Copyright Act. Weighing in on this idea, law professor Peter Friedman states, “I would advise that client not to sue Girl Talk; [Girl Talk]’s argument that he has transformed the copyrighted materials sufficiently that his work constitutes non-infringing fair use is just too good.” Forbes notes that “it is telling that no artist that has been sampled by Girl Talk has ever complained.” Having seen “Girl Talk” live, my sincere hope is that he is allowed to continue to produce music and that sampling and DJ-ing are allowed to continue as musical styles. Given that all mash-up artists currently operate in a “legal purgatory,” it would be helpful if current laws were updated so that these artists could continue to produce music without the persistent fear of an industry-ending lawsuit.  

[1] According to the case of Bridgeport Music, Inc. v. Dimension Films, 410 F.3d 792, 801 (6th Cir. 2005), the rule could not be any clearer: “Get a license or do not sample.”  

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November 11th, 2014 at 9:02 pm

Posted in MTTLR Journal

Is Genius.com the Next Napster?

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Back in 1999, two tech nerds named Shawn Fanning and Sean Parker upended the entire music industry with the launch of their peer-to-peer music sharing service Napster. All of a sudden, music consumers could get any song they desired for the price of “free.” In less than a year, Napster had over 20 million users. Napster obviously facilitated copyright infringement and the music industry responded strongly, fronted by the RIAA (Recording Industry Association of America) and high-profile artists such as Lars Ulrich from Metallica and Dr. Dre. By July of 2001, the RIAA’s lawsuit successfully shut down Napster. While the music industry may have won the Napster battle, it looks like it's still losing the digital war over free distribution of copyrighted property. According to the RIAA, record sales in the US have dropped 47%, from $14.6 billion in 1999 to $7.7 billion in 2009. Some studies have found that music piracy worldwide accounts for an economic loss of $12.5 billion year. Other studies claim that economic loss to the music industry is beside the point of copyright protection. As the argument goes, copyright protection exists to incentivize the creation of new works, and according to some analysts, high quality musical creations are still produced at high volumes even since the “Napster Revolution.” While online piracy of digital music is a fairly obvious and high-profile example of intellectual property theft, artists and record labels stand to be highly compensated through means other than record sales. Whenever a bar plays a copyrighted song on a jukebox or a network covering a football game broadcasts a famous tune played by a marching band, royalties are owed to those that own the song’s publishing rights. But more recently, some in the music industry are waging a new war on a seemingly more innocuous strand of copyright infringers: lyric websites. Leading this charge are Camper Van Beethoven, The Cracker frontman David Lowrey and the National Music Publishers Association (NMPA). The NMPA claims that websites that post song lyrics on their sites make revenue through ad sales, but none of these lyrics are licensed and no money goes to the copyright holders. Lowrey compiled a list of the 50 worst offenders. Number one on the list: Genius.com. Genius, which was rebranded from Rap Genius in July of 2014 and raised $40 million in investor funding this spring, claimed that it stood apart from the other websites posting lyrics. As one of the founders Ilan Zechory put it “The lyrics sites the N.M.P.A. refers to simply display song lyrics, while Rap Genius has crowdsourced annotations that give context to all the lyrics line by line, and tens of thousands of verified annotations directly from writers and performers. These layers of context and meaning transform a static, flat lyric page into an interactive, vibrant art experience created by a community of volunteer scholars.” Now Genius is expanding their content beyond just music lyrics, hoping to be a forum for interactive annotation and discussion in the realms of literature, news, and scholarship. When first confronted by the NMPA and Lowrey’s “take down” notice, Genius implied through the press that their use of the lyrics constituted “fair use” since it was being used for the purposes of commentary and criticism. The NMPA and Genius, however, have yet to make their arguments in court. Currently, Genius has begun entering into licensing deals with a number of publishing companies, thereby staving off a potential collapse to their business model. But the bigger issue may be whether artists and publishers are well served by being “copyright maximalists,” going after every threat posed to their intellectual property. The music industry may be better served by allowing consumers to freely interact with some intellectual property in a meaningful way, and potentially reap the benefits of that heightened interest through other avenues of revenue. Perhaps sites like Genius can help resuscitate the music industry in a way Napster never could.

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November 6th, 2014 at 11:02 pm

Posted in Commentary

Technology Companies Fight Back Against Government Requests For User Data

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In response to privacy concerns surrounding data transmission and disclosure of information, the federal government has enacted a couple of laws, most notably the Privacy Act of 1974 and the Health Insurance Portability and Accountability Act (“HIPAA”), in order to safeguard individuals’ private information. The Privacy Act of 1974 was enacted in reaction to the dawning age of information and was an attempt by the federal government to protect individuals’ privacy rights. The Act requires governmental agencies to do four things regarding the information they collect and store about private US citizens: 1) to, upon request, tell an individual what information they've collected about him or her, 2) to allow individuals to correct or amend that information, 3) to use certain principles when handling and using the information, and 4) to follow certain guidelines restricting how the individual’s information is shared with other agencies and people. HIPAA provides similar protections, specific to disclosures of personally identifiable information in the healthcare setting. However, despite the enactment of such federal laws, people like Steven Rambam, CEO of Pallorium, an international investigative agency, deliver lectures titled “Privacy is Dead – Get Over It”. The feeling that federal laws don’t protect individuals from unauthorized disclosures of private information is probably due in large part to the fact that neither the Privacy Act nor HIPAA, adequately protect consumers from US law enforcement agency requests for user information, such as requests from the National Security Agency.  Instead, providing safeguards from excessive government surveillance falls to the technology companies in possession of private individuals’ information. There has been a lot of push back from technology companies on both the concept that “privacy is dead” and the idea that the appropriate response to perceived breaches of privacy is to just “get over it”. Instead current and emerging technology companies are putting technological safeguards in place to protect their users against governmental breaches of privacy. For instance, as detailed in another post on this blog, technology companies like Apple and Google have recently updated their privacy policy and introduced passcode encryption technology that the companies themselves cannot bypass. This allows individual consumers to be protected against attempts by law enforcement to incriminate them based on the contents of their Apple or Google electronic devices. Additionally, Facebook is in the process of developing an app that allows anonymity. Users would be able to discuss topics using multiple pseudonyms.  These technological developments are arguably in response to public opinion reflected in a statement made by Jameel Jaffer, deputy director of the American Civil Liberties Union, that, “Technology companies have an obligation to protect their customers’ sensitive information against overbroad government surveillance….” Even before the creation of technological safeguards against unauthorized disclosure of information to US law enforcement, technology and internet companies have battled the US government openly and directly in court and in Congress. In fact, the battle between technology companies and the US government concerning governmental requests for user data continues, as on Tuesday, October 4, Twitter sued the FBI and the US Department of Justice on First Amendment grounds, in order to release a transparency report documenting the exact number of government requests for user information the company received. Twitter is not the first technology or internet company to sue the US government seeking to change the current rules surrounding data request disclosures. Companies, including Apple, Google and Microsoft, have fought for users’ privacy rights in court and in Congress. In fact, in December 2013, eight companies including Apple, Microsoft, Facebook and Google formed a coalition called “Reform Government Surveillance” to lobby Congress to place greater restrictions on governmental surveillance. The aforementioned coalition settled with the federal government and reached an agreement that would allow for companies to disclose how many government data requests they received in groups of one thousand. Twitter, however, did not participate in this agreement and instead pushes for further National Security Agency data request disclosure rights. For instance, Twitter not only wants to disclose the number of requests but also what types of data the government had requested. Surveillance law reform is slowly making headway, as companies with strong lobbying power like Apple, Microsoft, Twitter, and Facebook push for restrictions on the US government’s power to compel the disclosure of individuals’ information and engage in bulk, seemingly indiscriminate, data collection. In the meantime, according to the Electronic Frontier Foundation (“EFF”), there are a notable portion of technology companies that not only require a warrant before they disclose user information but also notify users about government requests, publish transparency reports and law enforcement guidelines, and fight for users’ privacy rights in court and in Congress. It might be useful for technology and internet platform users to note which technology companies have their backs when it comes to privacy rights and which technology companies do not.

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November 4th, 2014 at 6:11 pm

Posted in Legal/Tech News

Yielding to FCC Pressure, Verizon Scraps Plan to Extend Data Throttling to 4G Customers

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Last week, Verizon appeared to cave to FCC pressure when it shelved a new network management policy which would have extended the controversial practice of “data throttling” to 4G customers with unlimited data plans.  Verizon’s decision put an end to its two-month spat with the FCC over whether the new policy would have violated the FCC’s Open Internet Order. To provide some background: Verizon has “throttled” (i.e. slowed) data speeds for some customers on its 3G network since February 2011.  This practice only affects customers on “unlimited” data plans whose data usage ranked in the top 5%, and only lasts for the duration that they are connected to a “congested” cell site.  On July 25 of this year, Verizon announced that, starting in October, it would extend this network management policy to its 4G network. Luckily for 4G customers on unlimited data plans, the FCC was paying attention.  In a letter sent less than a week after Verizon's announcement, FCC Chairman Tom Wheeler expressed doubts as to whether the new policy fit within the Open Internet Order’s definition of “reasonable network management.”  In particular, Mr. Wheeler found it “disturbing” that Verizon would “base its network management on distinctions among its customers’ data plans, rather than on network architecture or technology.”   Verizon responded swiftly to Mr. Wheeler’s criticism.  In a letter sent just two days later, Verizon explained that the policy targeted customers on unlimited data plans because they do not have an incentive to limit their data usage, which made them disproportionately responsible for network congestion.  On its face, this argument seems reasonable—after all, the FCC gives “mobile” broadband providers more leeway to manage their network than it does “fixed” broadband providers.  So why wasn’t the FCC satisfied? From the FCC’s point of view, the fatal flaw in the new policy was not that Verizon throttled data speeds for some customers, but that Verizon chose which customers it throttled based on their data plans.  If the new policy's purpose was to discourage or punish heavy data users, then it should not matter whether the customer being slowed had unlimited data.  Put another way, a customer with a 4G device who uses 5 gigabytes worth of data per month puts the same strain on Verizon’s network regardless of whether the customer is on a usage-based plan or an unlimited plan. Had the policy gone into effect, it would have effectively forced 4G customers on unlimited data plans to choose to either (a) put up with potential throttling, or (b) switch to usage-based data plans (which are more profitable for Verizon).  As both of these options would have resulted in customers receiving something less than “unlimited” data, the FCC was understandably skeptical of Verizon’s motive behind the new policy.[1] Regardless of whether the FCC’s concern was justified, Verizon’s decision to throw in the towel was likely influenced by other concerns.  For one, this dispute came at an awkward time between Verizon and its chief regulator.  Earlier this year, Verizon successfully challenged many of the FCC’s “net neutrality” regulations, which the FCC is currently in the process of rewriting.  Consequently, Verizon may have decided that it risked stricter regulations if it continued to fight.  (The fact that the FCC held a roundtable in September in which it discussed rescinding some regulatory exceptions for mobile broadband networks seems to reinforce this idea.)  It's also possible that Verizon decided it was unlikely to persuade the FCC in light of the FCC’s recent requests for information from other major wireless carriers’ regarding their own data throttling policies.  This move could signal that the FCC intends to more carefully scrutinize network management policies going forward, or even that the FCC will be less permissive of data throttling policies going forward. Whatever Verizon’s true reason was for ditching its policy, the significant number of customers who remain on unlimited data plans suggests this may not be the last we hear about “reasonable network management" practices.

[1] By contrast, when Verizon first began throttling speeds for 3G customers in 2011, customers on unlimited data plans still had the option to keep their plans without speed limits by upgrading to the higher-capacity 4G network. In fact, some industry experts speculated that Verizon began throttling 3G precisely to encourage customers to make the switch to 4G.

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October 27th, 2014 at 6:56 pm

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