Archive for October 2012

Songkick introduces Detour, challenges the live-music business status quo

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The Internet has long been a place for fans to gather and discuss the pop culture they love. In recent years, however, the internet has begun to take that love to the next level, allowing fans to actively contribute to projects they find intriguing.  The most prominent website in this newly emerging market is obviously Kickstarter, yet more sites are beginning to adopt its model and diversify its applications. Perhaps the newest development comes from Songkick, which is attempting to apply the Kickstarter ethos to live music. Since its founding in 2007,  Songkick has been devoted to providing its users with alerts about upcoming shows by their favorite acts in any given area. The site aims to provide a forum for live music lovers to gather, and a way for them to keep up to date on when they may have the chance to see their favorite bands again. The site began by addressing fans’ frustration at missing out on a great show, but it has now evolved to begin dealing with a similar frustration: finding out a band you love isn’t coming to a venue near you. Detour, the site’s ever-growing solution to that problem, allows fans to place advance orders for tickets to a theoretical concert in their area, which they will only be charged for if the concert takes place. The process, called crowdfunding, allows fans raise money to bring their favorite bands to town and mitigates the risk artists take when traveling to new places.  The system lets fans to convince their favorite bands (and those artists’ booking agents) that there is not only a fan base in an area, but a base that is willing to buy tickets if the artist comes to town. After testing the system with smaller artists, like Hot Chip and Tycho, booking single venues through Detour, the site is now preparing to take the next step, by working with Andrew Bird to plan his entire tour of South America. Bird plans to do a six-city tour of the continent in February, and Detour is facilitating. Twelve cities have been chosen as contenders, among them large metropolitan areas like Rio de Janeiro and Sao Paulo, and smaller outlets like Santo Domingo and Caracas, and the first six cities to sell 250 provisional tickets will get the dates. If successful, the tour will be the largest fan-funded music tour in history. Co-founder and CEO Ian Hogarth insists the site aims to work within the existing framework, alongside bands, managers, promoters, and booking agents, yet he points out that “"If you think about recorded music over the last 20 years, we've seen MP3s and Napster; iTunes and the iPod; YouTube making Gangnam style an overnight hit and services like Spotify and Soundcloud -- there has been an incredible amount of disruption. Meanwhile very little has changed in live music." With every technological progression, legal questions inevitably follow. It is too early yet to accurately predict the problems that Detour may run into, though challenging the status quo of the music business, especially when it comes to the live music booking framework, tends to be met with resistance from those the current system benefits. If Detour is successful, it may be the beginning of a new world order for live music, where fans have greater control over who they see and where concerts take place. By seizing the possibilities of modern technology, Detour may be forging a new path for the planning and execution of concert tours.

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October 31st, 2012 at 7:44 am

Can the government force you to decrypt your hard drive?

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To qualify for Fifth Amendment protection from self-incrimination, a court must be satisfied that the requested testimony will be a (1) compulsion of a (2) testimonial communication that is (3) incriminating. When dealing with material evidence that is locked away from access, most courts have followed Supreme Court guidance, where compelling a party to surrender the key to a strongbox may be constitutional under the Fifth Amendment, but forcing that party to reveal the combination to a wall safe is not. But recently, courts have struggled to extend this doctrine to apply to encrypted computer disks. An encrypted disk is a portion of a computer’s filesystem that is unintelligible without first decrypting it with the proper password. Courts are now deciding whether or not compelling the decryption of electronic media is a form of testimonial communication that qualifies for Fifth Amendment protection. This question was first directly confronted in 2009, when a U.S. District Court Judge ordered the decryption of laptop confiscated by an Immigration and Customs Enforcement agent. Such an action would not be testimonial because the Government was already aware of the existence and the location of the encrypted files. Furthermore, in U.S. v. Fricosu, the defendant was compelled to decrypt the contents of her laptop. The district court reasoned that the government had already provided sufficient evidence establishing the existence and location of certain computer files, and thus compelling the decryption was not testimonial. The court order was appealed, but the 10th Circuit Court declined to hear the appeal until the case had been decided. Most recently, the 11th Circuit Court held that the decryption of a hard disks suspected of containing child pornography was a form of testimony that was protected by the 5th Amendment. Noting that the Government did not demonstrate knowledge of any specific files on the encrypted storage disks, the court concluded that compelling the decryption of those disks would require granting immunity consistent with Fifth Amendment protection. The court found it very important that expert testimony conceded that the encrypted hard disks could in fact simply be empty. All these decisions demonstrate that the Fifth Amendment protection does in fact extend to encrypted computer disks, but there still remains a need for doctrinal clarity: specifically, to what extent must the government show knowledge of the encrypted content? And by what standard of proof? In Fricosu, the district court glosses over this analysis, noting that there was “no question here but that the government knows of the existence and the location of the computers’ files” and that no knowledge of “specific content of any specific documents” was not a barrier to compel production. Disk encryption is becoming more common as people have begun realizing that any information stored on an electronic device does not qualify for a very high degree of privacy protection. Free software such as TrueCrypt provides the public with an easy method for encrypting sensitive information. Undoubtedly, the courts will confront this issue again and hopefully they will identify clearer guidelines to follow in order to balance the public good with individual privacy.

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October 27th, 2012 at 1:58 pm

FTC Crackdown on Tech Support Scammers

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On September 24, the FTC filed six federal cases against companies, mostly based in India, that have allegedly been scamming consumers by posing as computer tech support. The FTC describes the move as a “major international crackdown” against tech support scams. The agency has expressed appreciation for the help of agencies in Australia, Canada, and the United Kingdom. On October 3, the judge issued an order to halt the scams and freezing their assets in the United States. These scammers allegedly operate by calling consumers and claiming that they have detected some form of threatening malware on that person’s computer. Notably, they often make a claim implying that they are affiliated with a major and reputable computer or antivirus software company. In an interesting example, a staff member at tech news site ArsTechnica received a call, the very day of the injunction announcement, from a man claiming “I am calling you from Windows.” Once the supposed tech support employee has a consumer on the line, they proceed to direct them to Windows Event Viewer in order to “prove” the existence of the claimed malware. They then offer to rid the computer of the malware for a fee, reportedly “ranging from $49 to $450” according to the FTC. The consumer is then directed to download a program allowing the scammer to take control of their computer and delete the alleged malware. These scams are particularly interesting because, unlike many consumer fraud scam situations, they don’t quite target the lowest common denominator. This isn’t a Nigerian prince asking you to help him get his money out of the country. Instead, these scammers make a claim that to many is quite believable: a computer company knows what is going on on your personal computer. After all, as the New York Times notes, if anyone is going to be able to tell what’s going on with your computer from a distance, it would be Microsoft, right? Most tech savvy users aren’t going to hand over control of their computer to someone who calls them unsolicited even if they claim to be from a reputable company, but I worked in tech support and I’ve seen how many people are, in fact, clueless about this kind of risk. We regularly reminded users “we will never ask you for your password,” but our users still got tricked into handing it over to scammers claiming to be us. Microsoft has apparently reported that out of 1,045 people who “had told the company they believed they had been contacted by a fake tech support caller. More than 400 of those either fell victim to such operations, with losses averaging $875, or had to pay an average of $1,700 to repair damage to their computer.” The FTC’s action is based upon the Federal Trade Commission Act and the Telemarketing and Consumer Fraud and Abuse Prevention Act. Section 5(a) of the FTC Act grants the FTC power to pursue action against “[u]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce.” The charges also cover violations of the Telemarketing Sales Rule, which deals with the Do Not Call list.

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October 25th, 2012 at 7:19 am

Joint Infringement – A New Direction?

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In a recent combined en banc decision, a divided Federal Circuit overruled its own prior decision regarding joint infringement – all the steps of a method claim no longer have to be committed by a single entity – by a 6-5 vote.  Joint infringement covers cases when a party knowingly encourages a second party to complete the steps of a method patent.  The Federal Circuit grew the doctrine over the last six years in order to reach those offenders who simply farm out the steps of a method patent to another party. The en banc decision actually combined two cases, Akami Technology v. Limelight Networks, and Mckesson Tech v. Epic Systems, both concerning method patents, with Limelight replicating a web content delivery model (in part) and Epic replicating a method of doctor-patient interaction with its MyChart software, with the final steps of the method patent in each case being performed by innocent end users. The court ruled in favor of the plaintiffs on both cases. I’m particularly familiar with the issue at hand in the Epic case, having worked there as a software developer for two years.  In fact, having used MyChart myself to communicate with my own physician, and being aware of the lawsuit (and the patent at issue) suddenly makes me a joint infringer (I’ve got lots of loans and little else – sorry McKesson). The reaction to the decision has been mixed. Some commentators have praised the decision – closing a major loophole that has allowed some large corporate entities, like Epic, to knowingly use a patented invention that would otherwise require a license.  Others are concerned about the ramifications – saying “it opens a huge can of worms.”  There is concern that the language in the opinion, intended to clear the waters of joint infringement, has instead done the opposite and will come back to haunt the court in the future,  either in the form of a Supreme Court decision overruling the Federal Circuit, or for future joint infringement decisions at the Federal Circuit or inferior courts. The Electronic Frontier Foundation was particularly concerned with the outcome of these cases, worried that the court would expand liability to include innocent third party infringers, but as EFF amicus brief writer Michael Barclay stated the decision was “not all bad” from the EFF’s perspective, as innocent third party infringers are still free from liability, which was the main goal of the EFF amicus brief. Both parties, particularly Epic, with the usage of MyChart, a cornerstone product, estimated to be in use by millions of patients and doctors, will likely appeal this decision by the Federal Circuit to the Supreme Court, so the final word on joint infringement has probably not yet arrived.

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October 21st, 2012 at 2:44 pm

Posted in Commentary

Japanese Company to Acquire 70% of Sprint

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On October 15, Japanese tech titan SoftBank announced that it will acquire 70% of Sprint Nextel. The $20.1 billion deal will allow Sprint to compete with the two largest American wireless companies, Verizon and AT&T, by providing Sprint with $8 billion in new capital. Of the $8 billion, $3.1 billion will come in the form of a bond, to be issued by Sprint shortly after the announcement, convertible at $5.25 per share; this gives Sprint some immediate access to capital that could be used to retire some debt, improve its wireless network, and possibly to buy additional spectrum if airwaves are auctioned in the near future. The closing of the transaction is scheduled for mid 2013 and the advisers to this transaction stand to earn up to $200 million. Of course, it’s hard not to compare this deal to AT&T’s failed attempt to buy T-Mobile for $36 billion. However, the main reason that regulators opposed the AT&T deal was because it would reduce the number of national wireless choices from four to three. SoftBank’s acquisition of Sprint will likely make regulators happy, as it would strengthen one of the four national wireless competitors. Furthermore, both Verizon and T-Mobile are at least partly owned by foreign companies (45% and 100%, respectively). This acquisition could provide some much needed cash and spark innovative ideas in a company that has constantly been lagging behind AT&T and Verizon. The rise of Sprint as a reliable alternative to those companies would increase nationwide competition, which could not only incentivize the development of more advanced wireless network technologies, but also reduce the price of wireless services for consumers.  

BioDifferents?

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When the Supreme Court upheld the constitutionality of the Patient Protection and Affordable Care Act on June 28, the impact was diverse and widespread.  Relief was felt in one corner of the pharmaceutical industry, however, as the decision protected continued research and investment in a relative newcomer to the industry: the biosimilars. Enacted as part of the PPACA on Mar. 23, 2010, the Biologics Price Competition and Innovation Act of 2009 amends the Public Health Service Act § 351(k) to create an "abbreviated licensure pathway" for biological products shown to be biosimilar to or interchangeable with a biological reference product already licensed by the Food and Drug Administration.  Per the revised standards of § 351(k), a proposed biological product with demonstrated biosimilarity (i.e., a “biosimilar” product) can come to market by relying on certain existing scientific knowledge regarding the safety, purity, and potency of the reference product. What does this mean? In simpler terms, the “reference product” is a prototypical drug: a relatively small molecule with an equally uncomplicated chemical structure, synthesized in a laboratory.  Drug development generally has two distinct prongs: at the big-picture level, preclinical and clinical trials evaluate the safety and efficacy of a drug in treating a particular medical condition, while a separate set of R&D experiments attempts to determine the drug’s molecular targets (receptors) and the downstream cellular signaling pathways it regulates.  The advantage of small-molecule drugs is the reliability and reproducibility of both their physiological effects and the underlying molecular bases.  This characterization’s utility is limited, however, because the drugs don’t naturally occur in the body, and subsequent unexpected and unwanted side effects are a familiar concern. Biosimilars may solve this latter problem.  Briefly, biosimilars are proteins: typically, either antibodies or recombinant versions of endogenous proteins.  They interest the pharmaceutical companies because their gene sequences are usually known, making them amenable for therapeutic development, and because their biological effects are similar to or more powerful than typical drugs.  The promise of biosimilars is apparent: as naturally occurring molecules, the body should tolerate them better. They also have plenty of potential downsides.  Notably, biosimilars (and their targets) are much larger and have a more complicated structure than typical drugs, so they have greater potential to interact with other molecules in the body.  Endogenous proteins also usually have more than one target to begin with, and they may have post-translational modifications that alter their function.  In the body, their expression is closely regulated, because cells express proteins only when and if they need them.  Perhaps most importantly, while a biosimilar’s effect on one pathway may be similar to that of a branded drug, it is not necessarily biologically identical.  A biosimilar may interact with a different portion of the target, or it may regulate its function via an entirely different mechanism.  If the target is a member of a chain of communication within the cell, the biosimilar could achieve the same desired effect by interfering with a different member of the chain.  Ultimately, the implications of these differences may in fact be quite profound, as individual proteins often serve numerous cellular functions. What all this boils down to is that the regulators should scrutinize the equivalency of biosimilars and their reference drugs with great care. Biosimilar manufacturers must fulfill the testing requirements necessary to bring their products safely into the pharmaceutical market.  Fortunately, the FDA’s draft guidance language, issued earlier this year, indicates awareness of these problems.  Per § 351(i), the FDA must find that a biosimilar is “highly similar” to the reference product, with “no clinically meaningful differences” between the biosimilar and the reference drug in terms of safety, purity, and potency.  To do so, a biosimilar must satisfy a fairly sophisticated totality-of-the-evidence standard, including comparisons of the biosimilar and the reference drug with respect to structure, function, animal toxicity, human pharmacokinetics and pharmacodynamics, clinical immunogenicity, and clinical safety and effectiveness.  The guidance leaves some questions unanswered, however: to name a few, the extent of interchangeability required to satisfy the "highly similar" standard and specific requirements for the testing involved. Thus, in developing biosimilars, the drug manufacturers’ challenge is not so unusual.  Besides meeting regulatory standards, clinical safety and efficacy testing for pharmaceuticals is extremely time-consuming and expensive; meanwhile, sick people and their supporters clamor for new treatments.  It seems reasonable for them to at least try to expedite the process by piggybacking on existing scientific results demonstrated for the reference products. While the need for effective medications is great, however, we must ensure that these drugs meet the highest quality safety standards for the benefit of the patients they are designed to serve.  We can look forward to plenty of litigation to clarify the meaning of terms in the FDA’s draft guidance as drugmakers’ new confidence propels biosimilars onto the market.  

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October 11th, 2012 at 11:33 am

No Harm, No Foul?

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On October 5th, Facebook moved to dismiss allegations that it tracked users’ online activity after they logged out of the social network, because the users failed to show how they were harmed. This allegation of secretive-tracking-post-logout is the central claim of the $15 billion class action suit filed against Facebook on the eve of the company’s much-maligned IPO. Facebook’s litigation strategy in this case - In re Facebook Internet Tracking Litigation - appears to be based on the line of argument oft utilized with much success at the summary judgment stage in tracking cases (and privacy cases generally), that the plaintiff is not able to show how interception and collection of personal information/browsing history results in a cognizable or economic harm. But while gathering information about how a person uses the Internet, typically for purposes of enabling behavioral advertising, may not result in a substantial economic injury (as currently conceived), there is an intuition that harm is nonetheless present in this type of practice. A recent study out of Berkeley illustrates the obvious: Most Americans are uncomfortable with the collection of data about their online activity. Yet, those weirded-out or, possibly, legitimately harmed by the collection of personal information/browsing histories are currently not finding help when they turn to the courts for protection of their privacy concerns. The FTC seems to be making a concerted effort to reign in the use of tracking – note its $22.5 million settlement with Google; but also note that the Google settlement turns on the fact that Google misrepresented its policies and practices regarding its tracking cookies. Blatant misrepresentations aside, tracking of individuals by private companies remains the status quo. Maybe this is all just fine. It may be perfectly acceptable for a person’s activity to be monitored in order to improve her Internet experience through customization – maybe behavioral advertising should cause online shoppers to rejoice for streamlining the consuming process. Or it might be that online tracking is simply unavoidable, in the sense that it’s merely a cost of entry – privacy-as-causalty of the Internet age, as Senator Franken would say. Perhaps it’s needed to keep the Internet  free – or perhaps it’s not. Regardless of whether the act of monitoring and collecting information about online behavior is mostly beneficial or mostly problematic, those who find that the practice makes them uneasy – and judging by prevailing public opinion as well as the frequency and volume of lawsuits filed because of tracking, many are uneasy – will not be afforded relief by the legal system until new ways to conceive of and formulate the harm done by this type of monitoring are proposed and accepted. The questions remain how exactly to go about doing this, and whether the only way to possibly do so in an effective and comprehensive way is via new legislation. Until those questions are answered, we can enjoy prescient online ads while living with the knowledge that Facebook knows more about us than the majority of our Facebook friends.

Crowdsourcing – Not Just for Businesses Anymore

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USPTO director David Kappos is getting things done. He’s opening satellite USPTO offices, helping American University law students patent sex, and now, supporting crowdsourcing prior art searches for patent applications. Crowdsourcing is a method of tapping into the collective intelligence of the public at large in order to complete tasks such as gathering medical advice or raising funds. As technology has facilitated the gathering of third-party input, the concept of crowdsourcing has expanded into numerous fields. Now, the USPTO is supporting a new method of crowdsourcing patent prosecution through Ask Patents, a Q&A forum designed to scour the internet for patenting advice. On September 16, 2012, a provision of the Leahy-Smith America Invents Act was implemented to allow, for the first time in U.S. patent law, third parties to submit relevant materials to patent examiners in any given examination. Ask Patents is a platform that seizes on this opportunity to ask scientific experts, as members of the public, to identify prior art related to patent applications. The patentability of a claimed innovation in a patent application is based on the prior art. Prior art can be another patent, a published article, or a previous implementation. It can be created anywhere, in any language, making it a challenge for patent examiners to fully identify all of the prior art that pertains to a particular claimed innovation. Ask Patents's parent site, Stack Exchange, describes the new site as a “crowd-sourced worldwide detective agency to track down and obliterate bogus patent applications.” Other forums have tried crowdsourcing patents before. Peer2Patent was a joint project between the USPTO and New York Law School (NYLS) that allows anybody in the public to: (1) review and discuss posted patent applications; (2) search for and upload relevant prior art references; (3) evaluate submitted prior art; (4) gain to opportunity to have his or her references and commentary forwarded to the USPTO.  This pilot program was a main motivator of the Ask Patents platform after a final review indicated that “those applications that matured to issuance were more thoroughly vetted and, thus, stronger than many of their counterparts which did not participate in this public review.” Similarly, Article One Partners (AOP) is a privately funded platform that governs a wide network of researchers who are paid to identify publications related to the technology described in patents. Patent applicants or accused infringers can hire researchers in 176 countries to scour world-wide studies translated into nine languages. AOP asserts that this research “allows our clients to make better patent-related business decisions.The USPTO believes that crowdsourcing will lead to a more exhaustive scope of materials for examiners to review in order to improve the quality of issued patents. After all, why have one person judge if thousands are able and willing to contribute? Gaining access to a worldwide network of scientific experts has great potential. If an entire network of researchers has vetted the patent claims, the strength of the patent is much more secure. Additionally, even highly experienced examiners cannot be experts on every innovation an application might reveal. Innovations, by definition, are often esoteric to most members of even the scientific community. There will be at least a handful of experts whom have the potential to quickly pass on a note that can guide a patent examiner to relevant prior art. Proponents of crowdsourcing argue that high quality researchers will be eager to participate in exchange for the social status and reputation to be gained in the community of scientific experts. Accordingly, the Ask Patents site allows for ratings of its submitters, hoping to tap into this desire to build a strong reputation. However, there are conceived limitations to such a system. While proponents argue that public art searches will be expedited, there still remains the limitation that a single examiner is left to process the prior art. When an examiner conducts his own search, he understands what he is looking for, and is able to proceed along a logical thread. When the examiner is inundated with sources, he will flip from one consideration of the innovation to another. This approach may become messy, and ultimately more tedious for the examiners. Additionally, the quality of the results will naturally depend on the members of the public who participate. Some well-meaning submitters may simply yield distractions for the already over-worked examiners.  Furthermore, it is highly possible, if not likely, that at least a few scientific fields will lack experts that have already signed onto the program. In these areas, researchers with less useful submissions may be eager to help fill the void. If the third-party submissions have been consistently more comprehensive than the examiner’s individual search, it will be easy for an examiner to become too reliant on the third-party submissions. So what do you think? Do you think crowdsourcing is an effective way to improve the patent system? Or do you think it’s not worth the hassle? Leave your thoughts in the comments below.

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October 11th, 2012 at 9:31 am

Posted in Legal/Tech News

This Round of Map Innovation Goes to Google

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Apple and Google both received press for their new map applications this month. Map technology has certainly come a long way from paper maps. Among other benefits, web maps are an important tool for attorneys. Criminal prosecutors use interactive maps to analyze key locations in a case, and in conjunction with cell phone GPS positioning technology. Google Maps is one of the best tools for scouting potential apartments. It's easy to see street views of the apartment, virtually walk around the block to scope out the neighborhood, and spy from above using Google Earth. Now CNN reports that Google Street View will give you the ability to see underwater panoramas. You can enjoy beautiful views of coral, fish, turtles, and divers in locations like the Great Barrier Reef and the Hawaiian islands. Perhaps there is potential to use this capability in environmental and maritime legal cases. Google partnered with the Catlin Seaview Survey to capture coral reef panoramas with scientific and environmental objectives. In addition to expanding Google Street View, the project intends the images to further research on the impact of climate change on reefs, and raise public awareness of these ecosystems. It will be a great way for people who cannot travel to a reef or scuba dive to experience coral reefs. Currently Google has released 25 panoramas. The project has at least 35,000 more photographs to take to reach its goal of 50,000 to 100,000 panoramas. Apple revealed its own map innovation on September 21st when it released the iPhone 5. The iPhone 5 comes with the Apple Maps app, instead of the Google Maps app that came with the iPhone since 2007. So far the application has received disappointing reviews with complaints of location inaccuracy. According to NBC, Ireland’s Justice Minister, Alan Shatter, had to warn pilots not to land in the Airfield Gardens, a nursery that was mistakenly categorized as an airfield. Apple CEO Tim Cook addressed complaints in a letter to customers and urgently promised to improve the app. Despite Maps frustrations, demand for the iPhone 5 exceeds inventory. Customers bought over 5 million iPhones in the first weekend.

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October 1st, 2012 at 9:11 am

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