Law, Technology & Arts Blog

Executive Action Against Privacy Breaches

Posted in University of Washington School of Law by LTA-Editor on October 30, 2014

Screen Shot 2014-10-30 at 4.10.53 PMBy Stephanie Olson

Credit card fraud and identity theft is America’s fastest growing crime, as evidenced by recent hacks into major corporate data banks. The major data breaches at Home Depot, Target and JP Morgan Chase last year alone affected more than 100 million Americans. In August, the New York Times reported that Russian hackers stole over a billion Internet passwords.

The White House responded on October 17th by launching a chip and pin system called “Buy Secure.” The Washington Post quoted the President as saying, “The idea that somebody halfway around the world could run up thousands of dollars in charges in your name just because they stole your number or because you swiped your card at the wrong place and the wrong time, that’s infuriating. For victims, it’s heartbreaking. And as a country, we’ve got to do more to stop it.” (more…)

California Sets the Bar for State Regulation of Autonomous Vehicle Testing

Posted in Government and Regulation, Technology by LTA-Editor on October 29, 2014

Screen Shot 2014-10-29 at 1.28.28 PMBy Brooks Lindsay

Last month, a California law went into effect allowing autonomous vehicle testing on any California public road. The law, signed in May by Governor Jerry Brown, is the most important regulatory framework to date surrounding autonomous vehicle testing. The law deserves critical examination considering the societal changes that autonomous vehicles may bring and the likelihood that California’s law will be used as a legislative template by states around the nation.

California’s law purely regulates test-driving and does not attempt to regulate anything further—such as the commercial sale or consumer use of autonomous vehicles on California roads. Future legislation will have to include much broader provisions on the commercial sale and consumer use of these cars. In the meantime, testing requires here-and-now regulation, like that in California. (more…)

Investing In Alibaba Group: Sure Payoff Or Legal Nightmare?

Posted in Commerce, Government and Regulation by LTA-Editor on October 24, 2014

Screen Shot 2014-10-24 at 7.33.18 PMBy Yayi Ding

Last month, Chinese e-commerce giant Alibaba Group announced one of the biggest initial public offerings (IPOs) in US history, raising more than $21 billion USD. However, one could argue that the entire scheme might have been borderline illegal; of all the investors who “purchased” Alibaba’s stocks at IPO, none of them ended up actually owning a single share in Alibaba.

How could this be? Well, for starters, Chinese government regulations do not allow foreigners to own stock in Chinese Internet companies, Alibaba included. To circumvent these regulations and pursue an IPO on an American stock exchange, Alibaba had to adopt a complicated ownership structure known as a “Variable Interest Entity” (VIE). Through this structure, foreign shareholders do not buy into Alibaba, but rather buy into Alibaba Holdings, an offshore “holding company” that is registered in the Cayman Islands. Shareholders get a stake in the holding company and in Alibaba’s profits, but ultimately do not own shares in Alibaba and have no say in how the company is run. (more…)

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Cyberbullying: Should Parents be Held Liable?

Posted in Case Comment, Litigation, Privacy by LTA-Editor on October 22, 2014

shutterstock_89683588By Farah Ali

In May 2011, Dustin Athearn and Melissa Snodgrass, seventh graders at Palmer Middle School in Georgia, created a fake Facebook page to taunt another student, Alexandria Boston (Alex). The students set up the fake Facebook profile under Alex’s name and used a “fat face” application to create and post an unflattering picture of her. The fake account also stated that Alex was a homosexual and that she endorsed racist viewpoints. To create further damage, the fake persona connected to over 70 Facebook friends, and it sent friend requests to Alex’s classmates, teachers, and family members. Dustin and Melissa used the profile to post graphically sexual, racist and offensive material. This included insinuating that Alex had mental health disorders and took illegal drugs.

When the school found out, Principal Cathy Wentworth called Dustin and Melissa to her office and had them sign a written statement explaining their involvement. Wentworth sent a form to the students’ parents explaining that the students would be disciplined with a two-day in-school suspension for their harassment of Alex. Dustin’s parents grounded him for a week. However, it was not until 11 months later in April 2012 that the profile was taken offline. In fact, the fake profile continued to send and accept new friend requests and users could still view and post on the profile before Facebook finally deactivated the account. (more…)

Washington State Starts a Battle With Patent Trolls

Posted in Case Comment, Government and Regulation by LTA-Editor on October 20, 2014

Screen Shot 2014-10-20 at 3.43.28 PMBy Robin Hammond

Can a state use consumer protection laws to punish patent trolls?

The Washington State Senate Law and Justice Committee is considering penalizing patent trolling. The committee recently discussed a proposed ‘patent troll prevention act’ in a work session on October 2, 2014. The bill in its current form would create a new consumer protection law to fine patent infringement in bad faith. Violators could face a fine of up to $25,000.

The bill outlines a number of factors that a court may consider in determining whether an assertion of patent infringement has been made in bad faith. For example, bad faith may be shown when a person asserting the claim: should have known the assertion was meritless, provides inadequate information in the initial demand letter, or fails to provide basic patent information on request. A court may also consider the reasonableness of the asserting party’s diligence in comparing the ‘infringing’ activity and the patent, and the reasonableness of proposed licensing fees or timeframes. The bill also lists factors which indicate good faith, including diligence, timeliness, and reasonableness. It also names three types of patent holders that are presumed to act in good faith: an investor in the patent, an original assignee, or a university. (more…)

BYOD: Bring Your Own Devices or Bring Your Own Disasters?

Posted in Privacy by LTA-Editor on October 17, 2014

Screen Shot 2014-10-17 at 5.00.50 PMBy Denise Kim

What happens when personal phones are no longer for personal use? Gone are the days where we were issued separate business phones. We have entered into a new era where personal devices are used for work and work devices are used for personal use.

Bring Your Own Device (BYOD) is widely adopted to refer to employees who bring their own computing devices to the workplace for use and connectivity on the secure corporate network. It refers to an increasing trend of employees using personal devices in the workplace or for work purposes. BYOD policies have become an increasing trend in the workforce with more than 50% of midmarket organizations supporting BYOD as a way to boost productivity and reduce costs with the highest percentage of support coming from the legal sector. BYOD policies have the benefit of saving costs and increasing productivity since users have more sharing capabilities. Such sharing capabilities give employees more ability and freedom to share information on mobile devices. (more…)

Liking and Sharing Your Health Information: Privacy Concerns Raised Amidst Rumors of “Facebook Healthcare”

Posted in Privacy by LTA-Editor on October 16, 2014

Screen Shot 2014-10-16 at 7.04.19 AMBy Alex Boguniewicz

Every day millions of people share their interests, photos, and locations on Facebook. So why not share how you are feeling—medically that is. At least that seems to be the idea behind Facebook’s rumored plans to provide a platform for healthcare services. This month, anonymous employees of the social networking company leaked information that Facebook is planning to develop health applications, allowing users to make healthy lifestyle choices and connect with “support communities.” As part of this program, users would have to disclose private health information to Facebook. We have previously examined Facebook’s policy of forwarding user information to online advertisers and its alleged violations of European Union’s privacy laws. Due to Facebook’s history of privacy issues, this potential health program has raised the concern of some attorneys, especially given the extremely sensitive nature of private health information.

The rumored program would involve users sharing certain health information with Facebook, which would then be used to connect the users to a “support community” of other users suffering from the same illness or condition. The idea is similar to other websites dedicated to putting people in touch with each other to openly discuss their health struggles. It is also likely spurred on by the recent success of Facebook’s organ donor program. The organ donor program directs users on how to become organ donors in their state and then allows them to share their registration on their profiles. The initiative was a huge success, with hundreds of thousands of users registering to be organ donors within days of its launch. (more…)

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SEC Clarifies the Parameters for the Use of Crowdfunding in Connection with Social Media

Posted in University of Washington School of Law by LTA-Editor on October 13, 2014

Screen Shot 2014-10-13 at 3.13.42 PMBy Eric Siebert

News of successful crowdfunding efforts are present everywhere we look these days. From ideas of sock monkeys for cancer patients to ideas for dry composting toilets, crowdfunding has given everyday individuals who lack access to a large pot of financial resources the ability to make their otherwise lofty ideas become a reality. Crowdfunding has been described by the SEC as “an evolving method of raising capital that has been used outside of the securities arena to raise funds through the Internet for a variety of projects ranging from innovative product ideas to artistic endeavors like movies or music.” Although crowdfunding is not typically seen as a method for selling securities (due to the plethora of SEC regulations surrounding such sales), Title III of the JOBS Act creates an exemption to normal securities rules, allowing small businesses to more easily sell securities via crowdfunding. This exemption exists for small business as long as they comply with certain regulations.

Prior to the JOBS Act, the SEC restricted sales of securities to only accredited investors and a limited number of non-accredited investors. The majority of the population does not meet the high net worth or income standards to be qualified as an accredited investor, and thus cannot easily purchase a company’s securities. Under Section 5 of the Securities Act, businesses either had to comply with such requirements or face stiff penalties from the SEC.

However, pursuant to the JOBS Act, signed into law in April 2012, small U.S. business startups and entrepreneurs can sell securities to unaccredited investors (i.e., the general public) without having to deal with many burdensome SEC requirements. This crowdfunding exception is codified in Section 4(a)(6) of the Securities Act. This section allows a company (an “issuer” under the language of the Securities Act) to use the crowdfunding exception if, among other things, the company sells no more than $1 million in securities in any 12-month period and no more than a certain amount to any single investor. (more…)

Real Names and Fake Likes: The Struggle to Keep Facebook Interactions “Authentic”

Posted in University of Washington School of Law by LTA-Editor on October 10, 2014

Screen Shot 2014-10-10 at 10.05.56 AMBy Brennen Johnson

Facebook’s recent attempts to prevent fraudulent activity on its platform have drawn both heat and praise. Last week, Facebook issued a statement regarding its continued commitment to combat the proliferation of spammers selling fake “likes.” Facebook explained that businesses can harm themselves through the use of such services because they “could end up doing less business on Facebook if the people they’re connected to aren’t real.”

While the company’s stated intent to cut down on this form of spam has garnered positive response from users, other practices aimed at protecting the authenticity of interactions have come under severe criticism. For instance, last week Facebook officially apologized to the outspoken protestors, Sister Roma and Lil Miss Hot Mess, for its practice of flagging and freezing profiles made under drag queen pseudonyms. Facebook’s product chief issued the apology, stating that hundreds of drag queens who were flagged for violating Facebook’s real-name policy will be able to use their stage names on Facebook. The same practice of requiring the “real names” of users has drawn similar criticism in the context of domestic violence victims and political dissidents living within authoritarian political regimes. (more…)

Cell Phone Malware

Posted in University of Washington School of Law by LTA-Editor on October 8, 2014

Screen Shot 2014-10-08 at 2.34.08 PMBy Doug Logan

“But my cell phone can’t get a virus, right?” Wrong. The rise in smart-phone popularity and the “app” market have provided new avenues for unsavory people to try to attack your personal information.

“Cell phone Malware” comes in three main varieties: worms, trojans, and spyware, all of which can lead to system collapse, loss of information, and information leakage. Worms are typically transmitted via text or SMS messaging. Their primary goal is to endlessly reproduce, and worms do not require user interaction to execute. Trojans do require user interaction and can be much more dangerous because they typically transport information to a third party server. Trojans get their name because this type of malware is typically “hidden” in an application that is attractive to the user. Spyware, a broader category of malware, refers to any kind of malware that tracks and distributes a user’s information to third parties. All three of these viruses can be frustrating and potentially costly to the user.

One common source of cell phone malware is internet advertisements known as malvertisements. While impossible to keep completely secure on the internet, McAfee recommends users “[p]erform web searches on trusted search engines such as Google, Yahoo or Bing to ensure higher safety measures in your search results.” Further, McAfee suggests to “[d]ouble check the URL of any page you are visiting, especially when led there by an untrusted ad,” and to “[b]e wary of clicking on any ad that promises free product or prizes for almost no effort on your part.” (more…)

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