Lawsuit Filed Against Apple Amid Invasion Of Privacy Allegations

By: Justin McHugh

Earlier this month on July 11th, China’s Central Television (CCTV) reported on software in Apple iPhones that allows for users’ locations to be tracked.[1]  The state-run CCTV report warned iPhone users that Apple’s location-tracking software could be a potential security threat.[2]

After the report aired raising security issues concerning the location-tracking functions of the iPhone 4 and newer models, Chen Ma filed a lawsuit for invasion of privacy against Apple.[3]  Ma’s complaint alleged that “She was not asked for and thus has not given her consent, approval and permission nor was she even made aware that her detailed daily whereabouts would be tracked, recorded and transmitted to Apple database[s].”[4]  Ma also referenced the CCTV’s July 11th report in her complaint, stating that it was the report that brought the issue of Apple user location tracking to her attention.[5]  Ma’s complaint further states that “[a]ccording to information and belief, iPhone users are not given any meaningful choice enabling them to turn off the location service without substantially compromising [a] significant number of functionalities of iPhones.”[6]

After the CCTV’s report aired, Apple responded by stating that it does not actually track iPhone users’ locations.[7]  Apple further stated that its iPhone’s tracking capabilities are merely there to provide directions or to assist users in finding their current whereabouts.[8]  However, these comments seem to contradict other statements made by Apple where the company stressed that it will not disclose any information that they have collected on iPhone users’ daily whereabouts to any third party members.[9] 

This is not the first time that a lawsuit has been filed against Apple concerning data privacy issues.  In 2011, four iPhone users claimed that Apple had violated its own privacy policy by allowing for third party app developers to have access to users’ personal information and locations.[10]  The iPhone users stated that they were unaware that third party app developers could collect their personal information and alleged that Apple had specifically designed its software to allow for this to happen despite a privacy policy that claimed it would protect users.[11]  Additionally, the iPhone users alleged that their phones were transmitting their locations despite the fact that they had specifically turned that feature off on their phones.[12]  According to Apple, the reason that location information was still being sent was due to a “software bug” that was fixed when a new software update, iOS version 4.3.3, was released.[13]

Although Judge Lucy Koh recognized that there may have been harm done to the iPhone users, she stated that they had failed to show any evidence that they had relied on anything in the company’s policies before they bought their iPhones.[14]  In Judge Koh’s decision, she stated “[t]o survive a standing challenge at summary judgment, plaintiffs must be able to provide some evidence that they saw one or more of Apple’s alleged misrepresentations, that they actually relied on those misrepresentations, and that they were harmed thereby…In a case founded on the premise that Apple’s misrepresentations caused plaintiffs substantial harm, this evidentiary burden is far from unreasonable, yet plaintiffs have failed to meet it.”[15]  The case was more or less dismissed because the iPhone users had failed to read Apple’s privacy policy before buying their phones.

It remains to be seen whether or not Chen Ma’s lawsuit will be dismissed for similar reasons cited in the aforementioned 2011 lawsuit against Apple.  However, Ma is undeterred by this prior ruling and is currently seeking class certification for her lawsuit.[16]  Ma is seeking class certification for the roughly 100 million iPhone users who Ma says Apple has violated their privacy.[17]  Additionally, Ma is seeking an injunction that would prevent Apple from collecting and storing iPhone users’ private information without first giving them notice, and from sending their data to a third party without their prior permission.[18]  Along with the court ordered injunction, Ma is pursuing compensatory and punitive damages for Apple’s alleged invasion of iPhone users’ privacy.[19]



[1] Michael Kan, Apple face privacy suit following Chinese TV report, PCWorld (July 25, 2014, 12:00 AM), http://www.pcworld.com/article/2458320/apple-faces-privacy-suit-following-chinese-tv-report.html.

[2] Id.

[3] Id.

[4] Juan Rodriquez, Apple Illegally Tracks Customer Location, Class Action Says, Law 360 (July 24, 2014, 1:59 PM), http://www.law360.com/articles/560697/apple-illegally-tracks-customer-location-class-action-says.

[5] Id.

[6] Id.

[7] Rodriquez, supra note 4.

[8] Id.

[9] Id.

[10] Brid-Aine Parnell, Apple dodges data privacy sueball: Fanbois didn’t RTFM, says judge, The Register (Nov. 28, 2013), http://www.theregister.co.uk/2013/11/28/apple_data_privacy_lawsuit_thrown_out/.

[11] Id.

[12] Id.

[13] Id.

[14] Parnell, supra note 10.

[15] Id.

[16] Rebekah Kearn, Class Claims Apple iPhones Invade Privacy and Pass Along the Info, Courthouse News Service (July 28, 2014), http://www.courthousenews.com/2014/07/28/69879.htm.

[17] Id.

[18] Id.

[19] Id.

United States Tries to Extend Jurisdiction over the Elusive Bitcoin

By: Justin McHugh 

Mt. Gox, once known as the world’s largest trader of Bitcoins, has unexpectedly shutdown, devastating thousands.[1]  In the aftermath of the Mt. Gox shutdown, thousands of customers who traded on the exchange lost millions.[2]  In the face of losing millions, many Bitcoin traders are now calling for legal action and remedies from the Tokyo-based exchange firm.[3]

Immediately after Mt. Gox shutdown without warning, U.S. traders called for legal action.  One U.S. trader, in what will most likely be the first of many, has filed a lawsuit against Mt. Gox looking to recover some of his losses.[4]  This lawsuit came after Mt. Gox, the world’s largest bitcoin exchange, shutdown amid rumors that hackers had stolen hundreds of millions from the exchange, leading the exchange to declare bankruptcy.[5]  Originally, Mt. Gox had halted all trading activity due to what it claimed were software issues.[6]  It was not until Ryan Selkis, a Bitcoin supporter, discovered a Mt. Gox document that claimed an estimated 744,408 Bitcoins had been stolen.[7]  The document further alleged that the Bitcoins had been stolen by hackers over a two year period.[8]

“In a complaint filed on Thursday [Feb, 27, 2014] in [the] U.S. District Court in Chicago,” trader and plaintiff Gregory Greene said, “Mt. Gox and its chief executive, Mark Karpeles, were negligent and committed fraud for having failed to protect the Tokyo-based exchange from theft.”[9]

The price of bitcoins plunged after Mt. Gox discovered that it had been hacked for hundreds of millions.[10]  Bitcoin prices dropped more than 14% to around $465.[11]   Greene and other investors of the virtual currency were unable to recover their losses after Mt. Gox halted all transactions.[12]  Many investors were completely caught by surprise by the unexpected and immediate halt of trading on the Bitcoin exchange.[13]

Greene, who has now initiated a federal lawsuit against Mt. Gox, was further quoted as stating “Mt. Gox intentionally and knowingly failed to provide its users with the level of security protection for which they paid.”[14]  Greene’s loss, of an estimated $25,000 from the closing of Mt. Gox, pales in comparison to the millions many other investors lost in the blink of an eye.[15]

The lawsuit that Greene has filed in federal court seeks class action status and remedies based on the interests of Mt. Gox investors in the form of monetary damages.[16]  Because of the fact that Mt. Gox is a Tokyo-based Bitcoin exchange, it was not immediately apparent how U.S. courts would gain jurisdiction over the Japanese exchange.[17]

In a statement on February 28, 2014, Mt. Gox Chief Executive Mark Karpeles stated in a Tokyo District Court that “he was very sorry [for] the weakness in [their] system.”[18]  Additionally, Mt. Gox stated that its 750,000 Bitcoin investors were now out of approximately $480 million.[19]  This $480 million accounts for nearly seven percent of the world’s entire Bitcoin market.[20]

Mt. Gox Bitcoin investors may not be entirely without remedy, as Mt. Gox has assets of over $38 million.[21]  However, it is estimated that due to its Bitcoin losses, Mt. Gox now has liabilities of over $64 million.[22]  The $38 million that Mt. Gox has in assets pales in comparison to the estimated $480 million stolen.  Because Mt. Gox has so little in assets compared to the amount it owes investors, a class action lawsuit may not be the most financially sound option to choose.  The legal fees needed to sue Mt. Gox would most likely consume what is left of Mt. Gox’s assets, leaving insufficient funds to reimburse investors.[23]

It remains to be seen what the outcome of Greene’s class action lawsuit will be.  However, Steven Woodrow, a lawyer at the Edelson law firm, who filed Greene’s lawsuit, has been quoted as saying that he “intend[s] to get to the bottom of [Mt. Gox’s loss of millions] in an American court.”[24]  In order to restore confidence to the Bitcoin market, Mt. Gox will need to be held accountable for the misappropriation of its investors’ money.


[1] Jonathan Stempel & Emily Flitter, Mt. Gox sued in United States over bitcoin losses, Reuters (Feb. 28, 2014), http://www.reuters.com/article/2014/02/28/bitcoin-mtgox-lawsuit-idUSL1N0LX1QK20140228.

[2] Id.

[3] Id.

[4] Id.

[5] Id.

[6] Rob Wile, Bitcoin Exchange MTGox Disappears, Business Insider, (Feb. 24, 2014, 10:50 PM), http://www.businessinsider.com/reports-mtgox-halts-all-trading-2014-2.

[7] Id.

[8] Id.

[9] Stempel & Flitter, supra note 1.

[10] Id.

[11] Wile, supra note 6.

[12] Stempel & Flitter, supra note 1.

[13] Id.

[14] Id.

[15] See, id.

[16] Stempel & Flitter, supra note 1.

[17] Id.

[18] Stempel & Flitter, supra note 1.

[19] Id.

[20] Id.

[21] Id.

[22] Id.

[23] Cameron Keng, Bitcoin’s Mt. Gox Goes Offline, Loses $409M – Recovery Steps and Taking Your Tax Losses, Forbes, (Feb. 25, 2014, 4:46 AM), http://www.forbes.com/sites/cameronkeng/2014/02/25/bitcoins-mt-gox-shuts-down-loses-409200000-dollars-recovery-steps-and-taking-your-tax-losses/.

[24] Stempel & Flitter, supra note 1.

Is Technology Advancing Too Fast for Legislative Comfort?

By: Megan Conravey 

Technology is always evolving to make our lives easier.  We merge complicated tech knowledge to gain access to the world in quicker, easier, and more convenient ways. While advancements in technology create excitement for our everyday lives, they also create setbacks when we try to integrate these new toys into normal tasks. One of the newest tech toys to be released is Google Glass, a piece of discrete technology that promises to transform our view of life and interactions.

What is Google Glass? There is so much buzz about this new invention, but in reality, what effect will it actually have on our lives? In short, Glass is a computerized device that allows users to display access to the Internet right before their own two eyes. [1] Glass is wearable technology that also allows the user to capture and share the world they see straight from their eyewear.[2]  With smartphone integration and natural-language voice commands, Glass aims to transform the way we use technology.[3]

Glass allows a new way of looking at the world.  It is extremely innovative and offers many advantages—especially for those people who do not have the opportunity to experience the world through first-hand adventure.  For example, the Glass website tells the story of a paralyzed woman who can now interact with the world and see it as if through her own eyes.[4]  Many individuals using this technology, however, will attempt to interact with not only the networking world, but also the world around them simultaneously.  To these individuals, Glass offers a new way of ignoring the world around us. With the Internet projected right before our eyes, we can move seamlessly through many everyday activities while immersing ourselves in experiences that are a world away.

While ignorance may be bliss, some activities still require our full attention. Accordingly, several states are in the process of enacting legislation to restrict certain uses of the technology.[5]  One of these enactments involves the use of this technology while driving a car. [6]  West Virginia has moved to amend legislation to include “wearable computer with a head mounted display” within those actions prohibited while driving.[7]  Forty-one states use similar language that would lump the use of Glass and like devices in with the use of text messaging while driving.[8]  West Virginia’s amendment to the law would be consistent with its practice that also bans Mercedes Dual-Front Video Display—concern for distraction for the driver is paramount.[9]

According to the American Bar Association, a San Diego resident was cited for wearing Google Glass when she was pulled over for speeding.[10]  Cecilia Abadie, the woman cited for the violation, claims she fought the charge to set a precedent for those who wish to use Google Glass and similar technologies in this new technology age.[11]  Abadie beat the charge because there was no evidence that she had Glass activated during her drive.[12]

Cecilia’s case—one in which a driver is wearing technology such as Google Glass but claims she is not using it during her drive—presents one of the difficulties in enforcing legislation to restrict our increasingly stealthy technological efforts.  With the newest marketing push, Google Glass has moved to make its merchandise look more like fashionable eyewear.[13]  The ability to make these devices more invisible to the casual observer makes it easier to use them in contravention of any law that may be established restricting their use.

Some proposed solutions include vehicle integration, much like what is currently done with smartphones.[14]  Google, however, is fighting back against the restrictions, arguing that Glass may be relatively safe for the roads.[15]  The argument advanced by Google involves a distinction between distraction and access.[16]  Google argues that Glass is not meant to distract, only to provide a connection to the world at large.[17]  Further, the technology is not widely available yet, so the impact, according to Google, cannot yet be known.[18]  Google has, however, gained some support for its safety efforts in its use by the NYPD, but the future of the product remains unclear.[19]

Legislation is still in its preliminary phases in most jurisdictions, and the trick will be deciding how much decision to leave up to the consumer of this product.  The early worries about the impacts of this technology are not unwarranted, but what do these preliminary legislative attempts say about the faith in American consumers?  Are legislators too early to restrict this technology that may not impede road safety, or is early restriction a safer bet? The use of personal technology is important to our every day lives, but the overriding decision may come down to the impact this particular technology and the restrictions at issue may have on the public and public safety at large.



[1] See Google Glass: What It Does, http://www.google.com/glass/start/what-it-does/ (last visited Mar. 15, 2014).

[2] Id.

[3] Id.

[4] See Google Glass: How it Feels, http://www.google.com/glass/start/how-it-feels/ (last visited Mar. 15, 2014).

[5] Freeman Klopott & William Selway, Google Glass Faces Dirivng Bans as States Move to Bar Use, Bloomberg L. (Feb. 26, 2014, 12:00 AM), http://about.bloomberglaw.com/legal-news/google-glass-faces-driving-bans-as-states-move-to-bar-use/.

[6] Id.

 [7] 2014 West Virginia House Bill No. 3057, West Virginia Eighty-First Legislature – Regular Session, 2014,  available at http://www.legis.state.wv.us/Bill_Status/bills_text.cfm?billdoc=hb3057+intr.htm&yr=2013&sesstype=RS&i=3057.

[8] Klopott & Selway, supra note 5; 2014 Wyoming Senate File No. 35, Wyoming 2014 Budget Session, available at http://legisweb.state.wy.us/2014/Introduced/SF0035.pdf; 2012 New Jersey Assembly Bill No. 4146, New Jersey Two Hundred Fifteenth Legislature – Second Annual Session, available at http://legiscan.com/NJ/text/A4146/id/861887; 2013 New York Assembly Bill No. 8496, New York Two Hundred Thirty-Seventh Legislative Session, available at http://legiscan.com/NY/text/A08496/id/929877.

[9] Dan Carney, 10 Car Options the Law Won’t Let You Have, Yahoo! Autos, (June 19, 2013, 8:23 PM),  http://autos.yahoo.com/news/10-car-options-the-law-won-t-let-you-have-002345087.html?page=all.

[10] Brian Sullivan, Nowhere to Hide: This Modern Marvel Brings Out the Technophobes–and the Lawyers, 100-JAN A.B.A. J. 75, at 75 (2014).

 [11] Id.

 [12] John Roberts, Google Glass Woman Beats Ticket, but Device may Still be Illegal for Drivers, Gigagom, (Jan. 17 2014, 7:02 AM), http://gigaom.com/2014/01/17/google-glass-woman-beats-ticket-but-device-may-still-be-illegal-for-drivers/.

[13] See Google Glass: How it Looks, http://www.google.com/glass/start/how-it-looks/ (last visited Mar. 15, 2014).

[14] Klopott & Selway, supra note 5.

[15] Id.

[16] Id.

[17] Kevin C. Tofel, Driving with Google Glass: Road Hazard or a Smooth Ride?, Gigagom, (Feb. 25, 2014 7:25 AM), http://gigaom.com/2014/02/25/driving-with-google-glass-road-hazard-or-a-smooth-ride/.

[18] Tiffany Kalser, Google Lobbies to Kille Legislation Banning Google Glass While Driving, Dailytech, (Feb. 25, 2014, 12:37 PM), http://www.dailytech.com/Google+Lobbies+to+Kill+Legislation+Banning+Google+Glass+While+Driving/article34405.htm.

[19] Id.

It’s My Body and I’ll Die If I Want To!

            We can say all we want about the newest, fastest, lightest: IPhone, IPad, Tablet, Google Glass etc… but the simplest technology is all too often overlooked and outshined by plastic electronics. Technology and science that are on the cutting edge of medical breakthroughs, space exploration, and entertainment take center stage in our capitalistic sales driven world. It’s ironic that we stand in awe waiting for such new advances and overlook technology that impacts (for better or worse) something that we will all one day face. Death is something that we do not want to think about or deal with until that time comes. Yes, estate planning is an area of the law that many engage in while they are perfectly healthy and viable, but that is centered on money and assets. Technology/medical practices now exist in which a person can elect to die when they so choose. The slippery slope comes into play here, because the technology exists, but so do laws. As of right now the laws governing physician-assisted suicide makes the prospect of choosing when to die a complex endeavor.

Back in the day, people were much more likely to die at home as opposed to a hospital.[1] As medicine and technology have advanced, so too has the life expectancy of people in highly developed countries. For example, in the United States the average life expectancy in 1960, according to the Census Bureau, was 69.77 years.[2] In 2011, the average was 78.64 years.[3] In a 2012 CBS New York article, titled Could The Next Generation Live To Be 150? Experts: Huge Breakthroughs In Science And Technology Could Make It A Reality, Geriatrician Dr. Joyce Fogel said that, “There was a time when people didn’t live to older age because they died from the flu.[4] We’re doing much better. In 1900, when somebody was born, they were expected to live to the age of 50.”[5] Fogel goes on to say that “scientists are making huge advances in the lab,growing new organs from adult human stem cells, creating body parts with 3D printers, and using gene therapy to successfully treat diseases like blindness and leukemia.”[6] With all new technology seemingly centered on extending life, the technology surrounding death seems to be a topic that is avoided. The explanation for this avoidance may originate from two separate stimuli, the first being that people just don’t want to think about death until they are at that point, and the second being that the current state of the law (state, and Supreme Court decisions) seem to deter or prevent individuals from seeking the use of life ending technologies.

According to Katherine A. Chamberlain, Looking for A “Good Death”: The Elderly Terminally Ill’s Right to Die by Physician-Assisted Suicide, 17 Elder LJ 61, 65 [2009], there are three types of assisted death.[7] The first being where a doctor “actively injects the patient with medicine causing death.” The second is where a doctor does not act, thus withholding life-saving/extending care (hydration and/or nutrients).[8] The third method assists with suicide by offering “medical knowledge,” but the doctor refrains from “actively” assisting.[9] Accordingly, Chamberlain points out that the varying methods of assistance matter in terms of the law. For example, in the Supreme Court case Cruzan v. Director, Missouri Department of Health, the Supreme Court held that that the Fourteenth Amendment Due Process Clause also affords competent patients a “constitutionally protected liberty interest in refusing unwanted medical treatment.” In two cases decided on the same day, Washington v. Glucksberg and Vacco v. Quill, the Supreme Court further addresses the issues surrounding assisted suicide. In Glucksberg, the Court held that because the “Due Process Clause does not provide a fundamental liberty interest” in physician-assisted suicide, a Washington statute was not unconstitutional. The Court further held that the statute was “reasonably related”to furthering Washington’s compelling state interests, including protecting life, preventing suicide, preserving the integrity of the medical profession, protecting vulnerable groups (such as children and the elderly), and avoiding the slippery slope to voluntary and involuntary euthanasia.”In Quill, the Court upheld the distinction between refusing life-sustaining treatment and physician-assisted suicide, asserting that “[e]veryone, regardless of physical condition, is entitled, if competent, to refuse unwanted lifesaving medical treatment; (but) no one is permitted to assist a suicide.”

Currently this issue is left primarily to the states to regulate. Just last month an article in the Huffington Post, titled Judge Rules to Allow Physician Assisted Suicide in New Mexico, made reference to the recent development in which “A New Mexico judge has ruled that terminally ill, mentally competent patients have the right to get a doctor to end their lives.[10] The ruling by Judge Nan Nash of the New Mexico Second Judicial District would make New Mexico the fifth state to allow doctors to prescribe fatal prescriptions to terminal patients.”[11]

This is an area of the law that ties in arguments for and against the legalization of physician-assisted suicide based on different theories that stem from the technology behind it, morals, religion, history, tradition, rationality etc… It will be interesting how it all continues to play out.


[1] Sharon R. Kaufman, And a Time to Die How American Hospitals Shape the End of Life, press.uchicago.edu/Misc/Chicago/426858.html (last visited Mar. 18, 2014).

[2] Births, Deaths, Marriages, & Divorces: Life Expectancy,  US Census, http://www.census.gov/compendia/statab/cats/births_deaths_marriages_divorces/life_expectancy.html (last visited Mar. 18. 2014).

[3] Id.

[4] Seen At 11: Could The Next Generation Live To Be 150?, CBS New York, http://newyork.cbslocal.com/2012/02/14/could-the-next-generation-live-to-be-150/ (last visited Mar. 18, 2014).

[5] Id.

[6] Id.

[7] Katherine A. Chamberlain, Looking for A “Good Death”: The Elderly Terminally Ill’s Right to Die by    Physician-Assisted Suicide, 17 Elder LJ 61 [2009]

[8] ElderKatherine A. Chamberlain, Looking for A “Good Death”: The Elderly Terminally Ill’s Right to Die by Physician-Assisted Suicide, 17 Elder LJ 61 [2009]

[9] Katherine A. Chamberlain, Looking for A “Good Death”: The Elderly Terminally Ill’s Right to Die by Physician-Assisted Suicide, 17 Elder LJ 61 [2009]

[10] Steven Siebold, Judge Rules to Allow Physician Assisted Suicide in New Mexico, The Huffington Post, http://www.huffingtonpost.com/steve-siebold/new-mexico-assisted-suicide_b_4594951.html (last visited Mar. 18, 2014).

[11] Id.

The Rise and Fall of Flappy Bird: Flapping it’s Way into Copyright Infringement?

By: Tanjeev Thandi

Flappy Bird is no longer flapping its wings.  Invented by Dong Nquyen, a Vietnamese developer from DotGears, Flappy Bird rose to the top of charts and became the most downloaded app of the year…and then disappeared.

The actual concept behind Flappy Bird is quite simple.  Players control a tiny bird through a maze of metal pipes by tapping on the screen, and that is pretty much all there is to it. In fact, the game only took Nguyen three days to develop.[1]  With such a simple concept, it’s baffling that this app became such a success.  The game was downloaded more than 50 million times since it launched in May of 2013.[2]  Flappy Bird reportedly brought Nquyen around $50,000 a day in advertising revenues.[3]

Despite its success, Nquyen abruptly took this app down as it was appearing to be on the rise and attributed his reasoning to the game’s addictiveness.[4]  Nguyen took the game down as it was gaining attention and popularity, much to the nation’s surprise.[5]  It appears that the popularity of the game was the very reason that he even took the game down since it “ruins his simple life”.[6]  It had became “the world’s most popular free app, from both the Google Play store and Apple’s App store”.[7]

Nguyen claimed on Twitter that he did not take down the game because of legal reasons, however, one of the real questions is whether or not this game was taken down due to copyright issues.[8]  Two individuals close to Nquyen reported that Nguyen received a warning letter from Nintendo that the pipes and other art depicted were lifted from Nintendo’s Super Mario games without any modification.[9]  Nintendo recently denied allegations that they were pursuing legal action against the app.  Nintendo’s spokesman Yasuhiro Minagawa told the Wall Street Journal “While we usually do not comment on the rumors and speculations, we have already denied the speculation”.[10]

Although Nintendo claims to not be taking action, the resemblance between Flappy Bird and Nintendo’s Super Mario Bros. art is uncanny.  It is possible that taking down the game was strategic for Nguyen, because it was taken down before big companies had much incentive to come after him as they would if  “his profits become significant enough for big developers (like Nintendo) with big legal departments to be motivated to come looking for a cut”.[11]  There is also speculation that taking down the game so abruptly was a marketing ploy to foster significant attention, downloads and anticipation for a follow-up game.[12]  This possibility seems unlikely judging by Nquyen’s Twitter however, since he claimed that the game was “ruining his simple life”.[13]  Nguyen told Wall Street Journalists that he is waiting to regain normalcy in his life and even refused to be photographed for their article.[14]

Nguyen and subsequent app developers are not the only ones profiting from Flappy Bird’s success. The game has become such a craze that people are now selling their phones with this game downloaded on eBay for thousands of dollars.[15]  Flappy Bird has opened the door for the “small man” to create simple concept apps and have the success of famously branded game consoles by using little to no creativity.

The reality is that the game may be dead, but the idea is not.  What seemed to be a hybrid of famous app Angry Birds and Nintendo’s Super Mario Bros. is sure to spark up lots of imitations in the near future.[16]  The emergence of similar games is sure to continue this cycle of mobile cloning, but since the concepts are so simple, who is to say that a clone is a clone? This begs the question, when will all these creativity-lacking apps be replaced by truly original and creative games? As long as there are little to no repercussions and a lot to gain, the mobile scene appears to continue as a sea of simplistic games with little innovation.

 

 

 


[1] James Hookway, ‘Flappy Bird’ Creator Pulled Game Because It Was Too Addictive, The Wall Street Journal (Feb. 11, 2014, 12:22 p.m.), http://online.wsj.com/news/articles/SB10001424052702303874504579376323271110900.

[2] Jennifer Bootan, “Smartphones with ‘Flappy Bird’ Sell For Thousands on eBay, Fox Business (Feb. 13, 2014), http://www.foxbusiness.com/technology/2014/02/13/smartphones-with-flappy-bird-sell-for-thousands-on-ebay/.

[3] Eric Mack, Flappy Bird Creator May Have Been Scared By Legal Threats After All, Forbes (Feb. 10, 2014, 11:08 a.m.), http://www.forbes.com/sites/ericmack/2014/02/10/flappy-bird-creator-may-have-been-scared-by-legal-threats-after-all/.

[4] James Hookway, ‘Flappy Bird’ Creator Pulled Game Because It Was Too Addictive, The Wall Street Journal (Feb. 11, 2014, 12:22 p.m.), http://online.wsj.com/news/articles/SB10001424052702303874504579376323271110900.

[5] David Murphy, Flappy Bird-inspired ‘Flappy-Jam’ at 206 Free Games and Counting, PC Magazine (Feb. 15, 2014, 11:47 a.m.), http://www.pcmag.com/article2/0,2817,2453486,00.asp.

[6] Gaetano Prestia, Flappy Bird Creator Says Popularity Ruined His ‘Simple Life’, Removes Game From Sale, MSN ( Oct. 2, 2014,).

[7] Doug Gross, Apple, Google Cracking Down on ‘Flappy Bird’ Clones, CNN (Feb. 17, 2014, 5:17 pm), http://www.cnn.com/2014/02/17/tech/mobile/flappy-apps-banned/.

[8] Dong Nguyen, Twitter, (Feb. 8, 2014), https://twitter.com/dongatory.

[9] Nguyen Phuong Linh, Flappy Bird Creator Says Popular Game Will Fly No More, Reuters (Feb. 9, 2014, 4:05 am), http://www.reuters.com/article/2014/02/09/vietnam-flappybird-idUSL3N0LE05720140209.

[10] Newley Purnell, Nintendo: No Complaints About ‘Flappy Bird’, The Wall Street Journal (Feb. 10, 2014, 8:06 a.m.), http://blogs.wsj.com/digits/2014/02/10/no-complaints-about-flappy-bird-nintendo-says/.

[11] Eric Mack, Flappy Bird Creator May Have Been Scared By Legal Threats After All, Forbes (Feb. 10, 2014, 11:08 a.m.), http://www.forbes.com/sites/ericmack/2014/02/10/flappy-bird-creator-may-have-been-scared-by-legal-threats-after-all/.

[12] Eric Mack, R.I.P. Flappy Bird, Forbes (Feb. 9, 2014, 12:51), http://www.forbes.com/sites/ericmack/2014/02/09/r-i-p-flappy-bird/.

[13] Dong Nguyen, Twitter, (Feb. 8, 2014), https://twitter.com/dongatory.

[14] James Hookway, ‘Flappy Bird’ Creator Pulled Game Because It Was Too Addictive, The Wall Street Journal (Feb. 11, 2014, 12:22 p.m.), http://online.wsj.com/news/articles/SB10001424052702303874504579376323271110900.

[15] Jennifer Booton, Smartphones with ‘Flappy Bird’ Sell For Thousands On eBay, Fox Business (Feb. 13, 2014), http://www.foxbusiness.com/technology/2014/02/13/smartphones-with-flappy-bird-sell-for-thousands-on-ebay/.

[16] David Murphy, Flappy Bird-inspired ‘Flappy-Jam’ at 206 Free Games and Counting, PC Magazine (Feb. 15, 2014, 11:47 a.m.),  http://www.pcmag.com/article2/0,2817,2453486,00.asp.

Is the Line Between “Blurred Lines” and “Got to Give It Up” Really That Blurry?

By Laura Fleming

Editor’s Note: This blog was written prior to the settlement of the case being addressed.

When Robin Thicke sang, “I hate these blurred lines” in his latest song, “Blurred Lines,” he probably wasn’t talking about the blurry line between his hit single and Marvin Gaye’s “Got to Give It Up.” Thicke released his song this past summer, while Gaye, now deceased, released his song in 1977.[1] Gaye’s heirs are currently accusing Thicke, along with “Blurred Lines” co-writers Pharrell Williams and “T.I.” Clifford Harris Jr., of copyright infringement in a California court.[2]

The heirs of Gaye included a report by a musicologist in the filing of their lawsuit.[3] The musicologist identified a “constellation of at least eight substantially similar compositional features between the two works.”[4] The report claimed substantial similarity between “[t]he signature phrase, vocal hook, backup vocal hook, their variations, and the keyboard and bass lines” and the songs “departures from convention such as the unusual cowbell instrumentation, omission of guitar and use of male falsetto.”[5]

Under the Federal Copyright Act, in order to establish a claim for copyright infringement, the plaintiff must show that “he or she owns the copyrighted creation, and that the defendant copied it.”[6] However, if the plaintiff does not have direct evidence of copying, the plaintiff may still prevail by showing that the defendant had access to the song and that the songs are “substantially similar.”[7] In order to prove “access,” the plaintiff must show that the defendant had an opportunity to listen to and copy the plaintiff’s song.[8] After that, “substantial similarity” exists where “an average lay observer would recognize the alleged copy as having been appropriated from the copyrighted work.”[9]

However, if the plaintiff cannot prove “access,” illustrating that the two works are “strikingly similar” will result in victory.[10] Accordingly, “striking similarity” exists where “the proof of similarity in appearance is ‘so striking that the possibilities of independent creation, coincidence and prior common source are, as a practical matter, precluded.’”[11] However, unless the plaintiff can prove actual copying, proof of “independent creation” wholly negates a claim of copyright infringement.[12]

Still, proving copyright infringement in the area of musical composition is very difficult, because “substantial similarity is often an extremely close question of fact.”[13] In a similar case of copyright infringement, the composer of “Come-Up” accused the composer of “Betcha” of copying a repeating 3–note motif, or ostinato, which served as the fundamental rhythmic track to his song.[14] An expert concluded “the pattern [of Betcha] is identical (100%) to that in ‘Come Up.’”[15] However, the court held that there were “significant dissimilarities” between “Come Up” and “Betcha,” and the ostinato only accounted for 33% of the song.[16] Thus, combined, these factors weighed heavily enough against the plaintiff for the court to grant the defendant’s motion for summary judgment.[17]

As for “Blurred Lines,” during an interview with a magazine, Thicke claimed that he told Pharrell that he “wanted to do something kinda like Marvin Gaye’s ‘Got To Give It Up.’”[18] While this statement is likely insufficient proof of direct copying, it may satisfy the first prong of the copyright test, requiring access to Gaye’s song. However, as the Watt case showed, “substantial similarity” is going to be the difficult for Gaye’s estate to prove. While many journalists wrote about the similarity between the songs after Thicke released “Blurred Lines,” if Thicke can prove “independent creation” he will not be liable for copyright infringement.[19] This is because, even if the musical arrangement accompanying the “hey, hey, hey” verse is exactly the same as Gaye’s, as in the Watt case, this verse only accounts for less than half of the song, which might be enough for the court to rule for Thicke. Also, like Watt, there is much dissimilarity between Gaye’s song and the remainder of “Blurred Lines,” which will greatly help Thicke’s claim of “independent creation.”

Therefore, as past practice indicates, it is unlikely that Gaye’s estate will succeed on its copyright infringement claim against Thicke.



[1] Marvin Gaye Heirs Sue ‘Blurred Lines’ Artists, Alan Duke, http://www.cnn.com/2013/10/31/showbiz/blurred-lines-lawsuit (last visited Jan. 13, 2014).

[2] Id.

[3] Id.

[4] Id.

[5] Id.

[6] Jones v. Blige, 558 F.3d 485, 490 (6th Cir. 2009).

[7] Benson v. Coca–Cola Co., 795 F.2d 973, 974 (11th Cir.1986).

[8] Jones, 558 F.3d at 491.

[9] Watt v. Butler, 744 F. Supp. 2d 1315, 1322 (N.D. Ga. 2010).

[10]Herzog v. Castle Rock Entm’t, 193 F.3d 1241, 1248 (11th Cir.1999).

[11]Watt, 744 F. Supp. 2d at 1323.

[12] Id. at 1321.

[13] Jones, 558 F.3d at 490.

[14] Watt, 744 F. Supp. 2d at 1318.

[15] Id.

[16] Id. at 1324.

[17] Id. at 1325.

[18] Marvin Gaye, supra note 1.

[19] Id.

Large Databases of Customer Information are…a Target

By: Geoff Wills

On December 19, 2013, Target Corporation confirmed that it was aware of unauthorized access to payment card data impacting any Target customer that made credit or debit card purchases in its U.S. stores.[1]  The data breach occurred between November 27, 2013 and December 15, 2013.[2]  Target’s press released acknowledged that approximately 40 million credit and debit card accounts might have been impacted.[3]  As news broke and the issue was investigated, that number has now increased to 70 million customers, and includes online shoppers.[4]  The cyber attack on Target is the second-largest retail cyber attack in history, and has resulted in investigations by state prosecutors and Attorneys general.[5]  It has also resulted in numerous complaints filed across the country by individuals, all vying for the ever-elusive “class action” status.[6]

The hackers—who are still unknown and at large—stole personal information from a database comprised of names, addresses, telephone numbers, and email addresses.[7]  All of this information, which was obtained through the magnetic strip in debit and credit cards, could allow false magnetic strip credit cards to be made, creating the potential for 70 million new cases of identity theft.  This emerging crime is big business: it cost 13.3 billion dollars in 2010, and impacted seven percent of the nation.[8]  So what can be done, both legally and personally, to prevent or remedy this?

To prevent the likelihood of a data breach, one technology that could be used in the United States is the use of EMV chips in debit and credit cards.[9]  EMV, named after it’s founders—EuroPay International, Mastercard, and Visa has become the standard in the rest of the world.  EMV is a small computer chip embedded within a card, making for a more secure card.[10]  The biggest reason EMV technology has yet to be the standard in debit card and credit cards in the United States is cost.[11]  A card equipped with EMV costs roughly three times as much to make as a non-EMV equipped chip.[12]  This added cost would cost financial institutions more up front, but could go a long way in providing peace of mind and instilling confidence in their customers.

Unfortunately for the victims of this most recent breach, it is too late to prevent the identity theft.  Victims of this crime are now turning toward the legal system to remedy their harm.  Dozens of lawsuits seeking class-action status have already been filed, primarily alleging that Target was negligent in its handling of card data.[13]  While these cases are likely to put pressure on Target to settle out of court, courts have been reluctant in the past to find for plaintiff’s in similar cases due to the struggle to show privacy loss led to financial loss.[14]  Target is also being pro-active in the matter, providing credit monitoring to impacted customers, as well as public assurances that victims of this fraud will not be financially responsible.[15]  Target is likely to face state and federal investigations.  Multiple Attorneys general, including Rhode Island Attorney General Peter F. Kilmartin, have already sent letters to Target’s headquarters requesting information on the security breach.[16]

Looking in the past to similar cases shows how reluctant courts have been to hold retail stores liable for security breaches that have caused identity theft.  In Banknorth, N.A. v. BJ’s Wholesale Club, Inc., a federal court dismissed all claims against BJ’s.[17]  This case was not filed by impacted customers, but by an impacted financial institution.  In Banknorth, plaintiffs filed suit after third parties hacked into computer files maintained by BJ’s that resulted in confidential customer information being used for identity theft.[18]  Plaintiffs alleged three claims, including breach of contract, negligence, and equitable subrogation.[19]  Focusing on the negligence claim, Banknorth alleged that BJ’s breached their duty of care by retaining customer information and failing to protect it, and that such negligence caused unauthorized third parties to obtain customer information for fraudulent purposes.[20]  The court refused this negligence claim, citing the economic loss rule.[21]  Because the alleged negligence only resulted in economic loss and no physical harm, BJ’s had no liability.[22]  As in Banknorth, the economic loss rule could have large implications for deciding upcoming cases filed by victims of the Target data breach.

The consequences of this tremendous data breach are likely to be far-reaching, and could have significant implications in how customer information obtained by credit and debit cards is stored and used.  As society moves increasingly toward cashless transactions, keeping personal data secure and confidential will become even more important, and the battle will wage on between security and hackers.  Due to past decisions and the economic loss rule, it is likely that the best method to fix this large issue rests in the hand of congress and governmental regulation, and not in continuous, ongoing legislation.  This would also be a better mechanism for change as most claims involving multiple plaintiffs and large corporations are likely to never reach litigation, as many are settled out of court in an effort to maintain brand recognition.  Look for many more significant data breaches in the upcoming future, and don’t forget to always be on the lookout for identity theft.

 


[1] Press Release, Target Corp., Target Confirms Unauthorized Access to Payment Card Data in U.S. Stores (Dec. 19, 2013), http://pressroom.target.com/news/target-confirms-unauthorized-access-to-payment-card-data-in-u-s-stores. (Last visited January 15, 2014).

[2] Id.

[3] Id.

[4] Paul Ziobro, Target Now Says 70 Million People Hit in Data Breach, Wall St. J. (Jan. 10, 2014, 8:36 PM), http://online.wsj.com/news/articles/SB10001424052702303754404579312232546392464.

[5] Target Data Breach Hits at Least 70 Million Customers, Chi. Trib. (Jan. 10, 2014, 7:27 PM), http://www.chicagotribune.com/business/breaking/chi-target-data-breach-affected-70-million-customers-20140110,0,621285.story. (Last visited January 15, 2014).

[6] Katie Mulvaney, Kilmartin Seeks More Information From Target Corp. on Massive Security Breach, Providence J. (Dec. 31, 2013, 10:12 PM), http://www.providence journal.com/breaking-news/content/20131231-kilmartin-seeks-more-information-from-target-corp.-on-massive-security-breach.ece; Joel Rosenblatt, Target Sued by Shopper Over Data Security Breach Claims, Bloomberg L. (Dec. 20, 2013, 1:06 AM), http://about.bloomberglaw.com/legal-news/target-sued-by-shopper-over-data-security-breach-claims/.

[7]  Paul Ziobro, supra note 4.

[8] Jeff Sovern, How Common is Identity Theft?, Consumer L. and Pol’y Blog, Nov. 16, 2012, http://pubcit.typepad.com/clpblog/2012/11/how-common-is-identity-theft.html.

[9]  Elizabeth Dexheimer, Target Breach Spurs Push for Anti-Fraud Card Technology, Bloomberg News (Jan. 15, 2014, 12:00 AM), http://www.bloomberg.com/news/2014-01-15/target-breach-spurs-push-for-anti-fraud-card-technology.html.

[10] Id.

[11] Id.

[12] Id.

[13] Joel Rosenblatt, supra note 6.

[14] Jacob Gershman, Target’s Breach is Bigger Than Though, But Legal Exposure is Uncertain, Wall St. J. L. Blog (Jan. 10, 2014, 6:11 PM), http://blogs.wsj.com/law/2014/01/10/targets-breach-is-bigger-than-thought-but-legal-exposure-is-uncertain/.

[15] Id.

[16] Katie Mulvaney, supra note 6.

[17] See Banknorth, N.A. v. BJ’s Wholesale Club, Inc., 442 F.Supp.2d 206 (M.D. Pa. 2006).

[18] See Id.

[19] Id. at 208.

[20] Banknorth, 442 F.Supp.2d at 208.

[21] Id.

[22] Id. at 211.

Destruction of Federal Circuit Claim Construction

By: Erin Phillips

On October 1, 2013 the Supreme Court granted certiorari in the patent case Highmark, Inc. v. Allcare Health Management Systems, Inc. to decide whether a district court’s exceptional-case finding to award attorney’s fees was entitled to deference by the Federal Circuit.[1]  Although on its face the implications of a judgment in favor of deference seem to reach only the most exceptional cases, the possible effects on patent claim construction are monumental.  A decision in favor of deference could spark a major reduction in power for the Federal Circuit.[2]

In its petition for certiorari Highmark stated,

This case is deeply important for another reason: It is part of a larger pattern of Federal Circuit decisions arrogating greater authority to the court of appeals and upsetting the traditional relationship between trial and appellate courts. The Federal Circuit now has asserted de novo review for claim construction… these determinations have substantial factual components.[3]

Claims are the most significant aspect of the patent document.[4]  The claims are the portion of the document that determines the boundaries of the patentee’s rights.[5]  In 1998, the Federal Circuit, en banc, ruled in Cybor Corp. v. FAS Techs, Inc. that claim construction is solely a question of law and is therefore subject to a de novo standard of review.[6]  In his dissenting opinion, Judge Rader stated that the “objective of claim interpretation is to discern the meaning of the claim terms to one of ordinary skill in the art at the time of invention” and de novo review would negate any expert testimony that furthers this objective.[7]

Additional arguments against a de novo standard of review for claim construction include: increased uncertainty in the outcome of litigation, increased number of appeals, and demoralization of trial judges.  Federal Circuit trends have shown that as many as 40% of claim construction cases are reversed.[8]  Critics of Cybor argue that trial judges are better equipped to make claim construction determinations and the most extreme argue that claim construction is inherently a factual determination.[9]

In September, the Federal Circuit, en banc, heard oral arguments in Lighting Ballast Control v. Philips.[10]  The court asked the parties to brief whether Cybor should be overruled, whether any deference should be given to district court claim construction and if so, which aspects should be afforded deference.[11]  Both parties agreed that the de novo standard is not appropriate, but differed as to the scope of the deference.[12]  The oral arguments of both parties touch on many of the arguments that the critics of Cybor have made.

During the Lighting Ballast oral arguments, the parties argued that claim construction contains both issues of fact and law.[13]  However, neither could fully articulate how issues of fact could be separated from issues of law at the district court level to make the deferential standard workable.[14]  The court was very troubled by this, which may be indicative of its future ruling.[15]

If the Federal Circuit agrees and tries to disentangle issues of fact and law in claim interpretation, it may invade the United State Supreme Court precedence of Markman v. Westview Instruments, Inc. that held that the “construction of a patent, including terms of art within its claim, is exclusively within the province of the court.”[16]  Because it is not likely that the Federal Circuit will try to separate issues of fact and law in claim construction in Lighting Ballast, the Supreme Court’s decision in Highmark has the potential to be the biggest impact on claim construction in the last decade.


[1] Highmark Inc. v. Allcare Management Systems, Inc., Supreme Court of the United State blog http://www.scotusblog.com/case-files/cases/highmark-inc-v-allcare-management-systems-inc/ (last visited Nov. 14, 2013).

[2] Petition for a Write of Certiorari at 30, Highmark Inc. v. Allcare Health Management Systems, Inc., 687 F.3d 1300 (Fed. Cir. 2012) (No. 12-1163), 2013 WL 1209137, at *30.

[3] Id.

[4] Robert P. Merges, John F. Duffy, Patent Law and Policy: Cases and Materials 26 (6th ed. 2013).

[5] Id.

[6] Cybor Corp. v. FAS Techs., Inc. 138 F.3d 1448 (Fed. Cir. 1998).

[7] Cybor Corp., 138 F.3d at 1475.

[8] Id. at 1476.

[9] See Robert P. Merges, Peter S. Menell & Mark A. Lemley, Intellectual Property in The New Technological Age 295-98, 310-11 (6th ed. 2012).

[10] Jonas Anderson, Oral Argument Recap: Lighting Ballast Control v. Philips, PATENTLYO (Sept. 13, 2013, 3:51 PM), http://www.patentlyo.com/patent/2013/09/oral-argument-recap-lighting-ballast-control-v-philips.html

[11] Id.

[12] Id.

[13] Id.

[14] Id.

[15] Id.

[16] Markman v. Westview Instruments, Inc., 517 U.S. 370, 372 (1996).

Navigating the Bitcoin Minefield: Legal Considerations for Venture Capitalists

By:  Ashley Jacoby

This October a Norwegian man made international headlines after he reportedly opened his wallet and discovered an unexpected $850,000.[1]  Four years ago, Kristopher Koch decided to invest approximately $22 in the virtual currency Bitcoin while researching encryption online.[2]  In April 2013, extensive media coverage on this trending peer-to-peer digital currency reminded Koch of his otherwise forgettable investment.[3]  Although Koch struggled to remember the e-password for his encrypted Bitcoin wallet, his efforts paid off; his small investment in 5,000 coins in 2009 enabled Koch to buy an upscale apartment in Osolo with a fraction of his earnings.[4]

Bitcoin is an electronic form of currency designed to decrease transaction costs third party’s employ to offset processing and mediation expenses.[5]  Bitcoin is neither regulated by a centralized authority, nor backed by any real asset.[6]  Instead, an open source algorithm run over the Bitcoin network generates the system’s currency—the aptly named “Bitcoin”—in a process called “Bitcoin mining.”[7]  The process of mining requires many users to connect their computers to the network in order to solve complex cryptographic tasks and uncover buried coins.[8]  Bitcoins can thereafter be traded, bought, or sold to a third party in exchange for real money, or a user may directly transfer the coins online as payment for goods and services.[9]  Given the glamour and ease in which Koch obtained his fortune in Bitcoin, it is not surprising that venture capitalists have continued to invest.[10]  A recent decision in a federal case from Texas—holding bitcoin is in fact currency just like the US Dollar—has even helped Bitcoin branch out into the business world.[11]  However, before potential investors reach for their actual wallets, they may want to consider Bitcoin’s future legal status and its connection to illegal activities.

For instance, following a large-scale FBI bust this fall, authorities learned that the Silk Road—one of the most infamous online marketplaces for drugs and illegal merchandise—generated more than 9.5 million bitcoins, or approximately $1.2 billion, in sales.[12]  Silk Road drug traffickers accepted bitcoins in exchange for their illegal products online, and thereafter anonymously mailed the goods to customers.[13]

Furthermore, recent reports indicate the Bitcoin network is vulnerable to attack from cyber thieves.[14]  Hackers have installed “malicious software” on the network that seeks out and empties bitcoin owner’s virtual wallets.[15]  One phishing gang successfully robbed an owner of thirty-four coins in a malware attack.[16]  With shares at a high of $260, the owner’s loss was not unsubstantial.[17]  

Moreover, scientists at Cornell University have argued that Bitcoin’s susceptibility to a “selfish attack” indicates the system is broken.[18]  The system assumes members honestly report network activity; a mining group that fails to inform the community that it has solved a cryptographic puzzle could, in theory, take over Bitcoin by progressing to the next puzzle while the rest of the community searches through an empty mine.[19]

In addition to Bitcoin’s obvious association with illegal activity, doubts about the system’s legitimacy and its sustainability have created a volatile market. For instance, following the FBI shut down of the Silk Road, bitcoin shares dropped dozens of dollars in one day.[20]  On another occasion, the Bitcoin market saw fluctuation after the SEC charged a Texas man with raising 700,000 bitcoin, or $4.5 million, from investors in an online Ponzi scheme.[21]

Thus, as the Bitcoin system is currently ripe for criminal abuse, the status of the digital currency is unlikely to remain in a legal gray area for long. With legal scholars arguing both for and against the continued use of the Bitcoin system, and very little case law or statutory framework on-point, investors should be mindful to consider both the legal and financial implications of investing in Bitcoin so early in this legal minefield.

 


[1] $22 Bitcoin Investment Brings Norwegian Man Fortune, BBC, http://www.bbc.co.uk/news/world-europe-24737671 (last updated Oct. 29, 2013, 18:00 ET).

[2] Id.

[3] Man Buys $27 of Bitcoin, Forgets About Them, Finds They’re Now Worth $886k, theguardian (Oct. 29, 2013, 10:07 EDT), http://www.theguardian.com/technology/2013/oct/29/bitcoin-forgotten-currency-norway-oslo-home.

[4] Id.

[5] Derek A. Dion, I’ll Gladly Trade You Two Bits on Tuesday for a Byte Today: Bitcoin, Regulating Fraud in the E-conomy of Hacker-Cash, 2013 U. Ill. J.L. Tech. & Pol’y 165, 167 (2013).

[6] Id.

[7] Andrew Byre & Will Hallatt, Bitcoin or Bitcon?, 18 No. 8. Cyberspace Law. 13 (2013).

[8] Bitcoin at Risk of Network Attack, Say Researchers, BBC, http://www.bbc.co.uk/news/technology-24818975 (last updated Nov. 5, 2013, 7:21 ET).

[9] Byre & Hallatt, supra note 7.

[10] See Wanfeng Zhou & Nick Olivari, Bitcoin Buzz Grows Among Venture Investors, Despite Risks, reuters (Oct. 1, 2013, 7:47 PM), http://www.reuters.com/article/2013/10/01/us-markets-forex-bitcoin-idUSBRE9901HA20131001.

[11] Sec. & Exch. Comm’n v. Shavers, 4:13-CV-416, 2013 WL 4028182 (E.D. Tex. Aug. 6, 2013).

[12] Noel Randewich, Bitcoin Sinks in Value After FBI Busts Silk Road Drug Market, reuters (Oct. 2, 2013, 5:06 PM), http://www.reuters.com/article/2013/10/02/net-us-crime-silkroad-bitcoin-idUSBRE99113A20131002.

[13] Id.

[14] Cyber Thieves Target Bitcoin Owners, BBC, http://www.bbc.co.uk/news/technology-22120833 (last updated Apr. 12, 2013, 6:01 ET).

[15] Id.

[16] Id.

[17] Id.

[18] Bitcoin at Risk of Network Attack, Say Researchers, supra note 8.

[19] Id.

[20] Randewich, supra note 12.

[21] Sarah N. Lynch, SEC Says Texas Man Ran Bitcoin Ponzi Scheme, NBC NEWS (Jul. 23, 2013, 6:36 PM), http://www.nbcnews.com/business/markets/sec-says-texas-man-ran-bitcoin-ponzi-scheme-f6C10722287.

IBM Accuses Twitter of #PatentInfringement

By: Kelly McIntosh

In the days leading up Twitter’s initial public offering (IPO) , a lawsuit was bound to arise.[1] IPO’s are “the first sale of stock by a private company to the public.”[2] The theory is that a company being sued and approaching their IPO date, would want “minimize risks” and possibly settle, which is great news for a claimant since a profit is almost guaranteed. [3]

On November 7, 2013, Twitter released stock to the public at $26 per share.[4] Only days prior, International Business Machines Corporation (IBM) accused Twitter of three patent infringements.[5] The first is the “efficient retrieval of uniform resource locators” patent.[6] This is what allows URLs to be shortened.[7] Second is a patent for how Twitter helps users find people to follow by using the person’s email contacts.[8] This patent is called the “programmatic discovery of common contacts.”[9] Lastly, is the patent of a “method for presenting advertising in an interactive service.”[10]

Patent infringement occurs when “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent.”[11] Patent infringement does not need to be intentional.[12]

When deciding whether a patent has been infringed upon, a court will take a two-step analysis: “First, the claim must be properly construed to determine its scope and meaning.[13] Second, the claim as properly construed must be compared to the accused device.”[14] The entity claiming patent infringement must prove by a preponderance of evidence that “the asserted claim is found in the accused product,” or that there is a substantial equivalency.[15] Substantial equivalency is found if a product “performs substantially the same function in substantially the same way to achieve substantially the same result.”[16]

IBM may have the upper hand in this battle because it is a much larger tech company than Twitter and it makes over one billion dollars yearly in patent licensing.[17]  This infringement attack from a major company may be a first for Twitter.[18] Also, Twitter admitted that it is not an expert in dealing with patent lawsuits.[19] In an amendment to its latest filing with the Securities and Exchange Commission (SEC), Twitter believes it has “meritorious defenses” to the claims being made by IBM, but that there is no assurance to stock holders that it will be successful in defending these claims.[20] Two of the patent infringement claims made by IBM look broad and “general,” while the other looks like it could be used to sue any “ad network,” including “Google or Facebook.”[21] Although Twitter has not talked about making a settlement and IBM has yet to file a lawsuit, IBM hopes to work out a “business resolution,” through negotiations.[22]

IBM’s closing comments to Twitter about an out of courtroom meeting and negotiations, make it seem like IBM is employing a common strategy used to make a profit by allowing Twitter to feel at risk. Twitter could get lucky this time because it looks like IBM doesn’t intend to take this all the way into a courtroom. But Twitter will need to become familiar with patent lawsuits as it allegedly has new technology that it will be releasing in the near future.[23]

 



[1] Dan Levine, In Patent Showdown, IBM’s Arsenal dwarfs Twitter’s, Reuters (Nov. 4, 2013, 4:36 PM), http://www.reuters.com/article/2013/11/04/us-twitter-patents-idUSBRE9A30ZW20131104?feedType=RSS&feedName=technologyNews.

[2] Initial Public Offering Definition, Investopedia.com, http://www.investopedia.com/terms/i/ipo.asp (last visited Nov. 15, 2013).

 [3] Levine, supra note 1.

 [4] Twitter, Twitter (Nov. 6, 22013, 5:48 PM), https://twitter.com/twitter/status/398235511254298624

 [5] Michael Passingham, Twitter Embroiled in IBM Patent Feud but Pre-IPO Share Price Rises, V3 (Nov. 4, 2013), http://www.v3.co.uk/v3-uk/news/2304857/twitter-embroiled-in-ibm-patent-feud-but-pre-ipo-share-price-rises.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

[10] Id.

[11] 35 U.S.C.A. §271(a) (2010).

[12] John F. Duffy and Robert P. Mergers, Patent Law and Policy: Cases and Materials 749 (6th ed. 2013).

[13] Wolverine World Wide, Inc. and Brooks Shoe, Inc. v. Nike, Inc., 38 F.3d 1194, 1196 (1994).

[14] Id.

[15] Id.

[16] Id.

[17] John Koetsier, IBM vs. Twitter: IBM says Twitter Infringes its Patents, Venture Beat (Nov. 4, 2013, 7:53 AM), http://venturebeat.com/2013/11/04/ibm-vs-twitter-ibm-says-twitter-infringes-its-patents/.

 [18] Mike Isaac, IBM Hits Twitter with Patent Infringement Claims Ahead of IPO, All Things D (Nov. 4, 2013, 6:34 AM), http://allthingsd.com/20131104/ibm-sues-twitter-for-patent-infringement-ahead-of-ipo/.

[19] Aaron Elliot, IBM Says Twitter Infringes on 3 of Its U.S. Patents, Social Media Today (Nov. 11, 2013), http://socialmediatoday.com/socialbarrel/1901886/ibm-says-twitter-infringes-three-its-us-patents.

[20] Passingham, supra note 5.

[21] Koetsier, supra note 9.

[22] Twitter Faces Patent Infringement Lawsuit from IBM, Electronista (Nov. 4, 2013), http://www.electronista.com/articles/13/11/04/legal.dispute.noted.in.ipo.filings/.

[23] Tim Parker, IBM Accuses Twitter of Patent Infringement (IBM, TWTR), Benzinga (Nov. 5, 2013, 7:44 AM), http://www.benzinga.com/news/13/11/4050809/ibm-accuses-twitter-of-patent-infringement-ibm-twtr.