Vogel Internet, Information Technology and e-Discovery Blog : Texas Internet, Information Technology, eCommerce & E-Discovery Lawyer & Attorney Peter S. Vogel : Gardere Wynne Sewell Law Firm : Dallas TX

Special Masters can help Judges and parties in eDiscovery disputes and also reduce the cost of litigation. Also managing eDiscovery can be improved by using eMediators who can help simply eDiscovery disputes and reduce motion practice. My recent article in the Texas Lawyer discusses some of the benefits of eMediation and Special Masters in eDiscovery. Over the past 20 years I have served as a Mediator and Special Master in computer technology and Internet lawsuits, and since there is electronic evidence in every case my experience is that Mediation conference and using Special Masters can make eDiscovery less expensive.

Court Ruled that Special Master in Anna Nicole Smith Abused Trial Court’s authority

A California defendant challenged Texas jurisdiction, but the Judge had not determined if the Court even had jurisdiction, as a result the trial court violated the Texas Special Master appointment Rules by authorizing the Special Master to get the defendant’s hard drive and conduct a a complete search. This was the second time that the same appellate court ruled that the trial court exceeded its authority to appoint a Special Master in this high profile case. There are always limits on the authority of what a Special Master can do in a case which should be spelled out in the Order Appointing the Special Master. Notwithstanding the outcome in this case surely we will see more cases with Special Masters since there is so much electronic evidence.
 

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Growth at Facebook has been unbelievable and not a surprise that its user rolls will get to 500 million, but last fall a childhood friend died, and a few months later I was taken aback after Facebook asked me to post on his wall. Since so many new Facebook users are grandparents and over 60 more and more Facebook members will be dying sooner rather than later. A recent article questioned how Facebook determines that some members have died so they can be removed from Facebook, or whether pages should be saved as a memorial. Interesting issue, but then again, if members are never deleted how can one be sure that there are really 500 million members… once someone joins Facebook maybe they stay forever.

On Facebook, Telling Teachers How Much They Meant

One nice benefit of Facebook and Social Media is the ability to find old friends, and a recent article in the New York Times told the story of a 49 year woman who found her high school teacher on Facebook. This teacher apparently had a significant impact on the student’s life and former student spent years searching the Internet to find the old teacher. Social Media allowed this connection to take place.

Do You Have a Phone Book?

A couple of years ago an older woman was lost in my neighborhood, so she stopped me to ask for directions. Unfortunately she did not have an address, only a name so she asked me to look in my white pages. She seemed amazed that I didn’t have any white pages, let alone yellow pages. The Internet has changed so much, it seems like not all that long ago people looked in phone books to find people, and now most of us rely on the Internet and don’t have white pages or yellow pages. Without question Social Media is transforming communications even more…stay tuned for more change.

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Purportedly Facebook CEO Mark Zuckerberg gave the original web designer 84% of the company and a New York Judge issued the designer’s TRO (Temporary Restraining Order) which has been challenged by Zuckerberg and Facebook. Paul Ceglia’s lawsuit alleges that he was paid $1,000 by Zuckerberg for 50% of the company, plus 1% per business day from January 1, 2004 until till the website was completed. Although New York Judge Thomas Brown issued the TRO, Facebook requested that the case be moved to federal court. Why Ceglia waited this long is unclear since he and his lawyer are not responding to the media, but now that Facebook has an estimated 500 million users and is worth more than $11.5 billion I guess claims of ownership are not a big surprise. However, in New York the statute of limitations on contract breaches are 6 years so Ceglia probably will lose on that issue alone.

What’s The Standard for Issuing Injunctive Relief?

It does seem strange that a TRO was issued because in order to prove to a Judge that a TRO should be issued there needs to be evidence of imminent and irreparable harm to the moving party, and it seems strange that Ceglia could have carried that burden. Also to get an injunction one must prove that money damages won’t suffice and there is no other remedy available, and in this instance it seems that money damages would suffice and there are other remedies. Of course an interesting wrinkle to this case is that the Wall Street Journal reported that about Ceglia:

In 2009, New York's Attorney General Andrew M. Cuomo accused Mr. Ceglia of defrauding customers of his wood-pellet fuel company, according to a news release from the Attorney General's office. The state claimed that he took more than $200,000 from consumers and then failed to deliver any products or refunds. The wood-pellet case is ongoing.

This will be interesting litigation to follow. Stay tuned

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At the same time Lady Gaga takes over the Social Media spotlight from the President, Prince announces that the Internet is nowhere and his next album will only be a CD. No surprise what Lady Gaga is doing since “Gaga’s Facebook fans organized “National Lady Gaga Day.” The accompanying Event had more than 100,000 attendees.” So I guess Prince has missed this big picture altogether since Prince proclaimed “all these computers and digital gadgets are no good. They just fill your head with numbers and that can't be good for you." Hard to imagine that the formerly known music star can be so far off base. Given all the negative impact from the proposed Presidential “Internet Kill Switch” it seems to me that the economy of the world would suffer by shutting down the Internet. Culture today depends on a vibrant Internet, and I guess it makes more sense to follow Lady Gaga rather than Prince….not too hard to figure out!

Music Infringement Verdicts Reduced

At the same time Lady Gaga sets the gold standard and Prince doesn’t get it, Judges are reducing jury verdicts for music Copyright infringements significantly. After a second Recording Industry Association of American (RIAA) trial against Jammie Thomas-Rasset’s for Copyright infringement, a jury ruled that the damages were $1.92 million for distributing 24 songs. US District Judge Michael Davis reduced the verdict to $54,000 ($2,250 per song) in January, 2010. Earlier this month US District Judge Nancy Gertner reduced the jury verdict against Joel Tennebaum by 90% ruling that $22,500 per song infringement that there “is no question that this reduced award is still severe, even harsh.” In the trial against Tennebaum, a Ph.D. student at Boston University, the RIAA proved that he downloaded 30 online songs. Judge Gertner wrote:

It not only adequately compensates the plaintiffs for the relatively minor harm that [Joel] Tenenbaum caused them; it sends a strong message that those who exploit peer-to-peer networks to unlawfully download and distribute copyrighted works run the risk of incurring substantial damages awards.

My experience in copyright infringement litigation is that proving damages is not simple. Each case is unique, so the jury must make a determination how willful the infringement is, and then can penalize an infringer up to $150,000 per infringement. Courts will continue to grapple with Copyright infringement constitutional size of damages.  The Tennebaum and Thomas-Rasset cases are important to help understand how juries and judges value online music. Perhaps Prince should spend more time with Social Media so he can get with it, because otherwise he may disappear entirely!

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Google plans to buy ITA Software who provides airline travel utilities to American, Continental, Hotwire, Kayak, Orbitz, Microsoft's Bing, among other companies. Of course this purchase for $700 million will require federal scrutiny given the antitrust implications, but as my friend Erika Morphy reports “Google says it plans to honor all the agreements the firm has with its customers and does not intend to sell airline tickets. Instead, CEO Eric Schmidt said, the company plans to build new flight and fare search tools for travelers.” Google’s attempt to take control over the travel industry is an interesting evolution, but one must wonder if the acquisition of ITA Software will give monopoly power in the travel space to Google.

Google Reviewing My Final Exam Questions?

Since 2000 I have taught courses on the Law of eCommerce at the SMU Dedman School of Law and Google must have gotten the idea about taking over the travel industry from my 2008 Final Exam:

Google hired you to give e-Commerce business advice immediately after announcing that Google bought Microsoft, Oracle, SAP, IBM, Symantec, Adobe, AOL, Amazon, Yahoo!, American Airlines, Delta Airlines, United Airlines, US Air, Southwest Airlines, British Air, Cathay Pacific Air, China Air, Korean Air, Japan Airlines, Airbus, Boeing, Hilton Hotels, Marriott, Starwood, Hyatt Hotels, Hotels.com, Orbitz, and Travelocity. The combined company plans to operate from one main website located at www.google.com.

The government agencies that regulate each of these companies have not approved these mergers, regardless Google intends to begin the new website located at www.google.com  on January 1, 2009.

Assume that each of the acquired entities will continue conducting business in their current field of business.

(1) TERMS OF SERVICE. Write one set of terms of service that will apply to www.google.com.
(2) PRIVACY POLICY. Write one privacy policy that will apply to www.google.com.
(3) ASSUMPTIONS: State all assumptions.

Google got the idea from me. Right? What do you think?
 

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Tweets a plenty were posted announcing that Wikipedia and LinkedIn were down, but one tweet wondered what would happen if Twitter also went down! We are so dependent on these Social Media tools that when these sites go down the communications also disappears….except probably text messages, phone calls, or even face-to-face conversations. If Social Media sites going down for a short time cause shock waves just image what would happened if the President flipped the “Internet Kill Switch?” Or if a Cyber War totally disabled the Internet and Social Media? These events only re-enforce how vulnerable the Internet is and how critical it is that our government does everything possible to protect the Internet.

We All Know that Computers Will Fail

After working with computers for more than 40 years one thing is absolutely clear to me, every computer will fail since that is the inherent design…that is, every component will fail at some point since each component has a mean time between failure. So Internet system designers take into account system failures to avoid Internet down time, or at least minimize down time. Because of the nature of computer technology and its inherent design that they will fail it’s not really much of a surprise that Wikipedia, LinkedIn, and other Social Media sites are reported down from time to time. However we have become so dependent upon Social Media that we are all at a loss about how to communicate during down times!

Good News - More US Broadband

Recent reports announced “that $795 million in grants and loans for broadband deployment projects across the US in all 50 states from the National Telecommunications and Information Administration (NTIA) and the US Department of Agriculture's Rural Utilities Service (RUS). The Texas Department of Agriculture recently announced that “More than 96 percent of Texas households have access to home broadband service; however, a quarter of a million households in the Lone Star State - more than all of the households in Vermont - lack access to this critical service.” However if that were really true then it’s unlikely that the NTIA and RUS would be spending so much money. Rural Texas and US do not have broadband services as I know my own personal experience in central Texas, just check the ConnectedTexas.org website to see. We will have 100% broadband coverage in the US someday, and it’s great that the federal government is helping expand broadband.

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Without much public fanfare recently a Senate Committee unanimously approved the bill dubbed “Internet Kill Switch,” which among other things would allow the President to take over civilian networks in case of an emergency. The Homeland Security and Governmental Affairs Committee unanimously approved the Protecting Cyberspace as a National Asset Act of 2010 (S. 3480) and now moves to the Senate floor for a full vote. Given our economic dependence on the Internet and the amount of energy devoted defending major cyber attacks one might wonder if a more public debate would be wise. Many Internet based companies I represent would simply cease to exist if the President hit the “Internet Kill Switch”!

Who Supports the “Internet Kill Switch”?

Microsoft, Verizon, EMC, Symantec, and others support the proposed law, so there must be something to the proposed Act.  You can be your own judge by reviewing the Senate Committee’s report entitled “Myth v. Reality of Cybersecurity Legislation.” Whether the proposed Act is best for the US is still in debate, however given threats of Cyber War to the Internet something must be done to protect the Internet.

Senator's Interview about the “Internet Kill Switch”

Sponsor of the proposed Act Senator Lieberman recently told CNN’s Candy Crowley about the whether the proposed Act was an “Internet Kill Switch”:

… total misinformation. I don't know whether people are intentionally pedalling misinformation. Here is the fact. Cyber war is going on in some sense right now. Our civilian infrastructure, the Internet that runs the electric grid, the telecommunications grid, transportation, all the rest is constantly being probed by nation states, by some terrorist groups, by organized criminal gangs.

And we need this capacity in a time of war. We need the capacity for the president to say, Internet service provider, we've got to disconnect the American Internet from all traffic coming in from another foreign country, or we've got to put a patch on this part of it.

The president will never take over -- the government should never take over the Internet. Listen, we've consulted, Senator Collins and I, who are proposing this bill, with civil liberties and privacy experts. This is a matter of national security. A cyber attack on America can do as much or more damage today by incapacitating our banks, our communications, our finance, our transportation, as a conventional war attack.

And the president, in catastrophic cases -- not going to do it every day, not going to take it over. So I say to my friends on the Internet, relax... take a look at the bill. And this is something that we need to protect our country. Right now, China, the government, can disconnect parts of its Internet in a case of war. We need to have that here, too.

Seems pretty clear to me that we need public debate and scrutiny of Cyber protection since our culture has become so dependent on the Internet.

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President-Elect Obama’s Twitter account was hacked “offering his more than 150,000 followers a chance to win $500 in free gas.” Twitter settled the FTC’s charges that “that it deceived consumers and put their privacy at risk by failing to safeguard their personal information, marking the agency’s first such case against a social networking service.” In my recent testimony before the Texas Senate I highlighted the problem with violating FTC privacy laws, and obviously this is just the beginning of Social Media claims that we will all deal with about Internet privacy.

FTC Settlement Terms

Here’s what Twitter agreed to as part of its settlement:

Twitter will be barred for 20 years from misleading consumers about the extent to which it protects the security, privacy, and confidentiality of nonpublic consumer information, including the measures it takes to prevent unauthorized access to nonpublic information and honor the privacy choices made by consumers. The company also must establish and maintain a comprehensive information security program, which will be assessed by an independent auditor every other year for 10 years.

Twitter Adds Location to Messages

Recently Twitter announced that it would allow “users tag their messages with their location.” So given the FTC settlement it seems that adding location would seriously impact privacy if one can easily learn when the tweets are originating.

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Viacom lost its $1 billion lawsuit against Google and YouTube for alleged copyright infringement when a judge granted summary judgment. YouTube’s defense was that it used the “safe harbor” protection of the Digital Millennium Copyright Act (DMCA) where YouTube would remove allegedly infringing videos after being notified, and after three offenses a poster would be banned from YouTube. On June 23, 2010 US District Judge Louis Stanton granted YouTube and Google’s motions in defense of claims brought by Via and other plaintiffs. In the 30 page Opinion Judge Stanton pointed out that “over 24 hours of new video-viewing time is uploaded to the YouTube website every minute.”  I know that YouTube is responsive to the DCMA takedown requests because YouTube has removed videos which have infringed copyrights of my clients.  The DCMA takedown procedures rules are part of YouTube's Terms of Service.

Viacom to Appeal

Viacom plans an appeal, but at this moment this appears to be a monumental ruling for Google and YouTube which helps define Copyright law on the Internet. As a trial lawyer my experience is that Judges rarely grant summary judgment (there are no facts in dispute, and the moving party wins on the law without a trial).  It is more likely than not that Google and YouTube will prevail on the appeal since the trial Judge granted summary judgment.  This case is important given size of YouTube and its role in changing Social Media.

YouTube Turns 5

When YouTube celebrated its fifth birthday in May, 2010 it announced that it passed “two billion video views a day.” YouTube has perennially lost money so there were many analysts who criticized Google’s $1.65 billion purchase of YouTube in 2006, which was made worse when Viacom brought its Copyright infringement lawsuit in 2007. YouTube has been developing partnerships with music labels to compete with "Hulu.com, the joint venture of Fox, NBC and ABC." So Judge Stanton’s Order should help clear Google and YouTube’s path for success and bring clarify about the DMCA.

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