Inside Tech Media | Internet & Telecommunications Law

BYOD’s Rapid Growth Presents New Legal Challenges

By Jeff Kosseff on May 2, 2013 Posted in Privacy & Data Security, Telecommunications

Companies are increasingly allowing employees to access work email and apps on their personal devices, according to a new Gartner survey of chief information officers. But employers confront many tough policy and legal questions when they adopt Bring Your Own Device (“BYOD”) programs.

Thirty-eight percent of the CIOs said that their organizations will stop providing laptops, smartphones, and tablets to workers by 2016. Those employees will have to access work networks via their personal devices through BYOD programs. Forty-five percent of the CIOs expect to require BYOD by 2020.

“Everybody in every industry is looking at how they can leverage the Bring Your Own Device program,” David Willis, Gartner’s Chief of Research for Mobility and Communications, stated on a web conference today.

According to the survey, employers in the United States and Asia-Pacific region lead BYOD adoption, while Europe lags behind.

BYOD programs present substantial savings for employers, Willis said. Although employers typically reimburse employees for part of their monthly smartphone bills, those payments are not nearly as high as the costs of employer-issued devices, he said. Additionally, he noted that many employers offer BYOD programs to meet the “incredibly employee demand for using the device they prefer in work.”

Before offering BYOD, Willis said, employers should carefully examine all legal implications, including the taxation of device stipends, whether labor laws prohibit hourly employees from responding to work emails after-hours, and data security and privacy laws. In particular, Willis noted that employees must be aware that if litigation arises, the employees may be required to turn over their devices during discovery.

Future Fifty: A UK Initiative to Help High-Growth Companies

By Matthew Edwards on May 2, 2013 Posted in Transactions, Uncategorized

By Matthew Edwards and Jacqueline Clover

Last month, we blogged about the launch of the London Stock Exchange High Growth Segment. As part of another programme of measures to support UK and EU start-ups, Future Fifty, a new fast-track programme for businesses, was announced by Chancellor George Osborne on 25 April 2013 and aims to help 50 high-growth companies develop so that they can successfully list in the UK.

Future Fifty has been developed in partnership with the Tech City Investment Organisation. To apply, a UK, EU or UK-controlled foreign business needs to have been trading for at least 24 months and must demonstrate revenue growth of at least 100 per cent. each year.

Timely Delivery Regulations May Soon Apply to Online Sales

By Jeff Kosseff on May 1, 2013 Posted in Transactions

In a draft report released this week, the Federal Trade Commission staff recommended that the Commission require online merchants to adhere to the same timely delivery requirements as mail- and telephone-based retailers.

In 1975, the FTC began requiring mail- and telephone-order merchants to ship their products within the advertised time frame. If the merchant does not specify a time frame, the merchant must ship the goods within 30 days. If the retailer cannot ship the goods on time, it must offer the customer a refund.

In the report issued on Monday, the FTC staff noted that there is widespread support for treating Internet orders in the same way as the FTC regulates mail and phone orders. “Explicitly covering all Internet order sales regardless of means of access would meet buyers’ expectations that their legal protections are independent of their means of Internet access,” the staff wrote.

The FTC staff is taking public comment before it makes its final recommendations to the Commission. Comments are due on July 15, and may be filed on the Commission’s website.

First Amendment Does Not Protect Hackers’ Identities, NJ Court Holds

By Jeff Kosseff on April 25, 2013 Posted in Privacy & Data Security

The First Amendment does not protect the identities of computer hackers, a New Jersey appellate court held this month.

Warren Hospital alleges that two anonymous individuals hacked into its web and email servers and sent inappropriate and defamatory messages to all hospital employees. The hospital and some employees filed a civil action against the John Doe defendants for defamation and other torts. To obtain the true identities of the defendants, the plaintiffs subpoenaed four Internet Service Providers. The anonymous defendants moved to quash the subpoena under the First Amendment.

To decide the motion to quash, the state trial court applied a four-part qualified First Amendment analysis, known as the Dendrite test, which considers whether the plaintiffs identified the defendant with sufficient specificity, whether the plaintiffs made a good-faith effort to serve the defendants, whether the suit can withstand a motion to dismiss, and whether the discovery will likely lead to identifiable information that will enable service of process. Applying these factors, the trial court quashed the subpoenas.

The New Jersey Appellate Division reversed the trial court’s decision, concluding that Dendrite does not apply because this case involves hacking. The appellate court stated that the anonymous defendants’ alleged actions were “no different than if they had broken into the hospital and spray painted their messages on the hospital’s walls.” The court rejected the argument “that those who engage in this type of conduct are entitled to cling to their anonymity through a strict or overly-formulaic application of the Dendrite test.”

This ruling is particularly noteworthy because the New Jersey Appellate Division developed the Dendrite test in a 2001 decision, Dendrite Int’l, Inc. v. Doe No. 3. Since then, many state and federal courts nationwide have adopted the Dendrite test when considering motions to quash subpoenas for identities of anonymous defendants.

ZTE Signs Android Licensing Deal With Microsoft

By Joanne Sum-Ping on April 25, 2013 Posted in Intellectual Property, Telecommunications, Transactions

On Tuesday, Microsoft announced a deal with ZTE under which ZTE will license Microsoft’s worldwide patent portfolio for use in cell phones, tablet computers, and other devices running the Android and Chrome operating systems. Although the terms of the ZTE deal were not released, Microsoft’s agreements with other device manufacturers have required a royalty payment to Microsoft for each Android or Chrome device manufactured. The announcement follows a similar deal reached last week between Microsoft and Hon Hai (the parent company of Foxconn, which manufactures Android devices for multiple clients), bringing the total the number of device makers who have signed patent deals with Microsoft up to 20. According to Microsoft, 80% of Android phones sold in the U.S. and the majority of those sold worldwide are now covered by licensing agreements with Microsoft.

Online Sales Tax Legislation Advances in the U.S. Senate

By Elizabeth Bell on April 24, 2013 Posted in Uncategorized

Last night, a substantial majority of Senators voted to end debate and thus to advance the Marketplace Fairness Act, a bill that would allow states to require “remote” retailers to collect sales taxes on purchases “sourced to” that state. The bipartisan 74–20 vote suggests that the bill will likely pass the Senate. The bill’s fate in the House of Representatives, however, remains uncertain.

The version of the bill voted on yesterday would require a state to meet certain “simplification” criteria before it could collect taxes from remote retailers, such as providing a single tax return to be filed with a single entity responsible for all sales tax administration. A state that meets the simplification criteria could require remote retailers to collect sales taxes for sales whose delivery location is in that state — or, if no delivery location is specified, the customer’s residence or billing address. The draft legislation provides an exception for “small sellers,” whose gross annual receipts from remote sales in the United States are $1 million or less.

Unlike some state statutes — such as the New York law we blogged about earlier this month — the Marketplace Fairness Act would treat all remote retailers equally, regardless of whether they use “affiliate” advertising programs and regardless of whether they make sales via the internet or mail order catalogs. Indeed, the issue predates widespread use of the internet: twenty years ago, the U.S. Supreme Court held that the federal Constitution prohibits a state from collecting sales and use taxes from retailers that lack a physical presence in the state. The Court emphasized, however, that “the underlying issue is not only one that Congress may be better qualified to resolve, but also one that Congress has the ultimate power to resolve.” Fittingly, the losing party in that case — North Dakota’s tax commissioner Heidi Heitkamp — now serves in the U.S. Senate, and yesterday evening cast her vote in favor of the bill.

Dustin Cho contributed to this report.

FCC Cracks Down For First Time on Mobile Jamming Device Use; Fines in the Six Figures

By Kara Azocar on April 17, 2013 Posted in Spectrum & Mobile, Telecommunications

Last week, the FCC for the first time proposed to fine companies for using mobile phone signal jamming devices. The FCC found that two entities, Taylor Oilfield Manufacturing, Inc. and The Supply Room, Inc., willfully and repeatedly imported and operated multiple illegal mobile phone signal jammers in the U.S. Although the FCC in the past had issued warnings against such conduct, as well as citations and fines for importing and marketing these devices, this was the first time the FCC resorted to fining users of these devices.

Signal jammers operate by transmitting powerful radio signals that overpower or interfere with authorized communications. Federal law prohibits the importation, operation, marketing, or sale of any type of signal jamming equipment, including devices that interfere with cellular and Personal Communication Services, police radar, GPS, and Wi-Fi communications in the U.S. According to the FCC, jammers not only impede authorized communications, they also disrupt public safety communications.

The FCC proposed to fine Taylor Oilfield $126,000 and Supply Room $144,000 for their violations, and warned that fines in the future may be higher.

Under the FCC’s rules, Taylor Oilfield and Supply Room have an opportunity respond to and contest the proposed fines by May 9, 2013.

FCC Adopts Rules Requiring Emergency Information Provided During Non-News Programming To Be Conveyed on Secondary Audio Stream

By Kara Azocar on April 17, 2013 Posted in Broadcasting & Cable

New rules adopted by the FCC require that when television stations in the U.S. display emergency information visually during non-news programming, they must provide the same information aurally on a secondary audio stream. The new rules do not change the requirement that emergency information provided visually during newscasts be conveyed aurally on primary audio.

The new rules apply only to programming shown on television and not to online video. And these requirements do not apply to emergency alerts delivered via EAS, but if a station uses information provided via EAS to generate its own crawl, that crawl is subject to the audio conveyance requirement. The entity that creates the visual emergency information content is the party responsible for providing an aural representation of the information on the secondary audio. Specifically, that entity must:

play a tonal alert at the same time in the main program audio, customarily three high-pitched tones, when emergency information is provided visually during non-news programming.
repeat the emergency information provided aurally on the secondary audio stream at least twice in a row.
interrupt and supersede any other secondary audio programming for the emergency information, including any otherwise-required video description.
have two audio streams, but the secondary audio stream is not required to be dedicated to emergency-only audio.
communicate the aural information accurately and effectively such that visually impaired customers receive the critical details about a current emergency and how to respond to the emergency, including providing descriptions of graphic displays such as maps. Verbatim aural translation of textual emergency information is not required.

Stations may use any method to provide an aural rendition of textual emergency information, including text-to-speech (TTS). The compliance deadline for the new requirement is two years from the date the rules are published in the Federal Register. The FCC declined to adopt a technical capability exception to the rule, but stations may seek a waiver for good cause.

Michigan Court Rejects First Amendment Balancing Test for Online Anonymous Speech

By Jeff Kosseff on April 8, 2013 Posted in Privacy & Data Security

A Michigan appellate court ruled last week that state discovery rules provide adequate safeguards for anonymous online speech. The opinion is a significant deviation from the rulings of other state courts, which have applied a First Amendment balancing test to determine whether to grant discovery requests for the identities of anonymous online speakers.

Thomas M. Cooley Law School sued several defendants for allegedly defaming the school online and issued subpoenas for their identities. Defendant John Doe 1, who operated a website about the law school, sought a protective order and moved to quash the subpoena to his Internet service provider. The trial court applied a First Amendment balancing test, first articulated by state appellate courts in New Jersey and Delaware, that considers factors including (1) whether the defendant is a person or entity who could be sued, (2) whether the plaintiff made a good-faith effort to serve the defendant with process, (3), whether the lawsuit could withstand a motion to dismiss, and (4) whether there is a reasonable likelihood that discovery would uncover information that would allow service of process. Under this analysis, the state trial court denied the motion to quash and denied the protective order.

InsideTechMedia

Updates on Developments in Global Privacy & Data Security