February 25, 2014
In January of this year, the California Attorney General obtained $150,000 settlement, plus ongoing notification obligations, from a CA company that learned that one its computers had been sold at a thrift shop.
The ongoing obligations include a duty to: 1) notify employees as information becomes available, 2) train employees on additional methods to protect sensitive information, and 3) review and improve its policies regarding protecting sensitive information.
The CA AG’s enforcement action alleged that the company learned of the lost hard drive on September 24, 2011 and regained the drive on December 21, 2011. Within a week, forensic analysis determined employee personal information was contained on the drive. However, the company did not notify some 20,000 current and former affected by the disclosure until mid-March 2012, almost four(4) months later.
So, what is a reasonable time period to respond to a security breach and how fast does a company have to notify consumers or employees that a data breach has occurred?
Unfortunately, there is no “bright line” rule. Most state breach notification laws and, for that matter many Data/IT/Cloud contracts, require notification within a reasonable time frame, or “without delay”, subject to some qualifications. A couple of states require notification to occur no later than 45 days after discovery, there is not a bright-line, objective answer.
California’s law requires that: “The disclosure shall be made in the most expedient time possible and without unreasonable delay, consistent with the legitimate needs of law enforcement . . . or any measures necessary to determine the scope of the breach and restore the reasonable integrity of the data system.”
The key take away is that waiting several months after a forensic investigation to disclose the occurrence of a data breach to those affected is probably too long. Companies facing a data breach can and should take into account the legitimate needs of law enforcement and the requirements of forensic investigation. Within those parameters, a company is well-advised to begin the notification process even if it must reserve for itself the ability to conduct additional investigation and provide sole tang notification.
NOTE: This is not legal advice. Every situation is unique and if you or your company is dealing with a data breach or its consequences you should engage a qualified attorney.
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February 12, 2014
One of the key issues that must be examined when negotiating or drafting any contract is how the parties may get out of, or “terminate,” that contract. While many attorneys will rest on standard “termination for breach with notice and cure” language, the recent case of Powertech Tech. v. Tessera, Inc. demonstrates how artful drafting can put limitations on a party’s right to terminate. The Opinion in U.S. District Court for the Northern District of California case No. C 11-6121 can be found here.
Powertech and Tessera were parties to a patent license agreement, although the court’s reasoning does not seem limited to only those types of agreements. The license agreement allowed Powertech to use Tessera’s patents in exchange for payment of license fees.
The contract contained the following clause regarding termination for breach:
“Termination for Breach. Either party may terminate this Agreement due to the other party’s breach of this Agreement, such as failure to perform its duties, obligations, or responsibilities herein (including, without limitation, failure to pay royalties and provide reports as set forth herein). The parties agree that such breach will cause substantial damages to the party not in breach. Therefore, the parties agree to work together to mitigate the effect of any such breach; however, the non-breaching party may terminate this Agreement if such breach is not cured or sufficiently mitigated (to the non-breaching party’s satisfaction) within sixty (60) days of notice thereof.”
The court held that Powertech was not permitted to terminate a license agreement with Tessera for Tessera’s breach because Powertech itself was in breach of the agreement by its failure to pay royalties to Tessera.
Acknowledging Powertech’s argument that Tessera was itself in breach, that in and of itself did not give Powertech the right to terminate the contract. Only a “non-breaching” party may terminate the agreement. Said the court “[a]lthough the first sentence of the termination clause is broad – ‘Either party may terminate this Agreement due to the other party’s breach’ — the language of the clause as a whole makes clear that only a non-breaching party may terminate. Reading the clause as a whole, the court concluded “[t]he termination clause refers to a “breaching party” and a “non-breaching party” in every sentence after the first… [therefore]…the clause requires the party seeking to terminate for the other party’s purported breach to be substantially in compliance with its own obligations first.
The Powertech agreement’s termination clause is useful because it put conditions on a party’s ability to terminate the agreement even when the other party was in breach.
January 19, 2014
Digital media continues to befuddle courts and push traditional legal boundaries.
Originally posted on Gigaom:
When Montana blogger Crystal Cox lost her defamation case in 2011, the decision was greeted by a chorus of cheers from journalists, who were quick to argue that Cox wasn’t a journalist in any real sense of the word, and therefore didn’t deserve any protection from the First Amendment. An appeals court for the Ninth Circuit has disagreed, however: on Friday, a panel of judges overturned the original decision and said that Cox was in fact entitled to protection.
The implications of this ruling go beyond just a single defamation case. It’s another link in a chain of decisions that are gradually helping to extend the principle of free-speech protection beyond professional journalism to anyone who is publishing information with public value — and as such, it helps shift the focus away from trying to define who is a journalist and puts it where it should be: on protecting the practice of journalism, broadly defined.
Legislators who have been trying to design a “shield law” for journalists have been doing their best to specify who should be protected from government interference, but as journalism professor Jay Rosen and others have argued, it is the content itself that requires protecting, not some specific group of professional journalists who are able to fill in the correct checkboxes.
September 19, 2013
A presentation on what goes into creating original designs and how these differ from copycats.
WHERE: Decoration & Design Building, J. Robert Scott Showroom, Suite 220
WHEN: Wednesday, October 2,2013 !2 p.m.
WHAT: From film to fashion, creative industries are taking steps to protect and promote original work. Designers and manufacturers need to know what steps they can take to protect their designs, their businesses, and their profits. The discussion will address issues related to how to protect original design (copyright & design patent) and the manufacturers (trademark, unfair competition).
INTERIORS Magazine Editorial Director Michael Wollaeger
J. Robert Scott Founder Sally Sirkin Lewis
Designer Laura Kirar [Web Site]
Intellectual Property lawyer David Adler
Showroom reception to follow.
Download the full Fall Decoration & Design Building Market Brochure Here.
September 14, 2013
I’m always surprised when I see that a politician is being sued for copyright infringement. It actually happens more than I thought it would. Senator John MCain has been accused of using a song without permission at least five times. No, Senator, there is no Fair Use of some one else’s copyright work just because you are using it in connection with political speech (if one could even go so far as to make that argument.)
Ownership of copyright is still a mystery to Sarah Palin as well. On September 13, 2013, news broke that Sarah Palin and her political action committee SarahPAC are being sued by North Jersey Media Group Inc., publisher of The Record and Herald News. The lawsuit claims copyright infringing form use of a an iconic photo of firefighters raising the U.S. flag at the World Trade Center following the Sept. 11 attacks.
The lawsuit, North Jersey Media Group Inc. v. SarahPAC, 13-cv-06494, U.S. District Court, Southern District of New York (Manhattan) claims the image are posted on Palin’s Facebook page and her political action committee page, http://www.sarahpac.com
The photo, depicting three firefighters blackened by soot as they raise the flag while standing at ground zero, was taken by Record photographer Thomas E. Franklin. The U.S. Postal Service later sued the image on a stamp called “Heroes,” released in 2002.
Does your business use images for sales, marketing and promotional purposes. Contact me for a free consultation on how to identity, protect and commercialize your creative works or properly use the creative works of others. I can be reahced at (866) 734-2568 or http://www.lsglegal.com & http://www.ecommerceattorney.com.
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On October 2, 2013, I will be attending the Decoration & Design Building Fall Market where I am giving a presentatIon on protecting original furniture & textile designs. Those in attendance share a belief that style and design matter.
As designers and purveyors of good taste, you may spend months developing a concept, selecting materials, agonizing over the exact curve of the arm of a chair. Manufacturers may refine the design, invest in tooling to build it, promote it, and get it to market. Merchandise buyers may spend months reading, researching, attending events such as this to obtain and fill your showrooms and catalogue with ineffable elements of style. This is original, authentic design. Authentic designs—pieces produced by designers or their authorized manufacturers—are investments.
Therein lies the problem for today’s furniture designers and retailers. It takes intellectual and financial capital to conceive, create and produce good design. Yet, today’s consumer driven, price-focused economy is making it more and more difficult for a designer to protect and profit from the investment of this intellectual capital.
This presentation will focus on why certain designs are protectable, how to protect them, and how to defend against knock-offs.