At a time when #media creation & consumption is traveling across a growing number of devices, at increasing speeds, and without care for for borders whether physical, digital, or geographic, licensing, distribution and use of digital content can cause problems.
The case of Fastcase, Inc. v. Lawriter, LLC, Case No. 17-14110 (11th Cir. Oct. 29, 2018) (Tjoflat, J), involved a dispute between two legal publication service companies over the right to re-publish the Georgia Regulations.
The Declaratory Judgment defendant and presumptive rights owner had no enforceable copyright or contract rights in the Regulations. Defendant updated the terms so that unauthorized re-publication of the Regulations would result in liquidated damages of $20,000 per instance, which was relevant to the jurisdictional issues of whether § 411(a) is a jurisdictional bar.
From The National Law Review, source for this story: “Practice Note: A demand letter alleging infringement under the Copyright Act—or even alleging state law claims that would arguably be preempted by the Copyright Act—confers jurisdiction on a federal court to hear the recipient’s declaratory judgment action.”
As every CIO knows, today all business is digital business. From the corner mom and pop bodega using Square to process credit cards up to Cisco Systems global network of devices supporting Zetabytes of data over an increasing number of devices.
What began as largely static website e-commerce at the turn of the millennium is now every day operations across multiple devices and the many different brands of platform and content delivery network. In case you missed it, two recent cases will have a wide impact regardless of industry period
Law Enforcement Access To Cell Phone Location Data Requires Warrant
In the case of Carpenter v. United States, the Supreme Court ruled that law enforcement must obtain a warrant to have access to location and other data contained on a suspect’s cell phone. In case you’re not familiar with the case, the facts in the Carpenter case are worth mentioning. In 2011, the government, conducting a criminal investigation in Detroit, obtained months’ worth of time-stamped records known as cell-site location information (CSLI) for suspects. Wireless carriers produced CSLI for petitioner Timothy Carpenter’s phone, and the Government was able to obtain 12,898 location points cataloging Carpenter’s movements over 127 days—an average of 101 data points per day. Carpenter moved to suppress the data, arguing that the Government’s seizure of the records without obtaining a warrant supported by probable cause violated the Fourth Amendment. The District Court denied the motion, and prosecutors used the records at trial. Carpenter was convicted, based in part on the cell-site records, and he appealed. holding that the government’s acquisition of historic cell-site location information (HCSLI) – at least to the extent it includes 7 days or more of cell-site records – was a search and thereby required a warrant.
In reversing the conviction, a majority of the Court has recognized that individuals have a reasonable expectation of privacy in the whole of their physical movements and a warrant is required only in the rare case where the suspect has a legitimate privacy interest in records held by a third party. The Court downplayed the significance of its ruling, calling its decision “a narrow one” that “does not express views on “real-time CSLI” or question the application to … a range of other information-gathering tools, such as security cameras.”
What this means for business. While pundits are wisely praising the decision as a victory for privacy, I for one, do not believe it applies that broadly. Even so, there is a tangible benefit for corporate counsel at technology companies, especially those that maintain location information about their customers. Lawyers and compliance pros will feel some relief knowing that they do not have to scramble, prevaricate or litigate with law enforcement when a company receives a subpoena or other demand for location data without a warrant attached.
States Can Now Require That Internet Retailers Collect Sales Tax
The other notable decision to come down from the Supreme Court involves the long-simmering issue of state taxation on internet sales.
The decision, in South Dakota v. Wayfair Inc., was a victory for brick-and-mortar businesses that have long complained they are put at a disadvantage by having to charge sales taxes while many online competitors do not. And it was also a victory for states that have said that they are missing out on tens of billions of dollars in annual revenue.
The South Dakota Legislature enacted a law requiring out-of-state sellers to collect and remit sales tax “as if the seller had a physical presence in the State” to address the erosion of its sales tax base causing a corresponding loss of critical funding for state and local services (“Act”). The Act covers only sellers that, on an annual basis, deliver more than $100,000 of goods or services into the State or engage in 200 or more separate transactions for the delivery of goods or services into the State. Top online retailers with no employees or real estate in South Dakota who met the Act’s minimum sales or transactions requirement, but do not collect the State’s sales tax opposed the Act. South Dakota filed suit in state court, seeking a declaration that the Act’s requirements are valid and applicable to respondents and an injunction requiring respondents to register for licenses to collect and remit the sales tax. At trial and on appeal, courts held that the Act is unconstitutional.
The ruling effectively overturned a system that it created. In 1992, the Supreme Court held that the Constitution bars states from requiring businesses to collect sales tax unless they have a substantial connection to the state. That case was Quill Corporation v. North Dakota. The Quill decision helped pave the way for the growth of online retail by letting companies sell nationwide without navigating the complex patchwork of state and local tax codes.
South Dakota’s attorney general, called the ruling “a big win for South Dakota and Main Streets across America.” The case should benefit both rural businesses where local businesses have been hit hard by competition from online retailers and municipal coffers as well, because in some states local sales taxes are collected at the state level. Owners of brick-and-mortar stores like the decision as a means of leveling the playing field because they feel they often missed out on sales of big-ticket items since sales tax could have had an amplified effect on the price. For consumers, this could mean paying more for products bought online. Although most have a “use tax” that works like a state sales tax for online purchases, few if any consumers actually pay it.
Since the beginning of my practice in 1999, I suggested businesses take a state-by-state approach when it comes to issues like sales tax, since it can vary widely by jurisdiction. No business is entirely virtual. All businesses will need to examine their ecommerce strategy to see whether and to what extent this case affects the business model.
Soem prior conferences:
Data at Risk: Regulatory and Privacy Concerns in a Data Breach. – Enfuse Conference 2018, Las Vegas, NV, May 23, 2018.
Trends in Cyber-Law 2017– ISACA CSX North America 2017, Washington, DC October 2-4, 2017
The Human Side of IT Acquisitions– Assoc. of Technology Acquisition Professionals CAUCUS IT Procurement Summit, New Orleans, LA, November 7-8, 2017
My topic, Assessing and Responding to Cyber Legal Risk,was chosen for presentation at the 2018 New York State Cyber Security Conference.
On September 25, 2017, I gave a presentation at Influencer Marketing Days in NY on how to avoid unnecessary legal risks when using Influencer Marketing.
As most marketing professionals know, media consumption is moving from traditional outlets to other platforms. Explosive growth for social media and declining TV viewership means that advertising dollars are migrating with the eyeballs. As a result, brands are turning to “influencers,” celebrities, paid spokespersons and even consumers who credibility enables them to affect attitudes and purchasing decisions.
Due to popularity and reach of platforms like Instagram, Snapchat, YouTube and even a resurgent Twitter, brands are partnering with these influencers to help the grow through views, impressions and “likes.” Online advertising is an active legal enforcement area and influencer marketing presents potential legal issues.
Since most lawsuits focus on consumer awareness (or lack thereof), legal compliance requires appropriate and adequate disclosures. The presentation focused on when disclosures are required and what constitutes adequate disclosure.
Understanding the “rules of the road” will help you navigate your influencer marketing campaign or program. Some rules prohibit certain activities while other rules require affirmative actions to be compliant.
Contact us info @ adler-law.com to get a copy of the full presentation.
In case you missed it, Ken Dort at Drinker Biddle held a discussion covering high points of the EU/US Privacy Shield. Talking points covered:
1. Application Overview
2. Certification Issues
3. Privacy Shield Principles and Supplemental Principles
4. Implementation Timelines (Expected)
5. Best Practices Going Forward Pending Implementation
The draft EU-U.S. Privacy Shield “adequacy decision” includes the Privacy Shield Principles companies must follow. Suggested Best Practices for compliance with EU-U.S. Privacy Shield Principles include: evaluating disclosures about data collection and use to determine whether they are sufficiently clear and evident to consumers, and 2) giving strong consideration for implementation of a formal opt-in mechanism. European government trade regulators are concerned about whether consumers are being sufficiently informed about the nature and scale of data collection.
Ken graciously provided this great list of resources for the discussion:
As part of Adler Law Group’s Privacy & Information Security Practice, we continue to follow the developments in this area. We can help you review, enhance and adopt standardized contracts and implement methodologies for approaching these challenges by setting objectives, determining scope, allocating resources, and developing agreements that will efficiently and effective manage risks.
From healthcare apps, to mobile devices, to utilities, services are collecting and aggregating customer data across many different types of connected devices. Many mobile apps and services rely on a consumer’s location information. As more mobile apps connect to the Internet to send and receive location data, the FTC, legislators, privacy advocates, and others have identified location information as a particularly sensitive category of data. A recent study conducted by Carnegie Mellon University contained shocking revelations about the frequency with which location information is gathered and transmitted to companies through their mobile apps. At the same time, the recent settlement with in-store retail customer tracking provider Nomi highlights the FTC’s increased scrutiny of data gathering practices and disclosures of mobile application developers.
It is no secret that retailers could derive significant business intelligence from the real-time moments through stores. This is one of the areas around which companies innovate around customers’ private information. For example, Nomi Technologies, a company whose technology allows retailers to track consumers’ movements through their stores, made headlines when it agreed to settle Federal Trade Commission charges that it misled consumers about opting out of their tracking services. This is not why you want to have your company’s innovations in the news.
Business counsel both inside and outside of companies developing applications that leverage mobile geolocation data of consumers and employees should be aware of the many issues that are developing around this area such as: How is geolocation information gathered and how does data flow from device, to app to, third party? How is it shared and used in mobile advertising? When is consent required and how should stakeholders obtain such consent?