Thursday, March 26, 2009

Blog Bites -- A Few More Words on Micro-Blogging

Not long ago I wrote a long, detailed piece on the potential pitfalls involved in blogging. What is not mentioned in that article in any detail is mico-blogging.

Micro-blogging is defined by Wikipedia as a form of blogging “that allows users to send brief text updates or micromedia . . . to be viewed by anyone or by a restricted group. . . .” Think Twitter or Facebook, MySpace, LinkedIn or Xing: Micro-blogging typically consists of short pieces, almost like “sound bites” or “blog bites,” if you will. They provide short, immediate commentary, and often related to such important, breaking news as “What I’m doing now is . . . .”

Because one often uses micro-blogging only with respect to one’s close friends (or expanded circle of friends), one’s micro-blogged persona may differ from one’s professional persona. Ask yourself this: would I “friend” my boss on Facebook and let him or her see everything that’s going on in my personal life? If the answer is “no,” you’ll understand why a number of companies no insist that job applicants “friend” them so they can check out the what isn’t on the resume.

Is this legally acceptable? Seems that it. I put the question to one of my colleagues who practices in the firm’s Labor & Employment Group, and her response was that it would seem to pass legal muster. (I’m omitting a slew of caveats, but that was the general idea.)

What’s more, a colleague in our Atlanta office chimed in with an anecdote about having found the “smoking gun,” which allowed his team to prevail on a lawsuit, on the plaintiff’s Facebook page. Hey, an admission is an admission no matter where you find it. But with the advent of the Internet, and the proliferation of micro-blogging sites, there are more opportunities to make potentially case-killing statements, and a greater chance that, once made, they won’t simply disappear into the ether.

Add into this mix, the Federal (and California, etc.) rules on electronic discovery, and you can see a storm brewing. In a nutshell, the Federal Rules explicitly incorporate e-discovery as subject to disclosure requirements. While certain “safe harbors” exist, for example where the e-information sought is automatically deleted as part of good-faith, routine system operations (and not as part of a plan to destroy evidence), the fact is that most of what we create in cyberspace (micro-blogs included) would be subject to such discovery, and we – and our clients – would have a duty to preserve such data, search for it and (gulp!) disclose it (provided it is relevant, not privileged and "reasonably accessible" of course).

So, what happens when Web 2.0 (social networking, Twitter, Facebook, etc.) meet e-discovery? The answer may depend on how – and if – such data can be archived. In other words, is it there when the opposing counsel asks for it? Certainly one could ask for a print out of everything available as of the date of the request.

Moreover, if the data resides on the Twitter, Facebook or LinkedIn server, it may be obtainable by subpoena, and if it has been stored on the responding party’s internal computer RAM, there seems to be no question that it is subject to discovery.

While this area of law is sure to evolve in the coming months, it is something to remember when seeking discovery, or representing a company in their hiring issues. After all, you don’t a blog bite to come back and bite you in the . . . .

Jonathan Pink is a member of the Intellectual Property Service Group at Bryan Cave, LLP. He can be reached at

Monday, March 16, 2009

An Italian Fling

So I’m sitting in my office the other day, generally depressed about the depression, when my phone rings and (trumpets sound) a new case lands on my desk.

Now, I love the thrill of a new case. It’s like a new love (as best I can remember from way back when). Everything is new, and bright and interesting. And get this: this one was Italian. Actually, an Italian copyright case, to be exact.

Seems that my client – located in Italy -- had been accused by an American company of hacking into the Yank’s computer (located in the U.S.), and then copying software code (from Italy) that is covered by a valid, U.S. Copyright registration. And, of course, the U.S. company was threatening a parade of nasties all covered by the U.S. Copyright Act.

But that really begs the question, doesn’t it: if this was infringement, is it governed by the U.S. Copyright Act? Or is this a dispute that would have to be litigated in Italy?

In general, “United States copyright laws do not have extraterritorial effect, and therefore, infringing actions that take place entirely outside the United States are not actionable.” Subafilms, Ltd. v. MGM-Pathe Comm’ns Co., 24 F.3d 1088, 1091 (9th Cir. 1994) (en banc); Peter Starr Prod. Co. v. Twin Continental Films, Inc., 783 F.2d 1440, 1442-1443 (9th Cir. 1986). In other words, even if the plaintiff is a U.S. based company, and the method of copyright violation occurs by internet connection (as would have been the case if my clients had infringed as alleged), “[a]t least one alleged infringement must be completed entirely within the United States.” Allarcom Pay Television, Ltd. v. Gen. Instrument Corp., 69 F.3d 381, 387 (9th Cir. 1995); see also Danjac, LLC v. Sony Corp., 1998 U.S. Dist. LEXIS 22231, at *22 (C.D. Cal. 1998) (scope of injunction limited to domestic activities).

In Allarcom, the plaintiff was the authorized Canadian distributor of certain television and movie rights, while defendant, Showtime, had U.S. rights to some of the same material. 69 F.3d at 383-384. Co-defendant, General Instrument, manufactured a descrambling device that allowed unauthorized users to receive protected television signals from companies such as Showtime (e.g. they received the content for free by stealing it with the use of the descrambling device). The plaintiff sued for copyright infringement, filing its claim in a U.S. district court. The court held that the Copyright Act did not apply to infringement at issue, as it had occurred in Canada. Id. at 387. Specifically, the court held that although the signal was from the United States, it had been received and decoded in Canada, and thus “the potential infringement was only completed in Canada once the signal was received and viewed.” Id.

So bringing this back to my case, these facts will weigh heavily when negotiating a settlement. That is, while the plaintiff has asked for a boatload of money, I’ve pointed out that if she wants to litigate this case, she’d better brush up on her Italian (where, by the way, the penalties for alleged infringement are not as steep as they are in the U.S.). I’ll let you know haw this goes.

Trade Secret Cloak and Dagger: the Economic Espionage Act of 1996

As if getting hit with a claim for misappropriation of trade secrets were not enough, many people do not realize (OK, it came as a surprise to me) that there is a criminal component to misappropriation. That is, at least where the theft is done for purposes of passing off the secrets to a foreign government.

Cloak and dagger: the Economic Espionage Act of 1996 (18 U.S.C. § 1831–1839) criminalizes the theft or misappropriation of a trade secret. Moreover, the offense applies even where the information taken is not top secret. (Although it makes the story so much more interesting if it is highly classified). The EEA involves any commercial information that is neither classified nor related to national defense (in which case it is falls under the run-of-the-mill espionage act).

This EEA in a nutshell: The Act is broken into two parts. The first, 18 U.S.C. § 1831(a), criminalizes the misappropriation of trade secrets (including conspiracy to misappropriate trade secrets and the subsequent acquisition of such misappropriated trade secrets) with the knowledge or intent that the theft will benefit a foreign power. The second, 18 U.S.C. § 1832, criminalizes the misappropriation of trade secrets related to or included in a product that is produced for or placed in interstate (including international) commerce, with the knowledge or intent that the misappropriation will injure the owner of the trade secret.

So far as I can tell, the EEA isn’t used all that often, and when it is, the cases seem to look to the Uniform Trade Secret Act for guidance as to what is -- or isn’t – a trade secret. There was one fairly high profile case decided in August, 2007 in the Northern District of California (before District Court Judge Jeremy Fogel). In that case, Judge Fogel sentenced a Canadian citizen, Xiaodong Sheldon Meng, to 24 months in federal prison "for stealing military software from a Silicon Valley defense contractor and trying to sell it to the Chinese military."

According to my sources, another case is poised to go to trial this May in the Central District of California. That case also involves efforts to sell (or at least deliver) to the Chinese government material that was gleaned by an employee of a military contractor.

Like most criminal conduct, the penalties for violation of the EEA are steep. Penalties for violation of Section 1813(a) include fines of up to $500,000 and imprisonment of up to 15 years. (Organizations can also be guilty of this Act, and while they won’t do any prison time, they will pay a fine of up to $10 million.) Penalties for violation of section 1832 are imprisonment for up to 10 years for individuals (no fines) and fines of up to $5 million for organizations.