JOLT Digest

Written by Susanna Lichter
Edited by Laura Fishwick
Editorial Policy

“CyberPatrol, ” “SniperSpy,” and “IamBigbrother” are the names of keyloggers that might be installed on your office computer. These easy to use and inexpensive hardware or software devices record keystrokes and allow a monitor to access email, and other password-protected accounts of an unsuspecting typist. Employers are using keyloggers more often in the workplace to oversee employees without their knowledge. Managers argue that computer surveillance is important to ensure productivity, but alternative tools like website blockers, remote desktop access and time audits allow employers to determine whether an employee deviated from her task without risking the same breach of trust or employee humiliation associated with keyloggers.

Although keyloggers facilitate a major invasion of privacy, they are legal in many jurisdictions. There is currently no federal law that has been interpreted to prohibit their surreptitious use. The Electronic Communications Privacy Act (ECPA), which includes the Federal Wiretap Act (FWA) and the Stored Communication Act (SCA), could potentially prevent keystroke theft, but thus far the protections it offers have not been extended to keyloggers. However, there is evidence that this may soon change. Several recent cases have suggested a broader interpretation of the ECPA than what has previously been held. Additionally, in the absence of a consensus about federal law prohibiting keyloggers, some courts have interpreted state statutes to protect the public from having their strokes stolen. The conflict of interpretations between jurisdictions leaves people in many states vulnerable to invasive employer spying. It also creates a lack of clarity for employers and employees regarding what is considered lawful conduct. The surreptitious use of keyloggers should be subjected to wider regulation by state or federal law. In a few cases courts have diverged from precedent and adopted this position.  (more…)

New Information about Carrier IQ Software Sparks Concerns that Wireless Carriers Have Violated Federal Anti-Wiretapping Laws

By Abby Lauer – Edited by Michael Hoven

Last month, a security researcher from Connecticut published information about a software program installed on some mobile smartphones that may be surreptitiously collecting data about how the phones are used. The software, called Carrier IQ and manufactured by a company of the same name, has been described as hard to detect, hard to remove, and programmed to run by default without the user’s knowledge. The scandal escalated last week when Senator Al Franken sent a letter to Carrier IQ asking for details about the software and the company’s business practices. Privacy analysts are concerned that the software violates the Federal Wiretap Act, as amended by the Electronic Communications Privacy Act, which forbids the intercepting of “wire, oral or electronic communication” and authorizes penalties of $100 per day for each violation. 18 U.S.C. §§ 2511, 2520. Other commentators have suggested that Carrier IQ may also violate the Computer Fraud and Abuse Act. 18 U.S.C. § 1030. So far, at least eight class action lawsuits have been filed against Carrier IQ and various device makers and wireless carriers.

Computerworld provides a general overview of the Carrier IQ software and the recent scandal. For a more detailed analysis of the legal issues, see Forbes, paidContent.org, and Talking Points Memo. (more…)

Ninth Circuit Holds that Apple did not Engage in Copyright Misuse
By Laura Fishwick – Edited by Michael Hoven

Apple Inc. v. Psystar Corp., No. 10-15113 (9th Cir. Sept. 28, 2011)
Slip Opinion

The Ninth Circuit affirmed the Northern District of California’s holding that Psystar infringed Apple’s federal copyrights, and vacated and remanded the district court’s grant of Apple’s motion to seal summary judgment papers. The district court had rejected Psystar’s defense of copyright misuse, in which Psystar had argued that Apple’s Software Licensing Agreement (“SLA”) requiring users to run Mac OS X only on Apple computers “impermissibly extend[ed] the reach of Apple’s copyright.”

The Ninth Circuit held that Apple did not engage in copyright misuse by restricting the use of its software to Apple computers because this restriction did not prevent other companies from developing competing products. The court upheld the district court’s grant of an injunction on the grounds that it did not abuse discretion, even though Psystar did not contest the ruling that the enjoined use of Apple’s software did in fact constitute infringement. Finally, the court vacated and remanded the district court’s sealing orders, finding that the district court did not adequately provide reasons underlying its decision given that there is a presumption in favor of access.

The Wall Street Journal provides an overview of the case and notes that Psystar has shut down its operations. Internet Cases criticizes the decision for reaffirming Apple’s long-standing policies of distributing software and hardware as a “closed ecosystem,” which limits third parties from creating valuable technologies in this space.  (more…)

Federal Circuit Invalidates Software Patent As Mere Mental Process
By Albert Wang – Edited by Chinh Vo

CyberSource Corporation v. Retail Decisions, Inc., No. 2009-1358 (Fed. Cir. August 16, 2011)
Slip Opinion

The Federal Circuit affirmed the United States District Court for the Northern District of California’s grant of summary judgment, agreeing that plaintiff CyberSource’s patents were invalid for ineligible subject matter under 35 U.S.C. § 101.

Writing for a unanimous panel, Judge Dyk held that CyberSource’s method of verifying credit card transactions by matching up Internet addresses represented an abstract process, doable entirely within the human mind and thus not amenable to patent. The court also invalidated CyberSource’s patent for the actual program in its computer readable medium, characterizing the patent claim as a mere enshrining of an unpatentable method in object code.

Patently-O provides an overview of the case. TechDirt characterizes the decision as part of a broader trend, derived from Bilski, against “bogus” software patents. Ars Technica also takes a favorable view of the result, but characterizes the Federal Circuit’s human-capability test as an artificial distinction. (more…)

by Michael Adelman

Copyright Suit Fails to Prevent Memorial Day Weekend Release of The Hangover: Part II

On Tuesday May 24, the New York Times reported that Judge Catherine D. Perry of the U.S. District Court for the Eastern District of Missouri denied tattoo artist Victor Whitmill’s preliminary injunction that would have halted the release of the film The Hangover: Part II over Memorial Day weekend. Mr. Whitmill claims that Warner Brothers has infringed on his exclusive rights to the Maori-inspired tattoo which he designed and inked on boxer Mike Tyson’s face by putting it on the face of the character Stu, played by Ed Helm, in the film and promotional merchandise. Wired reports that the litigation has prompted an about face by the nation’s preeminent copyright scholar, UCLA law professor David Nimmer, who testified that tattoos should not be copyrightable while serving as an expert witness for Warner Brothers. Likelihood of Confusion noted that Judge Perry strongly indicated Mr. Whitmill stands to recover on his claim in the future, but that she declined to issue the injunction after finding the public interest in letting the movie be released outweighed the harm of infringement.

G8 Nations Issue A Statement on Internet Governance

Ars Technica reports on the recent G8 summit that produced a Declaration of Renewed Commitment for Freedom and Democracy, which extolled the power of the Internet in increasing democratic participation and as a driver of economic growth. The document emphasized the need to safeguard against “arbitrary or indiscriminate censorship” in preserving the Internet as a democratic forum. The G8 nations also announced their commitment to enhancing protections of intellectual property (copyright in particular) through greater international cooperation of governments and private entities.

New Legislation Would Make Unauthorized Internet Streaming a Felony

Ars Technica reported on the testimony of new Register of Copyrights, Maria Pallante, before the House Judicicary Committee about whether illegal online streaming should be upgraded from the current misdemeanor status to a felony punishable by up to 5 years in jail. Pallante asserted that increased bandwidth and greater scrutiny of file-sharing networks have made video streaming sites that display pirated material increasingly popular, and that the law needed to be adjusted to keep pace with technology. This is also the position espoused by the Obama Administration’s White Paper on Intellectual Property Enforcement. But Techdirt warned that by making “performance” of a copyrighted work a felony, the proposed bill (via GovTrack.us) could potentially render the act of embedding or hosting an infringing video a felony.

Amazon Launches New Mac Software Store to Compete with Apple’s App Store

Amazon has recently launched a subsection of its online downloads store specifically oriented to Mac OSX software. Ars Technica reports that Amazon has called this service the “Mac Downloads Store”, probably to avoid another legal dispute with Apple. Slashdot has covered Apple previously filed lawsuit against Amazon for trademark infringement over Amazon’s ‘Appstore for Android’. ComputerWorld analyzes some of the differences between Amazon’s Mac Download Store and Apple’s Mac App Store, speculating that these differences are largely driven by differences in Amazon and Apple’s licensing agreements with software developers.