What Does a First-To-File System Mean and What Will This Change to the Patent Process Mean for Inventors and Companies?

The America Invents Act (AIA) is the latest reform in U.S. patent law signed into effect on September 16, 2011. With a set of rolling changes, on of the main modifications takes place on March 16, 2013, which will transition the patent system from a “first-to-invent” system to a “first-to-file” system. This will bring serious change for inventors and companies in their strategies for filing patents.

The United States patent system has operated under a first-to-invent system for the last 200 years. Under this system a patent is granted to the inventor who first effectively invented the patent, regardless if they were the first to file for a patent application on the invention. For example if Inventor A invents a patentable invention but does not yet file an application with the United States Patent and Trademark Office (USPTO), but then Inventor B invents the same patent and does file an application with the USPTO claiming the invention, A would be entitled to the patent if A later filed an application. Even thought A filed after B, A would be granted the patent if he showed documentation of having an earlier invention date and showing he actually or constructively worked to “reduce the invention to practice.” This system is time consuming and difficult as attempting to deduce a date on which a person actually invented something can prove quite difficult.

March 16, 2013 brings about a first-to-file system, which de-emphasizes the actual invention date while focusing on who filed first. This change will further synchronize U.S. patent law with most of the rest of the world who also implement a first-to-file patent law system. The main question this change brings about is not who first conceived an invention (as in under a first-to-invent system), but rather who was the first to file a patent application with the USPTO. Some critics of the system change argue that this first-to-file system will boost patent troll activity, which will a person to be able to file patent applications on inventions that have been released but not yet filed on by smaller companies or underfunded startups. Some argue this will also give larger companies an advantage over smaller companies who do not have equal funds or resources to file patent applications at the same rate large companies do. However something to understand with this change is that while a first-to-file system will go into effect, it is not a true first-to-file system because the one-year grace period on public disclosure will stay in effect. An inventor can publically disclose his invention, through for example a blog post, and is given a one-year grace period from that time of disclosure to file for a patent application. If an inventor publically discloses his invention but does not file with the USPTO right away, he still has one year from that disclosure and will be granted a patent over any other inventor who disclosed later but may have filed earlier. This essentially means that the USPTO will now look to who first filed a patent application or who first publically disclosed the invention, both easier to deduce than which inventor first conceived the invention.

Under this new system well-timed disclosures of inventions by smaller companies will be able to block better funded companies from receiving patents. Disclosure will become of utmost importance as delay of disclosure can allow a competitor to file a patent application on the same technology that they invented later, but filed first. The competitor in that situation would receive the patent under this new system. Companies should begin to create processes that will quickly and effectively identify inventions, as well as whether it is financially beneficial to file a patent application or to publically disclose first.

Minnesota Department of Administration Rules License Plate Reader Data is Private

On Monday March 18, 2013, the Minnesota Department of Administration ruled data collected on the license plate readers is private, including plate numbers, times, dates and locations of vehicle scans, and vehicle photos. Automatic license plate readers (ALPRs) are used by law enforcement to rapidly scan plates and can be used to track wanted vehicles. These cameras take a photograph of every license plate that passes them by, often storing that photo of the vehicle in addition to the plate number, meta-tagging each file with a GPS location, time and date, and converting each number into text that is searched in a database of plate numbers entered manually or selected by an agency. In December of 2012, the City of Minneapolis released a database of over 2 million license plate scans, as reported in the StarTribune.

The reclassification of license plate reader data as private is temporary through 2015. The Minnesota House of Representatives Civil Law Committee addressed Rep. Mary Liz Holberg’s (R) bill to regulate automated license plate reader data to make it classified, require log of use, and require data to be destroyed.

When the City disclosed the data, it nonetheless sought to protect the locations of its stationery cameras by redacting the locations across much of the entries. ALPRs are generally mounted on stationery objects like telephone poles and under bridges or on patrol cars. Among the seven people that requested and received the data from the city were a web developer, a University of Minnesota researcher, and a StarTribune reporter.

This practice sparked a debate in the legislature, a push to reclassify the data as private from Minneapolis Mayor R.T. Rybak (among those tracked), and calls from privacy advocates to narrow limitations on retention policies for such data. Arstechnica reported that a local Minnesota firm, Datalytics had received the database. The firm caught the local police department’s attention when it advised that it was able to pin the locations of the stationery cameras, underscoring the vulnerability exposed by making all of the data collected freely accessible for the police itself. The data had been public by default, and could be stored indefinitely absent state law on the matter. StarTribune reported last August that in Minneapolis the location data is stored for one year, while St. Paul discards it after 14 days, and State Patrol erases it in 48 hours.

The discourse over how to manage the data echoes the concerns of nationwide public interest groups and privacy advocates like the American Civil Liberties Union (ACLU). ACLU noted in July 30, 2012 that only two states had passed legislation barring retention of “non-hit” plate data, which is data on cars that are not wanted by the police. This locational information provides potential for data mining, generating profiles on plate owners and potentially sensitive information about where they have been, raising privacy concerns similar to those raised by warrantless GPS tracking. The license plate reader data in effect becomes a retroactive warrantless surveillance tool. States and municipalities have a valuable tool in license plate readers, but should regulate them with considered data retention and access policies that address the privacy interests of the public to prevent unfettered tracking and abuse of sensitive information.

Court Rules Homeland Security has the Right to Search through Electronics

The Ninth Circuit Court of Appeals has ruled, in United States v. Cotterman, that Homeland Security’s border agents may conduct a forensic examination of mobile phones, laptops, memory cards in cameras, and many other electronics, as long as the border agents have the “reasonable suspicion” to do so. In Cotterman, Howard Cotterman and his wife were driving home to the U.S. from a vacation in Mexico, eventually reaching Lukeville, Arizona, Port of Entry. During the primary inspection, the border agents found a hit on Howard, which indicated that he was a sex offender - he was previously convicted: on two counts of use of a minor in sexual conduct; two counts of lewd and lascivious conduct upon a child; and three counts of child molestation.

Based on Howard's history and the fact that he was potentially involved in child sex tourism, the border agents performed a secondary inspection on him and his wife, and they were told to exit their car, subsequently leaving their belongings behind. The agents searched the vehicle and retrieved two laptops and three digital cameras; upon reviewing these items, it appeared that these devices only contained family and other personal photos, along with other password-protected files. The agents retained the two labtops and one camera for forensic reviews, where a computer program would be used to copy the hard drives of the electronic devices and extract information that was deleted. Upon inspecting the two laptops, the inspector found about hundreds of images of child pornography, stories, and videos depicting children. Based on this evidence, the grand jury indicted Howard Cotterman for various offenses related to child pornography. In his defense, Cotterman argued that the evidence should not have been admitted because it violated his Fourth Amendment protection from warrantless searches.

Before examining the details of the case, the Ninth Circuit Court of Appeals noted that case law in this field is ambiguous, noting that the Supreme Court “has never defined the precise dimensions of a reasonable border search, instead pointing to the necessity of a case-by-case analysis.” In fact, the court in Cotterman cited to U.S. v. Duncan in explaining that "reasonableness, when used in the context of a border search, is incapable of comprehensive definition or of mechanical application.” As a result, the court noted that it must evaluate the totality of the case, rather to the specifics. The court found that although Cotterman’s previous convictions do not support the reasonable suspicion to conduct an extensive forensic search, the border agents’ understanding of the objective facts became the baseline for determining reasonable suspicion. The court determined that it was reasonable for the border agents to have acted the way they did given the fact that Mexico is a country associated with sex tourism and that Cotterman was previously convicted as a sex offender.

It appears that the Ninth Circuit Court of Appeals made its decision in a punative, yet politically and publically popular way; it did not want to let a sex offender go unpunished in light of the amount of child pornography that was found in his possession. Although the court made well rationalized decisions as to why the search was reasonable, the idea that courts should look to the totality of the circumstances for example, it appears that there is still a violation of one’s Fourth Amendment right from warrantless searches. Because the law in this field is vague and fairly new, we should expect more litigation in this area soon and it shouldn’t be a surprise if decisions vary in their outcome and reasoning.

Podcasters Hope to Raise SHIELD Against Patent Trolls

Ahead of the standard introduction to his February 28, 2013 episode of his WTF Podcast, standup comic Marc Maron decided to shine a light on patent trolls, or “non-practicing entities” ("NPEs") as they are otherwise called. These organizations have been characterized as shell companies that procure broad patent portfolios, do not produce content, and sue inventors for patent infringement if the invention allegedly incorporates a patent held in the portfolio. Winning in court is not even the endgame for the troll here, because the defendant may be someone who can ill afford to continue in drawn-out litigation, and therefore the inventor may opt to settle.

Protracted patent litigation is well-trodden ground for the likes of Apple and Samsung. Apple has been criticized for wielding broad patents against competitors like Android with respect to touchscreen smartphone interfaces. On a different scale, this is occurring in the arena of podcasting. A February 7, 2012, patent issued for Personal Audio LLC that it is being put forth as essentially preempting podcasters in the medium, many of whom are small operations out a garage speaking to their audiences in weekly installments on all matters of, well, anything at all. Personal Audio has actually taken on Apple in the past and won $8 million in a suit for infringement of downloadable playlists.

Personal Audio’s patent is said to be the precursor to podcasting, as it set forth a “system for disseminating media content representing episodes in a serialized sequence.” Some of the podcasters Personal Audio has reached out to and invited to apply for a license include Maron, Adam Corolla, and Stuff You Should Know. Personal Audio has been criticized for having “not sold a product since 1998.”

The SHIELD Act, an acronym for Saving High-Tech Innovators from Egregious Legal Disputes, was initially introduced in 2011 by Rep. Peter DeFazio (D-OR) and Rep. Jason Chaffetz (R-UT) and intended to create a loser-pays rule by which the loser of the patent infringement or validity suit would be made to pay the costs of the opponents’ fees for the proceedings. The idea is to deter would-be litigants from filing frivolous suits regarding computer hardware and software patents, specifically, “where the court finds the claimant did not have a reasonable likelihood of succeeding.” The software portion is defined as covering “(A) any process that could be implemented in a computer regardless of whether a computer is specifically mentioned in the patent; or (B) any computer system that is programmed to perform a process described in subparagraph (A).” The revised bill intends to expand its scope to all patents to protect not just technology companies, but retailers, manufacturers, podcasters, and municipalities from being subjected to predatory litigation, as expressed in a press release from Rep. Chaffetz’s site.

It would seem like an oddly unjust policy to allow for a patent to cover a medium in its entirety; in the case of podcasts, an application of electronic audio files in a serialized form disseminated online. Legislative efforts like the SHIELD Act could help prevent patent litigation undertaken in bad faith.

For many podcasters, monetizing the podcast is an issue. While the format may be inexpensive, with the producers of the content often using nothing more than their microphones and a computer for interviews, it is not generally lucrative in a direct way. It seems that much of the value derived from the podcast for the broadcaster/podcaster is the goodwill it generates with the audience. It can also be an effective means of self-promotion; for example, a comic promoting his upcoming appearances and shows. Another mechanism for income is the utilization of ads for things like stamps.com or audible.com. This is all to say that podcasters may make for an odd target for this type of litigation, even if some podcast authors are more well-known and have somewhat deeper pockets. Is it because some in this demographic earn just enough to yield a promising settlement but not enough to pursue all-out “sport of kings” patent litigation?

There is also a question as to whether there should be a distinction made between original content available exclusively in the podcast format from, for example, a radio show on NPR that is broadcast live on terrestrial radio and via livestreaming online, and then packaged for downloads later as a podcast. Should podcasters now have to consider the high price of patent litigation just a cost of doing business?

As suggested in some comments on related articles like Techcrunch.com’s The Death of the Non-Practicing Entity?, additional measures could be taken to close potential loopholes, and to craft legislation to address not only NPEs, but NPEs that purport to be practicing entities. Arguments against the SHIELD Act suggest that it might stifle startup companies that have legitimate patent claims from litigating those claims, because the costs would be too burdensome if unsuccessful. Addressing the categories of companies that occupy the grey areas between practicing entities and NPEs might address that concern in some measure. What still remains is the larger issue of fairness and incentives created by the current standards used by the US Patent and Trademark Office in patent examinations and whether they are truly effective in promoting innovation, which was the original intent of patent protection in the United States Constitution.

Cameras in the Courtroom in Ohio

Permitting cameras inside of America’s courtrooms would allow the public the opportunity to see and learn more about the daily occurrences and processes of our nation’s legal system. Opponents argue that such coverage could pose harmful effects surrounding the privacy of those involved in the proceedings. Initial disfavor for banning cameras occurred after sensationalized public trials, such as the trial of Bruno Hauptmann who was accused of the kidnapping and murder of Charles Lindberg’s baby. This frenzy was furthered by the O.J. Simpson case in the 1990s. Proponents of cameras suggest that by providing insight into daily activities, the cameras would reveal to viewers that day-to-day activities are not always exciting, separating typical court proceedings from television show portrayals and dramatic public trials.

The public has a legal right to attend court and most courts are open and accessible to the public. However, many of the court proceedings occur during normal business hours so attending court may prove impracticable for most working Americans. While individuals have a right to access the proceedings, there is no First Amendment right to have cameras in the courtroom. Fundamental differences exist between attending court and having the proceedings recorded and broadcast on television or over the Internet.

There are different ways that the public can receive this information; one example being through a live-feed, or videos posted online. Live streaming video footage can be accessed on court’s websites and is more commonly used in state courts. Federal courts tend to be more restrictive and may choose to videotape the proceedings and then post those videos online. Federal courts also impose greater restrictions than state courts, including: no live streaming video (videos will be archived and posted online at a later date), only civil matters may be filmed, recordings are made by court employees rather than the media, and consent for the recording must be granted by the judge and both parties.

Many Americans are accustomed to receiving instant updates and news stories via social media outlets on the Internet. The benefit of facilitating access to courts online in a format that is user-friendly may be a wider appeal to a broader, younger audience. On the other hand, social media was not a concern when cameras were first introduced into courtrooms. Instant responses by social media and clips from trials going “viral” may occur as a result of our connectedness and globalization. With today’s ever-connected society, the reactions may divert too much attention in a way that threatens a fair trial because of adverse publicity.

Opponents point to privacy concerns as a major downfall of implementing cameras. Some have noted that cameras can be intimidating for witnesses and jurors and juror anonymity certainly should be a major concern with cameras in a courtroom. A ban on filming the jury at any point in the proceedings is one suggestion for removing any nervousness or fear of retaliation. Another issue is the security of witnesses, especially in regards to "snitches" (confidential informants), undercover investigators, and victims of sexual abuse and domestic violence.

The presence of cameras is an issue that should and will be dealt with in courts of every level; from local courthouses to the Supreme Court. Historically, cameras have been banned from the Supreme Court, but the newest members of the Court, Justices Sotomayor and Kagan, initially supported the idea of cameras during their confirmation hearings. However, once confirmed, both Justices changed their positions and supported a continued ban on cameras. They expressed concerns that Justices will play to the camera, and that the clips will be used for unintended purposes, such as political ads. Maybe it is too early to tell, but perhaps broadcast of courtroom proceedings will be comparable to C-SPAN coverage in the future, and it will serve as a useful and beneficial tool, allowing for greater access and understanding of what happens in America’s courtrooms.

Registered sex offenders’ right to free speech – Is a ban on social media unconstitutional?

In January 2013, the United States Seventh Circuit Court of Appeals struck down an Indiana Law that made it a misdemeanor (or, in some instances, felony) for registered sex offenders to use a social networking website. Implying that the law was too broad, the panel of judges declared that while the state has a legitimate interest in protecting the safety and welfare of its children, the law "targets substantially more activity than it seeks to redress.”

In the suit, initiated anonymously by a registered sex offender released from prison in 2003, “John Doe” alleged that the law infringed upon his First Amendment constitutional rights. After the trial court found the law constitutional, the case went before the Seventh Circuit who declared that laws implicating the First Amendment must be tailored narrowly. They found that a blanket ban on social media for all registered sex offenders does not fit within this narrow interpretation.

One reason the argument before the court was so complex was because it was simultaneously over- and under- inclusive in terms of the outlets it restricted. It banned sex offenders from using not only sites that allow minors to sign up, but also ones that allow users to create a website or a personal profile, and that provide users with an opportunity to communicate with another person online. If this definition were applied literally, even sites such as Amazon.com, YouTube and CNET, as well as thousands of other blogs and retail sites could have been included, as each afford members the opportunity to create profiles and comment and interact with each other.

While this decision will most certainly be precedent for other states considering legislation that monitors sex offender internet use, other states such as New Mexico are already considering enacting similar laws. A proposal in New Mexico introduces legislation that would ban all registered sex offenders from using any websites, including social media, that incorporate instant messaging or chat room features that the sex offender knows include individuals under eighteen years old. The first violation of this law would be considered a misdemeanor, and any subsequent violations would be treated as felonies.

Opponents of this proposed New Mexico law (and other similar laws proposed in Louisiana and Nebraska) argue that these laws are unconstitutional attempts to severely limit free speech and do not consider that many registered sex offenders did not commit a crime against a minor. On the other side of the argument, however, proponents of these laws present the argument that broad legislation banning the use of any website that allows communication between members and the creation of profiles prohibits substantial protected speech. While the protection of minors is a legitimate state interest, it is not substantial enough to so thoroughly infringe and restrict any registered sex offender’s free speech rights.

While there is still work to be done in order to strike a balance between the protection of minors on the internet and the preservation of First Amendment free speech rights of registered sex offenders, legislators are currently working to devise a narrower proposal that will achieve both ends. As of yet, it is still uncertain what the fate will be for those who have previously been charged under the newly-struck-down Indiana law.

LinkedIn Favored in Lawsuit over Hacking

LinkedIn provides an online community for professional networking, where prospective members may sign up by providing their email address and registration passwords, which are all stored to LinkedIn’s database. Although registration is free, for a monthly fee, LinkedIn members may upgrade to premium accounts, which allows access to increased networking tools and capabilities. During the registration process, the prospective LinkedIn members must agree to the LinkedIn’s User Agreement and Privacy Policy regardless of the type of accounts they decide to get.

In the Privacy Policy’s Security section (http://www.databreaches.net/wp-content/uploads/LinkedIn.pdf) it states “In order to help secure your personal information, access to your data on LinkedIn is password-protected, and sensitive data is protected by SSL encryption when it is exchanged between your web browser and the LinkedIn website. To protect any data you store on our servers, LinkedIn also regularly audits its system for possible vulnerabilities and attacks, and we use a tier-one secured access data center. However, since the internet is not a 100% secure environment, we cannot ensure or warrant the security of any information you transmit to LinkedIn . . . . It is your responsibility to protect the security of your login information. Please note that emails, instant messaging, and similar means of communication with other Users of LinkedIn are not encrypted, and we strongly advise you not to communicate any confidential information through these means.”

In June 2012, LinkedIn suffered a data breach where a hacker posted over the Internet 6.5 million password hashes and e-mail addresses from LinkedIn users. Of the 6.5 million hashes, 60% were cracked. Angered about the security breach, two premium account users (“Plaintiffs”) filed a class action suit against LinkedIn on behalf of all who also paid an extra fee to the networking server. The complaint included nine causes of action, two of which are relevant for the class action suit: (1) breach of contract and (2) restitution or unjust enrichment. However, before going into the merits of the claim, standing became an issue. To have standing: (1) an injury is concrete and particularized, as well as actual and imminent; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) the injury may be mitigated if given a favorable decision.

The Plaintiffs argued there was standing because they did not receive the full benefit of the bargain for the paid premium memberships. They alleged that in consideration of the extra fees, LinkedIn would take extra measures to protect these premium users’ personal information. The Plaintiffs further argued that if they had known that LinkedIn would not have provided these extra security features, they would not have upgraded their accounts. Federal District Judge Davila of the Northern District of California rejected this argument finding that the additional fees the Plaintiffs paid were not for extra security, but for the advanced networking tools and capabilities. Any alleged promise LinkedIn made to premium account holders were also made to non-paying account holders, and thus when a member purchases this upgrade it is only for the additional networking features. And as such, Davila found that there lacked a causal relationship between LinkedIn’s actions and the Plaintiff’s assertions of alleged harm.

Although it is unfortunate that LinkedIn users’ passwords and email addresses were revealed, these sorts of things happen all the time. As technology advances, so will hacking intelligence. The only way to prevent hackers from infiltrating these private servers is to be a step ahead of them; an impossible task.

The Times They Are A’ Changin’: Sony Exploits Recent Copyright Term Extension, Releases 50 Year Old Bob Dylan Tapes

After a recent European Union Directive, which extended the term of copyright for sound recordings, Sony has released a collection of Bob Dylan tapes in order to take full advantage of the situation. The 2011 Directive extends the term of protection for sound recording copyrights from 50 to 70 years. But, the work must be published within 50 years of creation. Recordings by many popular British bands of the 1960s, including the Beatles, the Rolling Stones, and the Who, are right at the 50 year mark. Sony recognized that the 50 year window’s expiration was approaching and released the tapes.

If not released before January 1, 2013, the works would have been dedicated to the public domain and free for anyone to exploit without requiring permission or payment to Sony. The new release, “Bob Dylan: The Copyright Extension Collection Vol. 1,” includes alternate takes of “Blowin’ in the Wind,” “Bob Dylan’s Dream” and “I Shall Be Free,” as well songs that missed final cuts and live performances from Carnegie Hall.

The Directive, named “Cliff’s Law” after the 1960s British pop singer who campaigned aggressively for the extension, is seen as a victory for many aging superstars, including the aforementioned British invaders, as well as American artists like Frank Sinatra, Miles Davis, and Mr. Dylan, who recorded in Europe. In an interview with the BBC, The Who’s Robert Daltrey explained that the Directive ensured that artists could continue to receive royalties into their old age. “They are not asking for a handout,” he said, “just a fair reward for their creative endeavors.”

Not everyone is as pleased with the extension, however. The Electronic Frontier Foundation points to numerous reports concluding that longer terms will not benefit the smaller acts and session artists whom the Directive was designed to protect. A study by the Center for Intellectual Property Policy and Management at Bournemouth University in England calculates that 72% of the financial benefits from the Directive will accrue to record labels, and the vast majority of the remainder to superstar acts, not those musicians identified in the Directive. And many argue that restricting the public’s access to recorded works for another 20 years will hinder creativity, an outcome seemingly at odds with a fundamental aim of copyright law.

Hail a NYC Taxicab on a Smartphone? Not Yet.

Considering that there is a smartphone application for just about everything these days, it is surprising that the New York City Taxi and Limousine Commission (TLC) did not approve a pilot program for electronic hail applications (e-hail program) until last December. However, the day before the pilot program was set to launch in NYC on February 13th, The Livery Roundtable and Black Car Assistance Corporation, among others, filed suit claiming that the program was improperly passed. The petition argued that the pilot program was invalid because the TLC failed to obtain City Council approval before starting a year long trial period for the e-hail program.

The e-hail app. would allow passengers using the application on their smartphones to identify available taxis in their area and/or hail a taxicab using the device. Alternatively, taxi drivers will be able to locate passengers in need of rides and/or receive electronic hails. Some companies with pre-existing e-hail applications such as Uber, GetTaxi, Hailo, and Flywheel were required to augment their pre-existing e-hail applications in order to conform to the TLC’s e-hail program regulations. Specifically, the TLC wanted to ensure that passengers and drivers used the application exclusively to hail, or accept hails, not bribe drivers with cash bonuses.

While the TLC was excited about the e-hail program and believed it would benefit both passengers and drivers, some companies lobbied against the program. Unsurprisingly, those in opposition of the e-hail program include the aforementioned petitioners Black Car Assistance Corporation and The Livery Roundtable, as well as other black car companies. The companies believe the e-hail system will generally hinder the livery business and negatively impact certain segments of the NYC population, specifically the elderly and the lower class. While this maybe true since yellow cab drivers and passengers will be easier to locate, there is nothing preventing black car companies from developing their own applications.

Nonetheless, the TLC and Mayor Michael Bloomberg remain unconcerned by the petitioners’ injunction and informed the public that the e-hail program was validly passed.

Marketplace Fairness Act Aims To Allow States To Obtain Sales Tax From Large Internet Retailers

On February 14, 2013 a bipartisan group of Senators and Representatives introduced legislation that will supposedly level the playing field between local brick-and mortar retailers and out-of-state Internet retailers. The Marketplace Fairness Act of 2013 would allow states to require out-of-state online retailers to collect sales and use tax on in-state purchases. Businesses with less than $1 million in annual domestic sales would be exempt from the bill. Despite the optimism for the passing of the bill, critics question whether it will achieve its goal of leveling the playing field between local businesses and out-of-state online retailers without introducing a host of unintended consequences.

Currently, due to a 1992 Supreme Court decision, states have been unable to require out-of-state online retailers to collect sales taxes from in-state customers. See Quill Corp. v. North Dakota ex rel. Heitkamp, 504 U.S. 298, 313 (1992) (holding that although businesses did not need to have a physical in-state presence to permit the state to require the business to collect taxes from its in-state customers, physical presence within the state is required for the business to have a “substantial nexus” with the taxing state as required by the Commerce Clause). Customers who order products from online retailers from outside of the state are supposed to declare these purchases on their tax forms, but few customers do. Due to this outdated Supreme Court ruling the National Conference of State Legislature reports that, collectively, states miss out on approximately $23 billion in tax revenue annually. Furthermore, local business are at a disadvantage because consumers can walk into these local stores, try out the product that they are interested in, and go home and purchase the item from an out-of-state online retailer without paying the state sales tax.

The current version of the bill combines several proposals from the previous bill that failed to pass last year while incorporating revisions intended to make the bill more palatable to critics and opponents. In particular, the exemption threshold for businesses was raised from $500,000 to $1 million in out-of-state annual sales. The Marketplace Fairness Act of 2013 would empower states to compel out-of-state online retailers to collect sales and use taxes provided that the state simplifies its sales and use tax system. Several online retailers, including Amazon, have expressed their support for the bill.

Despite the optimism and support for the passing of this bill, it is not without critics. Some critics argue that given that one of the prerequisites for states to use this bill is that they must simplify their sales and use tax system, the bill may have the potential to create a complicated new tax system with differences in each state. Furthermore, the legislation may be difficult to enforce because determining whether a retailer is not collecting the taxes may be challenging and needs to be addressed. There are concerns that the bill has a potential to stifle Internet commerce. Large online retailers such as Wal-Mart and Amazon can easily deal with the increase reporting expenses and decreased revenues in out-of-state sales but the smaller online retailers may be forced to keep their sales within their state of operation or confined to states where they have their largest out-of-state sales revenues. The bill, if passed, will likely do the most good in terms of getting states sales revenues that they are already rightfully owed but are not being paid because customers fail to report their out-of state purchases. In this tough economy an infusion of sales revenue may be the much-needed resource that may allow state governments to keep their taxes steady and prevent the need for cuts in programs and services and this bill appears like it has the potential to help in this respect.

The Marketplace Fairness Act appears most misguided in its focus on putting local business on a level playing ground with out-of-state online retailers. The bill may just be slowing down the inevitable. The fact that residents have to pay taxes on goods bought in local business may not be the only reason for why customers are choosing to buy from out-of-state online retailers. The prices of the online retailers may still be significantly lower than the local business even after the passing of this bill because some online retailers are able to provide lower prices due to economies of scale and the fact that they do not have the expense of having locations or warehouses within the state. Therefore, the bill should be presented more as a way for states to obtain revenue that they are rightfully owed and less as a savior of local businesses.

Source: http://news.cnet.com/8301-13578_3-57569600-38/politicians-push-bill-to-help-states-collect-online-sales-tax/

Rethinking the Cost and Benefits of Behavioral Targeting

Online behavioral targeting, also known as behavioral advertisement, involves tracking an individual’s online activities for the purpose of delivering tailored services or advertisement to a user. During the 2012 elections, it was revealed that even politicians used behavioral targeting in their campaigns. Online behavioral tracking has been proven to be extremely valuable because not only does it allow interested parties to align their advertisement with what the individual is likely to purchase, it also enables useful features to Internet users such as saving customized personal preferences and settings on the web.

Behavioral targeting has generated a form of service providers called network advertisers, companies that compile and classify expensive consumer profiles and deliver appropriate advertisements to participating websites across their network. Companies generally use “cookies”, amongst other tracking methods, to track consumer activities by associating those activities with a particular computer or electronic device.

Despite the Federal Trade Commission's efforts in setting self-regulatory principles, there is currently no law in the U.S that expressly addresses behavioral targeting. Typically, data that network advertisers collect does not fall under any existing privacy regulations because it does not include any personal identifying information, such as the user’s real name or other identifying information that can tie the user to his/her real identity.

Those who oppose to such act of data collection argue that behavioral targeting constitutes a breach of privacy because it implicates some form of personal information and more importantly, it invades an individual’s “inner identity”. A complete consumer data profile is, in a way, an attempt to replicate the individual’s personality in order to create customized advertisements. Such exploration can be more private and valuable than some aspects of external identity. For instance, the delivery of advertisements may reveal private browsing history such as religious beliefs or sexual orientation to other users of the same electronic device because cookies track the online activities of a device, not of a particular person. In other words, behavioral targeting may lead to not only identify thefts, but also embarrassment, inconvenience, and unfairness.

While many consumers in the U.S remain unaware that their online activities are being tracked, the European Union has heavily promoted Internet privacy awareness. Amongst other regulations, the e-Privacy Directive requires each member of the European Union to legislate the collection, use, and disclosure of personal information. Furthermore, the Directive requires all Internet firms and any other business that process data to obtain informed consent from data protection authority, as well as individuals, before commencing any data collection and processing.

There is an urgent need for the Legislature to find a way to balance data utility and privacy. Don’t you think it is about time that pair of shoes you checked out last week stops following you everywhere?

The Science of Constitutional Rights

Eroding the third trimester standard established in Roe v. Wade in 1973, the Idaho legislature passed the “Pain-Capable Unborn Child Protection Act” in 2011, prohibiting abortions based on neuroscientific findings that pain sentience in fetuses may occur before viability. Roe v. Wade insisted on viability as the critical point where the fetus’s life might outweigh the mother’s right to privacy, but Idaho, along with several other state legislatures, is fighting against the Supreme Court’s standard.

As the basis for the stricter abortion standard, Idaho’s “Pain-Capable Unborn Child Protection Act” cites findings that pain receptors are present throughout “the unborn child’s body no later than sixteen (16) weeks after fertilization” and that “the unborn child reacts to touch” by eight weeks after fertilization. Anti-abortion proponents support the pain-capable fetus protection acts, and former Presidential candidate Mitt Romney has voiced his agreement with such measures: “I will advocate for and support a Pain-Capable Unborn Child Protection Act to protect unborn children who are capable of feeling pain from abortion.”

Unsurprisingly, not everyone is on board with the contraction of abortion rights. In defending an Idaho woman who was arrested for inducing her own abortion and a related suit involving the Pain-Capable Unborn Child Protection Act, attorney Rick Hearn, M.D., questions the government’s use of science to circumscribe the constitutional right to privacy and thus abortion. William Egginton, a philosophy professor and guest columnist for the New York Times, attempts to discern the relationship of pain sentience to personhood for abortion purposes in an entry for the NY Times’s Opinionator blog. Egginton opines that scientific findings are facts that can inform thinking but mere data can neither provide an absolute definition of personhood nor generate an airtight argument for a particular variation of constitutional rights.

Frankly, the Pain-Capable Unborn Child Protection Acts are inconsistent with the standard established by Roe v. Wade. These statutes prioritize the possibility of the fetus’s pain over that of the mother’s right to privacy, a framework the 1973 Supreme Court rejected in favor of valuing the mother’s freedom to choose until viability. Pain sentience is simply not the standard set forth by Roe v. Wade, and the use of pain as a guideline for limits on abortion would greatly limit women’s life choices.

U.S. Urges Federal Judge Not to Unfreeze Megaupload’s Assets while It Fights to Extradite the Site’s Founder

The U.S. is advising a federal district court judge to reject Megaupload’s attempts to get its assets unfrozen while the site’s founder, Kim Dotcom, fights extradition from New Zealand. Megaupload’s argument is that having its assets frozen is causing it irreparable harm. The U.S. countered by arguing that even if it were to regain control of its assets Megaupload would not be able to resume its business operations. The freezing of Megaupload’s assets raises due process concerns and may lead to the firm going out of business regardless of whether they are found guilty of the charges alleged by the U.S.

Megaupload.com was a 50-petabyte online file storage website. It was a free online storage solution in the “cloud” for files that were too large for email. Megaupload generated about $25 million a year in revenue from ads and $150 million from its paid premium service. At its peak, 50 million people visited Megaupload each day. Megaupload handled about 4 percent of global Internet traffic. The company maintains that it was a legitimate data storage business used by millions of individuals including employees of NASA and the FBI. However, the Department of Justice (“DOJ”) maintains that the legitimate storage business was a front. The real money was made providing a virtual fence for $500 million in pirated material.

The DOJ further maintains that Kim Dotcom, Megaupload’s founder, ran the criminal swap meet with impunity from the safety of his $24 million New Zealand mansion, protected by guards, guns, and CCTV. New Zealand Special Forces carried out Operation Takedown, which was overseen by the FBI via video link. Operation Takedown was a dramatic raiding of the Dotcom Mansion via helicopter. Dotcom was captured by the New Zealand Special Forces in a panic room hidden behind a secret door located in one of the many closets of Dotcom’s mansion. If all goes according to federal prosecutors’ plan Dotcom and his six executives would be extradited to the U.S. to face a Virginia judge and the possibility of 55 years in prison.

Megaupload argues that by freezing its assets the government is subjecting it to ongoing irreparable harm similar to a criminal conviction following full criminal process. The company further argues that because it has not been convicted of anything the freezing of its assets violates its right to due process of law. The U.S. has countered this argument by saying that Megaupload and Dotcom have contradicted each other because Dotcom has stated on several occasions that he has no intention of re-launching Megaupload. Even if Megaupload regained control of its assets the site would have many issues trying to operate with a possible prosecution hanging in the air and would require years to regain the market position it enjoyed prior to the arrest of Dotcom and the freezing of the company’s assets.

The U.S.’s seizure of Megaupload’s assets raises fundamental due process issues. Without access to its servers Megaupload cannot maintain a steady cash flow. Companies cannot survive without a constant cash flow. Megaupload will likely not be able to recover from the criminal proceedings even if the company and its executives are acquitted of all criminal charges. Although it is likely possible at this point, regaining its previous market share would take many years for Megaupload as many customers have likely migrated to other file-sharing services and are likely wary of going back to a service that they see as vulnerable to prosecution. This is concerning because it raises the question of what is stopping the government from shutting down other businesses through freezing their assets rather than actually bringing a valid claim against them. The result appears to be the same whether the government can prove its claim or not.

For more information: http://arstechnica.com/tech-policy/2012/10/us-slow-legal-proceedings-are-megauploads-fault-dont-unfreeze-assets/

XV Enterprises: Tim Tebow Trademark

NFL quarterback Tim Tebow, as sole shareholder of XV Enterprises, has trademarked “Tebowing” both the term and the pose. The act of Tebowing, which was popularized by Tebow at the end of every touchdown play, is to get on one bended knee head bowed atop a clenched fist. This act quickly became an Internet meme and some have tried to trademark the act themselves. One such person was Jared Kleinstein, a Denver-born Broncos fan living in New York, who started the website www.tebowing.com for the purposes of submitting photos of people Tebowing, while profiting from their acts. However, the trademark office refused Mr. Kleinstein’s request saying that the material “falsely suggests a connection with Tim Tebow.”

The purpose of the trademarking was to keep it from being abused and misconstrued by others. The religious ritual that Tebow did at every touchdown play was something personal, between him and God, and was taken by society and transformed into something called Tebowing. The main reason for the trademarking was not so he could make some extra cash from lawsuits, but to “make sure it is used in the right way.”

If Tebow can trademark his praying, “can the Catholic church trademark the praying-hands . . . the Muslims trademark[] their traditional poses . . . Buddhists trademark[] the Buddhist belly?" It appears that these religious groups could trademark these acts, but the trademark office would probably not grant these rights for three reasons. The first is that these acts do not originate from an individual or one particular entity; the second being that these acts are not considered “memes;” and finally, society as a whole does not use these terms as frequently as they do with Tebowing. For these reasons, it is very unlikely that other football players’ signature moves, such as Aaron Rodger’s championship belt, Victor Cruz’s salsa dance, or even Arian Foster’s bow could be trademarked unless these acts were religiously motivated such as Tim’s Tebow.

How Secure is Your Connection?

Lawmakers and technology experts agree that better laws are needed regarding the online availability and use of personal information. There always has been, and probably will continue to be, a great tension between legislation that is too restrictive to innovation or is too vague to have significant legal impact.

Many challenges exist when creating such laws; chiefly, around the constant advancement of technology. Passing a law is a lengthy process that involves stakeholder meetings, compromise between many parties, and ultimately enactment and enforcement. Technological progression greatly outpaces legislative oversight. This dilemma is clearly illustrated in the issue of whether unencrypted wireless networks are protected from interception under the federal Wiretap Act (18 U.S.C. § 2511).

Currently, private wireless networks that are password protected, like the one you may have in your home, are protected from gathering information. However, when you use a non-password protected, unencrypted wireless network, that information might not be protected. These unprotected networks can be accessed in public places, such as coffee shops and airport terminals, or in homes that have a non-password protected wireless network.

The federal Wiretap Act prohibits “sniffing” or gathering of contents of communications by a device unless the contents are readily accessible to the general public. Initially, it only covered certain communication frequencies but over the years Congress has amended it to keep up with advancements in technology. For example, it was updated to include protection for cordless phone use in reaction to the expectation of privacy of most cordless phone users.

This issue has recently been discussed in a class action suit against Google, Inc. When Google was completing its Street View project, part of the project was to detect where the wireless access points were, but it also collected a large amount of data from unprotected wireless networks, such as individuals’ emails, passwords, and browser history. The plaintiffs argue that this collection of sensitive data was illegally intercepted because the users had an expectation of privacy. Google argues that it was legally obtained because the data was not secured. The court found in the plaintiffs’ favor stating, “[T]he wireless networks were not readily accessible to the general public as defined by the particular communication system at issue.” (In re Google Inc. St. View Elec. Communs. Litig., 794 F. Supp. 2d 1067, 2011 U.S. Dist. LEXIS 71572 (N.D. Cal. 2011).

This case clearly illustrates the problem of ineffective legislation attempting to solve technological problems. If the legislation is too strict, the fear is that it will stifle progress and innovation. Conversely, without clear, current laws, individuals’ privacy may be compromised. Whether it may be the Do Not Track proposed legislation, the President’s Privacy Bill of Rights, or something yet to come, the issue remains how to create laws that provide adequate safeguards while incorporating a flexible standard to adapt with the changes in technology.

If legislation continues to be ill equipped at dealing with these issues, high technological industry standards could enforce an atmosphere that would place a premium on individuals’ privacy.

The Making of the Next John D. Rockerfeller: Are Vertical Integrations Setting the Stage for Technological Monopoly?

Google has proven its ability to amaze us over and over again with products like Google Earth, Google Voice, Google driverless car and much more. While many are pleased that this continued innovation comes from a socially responsible corporation, others are concerned that its ambitious expansion could turn into a technological monopoly.

Not including the recent false reports on acquisition of WiFi provider ICOA, Google has actually acquired more than one company per week on average since 2010. Google’s rapid growth has triggered a chain of products, acquisitions and partnerships that extends well beyond pure web search engine. Its products range from various applications, Android mobile operating system to Google Chrome OS browser operating system. It owns several websites that top the most visited website list, along with Google, such as YouTube and Blogger. In 2012, Google began to establish its presence in the hardware industry by partnering with major electronics manufacturers on its “Nexus” series and its acquisition of Motorola Mobility. Google also initiated the Google Fiber broadband Internet service project with the construction of fiber-optic infrastructure in Kansas City.

Google has reached the height of vertical integration. It has purchased sufficient vertically integrated companies in its supply and production chain to prevent hold-up problems. Google and its subsidiaries now essentially control the hardware, software, and marketing of its product and possibly even an independent wireless network. It is worth noting that Google is not the only player in the race to vertical integration. Apple controls the design of its iPad and iPhone hardware and software, and sells its own products directly to consumers. Samsung has also thrived by making everything from LCD panels and televisions to processors and smartphones.

Although a vertically integrated company can benefit consumers with improved product quality and reduced production costs, critics argue that Google has subjected itself to scrutiny in light of all the monopoly accusations and FTC investigations. For example, Google could theoretically give Motorola its latest versions of Android exclusively and place other handset makers at a competitive disadvantage. Similarly, Google could use its ownership of YouTube to disadvantage competitors’ search results. One cannot help but wonder, is Google using vertical integration to eliminate its competitors?

Unlike horizontal monopoly, a vertical monopoly is not considered anti-competitive so long as there are opportunities for others to operate in the line of business. Search is the critical gateway by which users navigate the Web and Google already dominates search and search advertising. Google is now broadening its search-dependent products and services, which reinforces its dominance in the field. It is almost impossible for the government to challenge a vertical merger or acquisition between two companies that are not direct rivals. However, consumers can expect to face higher prices and reduced innovations, something that Google once promised would never happen.

A Look At the Internet Radio Fairness Act… and the Royal Mess That is the Copyright Royalties System That It Attempts to Address

On September 21, 2012 Rep. Jason Chaffetz (R-UT) introduced the Internet Radio Fairness Act of 2012 which would alter 17 U.S.C. §801, the statute which establishes the Copyright Royalty Board composed of Copyright Royalty Judges. Under the statute, the Librarian of Congress, as head of a freestanding entity, appoints this panel of judges who set default royalty rates and terms for webcasting digitally recorded music. While the Act enjoys five cosponsors, its senate counterpart has none thus far.

The Act proposes to make the appointment of Copyright Royalty Judges the province of the President with the advice and consent of the Senate, rather than that of the Librarian of Congress as is currently the case. The D.C. Circuit in 2011 held that the since the Librarian is restricted in the ability to remove Copyright Royalty Judges, Congress’s vesting appointment in the Librarian as head of a Department rather than the President makes limiting language of §802(i) unconstitutional as a violation of the Appointments Clause.

The Act would put the burden of proof on the party requesting a royalty to show that such royalty is reasonable. It would change the way rate proceedings are conducted by, for instance, removing the precedential effect of past royalty proceedings. Currently, rates for noninteractive broadcasting are based on interactive broadcasting rates. Much of these are based on extrapolations by expert witnesses testifying about which rates should be adjusted, using regression analysis to remove the effect of interactivity of broadcasting on precedent deals in the interactive market to guide rates to be set in non-interactive broadcasting—as in webcasting services like Pandora. Proponents argue this is problematic as a highly subjective and speculative analysis. Someone will be paying a rate based on fundamentally different market conditions from their own because of the inherent difficulty in trying to project what the non-interactive market actually is (See broadcastlawblog).

Currently, Sirius XM Satellite Radio pays about 8% of its revenue in sound recording royalties under the 801(b) standard while Pandora Internet Radio pays about 50% of its revenue in such royalties under the willing buyer/willing seller standard.

Are the uses that satellite radio makes of artists’ and producers’ copyrighted content so different from the uses used by internet radio services like Pandora as to justify such a large discrepancy in the royalties each one is to pay? SoundExchange is a non-profit tasked with collecting and distributing royalties on behalf of recording artists and master rights owners, that is, owners of recorded works. Its president is among the chorus against the Pandora-backed Act for its potential to reduce record label and musicians’ royalties. Analysts have said the bill seeks to create parity in royalties among internet, satellite, and cable TV services as a share of revenue instead of a flat rate per recording, currently at $.0011 per performance (each play of a song) per listener for an internet radio service.

Proponents of the bill argue that it would establish a fairer approach by using the 801(b) approach for all of these platforms. In theory this would close the gap between internet radio and satellite radio. It would also not allow standard AM/FM radio to pay much lower royalties than internet and satellite counterparts.

Opponents of the bill side with the willing buyer/willing seller approach. Among them is Congressman Jerry Nadler (D-NY) who has circulated a discussion draft of the Interim FIRST Act, touted as a promoting fair compensation for artists. MusicFIRST, a coalition of organizations representing musicians, performers, and producers, whose founding members include the Recording Industry Association of America (RIAA), criticizes Pandora’s lobbying against fair pay for playing authors’ works and seeking to raise profits since going public in mid-2011 when it was valued at over $3 billion at $16 per share. It is currently at $9.44 a share and has made $103 million in the second quarter of its fiscal 2013. Pandora’s opponents have suggested that it could generate more revenue with more ads on its site rather than trimming royalties on content it streams. Recording artists and musicians endorsing MusicFirst range from Jay-Z to Bonnie Raitt to Tom Waits. Which serves to better level the playing field here? Are these platforms even similarly situated? What is actually equitable here?

Proponents of the willing buyer/willing seller approach argue its approach makes an attempt to mirror the marketplace itself, while the 801(b) standard allows Copyright Royalty Judges the discretion to set rates that minimize any disruptive impact on the structure of the industries involved and on generally prevailing industry practices. It is unclear which approach ultimately provides a more equitable balance of the royalties to authors and master rights owners and revenues generated by companies using their content. The Internet Radio Fairness Act does appear to take a subtler approach to updating the current royalty system, which its proponents argue will promote greater innovation and growth in the industry by extending 801(b)’s benefits to all non-interactive broadcasters rather than a select few. The outcome will likely be more based on whose lobbying efforts prove stronger on Capitol Hill.

Creepin’ on your Internet, Surfin’ over your Shoulder

When it comes to the internet, you are never alone. Nor, for that matter, is anything you do or say really private. At its most basic level, the internet now functions as a phone call to the world, telling it exactly what you are thinking, buying, listening to, and reading. And for most people this is the best part of the internet. They can log in to their social media account and announce their inner-most thoughts, tell that funny story about the co-worker with the crazy cats, or share the cutest baby photos in the blink of an eye. Yet for all the willingness to share every instant of your life, the price you pay for this ability is steep: your right to privacy. The Fourth Amendment guarantees that individuals, their homes, and their papers are protected from unwarranted search and seizure. But now that everyone lives their lives simultaneously off- and online, there is a question of how much privacy we really expect online when we share everything anyway?

The Supreme Court has yet to answer this question directly. In Katz v. United States, the Supreme Court held that because society recognized an expectation of privacy while in an enclosed telephone booth, the recording of telephone conversations inside from microphones planted on the outside violated the Fourth Amendment.389 U.S. 347, 353 (1969). The Court found that the Fourth Amendment protects people, not places, which goes hand in hand with its acceptance of the fact that society recognizes that privacy can exist in public places, like the enclosed telephone booth at issue in the case. Id. at 351. The recognition that privacy wasn’t attached to a stationary object, like a house or apartment, but traveled with an individual, was a novel idea that has helped to shape some of the current concepts of privacy that we have today. And while you may not expect privacy in a phone booth anymore because they are, for all intents and purposes, defunct, thanks to this opinion you might have a reasonable expectation of privacy in the contents of your cellphone. Maybe.

In Kyllo v. United States, the Supreme Court found that the warrantless search of a private home through the use of infrared cameras to detect the presence of marijuana growing violated the Fourth Amendment. 533 U.S. 27, 40 (2001). The Court’s opinion in Kyllo though hinged on the belief that the Fourth Amendment “draws a firm line at the entrance to the house.” Id. This was a step back in terms of privacy because the Court retreated to a position where privacy afforded to individuals depends upon the location of the search. While expectation is still part of any analysis of whether a search or seizure implicates the Fourth Amendment, after Kyllo the conception of privacy afforded individuals seems rooted to the home and traditional conceptions of private places.

So what does this mean today, eleven years later, when we, as a society live almost as much of our life online as we do offline? The answer is unclear. Many would presume that because certain social websites allow you to make certain aspects of your online profile “private” that this gives you, the user, some sort of privacy. But the truth of the matter is that the second you connect to the internet, your expectation of privacy is being undermined (unless you have employed one or more of the nifty anti-tracking tactics discussed in this New York Times article). The distinction between the phone booth in Katz, the private home in Kyllo, and an individual’s activities on the internet boil down to one simple fact: a user of social media and email puts information out there to be read by at least one other person. The act of communicating to someone on these sites seems to undermine the very expectation of privacy that society has come to expect. In fact, the mere fact that an individual is talking with someone else further weakens the expectation of privacy because it is difficult to control what another person will do with private information. True, there may be a difference between posting a status update for only certain friends or family to see as opposed to posting the same sentiment on a public message board or on the front page of a well-traveled website. But that difference may be more artificial than actual because of one detail: the user voluntarily put that information on the web to be seen. When phone booths existed, the recognition of privacy while using them was simple to understand: a person went in, shut the door, and had a conversation away from the prying ears of the public. And the same rationale applies to a person’s home: what people do there is done away from the eyes of the public.

When the Court eventually deals with this issue, and at some point it will, the question will turn on what kind of expectation of privacy a user has in a post they have voluntarily put out on the internet to be seen by others. It will also turn on whether the Court recognizes that with an individual’s online and offline lives seamlessly merging into one, the expectation of privacy must depend less on society’s expectations in physical places and more on society’s expectations of privacy in electronic media and communication. But with people sharing more and more of their ostensibly private lives online, the real worry is this: does anyone actually expect privacy online?

Call Me Maybe? – The Use of Cell Phone Records as an Investigative Technique to Locate and Track Suspects

In 2008, the FBI utilized a novel and innovative way to track a band of bank robbers in Texas – they obtained phone records. These records not only documented over 20 calls made between two of the robbers around the time that the heists occurred, but also revealed the identities of the two men, thus allowing police to make an arrest. The two men were charged with robbery and possession of deadly weapons charges and were eventually convicted.

This case marked the beginning of a trend in the investigative method of cell phone tracking. The ambiguity of many longstanding federal privacy laws allows for debate over whether or not such a method is, in fact, constitutional. The Obama administration has taken the stance that because most Americans have no reasonable expectation of privacy when it comes to their cell phone records, their Fourth Amendment rights are not violated when a phone company subsequently turns over records to police.

On the other hand, many civil liberties groups such as the American Civil Liberties Union argue that allowing warrantless searches of an individual’s cell phone records could open a so-called “Pandora’s Box” regarding privacy limitations (or lack thereof). If cell phones can be tracked without a warrant, can online history, automobile GPS and even social media be trailed by the government as well sans justification?

And for proponents of this novel investigative technique – how far should investigators be allowed to go? Should warrantless searches be limited to retrospective data such as from where and to whom calls have already been placed? Or should law enforcement be privileged to attain up-to-date live information documenting where a cell phone is at any given moment and receive notification when such a device is used? Questions like these are not readily answered in current privacy statutes and have found themselves at the onus of much litigation regarding the issue.

Four years after the Texas case, this issue finds itself before the federal courts yet again, this time in New Orleans. Again the Obama administration is arguing that warrantless tracking of cell phones is entirely constitutional and does not violate any privacy expectations. In fact, federal prosecutors are maintaining that law enforcement should be able to obtain minute-by-minute movements of such devices for up to 60 days at a time as part of an investigative proceeding. Information to be gleaned by such close monitoring, they argue, involves medical treatments, political associations, religious convictions and even potential indiscretions such as adultery.

Advocates of warrantless searches argue that requiring police to obtain a warrant prior to tracking would only serve to hinder law enforcement’s ability to obtain valuable and crucial information relating to investigations of serious crimes. They state that because a cell phone provider stores and records information regarding cell phone location and usage, and because customers voluntarily convey information to their wireless provider by using their cell phone, that customer, upon signing a cell phone contract, has no reasonable expectation of privacy regarding their mobile device. They maintain that as long as law enforcement is able to demonstrate that the cell phone records are relevant and material to an ongoing investigation, no constitutional rights are violated.

On the other hand, individuals who oppose warrantless searches suggest that while tracking for a period of a few weeks might be constitutional, carrying out the period for over two months violates any expectation of privacy cell phone users may have.

While there is much debate in the Senate regarding this issue, with Democrats vetoing required warrants and Republicans introducing pro-warrant legislation, it does not appear as if the issue is soon to reach a resolution. In an age where an individual’s every movement and conversation can sometimes be traced using technology, whether that be through cell phone records, Facebook, Twitter, or otherwise, it seems as if some limits should be placed on the government’s ability to scrutinize every move of the American public. It is hard to believe that an unsuspecting customer using his or her cell phone or updating a status online impliedly renounces the right to privacy, and essentially acquiesces to having every move subject to the investigative techniques of law enforcement.

IT Human Capital Flight

Immigrants make up one-tenth of the overall U.S population and have made significant scientific and economic contributions to the country. According to recent studies of immigration statistics, the disparity between the large number of skilled professionals waiting for visas and the small number that can be admitted to the U.S is creating a possible reverse “brain-drain” effect of highly skilled labor, particularly in the field of high technology and bio-technology, driving both the talents and their businesses back to their home countries.

Human capital flight, more commonly known as “brain drain”, is the large-scale emigration of a large group of individuals with technical skills or knowledge. The U.S has enjoyed a “brain gain” in the IT, bio tech, aerospace, and entertainment industries since the 1990’s, due to its high wages, comfortable living standards and stabilized system of government. Aside from permanent U.S resident visas, the government introduced the H-1B visa program that allows U.S employers to temporarily employ foreign workers in specialty occupations, subject to numerical limits. Each year, over one million highly skilled professionals compete for the 120,000 permanent U.S resident visas and the 65,000 regular H-1B visas.

With the recently tightened immigration law and the thriving economy in other countries, the best and brightest talents are no longer begging to be let into the U.S. This is an alarming trend because immigrants have founded over 50 percent of Silicon Valley’s companies, including Yahoo!, Google, eBay, YouTube, Intel and Sun Microsystems. Most large IT companies have hired immigration specialists and spent millions of dollars on visa administrations in an effort to prevent losing overseas talents and creativities.

One’s loss is someone else’s gain. For the first time, immigrants have better opportunities outside of the U.S as the advantages in entrepreneurship in their home countries outweigh the burdensome visa application process. China and India, two countries that suffered the most from “brain drain” in the past few decades in the field of high technology, are currently benefiting from this reverse brain-drain effect. Studies show that things are good enough economically in these countries that there is little incentive for IT talents to come to the U.S, let alone stay.

Both candidates for the 2012 presidential election highlighted the importance of immigration reform in an economic context, suggesting changes designed to help retain IT talents and innovative businesses. Experts have recommended an expansion of visa programs to increase the number of visas for highly skilled professionals, creating a modern electronic visa system, and more importantly, addressing American workers’ concerns about impacts of immigration on the unemployment rate. Unless the U.S regains immediate access to these talents, it will soon find itself struggling to compete in the global technology industry.