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<title>Techdirt. Stories filed under &quot;doj&quot;</title>
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<image><title>Techdirt. Stories filed under &quot;doj&quot;</title><url>http://www.techdirt.com/images/td-88x31.gif</url><link>http://www.techdirt.com/</link></image>
<item>
<pubDate>Fri, 17 May 2013 14:34:00 PDT</pubDate>
<title>Want To Destroy Any Hope Of Serious Cybersecurity? Give The DOJ Its Desired Backdoor Wiretaps On All Communications</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130517/08111723117/want-to-destroy-any-hope-serious-cybersecurity-give-doj-its-desired-backdoor-wiretaps-all-communications.shtml</link>
<guid>http://www.techdirt.com/articles/20130517/08111723117/want-to-destroy-any-hope-serious-cybersecurity-give-doj-its-desired-backdoor-wiretaps-all-communications.shtml</guid>
<description><![CDATA[ The Obama administration has supposedly been "considering" the latest version of the DOJ's plan to require backdoor wiretapping abilities in <i>any</i> form of digital communication.  If you don't recall, the FBI <a href="http://www.techdirt.com/articles/20100927/10481011183/feds-pushing-for-new-legally-required-wiretap-backdoor-to-all-internet-communications.shtml">asks</a> for <a href="http://www.techdirt.com/articles/20110216/23535513143/its-back-fbi-announcing-desire-to-wiretap-internet.shtml">this</a> basically every year.  The latest version would lead to <a href="http://www.techdirt.com/articles/20130429/08042622880/doj-wants-to-be-able-to-fine-tech-companies-who-dont-let-it-wiretap-your-communications.shtml">fines</a> for any company that doesn't build in a backdoor wiretapping ability.  We've been pointing out for quite some time that putting in such backdoors only makes us all <a href="http://www.techdirt.com/articles/20130114/20442421683/how-fbis-desire-to-wiretap-every-new-technology-makes-us-less-safe.shtml">less safe</a>, because those with malicious intent will find and use those backdoors.
<br /><br />
A new report has been released, put together by some of the best known technologists and security experts out there, saying that the plan, as being considered <a href="http://www.nytimes.com/2013/05/17/business/concerns-arise-on-us-effort-to-allow-internet-wiretaps.html?ref=sominisengupta&#038;_r=1&#038;" target="_blank">would effectively undermine any cybersecurity regime</a>.  At a time when the administration and Congress keep insisting that we <b>need</b> better <a href="http://www.techdirt.com/blog/?tag=cybersecurity">cybersecurity</a>, to undermine it all with wiretapping backdoors would be ridiculous.  And let's not even begin discussing how this would play out if it passed and number one CISPA backer Mike Rogers then <a href="http://www.techdirt.com/articles/20130507/18341622994/cispa-sponsor-mike-rogers-may-go-to-lead-fbi.shtml">became head</a> of the FBI.
<br /><br />
Among the report's authors are names you might recognize, like Ed Felten, Peter Neumann, Bruce Schneier and Phil Zimmerman.  You can read <a href="https://www.cdt.org/files/pdfs/CALEAII-techreport.pdf" target="_blank">the full report</a> (pdf) to see all the details.  As Ed Felten told the NY Times:
<blockquote><i>
&#8220;It&#8217;s a single point in the system through which all of the content can be collected if they can manage to activate it,&#8221; said Edward W. Felten, a computer science professor at Princeton and one of the authors of the report...  &#8220;That&#8217;s a security vulnerability waiting to happen, as if we needed more,&#8221; he said.
</i></blockquote>
Once again, all of this suggests that the efforts around "cybersecurity" have always been more of a cover story to try to make it easier for law enforcement to access data, rather than any legitimate effort at improving security.<br /><br /><a href="http://www.techdirt.com/articles/20130517/08111723117/want-to-destroy-any-hope-serious-cybersecurity-give-doj-its-desired-backdoor-wiretaps-all-communications.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130517/08111723117/want-to-destroy-any-hope-serious-cybersecurity-give-doj-its-desired-backdoor-wiretaps-all-communications.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130517/08111723117/want-to-destroy-any-hope-serious-cybersecurity-give-doj-its-desired-backdoor-wiretaps-all-communications.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>stupid-ideas</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130517/08111723117</wfw:commentRss>
</item>
<item>
<pubDate>Thu, 16 May 2013 19:58:00 PDT</pubDate>
<title>NZ Supreme Court Will Review Kim Dotcom's Extradition Case</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130516/12483923107/nz-supreme-court-will-review-kim-dotcoms-extradition-case.shtml</link>
<guid>http://www.techdirt.com/articles/20130516/12483923107/nz-supreme-court-will-review-kim-dotcoms-extradition-case.shtml</guid>
<description><![CDATA[ Back in March, we noted that while a district court had <a href="http://www.techdirt.com/articles/20120815/23472720067/new-zealand-high-court-fbi-must-release-its-evidence-against-kim-dotcom.shtml">ordered</a> the US to hand over the evidence it was planning to use against Kim Dotcom, an appeals court had <a href="http://www.techdirt.com/articles/20130301/02155422167/kim-dotcom-loses-appeal-concerning-extradition.shtml">overturned</a> that ruling, and said that the evidence wasn't needed for the extradition fight.  Dotcom immediately appealed to New Zealand's Supreme Court, who has now said <a href="http://www.hollywoodreporter.com/thr-esq/kim-dotcom-case-be-reviewed-524004" target="_blank">that it will review that ruling as well</a>, so this case will continue to drag on for some time.<br /><br /><a href="http://www.techdirt.com/articles/20130516/12483923107/nz-supreme-court-will-review-kim-dotcoms-extradition-case.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130516/12483923107/nz-supreme-court-will-review-kim-dotcoms-extradition-case.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130516/12483923107/nz-supreme-court-will-review-kim-dotcoms-extradition-case.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>not-over-yet</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130516/12483923107</wfw:commentRss>
</item>
<item>
<pubDate>Wed, 15 May 2013 10:44:00 PDT</pubDate>
<title>What National Security Risk? Evidence Suggests Embarassment Drove DOJ Spying On AP Phone Records</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130514/17194923087/what-national-security-risk-evidence-suggests-embarassment-drove-doj-spying-ap-phone-records.shtml</link>
<guid>http://www.techdirt.com/articles/20130514/17194923087/what-national-security-risk-evidence-suggests-embarassment-drove-doj-spying-ap-phone-records.shtml</guid>
<description><![CDATA[ The saga concerning the DOJ scooping up <a href="http://www.techdirt.com/articles/20130513/15401423065/doj-unconcerned-about-constitution-obtained-ap-reporters-phone-records.shtml">phone records</a> of Associated Press has continued to expand.  The DOJ <a href="https://www.documentcloud.org/documents/700725-051413-letter-to-g-pruitt.html" target="_blank">sent a quick and rather disingenuous letter</a> in response to the AP's complaint.  In it, the DOJ -- contrary to its own history of <a href="http://www.techdirt.com/articles/20130514/01190323076/dojs-history-ignoring-rules-when-getting-phone-records-journalists.shtml">abusive practices</a> concerning reporter phone records -- insists that it was incredibly careful to only seek key information involving classified information that "can risk lives and cause grave harm to the security of all Americans."
<br /><br />
The AP quickly <a href="http://blog.ap.org/2013/05/13/ap-responds-to-intrusive-doj-seizure-of-journalists-phone-records/" target="_blank">hit back by calling bullshit on the DOJ's claims</a> of a "narrowly" focused subpoena:
<blockquote><i>
The scope of the subpoena was overbroad under the law, given that it involved seizing records from a broad range of telephones across AP&#8217;s newsgathering operation. More than 100 journalists work in the locations served by those telephones. How can we consider this inquiry to be narrowly drawn?
</i></blockquote>
Furthermore, the AP claims that while the DOJ says that only some records were obtained, the original notification it received indicated a very broad swath of phone records.
<br /><br />
However, the real question that's beginning to come out is whether or not this was really such a serious issue that the DOJ needed to sweep in and grab a bunch of phone records, likely revealing protected journalistic sources.  We've discussed in the past how the Obama administration has been <a href="http://www.techdirt.com/articles/20110516/12185514286/federal-governments-vindictive-legal-assault-nsa-warrantless-wiretapping-whistleblowers.shtml">the most aggressive</a> in history in going after whistleblowers and anyone who leaks to the press -- and, because of that, many are rightly <a href="http://www.slate.com/articles/news_and_politics/jurisprudence/2013/05/obama_s_justice_department_holder_s_leak_investigations_are_outrageous_and.html" target="_blank">wondering if that's what's driving the DOJ here</a>.  As more details come out, there is a very strong indication that the investigation had absolutely nothing to do with security at all.
<br /><br />
A few years ago, we wrote about how Daniel Ellsberg (one of the most famous whistleblower/leakers of all time) speculated that President Obama's unprecedented attacks on whistleblowers were really <a href="http://www.techdirt.com/articles/20110120/02542812739/daniel-ellsberg-others-discuss-serious-implications-wikileaks.shtml">out of embarrassment</a> about questionable things his administration was doing being revealed.  That may be the case with this particular leak and investigation as well.  The AP has pointed out repeatedly that the report they published -- concerning the thwarting of another underwear bomber -- had been held back, but they only published it after the government had said there was no more threat:
<blockquote><i>
We held that story until the government assured us that the national security concerns had passed. Indeed, the White House was preparing to publicly announce that the bomb plot had been foiled.
</i></blockquote>
But the issue appears to go deeper than that.  Eric Holder <a href="http://www.emptywheel.net/2013/05/14/if-undiebomb-2-0-is-one-of-the-worst-leaks-of-holders-career-why-is-john-brennan-cia-director/" target="_blank">made some extreme claims</a> about the leak to defend the collection of the phone records:
<blockquote><i>
This was a very serious leak. A very, very serious leak. I&#8217;ve been a prosecutor since 1976, and I have to say that this is among, if not the most serious, it is within the top two or three most serious leaks I&#8217;ve ever seen. It put the American people at risk. And that is not hyperbole. It put the American people at risk.
</i></blockquote>
However, as emptywheel points out in the link above, John Brennan, now head of the CIA, apparently was the one who revealed to the press the fact that the bomber was a US agent and that there was no real risk to anyone.  During his appointment hearings, when questioned about leaking that info to the press, Brennan explained:
<blockquote><i>
I think what you're referring to, Senator, is when I had a teleconference with some individuals, former government officials from previous administrations who were going to be out on talk shows on the night that a IED was intercepted.
<br /><br />
And so I discussed with them some of the aspects of that, because I was going on the news network shows the following day, I wanted to make sure they understood the nature of the threat and what it was and what it wasn't.
<br /><br />
And so what I said, at the time, because I said I couldn't talk about any operational details, and this was shortly after the anniversary of the Bin Laden takedown, <b>I said there was never a threat to the American public as we had said so publicly, because we had inside control of the plot and the device was never a threat to the American public.</b>
</i></blockquote>
When asked more specifically about this, Brennan again insisted that there was no threat because the US was in control.  As emptywheel asks, if this particular leak of information -- which it seems Brennan did directly -- was really so much of a threat that "put people at risk," then why would Brennan be appointed and approved to head the CIA?
<br /><br />
So, now we have a situation where the AP reported on information which it's pretty clear the government told them was no security risk.  That resulted in the eventual "outing" that the guy who had the bomb was a US controlled agent, which is apparently why the US government was upset.  But that outing seems to have come not from these reporters, but from the now head of the CIA directly to members of the press.  And yet it's the reporters that are being aggressively investigated, while Brennan gets the job at the top of the CIA?
<br /><br />
Once again, this points to an administration cracking down on leaks not because of any real risk or threat, but out of embarrassment.<br /><br /><a href="http://www.techdirt.com/articles/20130514/17194923087/what-national-security-risk-evidence-suggests-embarassment-drove-doj-spying-ap-phone-records.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130514/17194923087/what-national-security-risk-evidence-suggests-embarassment-drove-doj-spying-ap-phone-records.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130514/17194923087/what-national-security-risk-evidence-suggests-embarassment-drove-doj-spying-ap-phone-records.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>national-security?</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130514/17194923087</wfw:commentRss>
</item>
<item>
<pubDate>Tue, 14 May 2013 10:44:00 PDT</pubDate>
<title>DOJ's History Of Ignoring The Rules When Getting Phone Records Of Journalists</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130514/01190323076/dojs-history-ignoring-rules-when-getting-phone-records-journalists.shtml</link>
<guid>http://www.techdirt.com/articles/20130514/01190323076/dojs-history-ignoring-rules-when-getting-phone-records-journalists.shtml</guid>
<description><![CDATA[ There was, of course, plenty of talk about the DOJ getting two months of <a href="http://www.techdirt.com/articles/20130513/15401423065/doj-unconcerned-about-constitution-obtained-ap-reporters-phone-records.shtml">phone records</a> concerning calls involving some reporters.  Since the original story came out, reporters have quickly deduced <a href="http://www.huffingtonpost.com/2013/05/13/ap-phone-records-doj-leaks_n_3268932.html" target="_blank">what the government was after</a>: they were trying to figure out who leaked information about the CIA <a href="http://usatoday30.usatoday.com/news/washington/story/2012-05-07/al-qaeda-bomb-plot-foiled/54811054/1" target="_blank">stopping a plane bombing plot</a>, because the "would be bomber" was actually working for the US, and revealing the news apparently ended the work early.  The DOJ going batshit insane over a leak to the press is, unfortunately, par for the course for the Obama administration, which has been ridiculously <a href="http://www.techdirt.com/articles/20110702/00451614941/latest-attempt-obama-administration-to-punish-whistleblowers.shtml">aggressive</a> (to an unprecedented level) in going after anyone who leaks to the press.
<br /><br />
And while some are still trying to argue that this is a <a href="http://www.volokh.com/2013/05/13/the-non-story-of-the-ap-phone-records-at-least-so-far/" target="_blank">non-story</a>, what may be more important is pointing out what a complete bullshit response the DOJ gave to this whole thing:
<blockquote><i>
Despite the seizure of the phone records, a Justice Department spokesman said the agency valued freedom of the press and was &#8220;always careful and deliberative in seeking to strike the right balance between the public interest in the free flow of information and the public interest in the fair and effective administration of our criminal laws.&#8221;
</i></blockquote>
The "right balance"?  Well, let's take a look about how "always careful and deliberative" the DOJ is on these kinds of things.  Julian Sanchez <a href="https://twitter.com/normative/status/334117349852606464" target="_blank">helpfully points us</a> to the infamous 2010 report from the DOJ's Inspector General <a href="http://www.justice.gov/oig/special/s1001r.pdf" target="_blank">detailing how the FBI regularly abused "exigent letters"</a> (pdf) -- better known as National Security Letters or NSLs -- to get phone records.  This report got <a href="http://www.techdirt.com/articles/20100119/0339467809.shtml">plenty of attention</a> at the time, but if you don't recall all 300 pages of it, there's a discussion about getting info from reporters' call logs starting on page 89 (of the official pagination, which falls on page 102 of the pdf) detailing heavily redacted examples of getting reporters' phone records without getting the proper authorization or approvals.  What is striking is the extremely cavalier attitude law enforcement seems to have about this.  Here is just one example of the DOJ's "always careful and deliberative process" when "seeking to strike the right balance" in getting access to reporters' phone records.  This case was an investigation into a leak that appeared in articles in the NY Times and the Washington Post.  The full story is much longer, but here are the key points:
<blockquote><i>
On November 5, [redacted], the case agent sent an e-mail asking another Special Agent in the [redacted] Field Office to inquire, in the other agent's capacity as his squad's liaison to the CAU, whether the on-site communications service providers could obtain telephone toll records of U.S. persons making [redacted] calls [redacted].  The case agent's November 5 e-mail listed 12 [redacted] telephone numbers, 8 of which were identified in the e-mail as belonging to Washington Post reporters [redacted] and Washington Post researcher [redacted] and New York Times reporters [redacted]  The email identified a 7-month period -- a few months before and a few months after the published articles -- as the time period of interest for the leak investigation.
<br /><br />
[....] However, in absence of any request from the case agent or anyone in the FBI, the CAU SSA <b>issued an exigent letter</b> dated December 17, [redacted], to Company A for telephone records of the reporters and others listed in the case agent's November 5, [redacted], e-mail.  We determined that the SSA did this <b>without further discussion with the case agent or the Special Agent who had asked only whether such records could be obtained through on-site providers, not that the records should be obtained</b>.
<br /><br />
The CAU SSA's exigent letter sought records on nine telephone numbers, seven of which were identified in the e-mail exchanges described above as belonging to Washington Post and New York Times reporters or their news organizations' bureaus in [redacted].....
<br /><br />
<b>The exigent letter did not specify the 7-month interval noted in the case agent's November 5 e-mail, or contain any date restrictions.</b>  The exigent letter also stated that the request was made "due to exigent circumstances" and that "subpoenas requesting this information have been submitted to the U.S. Attorney's office who will process and serve them formally on [Company A] as expeditiously as possible."  However, <b>this statement was not accurate.  A subpoena request had not been sent to the U.S. Attorney's Office at the time the exigent letter was served, or at any time thereafter.</b>
</i></blockquote>
That's the "always careful and deliberative process"?  Hmm.  Later in the report, they note that even when the agent only had asked about (and never actually sought) 7 months of records, thanks to the NSL, they got months and months of records, nearly none of which was actually in the 7 month period the agent was interested in.  All total, they were sent 1,627 telephone call records, and only <i>three</i> calls were from that 7 month period.  Oh, and once they got those records, they were uploaded into a database, where they were searchable by other FBI staff and other government personnel as well.
<br /><br />
The report notes a few other examples of agents getting access to reporter phone information without the proper authorization as well.
<br /><br />
Of course, once this came out the FBI and DOJ insisted that this was no big deal.  But, in a coincidence of timing, just before this whole story broke, the FBI was in court, seeking to <a href="http://www.huffingtonpost.com/2013/05/13/fbi-exigent-letters-memo-_n_3268167.html" target="_blank">keep secret the memo that gave the "legal basis"</a> for its past use of NSLs to access phone records.  While the DOJ insists that it's not using these processes any more, it still thinks it should keep the legal basis for why it issued those letters a complete secret.  They claim, ridiculously, that this would "chill deliberative discussions within the Executive Branch."  But people aren't asking for deliberative discussions, just the very specific claimed legal basis for issuing such letters.  And, of course, the DOJ would prefer not to say.
<br /><br />
Given all of this, is it any wonder that people suspect the DOJ of being up to no good?<br /><br /><a href="http://www.techdirt.com/articles/20130514/01190323076/dojs-history-ignoring-rules-when-getting-phone-records-journalists.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130514/01190323076/dojs-history-ignoring-rules-when-getting-phone-records-journalists.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130514/01190323076/dojs-history-ignoring-rules-when-getting-phone-records-journalists.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>not-the-first-time</slash:department>
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</item>
<item>
<pubDate>Mon, 13 May 2013 16:04:47 PDT</pubDate>
<title>DOJ Unconcerned About The Constitution, Obtained AP Reporters' Phone Records</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130513/15401423065/doj-unconcerned-about-constitution-obtained-ap-reporters-phone-records.shtml</link>
<guid>http://www.techdirt.com/articles/20130513/15401423065/doj-unconcerned-about-constitution-obtained-ap-reporters-phone-records.shtml</guid>
<description><![CDATA[ We've talked quite a bit about how the federal government has been pretty aggressively shattering any remnants of the 4th amendment, and while there are some parts of the 1st amendment that are still respected, our government doesn't always seem so keen on that one either.  Apparently, they've decided to kill two birds with one stone recently, in <a href="http://blog.ap.org/2013/05/13/ap-responds-to-intrusive-doj-seizure-of-journalists-phone-records/" target="_blank">obtaining a broad collection of phone records concerning Associated Press journalists</a>, which is almost certainly in violation of the law.  The AP only just found out about this on Friday, despite the data already being obtained, and covering more than 20 separate phone lines (including work, home and mobile phones) for multiple AP journalists -- and a period covering approximately two months in early 2012.  The AP has sent a <a href="https://www.documentcloud.org/documents/700353-letter-to-eric-holder-tcm28-12896.html" target="_blank">quite reasonably angry letter</a> to Attorney General Holder about this collection.
<blockquote><i>
There can be no possible justification for such an overbroad collection of the telephone 
communications of The Associated Press and its reporters. These records potentially reveal 
communications with confidential sources across all of the newsgathering activities 
undertaken by the AP during a two-month period, provide a road map to AP&#8217;s 
newsgathering operations, and disclose information about AP&#8217;s activities and operations 
that the government has no conceivable right to know.
<br /><br />
That the Department undertook this unprecedented step without providing any notice to 
the AP, and without taking any steps to narrow the scope of its subpoenas to matters 
actually relevant to an ongoing investigation, is particularly troubling.
<br /><br />
The sheer volume of records obtained, most of which can have no plausible connection to 
any ongoing investigation, indicates, at a minimum, that this effort did not comply with 28 
C.F.R. &sect;50.10 and should therefore never have been undertaken in the first place. The 
regulations require that, in all cases and without exception, a subpoena for a reporter&#8217;s 
telephone toll records must be &#8220;as narrowly drawn as possible.&#8217;&#8217; This plainly did not 
happen
</i></blockquote>
The AP also (again, quite reasonably) notes that this appears to be a "serious interference with AP's constitutional rights to gather and report the news" and demand that the government destroy all copies of the data it received.
<br /><br />
This really is an incredibly broad move by the government.  Especially when it comes to reporters, the government has generally respected the right for reporters to keep their sources private, even if this administration has been known to <a href="http://www.techdirt.com/articles/20110702/00451614941/latest-attempt-obama-administration-to-punish-whistleblowers.shtml">threaten reporters</a> if they won't reveal sources.  In case you're wondering <a href="http://www.law.cornell.edu/cfr/text/28/50.10" target="_blank">the law here is pretty clear</a> about the limitations on getting this kind of info.
<blockquote><i>
There should be reasonable ground to believe that a crime has been committed and that the information sought is essential to the successful investigation of that crime. The subpoena should be as narrowly drawn as possible; it should be directed at relevant information regarding a limited subject matter and should cover a reasonably limited time period. In addition, prior to seeking the Attorney General's authorization, the government should have pursued all reasonable alternative investigation steps as required by paragraph (b) of this section.
</i></blockquote>
I'm sure that Eric Holder will try to tapdance around this one as well, but the claims here are very serious.  On the positive side, perhaps this will finally help the press wake up to the continued expansion of the federal government's surveillance operations and their general disdain for the constitution if it helps them go after whoever they want.  The press likes to go nuts when some startup accidentally leaks some data or tracks what people are doing online, but routinely ignores how the government seems to feel entitled to any bit of private data about anyone, often without a warrant.  Perhaps having the press have their records taken will wake some of them up to the fact that it impacts them as well (perhaps even more than others).<br /><br /><a href="http://www.techdirt.com/articles/20130513/15401423065/doj-unconcerned-about-constitution-obtained-ap-reporters-phone-records.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130513/15401423065/doj-unconcerned-about-constitution-obtained-ap-reporters-phone-records.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130513/15401423065/doj-unconcerned-about-constitution-obtained-ap-reporters-phone-records.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>freedom-of-the-press?-ha!-what's-that?</slash:department>
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<pubDate>Thu, 9 May 2013 15:59:42 PDT</pubDate>
<title>Judge Allows FBI To Use Evidence Collected Via Stingray Fake Cell Towers</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130508/17171423010/judge-allows-fbi-to-use-evidence-collected-via-stingray-fake-cell-towers.shtml</link>
<guid>http://www.techdirt.com/articles/20130508/17171423010/judge-allows-fbi-to-use-evidence-collected-via-stingray-fake-cell-towers.shtml</guid>
<description><![CDATA[ For the past few years, we've been covering a key DOJ case against Daniel Rigmaiden.  Rigmaiden appears to have been involved in some likely fraud, but after asking how the feds tracked him down, it was revealed that they used a <a href="http://www.techdirt.com/articles/20110923/17251716080/details-emerging-stingray-technology-allowing-feds-to-locate-people-pretending-to-be-cell-towers.shtml">fake mobile tower</a>, often referred to as a "stingray" (though the actual product goes by a few different names), to create an effective man in the middle attack. This allowed the FBI to keep tabs on Rigmaiden's location and some of what he was doing, as the aircard he used to get online was suddenly running through their own special fake Verizon tower.  In fact, it later came out that the DOJ has been <a href="http://www.techdirt.com/articles/20130327/15223122490/doj-mislead-judges-how-much-it-was-using-stingray-mobile-surveillance.shtml">misleading judges</a> for years about its use of the technology.
<br /><br />
However, a judge has now ruled that none of that really matters, and that the evidence collected by the stingray (or as a result of its use) <a href="http://www.wired.com/threatlevel/2013/05/rigmaiden-cell-tower-evidence/" target="_blank">can be used in the case against Rigmaiden</a>.  The reasoning is fairly odd, however.  The judge basically said that there's no 4th Amendment issue because Rigmaiden had no reasonable expectation of privacy in either the use of the aircard or in his apartment "because he had obtained the air card and rented the apartment and storage space through fraudulent means &#8212; that is, using identifications that he had stolen from other people."  That seems like a highly questionable standard on which to base that decision.  As the ACLU points out, while Rigmaiden may have been committing fraud elsewhere, and may have used different names in getting the aircard and the space, there is no indication that any fraud was involved in getting those particular things.  Under this ruling, you could see that doing something or buying something under an alias could be viewed as giving up one's 4th Amendment protections -- and that seems crazy.
<br /><br />
The court also didn't seem to much care about the DOJ hiding its use of the stingray from judges:
<blockquote><i>
The judge also ruled that the government was not in the wrong for failing to disclose to a magistrate judge that it planned to use a stingray to track the defendant, or to explain to the judge how the tracking device it intended to use worked. He characterized this information as a &#8220;detail of execution which need not be specified.&#8221;
</i></blockquote>
That seems fairly troubling, as it would allow the DOJ to hide other surveillance efforts that <i>might</i> be judged to be 4th Amendment violations... As the ACLU notes in response to this ruling:
<blockquote><i>
&#8220;When the government is seeking a warrant to use new technology, it has the duty to explain to the court what that technology is and how it works,&#8221; she said. &#8220;Stingrays are a very potent example of why that is so, because it scoops up innocent information of third parties who are not under probable cause surveillance.&#8221;
</i></blockquote><br /><br /><a href="http://www.techdirt.com/articles/20130508/17171423010/judge-allows-fbi-to-use-evidence-collected-via-stingray-fake-cell-towers.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130508/17171423010/judge-allows-fbi-to-use-evidence-collected-via-stingray-fake-cell-towers.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130508/17171423010/judge-allows-fbi-to-use-evidence-collected-via-stingray-fake-cell-towers.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>that-4th-amendment-thing...</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130508/17171423010</wfw:commentRss>
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<pubDate>Wed, 8 May 2013 11:46:09 PDT</pubDate>
<title>Feds Realize That Exploiting A Bug In Casino Video Poker Software Is Not Hacking And Not A CFAA Violation</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130508/11121223004/feds-realize-that-exploiting-bug-casino-video-poker-software-is-not-hacking-not-cfaa-violation.shtml</link>
<guid>http://www.techdirt.com/articles/20130508/11121223004/feds-realize-that-exploiting-bug-casino-video-poker-software-is-not-hacking-not-cfaa-violation.shtml</guid>
<description><![CDATA[ For years, we've talked about how casinos were able to get away with <a href="http://www.techdirt.com/articles/20071026/022323.shtml">not paying</a> people who won jackpots from electronic gambling machines, by claiming that their wins were really because of <a href="http://www.techdirt.com/articles/20100607/0240579712.shtml">software glitches</a>.  That always seemed like a highly questionable practice, but even more questionable was filing criminal charges against winners who won because of those glitches.  We talked about one such <a href="http://www.techdirt.com/articles/20070722/222657.shtml">case</a> back in 2007, and then <a href="http://www.techdirt.com/articles/20110106/15343412554/is-figuring-out-slot-machine-software-glitch-making-money-it-crime.shtml">another one</a> in early 2011.  That 2011 case involved two guys, John Kane and Andre Nestor, who had figured out a bug in some video poker software from International Game Technology, a gaming giant.
<br /><br />
The bug was very complex.  It involved a series of different steps that had to be taken: play one game on the machine until you have a high payout, then switch to a different game, play until an option popped up to "double up" (basically a double or nothing proposition on a "high card wins" bet), then add more money to the machine, exit the specific game, change the denomination amount to the game maximum, and then switch back to the original game played.  At that point the high payout from the initial round shows, allowing that amount to be re-awarded.  On top of that, it would recalculate the award by the new denomination level, often increasing the "payout" by 10x.
<br /><br />
Apparently Kane discovered this bug by accident from playing a ridiculous amount of video poker.  His lawyer claims that Kane was obsessed with video poker and probably played it more than anyone.  He also insists that there was no research or effort that went into this.  It was just a fluke from playing so often that Kane found the bug -- and then got his buddy Nestor (and a few others) involved in using this bug to win an awful lot of money.  When Nestor was arrested, he was reasonably <a href="http://www.wired.com/threatlevel/2013/05/game-king/" target="_blank">angry about the whole thing</a>:
<blockquote><i>
&#8220;I&#8217;m being arrested federally for winning on a slot machine,&#8221; he said. &#8220;It&#8217;s just like if someone taught you how to count cards, which we all know is not illegal. You know. Someone told me that there are machines that had programming that gave a player an advantage over the house. And that&#8217;s all there is to it.&#8230;
<br /><br />
&#8220;Who would not win as much money as they could on a machine that says, &#8216;Jackpot&#8217;? That&#8217;s the whole idea!&#8221;
</i></blockquote>
The feds, of course, hit them with CFAA (Computer Fraud and Abuse Act) charges, the same highly questionable hacking law we've been writing <a href="https://www.techdirt.com/blog/?tag=cfaa">so much</a> about lately.  The feds argued that Kane and Nestor "exceeded authorized access" -- one of the most troubling parts of the CFAA.  The DOJ argued that:
<blockquote><i>
In short, the casinos authorized defendants to play video poker. What the casinos did not do was to authorize defendants &#8216;to obtain or alter information&#8217; such as previously played hands of cards. To allow customers to access previously played hands of cards, at will, would remove the element of chance and obviate the whole purpose of gambling. It would certainly be contrary to the rules of poker.
</i></blockquote>
However, the court was skeptical of this argument, and after the 9th Circuit's <a href="http://www.techdirt.com/articles/20120410/10512618441/no-violating-your-employers-computer-use-policy-is-not-criminal-hacking.shtml">ruling</a> in last year's case against David Nosal, where they said that merely violating an employer's computer use policy did not mean  you had exceeded authorized access, the court asked the DOJ to explain how the CFAA still applied in light of the Nosal ruling.
<br /><br />
Apparently, the DOJ realized that the CFAA charges no longer made sense and, yesterday afternoon <a href="http://www.wired.com/threatlevel/2013/05/video-poker-hacking-dismissed/" target="_blank">dropped those charges</a>.  In a simple filing with no explanation, the DOJ asks the court to dismiss the two CFAA-related charges in the indictment.  Kane and Nestor still face a single wire fraud charge, but that's much less of a threat than the CFAA charges.  At the very least, it's good to see increasing pushback on the DOJ for its regular abuse of the CFAA to pile on charges.<br /><br /><a href="http://www.techdirt.com/articles/20130508/11121223004/feds-realize-that-exploiting-bug-casino-video-poker-software-is-not-hacking-not-cfaa-violation.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130508/11121223004/feds-realize-that-exploiting-bug-casino-video-poker-software-is-not-hacking-not-cfaa-violation.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130508/11121223004/feds-realize-that-exploiting-bug-casino-video-poker-software-is-not-hacking-not-cfaa-violation.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>about-time</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130508/11121223004</wfw:commentRss>
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<pubDate>Wed, 1 May 2013 15:47:00 PDT</pubDate>
<title>Mainstream Press Waking Up To DOJ's Massive Overreaction To Minor Computer Hacks</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130430/16153522894/mainstream-press-waking-up-to-dojs-massive-overreaction-to-minor-computer-hacks.shtml</link>
<guid>http://www.techdirt.com/articles/20130430/16153522894/mainstream-press-waking-up-to-dojs-massive-overreaction-to-minor-computer-hacks.shtml</guid>
<description><![CDATA[ We've talked plenty about the government abusing the CFAA to pretend that some minor hacks were some giant criminal conspiracy, but now even the mainstream press is starting to recognize that an overactive Justice Department seems so freaked out by computers that it feels the need to <a href="http://www.washingtonpost.com/politics/as-cyberthreats-mount-hackers-conviction-fuels-critics-claims-of-government-overreach/2013/04/29/d9430e3c-a1f4-11e2-9c03-6952ff305f35_print.html" target="_blank">use the CFAA over and over again against minor hacks</a>.  We've covered the various cases mentioned in the article in the past, but it's good to see a paper such as the Washington Post call the administration out for its silly overreactions.  It's as if they see a computer and assume that something bad must be happening.  At no point, when it comes to these cases, does the DOJ seem to step back and look at the actual seriousness of any of these cases.<br /><br /><a href="http://www.techdirt.com/articles/20130430/16153522894/mainstream-press-waking-up-to-dojs-massive-overreaction-to-minor-computer-hacks.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130430/16153522894/mainstream-press-waking-up-to-dojs-massive-overreaction-to-minor-computer-hacks.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130430/16153522894/mainstream-press-waking-up-to-dojs-massive-overreaction-to-minor-computer-hacks.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>omg-it's-a-computer!</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130430/16153522894</wfw:commentRss>
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<pubDate>Tue, 30 Apr 2013 09:39:00 PDT</pubDate>
<title>Barnes &#038; Noble's Filing Clearly Explains Why The Patent System Is Broken And How To Fix It</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/blog/innovation/articles/20130429/07091522869/fascinating-bn-submission-why-patent-system-is-broken.shtml</link>
<guid>http://www.techdirt.com/blog/innovation/articles/20130429/07091522869/fascinating-bn-submission-why-patent-system-is-broken.shtml</guid>
<description><![CDATA[ Via Groklaw, we learn of <a href="http://www.groklaw.net/article.php?story=20130424201754688" target="_blank">Barnes &#038; Noble's excellent filing with the FTC and DOJ concerning the problems of today's patent system</a>, and some suggestions on how to fix it.  You can read the <a href="http://www.ftc.gov/os/comments/pae/pae-0012.pdf" target="_blank">full filing</a> on the FTC's site.  In recent years, the FTC has grown <a href="http://www.techdirt.com/articles/20110308/01101513393/ftc-puts-patent-trolls-notice.shtml">increasingly concerned</a> about our broken patent system, in particular about patent trolls -- which they prefer to call "patent assertion entities" (i.e., businesses who exist solely to use patents in to seek money from others).  And, more recently, the FTC has teamed up with the DOJ to see if there's <a href="http://www.techdirt.com/articles/20121120/23114621108/can-ftc-doj-do-what-uspto-wont-crack-down-patent-trolls.shtml">anything</a> that can be done to help fix the situation.
<br /><br />
As Groklaw notes, the B&#038;N filing is clear, concise and highly readable.  It outlines the problem directly:
<blockquote><i>

The patent system is broken. Barnes &#038; Noble alone has been sued by "non practicing entities"&#8212;a/k/a patent trolls&#8212;well over twenty-five times and received an additional twenty-plus patent claims in the last five years. The claimants do not have products and are not competitors. They assert claims for the sole purpose of extorting money. Companies like Barnes &#038; Noble have to choose between paying extortionate ransoms and settling the claim, or fighting in a judicial system ill equipped to handle baseless patent claims at costs that frequently reach millions of dollars.
</i></blockquote>
As they point out clearly, even when they have a very strong case -- either when they don't infringe and/or when the patent is bogus, a lawsuit is incredibly costly in terms of time, money and effort.
<blockquote><i>
In the current system, patent trolls overwhelm operating companies with baseless litigation that is extremely costly to defend. Patent cases generally cost at least $2M to take through trial, and frequently much more. Litigating, even to victory, also entails massive business disruption. Companies are forced to disclose their most sensitive and top-secret technical and financial information and must divert key personnel from critical business tasks to provide information and testimony. The process is exceptionally burdensome, especially on technical staff. Document discovery and depositions seem endless.
<br /><br />
Patent trolls know this and as a result, they sue companies in droves and make settlement demands designed to maximize their financial take while making it cheaper and less painful to settle than to devote the resources necessary to defeat their claims. The current system lets them do so even with claims that are unlikely to prevail on the merits. That is because, whether win lose or draw, the rules effectively insulate trolls from negative consequences except perhaps a lower return than expected from any given company in any given case. They can sue on tenuous claims and still come out ahead. And so the broken system with its attendant leverage allows trolls to extract billions in blackmail from U.S. companies and, in the final analysis, consumers.
</i></blockquote>
One of the great things about the filing is that it reminds the FTC and the DOJ of the constitutional underpinnings of patent law -- not that patents are required or guaranteed, but that their purpose is to promote the progress of the useful arts.  If that is not happening, then the use of patents in such a manner should be seen as unconstitutional.
<blockquote><i>
The Patent and Copyright Clause grants Congress the power "[t]o...promote the Progress of </i><i><b>Science and useful Arts</b></i>," not science fiction and litigious arts. (Article 1, Section 8, Clause 8 (emphasis added)). But the current system allows trolls to pursue fantastic allegations&#8212;claims that would be laughed out of the room in actual scientific or technical circles&#8212;in endless litigation that taxes and taxes true innovators while making no meaningful contribution to society. Barnes &#038; Noble's experience exemplifies this and industry data confirms it. <i>See, e.g.</i>, James Bessen &#038; Michael J. Meurer, "The Direct Costs from NPE Disputes" at 2, Boston Univ. School of Law Working Paper No. 12&#8211;34 (June 28, 2012) (available at <a href="http:// papers.ssrn.com/sol3/papers.cfm?abstract_id= 2091210">http://papers.ssrn.com/sol3/papers.cfm?abstract_id= 2091210</a>) (estimating direct costs of troll litigation on economy at $29 billion for 2011 based upon study that included data from 82 companies and finding additional empirical support for earlier conclusion that "much of the cost borne by technology companies as they defend against NPE lawsuits is a social loss and not a mere transfer"). The system has lost its true north.
</blockquote>
As the company notes, while it's been sued by more than two dozen trolls, and has spent <i>tens of millions of dollars</i> defending itself against them in court, not a single court ruling has come out against Barnes &#038; Noble and in favor of the trolls.  Whenever we talk about patent trolls, some troll supporters show up in the comments to insist that the companies complaining have clearly infringed and should just pay up.  And yet, once again, we see that's clearly not true.  But Barnes &#038; Noble still has to spend all that money defending itself, and not innovating and providing more value to the public.
<br /><br />
Barnes &#038; Noble goes on to point out not just how ridiculous some of the patents are, but also how the trolls keep on fighting and demanding money, even after they have lost the case:
<blockquote><i>
Even the most plainly baseless lawsuits are expensive and can take years to defeat. In at least four cases, Barnes &#038; Noble has faced litigation by patentees asserting the same theories on which they previously lost. In one case, for example, Barnes &#038; Noble is alleged to infringe patents because BN.com uses the HTML language and returns search results other than exact matches. The patentee asserted these allegations against Barnes &#038; Noble despite having tried and lost a case against other ecommerce retailers based on the same functional allegations levied against their websites. In two of these four cases, the patentees ceased pursuing claims against Barnes &#038; Noble once the United States Court of Appeals for the Federal Circuit affirmed their earlier losses. But in two others, the appeals are not yet final and although Barnes &#038; Noble has filed dispositive motions, the litigations have carried on actively for years.
<br /><br />
In two other recent cases, Barnes &#038; Noble achieved victory at the district court level on summary judgment. In one such case, the Court awarded Barnes &#038; Noble its costs&#8212;but the total awarded was less than $50K. The company expended millions to achieve that victory, but attorneys&#8217; and expert fees are not recoverable as a matter of course.
<br /><br />
Appeals routinely follow summary judgment victories, and Barnes &#038; Noble's experience has been no exception. The Federal Circuit now has a mandatory mediation program. In that program, Barnes &#038; Noble has received demands for substantial settlement payments&#8212;even in cases that it won below. One such demand, for example, exceeded $3M. The settlement demands that patent trolls make on appeal, particularly in the wake of complete defeat, have nothing to do with the merits. They underscore the uncertainty and expense that accompany appeals and potential retrials in patent cases.
<br /><br />
In a growing number of cases, patentees sue Barnes &#038; Noble on multiple patents only to drop one or more of them before trial. This practice underscores that many patent claims are not made in good faith. Rather, plaintiffs frequently assert patents for additional leverage to force companies to expend significant resources mounting a defense on multiple fronts even when they know they will not ultimately prevail.
<br /><br />
Barnes &#038; Noble and other technology companies see countless lawsuits in which the asserted patents purport to cover products and technologies common to the entire industry. We face repeated allegations that anyone using Wi-Fi, anyone using 3G, anyone using MP3, anyone with an e-commerce website, anyone using Ethernet, and, recently, anyone using InfiniBand technology, to name a few, is infringing and must pay a hefty price to license purportedly essential patents. The allegations sweep far beyond specific innovations to which a patent might legitimately lay claim.
</i></blockquote>
I recognize I'm quoting extensively from the filing, but it really is <i>that good</i> and deserves to have so much of it highlighted.
<br /><br />
At the end, Barnes &#038; Noble suggests five specific fixes that it believes would help minimize the problems of the patent system.  I agree with many of the suggestions, though still think they could go somewhat further.  Let's look at the five suggestions.
<blockquote><i>
Require Losing Patentees to Pay Costs and Expenses, Including Attorneys' Fees
</i></blockquote>
This is basically B&#038;N coming out in support of the SHIELD Act, the law currently proposed in Congress that would do exactly what's described above.  Obviously, this would help in the situations where trolls are asserting clearly bogus patents hoping that companies will settle to avoid the cost of the litigation.  It is not a perfect solution, but one that would likely hold back some of the worst trolling activities.  It's interesting to note that the filing also suggests allowing such fee shifting for situations in which a troll files a lawsuit over a particular patent, but later drops that patent from the lawsuit.  Often, we've seen that such bogus claims are made merely to drive up the cost of defending the lawsuit, even though even the trolls know the patent in question has nothing to do with the actions of whoever is being sued.
<blockquote><i>
Require Actual Reduction to Practice and Commercialization
</i></blockquote>
I know this one is popular among many patent system critics, and I can understand the argument for it.  It would, certainly limit significant amounts of patent trolling.  My main concern with this one, however, is that if you can envision a good patent (and I know some argue there's no such thing, but let's assume it's possible), perhaps the patent holder isn't in a position to commercialize the invention.  Where I would support this is with a small tweak: that the <i>either</i> the patent holder has commercialized it <i>or</i> they've partnered with someone else who has done so.  That one tweak would make this quite useful in stamping out patent trolling.
<br /><br />
Also, as B&#038;N points out, this requirement serves another important purpose: limiting outrageous attempts to stretch what a patent really covers, including taking a very minor thing and pretending that it's of central importance to a completely different invention.  When a defendant can point to how the patent holder actually commercialized the offering, it's <i>much</i> easier to highlight how the patent holder clearly wasn't trying to cover what the defendant eventually did.
<blockquote><i>
Cap Damages at the Amount Paid to Acquire a Patent
</i></blockquote>
This is another interesting suggestion -- and one that I haven't seen much discussion about.  Barnes &#038; Noble's argument appears to be that a troll, who has purchased the patent and has no interest in bringing a product to market, doesn't have any real "damages" other than the cost it took to acquire the patent.  Furthermore, since the nature of patent trolling usually involves paying a rather small amount for the patent itself, before spinning around and claiming hundreds of millions in "damages," this would certainly help take away a big incentive to patent trolling.
<br /><br />
That said, frankly, this one is a bit less compelling.  Patent system supporters will argue, perhaps reasonably, that the "damages" are the loss of relevant licensing revenue.  And that could possibly make sense, though in most trolling cases, it's unlikely that there's any real likelihood of licensing fees making sense.
<blockquote><i>
Require Clear and Convincing Proof that an Invention is New and Non-obvious for a Patent to Issue
</i></blockquote>
I've been a big supporter of this argument for years.  The Patent Office is just really bad on this front, issuing all sorts of bad patents on a regular basis.  In part, this is because there is no such thing as an adversarial hearing in determining if a patent should be issued.  There's just one side.  On top of that, the incentives for the patent examiner is to approve patents, not to reject them.  So we get a ton of bad patents.  If we raised the bar for what's patentable while also putting the burden on the patent applicant to provide a high level of proof, that would help to reject many bad patents.
<br /><br />
And this wouldn't be a real "change," rather it would be bringing the patent system in line with where it's supposed to be.  Already, patent law requires that an invention be both new and non-obvious.  Yet, patent examiners don't really do a good job making sure it is both of those things.  They may look at some prior art, but often miss tremendous amounts of compelling prior art showing that the invention has already been done before.
<br /><br />
My bigger complaint has been the lack of real "obviousness" testing by the Patent Office.  Right now, they mostly just look at <i>prior art</i> to see if they can show if the new invention was anticipated by previous inventions. But patent art is really what applies to whether or not something is <i>new</i>, not whether or not it's "obvious."  While the two may seem related, they may not be.  As an example to help illustrate the differences: imagine a world in which lots of people are thinking about how to stream video online, but they're held back by a lack of bandwidth.  As bandwidth naturally increases over time, the video streaming becomes technologically feasible.  In that case, the technology to create the stream is not complicated -- the factor that was holding it back wasn't the lack of a compelling invention or breakthrough, but rather waiting for an ancillary technology -- broadband -- to catch up.
<br /><br />
In that case, you could argue that the "invention" is <i>new</i>, but that it's also obvious.  That's harder to show via prior art, but should be clearly understandable to those with actual knowledge or experience in the field.
<br /><br />
On this point of obviousness, I'd also go one step further, as I've advocated in the past: introducing both an independent inventor's defense <i>and</i> the ability to use evidence of independent invention as evidence of obviousness, since multiple players all reached the same place separately.  This makes sense in that it also stops the patent system from destroying the value of the work that every other innovator, who was not the patent holder, did to get to that point.
<blockquote><i>
Keep Trolls Out of the ITC
</i></blockquote>
This is another good one.  As we've talked about for <a href="http://www.techdirt.com/articles/20080702/1117121576.shtml">years</a>, patent holders get a ridiculous two cracks at making life difficult for those they claim are infringing.  First in the courts, and a second time at the ITC, where the rules are different.  The ITC can't order monetary fines, but it can issue injunctions that will block products from being imported into the US, which can be a very big deal for many companies.  Not too long ago, trolls rarely went to the ITC, as it was believed that you had to be actually selling the invention in question to make use of that path -- but after trolls convinced the ITC that <a href="http://www.techdirt.com/articles/20090217/0310283797.shtml">patent licensing itself</a> could be counted as having a "domestic industry" that needs protecting, patent trolls have been flooding the ITC.
<br /><br />
Barnes &#038; Noble reasonably suggests a return to the previous way things were where the ITC can only take part when there's an actual product being produced.
<br /><br />
All in all a really great filing and some fantastic suggestions, though personally I'd push for that independent inventor defense, combined with independent invention being evidence of obviousness.  Hopefully, the FTC, DOJ and others pay attention.<br /><br /><a href="http://www.techdirt.com/blog/innovation/articles/20130429/07091522869/fascinating-bn-submission-why-patent-system-is-broken.shtml">Permalink</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130429/07091522869/fascinating-bn-submission-why-patent-system-is-broken.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/blog/innovation/articles/20130429/07091522869/fascinating-bn-submission-why-patent-system-is-broken.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>now-if-only-someone-would-listen</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130429/07091522869</wfw:commentRss>
</item>
<item>
<pubDate>Mon, 29 Apr 2013 14:19:00 PDT</pubDate>
<title>DOJ Wants To Be Able To Fine Tech Companies Who Don't Let It Wiretap Your Communications</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130429/08042622880/doj-wants-to-be-able-to-fine-tech-companies-who-dont-let-it-wiretap-your-communications.shtml</link>
<guid>http://www.techdirt.com/articles/20130429/08042622880/doj-wants-to-be-able-to-fine-tech-companies-who-dont-let-it-wiretap-your-communications.shtml</guid>
<description><![CDATA[ We've talked a lot about how the Justice Department (DOJ), mainly via the FBI, has been pushing for years to change the laws in order to require tech companies <a href="http://www.techdirt.com/articles/20110216/23535513143/its-back-fbi-announcing-desire-to-wiretap-internet.shtml"> to build wiretapping backdoors</a> into any and every form of communication online.  As we've explained over and over again, this is a really silly proposal, that won't make us any safer.  Instead, it's likely to make us <a href="http://www.techdirt.com/articles/20130114/20442421683/how-fbis-desire-to-wiretap-every-new-technology-makes-us-less-safe.shtml">a lot less secure</a>, because those backdoors will be abused, not just by law enforcement, but by those with malicious intent who will work hard to find the backdoors and make use of them.
<br /><br />
The latest proposal on this front is equally ridiculous.  While it wouldn't dictate specific wiretapping/backdoor standards, it would require that companies make some sort of backdoor available <a href="http://www.washingtonpost.com/world/national-security/proposal-seeks-to-fine-tech-companies-for-noncompliance-with-wiretap-orders/2013/04/28/29e7d9d8-a83c-11e2-b029-8fb7e977ef71_story.html" target="_blank">or face rapidly escalating fines</a>.
<blockquote><i>
Under the draft proposal, a court could levy a series of escalating fines, starting at tens of thousands of dollars, on firms that fail to comply with wiretap orders, according to persons who spoke on the condition of anonymity to discuss internal deliberations. A company that does not comply with an order within a certain period would face an automatic judicial inquiry, which could lead to fines. After 90 days, fines that remain unpaid would double daily. 
</i></blockquote>
This would be a disaster for innovative companies and for public security and privacy as well.  The DOJ really needs to learn that <i>not everything</i> must be tappable.  As it stands now, if I just sit on a park bench talking to someone, the DOJ can't tap it.  Sometimes law enforcement <i>doesn't</i> get the right to hear everything I have to say.  That's the nature of freedom and privacy protection that we're supposed to believe in.  I'm sure with the news that chat apps are now <a href="http://news.cnet.com/8301-1035_3-57581830-94/chat-apps-now-more-popular-than-sms-worldwide/" target="_blank">more popular than SMS worldwide</a>, law enforcement folks think that they need to "do something" to make sure they can spy on those conversations, but that's not true.  Yes, it may make their job harder at times, but in a free country, the focus should be on protecting the freedom of the people, not decimating it to make the job of law enforcement easier.  Those who commit crimes leave other clues beyond their communications online.  Tapping such communications will lead to a massive security risk and huge expense for many innovative companies (likely slowing down the pace of innovation in that space).  Is that worth it just so the DOJ can spy on what you have to say?  That seems doubtful.<br /><br /><a href="http://www.techdirt.com/articles/20130429/08042622880/doj-wants-to-be-able-to-fine-tech-companies-who-dont-let-it-wiretap-your-communications.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130429/08042622880/doj-wants-to-be-able-to-fine-tech-companies-who-dont-let-it-wiretap-your-communications.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130429/08042622880/doj-wants-to-be-able-to-fine-tech-companies-who-dont-let-it-wiretap-your-communications.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>no-that-won't-be-absued-at-all</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130429/08042622880</wfw:commentRss>
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<item>
<pubDate>Thu, 25 Apr 2013 03:12:00 PDT</pubDate>
<title>DOJ Helped AT&#038;T, Others Avoid Wiretap Act, Promised Not To Charge Them If They Helped Spy On People</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130424/19014922826/doj-helped-att-others-avoid-wiretap-act-promised-not-to-charge-them-if-they-helped-spy-people.shtml</link>
<guid>http://www.techdirt.com/articles/20130424/19014922826/doj-helped-att-others-avoid-wiretap-act-promised-not-to-charge-them-if-they-helped-spy-people.shtml</guid>
<description><![CDATA[ Want to know one reason why the feds are so interested in giving blanket immunity to anyone who helps them spy on people?  Perhaps because they're <a href="http://news.cnet.com/8301-13578_3-57581161-38/u.s-gives-big-secret-push-to-internet-surveillance/" target="_blank">already telling companies that they have immunity</a> if they help them spy on people.  Specifically, they've issued special letters of immunity, more or less helping companies like AT&#038;T ignore the Wiretap Act.
<blockquote><i>
Senior Obama administration officials have secretly authorized the interception of communications carried on portions of networks operated by AT&#038;T and other Internet service providers, a practice that might otherwise be illegal under federal wiretapping laws.
<br /><br />
The secret legal authorization from the Justice Department originally applied to a cybersecurity pilot project in which the military monitored defense contractors' Internet links. Since then, however, the program has been expanded by President Obama to cover all critical infrastructure sectors including energy, healthcare, and finance starting June 12.
</i></blockquote>
Basically, the Justice Department, at the urging of the NSA, went to various telcos and ISPs and issued secret letters which told them that if they violated the Wiretap Act, the DOJ promised them it would not prosecute.  Not surprisingly, this kind of thing is not what you would generally consider <i>legal</i>.  However, after CISPA... it would likely be more protected:
<blockquote><i>
A report (<a href="https://www.fas.org/sgp/crs/misc/R42984.pdf">PDF</a>) published last month by the Congressional Research Service, a non-partisan arm of Congress, says the executive branch likely does not have the legal authority to authorize more widespread monitoring of communications unless Congress rewrites the law. "Such an executive action would contravene current federal laws protecting electronic communications," the report says.
<br /><br />
Because it overrides all federal and state privacy laws, including the Wiretap Act, legislation called <a href="/8301-13578_3-57580268-38/cispa-permits-police-to-do-warrantless-database-searches/">CISPA</a> would formally authorize the program without the government resorting to 2511 letters. In other words, if CISPA, which the U.S. House of Representatives <a href="/8301-13578_3-57580275-38/cispa-plan-to-let-feds-receive-confidential-data-wins-big-house-vote/">approved last week</a>, becomes law, any data-sharing program would be placed on a solid legal footing. AT&#038;T, Verizon, and wireless and cable providers have all <a href="http://intelligence.house.gov/hr-3523-letters-support">written letters</a> endorsing CISPA.
</i></blockquote>
Apparently, the DOJ knew  how problematic this was, and the CEOs of the various ISPs had indicated how worried they were about this program, but it still went forward.  In secret, of course.  Until now.
<br /><br />
Suddenly the emphasis on getting CISPA approved, and the attempts to frighten everyone with scare stories of what will happen without it, make a bit more sense...<br /><br /><a href="http://www.techdirt.com/articles/20130424/19014922826/doj-helped-att-others-avoid-wiretap-act-promised-not-to-charge-them-if-they-helped-spy-people.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130424/19014922826/doj-helped-att-others-avoid-wiretap-act-promised-not-to-charge-them-if-they-helped-spy-people.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130424/19014922826/doj-helped-att-others-avoid-wiretap-act-promised-not-to-charge-them-if-they-helped-spy-people.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>uh....</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130424/19014922826</wfw:commentRss>
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<item>
<pubDate>Mon, 22 Apr 2013 03:15:00 PDT</pubDate>
<title>Why The DOJ's Decision To Not Read Dzhokhar Tsarnaev His Miranda Rights Is A Terrible Idea</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130420/00321822776/why-dojs-decision-to-not-read-dzhokhar-tsarnaev-his-miranda-rights-is-terrible-idea.shtml</link>
<guid>http://www.techdirt.com/articles/20130420/00321822776/why-dojs-decision-to-not-read-dzhokhar-tsarnaev-his-miranda-rights-is-terrible-idea.shtml</guid>
<description><![CDATA[ On Friday, while he hunt for Boston bombing suspect Dzhokhar Tsarnaev was still going on (and after his bother, the other main suspect, had already been killed), Senator Lindsey Graham took to Twitter to argue that the US government, if it captures him while he's still alive, <a href="http://www.guardian.co.uk/world/2013/apr/19/lindsey-graham-miranda-rights-suspect" target="_blank">shouldn't read Dzokhar his Miranda rights</a>.  As you hopefully already know, the Miranda rights are the famous "you have the right to remain silent, anything you say can and will be used against you in court, and you have a right to an attorney" etc.  The requirement for a statement along those lines (and the name of the "Miranda rights") came from a 1960s case, <a hrerf="https://en.wikipedia.org/wiki/Miranda_v._Arizona" target="_blank">Miranda v. Arizona</a>, and has since been considered a core part of American due process for those being arrested.  And this is a good thing.
<br /><br />
When Graham made his statement, many got up in arms, and argued that Graham was <a href="http://www.theatlantic.com/politics/archive/2013/04/shorter-lindsey-graham-constitution-what-constitution/275157/" target="_blank">unfamiliar with the Constitution</a>.  While I more or less agree with the basics of that, much of that anger probably should have been directed at the Obama administration, which officially <a href="http://www.salon.com/2011/03/24/obama_rolls_back_miranda/" target="_blank">created an exception to the Miranda rules</a> (unilaterally, without court approval) a few years back (apparently in October of 2010, though news about it only <a href="http://www.nytimes.com/2011/03/25/us/25miranda.html?_r=0" target="_blank">came out in March 2011</a>).
<br /><br />
And, indeed, after Dzhokhar was apprehended, the DOJ said that it was <a href="http://www.huffingtonpost.com/2013/04/19/miranda-rights-boston-bombing-suspect_n_3120333.html" target="_blank">not reading him his Miranda Rights</a> because it was invoking a "public safety exception" with the argument being that they needed to get him to talk to make sure the public wasn't in danger.  As <a href="http://www.slate.com/articles/news_and_politics/jurisprudence/2013/04/dzhokhar_tsarnaev_and_miranda_rights_the_public_safety_exception_and_terrorism.html" target="_blank">others have pointed out</a>, this is a horrifically short sighted decision that can only backfire.
<ol>
<li>Suspending basic rights and due process out of fear is exactly the kind of thing that people attacking the US <i>want</i> to see.  Showing that we can't live up to our most basic rights and principles in the face of a terrorist attack gives those who hate us that much more incentive to keep going.  It's not just a sign of weakness, but an encouragement for those who seek to undermine our society.  In fact, it takes a step in that very direction by showing that the government is willing to throw out the rules and principles when it gets a little scared by a teenager.
</li><li>The slippery slope here is steep and extremely slick.  There are no rules on when the DOJ can suddenly ignore Miranda.  It gets to decide by itself.  This is an organization with a long history of abusing its power, now allowed to wipe out one of the key protections for those they're arresting, whenever it sees fit.  The <i>whole point</i> of the ruling in Miranda is that it should not be up to law enforcement.  A person's rights are their rights.
</li><li>The part that really gets me: if anything, this opens up a really, really stupid line of defense for Dzokhar Tsarnaev if he ever faces a criminal trial.  His lawyers will undoubtedly claim that the arrest and interrogation was unconstitutional due to the lack of (or delay in) Miranda rights.  Why even open up that possibility of a defense for him?
</li><li>The guy has lived in the US for many years -- chances are he actually <i>knows</i> the fact that he has the right to refuse to speak.  So, we're violating our principles, basic Constitutional due process, and opening up a massive opening for a defense, to avoid telling him something he likely already knows.
</li></ol>
It's been said before and it'll be said again, but turning ourselves into a paranoid police state without basic rights means that those who attack us are winning.  We should be better than that, and it's a shame that our leaders have no problem confirming for the rest of the world that we're not.  What a shame.<br /><br /><a href="http://www.techdirt.com/articles/20130420/00321822776/why-dojs-decision-to-not-read-dzhokhar-tsarnaev-his-miranda-rights-is-terrible-idea.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130420/00321822776/why-dojs-decision-to-not-read-dzhokhar-tsarnaev-his-miranda-rights-is-terrible-idea.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130420/00321822776/why-dojs-decision-to-not-read-dzhokhar-tsarnaev-his-miranda-rights-is-terrible-idea.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>this-is-just-stupid</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130420/00321822776</wfw:commentRss>
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<item>
<pubDate>Fri, 19 Apr 2013 09:14:40 PDT</pubDate>
<title>Megaupload Points Out That The DOJ Has Contradicted Itself Concerning Legality Of Serving Megaupload</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130418/18333222758/megaupload-points-out-that-doj-has-contradicted-itself-concerning-legality-serving-megaupload.shtml</link>
<guid>http://www.techdirt.com/articles/20130418/18333222758/megaupload-points-out-that-doj-has-contradicted-itself-concerning-legality-serving-megaupload.shtml</guid>
<description><![CDATA[ Earlier this month, we pointed out that the Justice Department had asked the federal courts to <a href="http://www.techdirt.com/articles/20130214/11192721981/justice-department-looking-to-change-law-that-made-it-impossible-to-serve-megaupload.shtml">amend the federal rules</a> concerning issuing a summons on a corporation.  As the filing made clear, they were concerned about being able to serve criminal complaints on foreign companies with no US presence, since the law clearly says that you need to send a summons to "the organization's last known address within the district or to its principal place of business elsewhere in the United States."  If they can't do that, they don't meet the qualifications of the summons.
<br /><br />
We thought it was noteworthy that the DOJ was looking to change that rule and wrote about it.  It appears that the lawyers for Megaupload have noticed this same point... and quickly realized that this filing pretty clearly <a href="http://www.techfirm.com/megaupload-updates/doj-flip-flops-in-megaupload-case-argues-one-thing-to-the-co.html" target="_blank">contradicted the DOJ's own statements</a> in the Megaupload case, where they insisted that the existing rules did not get in the way of serving Megaupload.  Megaupload is using that to <a href="https://www.documentcloud.org/documents/687128-megaupload-request-for-judicial-notice.html" target="_blank">renew its request</a> to have the indictment dismissed.
<br /><br />
Back in January, it seems, the DOJ told the court that there was no issue at all with the fact that Megaupload had no US address.  As Megaupload summarizes in its filing:
<blockquote><i>
Among other things, the Government argued that, even if the
individuals are never extradited to the United States, the Government can simply ignore Rule 4&#8217;s
requirement that the summons be mailed to Megaupload&#8217;s &#8220;last known address within the district
or to its principal place of business elsewhere in the United States&#8221; and instead mail it to an
alternate destination. (See Dkt. 159 at 3-4 (suggesting that the Government could mail the
summons to the Commonwealth of Virginia&#8217;s State Corporation Commission; or to the
warehouse of third party vendor Carpathia Hosting; or to other third parties).) Previously, the
Government had even suggested that Rule 4&#8217;s mailing requirement is merely hortatory, and that
&#8220;[s]ervice of process in the corporate context . . . is complete upon delivering the summons to an
officer or agent&#8221; of the corporation. (Dkt. 117 at 9-10.)
</i></blockquote>
But that's clearly contradicted by the DOJ's own statement to the courts in the request for the rules change -- which were filed <i>before</i> the DOJ's request to the courts.
<blockquote><i>
The Government&#8217;s letter is directly relevant to the Court&#8217;s consideration of Megaupload&#8217;s
pending motion to dismiss without prejudice, as it contradicts the Government&#8217;s repeated
contention that it can validly serve Megaupload&#8212;a wholly foreign entity that has never had an
office in the United States&#8212;without regard for Rule 4&#8217;s mailing requirement. To the contrary,
the Government explicitly acknowledges in the letter that it has a &#8220;duty&#8221; under the current Rule
to mail a copy of the summons to a corporate defendant&#8217;s last known address within the district
or to its principal place of business elsewhere in the United States. (See Exhibit 1 at 2.)
Moreover, by seeking to have the mailing requirement eliminated, the Government implicitly
admits it cannot validly serve Megaupload consistent with Rule 4 as currently written. Finally,
contrary to the Government&#8217;s contentions before this Court that Rule 4&#8217;s existing provisions are
mere accidents of drafting, the Government is acknowledging to the Advisory Committee that
they are in fact well considered products of &#8220;the environment that influenced the original drafters
of the Federal Rules of Criminal Procedure,&#8221; albeit an environment that the Government believes
&#8220;no longer exists,&#8221; given what it calls the &#8220;new reality&#8221; of &#8220;federal criminal practice.&#8221; (Id. at 2-
3.) To the extent that the Government would urge this Court to work the same substantive
modification of Rule 4 that it is urging upon the Advisory Committee, this Court should be
forthrightly advised in the premises as to the nature of the Government&#8217;s request and the
reasoning behind it.
<br /><br />
The Government&#8217;s letter to the Advisory Committee thus confirms what Megaupload has
argued all along&#8212;that the Government indicted Megaupload, branded it a criminal, froze every
penny of its assets, took its servers offline, and inflicted a corporate death penalty,
notwithstanding the fact that the Government had no prospect of serving the company in
accordance with current law, yet to be amended. Megaupload should not be made to bear the
burdens of criminal limbo while the Government seeks to rewrite the Federal Rules to suit its
purposes.
</i></blockquote>
Those darn pesky rules.<br /><br /><a href="http://www.techdirt.com/articles/20130418/18333222758/megaupload-points-out-that-doj-has-contradicted-itself-concerning-legality-serving-megaupload.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130418/18333222758/megaupload-points-out-that-doj-has-contradicted-itself-concerning-legality-serving-megaupload.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130418/18333222758/megaupload-points-out-that-doj-has-contradicted-itself-concerning-legality-serving-megaupload.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>oops</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130418/18333222758</wfw:commentRss>
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<pubDate>Thu, 11 Apr 2013 10:41:44 PDT</pubDate>
<title>Surprise: Rep. Bob Goodlatte Thinks The Justice Department Is Too Cozy With Hollywood</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130411/01024022673/surprise-rep-bob-goodlatte-thinks-justice-department-is-too-cozy-with-hollywood.shtml</link>
<guid>http://www.techdirt.com/articles/20130411/01024022673/surprise-rep-bob-goodlatte-thinks-justice-department-is-too-cozy-with-hollywood.shtml</guid>
<description><![CDATA[ Rep. Bob Goodlatte, the current head of the House Judiciary Committee, is seen as a friend of copyright maximalists -- generally supporting their legislative efforts.  He's not nearly as extreme as his predecessor, Lamar Smith, but he's hardly seen as a problem for Hollywood.  So, it's a <i>bit</i> surprising to see Goodlatte pen an article for Politico, talking about "waste" at the Justice Department, where he <a href="http://www.politico.com/story/2013/04/goodlatte-excessive-waste-department-of-justice-89825.html?hp=r5" target="_blank">explicitly calls out the DOJ's cozy relationship with Hollywood</a>.
<br /><br />
While he isn't talking about the cozy relationship that worries us -- the domain seizures, the willingness (and eagerness) to act as Hollywood's personal police force, and the revolving door between DOJ lawyers and big entertainment lobbying and litigation firms -- it is still interesting to see Goodlatte less than happy about <i>some</i> aspect of the DOJ and Hollywood's close and personal relationship:
<blockquote><i>
Tax dollars are also used at the department to help the entertainment industry. The FBI has its own Investigative Publicity and Public Affairs Unit, which is dedicated to helping Hollywood make movies and TV shows, including &#8220;The Kingdom,&#8221; &#8220;Fast and Furious 4,&#8221; &#8220;CSI,&#8221; &#8220;Numb3rs&#8221; and &#8220;Without a Trace.&#8221; This perk for Hollywood comes with an annual price tag of $1.5 million to the American taxpayer.
</i></blockquote>
We actually agree that this is a sickening waste of taxpayer funds.  And while it's less concerning than those things we mentioned above, it does serve to provide more reasons <i>why</i> the DOJ seems so eager to buddy up with Hollywood  when it comes to law enforcement.  They're star-chasing.  Either way, kudos to Goodlatte for calling out this point, and hopefully it will <i>also</i> lead to him recognizing that the improper relationship between Hollywood and the DOJ goes well beyond making TV shows.<br /><br /><a href="http://www.techdirt.com/articles/20130411/01024022673/surprise-rep-bob-goodlatte-thinks-justice-department-is-too-cozy-with-hollywood.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130411/01024022673/surprise-rep-bob-goodlatte-thinks-justice-department-is-too-cozy-with-hollywood.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130411/01024022673/surprise-rep-bob-goodlatte-thinks-justice-department-is-too-cozy-with-hollywood.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>didn't-see-that-coming</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130411/01024022673</wfw:commentRss>
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<item>
<pubDate>Thu, 11 Apr 2013 09:38:44 PDT</pubDate>
<title>Justice Department Looking To Change The Law That Made It Impossible To Serve Megaupload</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130214/11192721981/justice-department-looking-to-change-law-that-made-it-impossible-to-serve-megaupload.shtml</link>
<guid>http://www.techdirt.com/articles/20130214/11192721981/justice-department-looking-to-change-law-that-made-it-impossible-to-serve-megaupload.shtml</guid>
<description><![CDATA[ This one is a bit old, but it appears that nothing's happened on it yet.  <a href="http://www.techdirt.com/user/cosmicwonderful">cosmicwonderful</a> alerts us to the fact that, back in October, the DOJ asked the federal courts to <a href="http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/CR%20Suggestions%202012/12-CR-B-Suggestion-Breuer.pdf" target="_blank">amend the rules</a> on serving criminal complaints to foreign companies.  As you may recall, the Justice Department ran into a bit of a <a href="http://www.techdirt.com/articles/20120717/16255619735/doj-tries-to-explain-how-it-can-get-around-requirement-to-serve-megaupload-us.shtml">hiccup</a> when the courts first realized that Megaupload is a foreign corporation with no US address, and that the <a href="http://www.law.cornell.edu/rules/frcrmp/rule_4" target="_blank">federal rules</a> on issuing an arrest warrant or summons requires that a copy be sent to "the organization's last known address within the district or to its principal place of business elsewhere in the United States."
<br /><br />
But what if there is no business in the US?  That's what the DOJ and Megaupload have been fighting about in the courts, though the courts have (so far) said that the DOJ can proceed.  Still, with this <a href="https://www.documentcloud.org/documents/681194-12-cr-b-suggestion-breuer.html" target="_blank">requested amendment</a>, the DOJ makes it clear it doesn't want to run into this issue again.
<blockquote><i>
The Department of Justice recommends amendments to Rule 4 of the Federal Rules of
Criminal Procedure to permit the effective service of a summons on a foreign organization that
has no agent or principal place of business within the United States. We view the proposed
amendments to be necessary in order to effectively prosecute foreign organizations that engage
in violations of domestic criminal law.
<br /><br />
First, we recommend that Rule 4 be amended to remove the requirement that a copy of
the summons be sent to the organization's last known mailing address within the district or
principal place of business within the United States. Second, we recommend that Rule 4 be
amended to provide the means to serve a summons upon an organization located outside the
United States. The proposed amendments are necessary to ensure that organizations that commit
domestic offenses are not able to avoid liability through the simple expedients of declining to
maintain an agent, place of business and mailing address within the United States.
</i></blockquote>
While most of the request for the amendment focuses on a ruling in a case involving Chinese espionage via a Chinese firm called Pangang, Megaupload and Kim Dotcom do get a mention.  The DOJ first notes how unfair it seems that it can't unleash its powers on foreign companies:
<blockquote><i>
Accordingly, the United States
maybe faced with the anomalous result that a private civil litigant will be able to pursue an
action against an organization while the government remains helpless to vindicate the laws of the
United States through a corresponding criminal proceeding.
</i></blockquote>
And then discusses Megaupload in a footnote:
<blockquote><i>
Another example is provided by a pending case, United States v. Dotcom.... A
grand jury returned an indictment against foreign organization Megaupload Limited and other defendants on
racketeering, copyright infringement and money laundering charges. In response, Megaupload Limited &#8212; a foreign
organization that has an extensive presence in the United States (it allegedly leased more than 1,000 servers in the
United States, facilitated the distribution of illegally reproduced works throughout the United States, and has caused
damages in excess of $500 million to victims) &#8212; has specially appeared and argued that it is immune from
prosecution in the United States simply because it does not have an agent or mailing address in the United States:
"Megaupload does not have an office in the United States, nor has it had one previously. Service of a criminal
summons on Megaupload is therefore impossible, which forecloses the government from prosecuting Megaupload."
</i></blockquote>
I wouldn't be surprised to see this amendment eventually go through, though it still does seem somewhat questionable to think that the US government can bring criminal charges against a foreign company with no physical presence within the US.<br /><br /><a href="http://www.techdirt.com/articles/20130214/11192721981/justice-department-looking-to-change-law-that-made-it-impossible-to-serve-megaupload.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130214/11192721981/justice-department-looking-to-change-law-that-made-it-impossible-to-serve-megaupload.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130214/11192721981/justice-department-looking-to-change-law-that-made-it-impossible-to-serve-megaupload.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>but-of-course</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130214/11192721981</wfw:commentRss>
</item>
<item>
<pubDate>Thu, 4 Apr 2013 12:05:54 PDT</pubDate>
<title>DOJ Trying To Hide Secret Interpretations Of The Law Because You'd All DIE!!!!</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130403/18094922565/doj-trying-to-hide-secret-interpretations-law.shtml</link>
<guid>http://www.techdirt.com/articles/20130403/18094922565/doj-trying-to-hide-secret-interpretations-law.shtml</guid>
<description><![CDATA[ It's kind of sad that anyone could possibly think that it's <a href=https://www.techdirt.com/articles/20130103/18043521577/theres-secret-reason-why-government-has-to-keep-it-secret-how-many-americans-its-spying-without-warrant.shtml">okay</a> for the government to have <i>secret interpretations</i> of the law in a free and open society.  "The law" is more than just the legislation itself, but the collection of caselaw and interpretations, combined with the legislation, that make up the overall "law."  If some of those interpretations are kept secret, then how can the public obey the law?  The answer is that they can't -- which is why secret interpretations shouldn't be allowed.  The Justice Department, however, prefers to keep some things secret, and it's asking the court to <a href="http://legaltimes.typepad.com/blt/2013/04/justice-dept-asks-court-to-dismiss-suit-over-secret-courts-opinions.html" target="_blank">dismiss a lawsuit filed by the EFF</a> seeking to find out how the Foreign Intelligence Surveillance Court is interpreting parts of the FISA Amendments Act, after it was <a href="http://www.techdirt.com/articles/20120720/17450619780/feds-wait-until-late-friday-to-admit-that-yeah-they-ignored-4th-amendment.shtml">revealed</a> (late on a Friday) that the court found at least one situation in which the feds collected info in violation of the 4th Amendment.
<br /><br />
The EFF figured the public should know the details.  The DOJ on the other hand... would rather the public stay in the dark.  The DOJ actually suggests that merely revealing the fact that they got slapped down by the FISC provides enough "balance."
<blockquote><i>
Last summer, in an effort to strike the right balance between government 
transparency and the protection of critical intelligence activities, the government 
declassified four statements concerning its activities pursuant to Section 702 of the 
Foreign Intelligence Surveillance Act (&#8220;FISA&#8221;) Amendments Act of 2008. Not content 
with that disclosure, Electronic Frontier Foundation (&#8220;EFF&#8221; or &#8220;Plaintiff&#8221;) submitted a 
Freedom of Information Act (&#8220;FOIA&#8221;) request seeking additional information related to 
two of the declassified statements, specifically, that on at least one occasion the Foreign 
Intelligence Surveillance Court (&#8220;FISC&#8221;) &#8220;held that some collection carried out pursuant 
to the Section 702 minimization procedures used by the government was unreasonable 
under the Fourth Amendment&#8221; and that &#8220;on at least one occasion the FISA Court has 
reached th[e ] conclusion&#8221; that &#8220;the government&#8217;s implementation of Section 702 of 
FISA has sometimes circumvented the spirit of the law.&#8221;
</i></blockquote>
And thus, we should be satisfied with that and want no more.  Also, you don't want to know what kind of hell would break loose if the DOJ had to reveal how the law was <i>actually</i> interpreted.  I mean, we'd all die or something very close to it, judging by the DOJ's language.
<blockquote><i>
The government has determined that 
disclosure of the information withheld from Plaintiff <b>could result in exceptionally grave
and serious damage to the national security</b>. Plaintiff obviously cannot contend 
otherwise. The Court accordingly should defer to the government&#8217;s determination in this 
case, uphold the Department&#8217;s withholdings, and grant this motion.
</i></blockquote>
Basically, we've determined that you're all better off not knowing this information, and you should trust us because it's not like we have any incentives to lie (though, of course, we do).  Also: boo!
<br /><br />
Thankfully, more people are realizing just how ridiculous this is.  The Washington Post has put out an editorial <a href="http://www.washingtonpost.com/opinions/open-justice-departments-legal-interpretations-to-the-public/2013/04/01/9384041c-9b11-11e2-9bda-edd1a7fb557d_story.html" target="_blank">slamming the DOJ for its position</a>:
<blockquote><i>
Yet, as the amicus brief points out, the OLC&#8217;s opinions aren&#8217;t some intermediary step toward establishing the final legal interpretations for the executive branch. In general, they are the final legal interpretations for the executive branch. The FBI could choose to exercise the authority that the OLC said it had &#8212; or not &#8212; but Congress, the judiciary and the public at large all deserve to know what the executive branch thinks it can do, once it issues a conclusive opinion.
</i></blockquote>
In other words, it's not right that the government can determine its own secret interpretations of the law, and it's time for the courts to put a stop to this.<br /><br /><a href="http://www.techdirt.com/articles/20130403/18094922565/doj-trying-to-hide-secret-interpretations-law.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130403/18094922565/doj-trying-to-hide-secret-interpretations-law.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130403/18094922565/doj-trying-to-hide-secret-interpretations-law.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>secret-laws</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130403/18094922565</wfw:commentRss>
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<item>
<pubDate>Fri, 29 Mar 2013 17:37:00 PDT</pubDate>
<title>UPS Coughs Up $40 Million Because It Delivered Drugs From Rogue Pharmacies</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130329/14460922514/ups-coughs-up-40-million-because-it-delivered-drugs-rogue-pharmacies.shtml</link>
<guid>http://www.techdirt.com/articles/20130329/14460922514/ups-coughs-up-40-million-because-it-delivered-drugs-rogue-pharmacies.shtml</guid>
<description><![CDATA[ Whenever we talk about things like "secondary liability" and why it doesn't make sense to blame a company for something their users do, we'll often use examples like pointing out that it's inappropriate to blame AT&#038;T if someone makes a bomb threat over the phone, or to blame Ford for someone driving too fast.  Another example in the "of course that's silly" list may have to removed however: the inappropriateness of blaming UPS or Fedex for what's in the packages they deliver.  That one now has to be retired.  Because the good old US government has made UPS <a href="http://www.reuters.com/article/2013/03/29/net-us-ups-pharmacies-settlement-idUSBRE92S0DX20130329?feedType=RSS&#038;feedName=internetNews" target="_blank">forfeit $40 million</a> to the government for shipping drugs from "illegal internet pharmacies."  Details on what actually happened here are sparse, but the DOJ will be celebrating this one, despite almost none of the important details being shared.
<br /><br />
UPS put out a statement that doesn't sound even remotely forced upon it by DOJ people holding guns.
<blockquote><i>
"We believe we have an obligation and responsibility to help curb the sale and shipment of drugs sold through illegal Internet pharmacies," said Susan Rosenberg, a UPS spokeswoman.
</i></blockquote>
Of course, what is an "illegal internet pharmacy"?  There's a bit of an issue there because the DOJ thinks that an illegal internet pharmacy includes that Canadian pharmacy that is much cheaper, but which is making perfectly legitimate drugs and then shipping them -- gray market style -- into the US.    That's a very different picture than the "illegal internet pharmacy" selling sugar pills or worse.  But, here's the thing about all that: for all the talk of the risks and dangerous of illegal internet pharmacies there are amazingly few stories of any <i>actual harm</i>.  And, in fact, various random tests of the drugs coming from "illegal internet pharmacies" suggest that, for the most part, they're safe (and frequently appear to actually be what they say on the box).   So what is the DOJ protecting us from here?  The scourge of more affordable legal drugs?
<br /><br />
The bigger issue, however, is the question of secondary liability.  I don't <i>want</i> UPS going through my packages to make sure they're not illegal drugs.  Perhaps the government showed direct plans and strategies by UPS to attract illegal pharmacies, but from the outside, given the information that's been revealed, it looks like the real problem is why is the DOJ even bothering?  If UPS and Fedex are going to  have to start checking what's inside packages to avoid getting itself fined again, that's a really bad and dangerous precedent.<br /><br /><a href="http://www.techdirt.com/articles/20130329/14460922514/ups-coughs-up-40-million-because-it-delivered-drugs-rogue-pharmacies.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130329/14460922514/ups-coughs-up-40-million-because-it-delivered-drugs-rogue-pharmacies.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130329/14460922514/ups-coughs-up-40-million-because-it-delivered-drugs-rogue-pharmacies.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>uh,-secondary-liability?</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130329/14460922514</wfw:commentRss>
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<pubDate>Fri, 29 Mar 2013 07:47:24 PDT</pubDate>
<title>Law Professor Eric Goldman: The CFAA Is A Failed Experiment; It's Time To Gut It</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130328/15252122499/law-professor-eric-goldman-cfaa-is-failed-experiment-get-rid-it.shtml</link>
<guid>http://www.techdirt.com/articles/20130328/15252122499/law-professor-eric-goldman-cfaa-is-failed-experiment-get-rid-it.shtml</guid>
<description><![CDATA[ We've been talking a lot about <a href="http://www.techdirt.com/blog/?tag=cfaa+reform">CFAA reform lately</a>, but law professor Eric Goldman is taking it a step further.  He's written a fantastic piece for Forbes that explains why <a href="http://www.forbes.com/sites/ericgoldman/2013/03/28/the-computer-fraud-and-abuse-act-is-a-failed-experiment/" target="_blank">the whole concept underlying the CFAA is a failure and should be almost entirely done away with</a>.  The key part is the theory underlying the CFAA is an attempt to apply the age-old concept of "trespass to chattels" online, in the theory that the online world can be considered not unlike the offline world.  Except... it's not so simple.  Not at all.
<blockquote><i>
Stretching the ancient doctrine of trespass to chattels to apply to Internet activities has been an experiment in law-making.  Unfortunately, I think the experiment has failed completely.  The CFAA and state computer crime laws initially were designed to restrict hackers from breaching computer security&#8212;a sensible objective that, as I discuss below, should be preserved.  The expansion of these laws to cover all sending or receiving of data from an Internet-connected server hasn&#8217;t worked...
</i></blockquote>
He goes on to point out that there have been massive unintended consequences of trying to apply an offline concept to a very different online world, and to also note that other existing laws can already handle many, if not potentially all, of the scenarios that people normally fear concerning malicious computer hacking.
<blockquote><i>
Indeed, because legal doctrines already overlap so extensively, we almost never see an online trespass to chattels claim asserted on a standalone basis.  Instead, an online trespass to chattels claim is usually just one of numerous legal violations asserted against the defendant.  These doctrinal overlaps mean we usually don&#8217;t need online trespass to chattels either to supplement the more squarely applicable claims or to act as a &#8220;gap-filler&#8221; to plug the rare and narrow holes left by the other legal doctrines.
</i></blockquote>
And thus, his recommendation is basically to gut the CFAA almost entirely:
<blockquote><i>
1) Repeal most provisions of the CFAA (that don't relate to government-run computers) and preempt all analogous state laws, including state computer crime laws and common law trespass to chattels as applied online.  Note: without dealing with analogous state laws, reforming the CFAA is an incomplete solution.
<br /><br />
2) Retain only the (A) restrictions on criminal hacking, which I would define as the defeat of electronic security measures for the goal of fraud or data destruction (and some of these efforts are already covered by other laws like the Electronic Communications Privacy Act), and (B) restrictions on denial-of-service attacks, which I would define as the sending of data or requests to a server with the intent of overloading its capacity.
<br /><br />
3) Eliminate all civil claims for this conduct, so that only the federal government can enforce violations.
<br /><br />
4) Specify that any textual attempts to restrict server usage fail unless the terms are presented in a properly formed contract (usually, a mandatory click-through agreement).
</i></blockquote>
It's difficult to <i>argue</i> with these suggestions, which is probably why most of Congress will likely instead <i>ignore</i> them.<br /><br /><a href="http://www.techdirt.com/articles/20130328/15252122499/law-professor-eric-goldman-cfaa-is-failed-experiment-get-rid-it.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130328/15252122499/law-professor-eric-goldman-cfaa-is-failed-experiment-get-rid-it.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130328/15252122499/law-professor-eric-goldman-cfaa-is-failed-experiment-get-rid-it.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>take-a-stand</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130328/15252122499</wfw:commentRss>
</item>
<item>
<pubDate>Thu, 28 Mar 2013 05:56:01 PDT</pubDate>
<title>DOJ Misled Judges For Years About How It Was Using Stingray Devices To Spy On People</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130327/15223122490/doj-mislead-judges-how-much-it-was-using-stingray-mobile-surveillance.shtml</link>
<guid>http://www.techdirt.com/articles/20130327/15223122490/doj-mislead-judges-how-much-it-was-using-stingray-mobile-surveillance.shtml</guid>
<description><![CDATA[ How many times does it need to be repeated?  If you give law enforcement the ability to spy on people -- even with limits -- law enforcement will <i>always</i> blow through those limits and abuse its powers.  It happens over and over and over again.  And that becomes doubly true when law enforcement has worked out ways to avoid oversight.  Back in 2011, the WSJ broke a huge story about the frequent use by government officials of a technique for mobile device surveillance generically called <a href="http://www.techdirt.com/articles/20110923/17251716080/details-emerging-stingray-technology-allowing-feds-to-locate-people-pretending-to-be-cell-towers.shtml">"stingray"</a> devices (technically, there are a few products used for this, only some of which are actually called Stingrays, but the name is now used to refer to all of them).  The device works by pretending to be a mobile phone tower, so devices can connect to it, and law enforcement gets all your data.  It's basically a cellular man-in-the-middle attack, with law enforcement being that man in the middle.  Yay.
<br /><br />
The technology has been a key component in a case involving Daniel Rigmaiden, which we wrote about <a href="http://www.techdirt.com/articles/20120919/15083020437/lapd-joins-feds-skirting-fourth-amendment-with-cell-phone-tracking-devices.shtml">last year</a>.  Rigmaiden was taken into custody (on a fraud charge) and, representing himself in court, he has sought more info on how he was tracked down -- leading to some reluctant disclosure about law enforcement using Stingray devices on questionable authority to find him.  In that case, we noted that law enforcement claimed it had a court order to use the technology, but the judge was confused, asking where were the warrants for the use of the device.  The judge asked how it was possible that a court order or warrant was issued without the judge ever being told about the technology used in surveillance and was told, simply, "it was a standard practice."
<br /><br />
Indeed, that appears to be the case.  The ACLU filed a bunch of FOIA (Freedom of Information Act) requests to dig into this and newly released documents show that, indeed, it was apparently <a href="http://www.aclu.org/blog/national-security-technology-and-liberty/doj-emails-show-feds-were-less-explicit-judges-cell" target="_blank">standard practice by the DOJ to be "less than explicit" and less than "forthright" with judges</a> in seeking warrants and court orders to make use of this technology.  Here's an email that was revealed:
<blockquote><i>
As some of you may be aware, our office has been working closely with the magistrate judges in an effort to address their collective concerns regarding whether a pen register is sufficient to authorize the use of law enforcement's WIT technology (a box that simulates a cell tower and can be placed inside a van to help pinpoint an individual's location with some specificity) to locate an individual. It has recently come to my attention that many agents are still using WIT technology in the field although the pen register application does not make that explicit.
<br /><br />
While we continue work on a long term fix for this problem, it is important that we are consistent and forthright in our pen register requests to the magistrates&#8230;
</i></blockquote>
Basically, that's the DOJ admitting that it has not been forthright or explicit in letting judges know that it is going to use this extremely intrusive form of surveillance in seeking approvals.  And the courts have been concerned about this.  As the ACLU notes, this email was written three years <b>after</b> the Rigmaiden situation happened -- suggesting that the DOJ has been getting away with this sort of thing for many years, without anyone digging in.  The ACLU is now arguing that this should be a reason to suppress the evidence obtained via these devices, and will ask the court to "send a clear message" that it cannot hide the truth from federal judges in seeking rubber stamps to violate the privacy of the public.<br /><br /><a href="http://www.techdirt.com/articles/20130327/15223122490/doj-mislead-judges-how-much-it-was-using-stingray-mobile-surveillance.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130327/15223122490/doj-mislead-judges-how-much-it-was-using-stingray-mobile-surveillance.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130327/15223122490/doj-mislead-judges-how-much-it-was-using-stingray-mobile-surveillance.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>well-of-course</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130327/15223122490</wfw:commentRss>
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<item>
<pubDate>Wed, 27 Mar 2013 03:46:49 PDT</pubDate>
<title>Experts Scratching Their Heads At House Judiciary's Awful CFAA Reform Proposal</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130326/14213522465/cybersecurity-experts-scratching-their-heads-house-judiciarys-awful-cfaa-reform-proposal.shtml</link>
<guid>http://www.techdirt.com/articles/20130326/14213522465/cybersecurity-experts-scratching-their-heads-house-judiciarys-awful-cfaa-reform-proposal.shtml</guid>
<description><![CDATA[ On Monday, we broke the news of the House Judiciary Committee circulating a <a href="http://www.techdirt.com/articles/20130324/14342822435/rather-than-fix-cfaa-house-judiciary-committee-planning-to-make-it-worse-way-worse.shtml">terrible bill</a> that would make the Computer Fraud and Abuse Act (CFAA) much worse, rather than better.  It would expand definitions and make it even <i>easier</i> for the Justice Department to go after people for harmless activity.  In fact, even the part we originally thought might fix one of the worst parts of the CFAA actually <a href="http://www.techdirt.com/articles/20130325/16505322459/turns-out-one-good-change-cfaa-reform-may-actually-be-bad-too.shtml">makes it worse</a>.
<br /><br />
Now that the bill has been out a few days, various experts on the CFAA are scratching their heads about why the House Judiciary Committee is even bothering with this draft bill.  As Orin Kerr notes, this seems to be a basic rehash of the DOJ's attempt 2 years ago to <i>expand</i> the CFAA.  He suggests (and we agree) that <a href="http://www.volokh.com/2013/03/25/house-judiciary-committee-new-draft-bill-on-cybersecurity-is-mostly-dojs-proposed-language-from-2011/" target="_blank">the Judiciary Committee stop taking DOJ language from 2011</a> and start dealing in the present, and deal with the very real problems with the CFAA, and not just with a DOJ who wants more power.
<blockquote><i>
They&#8217;re looking for feedback, so here is mine: Stop taking DOJ&#8217;s language from back in 2011 and packaging it as something new. Based on a quick read, it seems that the amendments for 1030 in <a href="http://www.scribd.com/doc/132249133/House-Judiciary-Committee-discussion-draft">the new draft</a> are mostly copied from a bill that Senator Leahy offered (with substantial input from DOJ, as I understand it) back in November 2011. I criticized that language <a href="http://www.volokh.com/2011/11/22/my-assessment-of-senator-leahys-proposed-amendment-to-the-cfaa/">here</a>. The new circulating draft also adopts the sentencing enhancements (minus mandatories) and the proposed 1030a that DOJ advocated in May 2011. I criticized that initial DOJ language <a href="http://www.volokh.com/2011/05/24/congress-considers-increasing-penalties-adding-mandatory-minimum-sentences-to-the-computer-fraud-and-abuse-act">here</a>. (There&#8217;s also a breach notification provision in the new language, but I haven&#8217;t followed that issue closely; I don&#8217;t know if that proposal is also based on old language.)
<br /><br />
[....] This language is really, really broad. If I read it correctly, the language would make it a felony to lie about your age on an online dating profile if you intended to contact someone online and ask them personal questions. It would make it a felony crime for anyone to violate the TOS on a government website. It would also make it a federal felony crime to violate TOS in the course of committing a very minor state misdemeanor. If there is a genuine argument for federal felony liability in these circumstances, I hope readers will enlighten me: I cannot understand what they are.
</i></blockquote>
Of course, when we brought up similar examples in our original post, people said we were overreacting. Hmm.  Meanwhile Paul Rosenzweig, the former Deputy Assistant Secretary for Policy at Homeland Security is <a href="http://www.lawfareblog.com/2013/03/house-judiciary-cfaa-bill/" target="_blank">similarly stumped</a> by the direction of the reform.
<blockquote><i>
My quick review and reaction to this bill is that it seems to answer most of what the Department of Justice wants with very little for the internet online community in return.  Most notably the bill would make violations of the CFAA predicate acts for a RICO criminal charge &#8212; what this means is that if you engage in just two instances of violating the CFAA, then you are engaged in a pattern of racketeering, with substantial criminal penalties and .. .since the criminal definitions translate directly to civil liability .. a very significant possibility of a &#8220;bet the company&#8221; civil suit.  Not a move designed to foster innovation, I think.
</i></blockquote>
Hopefully, the House Judiciary Committee goes back to the drawing board on this, and takes a closer look at things like <a href="http://www.techdirt.com/articles/20130201/15410021859/rep-zoe-lofgren-continues-to-improve-aarons-law-via-reddit.shtml">Aaron's Law</a>, which is being developed to cut back on the excesses of the CFAA, rather than expand them.<br /><br /><a href="http://www.techdirt.com/articles/20130326/14213522465/cybersecurity-experts-scratching-their-heads-house-judiciarys-awful-cfaa-reform-proposal.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130326/14213522465/cybersecurity-experts-scratching-their-heads-house-judiciarys-awful-cfaa-reform-proposal.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130326/14213522465/cybersecurity-experts-scratching-their-heads-house-judiciarys-awful-cfaa-reform-proposal.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>why-would-they-do-this?</slash:department>
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<pubDate>Thu, 21 Mar 2013 08:49:09 PDT</pubDate>
<title>If Congress Won't Fix The CFAA, President Obama Should Order The DOJ To Stand Down</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130319/02580722374/if-congress-wont-fix-cfaa-president-obama-should-order-doj-to-stand-down.shtml</link>
<guid>http://www.techdirt.com/articles/20130319/02580722374/if-congress-wont-fix-cfaa-president-obama-should-order-doj-to-stand-down.shtml</guid>
<description><![CDATA[ Tim Wu has an excellent article in the New Yorker, talking about the Computer Fraud and Abuse Act (CFAA), and specifically about how it was used against Aaron Swartz, declaring it <a href="http://www.newyorker.com/online/blogs/newsdesk/2013/03/fixing-the-worst-law-in-technology-aaron-swartz-and-the-computer-fraud-and-abuse-act.html" target="_blank">the worst law in technology</a>.  Much of it covers similar ground to what we've covered before, but it also makes some really good points towards the end about how the Obama administration really needs to pull back on its reliance on the law in so many cases.  First, he notes that simply relying on "prosecutorial discretion" is not enough, since we've seen that doesn't work:
<blockquote><i>
The broadest provision, 18 U.S.C. &sect;1030(a)(2)(c), makes it a crime to &#8220;exceed authorized access, and thereby obtain&#8230; information from any protected computer.&#8221; To the Justice Department, &#8220;exceeding authorized access&#8221; includes violating terms of service, and &#8220;any protected computer&#8221; includes just about any Web site or computer. The resulting breadth of criminality is staggering. As Professor Kerr writes, it &#8220;potentially regulates every use of every computer in the United States and even many millions of computers abroad.&#8221; You don&#8217;t have to be a raving libertarian to think that might be a problem. Dating sites, to borrow an example from Judge Alex Kozinski, usually mandate that you tell the truth, making lying about your age and weight technically a crime. Or consider employer restrictions on computers that ban personal usage, like checking ESPN or online shopping. <b>The Justice Department&#8217;s interpretation makes the American desk-worker a felon.</b>
<br /><br />
When judges or academics say that it is wrong to interpret a law in such a way that everyone is a felon, the Justice Department has usually replied by saying, roughly, that federal prosecutors don&#8217;t bother with minor cases&#8212;they only go after the really bad guys. That has always been a lame excuse&#8212;repulsive to anyone who takes seriously the idea of a &#8220;a government of laws, not men.&#8221; After Aaron Swartz&#8217;s suicide, the era of trusting prosecutors with unlimited power in this area should officially be over.
</i></blockquote>
He notes (as <a href="http://www.techdirt.com/articles/20130211/03001721944/congress-apparently-uninterested-aarons-law-to-reform-cfaa.shtml">we have</a>) that it doesn't look like Congress is really taking the matter that seriously yet.  But he also notes that we don't have to wait for Congress.  The DOJ should make it a stated policy not to interpret the law in such a ridiculous manner.
<blockquote><i>
There is a much more immediate and effective remedy: the Justice Department should announce a change in its criminal-enforcement policy. It should no longer consider terms-of-service violations to be criminal. It can join more than a dozen federal judges and scholars, like Kerr, who adopt a reasonable and more limited interpretation. The Obama Administration&#8217;s policy will have no effect on civil litigation, so firms like Oracle will retain their civil remedies. President Obama&#8217;s DREAM Act enforcement policy, under which the Administration does not deport certain illegal immigrants despite Congress&#8217;s inability to make the act a law, should be the model. Where Congress is unlikely to solve a problem, the Administration should take care of business itself.
<br /><br />
All the Administration needs to do is to rely on the ancient common-law principle called the &#8220;rule of lenity.&#8221; This states that ambiguous criminal laws should be construed in favor of a defendant. As the Supreme Court puts it, &#8220;When choice has to be made between two readings of what conduct Congress has made a crime, it is appropriate, before we choose the harsher alternative, to require that Congress should have spoken in language that is clear and definite.&#8221; So far, at least thirteen federal judges have rejected the Justice Department&#8217;s interpretation of the Computer Fraud and Abuse Act. If that&#8217;s not a sign that the law is unclear and should be interpreted with lenity, I don&#8217;t know what is.
</i></blockquote>
Failing that -- and we've rarely seen a law enforcement agency take a weapon out of its own arsenal by choice -- Wu suggests that it's President Obama's responsibility to speak up and tell the DOJ to change its policies.  He notes, "with just one speech, the President can set things right."<br /><br /><a href="http://www.techdirt.com/articles/20130319/02580722374/if-congress-wont-fix-cfaa-president-obama-should-order-doj-to-stand-down.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130319/02580722374/if-congress-wont-fix-cfaa-president-obama-should-order-doj-to-stand-down.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130319/02580722374/if-congress-wont-fix-cfaa-president-obama-should-order-doj-to-stand-down.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>get-with-the-program</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130319/02580722374</wfw:commentRss>
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<pubDate>Fri, 8 Mar 2013 11:18:00 PST</pubDate>
<title>Aaron Swartz's Partner Accuses DOJ Of Lying, Seizing Evidence Without A Warrant &#038; Withholding Exculpatory Evidence</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130308/01330322250/aaron-swartzs-partner-accuses-doj-lying-seizing-evidence-without-warrant-withholding-exculpatory-evidence.shtml</link>
<guid>http://www.techdirt.com/articles/20130308/01330322250/aaron-swartzs-partner-accuses-doj-lying-seizing-evidence-without-warrant-withholding-exculpatory-evidence.shtml</guid>
<description><![CDATA[ Yesterday we wrote about Attorney General Eric Holder's <a href="http://www.techdirt.com/articles/20130306/13444122220/holder-doj-used-discretion-bullying-swartz-press-lacked-discretion-quoting-facts.shtml" target="_blank">ridiculous claims</a> defending the prosecution of Aaron Swartz.  We noted two key things that were ridiculous.  First, Holder insisted that Swartz was only facing a few months in jail (he implied 5 months, tops) and scolded the media for claiming it was 35 years.  As we noted it was the US Attorneys' <i>own press release</i> that trumpeted the 35 years.  More importantly, the few months in prison was <i>only if he agreed to plead guilty</i>.  If he continued to profess his innocence (something you would do if you believed you were innocent), the US Attorneys claimed they were going to push for seven years.  The other ridiculous point that Holder made was that it was "good prosecutorial discretion" to offer just a few months in the plea bargain, because that somehow showed them recognizing the "context" of the crime.
<br /><br />
In response, Swartz's girlfriend, Taren Stinebrickner-Kauffman has put out a very strong statement, slamming Holder's claims.  Not only does she highlight the threat of seven years in prison, but she goes much further, to allege clear prosecutorial misconduct by the US Attorney's office, including seizing and holding evidence without a warrant, lying to the judge and then withholding exculpatory evidence from Swartz's lawyers.  These are three really serious charges that I haven't seen much discussion about previously:
<blockquote><i>
"Eric Holder and the Department of Justice are clearly trying to mislead the Senate and the public. Holder claims that Aaron was only facing months in prison while Heymann and Ortiz were actively pursuing a penalty of 7 years if the case went to trial. If you believe you're innocent, you should not be coerced into accepting a plea bargain that marks you as a felon for life, just because prosecutors want to boast about taking a scalp. The discrepancy between the plea deal and the amount of prison time prosecutors said they would pursue at trial violates the DOJ's own guidelines in this regard. Holder is trying to engage in revisionist history at the same time he claims that the strict sentences pursued by prosecutors were a 'good use of prosecutorial discretion.'
<br /><br />
What's worse, this isn't just about sentencing. Steve Heymann engaged in serious prosecutorial misconduct on multiple occasions. Public documents show that he instructed the Secret Service to seize and hold evidence without a warrant, violating the Fourth Amendment. He then lied to the judge about that fact in written briefs. And he withheld exculpatory evidence from Aaron's lawyers for over a year, despite both a legal and ethical obligation to turn it over. If this constitutes appropriate behavior from the perspective of the Department of Justice, then we live in a police state.
<br /><br />
The Department of Justice is not interested in admitting their errors, even when an out of control US Attorney's office has cost this country one of our best and brightest. The DOJ is only interested in covering their asses."
</i></blockquote>
It's too bad that Holder wasn't quizzed about those specific points as well.  The fact that he was able to mischaracterize the actions by the US Attorney's office in how they went after Swartz is really unfortunate.<br /><br /><a href="http://www.techdirt.com/articles/20130308/01330322250/aaron-swartzs-partner-accuses-doj-lying-seizing-evidence-without-warrant-withholding-exculpatory-evidence.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130308/01330322250/aaron-swartzs-partner-accuses-doj-lying-seizing-evidence-without-warrant-withholding-exculpatory-evidence.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130308/01330322250/aaron-swartzs-partner-accuses-doj-lying-seizing-evidence-without-warrant-withholding-exculpatory-evidence.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>good-prosecutorial-discretion?</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130308/01330322250</wfw:commentRss>
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<pubDate>Thu, 7 Mar 2013 16:00:19 PST</pubDate>
<title>Google Reveals Some Data About National Security Letters, May Have Exposed DOJ Duplicity</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130305/18204022210/google-reveals-some-data-about-national-security-letters-may-have-exposed-doj-duplicity.shtml</link>
<guid>http://www.techdirt.com/articles/20130305/18204022210/google-reveals-some-data-about-national-security-letters-may-have-exposed-doj-duplicity.shtml</guid>
<description><![CDATA[ We've talked for years about the government's use of <a href="http://www.techdirt.com/blog/?tag=national+security+letters">"national security letters"</a> or NSLs, which are effectively a way for law enforcement types to seek information with less oversight than a subpoena, and which usually come with a very, very extreme gag order attached.  Despite the fact that, by their own admission, law enforcement has regularly and systematically <a href="http://www.techdirt.com/articles/20070309/145914.shtml">abused</a> this tool, they are still widely used and there has been little effort to block the abuses.  Google's latest transparency report is seeking to <a href="http://googlepublicpolicy.blogspot.com/2013/03/transparency-report-shedding-more-light.html" target="_blank">reveal some data about the NSLs it has received</a>, but without revealing too much.  Rather than directly revealing how many NSLs it has received, it is posting ranges (in bunches of 1,000) -- and apparently the company got at least some level of approval from the government to do this ("We're thankful to U.S. government officials for working with us").
<br /><br />
By itself, the data doesn't seem <i>that</i> enlightening.
<center>
<a href="http://imgur.com/JcwyihH"><img src="http://i.imgur.com/JcwyihH.png" width=560 /></a>
</center>
However, there is some useful information you can pick out of there, and who better to pick out that info that Julian Sanchez, who has followed this issue closely.  He's found that you can actually <a href="http://www.cato.org/blog/google-illuminates-shadowy-world-national-security-letters" target="_blank">tease out some useful info</a> even with those broad ranges.
<blockquote><i>
<p>
It's illuminating to compare the <em>minimum</em> number of users affected by NSLs each year to the numbers we find in the government's official annual reports. In 2011&#8212;the last year for which we have a tally&#8212;the Justice Department acknowledged issuing 16,511 NSLs seeking information about U.S. persons, with a total of 7,201 Americans' information thus obtained. That's actually down from <a href="http://www.cato.org/blog/record-number-americans-targeted-national-security-letters">a staggering 14,212 Americans</a> whose information DOJ reported obtaining via NSL the previous year. Remember, this total includes National Security Letters issued not just to all telecommunications providers&#8212;including online services like Google, broadband Internet companies, and cell phone carriers&#8212;but also "financial institutions," which are defined broadly to include a vast array of businesses beyond such obvious candidates as banks and credit card companies.
</p>
<p>
What ought to leap out at you here is the magnitude of Google's tally relative to that total: They got requests affecting <em>at least </em>1,000 users in a year when DOJ reports just over 7,000 Americans affected by all NSLs&#8212;and it seems impossible that Google could account for anywhere remotely near a seventh of all NSL requests. Google, of course, is not limiting their tally to requests for information about Americans, which may explain part of the gap&#8212;but we know that, at least of a few years ago, the substantial majority of NSLs targeted Americans, and the proportion of the total targeting Americans was increasing year after year. As of 2006, for instance, 57 percent of NSL requests were for information about U.S. persons. So even if we reduce Google's minimum proportionately, that seems awfully high.
</p>
</i></blockquote>
Sanchez wonders if the DOJ is effectively under-counting how many NSLs it uses by pretending that <b>some of the NSLs they issue shouldn't count</b> towards its official tally of NSLs.
<blockquote><i>
There's a simple enough explanation for this apparent discrepancy: The numbers DOJ reports each year explicitly exclude NSL requests for &#8220;basic subscriber information,&#8221; meaning the &#8220;name, address, and length of service&#8221; associated with an account, and only count more expansive requests that also demand more detailed &#8220;electronic communications transactional records&#8221; that are &#8220;parallel to&#8221; the &#8220;toll billing records&#8221; maintained by traditional phone companies.
</i></blockquote>
That would mean that the NSL number that the DOJ reports is not particularly accurate, and that the FBI really issues a hell of a lot more NSLs (not so).  Shocking reveal of the day: the DOJ may not be entirely forthright about how often it's spying on Americans using a widely abused process with little oversight.<br /><br /><a href="http://www.techdirt.com/articles/20130305/18204022210/google-reveals-some-data-about-national-security-letters-may-have-exposed-doj-duplicity.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130305/18204022210/google-reveals-some-data-about-national-security-letters-may-have-exposed-doj-duplicity.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130305/18204022210/google-reveals-some-data-about-national-security-letters-may-have-exposed-doj-duplicity.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>transparency...</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130305/18204022210</wfw:commentRss>
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<pubDate>Thu, 7 Mar 2013 07:45:42 PST</pubDate>
<title>Holder: DOJ Used Discretion In Bullying Swartz, Press Lacked Discretion In Quoting Facts</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130306/13444122220/holder-doj-used-discretion-bullying-swartz-press-lacked-discretion-quoting-facts.shtml</link>
<guid>http://www.techdirt.com/articles/20130306/13444122220/holder-doj-used-discretion-bullying-swartz-press-lacked-discretion-quoting-facts.shtml</guid>
<description><![CDATA[ Fresh off of explaining why the President can use drones to <a href="http://www.techdirt.com/articles/20130306/06353722213/eric-holder-domestic-drone-strikes-eh-could-happen.shtml">kill Americans</a> on American soil, Attorney General Eric Holder apparently feels emboldened to say just about anything to justify ridiculous government actions.  The latest?  <a href="http://arstechnica.com/tech-policy/2013/03/attorney-general-swartz-case-a-good-use-of-prosecutorial-discretion/" target="_blank">Defending the Aaron Swartz prosecution</a> at a Congressional hearing called by Sen. John Cornyn, who has already expressed his <a href="http://www.techdirt.com/articles/20130118/14324821731/senator-john-cornyn-asks-eric-holder-to-explain-doj-prosecution-aaron-swartz.shtml">concerns</a> over the prosecution.  
<center>
<iframe width="420" height="315" src="http://www.youtube.com/embed/CAdCU7u0kUI" frameborder="0" allowfullscreen></iframe>
</center>
As you might expect, Holder stuck with the official line that what the DOJ did in the Swartz case was perfectly reasonable.  The key to his argument, as we've been hearing from others who defended the government's actions: the DOJ never intended to put Swartz in jail for 35 years.  Also, apparently it was <i>unfair</i> of the media to use that 35 year number.
<blockquote><i>
As I've talked to the people who have looked into this matter, these news reports about what he was actually facing is not consistent with what the interaction was between the government and Mr. Swartz.  A plea offer was made to him of 3 months, before the indictment.  This case could have been resolved with a plea of 3 months.  After the indictment, an offer was made and he could plead and serve 4 months.  Even after that, a plea offer was made, of a range of zero to 6 months, that he would be able to argue for a probationary sentence.  The government would be able to argue for up to a period of 6 months.  There was <b>never</b> any intention for him to go to jail for a period longer than 3, 4, potentially 5 month range.
</i></blockquote>
These claims are not only misleading, but also total and complete bullshit.  First off, if you never intended for him to spend more than 6 months in jail, and you're upset at the "media" for using the 35 year number... why is it that the <a href="https://www.documentcloud.org/documents/611694-swartz-aaron-pr.html" target="_blank">DOJ's own press release</a> on the arrest played up the 35 years:
<blockquote><i>
AARON SWARTZ, 24, was charged in an indictment with wire fraud, computer fraud, unlawfully obtaining information from a protected computer, and recklessly damaging a protected computer. <b>If convicted on these charges, SWARTZ faces up to 35 years in prison</b>, to be followed by three years of supervised release, restitution, forfeiture and a fine of up to $1 million.
</i></blockquote>
I'm sorry, but you don't get to push that number around in your <i>own damn press release</i> and then whine and complain about how "unfair" it is that the media <i>uses the number you gave them</i>.
<br /><br />
Separately, concerning the insistence that they never wanted him to spend more than 6 months in jail, they leave out the fact that this was <b>only if Swartz agreed to plead guilty to multiple felonies</b>.  According to various reports, the DOJ, via Assistant US Attorney Steve Heymann made it clear that if Swartz did not agree to the plea, then he would seek somewhere around <b>seven years</b> in jail.
<br /><br />
Cornyn goes on to ask about why the DOJ pursued the case even after the supposed "victim," JSTOR said it didn't want to have anything to do with the case.  Cornyn specifically asks if it makes sense to threaten someone with 35 years in prison when the victim doesn't even seem to feel harmed by the situation.  Holder than tries to spin this around and, incredibly, argue that the fact that they <i>didn't</i> pursue the full 35 years is an example of <b>good</b> prosecutorial discretion.  Seriously.
<blockquote><i>
Cornyn: The subscription service didn't support the prosecution.  Does it strike you as odd that the government would indict someone for crimes that would carry penalties of up to 35 years in prison and million dollar fines and then offer him a 3 or 4 month prison sentence?
<br /><br />
Holder: Well I think that's a <b>good use of prosecutorial discretion.</b>  To look at the conduct, regardless of what the statutory maximums were, and to fashion a sentence that was consistent with what the nature of the conduct was.  And I think what those prosecutors did in offering 3, 4, 0 to 6 was consistent with that conduct.
</i></blockquote>
In other words, the only thing Holder is <i>really</i> saying here is that there was perfectly reasonable prosecutorial discretion <i>if and only if Swartz agreed to a plea bargain in which he plead guilty to all felony charges against him</i>.  Basically, it's a "good use of prosecutorial discretion" to bully someone into pleading guilty to a crime they don't believe they've committed, and as long as they accept that, go to jail, and be okay with being labelled a felon for life, then there's no problem.
<br /><br />
How do we let these people into positions of power?<br /><br /><a href="http://www.techdirt.com/articles/20130306/13444122220/holder-doj-used-discretion-bullying-swartz-press-lacked-discretion-quoting-facts.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130306/13444122220/holder-doj-used-discretion-bullying-swartz-press-lacked-discretion-quoting-facts.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130306/13444122220/holder-doj-used-discretion-bullying-swartz-press-lacked-discretion-quoting-facts.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>convenient</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130306/13444122220</wfw:commentRss>
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<pubDate>Wed, 27 Feb 2013 13:19:00 PST</pubDate>
<title>A Merger Challenge Not Worth Rating:  The DOJ's Misguided Suit Against A Paltry Software Merger</title>
<dc:creator>David Balto</dc:creator>
<link>http://www.techdirt.com/articles/20130226/23273122125/merger-challenge-not-worth-rating-dojs-misguided-suit-against-paltry-software-merger.shtml</link>
<guid>http://www.techdirt.com/articles/20130226/23273122125/merger-challenge-not-worth-rating-dojs-misguided-suit-against-paltry-software-merger.shtml</guid>
<description><![CDATA[ <i>The following is a guest post from David Balto, former Federal Trade Commission Policy Director.  Mr. Balto represented SunGard Data Systems in the US v. SunGard case described in this post.</i>
<br /><br />
Antitrust merger enforcement is a unique area of the law.  It requires an assessment of whether a merger carries the potential of significantly harming competition.  Courts are not very good at predicting the future and justifiably are very reluctant to prevent or unwind an acquisition without strong evidence of likely anticompetitive effects.  Appropriately the antitrust enforcers rarely turn to the courts to try to stop business conduct that is typically procompetitive.
<br /><br />
This cautionary approach is particularly necessary in software and other high tech markets.  Antitrust analysis works best in traditional products, such as industrial products, that have existed for years in which the characteristics of products and the dimensions of competition are well defined.  But in software the products are rapidly evolving, demand is ever changing, and the nature of competition can change overnight.  Today's so called dominant firm may find itself an afterthought as the market turns to a whole different set of solutions.  Not surprisingly, in the past decade the two litigated challenges to high tech mergers, Oracle's acquisition of PeopleSoft and SunGard's acquisition of Comdisco, resulted in stunning defeats for the Department of Justice's Antitrust Division.
<br /><br />
That is why many observers were puzzled when the Antitrust Division <a href="https://www.documentcloud.org/documents/608603-doj-complaint.html" target="_blank">sued to unwind the merger</a> between Bazaarvoice, a social software and data analytics company, and PowerReviews, a small provider of online reviews that had <i>less than $12 million</i> in total revenues at the time of the transaction.  (No one can seem to recall anytime the Division has sued to block a merger of a firm with an amount as paltry as $12 million in revenue). The merger involves the exciting software for providing ratings for products on the Internet, a product that did not exist a few years ago.  Although the Division seems to highlight some documents that seem to suggest potential anticompetitive effects, the wooden analysis of the complaint reflects a simple structural view that overlooks the many dimensions of competition and the dynamic nature of the market.  Rather than fully probing the likely competitive effects and dynamism of the online retail industry, the Division describes markets, consumer choices, and entry conditions that do not reflect reality.  As a result the complaint is plagued by internal inconsistencies and fails to recognize the true price constraints that mitigate the potential for any harm the DOJ predicts as a result of this transaction.
<br /><br />
<b>The DOJ Fails to Articulate a Proper Relevant Market</b>
<br /><br />
Antitrust analysis may sound daunting, but it is very straightforward.  The lodestar in any antitrust case is to define the relevant market &#8211; that is to determine what are the products that effectively compete with one another.  In a merger challenge, if the government does not properly define the relevant market then the case is over.  Defining the market can be very challenging, especially in dynamic markets such as software.  Not surprisingly, the government's defeats in challenges to software mergers have typically been because they did not define the relevant market properly.
<br /><br />
The DOJ defines the relevant market as "product ratings and review platforms," or "PRR platforms," and explains that these platforms "collect and display consumer-generated product ratings and reviews online."  It is axiomatic that defining a relevant market establishes the boundary between products that do compete and those that do not, and determines the firms or products that constrain the relevant firm&#8217;s exercise of market power.  <a href="http://www.leagle.com/xmlResult.aspx?xmldoc=20081585539gf3d1046_11579.xml&docbase=CSLWAR3-2007-CURR" target="_blank">As the Ninth Circuit has opined</a>, "A relevant market is identified by considering commodities reasonably interchangeable by consumers for the same purposes. Put another way, the relevant market includes all sellers or producers who have actual or potential ability to deprive each other of significant levels of business."  <a href="http://www.harvardlawreview.org/issues/124/december10/Article_7598.php" target="_blank">As the literature makes clear</a>, if a putative relevant market is too narrow, and does not account for competitive forces that serve as a real price constraint on the parties, then the analysis risks condemning perfectly legitimate and competitive behavior by imputing market power where it does not exist.
<br /><br />
On this count in Bazaarvoice, the DOJ does not get to first base.  The DOJ's alleged PRR platform market is too narrow and falls prey to the mischaracterization of market power risk embodied in the literature.  PRR platforms are one of many social-technological tools that retailers and manufacturers use to communicate with end-user customers.  Bazaarvoice and PowerReviews compete against numerous firms that strive to empower the consumer's voice through social media to "collect, organize, and display consumer-generated product ratings and reviews online."    Manufacturers may use popular network-driven social media tools such as Facebook, Twitter, Google+ and Yelp or more nuanced social media tools such as YouTube, Pinterest, and LinkedIn to give the consumer a voice in online product reviews.  Alternatively, manufacturers and retailers can include social media tools that are similar, but not identical, to consumer reviews such as question-and-answer, and community forums.
<br /><br />
These alternative platforms constrain Bazaarvoice, PowerReviews, and other companies that provide third-party review and aggregating services.  When a retailer or manufacturer considers purchasing services from these companies, they do not look only at these two options, but also at the available outlets for consumer review generation provided by the ever-increasing array of social media platforms.
<br /><br />
In defining markets, the courts rely on a wide variety of evidence including econometric price studies, other pricing evidence, win/loss data, and testimony of customers.  None of this is present in the DOJ complaint.  Instead the DOJ relies largely on the defendant's documents, but this is a thin reed indeed.  Many of these documents are outdated and ignore the realities inherent in this fast-moving industry.  It is debatable whether these documents reflected the true nature of competition at the time they were created.  It is certain, however, that these documents no longer reflect the current state of competition.  For instance, the DOJ twice references an April 2011 email in which a Bazaarvoice executive characterized the nature of the industry and opined that alternatives to Bazaarvoice are "scarce" and "low-quality."  In the intensely rapid changing world of the Internet, documents from 2011 are about as relevant as a floppy disk.  Instead of 1) demonstrating that this was in-fact true in 2011, and 2) reestablishing that this description remains accurate, the DOJ's complaint merely assumes that both are the case.  However, this description does not align with today's online retail industry or its intersection with social media. These are industries highlighted by dynamism, and it would be incorrect to believe that the relationships between PRR platforms and other social media outlets for consumer reviews have remained stagnant.
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<b>Even If One Accepts the DOJ's Relevant Product Market, the DOJ Fails to Recognize the Dynamic Nature of Competition</b>
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As explained above, a product market of PRR platforms is not a proper relevant market for antitrust purposes.  Even assuming <i>arguendo</i> that PRR platforms constitute a proper market, however, the DOJ's complaint fails to discuss adequately the nature of competition within these parameters.
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Two fatal flaws plague the DOJ's analysis.  First, the DOJ fails to offer any explanation for portraying the PRR platform market as consisting of just two meaningful competitors and numerous fringe competitors who offer no real constraint.  The DOJ attempts to justify this portrayal by analyzing the nature of competition between Bazaarvoice and PowerReviews within the "Internet Retailer 500," but it is unclear why the government focuses so closely on this tiny market segment and it is even less clear whether an impact solely on that segment would violate the law.  The DOJ even concedes that the PRR platform industry "can range from simple software solutions a company has developed with internal resources to sophisticated commercial platforms offering a combination of software, moderation services, and data analytics tools."   However, despite this wide range of styles and services, the complaint analyzes only a small segment of the market and suggests that these large sophisticated companies have only two effective alternatives.
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The Division has made this mistake in the past, and it did not end well.  In <a href="http://scholar.google.com/scholar_case?hl=en&as_sdt=2,9&case=6146228610031444552&scilh=0" target="_blank">Oracle</a> the DOJ "failed to prove that there are a significant number of customers (the 'node') who regard Oracle and PeopleSoft as their first and second choices."  Instead, the DOJ tried to make the unilateral effects argument with the unpersuasive facts that it had.  Judge Walker admonished the DOJ, stating the "Plaintiffs' attempt to show localized competition based upon customer and expert testimony was flawed and unreliable. Moreover, plaintiffs' evidence was devoid of any thorough econometric analysis such as diversion ratios showing recapture effects."  (A "diversion ratio" shows how much of one competitor's business will shift to another competitor if there is a price increase.)
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The complaint against Bazaarvoice is equally flawed.  The diversion ratios will simply not tell a story wherein a sizeable portion of all participants in the DOJ's (already flawed) market perceive only Bazaarvoice and PowerReviews as next-best options.  If the evidence of diversion ratios were available, the DOJ would have presented it already.  In fact, this is a consummated merger &#8211; the real-life data should show this effect if it is true.  Instead, the data likely tells a story of widespread, dissimilar, and largely unpredictable cross-elasticity of demand.  It is probably the case that no "node" in the PRR platform industry exists because the dynamic nature and subjective needs of clients dictate that there is no significant captive set of consumers choosing only between Bazaarvoice and PowerReviews.
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Second, the DOJ completely ignores the concept of self-help in the social media consumer reviews industry.  At its core, the products supplied by Bazaarvoice and PowerReviews are based on simple technology.  These companies create software that appears on a retailer's website and enables consumers to provide first-hand product reviews.  The companies also provide differing analytic and syndication services, both of which are a function of nothing more than intelligent use of data.  There is nothing stopping retailers and/or manufacturers from creating the same service and extracting value from the data.  Unsurprisingly, companies often perform some or all of these tasks themselves.  <a href="http://www.amazon.com/" target="_blank">Amazon</a> stands out as a leader in providing consumer review platforms and uses the data to drive marketing and sale decisions.  <a href="http://www.zappos.com/" target="_blank">Zappos</a>, the online shoe and apparel company from Henderson, Nevada provides its own consumer review platform on its website, and uses this information not only to improve sales and marketing, but to provide an added level of consumer care.
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Like the question of the consumer "node," the DOJ has also failed to account for internal solutions as a price constraint.  Once again the DOJ is forgetting an important lesson from a past defeat.  In <a href="http://scholar.google.com/scholar_case?hl=en&as_sdt=2,9&case=6146228610031444552&scilh=0" target="_blank">SunGard</a>, the DOJ tried to block the merger of two firms that provided computer disaster recovery services, which sounded like tremendously sophisticated and complex services.  But the court found that self-help ("internal hotsite solutions") was a perfectly adequate option for many customers.  The DOJ had portrayed the notion of internal hot sites as expensive and difficult to create, and suggested that not enough customers would turn to internal solutions to prevent the merging parties from raising prices.  Judge Huvelle disagreed, and pointed out that, not only did internal solutions exist in some capacity, but that the incentive to create internal solutions would increase alongside any increase in price.  Furthermore, the evidence demonstrated that customers had varying needs, and "any generalizations regarding customer behavior cannot be arrived at with any certainty, since it depends on a host of factors, including the type of equipment a customer must duplicate, the particular circumstances and needs of the customer, and in some cases, the size of the customer's operations."
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The same can be said for customers of social media consumer review -- any attempt to predict the future needs and behaviors of customers is nothing more than generalization and speculation based upon incomplete data, an uncertain technological future, and dynamic and varied customer needs.
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<b>The DOJ Fails to Account Adequately for Entry and Expansion, Both of Which are Likely </b>
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The DOJ asserts that anticompetitive harm resulting from this transaction will not be corrected by additional competitors entering the market or existing participants expanding.  The rationale for this assertion lies primarily in the DOJ's contention that Bazaarvoice's syndication network creates an insurmountable entry barrier.  This statement ignores the fact that PowerReviews entered the market and competed effectively without offering a syndication product on par with Bazaarvoice's. Furthermore, the DOJ makes no attempt to quantify the number of Bazaarvoice customers that take advantage of the syndication offering.  In fact, many manufacturers and retailers choose not to utilize this service, instead preferring to outsource to another vendor or perform the analytics in-house.
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Notwithstanding these factual oversights, the assertion that Bazaarvoice's syndication network is a barrier to entry fails.  The aggregation of data through the creation of consumer reviews is a profitable endeavor, but it is also an easily repeated endeavor.  Bazaarvoice's reviews and sophisticated analysis may make it a better competitor but it does nothing to cement Bazaarvoice as an enduring competitor in the face of an improved service.  Allegations of network effects as barriers to entry are made far too lazily, and the DOJ would have the trier of fact believe that a piece of data can only be captured once, or is a zero-sum game.  This is just not the case.  There is competition for data just as there is competition for any other product.  Finally, as the value of data continues to increase, retailers and manufacturers will have less incentive to continue outsourcing this portion of the business to Bazaarvoice.
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Unsurprisingly, entry is already occurring in this alleged market.  <a href="http://www.reevoo.com/" target="_blank">Reevoo</a> and <a href="https://www.yotpo.com/" target="_blank">Yotpo</a> are new entrants looking to disrupt competition, while <a href="http://www.amazon.com/review/top-reviewers" target="_blank">Amazon</a> and <a href="http://googlecommerce.blogspot.com/2012/11/see-more-relevant-reviews-and-share.html" target="_blank">Google</a> are established market participants looking to grow their profits at the expense of companies like Bazaarvoice.  The DOJ's entire theory of harm is premised on a presumption of stagnancy that runs contrary to the nature of the high-tech and electronic commerce industries.
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<b>Conclusion</b>
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Antitrust enforcement in high tech markets poses special challenges -- to recognize the dynamic fast paced nature of competition, the fluidity of product markets, and the opportunities for new forms of rivalry.  Unfortunately, the complaint in the Bazaarvoice case takes a static approach hinged to a few outdated documents.   Without more it is unlikely a court will take the draconian step of unwinding this merger.<br /><br /><a href="http://www.techdirt.com/articles/20130226/23273122125/merger-challenge-not-worth-rating-dojs-misguided-suit-against-paltry-software-merger.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130226/23273122125/merger-challenge-not-worth-rating-dojs-misguided-suit-against-paltry-software-merger.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130226/23273122125/merger-challenge-not-worth-rating-dojs-misguided-suit-against-paltry-software-merger.shtml?op=sharethis">Email This Story</a><br />
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