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Issue 65 November 2002 BYTES IN BRIEF® by Editors: Sharon D. Nelson, Esq. and John W. Simek Associate Editor: Amelia C. Hierholzer Editor Emeritus: G.V. Nelson 9500+ subscribers worldwide © 2001 Sensei Enterprises, Inc./Nelson & Wolfe. All rights reserved. This newsletter may not be reproduced or redistributed in any manner except with consent of the copyright owner. Distributed by Silver Law Inc. under license. COURT VACATES CHILD PORN PLEAS U.S. District Judge Robert P. Patterson of the Southern District of New York had accepted defendant Brian Reilly's plea on July 17th to one count of knowingly receiving child pornography. However, on October 11th, he vacated the plea because the defendant was not asked whether he knew the images he received were of actual children rather than simulated child pornography. Reilly moved to vacate the plea in U.S. v. Brian Reilly and the judge agreed, finding that Reilly did not fully understand the crime to which he pled. Further information may be found at http://www.law.com/jsp/printerfriendly.jsp?c=LawArticle&t=PrinterFriendlyArt icle&cid=1032128773648 APPEALS COURT CONSIDERS FAXED SEARCH WARRANTS On October 10th, the Justice Department asked an Eighth Circuit panel of judges to deem it acceptable for police to fax a search warrant to Yahoo instead of serving the warrant in person. The case involved a child pornography investigation. USA v. Dale Robert Bach appears to be the first case where an appeals court will rule on the validity of faxed search warrants. Privacy advocates are alarmed by the possibility of faxed search warrants because police can gather far more information more quickly than they could under traditional rules. The Justice Department appealed a district court decision, which ruled that police must be present when executing search warrants. The DOJ argued that such a requirement would hinder "investigations into other types of crime that commonly involve the use of computers, including Internet fraud, hacking, software piracy, cyberstalking, threats against the President, and international terrorism." In this case, a mother worried about sexually suggestive comments sent to her son from an individual in a Yahoo chat room gave the St. Paul Police Department the screen name "dlbach15." The public profile showed the name as belonging to Dale Bach, a registered sex offender. A Ramsey County judge approved a state search warrant ordering Yahoo to hand over any e-mail sent to or from Bach or the boy and the warrant was faxed to Yahoo. Yahoo sent the police a Zip disk with the e-mail messages, one of which had a photograph that was determined to be child porn. Bach was arrested, but U.S. District Judge Paul Magnuson ordered that the evidence obtained via the search warrant be suppressed because the law requires that police be present for search warrants. The documents in the case may be found by entering the case number (02-1238) at http://www.ca8.uscourts.gov/onestop.html RANDOM HOUSE RELEASES THE GIGALAW GUIDE TO INTERNET LAW Many "Bytes" readers are no doubt familiar with the valuable Internet law resources available on http://www.gigalaw.com. On October 22nd, Random House released The GigaLaw Guide to Internet Law by Doug Isenberg (the attorney/founder of GigaLaw.com and a frequent writer on Internet legal issues). The book is a guide to Internet law for both lawyers and non-lawyers. It examines Internet law in seven parts: copyrights, trademarks, privacy, patents, free speech, contracts and employment. The book introduces each part with a real-life case study, and then explains the fundamental legal issues involved and concludes with an analysis of timely and cutting-edge clashes between technology and the law. Complete details about the book, including remarks by Lawrence Lessig, Vint Cerf and others, are available at http://www.GigaLaw.com/guide. The book may be ordered from www.amazon.com for $12.57. 2ND CIRCUIT UPHOLDS NETSCAPE PRIVACY RULING On October 1st, a 2nd Circuit panel upheld a lower court ruling stating that Netscape users who sued the company for invasion of privacy were not bound by an end-user license agreement which compelled arbitration. The case involved a plug-in called "SmartDownload," which Netscape touted as an enhancement to its Netscape Communicator browser. The panel ruled that users who downloaded the plug-in had not received adequate notice of the terms of the agreement, which required scrolling past the download button to read the terms. The panel further noted that the terms of the agreement applied to Netscape’s Communicator browser, but not to the plug-in. The decision in Specht v. Netscape may be found at http://laws.findlaw.com/2nd/017860.html HOUSES PASSES ONLINE GAMBLING BILL On October 1st, the U.S. House of Representatives passed a bill to outlaw payments to Internet casinos. Although Internet gambling is unlawful in every state except Nevada, there are over 1,500 gambling web sites located in the Caribbean, Costa Rica and other offshore sites. The bill requires banks and other financial institutions to block payments to gambling sites and requires Internet service providers to remove ads about and links to those sites. Penalties for violation of the act include up to five years in prison. Reportedly, most major credit card companies already block online gambling transactions of their own initiative. The text of The Unlawful Internet Gambling Funding Prohibition Act may be found by entering the bill number (H.R. 556) at http://thomas.loc.gov/ BUSBOY PLEADS GUILTY TO ID THEFT On October 3rd, Abraham Abdallah entered a guilty plea to the 12-count indictment charging him with wire, mail and credit card fraud, identity theft and conspiracy. The 32-year-old busboy had 800 fraudulent credit cards and 20,000 blank credit cards in his possession when he was arrested in March of 2001. Abdallah targeted the rich and famous – he reportedly used telephones and computers in public libraries to obtain credit records of Microsoft co-founder Paul Allen, movie director Steven Spielberg, and CNN founder Ted Turner. The case is believed by authorities to represent the largest identity theft case in history. Further information may be found at http://news.com.com/2100-1023-960754.html 7th CIRCUIT REVERSES BEANIE BABY DILUTION RULING On October 4th, the 7th Circuit Court of Appeals vacated a trial court ruling holding that the domain name bargainbeanies.com diluted manufacturer’s Ty’s Beanie Babies trademark. The defendant operated a website selling second hand Beanie Babies. The court seemed concerned about extending trademark protection too broadly, noting "we do not think that by virtue of trademark law producers own their aftermarkets and can impede sellers in the aftermarket from marketing the trademarked product." The decision in Ty v. Perryman may be found at http://caselaw.findlaw.com/data2/circs/7th/021771P.pdf COURT RULES ADA DOESN’T EXTEND TO INTERNET On October 18th, a federal district court ruled that the Americans with Disabilities Act (ADA) applies to physical spaces such as restaurants and stores, but not to the Internet. The suit had been filed against Southwest Airlines by Access Now, an advocacy group for the blind and Robert Gumson, a blind man, attempting to force the airline into redesigning its web site to make it easier for blind people to use. The court noted that "to expand the ADA to cover 'virtual' spaces would be to create new rights without well-defined standards . . . the plain and unambiguous language of the statute and relevant regulations does not include Internet Web sites." Gumson, who said he had a screen reader with a voice synthesizer on his computer, asked the judge to order Southwest to provide text that could serve as an alternative to the graphics on its site and to redesign the site's navigation bar to make it easier for him to understand. He also asked for attorney fees and costs. The decision may be found at http://www.flsd.uscourts.gov/default.asp?file=cases/index.html MITNICK: REFORMED AND IN THE SECURITY BUSINESS On October 4th, Kevin Mitnick, the world’s most famous hacker, celebrated the publication of his new book The Art of Deception: Controlling the Human Element of Security. Co-authored with William Simon, the book focuses on "social engineering," the art of persuading people to disclose passwords and other confidential information in order to bypass a network’s security. Mitnick’s gift for social engineering landed him in prison for four and a half years on charges of computer fraud. Now in the security business himself, Mitnick hopes to persuade people that information cannot be protected by firewalls, passwords and encryption alone and that they need to keep their employees (as well as their computers) from being "hacked." Information about Mitnick’s business, Defensive Thinking, and his book may be found at http://www.defensivethinking.com/ COPYRIGHT OFFICE SEEKS DMCA COMMENTS The U.S. Copyright Office has undertaken an unusual course of action, asking the public for comments on the anti-circumvention clause of the Digital Millennium Copyright Act, which prohibits people from circumventing technological measures that effectively control access to a work, as well as creating or distributing tools meant to accomplish the same end. The Copyright Office is not looking to change the law but rather to determine what sort of activity should be legalized by creating exceptions to the law. Regulators are looking for specific examples of cases where the law’s restrictions cause "actual instances of verifiable problems occurring in the marketplace." Public comments are due to the Copyright Office by December 18th. The Comment page may be found at http://www.copyright.gov/1201/comment_forms/ CALIFORNIA REQUIRES NOTICE OF E-MAIL TERMINATION On September 21st, California Governor Gray Davis signed a new law that requires e-mail service providers to give 30 days' notice before shutting down e-mail accounts. The law becomes effective on January 1, 2003 and does not apply in situations where an account holder has violated the terms of service or when service is interrupted for reasons beyond the e-mail provider's control. The text of the bill may be found at http://www.leginfo.ca.gov/pub/bill/sen/sb_0751-0800/sb_772_bill_20020922_chaptered.html 9TH CIRCUIT UPHOLDS FBI’S FAX INTERCEPTS On October 11th, a three-judge panel from the Ninth Circuit Court of Appeals ruled that police did not violate federal wiretap laws when they conducted electronic surveillance against members of the Montana Freemen, who were convicted in 1998 of bank fraud. The FBI had obtained a court order allowing it to intercept voice communications and faxes as well as to plant a microphone. The issue in the case was whether the FBI used procedures to minimize the personal documents, unrelated to illegal activities, which were intercepted and stored. This is believed to be the first case dealing with the interception of faxes, and commentators believe that similar reasoning will be applied to e-mail cases. The decision in U.S. v. McGuire may be found at http://www.ca9.uscourts.gov/ca9/newopinions.nsf/ A719A508F0B7B0BE88256C4F00580A1C/$file/9930165.pdf?openelement SEARCH KING SUES GOOGLE OVER SEARCH RANKINGS On October 18th, Search King, a web site network and advertising seller, filed suit against the search engine Google, alleging that it had unfairly lowered its search engine rankings. The complaint, filed in the U.S. Western District Court of Oklahoma, charges that Google "purposefully reduced Search King’s value, as well as that of Web sites hosted by Search King" with the intent "to cause Search King’s clients to cancel contracts with Search King." Google said it has not adjusted the results to decrease Search King’s rankings, but that rankings automatically change every time Google updates its index every four weeks. Speculation is that Google has changed its "PageRank" algorithm which partially measures how a site will be ranked based on the number of sites that link to it. This has resulted in the creation of so called "link farms" where links are created for the sole purpose of increasing search engine rankings. Marketers have complained that Google changed the rules, penalizing link farms without any advance notice. Search King had started a PR AD Network, which was an advertising network in which it sold text links on popular Web sites to get them a better listing in Google’s results. Shortly after Search King announced its network, its ranking dropped and the PR AD Network itself was given a zero, "which in the Internet community is recognized as a manually determined penalty," according to the suit. The suit charges that the reduction of Search King’s ranking has damaged its reputation and diminished its value. Search King is seeking a preliminary injunction against Google to be restored to its previous ranking as well as monetary damages. The pleadings in the case may be found at http://www.searchking.com/news/sknews.htm INTERNET SOCIETY NAMED AS MANAGER OF ".ORG" The Internet Society, a Virginia group of computer professionals, was named as the manager of the ".org" domain on October 14th by the Internet Corporation for Assigned Names and Numbers (ICANN). The Internet Society will assume its responsibilities in 2003, taking control from VeriSign, Inc. as part of VeriSign’s deal to retain control of the ".com" domain. The separation of the ".org" domain is part of a plan to privatize the Internet. In 2005, the ".net" domain will be up for bid. That domain is also currently managed by VeriSign, which will be able to bid on management of the domain. Home to non-profit organizations, ".org" accounts for more than 2.3 million Internet addresses. The Internet Society, founded in 1991, is the home of two key Internet standards-setting bodies, the Internet Engineering Task Force and the Internet Architecture Board. It has members in more than 100 countries. Further information may be found at http://www.icann.org/announcements/announcement-14oct02htm COURT DISMISSES CELL PHONE BRAIN TUMOR SUIT On September 30th, the U.S. District Court in Maryland dismissed an $800 million lawsuit filed against Motorola by Christopher Newman, who claimed that his cell phone caused his brain cancer. U.S. District Judge Catherine Blake held that none of the evidence submitted by Newman was substantial enough to warrant a trial. Similar claims against other mobile-phone carriers also have failed. Newman claimed an analog cell phone he used from 1992 to 1998 gave him a cancerous tumor behind his right ear. Newman’s litigation has attracted particular attention because it was one of the first to be filed and was the first to reach the stage of evidence hearings. Though the plaintiff presented scientific evidence that showed analog phones may cause tumors, Blake ruled that a body of evidence showing no relationship between cell phone radiation and cancer overwhelmed the plaintiff’s evidence. The ruling in the case may be found at http://www.mdd.uscourts.gov/Opinions152/Opinions/newman0902.pdf BILL TO COMBAT NET CENSORSHIP INTRODUCED IN HOUSE On October 3rd, Rep. Chris Cox introduced a bill in the House of Representatives that would establish an Office of Global Internet Freedom to encourage the development of technologies to help countries like China and Saudi Arabia break through Internet censorship. The bill would allocate $50 million each for 2003 and 2004. The office would be part of the International Broadcasting Bureau, which provides engineering and administration for the Voice of America, Radio and TV Martí (Office of Cuba Broadcasting), and other electronic media aimed at viewers in authoritarian countries. The Senate is expected to introduce its own version of the bill soon, sponsored by John Kyl (R-Ariz.) and Ron Wyden (D-Ore.). The text of the House bill may be found by entering the bill number (H.R. 5524) at http://thomas.loc.gov/ UPS JOINS FIGHT TO BLOCK GATOR ADS On September 26th, the United Parcel Service (UPS) filed suit against online ad company Gator in the U.S. District Court in Atlanta. The suit charges that Gator delivers unauthorized advertisements to visitors on the UPS web site, including the advertisements of competitors such as FedEx. UPS is seeking a preliminary injunction against Gator. In June, The Washington Post, The New York Times, Dow Jones News Service and seven other publishers filed a suit against Gator alleging the company's ads violate their copyrights and steal revenue. Gator develops software that manages passwords and form filling for more than 10 million Web surfers who often download the application through other popular file-sharing programs. Bundled in Gator's software is a program called OfferCompanion, which monitors Web surfing behavior and delivers targeted pop-up ads to viewers, largely giving them the ads of competitors. Gator has contended in other suits that its advertisements are legal because people who download its software have given Gator permission to send them third-party promotions. Further information may be found at http://news.com.com/2100-1023-960535.html FBI/SANS JOIN FORCES TO COMBAT SECURITY HOLES On October 2nd, the FBI's National Infrastructure Protection Center and the SysAdmin, Audit, Networking and Security (SANS) Institute, a research and education organization made up of government, corporate and academic experts, unveiled initiatives aimed at assisting companies in dealing with the multitude of security flaws software companies announce every week. The focus is to identify security holes and offer tools so companies can plug the holes. This will be the third year that the SANS Institute has released a list of top flaws. In June 2000, the organization listed its Top 10. It updated that to a Top 20 in October 2001. Companies that eliminate the vulnerabilities on the Top 20 list from their networks will reportedly have made themselves immune to approximately 80 percent of all attacks on the Internet. The current SANS/FBI Top 20 list may be found at http://www.sans.org/top20/ NET ASSAULT FAILS The distributed denial-of-service (DDOS) attack on the Internet, which took place on October 21st, failed to cripple the Net. The attack sent a barrage of data aimed at the 13 domain-name service root servers. Some traffic was modestly delayed, but because the domain name system, or DNS, is spread out and because the 13 root servers are the last resort for address searches, the attack had almost no effect on the Internet itself. Nonetheless, this was the largest and most complex DDOS attack ever against the root server system according to published reports. The FBI is currently investigating the attack. Further information may be found at http://news.com.com/2102-1001-963005.html ACLU FILES SUIT TO GET PATRIOT ACT DATA On October 24th, the American Civil Liberties Union (ACLU) filed a Freedom of Information Suit against the Department of Justice in the U.S. District Court for the District of Columbia. Other plaintiffs include the Electronic Privacy Information Center (EPIC), the American Booksellers Foundation for Free Expression and the Freedom to Read Foundation. The suit seeks information regarding the Justice Department’s use of its surveillance powers under the Patriot Act. The Justice Department had written a letter to the ACLU dated September 3rd promising to respond quickly to the ACLU’s FOIA request, acknowledging that it concerned "a matter of widespread and exceptional media interest in which there exist possible questions about the government’s integrity which affect public confidence." However, the ACLU stated that it had received no response by October 24th nor any indication of what records the DOJ intended to disclose. The plaintiffs want to know how often the federal government has sought records from libraries, bookstores, or Internet service providers. The complaint in the case may be found at http://www.aclu.org/Privacy/Privacy.cfm?ID=11040&c=130. The DOJ’s responses to Congressional inquiries on the same subject may be found at http://www.house.gov/judiciary/patriotresponses101702.pdf CORPORATIONS RECEIVE FILE SWAPPING WARNING LETTER On October 24th, the Recording Industry Association of America (RIAA), the Motion Picture Association of America (MPAA) and various songwriters' associations announced that they had drafted a letter to be sent to the Fortune 1000 companies, warning executives that employees' song or movie-swapping could create legal liability on the part of the companies. The letter notes: "It appears that many corporate network users are taking advantage of fast Internet connections at work by publicly uploading and downloading infringing files on P2P (peer to peer) services, and also distributing and storing such files on corporate intranets." A similar letter was sent to university officials earlier in the month. A copy of the letter may be found at http://www.riaa.com/pdf/Corporate%20Outreach.pdf VERIZON SETTLES SPAM CASE On October 28th, Verizon announced that it had reached a settlement in its anti-spam lawsuit against Additional Benefits, LLC, a Detroit-based commercial e-mail company, and its owner, Alan Ralsky. Ralsky and his company are now barred from sending messages to Verizon’s 1.64 million Internet customers. Verizon filed its lawsuit against Ralsky in March 2001 after several incidents in 2000, which left Verizon Online customers inundated with millions of e-mail solicitations from companies that worked with Ralsky. Ralsky must also pay an undisclosed fine under the settlement. Further information may be found at http://newscenter.verizon.com/proactive/newsroom/release.vtml?id=77914& PROACTIVE_ID=cecfc8c6cbc8cacacfc5cecfcfcfc5cecfc6c6cfc8cccccfcec5cf KOURNIKOVA WORM: AUTHOR’S APPEAL REJECTED On October 28th, a Dutch appellate court upheld the conviction of 22 year-old Jan de Wit, the author of the infamous Kournikova e-mail worm. De Wit was sentenced to 150 hours of community service for creating and transmitting the worm, which ran rampant on the Internet during two days in February, 2001. De Wit said that he did not know what he was doing when he created the worm or what the consequences of unleashing it might be. The court expressed its disbelief based on De Wit’s collection of approximately 7,200 computer viruses and his employment in a computer store. De Wit could have been punished by up to four years in prison and a maximum fine of roughly $44,000. Further information may be found at http://idg.net/ic_960118_1794_9-10000.html Copyright ©  2001 Nelson & Wolfe/Sensei Enterprises, Inc. All rights reserved.