PRESIDENTIAL CAMPAIGNS: "IT’S THE DATABASE, STUPID!"

James Carville’s famous line, "It’s the economy, stupid" has been updated to "It’s the database, stupid!" Both sides of the aisle have discovered that effective exploitation of data mining tools is critical to getting out the vote and raising funds. In their effort to find those supporters who will vote for and perhaps contribute to their cause, both parties have invested millions in central, state-of-the-art data warehouses, data mining software and Web-based user interfaces, creating arsenals of marketing tools that rival those of large corporations. The Republicans, who started building this capability in the mid-1990s, got a jump on the Democrats, who have sprinted to catch up since 2000. By their own admission, the Democrats still lack some of the capabilities that the GOP already has in place, including the ability to give every field worker in every state online access to voter information. The Republicans began working on an integrated national voter database nearly a decade ago, a full six years before the Democrats. Further information may be found at http://www.cio.com/archive/060104/election.html

On June 29th, the U.S. Supreme Court blocked enforcement of the 1998 Child Online Protection Act (COPA). By a 5-4 vote, the court said the law "likely violates the First Amendment." The court ordered the parties to reconsider the case in a lower court trial. The decision gives the government an opportunity to prove that the law does not violate the First Amendment. The law, which never took effect, would have levied fines up to 50,000 for the crime of placing materials deemed "harmful to minors" on the Internet. Justice Kennedy, writing for the majority, said "the government has not shown that the less restrictive alternatives proposed . . . should be disregarded. Those alternatives, indeed, may be more effective." The decision in Ashcroft v. ACLU may found at http://a257.g.akamaitech.net/7/257/2422/29june20041115/www.supremecourtus.gov/op inions/03pdf/03-218.pdf

A May report issued by the General Accounting Office, issued after a year of investigation, reveals that federal agencies have undertaken 199 data mining projects, 131 of which are operational. A number of them resemble the controversial Total Information Awareness (TIA) project, which aimed to sort through exabytes of data on Americans from a multitude of sources in order to uncover terrorists. Though Congress put the kibosh on TIA, many variants have emerged elsewhere. The Department of Homeland Security is creating an Incident Data Mart designed to assemble data from every state, local, and federal police agency and spot possible terrorist activities. The data mart will sort through logs of incidents, defined as any "event involving a law enforcement or government agency for which a log was created, e.g., traffic ticket, drug arrest, or firearm possession." The FBI also has a data mart, compiling information from its own files, those of other federal agencies, and public data sources such as LexisNexis and court records. The purpose is "to determine unlawful entry" into the United States of potential terrorists. Four projects at the Defense Intelligence Agency seem to be the most far-reaching. Their purpose is to mine "data from the intelligence community and Internet searches to identify foreign terrorists or U.S. citizens connected to foreign terrorism activities." Even the Department of Education has a Project Strikeback designed to compare names in the department's databases with records supplied by the FBI and search for "anomalies" indicating "terrorist activities." The report may be found at http://www.gao.gov/new.items/d04548.pdf

The Enhanced Microsoft Support Lifecycle Policy took effect on June 1st, extending support for many Microsoft products. The new policy reflects the reality that many customers do not wish to upgrade as fast as Microsoft wishes them to. Microsoft itself has decided to shift to bigger, less frequent updates, in part because of customer preference. Microsoft said it will prolong support policies for all business and developer products from the current seven years to ten years. The new policy guarantees a minimum of five years of mainstream support, the basic level of assistance that includes free incident support and hot fix patches released to remedy critical problems. Mainstream support is extended if Microsoft allows more than five years to lapse between major product releases, so that support is offered for at least two years after a next-generation product is released. Thus, Windows XP would be supported for two years after its successor, Longhorn, is released. Once the mainstream support phase concludes, Microsoft will provide another five years of extended support, a reduced level that includes options for paid hot fixes and hourly support services. The new support policy may be found at http://support.microsoft.com/default.aspx?pr=LifeAn16

On May 27th, the Amsterdam District Court ruled in favor of Lindows Inc. on all counts in Microsoft’s second attempt to obtain a preliminary injunction on the basis of trademark infringement. The court ordered Microsoft to pay Lindows 944 Euros (roughly $1,160) in legal fees and agreed with Lindows that not all uses of the trade name Lindows infringe on the trademark of Windows. A copy of the ruling translated into English may be found at http://www.linspire.com/microsoftfine

A patent granted to Microsoft on April 27th is causing consternation among intellectual property experts who say it could be used to demand licensing fees from other mobile-device makers for something as well established as double clicking. The patent covers what Microsoft calls a "time-based hardware button for application launch." Microsoft said the technology was developed for use in handheld computers, such as its Palm-size PC, which use buttons to open files and start programs. In its patent application, Microsoft said the purpose of the technology is to make it easier for users to launch applications by either double-clicking a button or holding one down. Microsoft filed for the patent in July of 2002, but its application includes content from an earlier filing, made in 1999, which was subsequently abandoned. A Microsoft spokesman said the company would consider seeking licensing payments from those who employ technologies covered in the patent. The patent may be found at http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL &p=1&u=/netahtml/srchnum.htm&r=1&f=G&l=50&s1=6,727,830. WKU.&OS=PN/6,727,830&RS=PN/6,727,830

Just for fun: The new trend in Internet ads is "webisodes" – Internet infomercials with entertainment. To promote Burger King’s Tendercrisp chicken sandwich, a Miami ad agency created a site where a person dressed as a chicken will do whatever it is asked, including jump, fly, drink a beer, watch TV, read a book, stand on one leg, spin, fight, and lay an egg. In its first week of existence, the site received more than 400,000 visitors and the publishers of "Bytes in Brief" cheerfully admit spending an inordinate amount of time exploring the extent of the chicken’s vocabulary, which was most impressive. For others who also have nothing better to do than command a virtual chicken, the site may be found at http://www.subservientchicken.com. Schick Canada produced eight webisodes called "Close Shaves," in which Peter (Pistol Pete) Madigan, the cartoon host of a radio show for guys, rants on such topics as why he hates golf, and why facial hair makes people look like they eat out of garbage cans. These webisodes may be found at http://www.canada.com/entertainment/features/closeshaves/index.html

Cyberattacks on large financial institutions have more than doubled in the last year, according to a survey published by Deloitte & Touche on May 27th. The New York-based consulting firm said 83% of senior security officers at the world's leading financial institutions reported that their systems had been compromised in the past year, compared with 39% in 2003. 43% of the respondents whose systems were attacked said they lost money because of the attacks. Despite the increase in cyberattacks, more than 25% of respondents said their security budgets remained flat this year, while almost 10% said their budgets were cut from the previous year. According to the survey, 70% of respondents believe worms and viruses are the biggest threats to their systems, and 87% of them said they have deployed antivirus measures. Further information may be found at http://www.deloitte.com/dtt/press_release/0,2309,sid%253D2283%2526cid%253D50024, 00.html

On June 8th, Microsoft filed an appeal with a European Court to overrule measures imposed by European antitrust regulators that Microsoft said would injure its competitive edge and give critical intellectual property to competitors. The technology industry is closely watching the case, because the orders to unbundle software components and share proprietary information could have significant effects on other software and hardware firms. "The Commission's decision undermines the innovative efforts of successful companies, imposing significant new obligations...to license their proprietary technology to competitors, and restricts companies' ability to add innovated improvement to their products," said Horacio Gutierrez, Microsoft's European associate general counsel. Microsoft filed a 100-page appeal asking the court to annul the Commission's March 24th decision and to annul, or substantially reduce, the accompanying $611 million fine. European antitrust regulators said Microsoft didn't provide rivals with information they needed to fairly compete in the server software market. Also, by bundling a wide variety of features, such as media players and browsers, into its Windows operating system, the Commission found that the company unfairly blocked competitors. The Commission ordered Microsoft to offer a version of its operating system without a media player and share some of its intellectual property with competitors. European regulators have agreed not to enforce their interim measures until a hearing is held later this summer. The interim measures included in the Commission's March 24th decision gave Microsoft 90 days to offer an operating system without a bundled media player, and 120 days to begin sharing proprietary information with its competitors regarding its servers. Further information may be found at http://www.microsoft.com/presspass/press/2004/jun04/06-08AppealECCPR.asp

On June 9th, adware company Claria (formerly known as Gator) announced that it had sued L.L.Bean, charging the retailer with filing a frivolous lawsuit against its advertisers. Claria filed the complaint in the U.S. District Court for the Eastern District of Texas. Claria is apparently retaliating after L.L.Bean recently filed four complaints in Portland, Maine district court against Atkins Nutritionals, J.C. Penny, Nordstrom and Gevalia Kaffee. The four companies allegedly violated L.L.Bean's trademarks when they used Claria's software to deliver pop-up ads over its own Web site. Claria, which is seeking punitive damages, has countered that L.L.Bean's action is baseless because some of the defendants are not current advertisers. L.L.Bean is also one of several companies that have sued Claria and is part of an ongoing, separate multi-district litigation case. Claria, which has filed for an initial public offering, makes advertising software called adware that tracks Web surfing behavior to deliver relevant ads and bundles its software with free, popular downloads. Further information may be found at http://www.claria.com/companyinfo/press/releases/pr040609.html

On June 8th, European Union antitrust regulators announced they were looking again into Intel Corp.'s business practices after rival U.S. chipmaker Advanced Micro Devices Inc. declined to withdraw its complaint. The European Commission reached a preliminary conclusion a couple of years ago that there was insufficient evidence to bring charges, but AMD disagreed and renewed its complaint. The Commission has begun a new investigative phase by sending letters to key industry players requesting information. Further information may be found at http://www.siliconvalley.com/mld/siliconvalley/8870480.htm

On June 23rd, America Online (AOL) announced that Jason Smathers, a software engineer for AOL, had stolen 92 million customer screen names that were used to send huge volumes of spam. Smathers, 24, was arrested at his home in Harpers Ferry, West Virginia and charged with conspiracy. Smathers allegedly stole the list and sold it to a Las Vegas man, Sean Dunaway, who used it to promote an Internet gambling operation and sold it to spammers, according to the criminal complaint. Dunaway, 21, also was arrested at his home and was charged with conspiracy. He made an initial appearance in U.S. District Court in Las Vegas and was released and given 30 days to appear before a U.S. magistrate judge in New York. Each man could face up to five years in prison and at least $250,000 in fines if convicted. Smathers was not authorized to have access to the screen name list but used another employee's access code last year to steal it according to prosecutors. Smathers apparently received $100,000 for the purloined list. Dunaway’s charge to spammers was $52,000 for the entire list. AOL’s statement on the case may be found at http://media.aoltimewarner.com/media/cb_press_view.cfm?release_num=55254060

On June 28th, Microsoft announced that it had settled a class action suit in Arizona that alleged that Microsoft violated Arizona’s antitrust and unfair competition laws. The settlement, which received preliminary approval on June 28, 2004 from the Superior Court for the County of Maricopa, Arizona, will make vouchers available to class members that may be used to buy any manufacturer's desktop, laptop and tablet computers as well as any software available for sale to the general public and used with those computer products, and specified peripheral devices for use with computers. The total amount of vouchers issued will depend on the number of class members who claim vouchers, and the maximum value of the vouchers that may be issued to class members will be $104.6 million. Under the terms of the settlement agreement, Microsoft will provide one-half of the difference between $104.6 million and the value of vouchers issued to class members to Arizona’s public school districts in the form of vouchers that may be used by the school districts to purchase a broad range of hardware products, Microsoft and non-Microsoft software, and professional development services. The vouchers will be made available to public school districts in which 50 percent or more of the students are eligible for reduced-fee or free meals under the National School Lunch Program. Microsoft’s press release regarding the settlement may be found at http://www.microsoft.com/presspass/press/2004/jun04/06-28AZSettlePR.asp

On June 15th, the Federal Trade Commission (FTC) said it would not create a national do-not-spam registry to discourage unwanted e-mail for fear it could backfire and become a target list for new victims. The FTC told Congress that spammers might mine such a registry for names. The FTC was obligated by Congress to consider the proposal under the CAN SPAM Act of 2003. However, the FTC concluded that on the Internet, unlike the highly regulated U.S. telephone network, regulators would be "largely powerless to identify those responsible for misusing the registry." Regulators instead proposed broad adoption of new authentication technology that will make it more difficult to disguise the origin of unwanted e-mails. Further information may be found at http://www.ftc.gov/opa/2004/06/canspam2.htm

On June 15th, it was announced that seventeen companies have formed the Trusted Electronic Communications Forum (TECF) to focus on eliminating the threats of phishing and spoofing to e-mail and e-commerce. Members of the group include AT&T Wireless Services Inc., IBM, Best Buy Co., and Fidelity Investments. The TECF describes itself as "a cross-industry, cross-geographic consortium dedicated to the standardization of technologies, techniques and best practices in the fight against phishing, spoofing and identity theft." The group said it also plans to focus on standardizing technologies, techniques and best practices to fight cybercrime. The TECF website may be found at http://www.tecf.org/

On June 6th, the U.S. District Court for Minnesota held that seven consolidated class action lawsuits against Northwest Airlines had no merit, in part because the privacy policy posted on the airline’s website was unenforceable unless the plaintiffs said they had read it. The plaintiffs had contended that the airline, in giving passenger information to the government in the wake of the Sept. 11, 2001, terrorist attacks, violated laws and its own privacy policy. U.S. District Court Judge Paul Magnuson ruled that the plaintiffs’ expectation of privacy was low because they did not contend that they read the privacy policy. Privacy advocates attacked that part of the decision, saying it rendered Web site privacy policies all but unenforceable. According to the plaintiffs, Northwest violated its privacy policy, the Electronic Communications Privacy Act, the Fair Credit Reporting Act and Minnesota's Deceptive Trade Practices Act by giving NASA passenger name records, which included not only the passengers' name but also their flight numbers, credit card information, hotel and car rental reservations, and names of traveling companions. The decision in In Re Northwest Airlines Privacy Litigation may be found at http://www.nysd.uscourts.gov/courtweb/pdf/D08MNXC/04-04317.PDF

On June 10th, the Computer Security Institute announced that its survey of security professionals at nearly 500 companies found that damages related to cyberattacks declined, reaching about $290,000 per company versus $400,000 per company a year ago. The report, conducted in cooperation with the FBI, also said respondents thought denial-of-service attacks exceeded intellectual property theft as the most costly type of information threat. Most companies kept security functions inside the company, with only 12 percent of those surveyed indicating they outsourced more than 20 percent of security procedures. Companies with annual sales of more than $1 billion typically paid a little more than $100 per worker on security, while companies with revenue of less than $10 million spent an average of $500 per worker. Further information may be found at http://www.gocsi.com/press/20040609.jhtml

On June 10th, the Public Patent Foundation (PPF) announced that the U.S. Patent and Trademark Office had agreed to re-examine a controversial Microsoft patent on the Windows File Allocation Table (FAT) file system, the older of two main systems used by Windows to store files. Last year, Microsoft said it was seeking to license the FAT patent on reasonable terms as part of a broader push toward sharing its intellectual-property portfolio with the industry. The FAT file format has become a common means of storing files not just on computers but also on removable flash memory cards used in digital cameras and other devices. It is also used by the open-source Samba software that lets Linux and Unix computers exchange data with Windows computers, and by Linux itself to read and write files on Windows hard drives. Further information may be found at http://www.pubpat.org/Microsoft_517_Reexam_Granted.htm

On June 22nd, a coalition of Internet service providers issued a proposal of best practices for filtering and sending e-mail to combat spam. Yahoo, Microsoft, EarthLink, America Online, British Telecom and Comcast recommended technical methods for authenticating e-mail senders by Internet Protocol address or with digital content signatures. That way, ISPs and e-mail providers could help prevent e-mail fraud, one of the major frustrations for antispam fighters. The group advocated that ISPs detect and shut off Internet traffic from "zombie" machines, hijacked consumer computers on their networks used to send millions of unwanted e-mail messages every day. The effort is the latest from the Anti-Spam Technical Alliance (ASTA), formed in April 2003 by the four major ISPs--Yahoo, Microsoft, EarthLink and AOL. ASTA's proposal also said that ISPs should implement rate limits on outbound e-mail traffic, control automated registration of accounts and close all open relays, which are a big source for e-mail spam. They also urged ISPs to block or limit e-mail on Port 25, the main thoroughfare for e-mail communications. For consumers, they recommended that all PC users install virus protection and security systems. The proposal may be found at http://download.microsoft.com/download/2/3/7/23779c05-d409-46ce-b9d6-c24908789d8 b/ASTA%20Statement%20of%20Intent.pdf

On June 21st, the U.S. Supreme Court ruled 7-1 that confidential Intel documents can be given to European antitrust investigators evaluating the chipmaker’s business practices. The case arose out of an antitrust complaint that Advanced Micro Devices (AMD), Intel's rival, filed with the European Union's Directorate-General for Competition. AMD alleged that Intel unfairly used marketing funds to prevent competitors from landing deals with PC makers. AMD recommended that the EU seek documents that Intel had filed in an unrelated private antitrust case in an Alabama federal court. The ruling gives a California court wide discretion in permitting or refusing AMD's request and could lend more firepower to the European Commission's ongoing investigation of Intel. Current federal law says that judges may require a person or a corporation to produce a document or other thing for use in a proceeding in a foreign or international tribunal. The case turned on the meaning of foreign tribunal and whether the law required disclosure even when the European Commission itself had not requested the documents. AMD had recommended that European officials seek access to the Intergraph and Intel documents, which arose out of a complex legal dispute that involved allegations of patent and antitrust violations. After the European Commission chose not to do so, AMD asked a federal district court in California to order Intel to divulge the documents. The court declined but was reversed by the Ninth Circuit, which said the aim of federal law was "providing efficient assistance to participants in international litigation and encouraging foreign countries by example to provide similar assistance to our courts." The decision in Intel v. Advanced Micro Devices, Inc. may be found at http://www.supremecourtus.gov/opinions/03pdf/02-572.pdf

On June 22nd, a Utah court granted an injunction to adware maker WhenU.com to enjoin the state’s new anti-spyware legislation from taking effect. WhenU filed a lawsuit in April to challenge the nation's first anti-spyware statute, called the Spyware Control Act, on the grounds that it is unconstitutional. The suit, filed in the 3rd Judicial District Court in Salt Lake County, Utah, was filed shortly before the law was set to go into effect in May. Regardless of consent, the Utah law bars companies from installing software that reports its users' online actions, sends any personal data to other companies, or pops up advertisements without permission, excepting the use of cookies and ads served by ordinary HTML or JavaScript. The bill also bars context based tools from triggering unrelated advertisements based on visiting Web sites on a certain topic. Further information may be found at http://www.whenu.com/press_release_04_06_22.html

On June 23rd, Senator Orrin Hatch introduced the INDUCE Act, short for the Inducement Devolves Into Unlawful Child Exploitation Act of 2004. The bill would broaden potential copyright infringement liability by making it an offence to "induce" copyright infringement. The inducement provision would co-exist with current vicarious and contributory infringement doctrines. The legislation is intended to crack down on the free file-sharing services that the recording and movie industries claim are costing them millions of dollars in lost sales. Some legal experts argue that the bill is worded so broadly that it threatens numerous electronic devices and software products that enable legal copying of digital entertainment. Under the bill, someone would be liable if he or she intentionally "aids, abets, induces or procures" illegal material. Intent is defined as what a reasonable person would determine based on "all relevant information about such acts . . . including whether the activity relies on infringement for its commercial viability." The text of the bill may be found at http://scrawford.net/courses/INDUCE%20Act%20of%202004.pdf

On June 3rd, the U.S. District Court for Massachusetts ruled that an employer may not use e-mail to notify an employee about a new mandatory arbitration policy. The judge concluded that receiving an e-mail in a virtual mailbox is not the same as receiving a letter in a real mailbox, nor is showing that someone opened an e-mail the same as showing that they acknowledged it. The decision in Campbell v. General Dynamics may be found at http://pacer.mad.uscourts.gov/dc/opinions/gertner/pdf/campbell.pdf

On June 15th, the 11th Circuit Court of Appeals ruled that DirecTV cannot sue individuals for "mere possession" of technology that is capable of intercepting DirecTV's satellite signal. The court ruled that section 2520 of the Wiretap Act does not create a private right of action for possession of access devices. The decision in DirecTV v. Mike Treworgy may be found at http://caselaw.findlaw.com/data2/circs/11th/0315313p.pdf

On June 15th, the California Secretary of State released the first standards in the nation for a voter-verified paper trail for electronic voting machines. The standards came six months after Secretary of State Kevin Shelley mandated that all new e-voting machines purchased in the state produce a paper trail by July 2005. The standards may be found at http://www.ss.ca.gov/elections/ks_dre_papers/avvpat_standards_6_15_04.pdf

On June 25th, the U.S. Senate unanimously approved legislation that would allow the Justice Department to use civil penalties to go after people who illegally share and download computer files over the Internet. Under the Protecting Intellectual Rights Against Theft and Expropriation Act (PIRATE Act), the Justice Department would be able to file civil copyright infringement cases against people who wrongfully download or share computer files. The Pirate Act represents the latest initiative of the Recording Industry Association of America (RIAA) and its allies, who collectively argue that dramatic action is necessary to prevent file-swapping networks from continuing to flourish. The text of the Act may be found by entering the bill number (S. 2237) at http://thomas.loc.gov/

On June 24th, the 4th Circuit Court of Appeals issued a decision ruling that ISPs do not copy material in direct violation of the Copyright Act when passively storing material at the direction of users in order to make that material available to other users upon their request. The court added that the automatic copying, storage, and transmission of copyrighted materials, when instigated by others, does not render an ISP strictly liable for copyright infringement, though an ISP can become liable indirectly upon a showing of additional involvement sufficient to establish a contributory or vicarious violation of the Act. In that case, the ISP could still look to the Digital Millennium Copyright Act for a safe harbor if it fulfilled the conditions of the Act. The decision in CoStar Group v. Loopnet may be found at http://caselaw.findlaw.com/data2/circs/4th/031911p.pdf