IS YOUR CAR KEEPING TABS ON YOU?

Lawyer Robert Moran drove to his law offices in Rome, New York in July of 2003 without the slightest clue that he was being monitored by a secret GPS (Global Positioning System) bug planted without a court order by state police. The police thought he was connected to a Hells Angel Motorcycle Club selling methamphetamine. After watching him for a month, they filed drug charges. A federal judge in New York ruled in early January that police did not need a court order to plant the bug. U.S. District Court judge David Hurd wrote, "Law enforcement personnel could have conducted a visual surveillance of the vehicle as it traveled on the public highways . . . Moran had no expectation of privacy in the whereabouts of his vehicle on a public roadway." Further information may be found at http://news.zdnet.com/2100-9588_22-5533560.html

An appellate court in the state of Washington has ruled that police do not need a search warrant to examine an employee’s computer. In a 3-0 decision, the court ruled that only the permission of the business that owns the computer is required. The case stemmed from an instance in which an employee of a nonprofit organization used work computers to search for child pornography. The organization allowed its computer to be seized without a warrant and the employee was charged with 50 counts of possessing child pornography and sentenced to four years in prison. He claimed the Washington State Patrol Crime Lab's seizure and search of the computer without a warrant was illegal because it violated his Fourth Amendment right to privacy. The court upheld the conviction and sentence. Further information may be found at http://news.zdnet.co.uk/business/legal/0,39020651,39183217,00.htm

On December 22nd, the 8th Circuit Court of Appeals ruled that the Minnesota Public Utilities Commission (MPUC) may not regulate VoIP (Voice over Internet Protocol) as it does traditional phone lines. The decision upheld a lower court ruling, providing a victory for VoIP companies like Vonage Holdings Corp. The MPUC had argued that VoIP companies were providing phone-like service and therefore should be regulated as phone companies are. VoIP companies said they provide an information service rather than a telecommunications service. The Federal Communications Commission last month issued its own rules, saying that Internet phone services should not be governed by the same state regulations as traditional telephone companies. In its order, the 8th Circuit said the FCC rules back the lower court's ruling prohibiting the state from treating Internet-based services the same way as other telecommunications services. The FCC ruling had been criticized by some consumer groups, who argued that state regulators should have regulatory power over VoIP service in order to guarantee safeguards such as making sure 911 calls work properly and rural subscribers aren't left out. The MPUC is appealing the decision. The opinion in the case may be found at http://www.ca8.uscourts.gov/tmp/041434.html

On January 4th, Apple Computer filed suit against the publisher of a Macintosh-centric site called Think Secret, alleging that recent postings on the site contained Apple trade secrets. The suit was filed in the Superior Court of Santa Clara County, California and seeks to identify the individual leaking information and to get an injunction barring the further publication of trade secrets. The action would seem to validate recent stories indicating that Apple will begin to offer a cheaper Macintosh and its own line of office software. Apple maintains that while others obtained the trade secrets that were leaked by Think Secret, the site engaged in "tortious interference" with the confidentiality agreements that Apple requires employees and contractors to sign. The suit also seeks damages from the unnamed individuals who breached Apple's confidentiality agreement. Further information may be found at http://www.thinksecret.com/news/defense.html

On January 4th, the 8th Circuit Court of Appeals overturned a Missouri district court ruling that ordered ISP Charter Communications to turn over about 200 subscriber names to the Recording Industry Association of America (RIAA) pursuant to a subpoena. The court's decision will not stop the RIAA from filing lawsuits against unnamed peer-to-peer users in "John Doe" actions. The association has filed more than 7000 such lawsuits against unidentified file traders since December 2003, when the U.S. Court of Appeals for the District of Columbia also rejected the subpoena process used by the RIAA to obtain ISP subscriber names. The decision in the case may be found at http://www.ca8.uscourts.gov/opndir/05/01/033802P.pdf

The Federal Trade Commission (FTC) is seeking public comment on a proposal to amend the Children's Online Privacy Protection Act Rule. The proposal seeks to make permanent a temporary provision in the Rule allowing operators of Web sites and online services that collect personal information from children only for internal use to obtain verifiable parental consent via e-mail. Further information may be found at http://www.ftc.gov/opa/2005/01/coppafrn.htm

On December 30th, the city of Los Angeles filed suit against a group of Internet travel sites, alleging that they have underpaid hotel room taxes, pocketing the difference between amounts collected from consumers and room taxes paid to cities. The suit was filed in Los Angeles Superior Court against such companies as Priceline.com, Expedia, Orbitz and Travelocity, claiming that all of them have underpaid transient occupancy taxes. All of the sites contract with hotels for rooms at negotiated discounted rates, then mark up their inventory of rooms to sell them to the public. The lawsuit claims that they charge and collect taxes from occupants based on the marked-up rates, but only pay taxes to cities based on the lower, negotiated rates. The city is seeking class action status for the suit. Further information may be found at http://www.reuters.com/newsArticle.jhtml;?storyID=7225832

In late December, a Utah appellate court ruled that unsolicited pop-up ads did not violate a state advertising law banning unsolicited electronic messages. The court found that Celebrity Cruises’ pop-up ads did not violate the law, which was intended to target spam. The opinion notes that because the law is "limited to e-mail sent to e-mail addresses and pop-ups are not sent to e-mail addresses, pop-up ads simply do not come within the act's definition." Further information may be found at http://www.geek.com/news/geeknews/2005Jan/gee20050106028569.htm

On January 4th, Representative Mary Bono reintroduced an antispyware bill that passed the House of Representatives in 2004, but did not make it through the Senate. The Securely Protect Yourself Against Cyber Trespass Act, or SPY ACT, defines most functions performed by so-called spyware as unfair business practices subject to U.S. Federal Trade Commission fines. Bono said she expects the bill to sail through Congress this year. The bill passed the House in October 2004 on a 399-1 vote. The SPY ACT, which would require a user's permission before software is downloaded onto a computer, was criticized by software vendors, who suggested the bill could force software vendors to notify users every time the software scans their machines for updates. The SPY ACT also would prohibit unauthorized software from changing a browser's default home page, changing the security settings of a computer, logging keystrokes and delivering advertisements that the computer user cannot close without turning off the computer or closing all sessions of the browser. The text of the bill may be found by entering the bill number (H.R. 29) at http://thomas.loc.gov/

On January 13th, the attorney general of Texas announced that the state had sued one of the world’s largest spam operations, seeking millions of dollars from its two operators. Greg Abbott said the state had filed the civil lawsuit in federal court in Austin against Ryan Samuel Pitylak, a University of Texas student, and Mark Stephen Trotter of California. The two are suspected of controlling companies such as PayPerAction L.L.C., Leadplex L.L.C. and Leadplex Inc., all of which allegedly sent millions of spam messages selling fraudulent services. Watchdog group SpamHaus.org has ranked the pair as running one of the top five spam operations in the world. Abbott said the operations named in the civil suit have violated federal and Texas laws on spam as well as Texas trade practices. No criminal charges were filed. The suit charges the operation with using misleading subject lines in e-mail messages and making misrepresentations in the body of the e-mail. Further information may be found at http://www.oag.state.tx.us/oagnews/release.php?id=752&PHPSESSID=df026bf2eed0 8fe1d15bb43cdd537535

On January 11th, the Federal Trade Commission (FTC) announced that it had won an order to shut down illegal Internet advertising for six companies accused of profiting from sexually explicit e-mail. A federal judge in Las Vegas granted the commission's request for a temporary restraining order against the companies, their executives and an affiliate for allegedly violating federal laws regulating spam. The FTC sought an injunction halting the network's illegal e-mail ads. The judge issued the order on January 5th. The case marked the first time the commission took action under a rule that requires an identifying label in the subject line of sexually explicit e-mails, to make it easier for parents and others to filter such messages. The law also holds others liable for operating Web sites that benefit from fraudulent pornographic spam. The Nevada companies named as defendants were Global Net Solutions Inc., Open Space Enterprises Inc., Southlake Group Inc. and WTFRC Inc., which does business as Reflected Networks Inc. Also named in the complaint were Global Net Ventures Ltd., of London, and Wedlake Ltd., which the FTC said is based in Riga, Latvia. The FTC said the e-mails did not include the required "SEXUALLY EXPLICIT" warning in the subject line, falsely promised free membership to the Web sites and gave recipients no way of stopping the unwanted e-mails. Further information may be found at http://www.ftc.gov/opa/2005/01/globalnetsolutions.htm

On January 11th, the Internal Revenue Service (IRS) announced that officials at large companies and tax-exempt organizations must electronically file their Internal Revenue Service forms starting in 2006. The new regulations will first apply to corporations worth more than $50 million and tax-exempt organizations with assets of at least $100 million. The threshold lowers in 2007 to businesses and tax-exempt organizations worth $10 million. IRS officials expect that by then at least 20,000 large corporate taxpayers and up to 10,000 tax-exempt entities will be covered by the electronic filing requirement. Companies that file fewer than 250 annual IRS returns, such as income, excise, information and employment tax forms, will be exempt from the new electronic submission rules. Further information may be found at http://www.irs.gov/newsroom/article/0,,id=133977,00.html

On January 13th, it was reported that a central part of the FBI’s computer system overhaul may have to be junked, compelling a further delay in a four-year, half-billion-dollar reconstruction of its outdated computer system. The software at issue, known as Virtual Case File, is so inadequate that the FBI has begun to solicit proposals from outside contractors for new software. The computer system overhaul was noted as a priority by the September 11th commission and Congress, both of whom concluded that the FBI's old system prevented agents from sharing information that could have thwarted the attacks. So far the overhaul has cost $581 million, and the software problems are expected to set off a debate over how well the bureau has spent the vast sum allocated to it. The bureau recently commissioned a series of independent studies to determine whether any part of the Virtual Case File software could be salvaged. Any decision to proceed with new software would add tens of millions of dollars to the development costs and render worthless much of a current $170 million contract. The bureau is no longer saying when the project, originally scheduled for completion by the end of 2003, might be finished. A prototype of the Virtual Case File was delivered to the FBI last month by Science Applications International Corp. Bureau officials consider it inadequate and already outdated, and are using it mainly on a trial basis to glean information from users that will be incorporated in a new design. Further information may be found at http://www.latimes.com/technology/la-na-fbi13jan13,1,2171776.story

On January 3rd, an intruder broke into a server at George Mason University. It took nearly a week to confirm the nature of the intrusion - on January 9th, GMU warned its 32,000 students, faculty and staff that they could be exposed to possible identity theft or credit card fraud. The compromised computer held a massive cache of information, including names, Social Security numbers, university identification numbers and photographs of everyone on campus. On January 11th, GMU turned the hacked Windows 2000 server over to the Fairfax County Police Department, to run forensic tests, looking for electronic clues to the hacker's identity. Early reports suggested that the server may not have been adequately protected by a firewall. George Mason is thought to be a technology savvy university, and is home to the Center for Secure Information Systems, which works to develop improved security technology. The center receives $2 million a year in funding from federal agencies such as the National Security Administration, the National Science Foundation and the Air Force, as well as private corporations. Further information may be found at http://www.gmu.edu/intrusion/

A federal judge in New York has held that a sex offender who used the Internet to lure young victims and traffic in child pornography may be barred from using a computer or any other device with online capabilities, even in the performance of his job. Judge Thomas J. McAvoy distinguished the case of Jeffrey A. Johnson from those of two other convicts whose Internet-restrictive conditions were stricken by the 2nd U.S. Circuit Court of Appeals. In U.S. v. Johnson, 97-CR-0206/ 98-CR-160, the court found the risk of re-offending was too great to allow him Internet access. Courts have generally asserted that it makes no more sense to deny an offender Internet access because he or she used the Internet to facilitate a crime than it does to bar a wire fraud perpetrator from using the telephone. The 2nd Circuit has addressed the issue at least twice. On both occasions it reversed trial courts that had restricted Internet access because the restrictions were overly broad and/or not reasonably related to the crime committed. Unlike early cases, the defendant in this case enticed minors to engage in physical conduct and made arrangements online to meet them. Crucial to McAvoy's ruling was evidence that Johnson had relied on the Internet to commit his crimes, showed little indication that he appreciates the risk he presents to children and had shown signs of breaking the law once again. Further information may be found at http://www.law.com/jsp/article.jsp?id=1105364089680

The Internal Revenue Service (IRS) has announced this year’s Free File program, giving consumers the opportunity to use online tools developed by private software makers to help get their tax documents directly to the IRS at little or no charge. The IRS said January 12th was the first day that people could begin electronically filing their 2004 taxes. Previously, the companies involved in the program offered free online tax filing to only a select group of people, specifically individuals in certain age or income brackets. But now IRS partners Intuit, TaxAct and eSmartTax are offering no-cost services to everyone. Two additional companies, FreeTaxUSA.com and FileYourTaxes.com, are extending free services to residents of certain U.S. states. The 10 remaining participating companies, including tax giant H&R Block, have no-cost programs for specific demographics, such as people over the age of 60 or members of the military. The IRS is expecting that roughly half of the nation's 133 million taxpayers will use electronic tax filing in 2005, compared with the 62 million Americans who filed returns online last year. A list of Free File Alliance Companies may be found at http://www.irs.gov/app/freeFile/jsp/index.jsp?

On January 18th, it was reported that the Federal Bureau of Investigation has effectively scrapped its custom Internet surveillance technology, once known as Carnivore, designed to read e-mails and other online communications among suspected criminals, terrorists and spies. Bureau oversight reports submitted to Congress suggest that the FBI has switched to unspecified commercial software to eavesdrop on computer traffic during such investigations and has increasingly asked Internet providers to conduct wiretaps on targeted customers on the government's behalf, reimbursing companies for their costs. The FBI performed only eight Internet wiretaps in fiscal 2003 and five in fiscal 2002, none using Carnivore, which was later renamed DCS-1000. The congressional oversight reports were obtained under the U.S. Freedom of Information Act by the Washington-based Electronic Privacy Information Center. Further information may be found at http://www.internetnews.com/security/article.php/3462771

On January 26th, Microsoft announced that it will severely curtail the ways in which people running pirated copies of its Windows operating system can receive software updates, including security fixes. The new authentication system will still allow people with illegal copies of Windows to obtain security fixes, but their options will be limited. Some security experts said the crackdown also could increase Internet security problems in general, if there is a rise in unsecured computers open to attack via unpatched Windows vulnerabilities, which then could be used to attack others. The program is entitled Windows Genuine Advantage, and will ask users to provide proof their Windows copy is authentic before receiving some software updates. By mid-2005, the program will become mandatory for Windows users to get virtually all updates, including security fixes available through the company's Windows Update Web site. Users who have pirated copies of Windows will be able to continue to get security fixes if they sign up to automatically receive security updates. Further information may be found at http://www.microsoft.com/presspass/press/2005/jan05/01-26GenuineAdvantagePR.asp

On January 25th, the Department of Homeland Security announced that it would begin issuing special identification devices to foreign visitors arriving by foot and by car by July 31st. The devices will contain radio-frequency identification (RFID) chips storing a unique identification code linked via government computers to document holders' names, countries of origin, dates of entry and exit, and biometric data. The department plans to begin issuing the high-tech IDs to foreign visitors at border crossings in Nogales, Arizona; Alexandria Bay, New York; and Blaine, Washington, as part of a yearlong test of the system. The goal of using the technology is to more easily track visitors' arrival and departure, and to catch those who overstay their visas, the agency said. It should also speed up inspection procedures at checkpoints. Border officials can simply scan the chips, which signal their ID numbers via radio frequency, from a distance and automatically gather the data they need. The new chip system is part of the US-VISIT program, a federal initiative designed to capture and share data such as fingerprints and photographs of foreign visitors. Further information may be found at http://seattletimes.nwsource.com/html/nationworld/2002160797_border26.html

On January 25th, Internet service provider Earthlink announced that the so-called "Alabama Spammers," Damon DeCrescenzo and David Burstyn, have agreed to comply with a court order forbidding them from sending further unsolicited e-mail. The settlement also requires them to pay an undisclosed cash settlement to EarthLink. In February 2004, EarthLink brought its case against DeCrescenzo and Burstyn in the U.S. District Court of Atlanta, charging the two men with masterminding a "massive scheme of theft, spamming and spoofing." The lawsuit alleged that the defendants used a system of false names, addresses and corporate entities to cloak their spamming operation. The defendants became known as the "Alabama Spammers" because of their practice of using phone lines in and around Birmingham, Alabama to execute their schemes. EarthLink charged the defendants with violating the Computer Fraud and Abuse Act, the Electronic Communications Privacy Act and the Georgia Computer Systems Protection Act. Further information may be found at http://www.earthlink.net/about/press/pr_ALcourtorder/

On January 18th, New Jersey acting governor Richard Codey signed into law a bill making it a crime to lure a person from cyberspace to a real place with a criminal purpose in mind. Although Bill A-2864 applies to all means used to lure, the Internet is its focal point. Under the law, it is a third-degree crime to attempt "via electronic or any other means, to lure or entice a person into a motor vehicle, structure or isolated area, or to meet or appear at any place, with a purpose to commit a criminal offense with or against the person lured or enticed or against any other person." The law states that a conviction for luring will not merge with a conviction of any other criminal offense and that a court will impose separate sentences for each. In addition, a court may not suspend or make any other noncustodial disposition of any person sentenced under the law. One clear target of the law is those who use the Internet to lure minors. Further information may be found at http://www.state.nj.us/cgi-bin/governor/njnewsline/view_article.pl?id=2323

On January 14th, the U.S. Court of Appeals for the District of Columbia ruled in favor of maintaining copyright license rates for webcasters, set by the Librarian of Congress. The Recording Industry Association of America (RIAA) had argued that the rates set in 2002 were too low and based on faulty market data. The decision in Beethoven.com v. Librarian of Congress may be found at http://caselaw.findlaw.com/data2/circs/DC/021244A.pdf

In January, Harvard's Berkman Center released a pair of reports together with Gartner|G2 on the state of digital media. The reports include analysis of legal cases and a supplement detailing international developments. The reports may be found at http://cyber.law.harvard.edu/media/files/wp2005.pdf and http://cyber.law.harvard.edu/media/files/wpsupplement2005.pdf

The entertainment industry has rounded up dozens of allies to persuade the Supreme Court to hold Internet file-trading services responsible when users copy songs and movies without permission. The U.S. government, 40 states and territories, and outside groups from the National Football League to the Christian Coalition of America have asked the Supreme Court to hold services like Grokster and Morpheus accountable for the millions of copyright files traded over their networks. The Supreme Court will hear the case on March 29th. An archive of the briefs filed may be found at http://www.eff.org/IP/P2P/MGM_v_Grokster/