Thursday, January 18, 2018

Crypto Market Will Rebound

South Korea, a hotbed of cryptocurrency trading, considers shutting down domestic cryptocurrency exchanges. Bitcoin fell 50%. Many news sources report it as a "plunge" of cruptocurrency that can cause the Bitcoin bubble to finally burst. I don't think so. Here is why.

1. It would not be easy to ban cryptocurrency in South Korea

South Korean gov't regulators announced their intention to ban cryptocurrency trading on exchanges. For that bill to become law, it would have to overcome huge resistance from public and pass through parliament. That will take months. 

2. Even if the ban is implemented, it will be easy to circumvent

Cryptocurrency is decentralized, anonymous and electronic. It's practically impossible to ban it without global consensus. There is no global consensus and in fact some nearby countries (e.g. Singapore, Hong Kong, Japan) welcome cryptocurrency trading. Investors can go abroad, use virtual private networks (VPNs) and offline wallets the size of a USB stick.  Decentralized exchanges, such as Shapeshift or Stellar Dex, do not require identification and can be accessed from anywhere. Cryptocurrency wallets such as Exodus and Jaxx are linked to such exchanges, so trading and storing the assets can still be anonymous. VPNs easily allow hiding trader's real IP address and substituting it with the IP address of another country, without any specialized technical skills. In other words, if somebody is tech savvy enough to trade cryptocurrency in the first place, they can easily circumvent the unlikely ban.

3. South Korea's importance in the crypto market is overstated

South Korea accounts for between 5 and 15 percent of daily Bitcoin trading. Sure, that's a lot for a small country. But, even if the local exchanges are banned, those traders will not all vanish. Many will just go trade somewhere else.

4. Volatility is in the cryptocurrency's nature

We have already witnessed crypto drops of over 50%. Most recently, China's shutdown of local exchanges in September caused a 50 percent drop in Bitcoin, but prices rebounded eight-fold to almost $20,000 in December. That's just the nature of the crypto trading game.  Even the US SEC, Europol, China and a number of other major influencers could not "burst the bubble" with their warnings and bans. Even with the latest 50% price drop, Bitcoin is still worth 10 times more than it did a year ago today.

Wednesday, January 17, 2018

How to Comply with EU's New ePrivacy Law, GDPR

What is GDPR?

The EU's General Data Protection Regulation (GDPR) takes effect on May 25, 2018 in all of the EU's member states. It imposes stringent compliance requirements on virtually all businesses that collect personal information from individuals in the EU. There are hefty fines for non-compliance.

It's a regulation, not a directive. That means that it will apply automatically and simultaneously to all member states on May 25, 2018 without the need for ratification. The regulation also applies to organizations based outside the European Union if they collect or process personal data of EU residents. Data can only be processed if there is "lawful basis for processing."

What is "lawful basis for processing"?
Data can only be processed if there is at least one lawful basis to do so. The lawful bases for processing data are:

Monday, January 15, 2018

NDA for (Overseas) Developer

Suppose, you are looking to hire an Indian (or Russian or US, it doesn't matter) development company to develop an app for you. Before sharing your unique app idea, specifications, business practices and other confidential information, it's a good idea to have them sign an NDA that ensures:

- Confidential Information can only be used as required to accomplish the purpose of the agreement;

- Developer is liable for its employees, consultants and associates if they breach the NDA;

- In case there are any leaks, Developer has to prove by written evidence if that the use of your information was lawful;

- Developer cannot attempt to "steal" your employees, customers or consultants;

 - All disputes must be resolved in your state, so you don't have to try to sue in a foreign jurisdiction;
- English language prevails in case there are any discrepancies between any foreign language translation of the NDA.

Saturday, January 13, 2018

Russian Bill on 'Foreign Agent' Media Advances in Parliament

On Friday, one day before Russia's annual Day of Journalists, a new bill that would allow the government to designate media outlets, journalists, bloggers and social media users as 'foreign agents' passed in the first of three readings in the country's lower house of parliament. The bill would not censor the content but, naturally, it will have a chilling effect on free speech nonetheless.

The bill was voted for by 333 deputies, with one abstention and one lawmaker voting against. So, it is likely that the bill will become law. If it does, those who are designated 'foreign media' will be required to label their content as coming from a foreign agent media. Those who share such content, will also be required to disclose that it came from a foreign agent. Pyotr Tolstoi, a deputy Duma speaker from the ruling United Russia party, clarified that the bill will reach as far as "all information sources, from television channels and print media to social media users of medical or cooking websites," Tolstoi said.

The bill would also require media outlets designated as foreign agents to set up Russian operational companies. Violators’ websites will be blocked in Russia. Following tensions between Russia and the United States over Ukraine and alleged Russian interference in U.S. elections, the Russian Justice Ministry declared Voice of America (VOA), Radio Free Europe/Radio Liberty (RFE/RL), and seven affiliated news services as foreign agents on December 5,

Friday, January 12, 2018

Can Satanic Temple Sue Twitter for Religious Discrimination or ToS Violation?

On Wednesday, a Twitter user tweeted a call to burn down the Satanic Temple's international headquarters recently opened in an old funeral parlor in America's witch town, Salem, MA, less than a mile from a place where they used to burn witches in the 17th century. The Satanic Temple's co-founder said that Twitter has permanently suspended his account without any notice after he had asked his followers to report the aspiring arsonist's tweet for violating the platform's Terms of Service. The potential arsonist's account and tweet remain intact. The Satanist now intends to sue Twitter for religious discrimination. Does he have a case?

Twitter is a California company. So, the dispute will be governed by: 1) U.S. federal law, 2) California state law, and 3) Twitter's Terms of Service. Let's examine whether Twitter violated either of the three.

I. Federal Law

The federal Civil Rights Ac of 1964 prohibits religious discrimination in various settings - such as workplace, educational institutions as well as and brick-and-mortar places of public accommodation involved in interstate commerce. In the Satanists' case, there is no employment or education claim and websites (Twitter) are not considered "public accommodations" for the purposes of federal religious discrimination claims. So, it is unlikely that the Temple will prevail under the federal law. What about California law?

Wednesday, January 10, 2018

Russia Wins 15-Year Legal Battle to Reclaim Stoli Trademark

On Tuesday, Russia's state-owned company, Sojuzplodoimport (Союзплодоимпорт) won a case in a court in the Netherlands that ruled that the company is the rightful owner of the Stoli and Stolichnaya trademarks in Belgium, the Netherlands, and Luxembourg.  The opposing party in the case is the SPI Group (Spirits International), founded by billionaire businessman Yuri Shefler in 1997. He maintains he bought the rights to the trademarks after they became privatized following the breakup of the Soviet Union. However, the Russian government disputes the legitimacy of this acquisition. In the latest court ruling, SPI has been ordered to repay profits made from Stolichnaya in the Benelux region since 1999 and to stop using the trademarks there.

Sojuzplodoimport is engaged in court battles with SPI all over the world over those trademarks because SPI and its affiliates have registered them in over 180 countries. SPI does not own the trademarks in Russia. Last year, SPI’s court cases in the US and Australia were suspended due to the Russian Federation’s failure to produce relevant documents.  However, in Brazil, the Federal Court of Appeal confirmed SPI’s legal ownership of the Stolichnaya trademarks.

Tuesday, January 9, 2018

$124M Terms of Use Violation in Latest Clone War

On Monday, a federal appeals court in San Francisco ruled mostly for Oracle in its battle against cloning of its software by Rimini Street Inc. in violation or Oracle's terms of use. The lawsuit was first filed in 2010 after Rimini began hosting Oracle software on Rimini's own servers, as well as "cloning" that software to make it available to multiple customers. The terms of use for software products at issue allowed for some copying of Oracle's software. Specifically:

J.D. Edwards terms: “Customer shall not, or cause anyone else to . . . (iii) copy the Documentation or Software except to the extent necessary for Customer’s archival needs and to support the Users.”

Siebel terms: “Customer” may “reproduce, exactly as provided by [Oracle], a reasonable number of copies of the Programs and the Ancillary Programs solely for archive or emergency back-up purposes or disaster recovery and related testing.”

That's why Rimini's defense was that the terms of use allow it to copy Oracle’s database software systems to adjust them to the needs of a given user. But Oracle argued Rimini was copying Oracle’s software and selling it as its own, which was in excess of what the terms of service had allowed, in violation of copyright law.

Friday, January 5, 2018

Harley-Davidson Sued Affliction for Trademark Infringement

Harley-Davidson filed a lawsuit against California-based clothing company Affliction. The lawsuit alleges that Affliction is selling t-shirts and other items which bear images that closely the Harley bar-and-shield logo.

The complaint says Harley-Davidson sent a cease-and-desist letter on Oct. 18. In that letter, Harley listed 20 allegedly infringing products. A month after that, Affliction apparently stopped selling six of the items but allegedly continued selling the others.

The lawsuit asks the court to stop Affliction from selling the items, destroy them, cover the cost of corrective advertising, pay Harley $2 million per trademark per type of product, pay Harley any profits it earned from infringing items, pay compensatory and punitive damages, as well as Harley’s attorney fees.

Wednesday, January 3, 2018

Appeals Court: California Ban on Credit Card Surcharges Is Illegal

On Wednesday, a federal appeals court in California ruled that this state's law prohibiting businesses from charging customers extra for using credit cards violates free speech. California Civil Code Section 1748.1(a) had been effective since 1985. It prohibits businesses from imposing a surcharge on clients who pay with a credit card, but allows them to offer discounts for cash or check. So, the end result is the same, as long as the retailer calls it a discount rather than a credit card surcharge.

Therefore, the state law is regulating speech and not conduct, ruled the Ninth U.S. Circuit Court of Appeals in San Francisco. It said, "[p]laintiffs can already charge credit card customers more than cash customers. They seek to communicate the difference in the form of a surcharge rather than a discount. To paraphrase the Eleventh Circuit, imposing a surcharge rather than offering a discount is no more misleading than calling the weather warmer in New Orleans rather than colder in San Francisco."

Airbnb Beats Lawsuit over 'Illegal' Sublets

On Dec. 29, Airbnb Inc. beat a lawsuit filed against it by by Apartment Investment & Management Co. (Aimco), one of the largest residential landlords in the US. Plaintiff alleged that Airbnb is responsible for  enabling tenants to break their leases by allowing unauthorized sublets via Airbnb. The case highlights the importance of having the website terms of use drafted correctly, in addition to utilizing statutory protections available to website owners/operators.

Aimco sued Airbnb last year, alleging that tenants at its high-end apartment complexes in Los Angeles, where a unit can rent for as much as $17,000 a month, have been complaining about noisy Airbnb guests who were allowed to stay at the units in violation of the leases that prohibit subletting. That caused damages to Aimco because it had to hire more staff to find and evict illegal Airbnb visitors.

However, a federal judge in Los Angeles ruled that Airbnb is protected from liability by the Communications Decency Act. It is a 1996 law that shields online service providers from liability for the content users post. So, it is legal for online platforms to host "illegal" listings, as long as it's the platforms' users  (and not the platform itself) provides the content of those listing. In the present case, it's Airbnb hosts the ones who are providing the content of their listings on the site.

Airbnb is further protected from liability because its website terms of use state that hosts are responsible for compliance with local laws and guaranteeing that their bookings “will not breach any agreements with third parties.”

For years critics of Airbnb (landlords and competitors) have argued that this business model operates as an illegal hotel that violates zoning laws and disrupts neighborhoods. Even though Aimco has lost the present lawsuit, it also has a separate one filed against Airbnb in Florida.

Here is a copy of the dismissal: