Tuesday, March 28, 2017

Congress Just Killed Landmark FCC Internet Privacy Rules. What to Do?

Today, Republican-led Congress had its final vote to repeal online privacy rules imposed by the FCC last year. The repeal will become final after President signs it, which he is expected to do, as the White House has already published a statement announcing strong support of the repeal.  This is a big victory for telecoms and a defeat for consumer-protection advocates.

The now-blocked FCC's protections would have required ISPs to ask users for opt-in before sharing your personal data, browsing history, buying habits, location, app usage, etc.  The rules had also required ISPs to strengthen protection for user data against hackers.

The FCC is also precluded from issuing similar rules in the future. With no new FCC rules on the horizon, the ISPs can now sell their users’ information directly to marketers that mine personal data without consumer's consent.  ISPs can normally see all of the sites consumer visits, unless the consumer takes steps to hide data from the ISP, as discussed below.

What can consumers do to protect their privacy? They can find a broadband provider who does not collect personal data or they can hide their browsing history from the ISP. However, switching a broadband provider may not be possible due to the lack of competition in this market. Most Americans only have one or two broadband providers in the area. hiding browsing activity can be done via a Virtual Private Network (VPN).

VPN is sort of a middleman between you and your ISP. When you connect to a VPN, it handles all of your traffic. Your ISP then sees that you connected to a VPN server but the ISP does not see what sites are you visiting after that. VPNs are not a perfect solution. First of all, you need to find a VPN that is certain not to sell your data itself. Second, some companies (e.g. Netflix) try to block VPNs to ensure people are not accessing content that is not licensed in foreign countries and to block hackers.

Monday, March 27, 2017

Bentley Motors Loses Trademark Fight v. Bentley Clothing

A luxury automaker has lost a trademark battle to a small clothing company with the same name. This case illustrates the "use it or lose it" principle of trademark law. That is, if you do not actively use your trademark for the goods or services you registered it for, you can lose the rights to that trademark to someone who uses the TM.

Manchester-based Bentley Clothing company of less than 10 employees has filed to register the "Bentley" trademark with the United Kingdom Intellectual Property Office (“UK IPO”) for clothing and retail services.  Bentley Motors objected to that on the grounds that it had registered that mark for a variety of goods, including bags and jewelry. Bentley Motors argued that, even though it does not have a specific registration for garments, it has used the “Bentley” mark in connection with garments and accessories since 1920. However, the UK IPO trademark hearing officer George W. Salthouse ruled that Bentley Motors failed to provide any evidence of use of the “Bentley” name in connection with garments and the sale of garments. Ferrari, Lamborghini and Aston Martin sell clothing ranges but Bentley Motors does not have a significant reputation as a clothing manufacturer. Therefore, Bentley Clothing was allowed to use the mark "Bentley" for clothing.

FB Launches a Tool to Contact Officials

Today, Facebook announced a new tool, Town Hall, which enables users to follow and contact their elected representatives. including county board commissioners, mayor, state reps, senators, governor and even the vice president and president. The "contact" feature varies depending on what information is disclosed on an official’s page.

The feature is also integrated into the News Feed: after a user has liked or commented on a representative’s FB post, a new post may appear prompting to “Contact Your Representative.” Facebook will also include local election reminders at the top of News Feed.

To access Town Hall from a desktop, look under the "Explore" section of your News Feed. To access from a mobile phone, look in the menu section of the Facebook app.

(image from Mark Zuckerberg's FB post)

Friday, March 17, 2017

China & EU to End Anonymity of Bitcoin. Its Price Drops.

It has been a tough week for bitcoin. Chinese central bank, EU's top law enforcement agencies and legislators are deliberating to end anonymity of virtual currencies. As a result,  bitcoin price dropped significantly.


The Chinese central bank, People’s Bank of China (PBoC), is currently circulating new guidelines which, if enacted, would require domestic bitcoin exchanges to identify users and report suspicious trading activities to authorities.  Zhou Xuedong, director of PBoC’s Business Administration division, recently suggested creation of blacklists against exchanges that do not follow PBoC’s directives. China's “big three” exchanges (Huobi, OKCoin and BTCC) halted bitcoin and litecoin withdrawals while undergoing upgrade of anti-money laundering systems. The PBoC now awaits feedback on its proposed guidelines from the exchanges.


On Monday, EU's top law enforcement agencies have released a joint report stating that encryption, loss of location and lack of cohesive legislation on digital currencies make it difficult to "follow the money" while fighting cybercrime.

Thursday, March 16, 2017

Delaware Initiative to Permit Blockchain Corporate Shares

The Corporate Council of the Corporation Law Section of the Delaware State Bar Association has proposed amendments to the Delaware General Corporation Law (DGCL) to allow corporations to issue "Distributed Ledger Shares." It's a new innovative method of recording corporate share ownership by using the same technology that supports the virtual currency Bitcoin.

These amendments are a part of the Delaware Blockchain Initiative, the program supported by the Delaware Governor to accommodate blockchain businesses. Distributed ledger is a blockchain-based share registration. It's when each network user maintains a complete copy of the ledger (hence, the ledger is "distributed").  All users collectively participate in recording and validating the transactions. A major benefit to this method over traditional ledger is that the former does not require a clearinghouse intermediary to settle transactions. That's why the distributed ledger can be cheaper, faster and more efficient.  It cuts out the middleman.

Bitcoin was the first major application of blockchain technology. However, that technology can be applied to record and validate pretty much any digital asset, such as securities, commodities, property titles, derivatives, etc.

Tuesday, March 14, 2017

Europol vs. Virtual Currencies

On Monday, Europol, EU's top police agency, and Eurojust, cross-border anti-organized crime agency, released a joint paper stating that the growing use of digital currencies is impeding law enforcement efforts.  Both agencies claim that encryption, loss of location, lack of cohesive legislation on digital currencies make it difficult to "follow the money" while fighting cybercrime. This comes at a time when Members of the European Parliament are deliberating new legislation to end the anonymity of cryptocurrency and allow “competent authorities... to monitor the use of virtual currencies.”

The law enforcement agencies elaborated on the following factors:

Encryption. "The growing use of encryption by criminals to protect their communications or stored data... [is] leading to loss of critical intelligence and evidence... The widening criminal use of decentralised virtual currencies... effectively prevent law enforcement to ‘follow the money’ and significantly complicate the possibilities for asset recovery and the prevention of fraudulent transactions. The lack of (minimum) standards for due diligence and Know-Your-Customer for such services and the non-application of existing regulations compound to the problem."

Loss of location. "Recent trends such as the increasing criminal use of encryption, anonymisation tools, virtual currencies and the Darknets have led to a situation where law enforcement may no longer (reasonably) establish the physical location of the perpetrator, the criminal infrastructure or electronic evidence. In these situations, it is often unclear which country has jurisdiction and what legal framework regulates the (real time) collection of evidence."

Differences in legislation. "Despite the existence of international legislative instruments, differences in domestic legal frameworks... prove to be a serious impediment to international criminal investigation and prosecution of cybercrime. This is partly due to an incomplete transposition of international instruments to domestic legislation."

Lack of case law. "Case law (jurisprudence) can be a valuable tool to compensate for a lack of specific legislation, but unfortunately little case law exists with regard to new developments (eg virtual currencies, anonymization tools and various technology-driven criminal modi operandi)."

Thursday, March 9, 2017

Who Owns Copyright to Translations?

I perform legal translations, represent authors and translators in various countries. Every once in a while they come across a brilliant article or a book and ask, "Would it be legal to translate it and post the translation online?" No, not in the U.S. Not unless the original work is in a public domain or you have the original author's (or other copyright holder's) permission.  Without such permission, you could only publish excerpts from that translation for non-commercial use under the "fair use" exemption in the US copyright law.

Copyright law of other countries generally follows the same pattern, even though there is really no such thing as international copyright law. A claim of copyright infringement is governed by the laws of the country where the alleged infringement occurred. Nevertheless, most countries have signed international IP treaties and conventions that offer copyright protection to foreign works. Berne Convention largely standardized copyright law among the 172 countries that signed it.   This Convention introduced the concept that a copyright exists the moment a work is created, even if the copyright is not formally registered.

Under the U.S. copyright law, a translation is a "derivative work" that is based on the original work. Other examples of derivative works are: motion picture versions of literary material or plays, art reproductions, “new editions” of preexisting works, a motion picture based on a play or novel, a drawing based on a photograph, a new version of an existing computer program, etc. The exclusive right to prepare derivative works belongs to the original copyright owner (U.S. Code 17 § 106 (2)). That's normally the author, unless the author sold copyright to somebody else. E.g., if the author wrote the piece as work for hire, then the employer will own copyright. Author could have sold copyright to publisher. Or, author could have licensed exclusive publication rights that last some years. Bottom line being, you need to determine who holds the rights to the original work and ask permission prior to publishing your translation.

Without the author's (or other rights holder's) permission, you can still use parts of the original work to publish derivative works if it falls within the "fair use" exemption to the exclusive rights of the copyright holder. (U.S.C. 17 § 107).  It gives you the right to use portions of others' work for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research. Such limited use will not be considered copyright infringement even if you do not have the author's permission, especially if the use is noncommercial. Basically, the less of the copyrighted work you use and the more benign the purpose of your use, the higher likelihood that it will fall within the "fair use."

In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include —

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.

Another exception that would allow you to post translation is if the original work is in the public domain. For example, a translation of an ancient epic poem.  See Copyright Term and the Public Domain in the United States.

Saturday, March 4, 2017

How to Amend a Contract

Suppose, you've signed a contract but now the parties agreed to change some of its terms. E.g., change price, delivery dates, etc. You first instinct will probably be to sign a whole new contract with a  clause that says this contract supersedes the previous contract. Fortunately, there is an easier way. You can just sign an Amendment which lists the modifications.


This amendment (the "Amendment") is made by _________________ and _________________, parties to the  _____________________ Agreement dated ________ (the "Agreement").

1. The Agreement is amended as follows: ______________________________________________________.

2. Except as set forth in this Amendment, the Agreement is unaffected and shall continue in full force and effect in accordance with its terms. If there is conflict between this amendment and the Agreement or any earlier modification, the terms of this Amendment will prevail.

By: __________________________
Name: ________________________
Title: _________________________
Date: _________________________

By: __________________________
Name: ________________________
Title: _________________________
Date: _________________________

Wednesday, March 1, 2017

How to Amend the Bylaws/Operating Agreement?

Clients often ask how to amend the Bylaws (Operating Agreement). Do all members have to sign the whole updated document? No, there is an easier way.  After the company has voted to update the Bylaws, it can issue the following resolution:


Pursuant to a unanimous consent of the Board of Directors of ABC, Inc. (the "Corporation"), the Bylaws of the Corporation were amended as follows, effective as of such date:

RESOLVED, that Section X of the Corporation's Bylaws be, and hereby is, amended and restated in its entirety to read as follows:

              [Insert the amended text of Section X here]

Certified by:

[Name], Secretary

Sunday, February 26, 2017

Fed. Judge Blocks IMDb Age Discrimination Law

On Wednesday, a federal judge in California issued a preliminary injunction that bans the state from enacting last year's bill AB 1687 that prohibited websites like IMDb from listing an actor’s age if the actor objects to it. The purpose of the bill was to prevent age discrimination in youth-obsessed entertainment industry. But the opponents claimed the bill is unconstitutionality in that it violates the First Amendment.

When judge evaluates issues that restrict non-commercial speech on the basis of its content, there must be a showing that “the restriction is ‘actually necessary’ to serve a compelling government interest." In other words, when the state enacts a law that restricts anyone from publishing factual information (regarding age in this case), the state must show that the restriction is "actually necessary" to serve a "compelling government interest."

In this case, the court found that, while fighting age discrimination is a compelling gov't interest, the state has not shown that the bill is “necessary” to combat age discrimination. Specifically, the decision states:

To be sure, the government has identified a compelling goal – preventing age discrimination in Hollywood. But the government has not shown how AB 1687 is "necessary" to advance that goal. In fact, it's not clear how preventing one mere website from publishing age information could meaningfully combat discrimination at all. And even if restricting publication on this one website could confer some marginal antidiscrimination benefit, there are likely more direct, more effective, and less speech-restrictive ways of achieving the same end. 

Photo Model: Lea Ann.