The Virtual Skinny: Yup … It Really Is Only Tuesday…

7.8.2014

GOOD TO KNOW: When your company is lesser known and often confused with militant groups, that’s probably not good for your bottom line.  Note: ISIS (the company responsible for the ISIS mobile payment system) should not be confused with the Islamic State of Iraq and Syria (ISIS).  The mobile payment company would likely thank you. 

NEW HOUSE TSA RULES. 

HOW MUCH BATTERY LIFE DO YOU HAVE?

Can’t turn on your phone for airport security? Sorry, you won’t be getting on your flight. TSA is changing up its rules to require more than a dozen foreign airports in Europe, Africa, and the Middle East to check passenger electronic devices for security purposes.

WHY IS THIS HAPPENING?

This isn’t your parents’ underwear bomber anymore.  Turns out some terrorists see aviation security as a challenge and are constantly looking for ways around it.  Recent reports indicate that Al Qaeda affiliates in Yemen may be hatching up plans to transform mobile devices into explosives.  Unresponsive phones may simply be shells with their innards replaced with explosive materials.  Nope, not scary at all.

WHAT ELSE IS GOING ON?

GET RICH OR LOSE YOUR PRIVACY TRYING?

Some say money can’t buy you happiness, but it could at the very least buy you privacy. In today’s Wall Street Journal, cybersecurity expert Richard Clarke predicts that in the next 25 years, there will be so much data collected about every aspect of our daily lives from how we drive to how we keep our homes and take care of our health.  He warns that all this data could be known by any governmental and corporate entity.  Clarke opines that privacy will soon become a commodity only briefly available to the rich and in limited locations. For the record, the verdict is still out on the money and happiness thing … just saying …

HACKITY, HACK, HACKED …

A group of Chinese hackers (potentially affiliated with the Chinese government) may be targeting the computers of U.S. experts on Iraq.  Security firm, Crowdstrike, Inc., believes that this group is just one of 30 in China that its following.  The motivation for all of this could be China’s attempts to ward off any interference with its government’s investment in Iraq’s oil infrastructure. Meanwhile, the U.S. governments will continue to push for China’s cooperation on combating cyber espionage.

THE STREETS ARE TALKIN’

‘Cause they’re fancy.  Apple’s stock continues to rise, and it’s full steam ahead for the company as it prepares to offer its smartwatch or “iWatch” this fall. As it transitions to wearable tech, it’s recruiting executives from major fashion brands such as Burberry and LVMH.

Box, Inc., an online storage startup, just raised $150 million from private equity firm TPB – buying it more time before an initial public offering.

Israeli startup Playbuzz is now has more traffic than upworthy.com and aol.com in just two years.  The company targets the U.S. market and provides users with quizzes and ‘listicles’ similar to Buzzfeed.

Coming to a market near you but sooner than you think … though Netflix isn’t officially available in New Zealand just yet, local ISP Slingshot is already offering Netflix services to its users via its “global mode” Internet plan.  To avoid any trouble, ‘global mode’ is essentially a VPN that re-directs traffic through servers located in other countries.

The Virtual Skinny: BACK TO REALITY!

7.7.2014

Wakey, wakey! Hope you enjoyed the long weekend because we sure did.  Now that you’ve slept off your food coma after all that BBQ, here’s what you need to know that start off your Monday right.

GOOD TO KNOW:  1 for 6 is a losing record for anyone including the Federal Circuit. Though the Federal Circuit has almost all the power when it comes to patent appeal cases, the court appears to be slacking. In this past term alone, the U.S. Supreme Court has heard an all time high of six appeals from the Federal Circuit and reversed five of them. Ouch!

WHILE YOU WERE EATING … 

HOUSTON, WE HAVE [ANOTHER] PROBLEM.

While most of us were busy celebrating the land of the free, the Washington Post released a major story about yet another NSA revelation.  Snowden handed over some files to the Post, and it turns out that the agency has collected and retained private information for tens of thousands of regular folk just surfing the interwebs.  In attempts to target foreign nationals, the agency picked up on harmless communications such as online chats and emails with about half of these files containing names, email information, and other important pieces of information.

WHAT’S THE MATTER, MARTA?

Legally, the NSA may only target foreign nationals based abroad if it has a court-issued, surveillance warrant and has a reasonable belief that the target is in the know about a terrorist of foreign government.

NOT ALL FOR NAUGHT.

The Post explains that about 9 out of 10 account holders were just bystanders and not the actual targets of the agency’s investigation.  However, the files did reveal some important information, including the 411 about a new overseas nuclear project, a non-ally’s military debacle, and the identities of hackers into U.S. computer networks.  These files even lead to the direct capture of terrorist suspects, Muhammad Tahir Shahzad and Umar Patek.

IN THE INTERNET WE TRUST…

Or not.  According to a new survey by Pew Research, excessive government control and surveillance could undermine users’ trust in the platform by 2025.  The survey reveals that Internet experts fear that along with diminished user trust, increased control and filtering will balkanize the Internet, efforts to curb the “TMI” problem will limit valuable content sharing, and commercial pressures will compromise the “open structure of online life.”

DON’T BELIEVE THEM? EXHIBIT A …

Sina Weibo,  The Chinese Twitter-like, microblogging service that provides users with a platform to engage in public debates may soon be replaced by the more private and less censored, Facebook-like WeChat.  Partly due to government oversight, Chinese users are shifting to WeChat, which offers communication with self-selected followers and allows for “deeper” discussions with “like-minded people.”

MEANWHILE … ACROSS THE POND …

I HATE THAT I LOVE YOU

According to the New York Times, European Internet users are going through some things.  Despite Europeans complaints about American web services, they can’t seem to get enough.  In Europe’s five largest markets including Britain, France, and Germany, Google’s market share is now 85% (up five percent since 2009).   British e-commerce website ASOS can’t hold a candle to Amazon’s diversified products and deep discounts. And, European Facebook users now total over 150 million, which is more than double from the past five years. Even FB’s acquisition of messaging service, WhatsApp only led to an increase in users (now at half a billion).  Looks like European users are willing to give a little to take advantage of these services.

TO POST OR NOT TO POST? THAT IS THE QUESTION

Last week, we learned that Google decided to remove several links to stories British newspaper, the Guardian, in attempts to comply with the ‘right to be forgotten’ ruling.  However, after protests from the Guardian, Google reversed its decision.  While the link about the ousting of Merrill Lynch CEO E. Stanley O’Neal after the bank suffered billions of dollars in losses remains, we could’ve “forgotten” about the time when that soccer ref lied about reversing a penalty decision. Wait, you didn’t know about that?  That’s precisely the point.  There are claims that this new rule may actually bring light to stories that may have otherwise disappeared into obscurity. And, this whole scenario raises questions about press censorship and highlights flaws in implementation of this rule.

THE STREETS ARE TALKIN’… 

And, the Pennsylvania Public Utility Commission is not a fan of Uber and Lyft. Just before the long weekend, the Commission issued emergency cease-and-desist orders to bar these services from operating in Pittsburgh, pending their approval.  Pittsburgh Mayor William Peduto, a proponent for ride-sharing services, blasted the Commission’s decision and proclaimed that he wouldn’t let the Commission “shut down innovation without a battle.” Speaking of being resistant to change.

AirBnB continues its promotional campaign to inform the public (mostly the haters) about the social value its services provide.  Operating in 34,000 cities, the company is no stranger to resistance with cities like Barcelona, New York, and San Francisco not jumping on the bandwagon.

Twitter’s ad business is still going strong despite all the changes in its top ranks.  With its running of sponsored video clips and it’s transition into the mobile space, the social network expects to double its revenue from last year and post  $1.2 billion to $1.25 billion in revenue. Independent artists are giving the online streaming subscription model a go.

Sub Pop, an indie label that gave us Nirvana and the Shins, is partnering with Drip.fm, a subscription streaming and download service.  At $10 a month, music lovers can access albums, singles, and other exclusives from Sub Pop courtesy of the online service.  Though this new venture is not likely to produce significant earnings, it does seem like a viable solution to indie artists’ distribution and audience access problems.

The Virtual Skinny. Those ‘Dog Days’ of Summer.

7.2.2014

FOR FUNSIES:  Pretty soon, we’ll be able to run full-blown scientific experiments in the cloud. D.J. Kleinbaum, co-founder and co-CEO of Emerald, said, “”Anyone with a credit card and an Internet connection will be able to go and run experiments.” 

PRVIACY & GOVERNMENT SURVEILLANCE

Let the Disclosures Roll.  This past Monday, we learned that the FBI has conducted a significant amount of warrantless searches for Americans’ emails and phone calls stored in a special database.  U.S.officals don’t see why requiring a search warrant is necessary for information collected lawfully.  Major issue is there’s no word or track record on how often these queries occur.

Not It.  The Washington Post reports that Australia, Canada, New Zealand, and the UK are immune from the National Security’s Agencies authorization to intercept information. These four nations and the U.S. make up the “Five Eyes” and have established a no-spying arrangement. This continues to raise questions about the extent of the NSA’s authority as privacy domestically and internationally remains a sensitive issue.

Chips or Cookies?  Following the European Court of Justice’s ruling, Google has launched a new website, CookieChoices.org, to educate users who visit European sites on how cookies work. The ruling raised questions about implementation, and this site aims to provides tools for publishers to notify their users about their browsing history or profile information.

COPYRIGHT

Keeping the Fight Alive.  Still adjusting to the Supreme Court’s decision last week, Aereo is calling on its subscribers to “raise [their] hands and make [their] voices heard.” The company launched a new website to urge subscribers to contact Congress.  This call from the startups CEO, Chet Kanojia, comes in the middle of the U.S. House of Representatives Judiciary Intellectual Property Subcommittee’s comprehensive review of the U.S. copyright system.  Aereo points out that the spectrum broadcasters use to transmit their programs over the air belongs to the American people who have a right to access these programs in whichever way they like — via a physical antenna or the cloud.

Trademark 

Pro tip – Don’t mess with people’s dogs or their dogecoins!  Ultra Pro International, LLC, a sports and gaming memorabilia company, submitted a trademark application for the word “doge” with the intention of using it to sell clothing.  Ultra Pro obtained a license for the original picture of a recently popularized online meme.  The company says want to use a trademark to “better commercialize the concept” and the meme.  This application has upset the Doge Community.

What is the Doge Community? It’s a community of people who use Dogecoin, a new form of Internet currency, to easily transfer money online.  The group’s mascot is the Shiba Inu, a Japanese dog breed, that’s recently been a popular online meme.

What Next?  On July 8, The United States Patent and Trademark Office publishes the registration for review and allows a month-long period for the public an opportunity to oppose.

INDUSTRY RUNDOWN

Twitter’s a changing.  The social platform just named Anthony Noto, a former Goldman Sachs technology banker, as its new Chief Financial Officer.  Twitter also recently bought TapCommerce, a mobile advertising startup that engages in “retargeted” advertising for mobile devices.

Need a quick helicopter ride?  This may soon be easier than you think if you are venturing from New York to the Hamptons or Montauk.  Uber is partnering with helicopter booking app Blade, to make your dreams a reality for a price tag of $2,500.  And for those on the West coast, this service could soon be coming to a place near you.

As the Bitcoin craze continues, Newegg is the latest retailer to announce that it will be accepting this online currency.  The company is teaming up with Bitpay, a payment process to allow its customers to use Bitcoin to make purchases. 

According to the Boston Consulting Group, Facebook contributes $519 million dollars to Sweden’s economy and creates 900 news jobs.

Chinese businesses are starting to feel the impact of China’s restriction of Google’s services. For the wide range of businesses that rely on Google’s services such as search and Gmail, disruptions of these services are costing their bottom line.

 

 

The Virtual Skinny. Happy July 1st!

7.1.2014

 

FOR FUNSIES:  Expending too much energy to take selfies? No worries. Swedish startup Crunchfish’s GoCam apps for Apple devices will take the stress off by allowing you to take a selfies without touching your phone screen.

IMMIGRATION

There’s No “I” in Team, But There’s a “Me” …

President Obama is prepared to take executive action on immigration reform as it is clear that a bill is going nowhere – at least this year.  Speaker John Boehner confirmed recently that he would not take up an immigration bill because people simply don’t trust the President to enforce current law.  In a speech from the Rose Garden, Obama called out House Republicans for failing to pass a “darn bill” and did not mince words by stating “I take executive action only when we have a serious problem … and Congress chooses to do nothing.”

I Thought We Were Making Progress…

For years, Republicans and Democrats have been sparring over comprehensive immigration reform — though everyone agrees that the system needs a major overhaul (particularly with regards to allowing more high-skilled immigrants).  Last year, Democrats led a movement and passed a comprehensive bill out of the Senate, but things stalled in the House.

Wait… Did Something Happen?  

In the past few weeks, Dave Brat beat out House Majority Leader Eric Cantor (R-Va) in a primary race. And, there has been an unexplained spike in the number of children trying to cross over the Texas border solo.

Taking Steps Forward …

In addition to requiring Homeland Security Jeh Johnson and Attorney General Eric Holder to transfer immigration enforcement resources to the United States border, President Obama is seeking input from administration officials on other actions he can implement on his own.  Open dialogue with immigration advocates is also welcome.

PRIVACY & GOVERNMENT SURVEILLANCE

Because I Said So …

Yesterday, the Supreme Court issued an order to decline hearing Google’s appeal of an appellate decision ruling that determined that Google crossed the line with its Wi-Fi system when collecting data for its Street View mapping service.  But why? No reason … the Court did not deem an explanation necessary.  Google argues that the data sent over its Wi-Fi is a radio communication that is publicly available.  The refusal to hear the case maintains the appellate court’s findings that Google’s actions violates federal wiretap laws because information collected include documents, emails, usernames, passwords, etc.

Leaks? What Leaks?

The National Security Agency’s new leader Michael Rogers is striking a different, more moderate tone than his predecessor Michael Hayden.  Post-Snowden leaks, Hayden described the situation as “unquestionable, irreparable, irreversible harm.”  Rogers, on the other hand, is fully embracing internal changes to prevent future leaks and is supportive of President Obama’s goal to end bulk collection of Americans’ telephone data. He anticipates that the fallout from the leaks will be manageable in the long term.

But, This Isn’t Helping …

Vice President of the European Commission Viviane Reding believes that the United States’ ordering of Microsoft to hand over emails housed in servers based in Ireland is a breach of international law and is concerned about privacy violations against individuals in the European Union.  Microsoft argues that this move will continue to hurt the ability for U.S. cloud companies to compete abroad as companies and the U.S. government work to rebuild trust with foreign counterparts when it comes to users’ data.  Reding suggests that the U.S. work through the mutual legal assistance treaties (MLATs) — basically agreements between countries to cooperate in sharing with information regarding criminal investigations.

What to Say to the Office Gossip …

Happiness is contagious, and that’s not just because of Pharrell’s hit song.  News broke over the weekend about a study Facebook ran back in March 2012. For a one-week period, FB adjusted the newsfeed of almost 700,000 users and randomly showed them either positive or negative posts.  The results confirm that positivity breeds positivity and well … negativity does in fact bring others down.  Users who saw positive posts on their newsfeed also posted positive responses while those who saw negative posts tended to be more negative.  Privacy advocates are not pleased because FB relied on its Data Use Policy to conduct the study rather than seeking explicit permission.  Though the lead FB researcher defended the reasons behind the study (determine the emotional impact of FB), he apologized for the anxiety caused by the study and suggested that the study’s findings may not have been worth the strong reactions after all.

COPYRIGHT

You Win Some, You Lose Some …

Following last week’s Supreme Court decision ruling Aereo’s technology illegal, the company announced that it would suspend its services for now and issue refunds to its subscribers.  As Aereo puts on the brakes, competitors are ramping up their services to fill the new void.  Mark Ely, founder of Simple.TV, is recruiting Aereo subscribers via Twitter. Simple.TV provides a ‘private TV server’ to record programs on a hard drive connected to users’ device.  Another potential competitor, Mohu, provides streaming services via over the air antennas.

Reinventing Yourself, Not Just for Madonna …

No stranger to litigation brought on by broadcasters, FilmOn is now billing itself as a cable company post-Aereo. What’s the difference between the old and 2.0 version of the service?  FilmOn says simply implementing a paywall and requiring subscribers to pay for its service. Now, the company wants broadcaster to negotiate royalties in exchange for signals.  But, that’s not all.  FilmOn recently just announced its Teleporter technology.

GOOD TO KNOW

Stacks On Stacks on Stacks …

Rakuten, a Japanese e-commerce company, is establishing  a $100 million startup fund to support tech firms in Asia-Pacific, Israel, and the U.S.  This move is likely to ensure new revenue streams to facilitate competition against other e-commerce giants like Amazon.  So, what type of start-ups is Rakuten looking to fund?  Word to the wise — think ‘big’ as in companies that support big data back-end systems.

How Would the Urban Dictionary Refer to Bitcoin …

Last weekend, California Governor Jerry Brown enacted a bill into law that confirms the use of Bitcoin and other alternatives as legitimate forms of payment.

It’s Not JUST a Game, It’s Our Lives …

World Cup fever is still alive and is breaking records — on Twitter.  During a critical moment during the Brazil v. Chile game that kept Brazil in the tournament, almost 389,000 tweets were generated.  The game broke this year’s Super Bowl record of about 382,000 tweets that ensued following an impressive, Seattle Seahawks’ 87-yard punt return for a touchdown.  Today at 4 PM ET, the U.S. takes on Belgium following the Argentina-Switzerland match.

SCOTUS Rules on Aereo, Raises More Legal Questions than Answers

Last week, the U.S. Supreme Court issued a major copyright decision and ruled that Aereo’s technology is illegal.  Not familiar with the case?  Here’s what you need to know:

What is Aereo?

According to Aereo’s website, the company provides cloud DVR services for a simple, straightforward way to watch live cable television online via tiny remote antennas.  If you are based in one of 11 U.S. cities (including New York, Boston, and Miami just to name a few), for a fee, you can subscribe to Aereo’s service.

How Does It Work Exactly?

Once subscribed to Aereo’s service, users can access a dime-sized TV antenna attached to a remote DVR, both of which are housed in a local data center.  When users access Aereo’s service to watch a particular channel or television program, they can instruct the antenna to record a program on that channel.  After the program has aired for a few seconds, users can stream to their device the slightly delayed over-the-air broadcast.

What the Broadcasters Said …

Broadcasters, television producers, marketers, and distributors brought suit against Aereo because of their copyright ownership in many of the programs available via Aereo’s system.  More specifically, they claimed that Aereo infringed against their right to perform these works publicly and sought a preliminary injunction to prevent Aereo from continuing to offer its services.  Following the New York District Court’s denial of the broadcasters’ request, the Second Circuit found that Aereo did not infringe on the broadcasters’ right to perform publicly because the company streamed content to users via a private transmission.  Therefore, the Second Circuit denied the broadcasters appeal to rehear the case.  This outcome prompted the Supreme Court’s consideration of the case.

Why Your Aereo Subscription Doesn’t Quite Work Like It Used to …

In a 6-3 decision, the Supreme Court ruled that Aereo’s service is illegal because it infringes on broadcasters’ exclusive right to publicly perform their works.  In reaching this conclusion, the Court considered two legal questions: (1) does Aereo “perform” and (2) “if Aereo does perform, is this performance “public?”

Given that Aereo’s users must proactively use the company’s equipment to engage the service to transmit programs, Aereo argued that the service does not “perform” and should not be held directly liable.   The dissenting justices characterized this as a critical difference from other cable systems that transmit constantly.  To address these types of cable systems, Congress previously amended the Copyright Act and the Transmit Clause to clarify that both the broadcaster and viewer of a television program “perform” as they both show the program’s images and transmit audible sounds.  The majority of the court Court did not find Aereo’s argument persuasive and dismissed it.  Ultimately, the Court found that Aereo does “perform” because there is essentially no difference between Aereo and cable systems.

Though the Court found that Aereo “performs,” the case then hinged on whether it performs publicly.  Under the Transmit Clause, “an entity performs a work publicly when it transmits … a performance … of the work … to the public.”    As previously mentioned, Aereo argued that the performance is not public because programs are transmitted privately to one subscriber.  However, the Court determined that what constitutes ‘public’ depends on the relationship of the viewers to the underlying work.  Relying on a valet parking and car dealership analogies, the Court reasoned that if an entity transmitted works to people in their capacity as owners or possessors, this did not amount to a public performance.  However, if that entity transmitted works to users or subscribers that have no prior relationship in the work, then that transmission is deemed public.  Therefore, Aereo’s streaming services to its subscribers who had no relationship to the programs constitutes a public performance.  To support this determination, the Court further reasoned that the Transmit Clause provides that a performance is public regardless of members of the public are viewing the program at the same time or are viewing it in the same place.

What Will This Mean in the Future?

Well, in typical lawyer fashion, it depends …

The Supreme Court notes that its decision is limited and anticipates that it will not hinder the emergence and development or use of different types of technologies.

Aereo begs to differ as its CEO and founder Chet Kanojia expressed disappointment in the outcome and stated that “this sends a chilling message to the technology industry.”

The broadcasters on the other hand reveled in their victory with CBS CEO Les Moonves championing the Court’s decision and condemning Aereo’s technology as “theft.” For the time being, Moonves is pleased that people will be required to pay for their content.

This decision raises more questions than provides answers for copyright wonks.  Rather than creating specific, bright-line rules, the decision leaves much to be desired in terms of establishing precedent.  It is unclear whether this decision will apply only to platforms similar to cable systems or if it will be applied more broadly.  Because this decision raises questions about when the “volition” test (in other words, who chooses and initiates the copying of a protected work) is triggered,  platforms that facilitate the distribution of copyrighted works may be subject to increased litigation risk.   Though the opinion provides some direction in terms of determining that a system is indistinguishable from a cable system when a user can watch a copy of a broadcast “contemporaneously” with a live television program, even this determination raises more questions, even this finding raises additional questions (e.g., When is it acceptable for an entity to distribute copies of a broadcast?).

In its summation, the Court noted that to the extent that interested parties are concerned with “the relationship between the development and use of …technologies and the Copyright Act, they are … free to seek action from Congress.”  House Judiciary Chairman Bob Goodlatte interpreted this decision as further justification of his committee’s ongoing copyright review.

As more analysis and predictions occur around this case, users should continue to enjoy the benefits of technologies and services that exist and continue to innovate because of the appropriate balance in the U.S. Copyright system.