Communication Media & Internet Archives - Page 51 of 65

Facebook for Attorneys: How to Double Your Likes in No Time

Yesterday’s post detailed how business attorneys can double their connections on LinkedIn, but for consumer attorneys the most likely social media platform for your attention is Facebook.

And just like all social media networks, the lion’s share of the attention goes to those who interact frequently – and genuinely – with followers and fans.

Knowing how valuable and limited your time may be for social media marketing, you need to make efficient use of it to get the maximum benefit. The infographic below from WhoIsHostingThis.com gives you specific steps you can take to double your Facebook “likes” in just five minutes a day:

Article By:

Stephen Fairley

Of:

The Rainmaker Institute

HEARTBLEED: A Lawyer’s Perspective on the Biggest Programming Error in History

By now you have probably heard about Heartbleed, which is the biggest security threat to the Internet that we have ever seen. The bottom line of Heartbleed is that for the past two years most web sites claiming to besecure, shown by the HTTPS address (the S added to the end of the usual HTTP address was intended to indicate a web secured by encryption), have not been secure at all. Information on those webs could easily have beenbled out by any semi-skilled hacker who discovered the defect. That includes your user names and passwords, maybe even your credit card and bank account information.

For this reason every security expert that I follow, or have talked to about this threat, advises everyone to change ALL of their online passwords. No one knows who might have acquired this information in the past two years. Unfortunately, the nature of this software defect made it possible to steal data in an untraceable manner. Although most web sites have upgraded their software by now, they were exposed for two years. The only safe thing to do is assume your personal information has been compromised.

Change All of Your Passwords

After you go out and change all of your passwords – YES – DO IT NOW – please come back and I will share some information on Heartbleed that you may not find anywhere else. I will share a quick overview of a lawyer’s perspective on a disaster like this and what I think we should do about it.

Rules of the Internet

One of the things e-discovery lawyers like me are very interested in, and concerned about, is data security. Heartblead is the biggest threat anyone has ever seen to our collective online security, so I have made a point of trying to learn everything I could about it. My research is ongoing, but I have already published on detailed report on my personal blog. I have also been pondering policy changes, and changes in the laws governing the Internet that be should made to avoid this kind of breach in the future.

I have been thinking about laws and the Internet since the early 1990s. As I said then, the Internet is not a no-mans-land of irresponsibility. It has laws and is subject to laws, not only laws of countries, but of multiple independent non-profit groups such as ICANN. I first pointed this out out as a young lawyer in my 1996 book for MacMillan, Your Cyber Rights and Responsibilities: The Law of the Internet, Chapter 3 of Que’s Special Edition Using the Internet. Anyone who commits crimes on the Internet must and will be prosecuted, no matter where their bodies are located. The same goes for negligent actors, be they human, corporate, or robot. I fully expect that several law suits will be filed as a result of Heartbleed. Time will tell if any of them succeed. Many of the facts are still unknown.

One Small Group Is to Blame for Heartbleed

The surprising thing I learned in researching Heartbleed is that this huge data breach was caused by a small mistake in software programming by a small unincorporated association called OpenSSL. This is the group that maintains the open source that two-thirds of the Internet relies upon for encryption, in other words, to secure web sites from data breach. It is free software and the people who write the code are unpaid volunteers.

According to the Washington Post, OpenSSL‘s headquarters — to the extent one exists at all — is the home of the group’s only employee, a part timer at that, located on Sugarloaf Mountain, Maryland. He lives and works amid racks of servers and an industrial-grade Internet connection. Craig Timberg, Heartbleed bug puts the chaotic nature of the Internet under the magnifying glass (Washington Post, 4/9/14).

The mistake that caused Heartbleed was made by a lone math student in Münster, Germany. He submitted an add-on to the code that was supposed to correct prior mistakes he had found. His add on contained what he later described as a trivial error. Trivial or not, this is the biggest software coding error of all time based upon impact. What makes the whole thing suspicious is that he made this submission at one minute before midnight on New Year’s Eve 2011.

Once the code was received by OpenSSL, it was reviewed by it before it was added onto the next version of the software. Here is where we learn another surprising fact, it was only reviewed by one person, and he again missed the simple error. Then the revised code with hidden defect was released onto an unsuspecting world. No one detected it until March 2014 when paid Google security employees finally noticed the blunder. So much for the basic crowd sourcing rationale behind the open source software movement.

Conclusion

Placing the reliance of the security of the Internet on only one open source group, OpenSSL, a group with only four core members, is too high a risk in today’s world. It may have made sense back in the early nineties when an open Internet first started, but not now. Heartbleed proves this. This is why I have called upon leaders of the Internet, including open source advocates, privacy experts, academics, governments, political leaders and lawyers to meet to consider various solutions to tighten the security of the Internet. We cannot continue business as usual when it comes to Internet data security.

Article By:

Ralph C. Losey

Of:

Jackson Lewis P.C.

Social Media Marketing – New FTC (Federal Trade Commission) Guidance On Generating “Buzz”

For the first time since it issued its Guides Concerning the Use of Endorsements and Testimonials in Advertising in 2009, the FTC has provided new guidance on the use of social media to generate consumer interest (or “buzz”) in a brand.

Shoe manufacturer Cole Haan had a great social media marketing idea. They would run a contest through Pinterest. The winner would get a $1,000 shopping spree courtesy of Cole Haan. To enter, Pinterest users had to “pin” images of Cole Haan shoes on Pinterest. They even came up with a great slogan for the campaign: “Wandering Sole.” Finally, so that people could find the images easily, contestants were required to include the hash tag “#wanderingsole” in their pin descriptions.

This was a great marketing idea. Lots of Pinterest users would post pictures of Cole Haan’s product on Pinterest and generate buzz about Cole Haan shoes. Here is what one Pinterest page currently looks like:

There was only one problem; the Federal Trade Commission.

The FTC considered the posting of images of Cole Haan shoes by Pinterest users to be endorsements of the product. To be clear, the issue was not whether the Pinterest users actually intended to endorse the brand. Rather, the concern was whether viewers of the image might perceive the posting of the images to be endorsements. As such, the FTC investigated the marketing practice and issued a closing letter to Cole Haan regarding their investigation.

As stated in the closing letter, the FTC thought that the since the Pinterest “pins” constituted an endorsement, there should have been a “clear and conspicuous” disclosure concerning the fact that the “endorsers” (i.e., the Pinterest users entering the contest) were being compensated for their endorsement, namely, the chance to win the $1,000 shopping spree. The FTC did not believe that the “#Wanderingsole” hash tag was sufficient to provide this required disclosure. Fortunately, the FTC did not take enforcement action against Cole Haan, recognizing that the FTC had not squarely addressed this issue before.

So finally, we get to the point of this post. While I understand the FTC’s point (I really do), I think social media marketers will need more specific bright line guidance as to what type of disclosure is required. The reason is that in the social media context, the amount of text that may be capable of devoting to such disclosure can be very limited. It is noteworthy that the 2009 guidance issued by the FTC provided numerous examples to help us identify when endorsement disclosure s would be required. Not one of those examples, however, indicated what would constitute a sufficient disclosure.

In fact, one of the comments submitted (by Heath-McLeod) in connection with the 2009 guidelines requested that the FTC provide “minimum standards for the size and clarity of disclosures.” The FTC expressly rejected this request saying that:

“advertisers flexibility to meet the specific needs of their particular message is often preferable to attempting to mandate specific language, font, and other requirements applicable across-the-board to all ads. Advertisers thus have always been free under the Guides to make their disclaimers as large and clear as they deemed appropriate to convey the necessary information to consumers”

That’s good, I suppose. Advertisers need some freedom to do what they think is appropriate in the context of their marketing. But how, as a practical matter, are advertisers supposed to get comfortable that the disclosure they give is sufficient? For example, would it have been sufficient for the Pinterest users to have included the word “sponsored” in their pin description? How about just the word “ad?” Would that have been sufficient? It’s not clear.

Consider, for example, the fact that a similar disclosure having to be made through Twitter or using SMS (i.e., texting) might be very difficult given the 140 character limit. Now, consider further that the FTC guidelines for endorsements also require an additional disclosure when the person depicted in the endorsement is not a real consumer of the product. Perhaps Cole Haan’s hash tag should have read:

“#These pins are part of a contest. Contestants may win prize for posting pins of Cole Haan products. Persons in such pins may not be actual consumers of the pinned product”

Darn, that’s 141 characters. Maybe if I get rid of the “#” ….

Article By:

Kurt E. Anderson

Giordano, Halleran & Ciesla, P.C.

Target Becomes a Target: Proposed California Bill Aims to Make Retailers Liable for Data Breach Incidents

Following a string of high-profile data breaches and new data suggesting that approximately 21.3 million customer accounts have been exposed by data breach incidents over the past two years, the California legislature has introduced legislation aimed at making retailers responsible for certain costs in connection with data breach incidents. If passed in its current form, Assembly Bill 1710, titled the Consumer Data Breach Protection Act, would have a substantial impact on retailers operating in California.

Among the major changes proposed in the bill:

Stricter Notification Requirements. The proposed bill would create stricter time-frames and specific requirements for notification of affected consumers following a data breach incident. In addition to current requirements to notify consumers individually in the most expedient time possible, a retailer affected by a data breach will be required, within 15 days of the breach incident, to provide email notification to affected individuals, post a general notice on the retailer’s web page and notify statewide media.
Retailer Liability for Costs Associated with Data Breach Incidents. A.B. 1710 would amend California’s Civil Code to make retailers liable for reimbursement of expenses incurred in providing the notices described above, as well as the cost of replacing payment cards of affected individuals.
Mandatory Provision of Credit Monitoring Services. If the person or business required to provide notification under the Civil Code is the source of the breach incident, A.B. 1710 will require that person or business to offer to provide identity theft prevention and mitigation services at no cost to affected consumers for not less than 24 months.
Prohibitions Against Storing Payment-Related Data. Under a new section to be added to the Civil Code, persons or businesses who sell goods or services and accept credit or debit card payments would be prohibited from storing payment-related data unless that person or business stores and retains the data in accordance with a payment data retention and disposal policy that limits retention of the data to only the amount of time required for business, legal and regulatory purposes. In addition, A.B. 1710 imposes further restrictions on the retention and storage of certain sensitive authentication information, such as social security numbers, drivers’ license numbers and PIN numbers.
Authorization of Civil Penalties. As amended by A.B. 1710, the Civil Code would authorize a prosecutor to bring an action in response to a data breach incident to recover civil penalties of up to $500 per violation, or up to $3,000 for a willful or reckless violation.

Historically measures like A.B. 1710 have faced a difficult road. Similar bills passed by the California legislature were vetoed twice by Governor Schwarzenegger, and the proposal of A.B. 1710 has already caused the California Retailers Association to speak out against the bill. However, there may be a critical difference in the current climate because consumer awareness of the danger and reality of breach incidents has never been higher and, as shown by the recent Harris Poll, consumers overwhelmingly believe that merchants are to blame.

Article By:

Jake Romero

Of:

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Supreme Court Inks Uniform Standing Test for Lanham Act False Advertising Claims

Key Takeaways

The US Supreme Court created a uniform test for standing for false advertising claims under Section 43(a) of the Lanham Act, resolving a three-way circuit split.
The new standing test requires the plaintiff to allege and prove that it suffered an injury to a commercial interest in sales or business reputation, and that such injury was proximately caused by the defendant’s alleged misrepresentations.
The Court closed the courthouse doors to consumer class action suits under Section 43(a), pointing to the commercial interest requirement.
The decision may prompt speculation regarding uncertainty as to standing for other claims under Section 43(a), including claims for infringement of unregistered trademarks.

Discussion of the Case

In a decision issued March 25, 2014, Lexmark International, Inc. v. Static Control Components, Inc., the US Supreme Court rejected three conflicting tests for standing for false advertising claims under Section 43(a) of the Lanham Act, creating a new test in the process. Specifically, plaintiffs must now “plead (and ultimately prove) an injury to a commercial interest in sales or business reputation proximately caused by the defendant’s misrepresentations.”

Plaintiff Lexmark International, Inc. (Lexmark) sells laser printers and corresponding ink cartridges. The ink cartridges contain a microchip that deactivates them after they run out of ink, which is intended to stop “remanufacturers” from refurbishing and selling the ink cartridges in competition with Lexmark. Defendant Static Control Components, Inc. (Static Control), while not a direct competitor of Lexmark, sells component parts to remanufacturers, including a replacement microchip that allows the remanufacturers to once again refurbish and sell ink cartridges in competition with Lexmark. In response, Lexmark sent letters to the remanufacturers, advising that it was illegal to sell the refurbished ink cartridges and, in particular, that it was illegal to use Static Control’s products to refurbish the ink cartridges.

Lexmark sued Static Control for copyright infringement based on its creation and sale of the microchips. Static Control counterclaimed for false advertising based on, among other things, the letters to the remanufacturers. The US District Court for the Eastern District of Kentucky dismissed Static Control’s counterclaim for lack of “prudential standing,” and the US Court of Appeals for the Sixth Circuit reversed.

The Supreme Court granted certiorari and ultimately held that Static Control satisfied the Court’s new test for standing under Section 43(a) of the Lanham Act. In so holding, the Court swept aside what it called the “misleading” concept of “prudential standing,” which has been applied by courts as an additional hurdle to alleging standing beyond the broad “case or controversy” requirement (i.e., an injury in fact that is fairly traceable to the conduct complained of) of Article III of the US Constitution. The Court held that standing simply flows from traditional statutory interpretation principles. In particular, courts need only look to the at-issue statute to determine (1) whether the plaintiff’s alleged injury falls within the “zone of interest” protected by the statute, and if so, (2) whether such injury was proximately caused by the defendant’s alleged misrepresentations.

The Court’s new standing analysis falls somewhere in the middle of the three rejected tests: one, which conferred standing only on direct competitors of the defendant; the second, which used a multifactor analysis borrowed from antitrust law; and the third, which conferred standing on any plaintiff that demonstrated a “reasonable interest to be protected against” and a “reasonable basis for believing” that such interest was likely to be harmed.

Turning to the interpretation of the “zone of interest” protected by the Lanham Act, the Court looked to the statute’s clear statement of intent in Section 45 regarding protection against “unfair competition.” Citing to a law review article from 1929, the Court found that unfair competition “was generally understood to be concerned with injuries to business reputation and present and future sales.” Thus, the Court concluded that the “zone of interest” of Section 43(a) was limited to injuries to a commercial interest in reputation or sales. The Court then slammed the courthouse doors on consumer class actions under Section 43(a), pointing out that this “zone of interest” excluded a suit based on a “consumer who is hoodwinked into purchasing a disappointing product.”

On the facts at hand, the Court held that Static Control had sufficiently alleged lost sales and damage to its business reputation, easily satisfying the “zone of interest” requirement. Further, the Court found that Static Control’s allegations sufficiently pled that those injuries were proximately caused by Lexmark’s representations that Static Control’s business was illegal. Accordingly, the Court held that Static Control had standing and was thus “entitled to a chance to prove its case.”

While this decision provides some welcome certainty for false advertising litigants, ending the three-way circuit split regarding Section 43(a) false advertising standing, it also opens the door to speculation regarding standing for other “unfair competition” claims under Section 43(a) (e.g., infringement of unregistered trademarks). Specifically, the Court’s holding and analysis were not expressly limited to Section 43(a)(1)(b), which relates to false advertising, but instead apply to all of Section 43(a). It is thus unclear whether, for example, some increased level of “proximate harm” will be required for trademark claims under Section 43(a). Then again, the Court’s formulation of what constitutes proximate harm under Section 43(a)—when “deception of consumers causes them to withhold trade from the plaintiff”—seems to fit nicely with the “likelihood of consumer confusion” standard applied in trademark cases.

Article By:

Roger P. Furey

Doron S. Goldstein

Michael R. Justus

Of:

Katten Muchin Rosenman LLP

Gaga for Gigabit: The FCC (Federal Communications Commission) Liberates 100 MHz of Spectrum for Unlicensed Wi-Fi

On April 1, the FCC took steps to remedy a small but growing annoyance of modern life: poor Wi-Fi connectivity. Removing restrictions that had been in place to protect the mobile satellite service uplinks of Globalstar, and by unanimous vote, the FCC’s First Report and Order on U-NII will free devices for both (i) outdoor operations; and (ii) operation at higher power levels in the 5.15 – 5.25 GHz band (also called the U-NII-1 band).¹The Report and Order also requires manufacturers to take steps to prevent unauthorized software changes to equipment in the U-NII bands, as well as to impose measures protecting weather and other radar systems in the band.

The practical impact of these rule changes is difficult to overstate. By removing the operating restrictions in the U-NII-1 band, the FCC essentially doubled the amount of unlicensed spectrum in the 5 GHz band available to consumers. In the near future, use of this spectrum will help to alleviate congestion on existing Wi-Fi networks, especially outdoor “hotspots” typically used at large public places like airports, stadiums, hotels and convention centers. Two less-obvious, longer-term benefits also are worth watching.

First, the new IEEE 802.11ac standard for Wi-Fi was finalized in January 2014. This next generation Wi-Fi standard is capable of delivering vast increases in raw throughput capacity to end-users, often approaching the holy grail of transfer speeds: 1 gigabit. To achieve those speeds, wide channels of operation are required – channels that simply were not available to Wi-Fi devices. Now that the U-NII-1 band has been unleashed for Wi-Fi usage, there should be little impediment to the near-term rollout of 802.11ac compatible devices.

This new standard will offer marked improvements in download speeds and streaming quality, and be a boon to consumers who increasingly rely on mobile devices for bandwidth intensive applications such as HD video. Unsurprisingly, cable operators in particular are excited by the possibilities of this technology; on the day the Report and Order was released, Comcast Chief Technology Officer Tony Werner authored a lengthy blog post touting the possibilities of Comcast offering Gigabit Wi-Fi to its customers utilizing the U-NII-1 band.^[2]

Second, in addition to the untempered enthusiasm of the MSOs, wireless carriers also have a stake in this unlicensed spectrum. Specifically, as use of licensed mobile spectrum continues to expand exponentially, the wireless carriers will increasingly encourage wireless offloading as a means of addressing congestion and capacity issues on macro cellular networks. For example, Cisco Systems estimates that 45% of global mobile data traffic was offloaded onto the fixed network through Wi-Fi or small cells in 2013^.[3]

This transformation of 100 MHz of spectrum in the U-NII-1 band marks one part of a renewed focus on consumer broadband at the FCC. In addition to unlicensed Wi-Fi, the FCC is also in the middle of a proceeding – covered in an earlier FCC Law Blog post^[4]– to streamline rules for wireless infrastructure. Taken together with the FCC’s release earlier this week of auction rules for 65 MHz of AWS-3 spectrum later this year, it becomes clear that although it is early yet, the Wheeler Commission is gaga for broadband.

_{[1] U-NII is the acronym for “Unlicensed National Information Infrastructure devices”, unintentional radiators which facilitate broadband access and wireless local area networking, including Wi-Fi. A copy of the First Report and Order is available here.}

_{[2] See Tony Werner’s blog post here.}

_{[3] See Global Mobile Data Traffic Forecast Update, 2013-2018.}

_{[4] See Sleeper “Small” Cells: The Battle Over The FCC’s Wireless Infrastructure Proceeding.}

Article By:

Douglas A. Svor

Dave Thomas

Of:

Sheppard, Mullin, Richter & Hampton LLP

The 7 Blocks to a Firm Marketing Foundation: Block One

Being a successful attorney is something that takes more than just knowledge of the law. It’s an unfortunate fact that many attorneys will find themselves faced with. You may be the best lawyer in your city or even state, but no one will ever know that if you don’t make a point to make yourself known.

Now, people have heard me say these tips at events, but I’m going to give you the information because I’m committed to making the attorney dream come true. The dream we all had when we entered into law school of the firm with our names on the sign, with the staff that handles things well and the cases that we enjoy doing. I know that dream because I’ve managed to achieve that dream.

The foundation of achieving this dream is much easier than you would expect. It’s built on 7 solid blocks.

Block number one: Videos

When someone visits your website, they’re subconsciously looking for something that is different; something that they don’t see on other lawyer websites.

If you have a set of videos available to them, they’ve found that one thing.

Videos are some of the most important parts of my firm marketing foundation; they are one of the things that I will probably never give up.

When a potential client goes to your website and watches a few videos, the information that you relay causes a psychological trigger that makes them trust you more. The more videos you have on your website (and even YouTube) can (and probably will) start the ball rolling for a good attorney-client relationship.

You may be wondering what exactly you should even make videos on, especially since some states have strict restrictions on things that could be construed as legal advice.

One of the things that I’ve found to be most popular with consumers is a Frequently Asked Questions series. Think of the 5 (or more) questions that you hear from almost each person you meet with.

These are questions that you could probably answer in your sleep and find yourself repeating the same information up to 10 times a day. You already know how to answer these particular questions in a short way that gives the most information because of the frequency of which you actually hear them.

Those questions are not going to go away, you hear them every day because people want to know those answers. If you take some time to film the answer to each of those videos and produce a series of one a week for however many weeks, you’re going to see some changes. Instead of having to answer the questions day after day, the people you meet with will have the answers or, if they haven’t had a chance to see the video yet, you can just send them the link and they’ll be even more impressed.

Videos are marketing tools that never stop working. A video can answer questions for you, 24 hours a day, 7 days a week, 52 weeks a year.

Article By:

Ben Glass

Of:

Great Legal Marketing, Inc.

How to Write Blog Posts People Actually Want to Read [INFOGRAPHIC]

The purpose of having a blog is to foster an online dialogue with prospects, clients and referral sources so that when they need someone who does what you do, they will think of your first. Drawing people into your conversation requires you to often step outside your comfort zone, since most attorneys write the way they were trained to do in law school.

But when it comes to writing blog posts that people actually want to read, that just doesn’t cut it.

The most important thing to remember when writing for those who don’t practice law for a living is to be authentic. And the best way to do this is to write the way you talk. As you sit down to craft a new post, imagine you are talking to a friend who needs your guidance on a legal issue. Use the same words you use in your everyday life. Forget the grammar rules and write your draft, then go back over it to correct any glaring grammatical errors.

The infographic below, courtesy of Copyblogger.com, outlines the other essentials for writing blog posts. Print it off and keep a copy by your computer to refer to as you write. Following these simple guidelines will have you authoring a compelling, lead-generating blog in no time.

Blogs Social Media

Article by:

Stephen Fairley

Of:

The Rainmaker Institute

California District Court Holds that Providing Cellphone Number for an Online Purchase Constitutes “Prior Express Consent” Under TCPA – Telephone Consumer Protection Act

A federal district court in California recently ruled that a consumer who voluntarily provided a cellphone number in order to complete an online purchase gave “prior express consent” to receive a text message from the business’s vendors under the TCPA. See Baird v. Sabre, Inc., No. CV 13-999 SVW, 2014 WL 320205 (C.D. Cal. Jan. 28, 2014).

In Baird, the plaintiff booked flights through the Hawaiian Airlines website. In order to complete her purchase, the plaintiff provided her cellphone number. Several weeks later she received a text message from the airline’s vendor, Sabre, Inc., inviting the plaintiff to receive flight notification services by replying “yes.” The plaintiff did not respond and no further messages were sent. The plaintiff sued the vendor claiming that it violated the TCPA by sending the single text message.

The central issue in Baird was whether, by providing her cellphone number to the airline, the plaintiff gave “prior express consent” to receive autodialed calls from the vendor under the TCPA. In 1992, the FCC promulgated TCPA implementing rules, including a ruling that “persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary.” In re Rules & Reg’s Implementing the Tel. Consumer Prot. Act of 1991, 7 F.C.C.R. 8752, 8769 ¶ 31 (1992) (“1992 FCC Order”). In support of this ruling, the FCC cited to a House Report stating that when a person provides their phone number to a business, “the called party has in essence requested the contact by providing the caller with their telephone number for use in normal business communications.” Id. (citing H.R.Rep. No. 102–317, at 13 (1991)).

The court found that, while the 1992 FCC Order “is not a model of clarity,” it shows that the “FCC intended to provide a definition of the term ‘prior express consent.’” Id. at *5. Under that definition, the court held that the plaintiff consented to being contacted on her cellphone by an automated dialing machine when she provided the number to Hawaiian Airlines during the online reservation process. Id. at *6. Under the existing TCPA jurisprudence, a text message is a “call.” Id. at *1. Furthermore, although the plaintiff only provided her cellphone number to the airline (and not to Sabre, Inc., the vendor), the court concluded that “[n]o reasonable consumer could believe that consenting to be contacted by an airline company about a scheduled flight requires that all communications be made by direct employees of the airline, but never by any contractors performing services for the airline.” Id. at *6. The Judge was likewise unmoved by the fact that the plaintiff was required to provide a phone number (though not necessarily a cellphone number) to complete the online ticket purchase. Indeed, the court observed that the affirmative act of providing her cellphone number was an inherently “voluntary” act and that, had the plaintiff objected, she could simply have chosen not to fly Hawaiian Airlines. Id.

Baird does not address the October 2013 TCPA regulatory amendments that require “prior express written consent” for certain types of calls made to cellular phones and residential lines (a topic that previously has been covered on this blog). See 47 CFR § 64.1200(a)(2), (3) (emphasis added). “Prior express written consent” is defined as “an agreement, in writing, bearing the signature of the person called that clearly authorizes the seller to deliver or cause to be delivered to the person called advertisements or telemarketing messages using an automatic telephone dialing system or an artificial prerecorded voice, and the telephone number to which the signatory authorized such advertisements or telemarketing messages to be delivered.” 47 CFR § 64.1200(f)(8). Whether the Baird rationale would help in a “prior express written consent” case likely would depend on the underlying facts such as whether the consumer/plaintiff agreed when making a purchase to be contacted by the merchant at the phone number provided, and whether the consumer/plaintiff provided an electronic signature. See 47 CFR § 64.1200(f)(8)(ii).

Nonetheless, Baird is a significant win for the TCPA defense bar and significantly reduces TCPA risk for the defendants making non-telemarketing calls (or texts) to cellphones using an automated dialer (for which “prior express consent” is the principal affirmative defense). If that cellphone number is given by the consumer voluntarily (and, given the expansive logic of Baird, we wonder when it could be considered “coerced”), the defendant has obtained express consent. Baird leaves open a number of questions worth watching, including how far removed the third-party contractor can be from the company to whom a cellphone number was voluntarily provided. Judge Wilson seemed to think it was obvious to the consumer that a third-party might be utilized by an airline to provide flight status information, but how far does that go? We’ll be watching.

Article By:

Matthew J. Fedor

William A. Wright

Brianna E. Kostecka

Of:

Drinker Biddle & Reath LLP

Digital Currency Identified as an “Emerging Risk” in the Canadian Federal Government’s 2014 Budget

On February 11, 2014, the Canadian Federal Government released its 2014 Budget. In the 2014 Budget, the Federal Government pledged to introduce legislative amendments to strengthen Canada’s anti-money laundering and terrorist financing regime in the area of virtual (digital) currency.

2013: Year of Bitcoin?

At the beginning of 2013, one bitcoin could be purchased for $12. For a brief period in November 2013, one bitcoin was worth more than one ounce of gold ($1242 to $1240, respectively). Forbes and MarketWatch wrote articles proclaiming 2013 as the year of bitcoin, and “bitcoin” was chosen as the word of the year by the Australian National Dictionary Centre (beating out worthy candidates, including “selfie” and “twerk”).

This increased popularity of digital currency has brought increased scrutiny from regulators and law enforcement. Last year in the United States, the Financial Crimes Enforcement Network issued guidance with respect to whether activities by individuals and companies related to virtual currencies are subject to registration, reporting, and recordkeeping requirements, and the FBI arrested the “mastermind” of Silk Road (a marketplace selling illegal items and accepting payment in virtual currency). In early 2014, a prominent member of the bitcoin community was indicted on money laundering charges.

Canada Revenue Agency (“CRA”) Release Its Position on Bitcoin

Prior to the release of the 2014 Budget, the main Canadian government references to digital currency were from the CRA. The first notable CRA acknowledgment of bitcoin was in April 2013 in the form of a CRA communication to the Canadian Broadcasting Corporation (“CBC”). The communication stated that transactions involving bitcoin are barter transactions and that gains resulting from bitcoin transactions could be income or capital depending on the specific facts.

On November 5, 2013, the CRA issued its first release on the taxation of digital currency. This release reinforced the CRA’s earlier position on bitcoin that was set out in its April 2013 e-mail to the CBC. On December 23, 2013, in CRA Document No. 2013-0514701|7, subject “Bitcoins,” the CRA further clarified its position with respect to bitcoin “in response to a summary of comments that were provided in response to a recent media enquiry describing the income tax consequences of various transactions involving digital currency.”

Accordingly, the CRA considers bitcoin to be a commodity, not a currency. Therefore, using bitcoins to purchase goods or services is considered a barter transaction. The sale of bitcoins at a profit is treated as either income or capital depending on a particular taxpayer’s circumstances.

Virtual Currency in the 2014 Budget

Virtual currency is identified in the 2014 Budget as an “emerging risk” that threatens Canada’s international leadership in the fight against money laundering and terrorist financing. Bitcoin is cited in the 2014 Budget as an example of such virtual currency.

In the 2014 Budget, the Federal Government proposed to introduce anti-money laundering and anti-terrorist financing regulations for virtual currencies, such as bitcoin.

The Federal Government noted in the 2014 Budget that this proposal was based on a report by the Standing Senate Committee on Banking, Trade and Commerce entitled Follow the Money: Is Canada Making Progress in Combatting Money Laundering and Terrorist Financing? Not Really (the “Report”). The Report is a five-year review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the “Act”) and was issued in March 2013. However, the only reference in the Report to digital currency is a brief note that the development of electronic methods to launder money must be addressed through timely amendments to the Act and its regulations.

2014: Year of Bitcoin Regulation

The Federal Government has identified digital currency as an “emerging risk” in the fight against money laundering and terrorist financing. Accordingly, the regulation of digital currency in Canada is imminent, and individuals and businesses dealing in bitcoin will soon be subject to certain registration, reporting, and recordkeeping requirements.

Article by:

Michael D. Lipton, Q.C.

Kevin J. Weber

Jack I. Tadman

Of:

Dickinson Wright PLLC

Category: Communication Media & Internet