Category: Internet

NetEase Wins 50 Million RMB & Injunction on Appeal in Minecraft Infringement Litigation at the Guangdong Higher People’s Court

On November 30, 2022, the Guangdong Higher People’s Court announced that NetEase was awarded 50 million RMB (over $7 million USD) and an injunction in an unfair competition case against Shenzhen Mini Play Company (深圳迷你玩公司) involving Minecraft and Mini Play’s similar sandbox game Mini World (迷你世界).  NetEase has the exclusive right to operate Minecraft in China since 2016.  This is believed to be the highest damages award in China for game infringement.

 

 

 

 

Minecraft on left versus Mini World on right.

Minecraft (我的世界) is a sandbox game developed by the Swedish company Mojang Studios in 2009. In May 2016, NetEase announced that it had obtained the exclusive right to operate the game in China, and had the right to enforce any intellectual property infringement and unfair competition claims. In the same month, Shenzhen Mini Play Company launched “Mini World” on Android , and then launched the iOS version and the computer version successively. In 2019, NetEase filed a lawsuit with the Shenzhen Intermediate People’s Court, accusing multiple core elements of the game Mini World of plagiarizing Minecraft. Specifically, NetEase alleged that the overall screens of the two games are highly similar, which constitutes copyright infringement and unfair competition. The court ordered Mini Play to stop the unfair competition, eliminate the impact, and pay 50 million RMB in compensation. The Shenzhen Intermediate People’s Court also determined that “Mini World” was infringing the copyright in Minecraft, and ordered Mini Play to delete the infringing game elements and compensate NetEase more than 21.13 million RMB. Subsequently, both parties appealed to the Guangdong High Court.

The Guangdong Higher Court found that the two games involved in the case are sandbox games, which only set basic game goals and rules, and provided players with basic game resources or elements such as wood, food, creatures, etc. Players freely explore and interact in the virtual world. Players can use the basic game resources preset in the game to create virtual objects, buildings, landscapes, and even game worlds by destroying, synthesizing and building using the basic game resources. Minecraft mainly makes profits through user charges with the cumulative number of downloads from various channels exceeding 3.36 billion with more than 400 million registered users since its launch.

The Guangdong High Court held that the overall screens of the two games constitute electronic works, that is, “audio-visual works” under the newly amended copyright law, but the similarity between the two lies in the design of the game elements rather than the screens of the games. Therefore, it rejected NetEase’s claim of copyright infringement. At the same time, the court held that Mini World and Minecraft are highly similar in terms of gameplay rules, and there are many overlaps in the details of game elements that have exceeded the limit of reasonable reference. By plagiarizing the design of game elements, Mini Play directly seized the key and core personalized commercial value of other people’s intellectual achievements, and seized business opportunities by improperly obtaining other people’s business benefits, which constituted unfair competition.

In determining the amount of compensation, the court held that Mini Play, as the infringing party, should have on hand relevant data of its business income, but refused to provide it to the court without justified reasons, and should bear the legal consequences of adverse presumption.  According to evidence from a third-party platform, the profits of infringement by Mini Play far exceeded the amount of compensation requested by NetEase and therefore the upheld the award of 50 million RMB in compensation for unfair competition.  The Court further ordered Mini Play to delete 230 game elements from Mini World that infringed.

The original announcement from the Guangdong Higher People’s Court can be found here (Chinese only).

Article By Aaron Wininger of Schwegman, Lundberg & Woessner, P.A.

For more intellectual property legal news, click here to visit the National Law Review.

© 2022 Schwegman, Lundberg & Woessner, P.A. All Rights Reserved.

Episode 6: Shifting Mindsets: How Client-Focused Approaches Can Improve Law Firm Success with Matt Spiegel, CEO of Lawmatics

Welcome to Season 2, Episode 6 of Legal News Reach!

National Law Review Web Publication Specialist Crissonna Tennison and Matt Spiegel, Co-Founder and CEO of Lawmatics, discuss the mindsets that are necessary for law firm success. Practicing law isn’t just about winning cases—it’s about creating a supportive client experience in and out of the courtroom. How can firms integrate legal technology to center their clients, boosting their business success in the process?

We’ve included a transcript of the conversation below, transcribed by artificial intelligence. The transcript has been lightly edited for clarity and readability.

Crissonna Tennison

Thank you for tuning into the Legal News Reach podcast. My name is Crissonna Tennison, Web Publication Specialist for the National Law Review. In this episode, I will be speaking with Matt Spiegel, founder of Lawmatics. Matt, can you tell us a little bit about your background and what led you to start Lawmatics?

Matt Spiegel

Yeah, sure. So first of all, I’m very excited to be here, so thank you guys for having me. But yes, I’m Matt Spiegel, I am the founder and CEO of Lawmatics. I was a practicing lawyer, I don’t actually practice anymore, I haven’t practiced in like 11 years or so, but I still have my bar card. Long story short, I had a problem at my law firm that I wanted to solve with technology, and ended up starting a company called MyCase. So I founded MyCase, back in, like 2010. For those of you that don’t know, MyCase is now one of the biggest practice management software platforms on the market. So I was the original founder of that company, I also ran the company for five years. And then I left, and after a couple years doing some things unrelated to law and legal tech, I decided to come back into the legal tech space. I’m a glutton for punishment, and Lawmatics was what I decided to build. And it was really a product of what we saw when I was at MyCase. We saw the shift in the market, we saw lawyers starting to think about their law firm like a business and not just like a law firm. And when they start to do that, then they need business tools, right? They need the same kind of tools that other companies throughout industries, different genres of companies, tools that they’ve had forever, right? And so there was a little kernel of this idea of lawyers shifting to this mentality, you know, back in 2014. And so fast forward to 2017, we really saw this starting to become an opportunity that we thought was going to be a big one. And so we built Lawmatics to really address the business needs of a law firm and not as much of the practice management needs, right? The practice of law, we felt like that was pretty well taken care of. Our goal was to focus on the business side of it, you know, the lead management, the marketing, the automation, that sort of thing.

Crissonna Tennison

That’s awesome, and it sounds like a major change for you. When you were first starting your switch from being a lawyer to starting MyCase, what skill sets did you have already? And what skills did you have to develop along the way?

Matt Spiegel

Yeah, so it’s a good question. I mean, obviously, starting a software company is pretty different than being a lawyer. But I would say that I was probably a bad lawyer. And I just was always, I always had the skill set to be a decent entrepreneur, I guess. But I was probably just a really bad lawyer. It was very different. Well, I should strike that. Because the way I approached law–I was a criminal defense lawyer. And so I was in court all the time, I was doing a lot of trials, you know, it’s a very unique practice area. But I treated my law firm like a business right from the get-go. So I worked at a big law firm for like, four years, and then I started my own practice. And when I started my own practice, I was like, “I need to treat this like a business.” And I think that was the way I thought about it, even more so than being a good lawyer. And I think that was just because I was probably very entrepreneurial, even then. And so I was thinking about my law firm as like a business that I could build, not necessarily, “I’m a lawyer, I’m going to practice law.” So I think I always had that mentality, it was just manifesting itself within the confines of the legal space with starting my law firm. But as soon as I saw this need in the market for a product, which became MyCase, I kind of ran with it. It was like, “Wow, I’m building this business, a law firm, which can be big, but it’s going to have a ceiling, or I can start this, like, software company, which the ceiling is unlimited.” That just felt so much more exciting to me.

Crissonna Tennison

I do think it is very interesting that you brought up the entrepreneurial mindset, because from what I’ve observed there does seem to be a difference between that mindset and a lawyer mindset. It’s really interesting to hear you break that down a little bit.

What are some challenges that you’re most proud of overcoming in starting both MyCase and Lawmatics?

Matt Spiegel

What I’m most proud of, I think, is the legal tech space is not an easy space to enter. You know, there are a lot of companies that get started and not a lot of companies make it through. The fact that I’ve been able to build two companies in legal tech that have both been able to support these teams–like what I’m the most proud of in MyCase and Lawmatics are the teams that we built. They’re the people who made the company go and at MyCase, we just had an incredible team. It was such a great culture and at Lawmatics I think it’s even better, like, you know, we’ve built such an incredible team with with such an incredible culture, and it’s such a fun place to be and to work at. And so that’s a hurdle, right? It’s hard to build good cultures. You know, it’s hard enough to build one company, one startup that becomes successful, let alone two in the same space, especially when the space isn’t the biggest space in the world. So I think for me, you know, that hurdle of coming back into the legal tech space and trying to innovate in it, I’m think I’m most proud of that. And then the fact that we’ve been able to build such great teams. And that has nothing to do with the legal tech space, that’s just, you know, company mindset in general, company building in general. I think if I had to say what I’m most proud of it would be the teams that we’ve built.

Crissonna Tennison

That makes a big difference. And I feel like the teams you’re able to build and the workplace culture you’re able to foster really is everything when it comes to building a company.

You say that you saw some problems that you thought could be solved while you were a practicing defense attorney. So what exactly were you looking for that wasn’t available?

Matt Spiegel

MyCase came as a result of client communication problems. So my first company was a result of actually a State Bar complaint that I got. When I started my first law firm, I got a State Bar complaint pretty much right away. And it had nothing to do with the way I practiced, it was nothing to do with the outcome of the case, it was simply, “Hey, you didn’t call me back quick enough.” Right. And this is a tale as old as time. This is like, the most common complaint at every state bar still, even 12 years later, is attorney-client communication. And so I thought there has to be a better way to communicate than like, just calling me on the phone when I’m in court all day, every day. That cannot be the answer. And so I sought to develop a client communication portal. And that is what MyCase started as. Now it evolved into something so much more powerful and such a more robust piece of software. But the initial version, the initial idea was just simply a client communication portal. And so that’s how MyCase came about. Lawmatics really came about from what I observed talking to thousands and thousands of law firms in my time in MyCase, and what we saw was this shift, this idea that lawyers were starting to think about their law firms as a business, and not just the practice of law. And when I saw that, it’s like these people, if they have that mindset shift, they are going to experience some challenges with how to do that. Right? If they’re going to start doing marketing, if they don’t have a way to measure those marketing efforts, they’re going to be met with challenges, if they don’t have the ability to automate touchpoints, nurture campaigns, newsletters, like all the different things that are kind of marketing 101, if they don’t have that infrastructure in place, they’re going to be met with a lot of challenges. We anticipated that happening. And that’s sort of the problem that we look to solve with Lawmatics. And again, we weren’t reinventing the wheel. Products to solve the problems that Lawmatics solves have been around for decades, products like Salesforce, or HubSpot, they’ve been around for a really, really, really long time, they are not new concepts. What is new is a platform that is specifically built for law firms. And that’s where lawyers are a bit unique. They do and I’m not gonna say they require, but they do significantly better and they adopt more often tools that are designed for them, because they do have some unique requirements. And so that’s ultimately the problem that we look to solve with Lawmatics.

Crissonna Tennison

So as a lawyer, and as a person who’s running a law firm, you want to provide a great client experience, but you actually need to find clients in the first place. So what can law firms do from a marketing and client intake perspective to help this process?

Matt Spiegel

It’s about the client journey, right? A law firm needs to think about, “What is the journey that a client goes through with your law firm?” and we break that journey down into three phases.

Phase one is the intake phase, which is from the moment that they reach out to your law firm, by whatever means, all the way through to the point where they sign a fee agreement, and they pay you your retainer. Then you have phase two, which is an active case, you’re actually handling a case for them that has a definitive start and end time. And then phase three is after the case is over. Now, they are a former client. That is a very important part of the relationship.

So what Lawmatics is designed to do is help you with everything in phase one and everything in phase three, the practice management software like MyCase, they are designed to handle everything in phase two. So that journey starts from the very moment that a client reaches out to your law firm. And you have to understand that from that very moment, you have opportunities to delight your customers, and you need to think about it in terms of customer service: what kinds of service, what level of service are you providing to your client? And this is right from the get-go. So if someone reaches out to you, and they fill out a form on your website because they’re interested in talking to you, and maybe they don’t hear anything from you until the next day, that’s not good customer service. The first impression that they’re going to get is that you don’t respond to things very quickly. And so that initial moment of contact, there’s an opportunity to delight your customer, right, you can immediately engage them and show them that you’re on top of it. And that’s not something that a lot of law firms can do without the help of technology, right? You need technology to help you with those automated touch points. And so that’s just one example. But every step of the journey is an opportunity to delight your customer with customer service, not law. Forget about law. Right now we’re just talking about providing good bedside manner, good customer service. I have a saying that I’d love to repeat, which is that you could be the best lawyer in the world, but if you provide bad customer service, you are going to have a failing law firm. And the vice versa is true. You could be a mediocre or even a bad lawyer, but you could provide really, really excellent customer service, and you could be wildly successful. The outcome of the legal matter is not always the most important part of that relationship.

Crissonna Tennison

That’s something that I never would have thought about. But that makes sense that as a lawyer, of course, obviously, you want to win your case for your client, but you really want them to feel cared for and respected and like they can get in contact with you. And yeah, that is a lot of work to keep that going, especially because being a lawyer and running a law firm is so much work.

Matt Spiegel

Some of it is totally impossible! So here’s another example, let’s say after the case is over, something that would be a pretty nice thing to do would be to just send your former clients a note on their birthday every year, pretty simple. But you’ve got 2000 old clients, how are you going to keep track of all their birthdays and make sure you’re sending an email? It would take you, it would take an army to do that. So if you have a tool that can automate that whole process, all you do is click one button when you first set up the software, and then in perpetuity, every one of your former clients is going to get an email on their birthday every single year. So there’s so much that you can do that you can’t do manual, you have to have technology to help you do it. I think that that’s really important for law firms to understand when they’re looking at, “Well, what does this mean? How do I provide good customer service? Like what role can technology play?” I think it’s just really important to think about things that way.

Crissonna Tennison

The last few years have been a really chaotic time, especially for growing law firms. So what kind of feedback have you gotten from users of Lawmatics during this time?

Matt Spiegel

So the feedback that we get from our customers is pretty profound. So it’s two things, it’s what Lawmatics has enabled them to do. And then, you know, maybe not as sexy of a response is the amount of time that Lawmatics has saved them. So obviously, a product like Lawmatics that does so much around automation is going to save you time that really can’t even be put into words, the true impact can’t just be measured. And you know, some law firms are saving 20 hours a week. And that’s just a crazy amount of time. And the impact that has on a firm as a whole is pretty remarkable. But it’s really what Lawmatics has enabled them to do. Right? I mean, Lawmatics has really enabled growth for its customers. I think that’s the way to look at it. I think law firms before you know, our customers, before they used Lawmatics, it was really difficult to facilitate big growth for them. I’m not saying that law firms couldn’t grow before, that’s not true. But our customers were really struggling with certain aspects of it. They were getting into marketing, they were getting into intake management and thinking about things beyond just practicing law and how to attract more leads, and how to convert more of those leads into customers. But they had no way to manage it all. Maybe some of them knew what best practices were. But they couldn’t actually deploy those practices because they didn’t have the ability. Lawmatics has really enabled them to do the things that they’ve wanted to do on the lead management, the conversion side, the generating leads, it’s really pretty cool to hear the stories from these law firms that were struggling before to execute on growth plans, and now are exceeding what they thought they would be able to achieve.

Crissonna Tennison

I’m curious to hear more about why it’s so essential for those people who are running growing law practices to invest in quality practice management and CRM software. At this point in the game, how much do firms risk falling behind their competitors if they don’t use one?

Matt Spiegel

Personally, I feel like practice management software, right, like the MyCases, the Clios, the Practice Panthers of the world right now, I feel like that’s kind of table stakes, there are definitely still a lot of law firms out there that don’t use a platform like that. And for those firms, there must be some valid views. And but the vast majority of firms out there will have some sort of platform in place to help them with their time and their billing and their case management. I think that that’s table stakes in the industry now for the most part. But if you don’t have that, if you’re like doing your billing manually, that just is a colossal waste of time. And you would be falling behind the rest of the industry significantly, just because of the time that you’re wasting to input billing hours and send out invoices and things like that. But as far as CRM, this actually has the potential to make you fall behind even more. So first of all, we are at the inflection point for like CRM software and law firms. It is starting to become the focus of law firms, their understanding just how valuable it is and what they can do with it. And there’s a massive shift going towards this type of thing. That’s one reason why, you know, if you’re not on that boat, then you just fall behind technologically, but more importantly, it’s the byproduct of using a product like this. It’s the shift in thinking that is happening where you’re really going to fall behind because what it means is that law firms are out there thinking about marketing. They’re thinking about lead generation, they’re thinking about how to get more business and build their law firm. That means they’re going to be going out and taking leads from you if you’re not also thinking about that. So it’s so much more than just a piece of software that you’re talking about adopting, you’re talking about adopting a strategy for your business and your growth. So if you’re not on board with that, you are going to fall behind in ways that you probably haven’t necessarily thought of just yet.

Crissonna Tennison

That definitely makes a lot of sense. When we look at recent years, how have expectations of legal clients evolved, kind of along the lines of what you’re saying, if more and more firms are starting to really reorient their thoughts toward how they run their businesses and interact with their clients? How have their expectations evolved? And what changes have you seen in law firms and their operations since you started practicing?

Matt Spiegel

What we’ve really seen, I think, again, to me, it’s just been the wide adoption of some type of software platform and that software platform being in the cloud. So in starting MyCase, I was one of the people who was at the forefront of this shift to cloud computing in legal. I’ve gotten to observe this whole thing over the last, more than a decade at this point. And it’s really profound. It’s really cool. Right? It’s a mainstay in law firms now, cloud software. And what that’s enabled, operations are just easier. And there’s less operative people at a law firm, I think now, right? It’s just, it requires less, because so much is in software, it’s automated, it’s easy to access, it’s just makes things more streamlined. And so we see less of a need to have operators in a law firm and the ability for lawyers to focus more on actually handling their cases. A lot of this depends on the size firm that you are at. There’s a massive segmentation inside of the law firm industry, right? Like if you have solo and small law firms, they operate very differently than midsize or large law firms.

Crissonna Tennison

That kind of goes along with things that we’ve heard about in the past and prior conversations about CRM systems in general. Do you think that law students will have to start having practical knowledge of CRM systems as they enter the industry?

Matt Spiegel

No. I mean, it can’t hurt. But no, we saw this with practice management, too. I remember at MyCase, I would go down to the law schools, and I would help teach classes on managing a law practice and practice management software and what that meant and what it was. So the concepts we were teaching, but we weren’t giving them familiarity with the actual software themselves. I don’t think it’s difficult to pick up, I don’t think it’s really that critical. What I think is important is understanding the importance of these concepts to the business. But I don’t think it’s critical for people coming into law firms to like, have knowledge of the systems. I mean, that would be a bonus, it would be cool. I don’t think it’s something that is required.

Crissonna Tennison

So along those lines, would you say there’s been a change in law school education, in terms of a focus on how to run a law business? Like is that something that’s showing up a little bit more in legal academia than it was in the past, or maybe when you were in law school?

Matt Spiegel

So when I was in law school, it was really not a focus. Within five or six years after I left law school, it started to become a focus again, I started getting invited into law schools that actually had practice management classes, right, like how to run a law firm. To be honest with you, in the last few years, I haven’t seen it as much. So I don’t know if there was a small shift towards it, like 10 years ago, and now it’s shifted away from it. Maybe people thought that it wasn’t a practical class. I don’t really know. But I don’t think that we’ve seen a massive shift towards it in the last five or six years. I think it’s valuable to be honest with you. I think everyone always says, you go to law school, and the stuff you learn doesn’t necessarily help you as a subject matter. It doesn’t necessarily help you, when you get out of law school. What law school does is teach you how to think like a lawyer. Right? And that’s like the old cliche, but I think it’s relatively true. If law school is focused on the practicalities of running a business and running a law firm. I think that would be incredibly helpful. But unfortunately, I don’t have that much influence over this.

Crissonna Tennison

For our listeners who are interested in checking out Lawmatics, can you kind of take them through the process of getting started using your platform? Where can they find you?

Matt Spiegel

Finding us is very easy, anybody can go to our website, www.lawmatics.com. And from there, what we always have people do is we have them sign up for a demo. And when I say signing up for a “demo,” I use that term a little bit loosely, because what you’re really doing is you’re going to be talking to one of our specialists, who’s really going to spend some time learning about your law firm trying to, first of all make sure that as a law firm, you’re ready for a tool like Lawmatics, like Lawmatics is going to make sense for you as a law firm, and then starting to understand “What do you do currently? What are your processes like?” and then starting to show you how Lawmatics might be able to help. So when we get on this demo, it’s almost like a consultation. We have a lot of best practices that we share with people during this consultation, this demo, to hopefully get these law firms thinking about things a little differently. We really like this process. And that’s the most important thing for people to do is to just come to our website, sign up for that demo, you’re going to learn a little bit about Lawmatics, you might learn a little bit more about your law firm and certain steps you might need to take in order to execute on some of the initiatives that you’re looking to execute on at your law firm. And then we will show you how Lawmatics hopefully can help you do that.

Crissonna Tennison

That’s awesome. It sounds like the Lawmatics experience can be tailored to a variety of different law firm types.

Matt Spiegel

Lawmatics is really for everyone and anyone. We see it all across the spectrum. Sometimes brand new firms that are just trying to set up their tech stack and Lawmatics is the foundation of it or law firms with several hundred lawyers who have been around for a long time, but they need to update their tech stack and they see a lot of value in it.

Crissonna Tennison

Our time is coming to a close, so are there some points you would like to showcase that align with your organization’s experience?

Matt Spiegel

Lawmatics is Lawmatics, it’s great if people want to check it out, I encourage them to do that. But what I encourage all lawyers to do, regardless of the software platform, is to just start thinking about your law firm a bit differently and start thinking about your law firm as, you’ve got to be good at customer service. You have to think about satisfying your customers outside of their case, you cannot think, “if I get them a great outcome, if I’m a criminal defense lawyer, and I just defended my client out of prison,” you can’t just assume that that’s going to be enough, that that’s going to make them really happy. What you need to do–and this is a point that I was thinking about earlier that I want to bring up now–is this is what you need to remember. And if you remember this, I think it gives you a different lens to look through almost all practice areas, right? Almost all of them fit into this mold, where it is the most important thing happening in their life. If it’s a criminal offense case, if it’s a personal injury case, if it’s a bankruptcy case, if it’s a family law case, immigration, all these practice areas, like the vast majority of practice areas out there, the case that you are handling for your client, it is the most important thing that they have going on in their life. For you it’s just another client, right? And so sometimes it’s hard to have that perspective. But if you think about it like that, if you think “Hey, wait a second, this is the most important thing happening in their life. If I had the most important thing happening in my life right now, how would I want to be treated?” If you shift to that line of thinking I guarantee you will provide incredible customer service, and that’s going to benefit your firm.

Crissonna Tennison

Yeah, that makes a lot of sense, especially because if they’re dealing with something that is the most important thing in their life, and you’re the person guiding them through that, then that relationship is pretty important. So thank you for kind of expanding on that a little bit more.

Thank you to Matt Spiegel for taking the time to join us on the podcast to talk about Lawmatics and the different mindsets that can help a law firm be more successful. We really appreciate you joining us today.

Matt Spiegel

Yeah, thank you guys so much for having me. I really appreciate it.

Conclusion

Thank you for listening to the National Law Review’s Legal News Reach podcast. Be sure to follow us on Apple Podcasts, Spotify, or wherever you get your podcasts for more episodes. For the latest legal news, or if you’re interested in publishing and advertising with us, visit www.natlawreview.com. We’ll be back soon with our next episode.

Article By The National Law Review Editorial Team

For more law office management legal news, click here to visit the National Law Review.

Copyright ©2022 National Law Forum, LLC

ANOTHER TRILLION DOLLAR CASE:? TikTok Hit in MASSIVE CIPA Suit Over Its Business Model of Profiting from Advertising by Collecting and Monetizing User Data

Data privacy lawsuits are EXPLODING and one of our country’s most popular mobile app — TikTok’s privacy issues keep piling up.

Following its recent $92 million class-action data privacy settlement for its alleged violation of Illinois Biometric Information Privacy Act (BIPA), TikTok is now facing a CIPA and Federal Wire Tap class action for collecting users’ data via its in-app browser without Plaintiff and class member’s consent.

The complaint alleges “[n]owhere in [Tik Tok’s] Terms of Service or the privacy policies is it disclosed that Defendants compel their users to use an in-app browser that installs JavaScipt code into the external websites that users visit from the TikTok app which then provides TikTok with a complete record of every keystroke, every tap on any button, link, image or other component on any website, and details about the elements the users clicked. “

Despite being a free app, TikTok makes billions in revenue by collecting users’ data without their consent.

“The world’s most valuable resource is no longer oil, but data.”

While we’ve discussed before, many companies do collect data for legitimate purposes with consent. However this new complaint alleges a very specific type of data collection practice without the TikTok user’s OR the third party website operator’s consent.

TikTok allegedly relies on selling digital advertising spots for income and the algorithm used to determine what advertisements to display on a user’s home page, utilizes tracking software to understand a users’ interest and habits. In order to drive this business, TikTok presents users with links to third-party websites in TikTok’s in-app browser without a user  (or the third party website operator) knowing this is occurring via TikTok’s in-app browser. The user’s keystrokes is simultaneously being intercepted and recorded.

“Specifically, when a user attempts to access a website, by clicking a link while using the TikTok app, the website does not open via the default browser.  Instead, unbeknownst to the user, the link is opened inside the TikTok app, in [Tik Tok’s] in-app browser.  Thus, the user views the third-party website without leaving the TikTok app. “

The Tik-Tok in-app browser does not just track purchase information, it allegedly tracks detailed private and sensitive information – including information about  a person’s physical and mental health.

For example, health providers and pharmacies, such as Planned Parenthood, have a digital presence on TikTok, with videos that appear on users’ feeds.

Once a user clicks on this link, they are directed to Planned Parenthood’s main webpage via TikTok’s in-app browser. While the user is assured that his or her information is “privacy and anonymous,” TikTok is allegedly intercepting it and monetizing it to send targeted advertisements to the user – without the user’s or Planned Parenthood’s consent.

The complaint not only details out the global privacy concerns regarding TikTok’s privacy practices (including FTC investigations, outright ban preventing U.S. military from using it, TikTok’s BIPA lawsuit, and an uptick in privacy advocate concerns) it also specifically calls out the concerns around collecting reproductive health information after the demise of Roe v. Wade this year:

“TikTok’s acquisition of this sensitive information is especially concerning given the Supreme Court’s recent reversal of Roe v. Wade and the subsequent criminalization of abortion in several states.  Almost immediately after the precedent-overturning decision was issued, anxieties arose regarding data privacy in the context of commonly used period and ovulation tracking apps.  The potential of governments to acquire digital data to support prosecution cases for abortions was quickly flagged as a well-founded concern.”

Esh. The allegations are alarming and the 76 page complaint can be read here: TikTok.

In any event, the class is alleged as:

“Nationwide Class: All natural persons in the United State whose used the TikTok app to visit websites external to the app, via the in-app browser.

California Subclass: All natural persons residing in California whose used the TikTok app to visit websites external to the app, via the in-app browser.”

The complaint alleges California law applies to all class members – like the Meta CIPA complaint we will have to wait and see how a nationwide class can be brought related to a CA statute.

On the CIPA claim, the Plaintiff – Austin Recht – seeks an unspecific amount of damages for the class but the demand is $5,000 per violation or 3x the amount of damages sustained by Plaintiff and the class in an amount to be proven at trial.

We’ll obviously continue to keep an eye out on this.

Article By Puja J. Amin of Troutman Firm

For more communications and media legal news, click here to visit the National Law Review.

© 2022 Troutman Firm

Following the Recent Regulatory Trends, NLRB General Counsel Seeks to Limit Employers’ Use of Artificial Intelligence in the Workplace

On October 31, 2022, the General Counsel of the National Labor Relations Board (“NLRB” or “Board”) released Memorandum GC 23-02 urging the Board to interpret existing Board law to adopt a new legal framework to find electronic monitoring and automated or algorithmic management practices illegal if such monitoring or management practices interfere with protected activities under Section 7 of the National Labor Relations Act (“Act”).  The Board’s General Counsel stated in the Memorandum that “[c]lose, constant surveillance and management through electronic means threaten employees’ basic ability to exercise their rights,” and urged the Board to find that an employer violates the Act where the employer’s electronic monitoring and management practices, when viewed as a whole, would tend to “interfere with or prevent a reasonable employee from engaging in activity protected by the Act.”  Given that position, it appears that the General Counsel believes that nearly all electronic monitoring and automated or algorithmic management practices violate the Act.

Under the General Counsel’s proposed framework, an employer can avoid a violation of the Act if it can demonstrate that its business needs require the electronic monitoring and management practices and the practices “outweigh” employees’ Section 7 rights.  Not only must the employer be able to make this showing, it must also demonstrate that it provided the employees advance notice of the technology used, the reason for its use, and how it uses the information obtained.  An employer is relieved of this obligation, according to the General Counsel, only if it can show “special circumstances” justifying “covert use” of the technology.

In GC 23-02, the General Counsel signaled to NLRB Regions that they should scrutinize a broad range of “automated management” and “algorithmic management” technologies, defined as “a diverse set of technological tools and techniques to remotely manage workforces, relying on data collection and surveillance of workers to enable automated or semi-automated decision-making.”  Technologies subject to this scrutiny include those used during working time, such as wearable devices, security cameras, and radio-frequency identification badges that record workers’ conversations and track the movements of employees, GPS tracking devices and cameras that keep track of the productivity and location of employees who are out on the road, and computer software that takes screenshots, webcam photos, or audio recordings.  Also subject to scrutiny are technologies employers may use to track employees while they are off duty, such as employer-issued phones and wearable devices, and applications installed on employees’ personal devices.  Finally, the General Counsel noted that an employer that uses such technologies to hire employees, such as online cognitive assessments and reviews of social media, “pry into job applicants’ private lives.”  Thus, these pre-hire practices may also violate of the Act.  Technologies such as resume readers and other automated selection tools used during hiring and promotion may also be subject to GC 23-02.

GC 23-02 follows the wave of recent federal guidance from the White House, the Equal Employment Opportunity Commission, and local laws that attempt to define, regulate, and monitor the use of artificial intelligence in decision-making capacities.  Like these regulations and guidance, GC 23-02 raises more questions than it answers.  For example, GC 23-02 does not identify the standards for determining whether business needs “outweigh” employees’ Section 7 rights, or what constitutes “special circumstances” that an employer must show to avoid scrutiny under the Act.

While GC 23-02 sets forth the General Counsel’s proposal and thus is not legally binding, it does signal that there will likely be disputes in the future over artificial intelligence in the employment context.

Article By Steven M. Swirsky, Adam S. Forman, Nathaniel M. Glasser, Neresa A. De Biasi, and Ridhi D. Madia of Epstein Becker & Green, P.C.

For more labor law legal news, click here to visit the National Law Review.

©2022 Epstein Becker & Green, P.C. All rights reserved.

Attorney Mindfulness When Addressing Emails and Texts: ABA Formal Opinion Provides Ethical Guidance to Lawyers on Electronic Communications

In their roles as advisors, advocates, counselors, negotiators, and client representatives, lawyers communicate extensively though electronic means, particularly email and increasingly text messages. However, the fact that use of these electronic communication tools is commonplace in legal practice doesn’t mean that attorneys shouldn’t exercise caution when crafting their communications. The American Bar Association (“ABA”) Standing Committee on Ethics and Professional Responsibility published a formal opinion this month that advises lawyers to refrain generally from including their clients on emails and texts sent to opposing counsel.

ABA Formal Opinion 503 focuses on ABA Model Rule 4.2, often referred to as the “no-contact” rule. Under this model rule, a lawyer who is representing a client may not communicate about the subject of the representation with a represented person absent the consent of that person’s lawyer unless the law or court order authorizes such as communication. Most states’ codes of professional legal ethics draw heavily upon the ABA Model Rules, so many states have similar “no-contact” rules for lawyers.

The new formal opinion states that lawyers would not be deemed to violate ABA Model Rule 4.2 if they send a “reply all” response to a group email or text sent by an opposing counsel, even if that communication includes the opposing counsel’s client. The opinion states that, “[a]bsent special circumstances, lawyers who copy their clients on emails or other forms of electronic communication to counsel representing another person in the matter impliedly consent to a ‘reply all’ response from the receiving counsel,” the opinion said. “Accordingly, the reply all communication would not violate Model Rule 4.2.”

As a practical matter, Formal Opinion 503 provides a number of options to lawyers who wish to avoid creating an implied presumption of consent to such “reply all” communications from opposing counsel to their clients. These options include:

  • forwarding the electronic communication separately to the client without including opposing counsel as an addressee,
  • informing receiving counsel expressly and in advance that including the client on the electronic communication does not constitute a consent to a “reply all” response, or
  • sending the communication through other means (such as a mailed hard copy letter) where different norms are in place regarding responding to all addressees.

The full text of ABA Formal Opinion 503 is available here.

Article By Electronic Discovery at K&L Gates

For more law office management legal news, click here to visit the National Law Review.

Copyright 2022 K & L Gates

Buying, Selling, and Investing in Telehealth Companies: Navigating Structural and Compliance Issues

A multi-part series highlighting the unique health regulatory aspects of Telemedicine mergers and acquisitions, and financing transactions

Investors in the telehealth space and buyers and sellers of telehealth companies need to account for a set of health regulatory considerations that are unique to deals in this sector. As all parties to potential telehealth transactions analyze their long term role in the telehealth marketplace, two of the central issues to any transaction are compliance and structure – both in terms of structuring the telehealth transaction itself and due diligence issues that arise related to a target’s structure.

The COVID-19 pandemic, combined with strained health care staffing and provider availability, have accelerated the growth of the telehealth, and start-ups and traditional health systems alike are competing for access to patient populations in the telehealth space. However, as we adjust to life with COVID-19 as the norm, the expiration of the federal Public Health Emergency (PHE) looms, and the national economy contracts, we expect that the remainder of 2022 and into 2023 will see consolidation as the telehealth market begins to saturate and the long-term viability of certain platforms are tested. Telehealth companies, health systems, pharma companies and investors are all in potential positions to take advantage of this consolidation in a ripening M&A sector (while startups in the telehealth space continue to seek venture and institutional capital).

This is the first post in a series highlighting the unique health regulatory aspects of telehealth transactions. Future installments of this series are expected to cover licensure and regulatory approvals, compliance / clinical delivery models, and future market developments.

Telehealth Transaction Structure Considerations

The structure of any given telehealth transaction will largely depend on the business of the telehealth organization at play, but also will depend on the acquirer / investor. Regardless of whether a party is buying, selling or investing in a telehealth company, structuring the transaction appropriately will be important for all parties involved. While a standard stock purchase, asset purchase or merger may make sense for many of these transactions, we have also seen a proliferation of, affiliation arrangements, joint ventures (JV), alliances and partnerships.  These varieties of affiliation transactions can be a good choice for health systems that are not necessarily looking to manage or develop an existing platform, but instead are looking to leverage their patient populations and resources to partner with an existing technology platform. An affiliation or JV is more popular for telehealth companies operating purely as a technology platform (with no core business involving clinical services being provided). For parties in the traditional healthcare provider sector that provide clinical services, an affiliation or JV, which is easier to unwind or terminate than a traditional M&A transaction, can allow the parties to “test the waters” in a new, combined business venture. The affiliation or JV can take a variety of forms, including technology licensing agreements; the creation of a new entity to house the telehealth mission, which then has contractual arrangements with the both the JV parties; and exclusivity arrangements relating to use of the technology and access to patient populations.

While an affiliation or JV offers flexibility, can minimize the need for a large upfront investment, and can be an attractive alternative to a more permanent purchase or sale, there can be increased regulatory risk. Entrepreneurs, investors, and providers considering any such arrangement should bear in mind that in the wake of the COVID-19 pandemic and proliferation of telehealth, the Office of Inspector General of the Department of Health and Human Services (HHS-OIG) has expressed a heightened interest in investigating so called “telefraud” and recently issued a special fraud alert regarding suspect arrangements, discussed in this prior post. Further, the OIG’s guidance on contractual joint ventures that would run afoul of the federal Anti-Kickback Statute (AKS) should be front of mind and parties should strive to structure any affiliation or JV in a manner that meets or approximates an AKS safe harbor.

Target Telehealth Company Structure Compliance

Where telehealth companies are providing clinical services, and are not purely technology platforms, structuring and transaction diligence should focus on whether the target is operating in compliance with corporate practice of medicine (CPOM) laws. The CPOM doctrine is intended to maintain the independence of physician decision-making and reduce a “profits over people” mentality, and prevent physician employment by a lay-owned corporation unless an exception applies. Most states that have adopted CPOM impose similar restrictions on other types of clinical professionals, such as nurses, physical therapists, social workers, and psychologists. Telehealth companies often attempt to utilize a so-called “friendly PC” structure to comply with CPOM, whereby an investor-owned management services organization (“MSO”) affiliates with a physician-owned professional corporation (or other type of professional entity) (a “PC”) through a series of contractual agreements that foster a close working relationship between the MSO, PC, and PC owner and whereby the MSO provides management services, and sometimes start-up financing. The overall arrangement is intended to allow the MSO to handle the management side of the PC’s operations without impeding the professional judgment of the PC or the medical practice of its physicians and the PC owner.

CPOM Compliance Considerations and Diligence for Telehealth Companies

A sophisticated buyer will want to confirm that the target’s friendly PC structure is not only formally established, but is also operationalized properly and in a manner that minimizes fraud and abuse risk. If CPOM compliance gaps are identified in diligence this may, at worst, tank the deal and, at best, cause unexpected delays in the transaction timeline, as restructuring may be required or advisable. The buyer may also request additional deal concessions, such as a purchase price reduction and special indemnification coverage (with potentially a higher liability limit and an escrow as security). Accordingly, a telehealth company anticipating a sale or fund raise would be well served to engage in a self-audit to identify any CPOM compliance issues and undertake necessary corrective actions prior to the commencement of a transaction process.

Below are nine key questions with respect to CPOM compliance and related fraud and abuse issues that a buyer/investor in a telehealth transaction should examine carefully (and that the target should be prepared to answer):

  1. Does target have a PC that is properly incorporated or foreign qualified in all states where clinical services are provided (based on the location of the patient)?
  2. Does the PC owner (and any directors and officers of the PC, to the extent different from the PC owner) have a medical license in all states where the PC conducts business (to the extent in-state licensure is required)? To the extent the PC has multiple physician owners and directors/officers, are all such individuals licensed as required under applicable state law?
  3. Does the PC(s) have its own federal employer identification number, bank account (including double lockbox arrangement if enrolled in federal healthcare programs), and Medicare/Medicaid enrollments?
  4. Does the PC owner exercise meaningful oversight and control over the governance and clinical activities of the PC? Does the PC owner have background and expertise relevant to the business (e.g., a cardiologist would not have appropriate experience to be the PC owner of a PC that provides telemental health services)?
  5. Are the physicians and other professionals providing clinical services for the business employed or contracted through a PC (rather than the MSO)? Employment or independent contractor agreements should be reviewed, as well as W-2s, and payroll accounts.
  6. Is the PC properly contracted with customers (to the extent services are provided on a B2B basis) and payors?
  7. Do the contractual agreements between the MSO and PC respect the independent clinical judgment of the PC owner and PC physicians and otherwise comply with state CPOM laws.
  8. Do the financial arrangements between the MSO, PC, and PC owner comply with AKS, the federal Stark Law, and corollary state laws and fee-splitting prohibitions, to the extent applicable?
  9. Is the PC owner or any other physician performing clinical services for the PC an equity holder in the MSO? If so, are these equity interests tied to volume/value of referrals to the PC or MSO (i.e., if the MSO provides ancillary services such as lab or prescription drugs) or could equity interests be construed as an improper incentive to generate healthcare business (e.g., warrants that can only be exercised upon attainment of certain volume)?

Telehealth companies considering a sale or financing transaction, and potential buyers and investors, would be well served to spend time on the front end of a potential transaction assessing the above issues to determine potential risk areas that could impact deal terms or necessitate any friendly PC structuring.

Article By Hannah E. Zaitlin, Mitchell D. Lindstrom, David S. Sanders, and Natasha Allen of Foley & Lardner LLP

For more health law legal news, click here to visit the National Law Review.

© 2022 Foley & Lardner LLP

The Do’s and Don’ts of Data Cleaning – Don’t Drown in Bad Data

Bad CRM data can compound exponentially, impacting marketing and business development. It’s essential to understand the scope of  your data problems and follow a plan for regular data cleaning.  

Have you ever heard the saying, “No man ever steps into the same river twice”? Because a river’s water is constantly flowing and changing, the water you step in today will be different from yesterday. The same is true for the data in your CRM system: people are constantly changing roles, relocating, retiring; companies are opening, closing, moving and merging.

On top of that, new data isn’t always entered correctly. As a result, a database with clean, correct information today will not necessarily be accurate tomorrow. Over time, this bad data can compound exponentially, resulting in ineffective marketing, events and communication campaigns because as your data degrades, you reach fewer members of your target audience.

For professional services firms, poor data quality in your CRM system can also translate into a decline in system adoption. Once your professionals see bad data, they won’t trust the system as a whole and ultimately may outright refuse to use it. This is why we stress the importance of ongoing data cleaning.

Data Cleaning Do’s and Don’ts

Simply put, data cleaning involves identifying incorrect, incomplete and/or dated data in your systems and correcting and enhancing it. If you have a large database with thousands, or hundreds of thousands, of records, the data quality process can seem daunting and overwhelming.

While there’s no magic bullet or quick fix for poor data quality, ignoring data problems until there’s a crisis is not a strategy. Good data quality requires ongoing effort that never ends. The good news is that this means you have forever to get better at it. So, start now. Begin by assessing the scope of your data quality issues. Then, because it’s not always cost-effective or even possible to clean all your data, start by focusing on the highest priority projects.

Identify and Prioritize Your Most Important Data

All contact records are not created equal. For instance, client data is typically more important than non-client data. Additionally, individuals who have recently subscribed to your communications or attended an event are more important than those who last interacted with your firm years ago. Whatever segmenting scenario you select, it’s important to find ways to divide your contact data into manageable pieces because it makes the process more manageable and allows you to better measure progress.

Eliminate Stagnant Records

Related to prioritizing your data, don’t be hesitant about removing records that have been inactive for an extended period. Search your system for contacts that have not been updated for a few years, are not related to or known by any of your professionals, are not clients or alumni, and have not opened a communication or invitation in two to three years. Chances are good these records are not only outdated but also may not be worth the resources it would take to update them. Identify these records and consider removing them from the system. Less mess in your database makes cleanup a bit more manageable.

Your Plan Is Your Life Preserver

Once you’ve prioritized subsets or segments of contacts, identifying and prioritizing your most common data errors can help you decide on the best way to tackle ongoing data cleaning. For example, if you have an important email that needs to be sent to clients, you need to focus on email addresses. Identify records that don’t have an email address, have incorrectly formatted email addresses or have bounced recently.

In addition, if there are contacts you haven’t sent a communication or invitation to for an extended period of time, it’s entirely likely that their email may no longer be valid. It’s important to regularly test emails on your lists because not doing so can cause you to be blacklisted by anti-spam entities or have your account blocked by your eMarketing provider.

Initial Cleaning Cycle

The best place to start your data cleaning cycle is with a contact and list verification and cleansing service such as TrueDQ. This service will evaluate your list data, identify potentially harmful “honeypot” email addresses and even automatically update many of your contacts with current, complete contact information. The data can then also be enhanced with additional missing information, such as industries and locations, to help with targeting and segmenting.

Rinse and Repeat

When one segment or list has been cleaned, move on to the next one – bearing in mind that what’s important on the next list may be different from the last one. For example, maybe you need to send a hard copy postal mailing, so it will be important to ensure the accuracy of physical mailing addresses rather than email addresses.

Bounces and Returns

One of the most common data quality failures at law and other professional services firms is ignoring bounced emails and returned hard copy mailings. Bounces and returns are real-time indicators that can help you keep on top of your data quality. Researching and correcting them is important because sometimes they involve important former clients who could potentially hire the firm again at their new company.

Returned hard mail will often include the forwarding address of the recipient, which should be corrected in your CRM. For emails, use a central email address to collect automatic email replies, since these frequently tell you when a recipient no longer works at an organization.

Ideally, data stewards should regularly review all bounces to take the onus off the professionals. However, it can also be helpful to generate reports on bounced communications and circulate them to professionals or their assistants who may be able to provide updated information – or will at least appreciate knowing which of their contacts have moved on or changed roles.

Finally, if your eMarketing and/or CRM system has a process for automatically isolating bounced records, be sure you have a reciprocal process that automatically reinstates bounced records when the email field is updated.

Prevent Invalid Data

There are multiple ways to encourage good data habits, depending on your system and method of contact entry. If your firm relies on manual data entry, implement a firmwide Data Standards Guide to inform users how data should be entered (e.g., does your firm spell out or abbreviate job titles?). It can also be helpful to use system validation rules wherever possible to require certain information in new records such as last name, city and email address to ensure your contacts are relevant.

Finally, regularly review newly added records for consistency and completeness. This process can reveal issues such as users who may require additional training on contact input best practices. It can also help to catch spam or other potentially dangerous entries that can sometimes flow into your database from online forms that are filled out by bots.

Never, Ever Stop

Just as rivers keep flowing, so does the data in your CRM system – and the data will always need cleaning to ensure that it is fresh. While this may feel like a relentless and burdensome task, never stop – just go with the flow –  because when you’re not regularly cleaning the data, your CRM “river” can become stagnant, and the more polluted it becomes, the longer the eventual cleanup will take.

Article By Christina R. Fritsch JD and Rachel Fields of CLIENTSFirst Consulting

For more business of law legal news, click here to visit the National Law Review.

© Copyright 2022 CLIENTSFirst Consulting

ADA Compliance for Law Firm Websites in 2022

Legal reasoning involves applying the law to the facts to determine the rights and duties of those involved in a situation. Lawyers frequently take the position that the application of rules should settle disputes and that policies will be considered, if at all, only when there is a high degree of uncertainty surrounding the applicability of the rule. The lawyer might take the position that it is always preferable to seek the result that would further the underlying policies, even if that result would be contrary to the clear language of the rules.

But what if no explicit rules currently exist?

That is the issue with website compliance under the Americans with Disabilities Act (ADA). The Act does not offer specific guidelines to follow; however, websites are expected to be easily accessible to everyone, including those who are disabled. The failure to create an ADA-compliant website could expose an organization to discrimination lawsuits, financial liabilities, and severe damage to its reputation.

What is the ADA?

The ADA compels certain businesses, including banks, hotels, restaurants, public transit, law firms, and others to make accommodations for people with disabilities. According to the National Law Review, the Act is divided into three parts:

  • Title I prohibits employers from discriminating against employees based on disability and requires them to provide reasonable accommodation to certain employees under specific circumstances.
  • Title II covers state and local governments.
  • Title III covers “places of public accommodation,” which the ADA does not define, but are generally private businesses or organizations that provide goods, services, facilities, privileges, or accommodations to the public. These places commonly include schools, restaurants, health care providers, social service agencies, law firms, and more.

The ADA is commonly associated with physical locations and the accommodations that certain businesses must make for people with disabilities, which include wheelchair accessibility, reserved parking, and service animals. Companies that fall under ADA Title I and operate 20 or more weeks per year with at least 15 full-time employees, or Title III – those that fall under the category of public accommodation – must be ADA-compliant.

Although physical “brick-and-mortar” locations are nearly always considered places of public accommodation, the debate is ongoing as to whether a business’s website is a place of accommodation. If so, the digital content must be accessible to all users.

A law firm website must be designed so that those who are disabled can access it easily to comply with ADA requirements. While there are no well-defined regulations that describe precisely what an ADA-compliant website should include, businesses that fall under ADA Title I or ADA Title III are required to develop a website that offers “reasonable accessibility” to people with disabilities.

Compliance Tools & Plugins

Because the ADA doesn’t offer specific guidelines for website compliance, many organizations follow the Web Content Accessibility Guidelines 2.0 (WCAG), updated to 2.1 in 2018. While WCAG isn’t a legal requirement, its requirements have been followed in the European Union and other nations since 1999 and still serves as a reference for businesses that want to improve accessibility to their website.

Under WCAG 2.1, website accessibility concerns generally fall into four groups. These include issues that are:

  • Perceivable – issues that affect users’ ability to locate and process the information on a website, e.g., many visually-impaired individuals use screen readers to distinguish between the text and the background to help them navigate online content.
  • Operable – challenges that impair users’ ability to navigate a site, e.g., functions and navigations such as online forms should be accessible via keyboard-only commands, and users who need additional time to complete them should be allowed to do so.
  • Understandable – users should be able to comprehend the information on the site, e.g., error messages that provide an explanation and directions for correcting an error should be offered.
  • Robust – can be interpreted by various devices and platforms according to the varying needs and abilities of users, e.g., the alt text that should pop up to let users know what it is when read by assistive technology when they hover over an image.

Here are more suggestions regarding what to include to help ensure ADA website compliance:

  • “Alt” tags for every media file and map
  • Descriptive HTML tags for online forms
  • Hyperlinks with descriptive anchor text
  • “Skip navigation” links on all website pages
  • Heading tags to organize text
  • Accessible PDF files
  • Subtitles, transcripts, and audio descriptions for videos
  • Accessible fonts for all applications
  • HTML tables with column headers, row IDs, and cell information
  • Captions written in English for audio files
  • Call-to-action buttons with easily accessible names and ARIA labels
  • A website accessibility policy
  • Easy to find contact information

Meeting these guidelines will make a firm’s website more accessible to those with vision or hearing impairments, as well as cognitive, language, or learning disabilities.

Court Rulings Regarding Website ADA Compliance

According to the American Bar Association (ABA), the number of accessibility-related lawsuits filed against websites has increased dramatically in recent years. Plaintiffs are basing these lawsuits on two legal theories:

  1. Title IIIs “equal access and general nondiscrimination mandate
  2. A requirement that places of public accommodation must provide auxiliary aids and services as necessary (for no extra charge)

Although neither Title III nor its regulations mention websites and mobile applications, the phase “auxiliary aids and services” includes “accessible electronic and information technology,” which covers websites and mobile apps.

ADA Title III Lawsuits Filed Each Year Graph
Image by Seyfarth via adatitleiii.com

A recent ABA analysis of court filings related to ADA website compliance found:

  • Federal courts across the country were inundated with more than 8,000 website accessibility lawsuits between 2017 and 2020.
  • In 2020, three states – New York, Florida, and California – brought more than 85 percent of all the ADA website compliance lawsuits.
  • Since 2018, website and mobile app accessibility disputes have accounted for approximately 20 percent of all ADA Title III cases initiated in federal courts, which now regularly exceed 10,000 suits each year.

These statistics do not consider a significant number of website and mobile app cases pursued in state courts, cases settled before filing in court, and DOJ enforcement proceedings that are resolved prior to court filing.

Here are some examples of court rulings related to ADA compliance and websites:

Gil v. Winn-Dixie Stores Inc.

In June 2107, a Florida court ruled in favor of a blind plaintiff who brought an ADA violation lawsuit against Winn-Dixie. The man claimed that aspects of the supermarket chain’s site weren’t compatible with screen readers, leaving him unable to order his medications online or download rewards cards. The trial court agreed that the website was inaccessible to those with impaired vision and ordered that it be brought into compliance with the WCAG 2.0 Level AA.

Although Winn-Dixie complied with the court order, in April 2021, the Eleventh Circuit Court of Appeals overturned the trial court’s decision, finding that Winn-Dixie was not in violation of the ADA because it did not need accessibility aids to conduct business. After that, however, Winn-Dixie posted an accessibility statement on its website that commits to adhere to WCAG 2.0 AA by using testers from the disability community to check the accessibility of their website periodically.

Robles v. Domino’s Pizza

Domino’s Pizza lost a website accessibility lawsuit in 2019 after years of exhaustive litigation when a federal district court in California granted the plaintiff’s motion for summary judgment after it determined that the website was indeed not fully accessible. The court ordered Domino’s to make its website compliant with the WCAG 2.0 to connect customers to the goods and services of Domino’s physical restaurants.

The court held that the ADA applied to Domino’s website and app because the Act requires places of public accommodation, like Domino’s, to offer auxiliary aids and services to make visual materials available to blind individuals. Although customers primarily access the Domino’s website and app outside its physical restaurants, the court found that the Act pertains to the services of public accommodation, not services in a place of public accommodation.

Andrews v. Blick Art Materials

In 2017, Victor Andrews, who is blind, filed a lawsuit against Blick Art Materials for website inaccessibility. Andrews alleged that because Blick’s website was inaccessible, he could not navigate and purchase items on the defendant’s website independently. When Blick made a motion to dismiss the lawsuit, Judge Jack Weisenstein denied it and made this statement:

Today, internet technology enables individuals to participate actively in their community and engage in commerce from the comfort and convenience of their home. It would be a cruel irony to adopt the interpretation of the ADA espoused by Blick, which would render the legislation intended to emancipate the disabled from the bonds of isolation and segregation obsolete when its objective is increasingly within reach.

The ruling in this case and others illustrates that businesses need to consider their websites equivalent to a place of public accommodation, which puts them at risk of being sued, even without explicit web accessibility regulations.

Latest DOJ Guidelines

In 2010, the Department of Justice (DOJ) launched a rulemaking process to address ADA requirements for website accessibility, including technical standards for accessible websites. However, that effort stalled for seven years during the Obama administration (even though the administration continued to pursue investigations and enforcement actions against businesses with inaccessible websites).

The Trump administration abandoned the process to interpret the ADA entirely in 2017. In 2018, the DOJ revealed that it would not give official guidance regarding website accessibility under the Act, releasing this statement:

The Department is evaluating whether promulgating regulations about the accessibility of Web information and services is necessary and appropriate. Such an evaluation will be informed by additional review of data and further analysis. The Department will continue to assess whether specific technical standards are necessary and appropriate to assist covered entities with complying with the ADA.

Since the DOJ’s withdrawal, the number of lawsuits involving website accessibility increased dramatically, raising awareness regarding website accessibility among businesses but also causing confusion surrounding what features an ADA-compliant website should include. As a result, numerous website accessibility consulting companies emerged promising inexpensive solutions. However, some have been challenged in court.

In June 2018, some bipartisan members of the U.S. House of Representatives sent a letter to Attorney General Jeff Sessions encouraging the DOJ to release clear website accessibility regulations to diminish the unclear nature of current legislation. On September 25, 2018, the DOJ responded by stating that, at this time, the DOJ would not be issuing web accessibility regulations under the ADA: “The Department has consistently taken the position that the absence of a specific regulation does not serve as a basis for noncompliance with a statute’s requirements.”

In March 2022, the DOJ issued further web accessibility guidance under the ADA. The “new” guidance references both the WCAG – which are voluntary – and Section 508 standards, which set standards for federal websites, and indicates that the DOJ supports the notion that sites of public accommodation must be accessible, and in the absence of explicit regulations, websites can be flexible in how they choose to comply with the ADA’s requirements. However, the guidance does not clarify what such flexibility or choice entails and– not necessarily the direction regulation-seekers are looking for, since it provides no substantially new information regarding the vagueness of website accessibility requirements under the ADA.

Final Thoughts

As accessibility regulations for websites remain unclear, it can be easy for organizations to assume that they cannot be sued for noncompliance. However, with no specific standards to follow, law firms and other businesses must do their best to interpret the ADA, practice website accessibility as they see fit, and try to avoid website accessibility-related lawsuits.

One more thing to consider: ambiguity runs both ways, and even though an organization might think its website is accessible, a disabled person might think otherwise, providing the grounds for a lawsuit. Organizations aren’t granted immunity simply because of a lack of clarity in legislation. Instead, uncertainty allows for interpretation by anyone, including the courts.

This article was authored by Jan Hill of Lawmatics.

For more business of law legal news, click here to visit the National Law Review.

©2022 — Lawmatics

Actual Malice in the Age of #fakenews

Public figures are fighting back against fake news.

In the most recent headline from the world of celebrity defamation cases, E. Jean Carroll is suing former President Trump for statements he made after she accused him of sexual assault. In a 2019 book and excerpt in New York magazine, Carroll, a longtime advice columnist for Elle magazine, accused Trump of sexual assault in the mid-1990s. Trump responded that Carroll was “totally lying” and not his “type.” Carroll sued Trump for defamation, claiming his statements had harmed her reputation. But Carroll—like all public figure defamation plaintiffs—has an uphill battle before her. To succeed, Carroll will have to prove that Trump’s statements were false, and—because Carroll is a public figure—she will also have to show that Trump acted with “actual malice.” The actual malice standard often proves to be too high a threshold for most public figures to cross, and most cases are lost on that prong—regardless of whether the statement was false. In fact, Johnny Depp was one of the few public figures in recent years to win a defamation suit.

So, what would it mean if the actual malice requirement was rescinded?

The seminal decision in New York Times Company v. Sullivan and its progeny are the backbone of defamation law in this country. These cases hold that public officials and public figures claiming defamation must prove that the allegedly defamatory statement was made, “with knowledge that it was false or with reckless disregard of whether it was false or not.” In other words, with “actual malice.” On the other hand, a private figure, or one who has not sought out the limelight, need only show the false statement was made negligently. Prior to Sullivan, all plaintiffs fell under the negligence standard.

Public figures who must meet this “actual malice” standard fall into two categories: (1) all-purpose public figures, with “pervasive fame or notoriety,” like Johnny Depp; and (2) limited-purpose public figures, like Carroll, who, in the words of Gertz v. Robert Welch, Inc., achieve their status by “thrust[ing] themselves to the forefront of particular public controversies in order to influence the resolution of the issues involved.” The Court rationalized that both categories of public figures have “invite[d] attention and comment.” Moreover, because “public figures enjoy “greater access to the channels of effective communication” than private individuals, they are better able to “contradict the lie or correct the error.”

In today’s age of social media, do these justifications still hold true? When Sullivan and its progeny came down, there was a clear delineation between public and private figures. Typically, public figures had media access, and private figures did not. Today’s social media landscape muddles that line. We are all just one post, tweet, or TikTok away from becoming public figures.

In 2019, in a case strikingly similar to Carroll’s, the Supreme Court declined to review a defamation case filed by Kathrine McKee against Bill Cosby. In 2014, McKee publicly accused Cosby of forcibly raping her 40 years earlier. In response, Cosby’s attorney authored and subsequently leaked an allegedly defamatory letter. Excerpts of the letter were disseminated via the Internet and published by news outlets around the world. McKee argued that the letter deliberately distorted her personal background to “damage her reputation for truthfulness and honesty, and further to embarrass, harass, humiliate, intimidate, and shame” her. Applying Sullivan and its progeny, the Court concluded because McKee had “‘thrust’ herself to the ‘forefront’” of the public controversy over “sexual assault allegations implicating Cosby,” she was a “limited-purpose public figure” who needed to show actual malice—regardless of whether the statements about her were false.

In a lone dissent, Justice Clarence Thomas noted that “in an appropriate case, [the Court] should reconsider the precedents” requiring public figures to satisfy an actual-malice standard. Justice Thomas later double-downed on his proffer in his dissents in Berisha v. Lawson, and most recently in Coral Ridge Ministries Media, Inc. v. Southern Poverty Law Center. In Berisha, pointing to the shift in the media landscape since Sullivan, Justice Neil Gorsuch joined Justice Thomas in calling to review the Sullivan decision, noting our new media world “facilitates the spread of disinformation.”

According to these Justices, in recent years Sullivan has become less of a shield and more of a sword. The “actual malice” standard allows spreaders of conspiracy theories, false accusations, and fake news to be virtually untouchable. In an era where misinformation spreads like wildfire, has the actual malice standard allowed journalists to become sloppy and irresponsible? Under this legal standard a journalist is better off printing a story without fact-checking. In fact, failing to thoroughly investigate, standing alone, does not prove actual malice. If the Court abolished that standard, public figures would be like every other defamation plaintiff and would only need to show that the false statement was made carelessly. In other words, instead of the defendant knowingly printing misinformation, a plaintiff would only need to show that the defendant didn’t bother checking if the information was true or false before making it.

Under this precedent, for years reporters, and individuals alike have been shielded from consequences of publishing falsehoods about public figures. Removing the “actual malice” standard would have sweeping effects on journalists and news platforms, and would make reputable news organizations more vulnerable to attack and open to further scrutiny. But responsible journalists would still remain protected. Truth remains an absolute defense to a defamation claim.

Between 2018 and 2020 the number of defamation suits filed increased by 30%. With “fake news” on the rise, more individuals falling into the “public figure” category, and technology moving at warp speed, the Court may have no choice but to rethink Sullivan. While it is unlikely that that 50 years of settled precedent would be overturned, Sullivan just might, at the very least, be revisited.

Article By Melissa Sarsten Polito of Epstein Becker & Green, P.C.

For more litigation and legal news, click here to visit the National Law Review.

©2022 Epstein Becker & Green, P.C. All rights reserved.

Ankura Cyber Threat Intelligence Bulletin: August – September 2022

Over the past sixty days, Ankura’s Cyber Threat Investigations & Expert Services (CTIX) Team of analysts has compiled key learnings about the latest global threats and current cyber trends into an in-depth report: The Cyber Threat Intelligence Bulletin. This report provides high-level executives, technical analysts, and everyday readers with the latest intel and insights from our expert analysts.

Download the report for an in-depth look at the key cyber trends to watch and help safeguard your organization from constantly evolving cyber threats with the latest cyber intelligence, ransomware, and threat insights.

 Our latest report explains the following observations in detail:

Law Enforcement Works with Threat Intelligence to Prosecute Human Traffickers

In the age of high-speed internet and social media, criminals have evolved to use information technology to bolster their criminal enterprises and human traffickers are no different. Whether it be through the clearnet or dark web, human traffickers have leveraged the internet to scale their operations, forcing law enforcement to reevaluate how to best combat this problem. In response to the changes in trafficker tactics, techniques, and procedures (TTPs), governments across the world have responded with legislation and policies in an attempt to better thwart the efforts of these criminals. Researchers from Recorded Future’s Insikt Group have published compelling reports as a proof-of-concept (PoC) for a methodology on how law enforcement agencies and investigators can utilize real-time threat intelligence to leverage sources of data in order to aid in tracking, mitigating, and potentially prosecuting human sex traffickers. Download the full report for additional details on law enforcement efforts to prosecute human traffickers and more on the Insikt Group’s findings.

Emerging Threat Organization “MONTI”: Sister Organization or Imposter Threat Group?

Over the past several weeks a new, potentially imposter, threat organization has mimicked the tactics, techniques, procedures (TTPs), and infrastructure of the Conti Ransomware Group. Tracked as MONTI, this doppelganger organization emerged in the threat landscape in July 2022 after compromising a company and encrypting approximately twenty (20) hosting devices and a multi-host VMWare ESXi instance tied to over twenty (20) additional servers. While the July attack pushed the group into the limelight, analysts believe that attacks from the doppelganger organization go back even further into the early summer of 2022. Similarities discovered between Conti Ransomware and the alleged spinoff Monti Ransomware include attack TTPs alongside the reuse of Conti-attributed malicious payloads, deployed tools, and ransom notes. Additionally, the encrypted files exfiltrated by Monti contain nearly identical encryption, which could indicate code re-usage. Read the full report to find out what CTIX analysts expect to see from this group in the future.

Figure 1: Conti Ransom Note

Figure 2: Monti Ransom Note

Iranian State-Sponsored Threat Organization’s Attack Timeline Targeting the Albanian Government

In July 2022, nation-state Iranian threat actors, identified by the FBI as “Homeland Justice”, launched a “destructive cyber-attack” against the Government of NATO-member Albania in which the group acquired initial access to the victim network approximately fourteen (14) months before (May of 2021). During this period, the threat actors continuously accessed and exfiltrated email content. The peak activity was observed between May and June of 2022, where actors conducted lateral movements, network reconnaissance, and credential harvesting.

This attack and eventual data dumps were targeted against the Albania-based Iranian dissident group Mujahideen E-Khalq (MEK), otherwise known as the People’s Mojahedin Organization of Iran. MEK is a “controversial Iranian resistance group” that was exiled to Albania and once listed by the United States as a Foreign Terrorist Organization for activity in the 1970s but was later removed in late 2012. Albania eventually severed diplomatic ties with Iran on September 7, 2022, and is suspected to be the first country to ever have done so due to cyber-related attacks. For a more detailed analysis of this attack and its ramifications, download our full report.

 Figure: Homeland Justice Ransom Note Image

Banning Ransomware Payments Becomes Hot-Button Issue in State Legislature

There is a debate occurring in courtrooms across the United States regarding the ethics and impacts of allowing businesses to make ransomware payments. North Carolina and Florida have broken new ground earlier this year passing laws that prohibit state agencies from paying cyber extortion ransom demands. While these two (2) states have been leading the way in ransomware laws, at least twelve (12) other states have addressed ransomware in some way, adding criminal penalties for those involved and requiring public entities to report ransomware incidents. Download the full report to discover what experts think of government ransomware payment bans and the potential effects they could have on ransomware incidents.

Threat Actor of the Month: Worok

ESET researchers discovered a new cluster of the long-active TA428 identified as “Worok.” TA428 is a Chinese advanced persistence threat (APT) group first identified by Proofpoint researchers in July 2019 during “Operation LagTime IT”, a malicious attack campaign targeted against government IT agencies in East Asia. Download the full report for an in-depth look at Worok’s tactics and objectives, and insights from our analysts about the anticipated future impact of this group.

New List of Trending Indicators of Compromise (IOCs)

IOCs can be utilized by organizations to detect security incidents more quickly as indicators may not have otherwise been flagged as suspicious or malicious. Explore our latest list of technical indicators of compromise within the past sixty (60) days that are associated with monitored threat groups and/or campaigns of interest.

Article By Ted Theisen and Jason Hale of Ankura

For more data privacy and cybersecurity legal news, click here to visit the National Law Review.

Copyright © 2022 Ankura Consulting Group, LLC. All rights reserved.