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High-Tech Law & Litigation Blog

  • 20
  • February
  • 2018

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Tech Issues Dominate at Confirmation Hearing for Four FTC Nominees

At a February 14, 2018, confirmation hearing on President Trump’s nominees to the Federal Trade Commission before the Senate Commerce, Science, and Transportation Committee, Senators asked the nominees how, if confirmed, they would regulate technology companies, address data security issues exposed by the Equifax breach, and address net neutrality. While making few firm commitments other than to study the issues, the nominees agreed that the FTC should use its authority and resources to protect consumers from abuses by large firms, especially in light of evolving concerns over data privacy and aggregation.

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  • 15
  • February
  • 2018

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Tesla's Lawsuit Challenging Michigan Law Banning Direct Car Sales Raises Novel First Amendment Issues

A lawsuit filed by innovative technology and automotive company Tesla Motors, which challenges Michigan’s ban on direct car sales to consumers, raises the conflict between the need for discovery into matters of intent and First Amendment rights of association related to lobbying activity. The U.S. Sixth Circuit Court of Appeals will soon have to resolve this conflict in Tesla Motors, Inc. v. Johnson, No. 18-1010. In that case, Tesla seeks information about the communications of a trade association that lobbied in favor of legislation that Tesla has challenged as unconstitutional. This new conflict follows a habitual cycle: Technology companies push boundaries, governments seek to regulate their activities, and the companies become more involved in lobbying regulators and legislatures. The question of whether communications related to those efforts may be discovered by other parties in civil litigation is therefore likely to recur, and the Sixth Circuit’s resolution of the issue will merit close attention.

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  • 12
  • February
  • 2018

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Update: District Court Sets Aside $300,000 Apple Sanction

Last week, we wrote that Apple found itself in hot water when a federal magistrate imposed a $300,000 sanction against the company for failing to meet a Rule 45 (third-party subpoena) document production deadline in the Federal Trade Commission’s (“FTC”) case against Qualcomm Inc. In the sanction order, the magistrate cited a similar sanction against Samsung for untimely document production to Apple in an unrelated suit, Apple Inc. v. Samsung Elecs. Co., No. 11-CV-01846 (N.D. Cal. Apr. 23, 2012) [ECF No. 880].

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  • 09
  • February
  • 2018

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Apple Hit with $300,000 Sanction for Missing Document Production Deadline

The Federal Trade Commission’s (“FTC”) case against Qualcomm Inc. — alleging Qualcomm unlawfully maintained a monopoly in baseband processors — is in the midst of a contentious discovery period that has each side scrambling to subpoena documents from various third parties. Apple Inc. is one such third party and is now in hot water for missing a document production deadline, presumably by 12 days. In response, the Northern District of California magistrate judge sent a message to other third parties by sanctioning Apple to the tune of $300,000 ($25,000 per day). Tech companies may view the sanctions as a blessing or a curse, depending on what end of a subpoena they find themselves on.

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  • 18
  • January
  • 2018

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Important News for Publicly Traded Tech Companies: The Supreme Court Will Decide the Constitutionality of the SEC’s ALJ Appointment Process

The U.S. Securities and Exchange Commission (“SEC”) is considered by many to be the nation’s top watchdog on Wall Street — sniffing out insider trading, market manipulation, and financial fraud. But the reality is that any publicly traded company is subject to SEC regulation and enforcement. The tech industry, with its ever-changing landscape, may become a hot bed of SEC enforcement activity, especially as companies continue to navigate uncharted waters such as crypto currencies and innovative “initial coin offering” funding methods.

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  • 12
  • January
  • 2018

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FTC Reaches First COPPA Settlement With Connected Toy Manufacturer

Earlier this week, the Federal Trade Commission announced that it had reached a settlement with VTech Electronics Limited, a Chinese manufacturer of electronic learning toys, and its North American subsidiary over charges that VTech violated the Children’s Online Privacy Protection Rule (“COPPA”), a rule designed to “strengthen kids’ privacy protections and give parents greater control over the personal information that websites and online services may collect from children under 13.” The FTC’s complaint centered on three web-based platforms VTech created and maintained to support its numerous connected toys. The platforms are the Learning Lodge Navigator, a platform akin to Apple’s App Store that allows users to download games and content to their VTech devices; Kid Connect, a children’s messaging app for smart phones; and Planet VTech, an online platform that allows online game play and messaging between users. Each of these products allowed for children to share personal information or required registration from parents, including information such as a child’s name and age. In some instances, VTech stated that the collected information would be encrypted, which it was not.

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AI is Here, Is Your Company Ready? (Hint: No)
First published by The National Law Journal

In this article, Danny Tobey discusses the importance of companies and their legal counsel preparing for the impact of AI. From questioning “What Happens to Tort Law” to discussing how AI could challenge professional judgment and create new privacy issues, the message is clear: Companies and their legal teams should be thinking about the changes AI will bring and how to manage associated risks as AI continues to evolve.

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  • 30
  • November
  • 2017

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IP Implementers Beware: Assistant Attorney General Delrahim Stakes Out New Balance in Intersection of Innovation and Antitrust Policy

In the few short weeks since his Senate confirmation in late September, new DOJ Antitrust Division boss Makan Delrahim has wasted no time staking out the Division’s position regarding certain key areas of antitrust enforcement and regulation. One of those areas is innovation policy and, specifically, the intersection of antitrust law and intellectual property in the context of standard-setting organizations (“SSOs”) and policies regarding the licensing of standard-essential patents (“SEPs”). Assistant Attorney General Delrahim’s comments on this subject are especially interesting given that he is the first registered patent lawyer to helm the DOJ Antitrust Division. In a speech at the University of Southern California’s Gould School of Law earlier this month, Assistant Attorney General Delrahim made clear his belief that the application of competition policy and enforcement has been too heavy-handed in the SSO and SEP arena and that the scale has been tipped for too long in favor of implementers.

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  • 21
  • November
  • 2017

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Suggestion and Innuendo Held Insufficient To Create Federal Jurisdiction in Qualcomm Patent Licensing Litigation

Qualcomm scored a victory in one of the many battles in its war with Apple and others surrounding licensing practices for baseband processors. In July, Apple — which is suing Qualcomm for allegedly overcharging for licenses to use its chip patents and withholding over a billion dollars in royalties — amended a pending complaint to add claims relating to an additional nine patents-in-suit. In August, Qualcomm moved to dismiss the additional claims relating to those nine patents on the grounds that the court lacked declaratory judgment jurisdiction to hear the claims. This month, the Southern District of California dismissed the additional claims, agreeing with Qualcomm that jurisdiction did not exist.

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  • 16
  • November
  • 2017

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Businesses Increasingly Subjected to Class Action Lawsuits Alleging Violations of Illinois Biometric Information Privacy Act

Biometrics — measurements of a person’s physical being, such as fingerprints, retinal or iris scans, or facial recognition — are being increasingly used in commercial settings. For example, many employers are using biometric timekeeping systems, allowing employees to clock in and out with a fingerprint.

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  • 14
  • November
  • 2017

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Trumping Up CFIUS? Proposed Legislation Expands CFIUS Reviews To Include a Wide Variety of Technology Transactions

Section 721 of the Defense Production Act of 1950 (the “DPA”) authorizes the President of the United States and the Committee on Foreign Investment in the United States (the “Committee” or “CFIUS”) to take such action to protect the national security with regard to any transaction in which a foreign person could obtain control of a U.S. business (a “Covered Transaction”). Practitioners generally believe that CFIUS has and wields broad and effective authority to protect the national security of the United States. However, Senator John Cornyn (R-Texas) and key figures within the Administration apparently do not share that view, as on November 8, 2017, Senator Cornyn and a bipartisan group of co-sponsors introduced the Foreign Investment Risk Review Modernization Act of 2017 to amend the DPA (the “Amendment”). If enacted, the Amendment will significantly expand the authority of CFIUS by broadening the types of transactions that CFIUS is able to review and lengthening the list of factors that CFIUS is to take into account when assessing the impact of a transaction on the national security of the United States.

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  • 26
  • October
  • 2017

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The FTC Issues Clarifications on the Children’s Online Privacy Protection Rule and Voice Recordings

On October 23, 2017, the Federal Trade Commission released a new policy enforcement statement regarding the Children’s Online Privacy Protection Rule (“COPPA”), a rule designed to “strengthen kids’ privacy protections and give parents greater control over the personal information that websites and online services may collect from children under 13.” The FTC’s new policy statement clarifies that the Commission will not require online providers and websites to acquire parental consent for the recording of a child’s voice for the purpose of replacing written words — such as for a command or a search done using a home voice control system. For example, the FTC will not enforce if a home voice control system records a child’s voice when they ask a question or give a request. This clarification is not without limit, as we explain here.

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Something for Everyone: Businesses Across All Industries Can Learn from FTC's "Stick with Security" Guidance on Data Security Best Practices

As a dynamic follow-up to its “Start with Security” guide, the Federal Trade Commission (“FTC”) debuted in July its “Stick with Security” initiative to provide continued guidance to businesses on sound security practices. The initiative has kicked off with a series of Friday blog posts, each emphasizing a security best practice drawn from the FTC’s closed investigations, its law enforcement actions, and questions it has received from businesses. In the first blog post, published July 21, 2017, the FTC revealed some of the themes that resulted in the FTC not taking law enforcement action.

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Contributors

Jason A. Levine

Jason A. Levine Partner

Jennifer C. Chen

Jennifer C. Chen Partner

Devika Kornbacher

Devika Kornbacher Partner

Danny Tobey

Danny Tobey Partner

William R. Vigdor

William R. Vigdor Partner

Marc A. Fuller

Marc A. Fuller Counsel

John Andren

John Andren Associate

Thomas W. Bohnett

Thomas W. Bohnett Associate

Megan Coker

Megan Coker Associate

Caroline Colpoys

Caroline Colpoys

Trey Hebert

Trey Hebert Associate

Keeney, Jeremy C.

Jeremy C. Keeney Associate

Howard Lithaw Lim Associate

Kimberly R. McCoy

Kimberly R. McCoy Senior Associate

Elizabeth Krabill McIntyre

Elizabeth Krabill McIntyre Senior Associate

David C. Smith

David C. Smith Senior Associate

Janice Ta

Janice Ta Senior Associate

Margaret D. Terwey

Margaret Dunlay Terwey Associate

Ryan B. Will

Ryan Will Associate

Siho (Scott) Yoo

Siho (Scott) Yoo Senior Associate