July 2013

Massachusetts Federal Judge Applies the CFAA Narrowly in AMD v. Feldstein

July 31, 2013

This week’s internal report by MIT on its handling of the Aaron Swartz case may be an appropriate time to note that the sound and fury over the Computer Fraud and Abuse Act (the “CFAA”) is not limited to its use in criminal cases like the Swartz prosecution. The controversy extends to the use of this law in civil cases as well.* *The CFAA may be used as either a civil or a criminal law. However, the words of the statute must mean the same thing in each context. As the court noted in the case discussed in this post, “it is not possible to define authorization narrowly for some CFAA violations and broadly for others.” In my July 2nd post on AMD v. Feldstein I noted that the case had given rise to two note-worthy decisions.  The May 15, 2013 decision, discussed in that post, involved the legalities of the former-AMD employees’ alleged solicitation of current AMD employees in violation of  non-solicitation agreements. However, Massachusetts Federal District Court Judge Timothy Hillman issued a second opinion in the case on June 10, 2013, ruling on the defendant-employees’ motion to dismiss  claims of civil liability under the CFAA. Judge Hillman’s June 10th opinion reflects the struggle within the federal courts nationally over how to apply the CFAA.  The controversy focuses on the section of the law that imposes criminal and civil penalties on –…

Read the full article →

Client Advisory: New Law Applies Mass Sales and Use Tax to Software-Related Services

July 30, 2013

Click here for direct access to a pdf of this document. This advisory was updated on August 1, 2013, to reference a FAQ issued by DOR on July 31, 2013.

Read the full article →

Things are Settling Back Down in Yoknapatawpha County

July 22, 2013

“It was as though she realised for the first time that you – everyone – must, or anyway may have to, pay for your past; the past is something like a promissory note with a trick clause in it which, as long as nothing goes wrong, can be manumitted in an orderly manner, but which fate or luck or chance, can foreclose on you without warning.” Requiem for a Nun, William Faulkner __________________ For many years the Estate of James Joyce was infamous for its use of copyright law to restrict what many people considered fair uses of  Joyce’s works. Now that most of Joyce’s works are in the public domain, it seems that the owner of William Faulkner’s copyrights, Faulkner Literary Rights LLC (“Faulkner”, is stepping up to take its place. But in the “Midnight in Paris” case you’ve gotta wonder: what the heck was Faulkner thinking? Even many people who have never read a word of William Faulkner will recognize these famous lines: “the past is never dead. It’s not even past.” These words are spoken by the fictional County attorney Gavin Stevens in Faulkner’s novel Requiem of a Nun. The production of a Hollywood movie oftenrequires the producer to obtain many copyright permissions. However, when Woody Alan’s Midnight in Paris was released in 2011, one of the characters paraphrased these lines from Faulkner. When the protagonist, Gil (played by Owen Wilson) accuses his wife, Inez (played by…

Read the full article →

Why Did Broadcasters Use a Local Affiliate to Challenge Aereo in Boston?

July 12, 2013

Why did a Boston affiliate of ABC file suit a major copyright infringement action against Aereo in Boston, rather than ABC itself? Or another major broadcaster, such as CBS, NBC or Fox? On May 15th, in a post titled “Does Second Circuit Decision Determine Copyright Legality of Aereo “Antenna-Farm” System Nationwide?”, I discussed the fact that Aereo had filed a preemptive suit in the Southern District of New York. The suit asked the federal district court to enjoin the major broadcasters (ABC, NBC, CBS, Fox) from filing what Aereo called “duplicative-follow-on suits” or “do-overs.” Aereo was attempting to prevent the broadcasters from following it around the country and filing a new copyright infringement lawsuit in each circuit in which Aereo launched its service. Aereo argued that the opinion of the Second Circuit Court of Appeals in WNET v. Aereo, holding that Aereo’s retransmission of over-the-air broadcasts do not violate broadcaster copyrights, was binding nationwide on the plaintiffs in that case. However, as I pointed out in May, even if that legal argument were to be successful, at best it would only be binding on the plaintiffs in that case. For example, while ABC was a plaintiff in New York and could, conceivably, be bound nationwide by the Second Circuit decision, Aereo could not stop a non–party, such as a local affiliate, from bringing suit in another district. In fact, that…

Read the full article →

U.S. v. Apple: Where Were the Lawyers?

July 12, 2013

All antitrust cases are tried twice – once before the appeal, and once after the appeal. anon __________________________ The district court decision in U.S. v. Apple presents about as clear a case of price fixing as one can imagine.  Apple participated in a conspiracy with five of the “Big Six” publishers (an incestuous group based entirely in Manhattan) to raise prices for e-books above the $9.99 price charged by Amazon. This was not subtle stuff—it was conduct worthy of the classic 19th century price fixers that led to enactment of the Sherman Antitrust Act in 1890. Secret meetings among competitors to figure out a way to stop the hated price-cutter (Amazon), a White Knight that facilitates the conspiracy to foil the price-cutter (Apple), and an industry with its feet deeply planted in tradition (book publishing) under assault from a new technology (e-book publishing). The only thing that makes this price-fixing conspiracy different from those in the 19th century is the massive email trail that the parties left, making the government’s courtroom proof that much easier. At least the classic price-fixers had the sense to keep up a pretense of secrecy, and not leave a trail of writings that would be their undoing in court. Despite loud criticism of the district court decision from some quarters (see, for example, Guilty of Competition, WSJ, subsc.), it’s difficult to imagine that this decision…

Read the full article →

Oh, Did I Forget to Tell You That Was Confidential? Better Overkill Than Underkill

July 9, 2013

A lot of non-disclosure agreements (NDAs) provide that if one party gives the other a document and expects it to be treated as confidential, the document must be marked “confidential.”  Or, if the confidential information is communicated orally, the party that wants to protect it must notify the receiving party in writing within a specified number of days. (“Hey, the stuff we told at our meeting on Monday relating to our fantastic new product idea? That’s all confidential under our NDA”). This was the situation in Convolve, Inc. v. Compaq Computer, decided by the Court of Appeals for the Federal Circuit on July 1, 2013.  The NDA at issue in that case provided that to trigger either party’s confidentiality obligations “the disclosed information must be: (1) marked as confidential at the time of disclosure; or (2) unmarked, but treated as confidential at the time of disclosure, and later designated confidential in a written memorandum summarizing and identifying the confidential information.” Big mistake. People sign agreements like this and a year later they have completely forgotten that they need to follow them. Or, employees come and go, the NDA is buried away someplace, and new employees are blithely unaware that they need to follow the terms of the NDA. That’s what happened to Convolve. It had trade secrets relating to hard disk drive technology. It disclosed the secrets at a meeting, but it failed to…

Read the full article →

Supreme Court Decisions ChangeLegal Landscape for Employers

July 7, 2013

Note: If you are unable to view this document on your computer, please click here.

Read the full article →

Nudge, Nudge, Wink, Wink – Are You “Soliciting” in Violation of an Employee Non-Solicitation Agreement?

July 2, 2013

Two note-worthy decisions have emerged from AMD v. Feldstein, a trade secret case pending in federal district court in Massachusetts. At the heart of the case is the conduct of several AMD employees who left to work for Nvidia Corporation. Inexplicably, they copied and took with them huge amounts of AMD data, actions which earned them a preliminary injunction in the first of two opinions, dated May 15, 2013. However, in the May 15th decision Massachusetts federal district court judge Timothy Hillman also addressed the thorny issue of  what constitutes a “solicitation” in violation of a non-solicitation agreement, and specifically solicitation of employees (as opposed to customers) of the former employer. The employee non-solicitation provisions in this case were fairly standard. For example, Feldstein’s provided that: during [Feldstein’s] employment with [AMD] and for a period of one year following the termination of [Feldstein’s] employment, whether voluntary or involuntary, [Feldstein would] not hire or attempt to hire an employee of [AMD], or directly or indirectly solicit, induce or encourage an employee of [AMD] to leave his or her employ to work for another employer, without first getting the written consent of an Officer of [AMD]. However, just what kinds of behavior violate such a provision, and which do not? Clearly, expressly asking or encouraging an AMD employee to leave AMD would do so (“you should leave AMD and come to work for Nvidia with me – you…

Read the full article →