Category: University of Washington School of Law

University of Washington School of Law

Federal Court: Copyright Law Might Protect Stock Market Indices

NEW YORK–Yesterday the U.S. District Court for the Southern District of New York ruled that copyright law may protect indices that measure rates and performance in U.S. banking and mortgage markets.

BanxQuote compiled select banking, mortgage, and loan data and then licensed this information to allow Capitol One to measure performance of various U.S. markets. Capitol One then entered into an agreement with Costco Wholesale Corp. to provide a co-branded banking services with high yield savings accounts and CD accounts. BanxQuote alleged Capitol One breached the licensing agreement by redistributing the BanxQuote indices to Costco.

BanxQuote alleged copyright infringement, violation of the DMCA, misappropriation of the time-sensitive data, fraud, breach of contract, unfair competition, and unjust enrichment. Costco and Capitol One responded with a motion to dismiss all claims by arguing the raw data in BanxQuote’s indices were facts and therefore not protected by copyright law. BanxQuote argued it had a copyright in the final values and calculations, because such final values are not facts.

First the court pointed out the problems with obtaining copyright protection for financial market indices. Plaintiff could not seek copyright protection for raw data about interest rates because such data would fail to meet requisite originality requirements under copyright law. Second, the rates paid by investors on negotiable certificates of deposit and high yield savings were objective facts about the banking market, also lacking requisite elements of originality. Third, the information was not protectable even when compiling the data was expensive and time-consuming. Evidence that the indices were authoritative also undercut BankQuote’s case because it suggested the indices had achieved industry-wide acceptance.

The remaining question was whether BanxQuote had pled sufficient facts to allege originality in the method of converting this raw data into final values. BanxQuote argued its method for creating the indices involved complex proprietary algorithm. But the court emphasized the issue was originality, not difficulty of deriving the data. It was relevant that BanxQuate independently developed its methodology for deriving the indicies. But that independence was not sufficient to establish originality because purely objective methodologies could be developed independently.

The court also ruled copyright protection was not barred by the merger doctrine—which ensures that expression is not protected in those instances where there is only one or so few ways of expressing an idea that protection of the expression would effectively accord protection to the idea itself. It is plausible the BanxQuote Indices were sufficiently subjective that a wide range of potential final values would be possible. Thus, the court denied Costco’s motion to dismiss the copyright infringement claims.

The decision to deny Costco’s motion to dismiss copyright infringement claims, written by Judge Kenneth M. Karas, is BanxCorp d/b/a BanxQuote v. Costco Wholesale Corp., S.D.N.Y., No. 09-cv-1783 (July, 13, 2010).

University of Washington School of Law

FTC Settles First Privacy Case Against Social-Networking Site

WASHINGTON–The Federal Trade Commission today announced Twitter settled charges of deceiving consumers and putting privacy at risk by failing to safeguard personal information, an announcement that marks the agency’s first such case against a social networking service.

Twitter has operated since July 2006. The social networking website allows users to send brief 140-character updates to those who sign up to receive such messages. FTC charged Twitter with violating FTC Act §5 after intruders obtained unauthorized administrative control of the Twitter system to send unauthorized messages from accounts including one message, purportedly from Barack Obama, that offered more than 150,000 followers a chance to win $500 in free gasoline for filling out a survey. Unauthorized messages also were sent from eight other accounts, including Fox News.

FTC’s pursuit of Twitter signals the agency may be expanding the scope of its enforcement actions to include more than just identity theft and theft of personal financial data. The proposed consent order prohibits Twitter from misrepresenting the security, privacy, confidentiality, or integrity of any “nonpublic consumer information.” The proposed order would also require Twitter to establish and maintain a comprehensive information security program in writing.

The FTC would also require this security program “to contain administrative, technical, and physical safeguards appropriate to Twitter’s size and complexity, the nature and scope of its activities, and the sensitivity of the nonpublic consumer information.” This would include recordkeeping requirements to enable the commission to monitor compliance over the 20-year life of the order. The commission vote to accept the proposed consent order was 5-0.

The case is In re Twitter, Inc., FTC File No. 092 3093 (June 24, 2010).

University of Washington School of Law

States, Feds Probe Google’s Unauthorized Wi-Fi Tracking

HARTFORD–Thirty state attorneys general have launched an investigation into Google’s practices of gathering Wi-Fi “payload” data. “My office will lead a multistate investigation — expected to involve a significant number of states — into Google’s deeply disturbing invasion of personal privacy,” Connecticut Attorney General Richard Blumenthal said.

In May Google started getting sued around the country over its practice of collecting Wi-Fi data from potentially millions of people as the company photographed streets for Google maps.  In May, the House Energy Committee launched an inquiry into Google’s practice of gathering Wi-Fi data. The Electronic Privacy Foundation also wrote a letter to the FCC calling for a full investigation of the matter.

In June, the FCC said Google had clearly infringed on consumer privacy: “Whether intentional or not, collecting information sent over WiFi networks clearly infringes on consumer privacy.” On June 9 Google responded to the Congressional probe by stating that “being lawful and doing the right thing are two separate things.”

Blumenthal’s inquiry seeks records from Google including:

  • Copies of the company’s internal procedures and protocols for Street View cars and data collected by them;
  • What steps Google has taken to keep unauthorized code out of its products in the future;
  • Whether Google conducted internal or external audits, analysis or performance reviews of its Street View program and data collected;
  • How and when Google learned that its Street View cars were capturing data sent over unencrypted networks;
  • Why Google Street View cars recorded the signal strength and quality of personal and business wireless networks.
University of Washington School of Law

LTA-Journal Embraces Online Technology

SEATTLE–The newly-minted Washington Journal of Law, Technology & Arts has embraced web-2.0 in an effort to bring cutting-edge legal analysis to practicing attorneys. The Journal, which published its inaugural issue yesterday, is already connecting with bloggers, attorney-networking sites like JDSupra, and the Social Science Research Network (SSRN). This use of emerging communications media is consistent with the Journal’s new partnership with the Law, Technology & Arts group, an integrated academic unit at the University of Washington that delivers education, research, and outreach on the law’s role in promoting and regulating innovation in technology and arts.

University of Washington School of Law

University of Washington School of Law Launches New Technology and Arts Journal

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SEATTLE—Today the University of Washington School of Law published the inaugural issue of the new Washington Journal of Law, Technology & Arts, the nation’s first student-run electronic law journal focusing on technology, commerce, and artistic innovation.

The Journal replaces the Shidler Journal of Law, Commerce + Technology as part of a merger with the Law, Technology & Arts Group (LTA), a new interdisciplinary research unit at the law school. LTA was formed in 2009 to take a comprehensive approach to legal issues involved in artistic and technological innovation. LTA consolidated the J.D. and LL.M. programs, the former Shidler Center for Law, Commerce + Technology, and the Center for Advanced Research in Intellectual Property (CASRIP) into a single research team to cover the full scope of these areas.

The Washington Journal of Law, Technology & Arts will publish concise legal analysis aimed at practicing attorneys. The Journal will publish on a quarterly basis. This month’s issue includes six articles on topics including:

* Cloud Computing
* Arbitration Clauses in Wireless Telephone Service Contracts
* Cell Phone Text-Message Spam
* Liability for Posting Hyperlinks in Financial Disclosures
* Modifying Contract Through E-Mail
* Attorney-Client Ethical Issues Raised by Gmail

The Journal is the nation’s first technology and law journal that also publishes articles involving the arts. The new Journal will play a key role in furthering the University of Washington School of Law’s reputation as a center of innovation and path-breaking legal research.

The Journal accepts outside submissions from students, law professors, and practicing attorneys. For more information about the Washington Journal of Law, Technology & Arts please visit their new website at: http://www.law.washington.edu/WJLTA/.