Jury finds in Apple’s favor on most claims and awards $1.05 billion in damages

The jury in the most-anticipated patent trial I can remember, and certainly in the mobile phone and tablet industry, has reached a verdict surprisingly soon – after less than three full days of deliberation. And while Apple didn’t win on all claims, it comes out the victor in this trial…pending appeal, of course.

It’s hard to summarize such a complex trial involving so many patents, devices (including the Galaxy S, S II, Epic 4G, Captivate, Vibrant, Infuse 4G, Droid Charge, and the Galaxy Tab 10.1), and three different Samsung corporate entities, but I’ll give it my best shot, with some help from The Verge (and more help from The Verge here):

Apple’s design patents and the jury’s finding:

The ’677 Patent and the ’087 Patent both describe an iPhone with an uncluttered front display made of glass, rounded corners, an edge border, a home button, and a speaker slot. The jury found that almost all of Samsung’s smartphones in question infringed both patents.

The ’305 Patent describes the iOS user interface: a grid of icons with a dock for icons at the bottom of the display. The jury found that most of Samsung’s devices infringed the ’305 Patent.

The ’889 Patent relates to the iPad and describes a rectangular electronic device with a thin bezel, outer edge border, rounded corners, and rounded edges where the back casing meets the front display. This was a positive for Samsung, as the jury found that the Galaxy Tab 10.1 line of tablets did not infringe the ’889 Patent.

Apple’s utility patent claims and the jury’s findings:

The ’381 Patent, commonly referred to as the “scrollback” or “rubberbanding” patent, describes how a background image (a textured grey image in iOS) is displayed when a user scrolls beyond the edge of a page, and how the page bounces back afterwards so that the edge of the page aligns with the edge of the display. The jury found that all of Samsung’s devices infringed the ’381 Patent.

The ’915 Patent, commonly referred to as the pinch-to-zoom patent, describes how a user can use to fingers, either moving closer together or further apart, to zoom in on a display. The jury found that most of Samsung’s devices infringe the ’915 patent.

The ’163 Patent, known as the tap-to-zoom patent, describes how a user tapping a point on the display will result in the display zooming in and centering around the tapped point. The jury found that many Samsung devices infringe the ’163 Patent.

Apple’s trade dress claims and the jury’s findings:

Trade dress falls under the trademark umbrella and refers to visual elements of a product or its packaging that denote its source of manufacture to consumers. The classic example of trade dress is the shape of a coke bottle, but other examples can include the circular Corvette tail lights and the Tiffany blue box. When a third-party “blurs” the consumer association of the mark with the producer, then that third-party is said to have diluted the trademark. The owner of a trademark need not register the mark to have legal protection (though there are benefits to registering), and in this case the documentation regarding Apple’s trade dress claims is limited to one registration, and that one registration applies to the iPhone 3G/3GS. The jury found that Samsung diluted the trade dress relating only to the iPhone 3G/3GS, and only with regard to certain devices.

Samsung’s patent claims and the jury’s findings:

Samsung alleged that Apple infringed two of its standard-essential patents – ’941 and ’516 – that relate to the transmission of data over a 3G network. The jury found that Apple did not infringe either patent.

Samsung also alleged that Apple infringed three of its utility patents: the ’460 Patent relating to the transmission of emails with or without embedded images from a camera phone, the ’893 Patent relating to the method used when switching between the camera and gallery display, and the ’711 Patent relating to displaying music playing in the background while multi-tasking on a device. The jury found that Apple did not infringe any of Samsung’s utility patents.

Damages award:

Apple was awarded just under $1.05 billion in damages. Samsung was awarded no damages.

Apple’s statement:

We are grateful to the jury for their service and for investing the time to listen to our story and we were thrilled to be able to finally tell it. The mountain of evidence presented during the trail showed that Samsung’s copying went far deeper than even we knew. The lawsuits between Apple and Samsung were about much more than patents or money. They were about values. At Apple, we value originality and innovation and pour our lives into making the best products on earth. We make these products to delight our customers, not for our competitors to flagrantly copy. We applaud the court for finding Samsung’s behavior willful and for sending a loud and clear message that stealing isn’t right.

Samsung’s statement:

Today’s verdict should not be viewed as a win for Apple, but as a loss for the American consumer. It will lead to fewer choices, less innovation, and potentially higher prices. It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies. Consumers have the right to choices, and they know what they are buying when they purchase Samsung products. This is not the final word in this case or in battles being waged in courts and tribunals around the world, some of which have already rejected many of Apple’s claims. Samsung will continue to innovate and offer choices for the consumer.

My thoughts on the verdict:

As I was following the jury verdict on Twitter and various liveblogs, I started to get a sinking feeling in my stomach as it became increasingly clear that the verdict was going to really be in Apple’s favor. I don’t really have a dog in the fight here – I like Apple’s products a lot, and I also like Android devices, though for full disclosure at the moment I am more into the latter – but more than anything, I love reading about new technology, and especially in the smartphone and tablet arena where technology is developing lightning-fast. While Apple has paved the way in some respects, all technology products – including those made by Apple – have benefited by the fierce competition we see in this growing area. Perhaps if Android-powered tablets didn’t finally begin to become viable options about a year ago, we wouldn’t see an iPad with an incredible 2048×1536 display resolution. Maybe if Android-powered devices didn’t adopt 4G-LTE early on, even at the expense of decent battery life, then the new iPhone and the current iPad would still be sitting back on 3G. Ditto for the next iPhone’s larger display size, as the larger HD displays found on some Android phones have really made the 3.5″ iPhone screen look outdated. The same can be said for iMessage, which came as a result of BlackBerry Messenger and is clearly better than SMS messaging, as well as for pull-down notifications. I’m not saying this to claim Android and BlackBerry is to thank for all innovation. Apple certainly deserves credit for taking us away from physical keyboards and moving towards touchscreens, incorporating media into our smartphones, and basically forcing so many mainstream companies to adopt the concept of an “app,” among other developments.

My point is that all this competition is good for innovation because it pushes the competition to improve their devices in order to stay competitive. Maybe Samsung came too close to iPhone elements in some of its earlier devices – the case for willful copying was pretty strong and those Samsung documents describing how Samsung phones should be more like iPhones didn’t gain it any sympathy – but to uphold the validity of patents describing a device with rounded corners and a flat, all-glass front display (the ’677 and ’087 Patents), a grid layout of apps and a dock at the bottom of the display (the ’305 Patent), or pinch- and tap-to-zoom functionality (the ’915 and ’163 Patents), both of which are integral to using touchscreen displays, seems to be asking for the innovation we currently see to slow down because of the lengths that competitors will now have to go to in order to avoid claims of infringement. In short, my criticism here is not with Samsung being punished for what seems like intentional copying; my issue is that the validation of patents that are so basic and are the result of the natural progression of an industry rather than true invention will really hurt future invention and innovation in the industry.

Looking forward:

I think it is a safe bet that Samsung will appeal this verdict. Before an appeal, there will be motions by Apple for triple damages based on Samsung’s willful infringement, injunctions banning sales of infringing devices, and for a judgement notwithstanding the jury verdict to set aside the finding that the Galaxy Tab 10.1 does not infringe an iPad design patent. There will also be motions by Samsung to toss out all jury verdicts that went against Samsung and to issue an order finding invalidity and/or non-infringement or a new trial. The next hearing in the case is scheduled for September 20 December 6.

I also think that this is not sounding the death knell for Android – newer versions of Android stray further from the look and feel of iOS, and newer devices look less like the iPhone. While arguments could be made against other Android devices, it seems to me that Samsung and its TouchWiz user interface was most blatant in trying to look and function like the iPhone. For that reason, I think there is still a bright future for Android. That being said, the validation of the tap-to-zoom and pinch-to-zoom patents does concern me since those are crucial elements to using a touchscreen device. [UPDATE: Apparently the pinch-to-zoom patent is very narrow and there are many work-arounds.]

For further reading, check out:
The New York Times
The Washington Post
CNET
Engadget
The Verge
FOSS Patents
AllThingsD

Apple settles IPAD trademark dispute with Proview

In a story that I wrote extensively about on February 15, February 23, and touched on on May 12, Apple has settled the trademark infringement action brought by Proview Technology regarding the IPAD trademark in a court in Shenzhen, China. To refresh, here’s a summary of the facts, as adapted from my previous entries:

Proview made an IPAD computer in 1998, and registered the trademark for the IPAD in various countries thereafter, including in mainland China in 2001. In 2009, Proview’s IPAD was no longer in production and a company operating on behalf of Apple named IP Application Development Limited (abbreviated IPADL in documents) purchased rights to the IPAD mark in 10 countries, including mainland China, for $55,000 from Proview Electronics, a Taiwanese affiliate or subsidiary (the exact relationship is still unclear to me) of China-based Proview Technology. According to emails, the agreement was negotiated with Proview Technology’s legal department, but the agreement itself was signed by Proview Electronics. After the success of Apple’s iPad, Proview Technology began claiming that it, and not Proview Electronics, has the rights to the IPAD mark in mainland China and that the agreement with Proview Electronics did not transfer those rights. Proview Technology also argued that it was misled in negotiations by IPADL and did not know the mark would be sold to Apple for use in a tablet computer (knowledge that presumably would have driven the price up).

A Hong Kong court sided with Apple but a court in Proview Technology’s hometown of Shenzhen sided with Proview, and Apple’s intermediate appeal was rejected last winter. Apple appealed the case further. Proview Technology sought to have iPad sales blocked in Shanghai, but a court there denied its request until the Shenzhen matter was resolved. There were, however, reports that authorities in two Chinese cities were pulling iPads off shelves in stores during this time. Proview Technology, which was then either bankrupt or on the brink of bankruptcy, was demanding anywhere from $1.5 to $2 billion from Apple for use of the IPAD mark in mainland China, the largest iPad market behind the US, or else it will try to halt sales.

Proview Technology also sued Apple in a state court in California, but that lawsuit was dismissed by the judge in California in May to allow the parties to settle the dispute in China.

According to court documents, Apple has agreed to pay Proview Technology $60 million to settle the case and continue using the IPAD trademark in mainland China. The funds will be transferred by Apple to a court bank account, and then will be used to pay Proview’s creditors.

While $60 million is a lot of money, considering Proview’s outrageous demands and Apple’s $39.2 billion in revenue and $11.6 billion in profits in the second fiscal quarter of 2012, I think this is a pretty good outcome for Apple. Proview’s lawyer described the settlement as “OK,” which makes me think it was unhappy with the amount. It is frustrating that Proview got any benefit from dealings that could be considered shady – selling rights to a mark it may have known it did not own, but at the same time Apple loses a little sympathy by using a company with a name that was [intentionally?] nearly identical to the mark that it was seeking to acquire. So I guess Proview’s creditors got the money they need, Apple paid what amounts to chump change to it and learned a lesson on due diligence, and the companies can go back to liquidation and record profits, respectively.

Technology Week in Review, 6/29/12: Apple wins two injunctions against Samsung, RIM delays BB 10, and Google announces Jelly Bean and Nexus 7 & Q

This past week was pretty full of technology news, and here’s a quick rundown of some interesting items…

Apple wins preliminary injunctions against Samsung’s Galaxy Tab 10.1 and Galaxy Nexus
At the close of business on Tuesday, Judge Lucy Koh of The United States District Court for the Northern District of California granted a preliminary injunction banning sales of the Samsung Galaxy Tab 10.1. The injunction was based on Samsung’s alleged infringement of an Apple design patent related to the shape of the iPad – rectangular with rounded corners, curved bottom, and the edge of the display equidistant from the edge of the device on all sides – and the very similar design elements found in the Galaxy Tab 10.1. This injunction really deals with a device that is outdated and has been replaced by the Galaxy Tab 2 10.1

As I was typing this entry, news broke that the same judge in the same court granted Apple’s request for a preliminary injunction against the Samaung Galaxy Nexus. That hits close to home here at TMF HQ, considering I have and love the Galaxy Nexus. Of the four patents in question with regard to the Galaxy Nexus injuntion, Judge Koh only found that one of the alleged infringements – “a universal interface for the retrieval of information” (dubbed the “Siri patent”) – is capable of causing the irreparable harm necessary to warrant a preliminary injunction. The “Siri patent” as I understand it involves a user being able to perform a variety of tasks using one method of data input – Siri. Examples include searching the internet via the browser, locating a destination on a map, pulling up a contact’s phone number in the contacts directory, and adding a meeting to the calendar. This is done through Siri on iOS, but on my Galaxy Nexus has similar functionality using the Google search box with optional voice input found on each homescreen. I am not sure if the method of performing these tasks is the same from a coding perspective, but I can see how the Google search box qualifies as “a universal interface for the retrieval of information.”

This injunction will hurt Samsung more than the Galaxy Tab 10.1 injunction because the Galaxy Nexus is still a flagship device, even though the Galaxy S III will likely be the choice for customers going forward now. I would also think that some method of a unified search will be incorporated into devices in the future, so hopefully Samsung and Google can find another way of doing it that will not infringe, if the method used in the Galaxy Nexus does in fact infringe. And I say “if” because a preliminary injunction is not a final determination on the merits; obviously, though, a ban on a device in such a fast-moving industry is very damaging even if in the end it is lifted, which is why Apple has to post a bond of nearly $96 million for the injunction to go into effect.

Not to be left out, there also may be some patent issues with the upcoming Nexus 7 tablet too. From a consumer’s perspective, it is difficult to watch all these patent battles when I know that I am funding them, but I guess this is inevitable with such valuable patents in a fiercely competitive market.

Things keep going downhill for RIM
RIM, the maker of BlackBerry, announced that it was delaying the highly-anticipated BlackBerry 10 operating system from this fall to 2013. RIM also announced decreased revenue for the first quarter of 2012, but for a company whose time is running out as the competition keeps upping the ante, the delay of BlackBerry 10′s release seems much more troubling.

Google was busy
Google held its annual I/O Developer’s Conference this past week. Check out my post from Wednesday for more detail on some of the big news that came out at I/O 2012. At the event, Google unveiled Android Jelly Bean, which is aimed at having a smoother user experience and also incorporates improved voice recognition and a personal organizer of sorts dubbed Google Note, as well as the Nexus 7 tablet and the Nexus Q media streaming device. The Nexus 7 and Jelly Bean are receiving very good reviews, including by CNET, The Verge, BGR, and Engadget. However, CNET and The Verge gave the Nexus Q mediocre reviews based largely on the device being limited to displaying Google content and the high $299 price tag. Jelly Bean, Nexus 7, and Nexus Q will be available in mid-July, but the latter devices are available now for pre-order in the Google Play Store.

Google also announced a revamped Google+ app designed for tablets and the implementation of Google+ Events, which syncs with Google Calendar and also allows guests to automatically upload photos to the Event page and organizes uploaded photos in chronological order.

In light of the shift towards media consumption with the Nexus 7 and Nexus Q, Google also announced that it will begin offering magazines, television shows, and movie purchases in the Google Play Store.

A few more tidbits from Google this week include an updated Google Earth for Android app that includes 3D imagery for 14 cities, Google Chrome for Android leaving beta and becoming a stable release for devices running Ice Cream Sandwich, and Google Chrome coming to iOS and becoming the most popular free app in the App Store in one day, despite no promotion by Apple. Unfortunately, Apple only allows Safari to be the default browser, but Chrome still works great on my iPad. It’ll be interesting to see how Apple will handle some very popular competing apps in Chrome and Google Maps (after iOS 6 replaces Google Maps with Apple’s own mapping software). I think that if an iOS user prefers Chrome or Google Maps to Safari or Apple’s own Maps, then the user should be able to make those apps the defaults, but I wouldn’t be surprised to see Apple restrict that capability.

Again, for more on these Google stories, check out my post from Wednesday.

Finally, Google co-founder Sergey Brin made an appearance and did a pretty cool demonstration of Google Project Glass using Google+ Hangouts:

Technology Week in Review – May 31, 2012

I’m a day early on the Week in Review because I am leaving Friday morning for a weekend trip, so forgive me if a big story breaks Friday that I miss.

RIM is in trouble:
RIM has been on a downward decline for a long time, with losing market share in the smartphone world, an unsuccessful tablet, and having a long-hyped redesigned QNX-based OS that has not really materialized yet. All this resulted in Co-CEOs Jim Ballsillie and Mike Lazaridis stepping down in January. Well, the outlook for RIM became even more gloomy this week when the company announced that it had hired JP Morgan and RBC Capital to “review” its options with the announcement of disappointing Q1 revenue. The speculation is that this means RIM is looking to sell its company and/or its assets (patents, trademarks, etc.). Sadly, RIM also announced “significant” job cuts. I am still hoping that RIM comes out of this, and I have a soft spot for the company as a former satisfied BlackBerry user, but it isn’t looking good. They were once a true innovator and powerhouse, but when the smartphone market shifted from corporate-types just wanting email access to consumers wanting email, internet, multimedia, and apps, RIM was not quick enough to adjust their product offerings. This left an opening for Android to enter and the iPhone to gain popularity, and RIM never really recovered.

Samsung and Google announce the Chromebook and the first-ever Chrombox:
Google has been making its way into the OS market, and these two devices are the next step for them, so they say. The Chromebook is a notebook computer and the Chromebox is a compact desktop computer. Both run Chrome OS, which emphasizes speed and uses an app-centric user-interface. Google also touts its record of software updates in an effort to get people to make the plunge into a Chrome-powered computer without fear that it will be outdated in the near future. As a Windows user, that is something I can appreciate. For more info, check out the product announcement on the Google Blog.

iPhone 5 images leaked:
9to5Mac obtained photos of the metal casing of the next-generation iPhone, which is presumed to be named iPhone 5. Of note to me is that the images and sources indicate that the iPhone 5 will be the same width as the iPhone 4/4S but will be taller. While the more square 4:3 display on iPhones and iPads is somewhat outdated and the widescreen 16:9 format is now standard for HD content, one of the iPhone’s strengths is its AppStore, and all those apps are 4:3. I’m not sure how Apple would have apps be compatible with both the widescreen iPhone 5 and the previous 4:3 iPhones without zooming or having black bars on the display, but I’m sure Apple has thought it through.

Apple CEO Tim Cook increased Apple TV speculation:
There has been a lot of speculation about a Siri-enabled Apple HDTV set being in the works. Tim Cook added fuel to the fire this week by saying:

I think most people, maybe not all, but many people would say this is an area in their life they’re not really pleased with. You know, they might not be pleased with many things about it. The whole TV experience. So, it’s an interesting area, so we’ll have to see what we do.

Also adding to the rumors is a report that the Foxconn electronics manufacturing facility has begun taking orders for an Apple HDTV set. Rumors are also swirling that Apple will demo a new OS for its current Apple TV set top box in two weeks – an OS that may also be found in an Apple HDTV.

Google+ created a Local tab that uses Zagat and friends’ ratings:
Google announced a Local tab on its Search, Maps and Google+ that now shows Zagat ratings and also emphasizes ratings and reviews from friends and contacts in a user’s Google+ Circles. I find myself researching pretty much every place I go, and I think it will be really nice to have the professional Zagat ratings to complement the vast quantity of consumer reviews. I think the Circles capability has potential – I often do ask friends if they’ve been to a bar or restaurant and what they thought of it – but until more of my friends start using Google+ it is a feature that will unfortunately be lost on me.

A few legal stories:
First, the Recording Industry Association of America took exception to some of Google’s policies with respect to preventing access to infringing material online. In particular, the RIAA objected to Google imposing “artificial limits on the number of queries that can be made by a copyright owner to identify infringements,” Google limiting the number of “links [the RIAA] can ask [Google] to remove per day,” Google not doing enough on its own to identify and remove infringing content, and Google not doing enough to keep removed content from reappearing.

In other news, a judge ruled that No Doubt’s lawsuit against Activision and its “Band Hero” game will be heard by a jury. In this case, No Doubt apparently licensed their members’ likenesses and songs for use in the game “Band Hero.” No Doubt was unaware that Activision would allow players to “unlock” game characters and use them to sing other artists’ songs – in this case, songs that include the Rolling Stones’ “Honky Tonk Woman.” The suit claims that the unlocking capability “results in an unauthorized performance by the Gwen Stefani avatar in a male voice boasting about having sex with prostitutes.”

Finally, in what is now an amusing statement in light of Sean Parker’s involvement with Napster, Sean Parker and Daniel Elk, now with Spotify, said that they are competing with piracy and not with Apple. Talk about things coming full circle for him.

Facebook investigated and sued after its disappointing IPO

Facebook has had an unfortunate run the past six days, notwithstanding CEO Mark Zuckerberg tying the knot with his long-time girlfriend over the weekend. On Friday, its IPO was disappointing, with only a 0.61% gain on day one. Then stocks continued to fall significantly, though they did go up in value slightly today. After four days of trading, shares sit at $32, $6 below the IPO price, and $10 below the $42 that many people reportedly paid.

Now there are allegations that Morgan Stanley and other underwriters set the IPO price too high in light of negative financial issues facing Facebook, including the unprofitable shift to mobile platforms, and that the underwriters only disclosed certain negative financial information to select investors rather than make the information public as required by law. According to The New York Times, the Massachusetts Secretary of State, the Financial Industry Regulatory Authority, and the Securities and Exchange Commission are all looking into the matter. Shareholders have also sued Facebook and several banks over the alleged withholding of information. If the banks and/or Facebook really did selectively disclose information, then we are just seeing the beginning here.

Personally, I did not invest any money in Facebook, mainly because my money is invested in owed to Sallie Mae. But if I were to invest, I would be cautious because I really do not see how Facebook is going to become profitable on the level of Google or Amazon. Facebook’s value is that it has the capability to reach so many people with advertising. But the reason why people use Facebook is because they enjoy it. If Facebook were to significantly increase their advertising, and people stopped enjoying the site as much and instead turned to other social networking sites, then Facebook would lose some of its value. So Facebook has to walk a fine line between trying to be profitable while pleasing and retaining its user base, which historically is resistant to change. Honestly, I don’t know whether Facebook can successfully monetize its system while maintaining its position as THE social network. Only time will tell.

Technology Week In Review – May 19, 2012

Last week was a pretty big week in technology news…

The biggest story was Facebook’s IPO, which ended up being somewhat disappointing for investors considering all the hype. After the first day of trading, shares closed up just 0.61%. The New York Times has some good graphs and other visual aids comparing Facebook’s IPO with that of other tech companies, and The Verge has an interesting article with good quotes on the history of Facebook.

More legal battles involving Apple: HTC One X and Evo 4G LTE are delayed indefinitely by US Customs while it further investigates Apple’s claims of patent infringement. The patent in question relates to making certain numbers in text (most commonly telephone numbers) become active links – akin to hyperlinks – that bring up options, such as to call that number or add it to an address book. The US International Trade Commission ordered an import ban on all Motorola devices that infringe on an Apple patent dealing with “generating meeting requests and group scheduling from a mobile device.” Finally, Apple is seeking a preliminary injunction against the Samsung Galaxy Tab 10.1 in the Northern District of California.

Amazon is said to be prepping a Kindle Fire with a 10.1-inch display rather than the rumored 8.9 inches for release in the third quarter.

Verizon clarified their plans to eliminate unlimited data, and said that it will be pushing customers to tiered data plans when they renew their agreements.

Motorola plans to update the Motorola Droid RAZR/RAZR MAXX and Bionic to Ice Cream Sandwich in the third quarter of this year.

The Samsung Galaxy S III is doing very well in pre-orders.

Apple is rumored to be working on an iPad Mini with a 7-inch display for a fall release. Apple is also said to be increasing the screen size of its next generation iPhone to 4″. I say: good, but still should be bigger.

Google is said to be planning on releasing five different Nexus devices by year’s end. I like Nexus devices and am on board with the concept, but it seems like so many different devices defeats the purpose of a Nexus device, which is to show how Google intends for their Android OS to function.

Finally, here are two good articles comparing cloud storage services and internet streaming devices, respectfully.

Facebook’s Instagram Acquisition Shows Importance Of Mobile Apps

Facebook made some big news last week when it acquired Instagram, a mobile app that lets users add effects to photos and share them with friends. The deal cost Facebook $1 billion.

The New York Times has an interesting article describing how this deal is an example of the growing importance of mobile apps. According to the article, in years past technology start-ups would create a website first and then look towards mobile apps to let users enjoy what their website has to offer while on the move. Now start-ups, like Instagram, can first create a mobile app and either forego a website altogether or create a website to help direct users to the app. We’ve seen this with Words With Friends, Angry Birds, Draw Something, and foursquare, to name a few.

According to the article, investors are increasing their support for such companies:

Venture capitalists are eager to get in on the mobile trend. According to the research firm CB Insights, mobile apps and companies attracted 10 percent of the total investment dollars from American venture capital firms in last year’s fourth quarter, and 12 percent of deals were mobile-related, up from 7 or 8 percent in previous quarters.

Ben Lerer, manager of the venture capital firm Lerer Ventures, said he preferred to back companies that were building services for mobile first and the Web second, because “businesses that are thinking that way are planning for the future.”

Statistics also back up the increasing importance of mobile apps. According to a study by Chitika, mobile web traffic accounted for 10.55% of “all web traffic” (it is unclear if this study is worldwide or limited geographically) during the last week of February 2012, a 34.44% increase over levels measured in July 2011. Cnet reported similar figures, finding that mobile devices accounted for 6.8% of all web traffic in the US during the month of August 2011.

The bottom line of all this is that mobile apps can develop a really large user base, and this can be done with or without a computer/browser presence. As mobile devices get even more popular and sophisticated – better and larger screens, faster processors, faster data speeds – I think we’ll see an even greater percentage of web traffic coming from them, especially with leisure-type activities like social networking and reading the news.

Amendment prohibiting employers from requiring Facebook passwords is rejected

The Issue:
There are growing reports of employers requiring prospective employees to provide usernames and passwords (aka access) to their Facebook and other social networking accounts during the hiring process.

Facebook’s stance:
Facebook’s newly-appointed Chief Privacy Officer, Policy, released a statement on March 23 speaking out against this practice, and outlined the following points:
1. It is a violation of Facebook’s Statement of Rights and Responsibilities to share passwords. The reason for this is two-fold: a user shouldn’t be forced to share such information, and a user’s friends shouldn’t be forced to [unknowingly] share personal information, photographs, etc., with a third-party to whom the friends did not grant access.
2. This practice exposes employers to claims of discrimination if their access to Facebook gives them information that they otherwise could not ask for or base hiring decisions on, such as age, color, or religion.
3. This practice also exposes employers to liability if they fail to properly handle the usernames and passwords in accordance with privacy laws.
4. Facebook will take action by engaging policymakers, initiating legal actions, and/or shutting down access to abusive applications.

Senators request government intervention:
On March 25, Senators Charles E. Schumer (D-NY) and Richard Blumenthal (D-CT) requested that Attorney General Eric H. Holder investigate whether the practice of asking for passwords violates federal law. The two laws that may be applicable are the Stored Communications Act, which prohibits intentional and unauthorized access to information in electronic storage, and the Computer Fraud and Abuse Act, which prohibits intentional and unauthorized access to a “protected computer” to obtain information. “Protected computer” includes a computer that is used in interstate commerce or communication, and I think that Facebook servers would fall into this category given the fact that Facebook has users basically everywhere, and certainly in all states.

The Senators said that they are writing a bill to cover this issue if it is not covered by the above statutes.

House votes down amendment:
On March 28, the House voted down an amendment proposed by Representative Ed Perlmutter (D-CO) to an FCC regulation aimed at stopping this practice. During the debate, Representative Greg Walden (R-OR), who voted against the amendment, seemed in favor of prohibiting this practice, but felt that the amendment did not accomplish such a goal. The amendment was voted down 236-184.

My thoughts:
I think this practice should not be allowed, and requiring passwords is really the modern-day equivalent of asking to look through mail and photo albums and listen in on phone calls. My Facebook account is pretty boring and there really isn’t anything there that would make me undesirable to an employer, but that isn’t the point; I am entitled to privacy, and employers should not be able to read conversations I’ve had with my wife (we use Facebook Messenger on our phones) or with friends, or photos from birthday parties, or anything else, unless I say so.

The problem is that as a prospective employee in a bad economy, it is very hard to set and enforce that boundary. An interview is as much about getting the interviewer to like you as it is about showing off your experience, and I’d think refusing to give your Facebook password would certainly not make the interviewer like you.

And that point brings up the question of what constitutes “authorized” access to Facebook. If a prospective employee feels like he or she can either give the password or not get the job, is giving the password really giving “authorization”? Let’s say someone holding a gun approached me outside my car and told me to give him my keys, and I gave him the keys. Did I just give him authorized access to my car, in the same way that I would give a friend authorized access if I handed him the keys so he could borrow my car? I don’t think so. Clearly there is a difference between getting shot and not getting a job, but I think it is a valid point, and the reason why there is a good argument that this activity may be prohibited by current statutes – forcing a prospective employee to give access to his or her Facebook account may make the resulting access “unauthorized.”

I think while this practice may be prohibited by the Stored Communications Act and/or the Computer Fraud and Abuse Act, in the end, I think we’ll see new legislation explicitly prohibiting this practice.

The FCC’s stance on cell phone jammers and government shutdown of cell phone service

I came across two tangentially related stories yesterday, both of which involve cell phone service and the FCC…

Cell phone jammers:
Forbes ran an article asking whether cell phone jammers are “the next big thing?” Cell phone jammers are devices that emit a frequency that disrupts cell phone service, and according to the article, people are using them on buses and trains in order to silence their fellow passengers. The article reports that this is going on in Philadelphia and New York City, and that users of the device see themselves as doing some sort of public service by restoring peace and quiet. According to the FCC, it is illegal to use or sell cell phone jammers in the United States.

I often take public transportation, and I’ve heard my share of people having obnoxiously loud and/or long and/or annoying conversations. And I wouldn’t be opposed to some kind of no talking on cell phone rule, although I doubt that’d really be enforceable (and have seen firsthand that it is not enforceable on New York City Express Buses). But to have random people taking the power to shut down cell phone service – and interfere with a service contract between an individual and their cell phone provider – without any notice and maybe without justification is really overstepping the bounds of decency and is responding to rudeness with even more rudeness. I hardly ever talk on my phone in public, and when I do it is usually just to make plans and then I hang up (I actually get self-conscious having a personal conversation when strangers can hear me). But someday I may have to receive an emergency phone call and I do not want some random stranger deciding whether I should receive it or not. Yes, there was a time before cell phones when I couldn’t receive such a call, but now cell phones are staples in our society. Also, I keep busy on the train reading news and social media while listening to music on headphones (in other words, I keep to myself), and unless there is a law or official rule prohibiting that, there is no reason why I should be disrupted and prevented from using my phone’s internet capabilities. Finally, taking public transportation – or doing anything in public for that matter – inherently involves interaction with other people, some of whom will be annoying. That’s just a fact of life, and something people have to learn to deal with, especially if they choose to take public transportation in large cities.

Hopefully Forbes is just being sensational and we do not start seeing cell phone jammers on buses and trains.

Public entities turning off power to cell towers to curtail protests:
Back in August, I talked about the San Francisco subway system shutting off power to cell towers for 3 hours to hinder an illegal protest. I said that I think there may be legal issues with doing this. Last December, the San Francisco subway system (known as BART – Bay Area Rapid Transit) adopted a policy that provided that they will only interrupt cell phone service when there is “strong evidence of imminent unlawful activity that threatens the safety of district passengers, employees and other members of the public.”

BART’s policy may not fly with the FCC, which is reviewing whether such a policy should be allowed and whether it has authority to regulate this issue. Here’s the FCC’s statement:

Our democracy, our society, and our safety all require communications networks that are available and open. Any interruption of wireless services raises serious legal and policy issues, and must meet a very high bar. The FCC, as the agency with oversight of our communications networks, is committed to preserving their availability and openness, and to harnessing communications technologies to protect the public.

Also of note for this issue and with regard to cell phone jammers is that the FCC says that 70% of 911 calls originate from cell phones, so cell phones are used for positive reasons, not just to organize illegal protests or have small talk.

I think in the end there will be a rule strictly limiting circumstances under which cell phone service can be interrupted. Cell phone use is too important to everyone from all walks of life to leave it up to government agencies to determine when and under what circumstances they can block cell phone service, and I think some guidance from the FCC would be really beneficial.

Privacy issues take center stage this week

Privacy issues seem to be the technology topic du jour and are getting a lot of mainstream press, particularly in The New York Times.

Google’s new privacy policy:
Perhaps the most publicized privacy issue is Google’s new privacy policy, which went into effect on March 1. According to the The New York Times:

Until Thursday, a record of a user’s activity on Google’s search engine was kept apart from the record of that user’s activity on other Google properties.

Google’s search engine may have known a user was looking up sites about Jamaica, but it was not giving that information to YouTube or Google Maps, just as those sites were not sharing that user’s activity with Google Search.

Now it is. That is the big change. If you have a Google Account, your activity on one Google property is available to other Google properties.

Pretty self-explanatory, and frankly I don’t see the big deal. First of all, it simplifies the process of adjusting settings for Google services. But more importantly, Google already has information on all sorts of our internet activities, including browsing habits, YouTube, and Google Maps, and the fact that the information will now be shared across services does not seem like more of an invasion of privacy than when the information was kept isolated. Yes, it is a little creepy that I was eyeing an Ebel watch a few weeks ago, and now everywhere on the internet I go I see ads for grey market resellers selling that particular watch. But is it any more creepy that I see sponsored videos or store locations on YouTube and Google Maps as compared to just seeing ads on webpages and search results? I don’t think so. The creepy part is really that the information is being retained by Google, and whether it is used on one or ten Google services, the retention by Google is the same.

Another thing I have to keep in mind is that Google is offering all sorts of services for free (as are other sites, including Facebook and Twitter), based on the business model of selling ads. Thanks to Google, I can instantly get search results on any topic I can dream of, I can stream HD videos, I can look up map, satellite, and streetview images of any location I will ever go to (with a few exceptions), I can email and chat with friends, I can upload and share photos, I can store my entire mp3 collection, and I get an awesome operating system for my phone, to name a few services. And it is all free. But the reason it is all free is because all the information Google gets from my use of its services – which has no monetary value to me – is valuable in selling targeted ads. So I, and other Google users, give up some of that privacy (most of which can be maintained by going in cognito or logging out of your Google account) rather than pay for Google, or Facebook, or Twitter. And in exchange, Google, Facebook, and Twitter have to be careful not to overload people with ads in order to keep traffic coming to their websites.

iOS and Android loopholes allow app developers to surreptitiously upload users’ photos:
First, The New York Times revealed that a loophole in Apple’s iOS gives app developers access to users’ photos. As per the article:

As it turns out, address books are not the only things up for grabs [referring to the Path app that uploaded entire contact lists]. Photos are also vulnerable. After a user allows an application on an iPhone, iPad or iPod Touch to have access to location information, the app can copy the user’s entire photo library, without any further notification or warning, according to app developers.

It is unclear whether any apps in Apple’s App Store are illicitly copying user photos. Although Apple’s rules do not specifically forbid photo copying, Apple says it screens all apps submitted to the store, a process that should catch nefarious behavior on the part of developers. But copying address book data was against Apple’s rules, and the company approved many popular apps that collected that information.

Then, just two days later, The New York Times found a similar loophole that gives developers access to photos on Android devices, only with Android the loophole is arguably even larger and any app that requests permission to use the internet can access and upload users’ photos without ever asking or notifying the user.

It turns out that Google, maker of the Android mobile operating system, takes it one step further. Android apps do not need permission to get a user’s photos, and as long as an app has the right to go to the Internet, it can copy those photos to a remote server without any notice, according to developers and mobile security experts. It is not clear whether any apps that are available for Android devices are actually doing this.

Google explained that this ability/vulnerability stemmed from the need to allow a phone to access photos stored on an SD card – where photos were traditionally stored – and that Google will re-evaluate its policies now that phones and tablets are starting to phase out SD cards in favor of internal memory.

“We originally designed the Android photos file system similar to those of other computing platforms like Windows and Mac OS,” the [Google] spokesman said in an e-mail message. “At the time, images were stored on a SD card, making it easy for someone to remove the SD card from a phone and put it in a computer to view or transfer those images. As phones and tablets have evolved to rely more on built-in, nonremovable memory, we’re taking another look at this and considering adding a permission for apps to access images. We’ve always had policies in place to remove any apps on Android Market that improperly access your data.”

These privacy issues are troubling to me. I see two major distinctions between the browsing information, which I don’t mind, and the uploading of photos: (1)Browsing the internet is interactive and necessarily involves transmitting data to another party, whereas a user may never transmit to other parties photos taken with a phone or tablet’s camera and those photos reside on the device with or without a data connection, so I think it is fair to expect greater privacy with respect to photos residing on your phone or tablet; and (2)There are policies that designate how and what browsing information is used, whereas there is no published information regarding what apps upload photos and what they do with those photos.

I also find it troubling that Apple and Google do not appear to be rushing to fix this permission. With all the privacy options available on social networking, where many of our photos reside, I think it is a huge problem that an app by a rogue app developer can access our offline, private photos, and do whatever it wants with them, all without even telling us what they are doing. I understand that there are many permissions involved in third-party apps and that we don’t want to have to constantly be granting or denying certain permissions, but I don’t see how granting location/internet access has anything to do with granting access to photos, and there is really no reason why a separate “permission to access photos” setting can’t be added in the app settings on iOS and in the Android Market.

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