Monday, August 07, 2006

And so the Sun Sets on the Hawaii Annual Meeting

Many thanks to the great number of people who contributed to a great Annual Meeting here in Honolulu -- Members of the committee, members from the rest of the Section and Association, and colleagues from all over the globe.

Hawaii has been quite hospitable to each of us, and many of us have stated our hope to return in the future. Many are packing up today, many more tomorrow (Tuesday), and a few lucky ones are staying on for the rest of the week.

As we all knew, fewer of us could make it to this meeting as we would normally hope to see at an ABA Annual. Because of that, we are especially hoping that many of our friends will be joining us at the next gathering of Cyberspace Committee members in Little Rock, Arkansas this coming January. We are just on the verge of signing our hotel contracts and getting set up for this event, so please keep your travel plans open for the 26th and 27th of January, 2007. Member and Chair of the Malware Working Group Elizabeth Bowles is looking forward to greeting us all to her lovely home town, as well as to introduce us to her soon-to-be new family member (currently baking in the oven as they say).

And, stay tuned to the Blog in the meantime, since we will try to keep you apprised of Committee goings-on as well as the occasional piece of snarky commentary from your editors.

Aloha. And, hang loose cousins.

Final CLC Program of the Meeting

The last of the programs co-sponsored by CLC was held this morning -- "You Had a Security Breach, What Do You Have to Do and What Happens Next?," which was presented by the Consumer Financial Services Committee and co-sponsored by Cyberspace and the Committee on Banking Law. Our own Bob Ledig, seated on the right of the podium area, helped to prepare the panel of experts.

Two representatives from the government enforcement branches (neither of whom, as we all know all too well, was speaking on behalf of either or their respective government entities) helped lay the groundwork for the enforcement authority as well as developing laws in the 'notification of breach' arena (now known as NOB amongst those in the know). A forensic expert took us through many of the preparations that a business should be doing in advance of a problem as well as once the breach has occurred. Finally, an attorney who practices in defending companies who are being sued after a breach has occurred spoke (reminding us that not many of these cases have succeeded as of yet, frequently on the basis that the harm has not come into actuality).

Paper materials ran out early, but Business Section members can download their own copy here. Julie Brill's materials, which provide a great summary, among other things, of the current NOB laws, were updated after the publication date for the CLE materials -- I will be posting a copy of an updated version of those materials here once I receive it.

When will we have the first virtual scalpers?

Apropos our recent discussion of virtual gaming world economies, Boing Boing points out that 80s musical icons Duran Duran have taken a long-term gig playing within the virtual world of the multi-player game Second Life. I don't know who the opening act is yet.


Sunday, August 06, 2006

Business Meeting of the Committee

Candace opened the second of our two plenary sessions for the CLC in Hawaii -- This one, unlike yesterday which was intended to be our 'substantive' discussion, was intended for committee business.

Rae Cogar and Tim Chorvat discussed their ongoing projects for the Electronic Evidence Working Group. They wish to develop a few short articles for BLT followed by a program for one of our future ABA meetings. Candace suggested that what we need to is find the angle for business lawyers, since otherwise we will be (a) taking on more than we as a committee could chew, and (b) our expertise is not as litigators but rather as business advisors.

(Editor's note: Many lamented that management is not willing to engage in these issues, assuming that this is a lawyer's, and more particularly a litigator's, problem. What gets business managers' attention? If something will cost them money. Remember that system auditing controls were a non-issue until Sarbox came along, and consumer privacy issues were a minor issue for senior managers until the PCI standards came along threatening a merchant's ability to access credit card systems. As the new Federal Rules of Civil Procedure roll out in the next few months, which will be addressing deep-level electronic data concerns in discovery, management will eventually realize this is a bottom line issue. We best be ready to advise once that happens.)

Vince Polley raised the possibility of a project to advise primarily in-house attorneys regarding their companyies' receipt of a National Security Letter from the U.S. government (as provided in the USA-Patriot Act). This proposal would be jointly operated with other ABA constituencies such as the ABA Standing Committee on Law and National Security and the BLS Committee on Banking Law, each of which have indicated interest in working with the Cyberspace Committee. A lively discussion followed, with a few war stories and the like. For the moment, Michael Power and Peter McLaughlin in the Privacy Subcommittee will take the lead on organizing a project, although we will still be thinking about whether this is best in a particular subcommittee or organizing a task force, and maybe even setting up the task force as joint with other ABA groups. -- Stay tuned, but there was clearly a topic of great interest to this group.

Judie Rinearson opened up discussion of her sub-committee's work on how anti-money laundering laws (AML) will impact stored payment systems. Again, we pointed out that we should be looking to collaborate with other groups, such as Consumer Financial Services. Judy heard from others who offered help.

Candace announced that the upcoming Winter Working Meeting will be held in Little Rock, Arkansas. ABA is about to sign a contract with the Doubletree Inn in downtown. We will be pushing committee leadership to plan well ahead. Note that because the Spring Meeting in DC will be March 15-18, which is earlier than usual, we may well be too late at the WWM to prepare materials for Spring. (Unfortunately, we don't have hard deadlines yet, so this is surmise for the moment.)

Candace asked folks who participated in the prior day's CLC meeting, which was the "Un-Conference" format for setting up substantive discussions around the round table. All who were there yesterday thought it was a great exercise. One comment was that the size of the audience was probably important to how it worked, and that a typical full-sized CLC meeting would probably be too large for the format to work.

Candace mentioned the committee is being asked to provide a beta-testing group for the upcoming replacement of the ABA's listserve system (using the Fusetalk platform). A couple of the subcommittees volunteered to be guinea pigs. We will be learning more about the system in coming weeks.

Vince and Juliet Moringiello both mentioned that they are on the publications board for Business Law Today. They mentioned that cyberspace topics are much desired for that publication. We could provide the full-sized article of about 3000 words in the BLT format of chatty (no footnotes!), and there is now a smaller format of about 600 words that allows for very fast turnaround.

Program Two -- Transacting Business Over the Internet in the Asia-Pacific Rim

The primary program of the Committee opened at 7 AM Sunday morning -- Amazingly to a nice-sized crowd.

In the picture to the left: Scott Bain, Christina Kunz, Sajai Singh, Shivpriva Nanda, Martin Hsia, Nick Abrahams and Judith Rinearson

The program was set up with a hypothetical involving a new media company, doing business in the United States, which is delivering electronic products via the Internet to customers. As it is expanding business, it is reaching more customers in the Asia-Pacific Rim area, and is now seeking legal advice on what new issues come up. (For ABA Business Section members, a full description of the hypothetical as well as the rest of the program materials can be found here.)

Each of the panelists had a moment to give an initial impression of the hypothetical and how it related to their expertise.

Scott Bain from the ABA initiated the discussion by reviewing the current state of electronic delivery in the music industry, stretching from the well-known responses to the "free" services to the current growth of the legitimate download industry.

Sajai Singh took a moment to discuss how India has taken early leads in setting up legal structures, but that it had some significant missing areas of law such as electronic payment systems.

Shivpriya Nanda addressed how the hypothetical implicates many younger people as likely customers, and how Indian law considers contracts with such persons as void as well as the Indian law's perspective on materials that is inappropriate for young persons (and the lovely problem arising from the fact that 'young person' for purposes of majority in contract law is a different age from 'young person' for purposes of age-inappropriate materials!).

Martin Hsia suggested that it is very important to seek local counsel in each of the countries we need to do business in -- Enforcement rules and procedures are very different, and presumptions are usually wrong if we presume things are like we know them in the USA.

Nick Abrahams addressed the issues by again reminding us of the lack of uniformity in the legal customs in each of the countries of the Asia-Pacific Rim area. He noted that even simple things like click-through agreements, enforceable in some countries, for example China, are not enforceable in other countries, for example Singapore. Venue clauses are also going to be problematic -- While we can rely on venue clauses for dispute resolution in the States, many of these countries under discussion will not enforce them, and will not enforce judgments obtained in the States. Nick posted some additional materials which we have posted on the CLC page at the ABA site -- Download them here.

Judy Rinearson reviewed the payment system and how it adds a palpable risk when going overseas. While there are many risk mitigation tactics that we can use, the bottom line is that when we do this business overseas we must accept that there is some risk we cannot avoid.

The discussion went into free-flow at that time, and the value of this panel's broad experience became quickly obvious. One interesting question came from the audience, essentially suggesting that the picture is so bleak for a mid-sized businesses to figure this out that it should avoid the issues by simply licensing its content down to local companies in each of the countries and let them handle the issues. Nick pointed out that in China we more or less have no choice but to have a local party to do the business. Sajai noted that this is viable, but that there will still be a need to ensure that the local entity is doing its job because of the detailed differences in, for example, content control (anti-violent content rules) from country to country, so the local company will be reluctant to take on the job unless it has the right (and the capacity) to amend all content before it is willing to take on the risks of being the local distributor.

Scott mentioned that ABA is partnering with the Dept of Commerce to provide a lawyer referral service regarding enforcement of IP rights within China -- A free hour of consultation will be offered to US companies. The DOC's Web page has more information, and the ABA Section of International Law has the form one can use to get the referral.

Chris tried to get the panel to open up on thoughts on consumer privacy concerns. The eyebrows went up, and everybody more or less decided that it would be impossible to even scratch the surface in this forum. Again, local counsel is going to be important, because the rules are varying from country to country and subject to rapid change.

The panels discussed the issue of open-source software in non-US jurisdictions. Nick pointed out that some countries view the use of OS as a positive way to protect their own sovereignty (i.e., not letting a proprietary software supplier control the country's essential IT infrastructure). Nick and Sajai both noted that no matter what is thought by the suits in a company, the developers are using OS almost with abandon (in many cases because since there is no money changing hands the corporate control systems have no way to prevent the import of the OS code).

And the program continued for a bit more while my fingers grew too tired to keep up. This was a great program -- The ABA recorded the show, and we can certainly recommend a purchase of the CD audio if you want to learn more on this fascinating topic.


Michael Fleming and Vince Polley, finally being treated like the demi-gods that they really are, are chauffeured about the island in style.

Neither of them has any idea where those other shoes came from.

{Photography by C. Cooper}

Saturday, August 05, 2006

Cyberspace Law Committee Opening Session

Our first Committee meeting will begin in 15 minutes. Blogmaster and Chief Meeting Correspondent Michael Fleming is off at another meeting for an initiative about which he will fill you in later. That leaves me to try to report on our guided discussion. Our discussion topics:

Prof. Eric Goldman will lead a discussion of the various legal issues that arise in the blogosphere – employment, First Amendment, securities, IP, privacy, election law and the list goes on. In advance of this session, you may want to visit Prof. Goldman’s blog for a compilation of blog legal issues.

Nick Abrahams, a partner in the Sydney, Australia office of Deacons, will lead a discussion about multi-player on-line games. Have you figured out why anyone pays real money for “assets” that exist only in a game? An economist at Indiana University actually studies this stuff: Edward Castronova

And a late addition -- Judie Rinearson will be presenting an update about recent stored value card developments.

If you are planning to participate in the meeting in cyberspace, please post your comments, and we'll keep track and respond as the discussion continues.

Receptions Receptions Receptions

The Business Law Section reception was held on Friday evening, poolside at the Marriott Hotel. It was well attended, in spite of the occassional downpour, each of which lasted about a minute (and which seem to be a frequent-enough event that the local people working outside didn't even flinch). Nicely done music accompanied a fairly large group of attendees and some pretty darned-good food.

From there, a group of the Cyberspacers made their way over to Sergio's restaurant, and met with our new friends from the Cades Schutte firm here in Honolulu. Cades partner Martin Hsia, who will be joining our distinguished panel for our Sunday morning presentation on Doing e-Commerce business in the Pacific Rim, hosted many of the other panel members, including Candace Jones, Prof. Chris Kunz, Nick Abrahams, Scott Bain with Martin Hsia on the far right in the picture below.


Friday, August 04, 2006

First Program

This morning's program, put on by the Section of Science and Technology and co-sponsored by the Cyberspace Law Committee, was entitled Voice Over Internet Protocol: Connecting the Pacific, Connecting the World. CLC member Konrad Trope organized an excellent program, mixing lawyers and civilians. (Actually -- one of the 'civilians' on the panel was anything but -- A Lt. Colonel in the U.S. Army!)

One minor snag in the proceedings -- our moderator Konrad was unable to arrive after a snafu with the airlines. Luckily, he and the panel were able to talk prior to the program, and the panelists graciously held the fort until Konrad able to arrive mid-program.

(L-R) Kenneth W. Kousky, Saginaw, Michigan; Sheba Chacko, Reston, Virginia; LTC Jeffrey T. Girard, West Point, New York; Estevan Macias, Denver, Colorado

(I resisted the urge to photoshop a picture of Konrad in here...)

Thursday, August 03, 2006

Aloha from Honolulu!

The ABA Annual Meeting kicks off today, with many of our members arriving later today (Thursday). Your intrepid reporter arrived last night Hawaii time, which his body reminded him was actually quite late in back-at-home time. It's pretty warm for the islands -- About 90 degrees yesterday for a high, and probably similar today, so hardly the relief from the mainland's heat wave that we might have hoped for. Nonetheless, who's to complain while here?

The first event that many of us attended is the opening reception Thursday afternoon for the Business Section members held at the Convention Center (a modest bus ride from our primary hotel...). It was nice to have a time to view the displays without the crowds, and meet with our friends. Below, Michael Fleming, Judith Rinearson, Michael Power, Candace Jones, Rae Cogar, Juliet Moringiello and Vince Polley.

Doc -- You're getting a computer!

The Secretary of the (U.S.) Dept of Health and Human Services has announced that the healthcare provider anti-kickback regulations will soon be amended. The statutes and rules (more or less) prohibit medical providers who bill Medicare or Medicaid (i.e., more or less all of them) from accepting gratis anything of value from vendors (the economic theory being that such gifts will cause the providers to buy with less of a jaded eye on price, or to refer business for self-interested reasons rather than good medicine). The laws can be interpreted as saying anything of more value than your typical peppercorn is a potentially illegal kickback, and exceptions are strictly limited to items that are expressly allowed under the rules issued by HHS. (And, if you want to learn more about all that, the Cyberspace Law Committee is hardly your best resource! Go find some blog by health law attorneys...)

The cyberspace angle is that the rules will have a new exemption -- One that allows doctors to accept computers as 'donations.' (Doctors in need of 'donations' might seem a bit incredible for many of us, but we should remember that there are plenty of docs doing good work in less than well-funded circumstances.)

The weird thing is that HHS is saying that this is a good idea because their rules will require that any donated computer be interoperable with any other electronic health system. Sayeth the AP:
They also specify that the computer systems that are donated must be able to talk and interact with other health care computer systems around the country. Such "interoperability" requirements will prevent providers from supplying equipment that deters competition, said Health and Human Services Secretary Mike Leavitt. Some donors would be glad to give doctors equipment if it tied that doctor to doing business only with them, he said.

That seems fair on its surface, but I wonder what the Secretary is really trying to say? Is it really possible, in 2006, that a doctor would accept a non-general purpose personal computer (or a network that wasn't a general purpose system)? Or, if the doc did accept one that it wouldn't be quickly relegated to the basement? While the new exemption is probably justifiable on all kinds of reasons (particularly as we try to get all of the world to start using the new electronic medical records systems which will save money as well as improve medical care), I don't see why this idea of interoperability is the big justification where the docs are obviously going to be getting personal computers that are, almost by definition, interoperable. This sounds like the mind of some PR person at work...

[Props to Prof. Michael Geist for pointing to the story in his [BNA] Internet Law News for 8/2/2006]