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]

XML Automation -- Still on its way?

Dow Jones Newswires reports that a group of technology companies has published a draft of new specifications intended to improve the use of extensible markup language, or XML. "The group plans to submit the draft specification, called Service Modeling Language or SML, to an industry standards organization later this year. The new specifications aim to provide an improved means of expressing how computer networks and other IT resources are described in XML, so businesses can more easily manage the services that are built on these resources.
Companies publishing the draft included BEA Systems Inc., BMC Software Inc., Cisco Systems Inc., Dell Inc., EMC Corp., Hewlett-Packard Inc., IBM Corp., Intel Corp., Microsoft Corp., and Sun Microsystems Inc. "

The Committee has had many programs on similar topics going back for many years, including interesting discussions in the Winter Working Meeting this year in Wilmington. Members of the Committee are directly involved in these and similar efforts, including Jamie Clark who is with the Oasis organization (one of those 'industry standards organizations' mentioned above).

Yet another reason to keep up your contacts with this committee -- We not only anticipate the future, but we're there to implement it!

Program Book Available Online

You can download the Annual Meeting Program Book and plan your schedules. Click here for a copy. A hard copy will not be mailed in advance of the meeting but will be available at the Section Information Desk located on the 3rd floor of the Waikiki Beach Marriott Resort and Spa and at the Registration and Expo Reception. The Annual Meeting offers over 20 CLE programs and nearly 100 committee and subcommittee meetings, open to all, which provide concise and relevant developments important to your everyday practice.

No Satellite Registration This Year!

For those of you attending in Hawaii, a special note to you from the Business Section:

The Section of Business Law will host the Registration and Expo Reception on Thursday evening, August 3, from 5:00 - 7:00 p.m. at the Hawaii Convention Center. This unique reception, exclusive to Section of Business Law members and their families, is designed to let Section members pick up registration materials in advance, get a sneak preview of the Annual Meeting Expo, schedule island tours, and catch up with colleagues and friends! Attendees will be able to purchase tickets to Business Law and ABA ticketed functions during the Registration and Expo Reception. Join your Business Law colleagues for this private event—appetizers, cocktails and entertainment for the entire family will be provided! As an added bonus, there will be a special raffle during the reception! Be sure to bring your family as this is a kid-friendly event. Admission is free.

Special transportation from the Waikiki Beach Marriott Resort and Spa, the Section of Business Law headquarters, will also be provided to the Hawaii Convention Center for this event. Buses will begin boarding on Paoakalani Street at 4:30 p.m. and will shuttle continuously between the Waikiki Beach Marriott Resort and Spa and the Hawaii Convention Center until 7:30 p.m. Afterwards, transportation to the Hawaii Convention Center will be available via the ABA Shuttle.

THERE IS NO SATELLITE REGISTRATION IN HAWAII. You must pick up your registration materials, including your name badge, All-Access CLE Badge, CLE tickets, and social event tickets, at the ABA Registration Desk located in the Hawaii Convention Center before you can attend meetings and CLE programs. With meetings scheduled for early Friday morning, the Registration and Expo Reception is a great opportunity for attendees to pick up registration materials.

Time's a wastin'

Dear Committee Members:

The Cyberspace Law Committee will have an interesting but abbreviated schedule of events in Hawaii. We will be presenting one program for the Business Law Section -- Transacting Business via the Internet in Asia-Pacific Rim (co-sponsored with the UCC Committee and the International Business Committee) co-sponsoring a program with the Science and Technology Section about VoIP, and holding two expanded and dynamic Committee meetings in lieu of our typical schedule of separate Subcommittee and Working Group meetings. Both Committee meetings will include substantitve discussions.

Reservation deadlines for Hawaii are approaching. If you are still on the fence, I encourage you to make the trip. Also, if you are planning to attend and have not yet purchased tickets for Business Law Section events, please check them out. https://www2.expoedge.com/Its/0608ABAHNLevents/choices.asp The deadline to purchase advance tickets for the Business Law Section Brunch and Dinner is this Thursday, June 29.

The Cyberspace Law Committee will not be holding a separate Committee dinner this year. I'll look forward to seeing you at the Section events instead.

Candace Jones
Chair, Cyberspace Law Committee

Dropdown and Give Me Twenty Two!

The USDC in Washington has just issued a decision on specific personal jurisdiction over a Web site operator. In running through the typical analysis of how much the defendant aimed its activity at the forum state, the court held that the operator's site "was expressly aimed at Washington in that the website lists Washington as an available shipping location and Defendant intentionally shipped its product into this state . . .."

This after noting that only three of the plush dolls at issue had been shipped to Washington, out of the 22 total states where the Michigan-based defendant had sold its products. (Arguably, the three shipments alone might have tipped the balance, but I think some courts would have had a tough time with that as the only factor.)

So, a convenience offered to users of web sites that is not offered to people who fill-in little coupons out of a magazine suddenly subjects the retailer to jurisdiction. Who knew the Web was going to be so dangerous?

It seems unlikely that the vendor who probably sold the off-the-shelf shopping cart system to the defendant here took the time to note that including any particular state in the drop-down list was going to subject the defendant to the personal jurisdiction of every state in that list. It also seems a bit of a stretch to fathom the defendant's intent out of what was probably nothing more than a choice made by the shopping cart operator (who was merely following the standard practice for all shopping carts). Should we now be counseling our clients that they should not present a dropdown list of states to anybody? Or, is the convenience to the site's customers worth the risk (but the lawyers to the site need to counsel on the risk in any event)? Should shopping cart developers provide a functionality in their software to allow site operator to delete certain states from the list? Should the site operator bring a claim against the shopping cart vendor for a design defect? (Just kidding on that last one...) (Sort of...)

Second practice note: Keep in mind that this is not a case where a click-through choice of law/venue provision would have made a difference, since the plaintiff was not itself a customer of the defendant's site nor subject to any contract between it and the defendant. We can't always rely on those contracts to save us from all possible exposure to out-of-state litigation!

Case is Qwest Communications Int., Inc. v. Sonny Corp. (USDC WD Wash NO. C06-20P, May 15, 2006). Reported in the June 15 issue of BNA Electronic Commerce Reporter.

SCOTUS to Trolls: Go Home?

There is a bit of a bombshell for the patent bar on the Supreme Court's front porch today -- No doubt the folks at RIM are a bit miffed that this didn't occur about 3 months ago, but I digress...

Have Justices Kennedy, Stevens, Souter and Breyer all but given public recognition to the (so-called) patent troll industry? Read into the following whatever you might like...

In cases now arising trial courts should bear in mind that in many instances the nature of the patent being enforced and the economic function of the patent holder present considerations quite unlike earlier cases. An industry has developed in which firms use patents not as a basis for producing and selling goods but, instead, primarily for obtaining licensing fees. See FTC, To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy, ch. 3, pp. 38-39 (Oct. 2003), available at http://www.ftc.gov/os/2003/10/innovationrpt.pdf (as visited May 11, 2006, and available in Clerk of Court's case file). For these firms, an injunction, and the potentially serious sanctions arising from its violation, can be employed as a bargaining tool to charge exorbitant fees to companies that seek to buy licenses to practice the patent. See ibid. When the patented invention is but a small component of the product the companies seek to produce and the threat of an injunction is employed simply for undue leverage in negotiations, legal damages may well be sufficient to compensate for the infringement and an injunction may not serve the public interest. In addition injunctive relief may have different consequences for the burgeoning number of patents over business methods, which were not of much economic and legal significance in earlier times. The potential vagueness and suspect validity of some of these patents may affect the calculus under the four-factor test.

EBAY INC. et al. v. MERCEXCHANGE, L. L. C., ___ U.S. ___ (May 15, 2006) (J. Kennedy concurrence)(emphasis added).

8th Circuit Rules in Case Involving Digitally Enhanced Evidence

In U.S. v. Seifert, the U.S. Court of Appeals for the Eighth Circuit ruled on the admissibility of video evidence that had been digitally altered to brighten the image. The original images were very dark. An expert used software tools to brighten the entire image, which then showed a suspect who was dressed very much like the defendant.

So, fellow lawyers, add Photoshop to your list of essential software skills on your resumes.

The case is here.

No More Pesky 8x10 Enlargement Spam

No, not that kind of enlargement. Get your mind out of the gutter.

In a clear victory over the photolab spammer cadre, the FTC has once again shown us the immense value and public good that has come to us out of the CAN-SPAM Act. Kodak Imaging Network sent out an e-mail to 2 million recipients that failed to contain an opt-out mechanism, failed to disclose the right to opt-out, and failed to include a valid physical postal address. For this, they paid over $26 grand in penalties and have the watching eye of the FTC to contend with for the next few years.

So -- I have no doubt the marketer did the dastardly deed (as I gather from the rapid closure that Kodak did not dispute the facts). Take that as a lesson learned for them, as well as for the rest of us who are advising clients on how to comply with CAN-SPAM. Fair enough.

But was this what we thought we were getting when we passed a law about spam? 'Gotcha' cases against legitimate companies that make dumb mistakes as opposed to something that has a meaningful impact on the mess that flows into our inboxes every day? How many of us have spent time complaining to our loved ones about the burden of deleting great masses of photo-lab spams? Are the fake-pharmacy-spammers really going to read about this case and suddenly realize they need to alter their marketing methods to comply with the law?

If anything, this action by FTC -- if this is the best they can come up with -- seems to almost prove the ineffectiveness of CAN-SPAM to achieve its original purpose.

In any event, please be sure to tell your clients to include the opt-out and address! See 15 U.S.C. § 7704(a)(5)(A)!