Yes, they do go to jail. The law has very sharp claws.

Would you encourage your employees take a five-fingered discount from the office supply store? Probably not. Would you cheat a hard-working employee by not paying her? Of course not. However, in the press of the Great Recession, software piracy is still prevalent, and lax controls on software may be jeopardizing your company.

When buying new computers, it is easy to forget that there is more than just the cost for the hardware – you have to buy software, too. From word processors and spreadsheet programs to customized programs for your industry, it is tempting to copy programs with a single license onto multiple computers. Because after all, since you have the original media, you can do what you want, right? And who is going to check, anyway – the software sheriff?

There are two problems with this scenario, besides the fact that it is illegal. First, many programs today are subject to constant updating, and most updating is done only once per license. Your program may be missing important parts that keep it secure and let it work right. Second, there is a “software sheriff” around – the Business Software Alliance, or “BSA.” BSA’s members include some of the world’s leading software companies, like, Microsoft, Adobe, and Cisco.

Why Should You Care? The BSA is actively offering “rewards” to those who disclose illegal use of software. All a competitor or disgruntled ex-employee needs to do to mess with your business and cost you thousands of dollars and many hours of time is to contact the BSA and claim that your company is using unlicensed software. BSA is getting companies to pay $100,000 or more for their unlicensed software. This does not count the time you, your company and your counsel spend dealing with this unproductive hassle. You will save a lot of money by ensuring that you do not get stung. If your company gets taken to court for copyright infringement, your company can be held liable for up to $150,000 for willful infringement of each registered copyright, plus the attorneys’ fees and costs of the plaintiff, which can be even more substantial. Your company would also be stuck with paying for its own legal counsel, and the lost hours of employees and managers as they are called to participate in the litigation.

What to Do on Your Own. A preliminary step can be done by your own company: do a quick inventory of the software on a few computers. Select those computers that have been around the longest. Do not trust the employee using the computer to report the software – have someone else catalog all the software on each computer. Many programs are licensed for free, like Adobe Reader or Dropbox, and can be quite useful for many tasks. Others, like Adobe Photoshop or the Microsoft Office Suite can cost hundreds of dollars a copy, and are the type of software that the BSA is on the lookout for. Other common programs that are unlicensed are Symantec Antivirus programs and Microsoft Server. Match a license for each program installed. If you find an unlicensed copy or two, delete it and, if the program is needed, buy a new, licensed copy. If there is are a lot of unlicensed copies, stop and contact legal counsel for the next step.

(Incidentally, the software inventory can also turn up some other issues, such as BitTorrent clients like uTorrent, Deluge, or Vuze. Unless there is a legitimate purpose for using such software, such as distributing very large files within your business, an employee is probably using the bit torrent client to illegally copy and distribute music and movies. Since your company’s internet protocol (“IP”) address appears as the downloader, it will probably subject your company to liability. That is a nightmare you want to avoid.)

What to Do If The BSA Contacts You. If the BSA contacts you, or your preliminary inventory discovers a lot of unlicensed software, do not wait and hope that your company or your local computer guy can handle the problem. IT professionals do not have the legal background to understand the details of software licenses, which are written by legal professionals to bore and obfuscate. More importantly, your employees, or an IT professional that you employ to investigate, can be called as a witness against you if your company is sued for copyright infringement. The last thing you want is to give unfettered access to your computers to someone who can then be subpoenaed to reveal everything on your computers. If an IT professional is necessary, let your counsel do the hiring. Then the professional’s work is protected by the attorney work product doctrine or the attorney-client privilege. These concepts give attorneys and their clients private space to determine what to do, without the threat of those facts and discussions being revealed.

What Bay Oak Law Can Do for You. The sooner we are called in, the sooner we can cloak the investigation under the attorney work product doctrine and attorney-client privilege. We can manage the process to protect your data that might be demanded in a later lawsuit; if that information is destroyed, the modern trend in e-discovery is to sanction the party doing the destruction. Our lawyers have represented companies in many copyright infringement cases over the years. We can perform or supervise the license reviews. If necessary, we can assist in directing you to places where your company can buy properly licensed products. We can also assist in putting together the proper procedures to minimize future problems, including updating your employee handbook on this and other issues, like social media use.

Taking software is not cost-free – it can destroy your business. Paying for your software rewards those who work hard to develop the software, and is really much cheaper in the long run. If you have questions, call us at 510-208-5500, or contact andy@bayoaklaw.com.

You have received a notice from your Internet Service Provider, or “ISP,” indicating that you have been sued as a “Doe” in a bit torrent file sharing lawsuit. What now? Now you need to make some choices about how you want to handle this. But first, some information.

What does this even mean? This means that your Internet Protocol, or “IP” address (not necessarily your computer, but a computer using your internet connection) has been identified as part of a “swarm,” or a group of computers involved in sharing a certain file using a bit torrent client like Vuze, or LimeWire. You have been sued because the file in question was copyrighted material, and the company who owns the copyright is suing you for copyright infringement. Sharing or downloading copyrighted works violates the law. Deleting the file will not make this go away. Buying the copyrighted work after the fact will also not make this go away.

If you have no idea why you have been implicated, someone in your household (using your internet) may be the culprit. If your spouse/child/roommate is responsible, talk to them about how your household wants to handle this.

Your ISP should have sent you a letter explaining that your name and personal information have not yet been divulged. Right now, you are only identified by your IP address. The letter should include two dates: one is the deadline to file any legal action contesting the subpoena, and one is the date on which your ISP will provide the Plaintiff (the company that is suing you) with your name, address, and other information as directed by the Court.

Option 1 / So what if I just ignore this?

Recently, many people sued in this type of case have been fighting back, which means ISPs sometimes do not release information until after the date on your letter, and some cases are dismissed entirely. Some judges have dismissed all Doe defendants except one, because of issues with the way Plaintiffs group all the defendants together. This is great for the defendants who were dismissed, but very bad for the remaining defendant. You could take your chances hoping that you or your case might be dismissed, and you might be lucky. However:

If your name and address are released, you might be named in the lawsuit. This means you will no longer appear as “Doe ###,” instead your name will be listed as a Defendant in the case. Consider potential embarrassment and/or damage to your reputation if a Google search for your name returns this lawsuit, and your involvement in it. Has this ever happened? Yes, this is somewhat standard in these cases.

If you do not answer the complaint or file any legal action, the Plaintiff may request a Default Judgment. This is an automatic decision by the Court saying that since you did not defend yourself, the Court has no choice but to decide in favor of the Plaintiff. You will owe this to the Plaintiff, and if you keep ignoring, the Plaintiff could levy your paycheck or your assets.
Has this ever happened? Yes. For example on October 7, 2011 in the Northern District of CA, Judge Alsup granted $20,000 default judgments against two defendants in a file sharing case.

Option 2 / I want to fight this !

Lawsuits that target “swarms” of bit torrent sharers have been contentious in legal and online communities. Lawyers who represent Plaintiffs in these cases have been labeled “copyright trolls” and the lawsuits have been accused of being many things, ranging from collection rackets to extortion. At this time, none of these cases have actually gone to trial, and some people doubt that any will.

Some defendants have fought back with either (1) a Motion to Quash, which asks the Court to invalidate the subpoena for their information, or (2) a Motion to Dismiss, which asks the Court to dismiss them from the lawsuit. These motions are often successful.

You can try to write and file one of these motions without a lawyer. However, hiring a lawyer gives you several advantages. When you are represented by a lawyer, the Plaintiff is no longer allowed to contact you except through your lawyer, which will prevent harassment if the Plaintiff gets your personal information. Communicating through a lawyer means you will not incriminate yourself by inadvertently revealing personal information, or by admitting anything you shouldn’t. While we can’t speak for other lawyers, Bay Oak Law is experienced in civil litigation, and can help you draft and file your opposition. Defending you is our job, and we are good at it.

What are you risking if you fight? Sometimes you can’t fight without revealing your identifying information. Even if your name and personal information are not revealed, if you reveal which IP address you are, or which Doe, the Plaintiff may decide to make an example of you and sue you individually. If this happens, the Plaintiff is far less likely to settle for a small amount, and you may end up with a larger judgment against you. Remember that sharing or downloading copyrighted files without the permission of the copyright holder violates the law, and you might end up paying for it in court.

Option 3 / Just make this go away !

Many people do not want to risk having their identity revealed, or do not want the risk, time commitment, or attorney’s fees associated with a legal battle. In this case, you can settle with the Plaintiff, often for a few thousand dollars.

We recommend you do this through an attorney, who can protect your personal information and your rights. Also, when you are represented by an attorney, the Plaintiff can no longer contact you except through that attorney. This means no harassing phone calls or letters. An experienced attorney can often get a better deal on settlement because of prior and future relationships with Plaintiff’s attorneys, can make sure negotiations stay anonymous and do not incriminate you in any way, and can make sure the settlement agreement legitimately settles your case and protects your interests. Bay Oak Law is experienced in negotiating this type of settlement.

I am sure no one in my household was involved in this.

You need to show real evidence that you would not or could not have been involved in downloading or sharing the file. Our firm had a good result for a client who could prove that the client did not have the IP address at the time the alleged downloading occurred. However, that is not the norm. If someone accessed your wireless router, you may not be legally liable, but you would have to have real evidence to back up your assertion. It should not be a shock to know that many people claim that someone else did it; the needed difference has to be evidence to prove it. A 93-year-old great-grandmother with a wireless router that is not password-protected is going to get more people to believe that she didn’t download something than a college student with a password-protected router. We have an article on our website about the importance of securing your routers.

If you have received a subpoena notice like this from your ISP, we would be happy to discuss your case, free of charge. Give us a call at (510) 208-5507, or email admin@bayoaklaw.com.

When I was a kid, on days when we couldn’t play outside, my friend Mike and I would play Pong on our TV sets. Growing up in the Los Angeles area, many of our friends wanted to be in Hollywood. Now, the video game industry has earned more than Hollywood movies for years.

The San Diego Union Tribune has a great story on the opportunities and risks of the mobile app community. Appy Entertainment (motto: “deadly serious about stupid fun”) is based in Carlsbad, CA, and one of its founders is Chris Ulm, a friend of mine from Sutter Junior High School. One of Chris’ Appy co-founders said that

“One of the reasons we did this start-up is we saw this as the opportunity of the century . . . . The way mobile has grown since the iPhone was launched, it’s historic. But also, we want to create new things. And the video game business became so risk adverse because the budgets were so high.”

Mobile gaming apps, an industry that didn’t really exist four years ago, has now moved on to its second incarnation, in which the products are free, but in-game purchases for the apps cost money. This creates its own set of problems, especially when it is just an Apple App Store account that is charged: never mind kids ordering things without their parents’ approval, certain middle-aged attorneys have had problems mistakenly ordering more puzzles while helping his son on a kids’ app. Not only does the game now have to be entertaining, it has to have in-game items worth buying. But for addictive games, the revenue stream can continue long after the last game is downloaded. Legal headaches await, though, for in-game purchases that are not clearly marked as to price or purchasability. Already one child paid $1400 for “Smurfberries” (a Smurfs app “currency”), and an attorney in Philadelphia has filed a class action suit because his daughter racked up $200 in in-game purchases.

The rapid evolution of the mobile gaming industry echos the Internet boom of the late 1990s, when websites raced to fill the empty niches of the Internet. Good ideas like Google and Amazon flourished, while pets.com and webvan.com couldn’t deliver the goods efficiently to customers. Eventually in mobile gaming a few mega-winners will arise, while smaller successes will fill the niches in between.

Plenty of legal questions will arise. I can’t sell an all-new Gucci handbag from my office – but can I sell its doppelgänger in my lifestyle game, if I don’t use the Gucci name on it? If I (legally) reverse engineer the code to someone else’s game, can I sell in-game items for that game? If I have a valuable in-game item like a special sword, can I sell it? Should the video game company get a share of the proceeds? And what is going to happen when someone counterfeits “smurfberries” or other currency in the game? Intellectual property attorneys look forward to making a living off such momentous questions.

When the Internet burst into popularity in the mid-1990s, the rush to get popular names resembled the Oklahoma land run of 1889 – but for far more fertile cyberspace locations. Cybersquatting became rampant, as parasites tried to trade on the reputations established by others.

Cybersquatting on the Internet is far less of a problem now, but now businesses and individuals face a new problem – Twittersquatting. Two years ago, Former Oakland A’s manager (and current St. Louis skipper) Tony La Russa sued Twitter over a parody Twitter account purportedly by him. The account was quickly shut down and the dispute settled, but apparently precedent has been set. Twitter squatting has been born and is set to fly.

During the Deepwater Horizon oil spill in 2010, an inspired Twitter squatter sent out tweets purportedly from BP’s public relations department. In June 2011, a secondary life insurance company called Coventry First has sued to find the identities of whoever started the @coventryfirst Twitter account, which pretends to note Coventry First’s distress when there are no plane crashes that “increase shareholder value.”

While the above examples have been mostly humorous, twits using your business’s name could destroy your company’s reputation before you even know about it. Twitter does have an anti-squatting policy, but every business should participate in the Twitter land rush by claiming its own name. Besides being a potential marketing device, claiming your business’s name prevents it from being claimed by someone else. It’s free and took me less than 30 seconds to do.

When someone subpoenas subscriber information from an internet service provider, does the subscriber have an expectation of privacy? In California, at least, the answer seems to be: No.
In People v. Stirpo, (Second District Court of Appeal, May 16, 2011), the defendant challenged the search warrant to the internet service provider (“ISP”) that sought information based upon the internet protocol (“IP”) address connected with the hacking of a school district computer system. The ISP provided the subscriber information related to the IP address. Upon executing the search warrant, the police found a diagram that mapped the school district computer system intrusion.
Defendant Stirpo’s only real chance at avoiding the rotten fruit of his intrusion was to challenge the search warrant that sought the subscriber information. Defendant Stirpo claimed a right of privacy to his subscriber information. The Court of Appeal was not persuaded: “as stated by the Tenth Circuit in U.S. v. Perrine (10th Cir. 2008) 518 F.3d 1196, 1204, “Every federal court to address this issue has held that subscriber information provided to an internet provider is not protected by the Fourth Amendment’s privacy expectation.” The Stirpo court went on to quote another Federal case, US v. Forrester, 512 F.3d 500 (9th Cir. 2008): “[E]-mail and Internet users have no expectation of privacy in the to/from addresses of their messages or the IP addresses of the websites they visit because they should know that this information is provided to and used by Internet service providers for the specific purpose of directing the routing of information. Like telephone numbers, which provide instructions to the ‘switching equipment that processed those numbers,’ e-mail to/from addresses and IP addresses are not merely passively conveyed through third party equipment, but rather are voluntarily turned over in order to direct the third party’s servers.”

The moral of the story, of course, is that your internet secrets are not secrets — even when hacking in to the school district computer. Even if you co-found Microsoft.

UPDATE:  We’ve re-filed the case in the United States District Court for the Southern District of New York. You can find the updated complaint here, and the exhibits here.

Bay Oak Law and Haims Valentino LLP have filed a copyright infringement lawsuit against artist Sarah Morris, who used the crease patterns of at least six different origami artists. She did so without attribution or licenses.

The plaintiffs are Robert Lang, Manuel Sirgo Alvarez, Noboru Miyajima, Nicola Bandoni, Toshikazu Kawasaki, and Jason Ku — some of the most renowned origami artists in the world today. Click here for Robert Lang’s take on the case.

Without giving away too many details, we have been contacted by potential clients whose internet protocol information is being sought because it has been connected with illegal downloads of movies. However, these people only owned the wireless routers that were used to receive the movie; they did not download the movie themselves. Someone else downloaded the movies from the wireless router because the router was not password secured. The lesson: password secure your wireless router, so that your neighbors are not implicating you in their illegal actions.

First, downloading a movie or song off the internet without the proper permission (Hulu, Netflix, or iTunes – good idea; BitTorrent – bad idea) is copyright infringement. If someone uses your router to illegally copy content, you might have your records discovered if the copyright owner subpoenas your identifying information from your Internet provider. Even if you show that you did not actually download the file and thereby avoid liability, you are stuck with hundreds or thousands of dollars of legal bills. Courts have found that those who do not actually download the information are not liable, but it can be an expensive proposition to disprove even if it ends quickly.

[4/27 Update: The Huffington Post has an even more disturbing example of what can go wrong when you fail to secure your router -- automatic weaponry and inaccurate accusations of downloading illegal images of children.]

The quick and easy fix is to password protect your router. At most, it is a five minute procedure synchronizing your router with your computer or smartphone. After that, it is a seamless access – most routers do not require you to put in the password every time. Also, remind those who do use the router (teenage children, perhaps?) that copyright infringement is illegal, and has serious consequences to it. There is too much legal content accessible on the Internet to bother with the illegal stuff.

“Kim Vanderheiden of Painted Tongue Press, which does custom design invitations, business cards, and greeting cards, among many others, asks:

“Does the US Government and/or its branches own intellectual property rights on its forms and publications?”

As a general matter, the federal government has no copyrights. 17 USC 105 says that “Copyright protection under this title is not available for any work of the United States Government,” although the Government can own copyrighted works created by others – for example, someone might want to assign the rights to the a copyrighted work to pay off a tax debt. There are some small exceptions for the products from the National Institute of Standards and Technology, and for the Postal Service (which have their own kind of “commercial” products), but otherwise, using an IRS 1040 form, or a picture of an astronaut walking on the moon in an artwork is allowed.

Regardless of what you may feel about the intent, the execution of this remix is a fantastic illustration of how copyright’s fair use doctrine enlivens free speech today: