Mark Your Calendars For Dropbox’s Arbitration Opt-Out!

By Lauren Harriman

Heads up—Dropbox just dropped a bomb during its most recent Terms of Service (TOS) and Privacy Policy update, and you need to take action! The update, which takes effect on March 24, adds an arbitration section to the TOS. If you prefer not to arbitrate, you must opt-out by completing an online form. While arbitration is a “quick and efficient way to resolve disputes,” and “provides an alternative to things like state or federal courts,” which can take “months or even years,” arbitration does not provide a record of the proceeding.

A record is crucial to developing common law. Common law is critical in an area of law, such as technology law, where legislation is severely lacking. Any Dropbox user legal complaint should have the potential to provide legal precedent for future disputes. Only complaints filed in the state and federal courts can provide that potential. Remember that arbitration means you will likely be hailed to Dropbox’s headquarters in San Francisco should you have a dispute. Dropbox users can opt-out of the arbitration clause now by signing in with their usernames and submitting their first and last names. So take a minute and opt-out of this drop-bomb.

Preventing the “Napsterization” of 3-D Printing

By Nicole Syzdek

Gartner, Inc., an American information technology research and advisory firm, reported that in 2013, combined end-user spending on 3-D printers will reach $412 million, up 43% from 2012.[1] This rapid increase in revenue for 3-D printing companies is not likely to slow down anytime soon. Gartner predicts that in 2014, spending will increase by 62%, reaching $669 million. The increase of 3-D printing has the ability to shake-up many areas of commerce.

3-D printers allow consumers to print three-dimensional objects at home. Although there are many competing designs for 3-D printers, most work in a similar way. The printing begins with a blueprint typically created with a computer aided design (CAD) program running on a desktop computer. CAD programs are presently utilized by many designers, engineers, and architects to model physical objects before they are created. Blueprints can also be created by using a 3-D scanner to scan an existing object in a similar manner in which a regular flat scanner can create a digital file of a 2-D image. Once the CAD is created, it is sent to the printer, which builds the object up, layer by layer, from tiny bits of material. Continue Reading

The Computer Fraud and Abuse Act: Current Coverage and Needed Reform

By Lauren Harriman

In 1984, Congress was facing a rapidly changing technological landscape. The world wide web was not yet available at the consumer level, but Internet use was growing quickly among universities. Law enforcement officers felt unprepared to handle what they believed would be “brand new” crimes of the Internet. Officers were not only concerned with domestic computer security threats, but international threats as well. Thus, in 1986, Congress enacted the Computer Fraud and Abuse Act (CFAA) to clarify the law surrounding computer-related crimes. However, the “brand new” Internet crimes that law enforcement feared and the CFAA meant to address were not entirely novel. In fact, the CFAA duplicated charges for several crimes already included in the Penal Code, simply providing prosecutors with one more tool to use in plea bargaining.

In plea negotiations, prosecutors are able to threaten law violators with extensive jail time if a settlement cannot be reached. This is especially true when prosecutors can charge violators under multiple statutes for the same crime. This plea bargaining tactic discourages the exercise of the right to a jury because violators are not willing to risk being found guilty of all charges. Aaron Swartz, prosecuted under multiple sections of the CFAA for excessively downloading documents from JSTOR over MIT’s network, fell prey to this tactic in 2012. Rather than face a sentence of thirty years in prison, Swartz committed suicide in 2013. His fate has united the Internet community in demanding for reformation of the CFAA. Continue Reading

The Judicial System: NSA’s Key Recovery Service

By Kennard Herfel

Among the global gossamer of controversies concerning the NSA revelations brews a key case involving Ladar Levison, the founder of the encrypted email provider Lavabit. Levison created Lavabit soon after the Congress passed the Patriot Act to preserve citizens’ privacy in online messages.

Last Tuesday, the Fourth Circuit Court of Appeals heard oral arguments regarding the legitimacy of the contempt order placed on Levison for not providing the FBI with the Secure Sockets Layer (“SSL”) key to Lavabit. SSL is security technology that encrypts the links between server, client, and browser. The SSL encryption by Lavabit was likely too elaborate for the FBI to decrypt; thus, the FBI’s SSL request.

When the feds can’t decrypt SSL, like that used by Lavabit, they customarily turn to other methods to obtain the desired information, such as using “backdoor” hardware installation or asking the company to disclose the information or turn over the SSL key. To the extend of public knowledge, a company has never refused to comply with a government request for encryption keys—until Lavabit. Continue Reading

Professor Files Infringement Suit Against Square, Inc.

By Laura Whiteside

Robert Morley, Professor at Washington University in St. Louis, recently filed a patent infringement claim against Jack Dorsey and Jim McKelvey, founders of Square, Inc. Square, a startup based in San Francisco, is responsible for the white plastic card readers that plug into the audio jack of mobile devices and are used to send and receive money electrically.

In the complaint, Professor Morley claims he was the original and sole inventor of the card reader. In 2008, Morley assisted McKelvey in creating a new business, and together they formed a joint venture along with Dorsey. Morley was cut out of the company when Dorsey and McKelvey incorporated. Square subsequently filed various patents that Morley claims used his insights and methods. Morley alleges that he planned to use the value of his patentable ideas to exchange for shares in the company. A court must now decide if Morley was an unfortunate victim or is simply making baseless allegations. Either way, Dorsey and McKelvey will undoubtedly keep riding the success of Square as it grows and transforms into a business that may replace the cash register and change the way large corporations process transactions.

As this lawsuit shows, founder issues can be a serious problem for startups. This is unsurprising given the fact startups are temporary organizations that make it their goal to grow—which might also mean growing out of some of their initial members. Discussions of equity splits, division of labor, and allocation of credit for ideas might not seem as pressing as creating an actual product. However, in order to avoid future litigation, it would be wise for new companies to determine these issues at the outset—before mere ideas ripen into successful billion dollar companies.