Ethical, Social, and Legal Issues of IT MGMT Summer 2012, Dannelly Night 3, Lecture Part 1 loosely based on Chapter 4

Starter Question What does Privacy and Intellectual Property have to do with Business?

Textbook Figure 4.1

Outline for Tonight Legal Topics - Part 1  SPAM  Software Warranties  Intellectual Property Laws  Software Copyrights and Patents Privacy - Part 2  privacy from your employer  privacy from businesses  privacy from the government

SPAM Costs to Business bandwidth?  40% of is SPAM  consumes lots of disk space!!! CAN SPAM Act of 2003 The law permits marketers to send unsolicited commercial as long as it contains all of the following: an opt-out mechanism; a valid subject line and header (routing) information; the legitimate physical address of the mailer; and a label if the content is adult

Software Warranties DISCLAIMER OF WARRANTIES. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, MICROSOFT AND ITS SUPPLIERS PROVIDE TO YOU THE SOFTWARE COMPONENT, AND ANY (IF ANY) SUPPORT SERVICES RELATED TO THE SOFTWARE COMPONENT ("SUPPORT SERVICES") AS IS AND WITH ALL FAULTS; AND MICROSOFT AND ITS SUPPLIERS HEREBY DISCLAIM WITH RESPECT TO THE SOFTWARE COMPONENT AND SUPPORT SERVICES ALL WARRANTIES AND CONDITIONS, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, ANY (IF ANY) WARRANTIES OR CONDITIONS OF OR RELATED TO: TITLE, NON- INFRINGEMENT, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, LACK OF VIRUSES, ACCURACY OR COMPLETENESS OF RESPONSES, RESULTS, LACK OF NEGLIGENCE OR LACK OF WORKMANLIKE EFFORT, QUIET ENJOYMENT, QUIET POSSESSION, AND CORRESPONDENCE TO DESCRIPTION. THE ENTIRE RISK ARISING OUT OF USE OR PERFORMANCE OF THE SOFTWARE COMPONENT AND ANY SUPPORT SERVICES REMAINS WITH YOU.

Software Warranties Article 2 of the Uniform Commercial Code What specifically is at issue in many cases are the disks you buy with software to load onto your computer or the updates which are internally loaded when you agree to provisions of what are called licensing agreements. Are these purchases/updates "transactions in goods" under the UCC Article 2? At first the ALI and NCCUSL decided to handle this problem by a separate section of the UCC, which it would have called Article 2B. However, the ALI withdrew from the project when there seemed to be no attempt to bring all such transactions under the scope of Article 2. Thus, the remaining pieces of what was formerly 2B became a statute UCITA ("Uniform Computer Information Transactions Act"). Article 2 would then be revised to eliminate all reference to information and UCITA would carry the burden on that front. [In Article 2, the term "goods" does not include information.] UCITA was supposed to pick up the slack. But, UCITA ran into a lot of difficulties and only two states have approved it. Thus, that leaves us potentially in legal limbo regarding whether these software packages and other similar transactions are really Article 2 transactions. Because no statutory solution is forthcoming, action shifts to the courts.

Software Warranties Mortenson v. Timberline Software (≈1993) Mortenson used a TS application when creating a bid to build a hospital. The software created a bid that was $2M too low. TS knew about the bug, but had not sent an update to Mortenson. The State of Washington Supreme Court ruled in favor of Timberline Software.

Software Warranties If the software is part of a larger system (embedded software), the software creator is liable. Examples:  Toyota acceleration due to software error  online banking error  elevator controls

Software Copyrights US Constitution The congress shall have the power to promote the progress of science and the useful arts, by securing for limited times to authors and inventors the exclusive rights to their respective writings and discoveries. Copyright extension in 1980 set of statements or instructions to be used directly in a computer in order to bring about certain results must contain original ideas

Software Copyrights These are illegal without permission: Copying a program onto a CD to give or sell it to someone else Distributing a program over the internet Preloading a program onto the hard disk of a computer to be sold

Fair Use Sometimes it is "fair use" to reproduce copyrighted work without permission. Four factors used by judges: 1. What is the purpose and character of the use? 2. What is the nature of the work being copied? 3. How much of the work is being used? 4. How will this use affect the market for the work?

Sony v Universal Studios In 1976, Universal and Disney sued Sony stating that the Betamax enabled people to copy copyrighted material. The supreme court ruled (5 to 4) that the private, noncommercial use of copyrighted material is "fair use". Also, the Betamax should be legal to own because it could copy non- copyrighted as well as copyrighted material.

MGM v Grokster Grokster promoted themselves as the replacement to Napster. MGM et.al. sued because 90% of the content was copyrighted. Lower court judged ruled in favor of Grokster.  citing Sony v Universal - selling a copier is legal. Grokster does not control their users actions. In 2005, Supreme Court overruled 9-0 in favor of MGM et.al.

"Megaupload boss says innocent, rival stops file-sharing" (Reuters, Mon Jan 23, 2012) - The founder of file-sharing website Megaupload was ordered to be held in custody by a New Zealand court on Monday, as he denied charges of internet piracy and money laundering and said authorities were trying to portray the blackest picture of him. Prosecutor Anne Toohey argued at a bail hearing that Kim Dotcom, a German national also known as Kim Schmitz, was a flight risk "at the extreme end of the scale" because it was believed he had access to funds, had multiple identities and had a history of fleeing criminal charges. U.S. authorities want to extradite Dotcom on charges he masterminded a scheme that made more than $175 million in a few short years by copying and distributing music, movies and other copyrighted content without authorization. Megaupload's lawyer has said the company simply offered online storage. The shockwaves of the case appeared to be spreading among rival websites offering lucrative file-sharing. FileSonic, a website providing online data storage, said in a statement on its website that it had halted its file-sharing services. Dotcom, 38, and three others, were arrested on Friday after New Zealand police raided his country estate at the request of the U.S. Federal Bureau of Investigation. Police cut Dotcom out of a safe room he had barricaded himself in, because, according to his layer, he was frightened and panicked.

Digital Millennium Copyright Act DMCA  technology to circumvent copyright protection technology is illegal  making any copy of a copyrighted digital work is prohibited Example Result #1:  DVDs are equipped with a Content Scrambling System to make it hard to copy them.  In 1999 three teenagers in Norway wrote a de-css program which was posted by several US web sites so that linux users could play DVDs  In Norway, the teenagers were acquitted because they have the right to the contents of the DVD they purchased. Example Result #2:  Until July 2010, it was illegal to "jail break" your iPhone.

Can you Patent Software? In Europe: No. In USA: Kind of. Only if the software is part of a larger process. The US Patent and Trademark Office issues about 20,000 patents for software each year.

Amazon.com v Barnes and Noble.com Amazon.com developed a "one-click express checkout" and obtained a patent Barnes&Noble later developed a similar interface. Amazon sued in B&N stated that the idea did not meet the non-obviousness test (express pay lines are common) Amazon won the case.

eBay v. Bidder's Edge Bidder's Edge was an aggregate auction site. It had permission from eBay to crawl through eBay's site and build lists of goods. Then eBay stopped permitting Bidder's Edge to assemble eBay information. But, BE continued anyway stating that the info was not proprietary. Technically, the information does not belong to eBay. eBay can copyright the layout and organization of the data. eBay claimed BE was consuming costly CPU time The judge sided with eBay. "Ethics and Technology" by Tavani

Exercise Management Decision Problem #2 on page Is gathering and reviewing such data ethical? 2.Are the employees acting ethically? 3.What actions should be taken?