Peer-To-Peer News - The Week In Review - October 13th, '12

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"Our feeling is they don’t really want this to end. As long as everyone is distracted by these trials, the iPhone continues to sell." – Google



































October 13th, 2012




Leading US Studios Take the Fight to Movie Sharing Site

Suit filed by US studios against movie download site with LimeWire in their sights
Bloomberg

Walt Disney Co and other movie and TV studios asked a federal judge to rule that the file-sharing website LimeWire LLC and its founder, Mark Gorton, induced people to illegally download their shows and films for free.

The companies, which also include Viacom Inc, Twentieth Century Fox Film Corp and Warner Bros Entertainment Inc, seek the same judgement a federal court granted to the music industry against LimeWire in 2010, according to a court filing in Manhattan.

“Users by the tens of millions were attracted to LimeWire to access — for free — infringing copies of virtually any type of copyrighted content,” the entertainment companies said in their motion for summary judgement.

The plaintiffs want US District Judge Harold Baer to find LimeWire and Gorton liable for inducement of copyright infringement without a trial. The movie and TV companies sued in February.

In May 2010 US District Judge Kimba Wood found LimeWire and Gorton liable for inducing copyright infringement of music recordings. The site was shut down by an October 2010 court order. LimeWire settled with the recording industry for $105 million (Dh385 million) in May 2011 during a trial in Manhattan to determine damages.
http://www.businessweek.com/news/201...d-movies-shows





Finally: BitTorrent Piracy Evidence to be Tested in Court
Ernesto

A landmark order by a Pennsylvania District Court judge may become the turning point for the many mass-BitTorrent lawsuits that are sweeping through the United States. For the first time in these cases a copyright holder has been ordered to go to trial, instead of settling with the alleged file-sharers for a few thousand dollars. This will be the first time that BitTorrent-related evidence will be tested in a U.S. court.

Over the past two years a small group of copyright holders have started thousands of mass-BitTorrent lawsuits, targeting more than a quarter million people in the US alone.

The copyright holders who start these cases generally provide nothing more than an IP-address as evidence. They then ask the courts to grant a subpoena which allows them to request the personal details of the alleged offenders from their Internet providers.

The plaintiffs in these cases, often described as copyright trolls, are mostly adult movie studios. Malibu Media is one of the most active studios, and this year alone they have filed 349 mass lawsuits, targeting thousands of alleged downloaders across the U.S.

This strategy has earned the adult studio millions of dollars in settlements, without going to trial once. However, this is going to change soon thanks to Pennsylvania District Court Judge Michael Baylson who delivered a landmark ruling late last week.

In a memorandum covering three mass-lawsuits, the Judge reviewed the motions of five anonymous defendants who protested the subpoena which ordered their Internet providers to reveal their identities. Judge Baylson summarizes one of the Doe defendant’s motions as follows.

“Among other things, the declaration asserts that Plaintiff has brought suit against numerous unnamed defendants simply to extort settlements, that the BitTorrent software does not work in the manner Plaintiff alleges, and that a mere subscriber to an ISP is not necessarily a copyright infringer, with explanations as to how computer-based technology would allow non-subscribers to access a particular IP address,” Baylson writes.

“In other words, according to the declaration, there is no reason to assume an ISP subscriber is the same person who may be using BitTorrent to download the alleged copyrighted material. Similar assertions are made in memoranda filed in support of the other motions.”

However, the Judge also notes that the copyright holder’s rights can’t be ignored. Both the plaintiffs and the defendants present their own version of the truth and Judge Baylson believes that a trial is needed to decide who’s right.

“The Court cannot decide substantive issues on these conflicting documents. Discovery and, ultimately, a trial are necessary to find the truth,” he writes.

For this reason Baylson has ordered a Bellwether trial, which often take place when many plaintiffs file proceedings under the same theory swamping courts with an enormous caseload. The five defendants who filed a motion will now go to trial, and the verdicts will be used to rule on similar proceedings in the future.

The Judge notes that the five defendants can enter into a joint defense agreement, and ask for other interested parties to join them. He also calls for a speedy trial to resolve the matter in a few months.

“In this case, the Court will require that the pleadings be completed promptly and will enter an order which provides for discovery to start without delay and be completed expeditiously so the case can proceed to final disposition on the merits, within six months,” Baylson writes.

The Bellwether trial will be the first time that actual evidence against alleged BitTorrent infringers is tested in court. This is relevant because the main piece of evidence the copyright holders have is an IP-address, which by itself doesn’t identify a person but merely a connection.

In a past RIAA court case experts described the evidence gathering techniques of other file-sharing services “as factually erroneous”, “unprofessional” and “borderline incompetent.” In addition, academics have shown that due to shoddy technique even a network printer can be accused of sharing copyrighted files on BitTorrent.

Sophisticated Jane Doe, a critic of the copyright troll cases, is optimistic that the defendants will emerge as winners of the trial.

“The beauty of a Bellwether trial design is both in its pace and in its binding power: finally, trolls’ evidence (or lack thereof) will be tested. You won’t be surprised to learn that I really doubt that trolls will present enough evidence to declare victory; that’s why I’m excited and full of expectations,” she writes.

Considering what’s at stake, it would be no surprise if parties such as the Electronic Frontier Foundation (EFF) are willing to join in. They are known to get involved in crucial copyright troll cases, siding with the defendants. We asked the group for a comment, but have yet to receive a response.

On the other side, Malibu Media may get help from other copyright holders who are engaged in mass-BitTorrent lawsuits. A ruling against the copyright holder may severely obstruct the thus far lucrative settlement business model, meaning that millions of dollars are at stake for these companies.

Without a doubt, the trial is expected to set an important precedent for the future of mass-BitTorrent lawsuits in the U.S. One to watch for sure.
https://torrentfreak.com/finally-bit...-court-121008/





Child Porn in P2P Share Folder Is Smut Distribution, Appeals Court Says
David Kravets

A federal appeals court ruled that peer-to-peer file sharers can be prosecuted for distributing child pornography by having the illicit files in their open share folders.

That was the ruling by the nation’s largest federal appeals court, the 9th U.S. Circuit Court of Appeals. “Following the First, Eighth, and Tenth Circuits, we hold that the evidence is sufficient to support a conviction for distribution,” a unanimous three-judge panel of the San Francisco-based appeals court ruled for the first time Friday.

California defendant Max Budziak maintained that he believed he disabled the share folder in 2007, before the FBI detected child porn on his computer and downloaded it using the bureau’s “EP2P” program. Budziak was also prosecuted for possession, which he did not challenge on appeal.

The defendant, who had used the now-defunct program LimeWire, claimed that the federal judge presiding over the trial erred when the court failed to instruct the jury that distribution required a jury to find that Budziak took “affirmative steps” to send child pornography to another person. It was an assertion the appeals court did not buy.

Because of the open nature of peer-to-peer file sharing, IP addresses of users are exposed, and easily traced to their owners if they are not using a virtual private network, on an open public Wi-Fi connection or TOR.

The appeals court, which covers nine states in the West, however, did not immediately uphold Budziak’s conviction. That’s because the trial judge did not require federal prosecutors to turn over to the defense the EP2P program and its technical specifications.

“Budziak also identified specific defenses to the distribution charge that discovery on the EP2P program could potentially help him develop,” the appeals court wrote. “In support of his first two motions to compel, Budziak presented evidence suggesting that the FBI may have only downloaded fragments of child pornography files from his ‘incomplete’ folder, making it ‘more likely’ that he did not knowingly distribute any complete child pornography files….”

The appeals court added that “Budziak submitted evidence suggesting that the FBI agents could have used the EP2P software to override his sharing settings.”

The appellate panel sent the case back to the lower court with directions to determine whether the EP2P materials Budziak requested would have led to a different verdict.
http://www.wired.com/threatlevel/201...haring-appeal/





Eight ‘Music Pirates’ To Face Copyright Tribunal, One To Defend In Person
enigmax

New Zealand rightsholders have come under fire for failing to fully utilize the so-called “three strikes” mechanism after they sent out less than 3,000 notices to alleged pirates in a year. However, it’s now been revealed that eight individuals are now just one step away from the most serious punishments available, just six shy of the French total after they sent out a massive 1.1 million warnings.

The Copyright (Infringing File Sharing) Amendment Act was implemented in New Zealand last year but in July 2012 it was revealed that far from sending out large quantities of warnings to deter would-be file-sharers, rightsholders have been playing a cautious game.

RIANZ, the Recording Industry Association of New Zealand, sent out just 2,766 notices between October 2011 and April 2012. The movie industry sent none at all.

In contrast, in France, where a similar “3 strikes” scheme is operated, rightholders have been in overdrive. Between October 2010 and last month they had monitored 3 million IP addresses, had 1.15 million “first strike” notices and nearly 103,000 second warnings sent out.

The problem, Kiwi rightsholders insist, is that it costs too much to send a notice, a problem not experienced in France. But interestingly, and despite the huge difference in the number of warnings sent out, when it comes to summoning individuals to face their final punishments, the two countries are not that far apart, even though the French scheme has been running a year longer.

France has sent out more than a million first strike notices and almost 103,000 second strikes, ultimately sending just 14 cases to French prosecutors. New Zealand has sent out less than 2,800 notices in total, yet as revealed today is already sending 8 people to face the country’s Copyright Tribunal.

All of the individuals are targets of the Recording Industry Association of New Zealand (RIANZ). Their alleged offenses have not been detailed but it is presumed that they were monitored sharing music either on BitTorrent or another similar file-sharing system. All will have already received three “enforcement notices” against their ISP account but failed to modify their behavior.

Three of the individuals are customers of the ISP Telecom, while the remainder are customers of TelstraClear and Slingshot, Fairfox reports.

Seven of the accused have asked the Copyright Tribunal to consider their case on paper based evidence alone. An eighth took up the opportunity to appear before the Tribunal in person, a Justice Ministry spokesman said.

The punishments faced by the eight are more harsh than those faced by their French counterparts. The Tribunal can hand down a NZ $15,000 (US $12,337) fine, in France the maximum is 1,500 euros (NZ $2,368 / US $1,948)

In August the first French conviction was handed down. A 40-year-old man was given a 150 euro fine after he ended up taking the blame for his ex-wife’s file-sharing habits. Punishments in New Zealand are not expected to exceed a few hundred dollars.

The New Zealand notices, at NZ $25 (roughly $20 USD) per shot, are too expensive to send in large numbers and should be around NZ $2 each, rightsholders say. The ISPs, on the other hand, say that they costed their systems to handle large amounts and are now out of pocket. They want the cost of notices to increase. Last month the government said the prices would stay put.

And that might indeed be a good idea. The French send just over 0.0011% of notice recipients for punishment, currently the Kiwis are sending 0.29%, a huge difference.
https://torrentfreak.com/eight-music...person-121009/





Police Follow PRQ Action With New Raid, Anti-Piracy Group Says More to Come
enigmax

As the Swedish file-sharing scene recovered from the raids on the PRQ webhost last week, police were already queuing up their next target. After the takedown of Tankafetast on Monday, it now transpires that another site was raided on Thursday. Antipiratbyran informs TorrentFreak that five key sites have shut down during the last week and that further action against other sites should be expected.

A week ago today, Swedish authorities raided one of the most infamous webhosts in Europe.

PRQ, a company with a reputation for allowing almost anyone to anonymously use its facilities, was severely disrupted as police hunted for the file-sharing related servers behind a handful of IP addresses.

Dozens of sites went down, but it took until last Wednesday for the actual targets of the operation to be revealed. The primary target was Tankafetast, once Sweden’s #2 torrent site.

The second was Appbucket, a site that was the subject of legal action in August when the FBI seized its domain in a crackdown against Android app piracy. SVT now has confirmation that the raid on that domain was carried out in concert with a “foreign police force”.

By the middle of the week most PRQ-linked sites had returned and were back in business, meaning that Internet user interest in the raids had already started to wane. However, it appears that the Swedish government’s interest in shutting down torrent sites has not.

Last Thursday, action was taken against another site known as SweDream. Police carried out a raid in Skåne in southern Sweden, seizing several computers. The site is suspected of being involved in the unauthorized distribution of movies.

Swedream

“We think [the raids are] completely wrong, file sharing is something that is good for society,” says Swedish Pirate Party leader Anna Troberg.

“That it is illegal is one thing, but if a law is bad you should change the law,” she says.

But while a change in the law may help longer term, it isn’t going to help the situation developing in Sweden today. The first signs that something might be coming appeared in February when the Sweden’s Supreme Court said it would not be hearing an appeal of the Pirate Bay trial.

“The rule of law has spoken and this is a defining moment in the lengthy discussion of copyright on the Internet,” said Henrik Pontén, lawyer at Antipiratbyrån at the time.

“The Supreme Court has made clear to all involved in copyright violations, including those that provide them with Internet connections, must now assume their responsibilities.”

What followed was a public warning from Antipiratbyrån and local Hollywood lawyer Monique Wadsted to around 150 file-sharing sites with Swedish connections – shut down or else.

Later in February police in Gothenburg carried out a raid against an individual they said was involved with both The Pirate Bay and another local site, Shareitall.

Police also flexed their muscles with a raid on SwePiracy, although in the last couple of days the site appears to have coincidentally reappeared.

Since February Sweden has been fairly quiet though, until last week of course when things really heated up. Speaking with TorrentFreak this morning, Antipiratbyrån’s Henrik Pontén confirmed that in the last seven days at least five “key” Swedish sites have been completely shut down.

They are Tankafetast, SweDream, ShareItAll, SharingZone and SteelBits.

So, do the developments of the past week indicate the start of a new file-sharing crackdown?

“Yes, you can expect more actions against illegal sites,” Pontén concludes.
https://torrentfreak.com/police-foll...o-come-121008/





Lulzsec Member Raynaldo Rivera Pleads Guilty in Sony Pictures Hack
Ravi Mandalia

Raynaldo Rivera, 20 year old man from Tempe Arizona and alleged member of the Lulzsec group, has pleaded guilty of hacking Sony Pictures Entertainment website in May 2011.

The 20 year old, in his plea agreement, revealed that he joined Lulzsec in the month of May last year in a bid to help the hacking collective carry out cyberattacks on governments and businesses. The hacker, who has been known online through his aliases like "royal", "wildicv" and “neuron” pleaded guilty at the US District Court for the Central District of California.

Rivera, who surrendered to the FBI on August 28 this year, admitted that he was the one who launched an SQL injection attack against sonypictures.com that enabled him to extract confidential information from the website's database. The plea notes that Sony Pictures incurred losses in tune of $605,663.67 over a year’s time starting May 2011. The expenses were towards hiring computer forensic firms, call centers staffing, etc.

The hacker who was in line for a jail term of 15 years will be recommended for a reduced sentence because of his plea. Rivera's hearing about the final sentence is scheduled for March 14, 2013.

Members of the disbanded Lulzsec have either gone into hiding or have been arrested. Rivera’s co-conspirator Cody Kretsinger aka "Recursion" pled guilty back in April to one count of conspiracy and one of unauthorized impairment of a protected computer.

Similarly, Hector Xavier Monsegur, who is known to be the leader of the group, was arrested by the FBI in June 2011. Since then Sabu has been work for the FBI as their informant and has led to the arrest of other LulzSec members in and out of the US. Recently he was granted some reprieve in the form of 6-months delay for his sentencing hearing.
http://paritynews.com/security/item/...-pictures-hack





Nathan Myhrvold's Cunning Plan to Prevent 3-D Printer Piracy

A patent that covers digital encryption of "objects" could bring copy protection to 3-D printing.
Antonio Regalado

Sometime in the none-too-distant future, replacing your favorite coffee mug or creating a new iPhone case might be as simple as downloading a design you like from the Internet and firing up your 3-D printer.

Zip, zap, zip, and voilà.

Most 3-D printing has been done in industry or by hobbyists who share their designs freely online. Now Intellectual Ventures, the company run by Nathan Myhrvold, the former Microsoft CTO and alleged patent troll, has been issued a patent on a system that could prevent people from printing objects using designs they haven’t paid for.

The patent, issued Tuesday by the U.S. Patent & Trademark Office, is titled “Manufacturing control system” and describes methods for managing “object production rights.”

The patent basically covers the idea of digital rights management, or DRM, for 3-D printers. Like with e-books that won’t open unless you pay Barnes & Noble and use its Nook reader, with Myhrvold’s technology your printer wouldn’t print unless you’ve paid up.

“You load a file into your printer, then your printer checks to make sure it has the rights to make the object, to make it out of what material, how many times, and so on,” says Michael Weinberg, a staff lawyer at the non-profit Public Knowledge, who reviewed the patent at the request of Technology Review. “It’s a very broad patent.”

The patent isn’t limited to 3-D printing, also known as additive manufacturing. It also covers using digital files in extrusion, ejection, stamping, die casting, printing, painting, and tattooing and with materials that include “skin, textiles, edible substances, paper, and silicon printing.”
Control schema: A drawing from a patent won by Intellectual Ventures describes how to control digital rights for 3-D printing.

“This is an attempt to assert ownership over DRM for 3D printing. It’s ‘Let’s use DRM to stop unauthorized copying of things’,” says Weinberg, author of It Will Be Awesome if They Don’t Screw it Up, a 2010 white paper on how intellectual property rights could harm the development of 3-D printing.

But there’s a big caveat to all this, says Weinberg: “nothing says manufacturers have to use DRM.”

What is certain is that commercial manufacturers of toys and some consumer goods could eventually face a “Napster moment.” Recipes for simple physical objects have already begun circulating on the Internet. Anyone with a 3-D printer can make copies.

Facing similar disruptions, the music, book, and movie industries all turned to DRM as a way to stop copying. Results have been mixed. Apple’s iTunes dropped DRM for music in 2009 after consumers complained their songs wouldn’t play on non-Apple devices. But Apple still uses DRM for movies, as do DVD makers, which is why a pirated movie often won’t work on your home DVD player (see “The DVD Rebellion”).

The worry for manufacturers is that because the CAD files that carry directions for manufacturing objects are digital too, they’ll be just as easy to duplicate and re-distribute as an mp3 or a movie.

One big difference is that you can’t copyright objects. That’s because copyright applies to creative works but not to “useful articles.” You can, however, patent a new invention or product design, and Myhrvold’s system is a way to make sure no one prints patented ideas without compensating their inventor.

That could be particularly important to Intellectual Ventures itself. Myhrvold’s operation, based in Bellevue, Washington, basically exists to file and buy patents, and currently controls nearly 40,000 of them, according to a spokesperson.

The manufacturing control patent, number 8,286,236, was filed back in 2008 and issued on October 9th to Invention Science Fund I, an arm of Myhrvold’s company.

Myhrvold’s timing of the 3-D printing revolution could be perfect. The company MakerBot just opened the first retail store dedicated to 3-D printers in Manhattan’s trendy SoHo neighborhood where it began selling its Replicator 2 desktop printer for $2,199. There’s also an online store with several thousand designs for downloading. (They’re still free, for now.)

“People have begun accepting there is going to be wide access to [3D printing] machines, and they are going to be able to create a wide range of things,” says Michaels. “People will want to control that. This patent is people thinking about how to do it.” http://www.technologyreview.com/view...o-prevent-3-d/





Unauthorized File Sharing: Is It Wrong?
Joe Karaganis

We’re kicking off our Copy Culture in the US and Germany pre-release festivities with a fresh(ish) look at an old question: is unauthorized file sharing wrong? Or more properly: do Americans think it’s wrong?

Let’s recall that there are two conventional ways of talking about the ethics of copying copyrighted stuff–both in relation to the theft of material property. First: that copying is not like theft because it is non-rivalrous–making a copy does not deprive the owner of the use of the good. For short, call this the Paley position–the defense of digital culture, in particular, as a culture of abundance. Second: that copying is like theft because it deprives the owner of the potential economic benefit from the sale of that good (in the case of downloading, to the copier). Call that the MPAA position–the defense of culture as a market that depends on the scarcity or controlled distribution of digital goods.

Modern copyright law recognizes that copying can look more like one or the other depending on circumstances. Historically, large-scale copying required a factory, which implied commercial purposes, which made infringement look more like a deprivation of the rightsholder’s potential income. ‘Commercial-scale’ infringement thus became the most common trigger for the application of criminal law. Small-scale copying, in contrast, generally involved personal networks and non-commercial intent. Some of these uses became ‘fair use’ or ‘fair dealing’ in national copyright traditions. Other uses triggered civil but not criminal liability. And in practice, the inefficiency of chasing individual infringers created wide de facto latitude for personal use.

In much of Europe, this latitude was codified in the form of ‘private copy’ rules, which allowed personal copying in return for a payment of levies on copying technologies–blank media, tape recorders, and so on. In the US, despite some efforts in the early 1990s to create such rules for Digital Audio Tape (remember that? No?), the private copy model never took hold, leaving most of the practices associated with sharing media illegal or under a cloud of legal uncertainty.

Imagine Copy Culture–the sum total of informal copying–as a shifting product of what the law says, what wider ethical analogies people subscribe to, what parts of the law can be efficiently enforced, the relative ease of access to content through legal channels, and finally, what technological capacities for copying and sharing are readily available. The commercial scale / private copy distinction was the most important 20th century tool for mapping these interactions. As individuals began to be able to copy on a large scale, the technological basis for the commercial / private distinction began to break down. The past two decades of industry IP activism can be understood as an effort to compensate by ratcheting up the other limiting factors–law, enforcement, and moral persuasion. We’ve seen this in the creeping criminalization of personal copying under US law, and–as excessive sanctions demonstrate low returns–in the shift toward automated surveillance and punishment strategies online. And we see it in the array of efforts to make and remake the ethical argument. Much of the current copyright debate is framed as if the MPAA can win the hearts and minds of the copiers. As if it’s just a matter of telling the story better and more often.

Accordingly, nearly all consumer-directed IP enforcement plans are now framed in terms of education, including plans in which education refers primarily to fear of punishment rather than moral persuasion (such as the various ‘graduated response’ programs underway in France, the US, and other countries). Policymakers and industry stakeholders like to talk about education because they like to imagine a soft solution to piracy, in which “respect” for IP grows and piracy withers away. By the same token, nobody wants to talk about a copyright regime based primarily on mass surveillance and punishment. It’s terrible marketing.

So regardless of whether anybody actually believes that education can work, there is a lot vested in pretending that it does. As we argue in our Media Piracy report, soft education campaigns of the school curriculum or public service announcement variety are usually a sign of paralysis of the copyright debates, not progress. They appear when governments resist implementing more punitive measures on behalf of copyright holders and businesses resist changing their business models to lower the costs of legal access. Under these circumstances, everyone can agree to blame the consumer, who needs to be educated to respect IP. And nobody will look too closely at the fact that there is no evidence that these efforts work.

Rather than ask people to judge the morality of unauthorized downloading, we were interested in how people distinguish the different public and private contexts of copying And so we asked respondents whether different kinds of copying and ‘making available’ were “reasonable.” Our results suggest three things.

First, that strong moral arguments against file sharing mistake the structure of public attitudes. Not surprisingly, the public engages in many of the same negotiations of context as the law. For most people, like theft and not like theft are not diametrically opposed moral judgements about copying. Rather, they operate on a continuum. They depend on the context and scale in which copying takes place. Copying, our data makes clear, is widely accepted within personal networks, reflecting a view of culture as not only shared but also constructed through sharing. Outside networks of family and friends, in contrast, a commercial and property logic tends to prevail. Support for more active forms of dissemination and ‘making’ available’ through such networks is quite low. Support for commercial infringement–selling copied DVDs–is minimal.

Second, there is a strong generational divide in attitudes, with 18-29 year olds far more likely than older groups to view a wide range of copying practices as reasonable. This shift is strongest in relation to sharing within networks of ‘friends’–a category that has become very elastic in the last few years through the rise of online social networks. Among 18-29 year olds, sharing with friends is entirely normalized and large in scale. On average, ‘copying from friends/family’ accounts for nearly as much of music file collections as ‘downloading for free.’ What are the reasonable boundaries of such a network? My siblings? My five closest friends? My 500 Facebook friends? Or the 5000 music aficionados who subscribe to a private file sharing network? This is where the rubber hits the road as people develop their own digital ethics. The law has not begun to address it, and educational efforts to convince people that sharing within communities is theft are likely doomed.

Third, there is plenty of evidence that these ethical issues sit lightly with most file sharers. Sharing and downloading operate in a notionally contested ethical space, but rarely rise to the level of a major ethical dilemma. I take this to be the meaning (and real scandal) of NPR-Interngate: the fact that the intern, Emily White, admitted to understanding the ethical arguments against file sharing and… didn’t care. One sign of this in our work (and in numerous other surveys) is that large numbers of file sharers can be shown to agree with versions of the claim that online file sharing is wrong. The profile of P2P users in our study closely tracks our under-30 group in general–including the relative lack of tolerance for uploading.

Data from the Australian film and TV industry association, IPAF, makes this more explicit. In a 2012 survey, they found that 49% of “persistent illegal downloaders” agreed with the statement that “movie/TV piracy” is “stealing/theft.” But when asked whether they contribute to “the problem of TV/movie piracy,” 74% of chose “It’s not something I give a lot of thought to.”

It’s certainly possible to see this as selfish behavior–of just rationalizing getting stuff for free. And no doubt that enters into it. But this explanation seems inadequate to explaining the demographic shift in attitudes underway. Rather, it seems better to talk about growth of a different kind of audiovisual culture, marked by expectations of universal access and by sharing within increasingly Internet-mediated communities. The older ethical framework is still present and can be triggered by the right questions, but the underlying practices are completely normalized in those community contexts. The dilemma for both industry and the law is that the situation is unstable: the labor of copying continues to fall toward zero and the community is no longer limited to a small group of friends. It has shifted outward.
http://infojustice.org/archives/27479





SOPA Is Back! … As a Ransomware Virus
Ernesto

After historic Internet protests in January the SOPA anti-piracy bill was defeated. However, this week several reports have pointed to a rather unfortunate SOPA comeback. Not in Congress, but as a nasty cryptovirus that locks up people’s computers and accuses them of distributing copyright infringing files. Infected users can get their data back after a payment of $200 – at least, that’s what the virus makers promise.

The Stop Online Piracy ACT (SOPA) was a major threat to the Internet. The bill introduced draconian censorship tools for the Government and copyright holders, that worried the public and many key Internet companies including Reddit, Google and Wikipedia.

After months of protest, the bill was eventually killed off following the Internet Blackout earlier this year.

But that doesn’t mean SOPA is no longer a threat. This week ‘the bill’ was resurrected by a virus maker, who has been warning users of infected computers that their IP-address is on a blacklist after it was discovered distributing illegal content.



As a result, the SOPA virus holds all files on the host computer ransom.

“Your computer is locked!” the splash screen above warns, adding:

If you see a warning.txt or warning screen, it means your IP address was included in S.O.P.A. Black List. One or more of the following items were made from your PC:

1. Downloading or distributing audio or video files protected by Copyright Law.
2. Downloading or distributing illegal content (child porn, phishing software, etc.)
3. Downloading or distributing Software protected by Copyright Law.

As a result of these infringements based on Stop Online Piracy Act (H.R. 3261) your PC and files are now blocked.

The SOPA virus is so-called ransomware, meaning that it holds computers hostage and only promises to free data after victims hand over cash. In the U.S. and Canada people are instructed to pay with a MoneyPak prepaid voucher, and in other parts of the world they can use Western Union.

Those who don’t pay within three days are in trouble, the virus maker warns.

“WARNING!!!: If you don’t pay the fine within 72 HOURS at the amount of 200 USD, all your computer data will be erased.”

People who are affected should of course ignore all the above. Searching online for “Stop Online Piracy Automatic Protection System Removal”” is a better option, there are plenty of ways to defeat the resurrected SOPA and get your data back.
https://torrentfreak.com/sopa-is-bac...-virus-121011/





Microsoft: Pirates at High Risk of Malware Infection

Freetards have only themselves to blame
Neil McAllister

Web-based attacks are on the rise, but according to Microsoft security researchers, the risks involved with casual browsing are nothing compared to the dangers of downloading and sharing illicit software, videos, music, and other media.

In the latest edition of the Microsoft Security Intelligence Report, published on Monday, Redmond's Trustworthy Computing Group warns of a growing trend of malware infection via "unsecure supply chains," which the report defines as "the websites, protocols, and other channels by which software and media are informally distributed."

Examples of these so-called supply chains include underground websites, peer to peer networks, bootleg discs, and unreliable software archives – in short, anywhere media might be found that's off the beaten track.

Sometimes the victims of these malware attacks are wholly innocent, such as when a user attempts to download a free software package but is duped into installing malware instead. For example, in the first half of 2012, Microsoft's researchers spotted 35 different types of malware disguised as "install_adobeflash.exe."

Far more often, however, the researchers found that malware had likely come bundled with illegal copies of commercial software or media that had been downloaded by users looking for a free lunch.

"Preying on the desire to 'get a good deal' is a form of social engineering that has been around for a long time, but it's proving to be a perennially popular method for malware distributors," writes Joe Blackbird of Microsoft Malware Protection Center, adding that people hoping to download media for free or at reduced cost are putting their PCs at risk.

Naturally, Microsoft has a vested interest in making such claims. Between Windows and Office alone, Microsoft products are among the most frequently pirated software in the world. But Redmond's latest Security Intelligence Report attempts to back up its assertions with real-world research.

Who's been naughty, then?

To get a sense for how widespread malware infection is among illicit downloaders, Microsoft's security team studied data reported by PCs running Microsoft antimalware software, looking for six "indicator families" of malware – that is, certain types of malicious or unwanted software that are closely correlated with illegal downloads.

One such indicator family is Win32/Keygen, a generic name for a category of software designed to generate license key codes for various commercial software packages, such as Microsoft Office, Adobe Photoshop, and so on.

Technically, Win32/Keygen is classified as "potentially unwanted software," rather than malware. Software in this category does not necessarily carry any kind of harmful payload (although it can). But key generators are highly correlated with illicit software trading – naturally, since legitimate software purchasers don't need them – making them good markers for studying the threats associated with software piracy.

The other malware families the researchers tracked follow a similar theme. Some are designed to bypass Microsoft's Windows Activation process, while others try to patch trial copies of software to unlock their full features. One family, Win32/Pameseg, is a scam that tricks users into paying to install illicit software. As with Win32/Keygen, the presence of any of these families is good evidence that someone has been up to some funny business.

In their study, the first thing Microsoft's researchers noticed was that these indicator families were widespread and commonplace. Of all the PCs that reported malware detections in the first half of 2012, around 17 per cent detected at least one of the indicator families. Win32/Keygen, in particular, was the most frequently detected potential threat across every version of Windows studied.

More crucially, of those PCs that detected one or more indicator families, more than 76 per cent also detected some other form of malware threat. That's a common pattern; users who become infected with one form of malware often pick up others. But PCs that detected one of the indicator families were actually 10 per cent more likely to detect multiple infections than PCs that didn't detect an indicator family.

Of course, correlation is not causation. Nobody is saying the indicator families were directly responsible for downloading other malware (although it's possible). But the data does suggest that people who are involved in illicit file trading are at high risk for malware infection.

It's a scary underworld out there

Microsoft's report goes on to explain that illegal software isn't the only risk vector. A category of malware called ASX/Wimad can disguise itself as a number of popular media file formats – including MP3, AVI, and WMV, among others – and exploit a Windows Media Player bug to download a malware payload. While this type of malware wasn't as prevalent as Win32/Keygen in Microsoft's research, it was still in the Top Ten threats detected on most versions of Windows.

Furthermore, Microsoft's Blackbird says, users who want something for nothing may put themselves at risk simply by the act of searching for illegal media. Sites that purport to offer free downloads often hide exploits that can install malware on users' PCs without their knowledge, he said.

For example, in Microsoft's research, PCs that detected Win32/Keygen were twice as likely to also encounter "Blacole," a comprehensive web-based exploit suite that can install malware by attacking a variety of different browser and plugin vulnerabilities.
According to Redmond's report, avoiding all of these malware threats is largely a matter of following the usual advice. Users should have antimalware installed and their definition files should be up to date. They should also make sure that they have the latest security patches installed, both for their OS and for all of their applications.

But according to Microsoft's security team, it's equally important that users don't go out of their way to find malware threats by looking for illegal downloads. In fact, they should avoid digging around the wrong corners of the web altogether.

"In other words," Blackbird writes, "it's not just downloading license key generators, cracked software or free media files that expose users to malware; the act of visiting web pages of unknown origin, claiming to provide this type of free software download, is risky activity."
http://www.theregister.co.uk/2012/10...el_report_v13/





Microsoft DMCA Notice ‘Mistakenly’ Targets BBC, Techcrunch, Wikipedia and U.S. Govt
Ernesto

Over the last year Microsoft asked Google to censor nearly 5 million webpages because they allegedly link to copyright infringing content. While these automated requests are often legitimate, mistakes happen more often than one might expect. In a recent DMCA notice Microsoft asked Google to censor BBC, CNN, HuffPo, TechCrunch, Wikipedia and many more sites. In another request the software giant seeks the removal of a URL on Spotify.com.

windowsIn recent months the number of DMCA takedown requests sent out by copyright holders has increased dramatically, and it’s starting to turn the Internet into a big mess.

One of the problems is that many rightsholders use completely automated systems to inform Google and other sites of infringements.

That these automated tools aren’t always spot on is nicely illustrated by a recent DMCA notice sent to Google on behalf of Microsoft.

Claiming to prevent the unauthorized distribution of Windows 8 Beta the software company listed 65 “infringing” web pages. However, nearly half of the URLs that Google was asked to remove from its search results have nothing to do with Windows 8.

This apparent screw up in the automated filter mistakenly attempts to censor AMC Theatres, BBC, Buzzfeed, CNN, HuffPo, TechCrunch, RealClearPolitics, Rotten Tomatoes, ScienceDirect, Washington Post, Wikipedia and even the U.S. Government.

Judging from the page titles and content the websites in question were targeted because they reference the number “45″.

Unfortunately this notice is not an isolated incident. In another DMCA notice Microsoft asked Google to remove a Spotify.com URL and on several occasions they even asked Google to censor their own search engine Bing.

The good news is that Google appears to have white-listed a few domains, as the BBC and Wikipedia articles mentioned in the DMCA notice above were not censored. However, less prominent sites are not so lucky and the AMC Theatres and RealClearPolitics pages are still unavailable through Google search today.

As we have mentioned before, the DMCA avalanche is becoming a bigger problem day after day.

Microsoft and other rightsholders are censoring large parts of the Internet, often completely unfounded, and there is absolutely no one to hold them responsible. Websites can’t possibly verify every DMCA claim and the problem will only increase as more takedown notices are sent week after week.

Right now rightsholders and the anti-piracy outfits they employ have absolutely no incentive to improve the accuracy of their automated takedown systems, so perhaps it’s time for them to be punished?

Just a thought.
https://torrentfreak.com/microsofts-...d-more-121007/





The Patent, Used as a Sword
Charles Duhigg and Steve Lohr

When Apple announced last year that all iPhones would come with a voice-activated assistant named Siri, capable of answering spoken questions, Michael Phillips’s heart sank.

For three decades, Mr. Phillips had focused on writing software to allow computers to understand human speech. In 2006, he had co-founded a voice recognition company, and eventually executives at Apple, Google and elsewhere proposed partnerships. Mr. Phillips’s technology was even integrated into Siri itself before the digital assistant was absorbed into the iPhone.

But in 2008, Mr. Phillips’s company, Vlingo, had been contacted by a much larger voice recognition firm called Nuance. “I have patents that can prevent you from practicing in this market,” Nuance’s chief executive, Paul Ricci, told Mr. Phillips, according to executives involved in that conversation.

Mr. Ricci issued an ultimatum: Mr. Phillips could sell his firm to Mr. Ricci or be sued for patent infringements. When Mr. Phillips refused to sell, Mr. Ricci’s company filed the first of six lawsuits.

Soon after, Apple and Google stopped returning phone calls. The company behind Siri switched its partnership from Mr. Phillips to Mr. Ricci’s firm. And the millions of dollars Mr. Phillips had set aside for research and development were redirected to lawyers and court fees.

When the first lawsuit went to trial last year, Mr. Phillips won. In the companies’ only courtroom face-off, a jury ruled that Mr. Phillips had not infringed on a broad voice recognition patent owned by Mr. Ricci’s company.

But it was too late. The suit had cost $3 million, and the financial damage was done. In December, Mr. Phillips agreed to sell his company to Mr. Ricci. “We were on the brink of changing the world before we got stuck in this legal muck,” Mr. Phillips said.

Mr. Phillips and Vlingo are among the thousands of executives and companies caught in a software patent system that federal judges, economists, policy makers and technology executives say is so flawed that it often stymies innovation.

Alongside the impressive technological advances of the last two decades, they argue, a pall has descended: the marketplace for new ideas has been corrupted by software patents used as destructive weapons.

Vlingo was a tiny upstart on this battlefield, but as recent litigation involving Apple and Samsung shows, technology giants have also waged wars among themselves.

In the smartphone industry alone, according to a Stanford University analysis, as much as $20 billion was spent on patent litigation and patent purchases in the last two years — an amount equal to eight Mars rover missions. Last year, for the first time, spending by Apple and Google on patent lawsuits and unusually big-dollar patent purchases exceeded spending on research and development of new products, according to public filings.

Patents are vitally important to protecting intellectual property. Plenty of creativity occurs within the technology industry, and without patents, executives say they could never justify spending fortunes on new products. And academics say that some aspects of the patent system, like protections for pharmaceuticals, often function smoothly.

However, many people argue that the nation’s patent rules, intended for a mechanical world, are inadequate in today’s digital marketplace. Unlike patents for new drug formulas, patents on software often effectively grant ownership of concepts, rather than tangible creations. Today, the patent office routinely approves patents that describe vague algorithms or business methods, like a software system for calculating online prices, without patent examiners demanding specifics about how those calculations occur or how the software operates.

As a result, some patents are so broad that they allow patent holders to claim sweeping ownership of seemingly unrelated products built by others. Often, companies are sued for violating patents they never knew existed or never dreamed might apply to their creations, at a cost shouldered by consumers in the form of higher prices and fewer choices.

“There’s a real chaos,” said Richard A. Posner, a federal appellate judge who has helped shape patent law, in an interview. “The standards for granting patents are too loose.”

Almost every major technology company is involved in ongoing patent battles, but the most significant player is Apple, industry executives say, because of its influence and the size of its claims: in August in California, the company won a $1 billion patent infringement judgment against Samsung. Former Apple employees say senior executives made a deliberate decision over the last decade, after Apple was a victim of patent attacks, to use patents as leverage against competitors to the iPhone, the company’s biggest source of profits.

Apple has filed multiple suits against three companies — HTC, Samsung and Motorola Mobility, now part of Google — that today are responsible for more than half of all smartphone sales in the United States. If Apple’s claims — which include ownership of minor elements like rounded square icons and of more fundamental smartphone technologies — prevail, it will most likely force competitors to overhaul how they design phones, industry experts say.

HTC, Samsung, Motorola and others have filed numerous suits of their own, also trying to claim ownership of market-changing technologies.

While Apple and other major companies have sometimes benefited from this war, so have smaller partners. In 2010, Apple acquired Siri Inc., the company behind the software of the same name. The stock price of Mr. Ricci’s company, Nuance, which had by then become Siri’s partner, rose by more than 70 percent as iPhone sales skyrocketed. Some former executives at Vlingo, Nuance’s old rival, remain bitter.

“We had spent $3 million to win one patent trial, and had five more to go,” said a former Vlingo executive who spoke on condition of anonymity because he had signed confidentiality agreements. “We had the better product, but it didn’t matter, because this system is so completely broken.”

Mr. Ricci declined to be interviewed. Others at Nuance said they were simply protecting their intellectual property.

“Our responsibility is to follow the law,” said Lee Patch, a vice president at Nuance. “That’s what we do. It’s not our fault if some people don’t like the system.”

Today, Nuance is a giant in voice recognition. Apple is the most valuable company in the world. And the iPhone is wrapped in thousands of patents that keep companies in numerous court battles.

“Apple has always stood for innovation,” the company wrote in a statement in response to questions from The New York Times. “To protect our inventions, we have patented many of the new technologies in these groundbreaking and category-defining products. In the rare cases when we take legal action over a patent dispute, it’s only as a last resort.

“We think companies should dream up their own products rather than willfully copying ours, and in August a jury in California reached the same conclusion,” the statement said.

At a technology conference this year, Apple’s chief executive, Timothy D. Cook, said patent battles had not slowed innovation at the company, but acknowledged that some aspects of the battles had “kind of gotten crazy.”

“There’s some of this that is maddening,” he said. “It’s a waste; it’s a time suck.”

The evolution of Apple into one of the industry’s patent warriors gained momentum, like many things within the company, with a terse order from its chief executive, Steven P. Jobs.

A Patent Warrior’s Education

It was 2006, and Apple was preparing to unveil the first iPhone. Life inside company headquarters, former executives said, had become a frenzy of programming sessions and meetings between engineers and executives. And, increasingly, patent lawyers.

Just months earlier, Apple reluctantly agreed to pay $100 million to Creative Technology, a Singapore-based company. Five years before, Creative applied for a broad software patent for a “portable music playback device” that bore minor similarities to the iPod, an Apple product that had gone on sale the same year. Once the patent was granted to Creative, it became a license to sue.

Apple settled three months after Creative went to court. “Creative is very fortunate to have been granted this early patent,” Mr. Jobs said in a statement announcing the settlement in 2006.

Privately, Mr. Jobs gathered his senior managers. While Apple had long been adept at filing patents, when it came to the new iPhone, “we’re going to patent it all,” he declared, according to a former executive who, like other former employees, requested anonymity because of confidentiality agreements.

“His attitude was that if someone at Apple can dream it up, then we should apply for a patent, because even if we never build it, it’s a defensive tool,” said Nancy R. Heinen, Apple’s general counsel until 2006.

Soon, Apple’s engineers were asked to participate in monthly “invention disclosure sessions.” One day, a group of software engineers met with three patent lawyers, according to a former Apple patent lawyer who was at the meeting.

The first engineer discussed a piece of software that studied users’ preferences as they browsed the Web.

“That’s a patent,” a lawyer said, scribbling notes.

Another engineer described a slight modification to a popular application.

“That’s a patent,” the lawyer said.

Another engineer mentioned that his team had streamlined some software.

“That’s another one,” the lawyer said.

“Even if we knew it wouldn’t get approved, we would file the application anyway,” the former Apple lawyer said in an interview. “If nothing else, it prevents another company from trying to patent the idea.”

The disclosure session had yielded more than a dozen potential patents when an engineer, an Apple veteran, spoke up. “I would like to decline to participate,” he said, according to the lawyer who was at the meeting. The engineer explained that he didn’t believe companies should be allowed to own basic software concepts.

It is a complaint heard throughout the industry. The increasing push to assert ownership of broad technologies has led to a destructive arms race, engineers say. Some point to so-called patent trolls, companies that exist solely to sue over patent violations. Others say big technology companies have also exploited the system’s weaknesses.

“There are hundreds of ways to write the same computer program,” said James Bessen, a legal expert at Harvard. And so patent applications often try to encompass every potential aspect of a new technology. When such applications are approved, Mr. Bessen said, “the borders are fuzzy, so it’s really easy to accuse others of trespassing on your ideas.”

The number of patent applications, computer-related and otherwise, filed each year at the United States patent office has increased by more than 50 percent over the last decade to more than 540,000 in 2011. Google has received 2,700 patents since 2000, according to the patent analysis firm M-CAM. Microsoft has received 21,000.

In the last decade, the number of patent applications submitted by Apple each year has risen almost tenfold. The company has won ownership of pinching a screen to zoom in, of using magnets to affix a cover to a tablet computer and of the glass staircases in Apple stores. It has received more than 4,100 patents since 2000, according to M-CAM.

And as patent portfolios have expanded, so have pressures to use them against competitors.

In March 2010, Apple sued HTC, a Taiwanese smartphone manufacturer that had partnered with Google. Apple did not talk to HTC before suing. Negotiations were not part of the strategy, according to a former executive. “Google was the enemy, the real target,” the executive said.

It was one of seven major smartphone and patent-related lawsuits Apple has initiated since 2006. The suits have focused on two large companies, HTC and Samsung, both Google partners, which together account for 39 percent of American smartphone sales. Apple has also filed countersuits against Nokia, as well as against Motorola Mobility, which is now owned by Google and accounts for 12 percent of sales.

In addition, the company has filed two declaratory judgment actions asking the courts to rule on the provenance and validity of patents. Over the same period, Apple itself has been sued 135 times, mostly by patent trolls interested in its deep pockets.

Apple is not alone. The number of patent lawsuits filed in United States district courts each year has almost tripled in the last two decades to 3,260 in 2010, the last year for which federal data is available. Microsoft has sued Motorola; Motorola has sued Apple and Research in Motion; Research in Motion has sued Visto, a mobile technology company; and in August, Google, through its Motorola unit, sued Apple, contending that Siri had infringed on its patents. (Google dropped the suit last week, leaving open the possibility of refiling at a later date.) All of those companies have also been sued numerous times by trolls.

Patents for software and some kinds of electronics, particularly smartphones, are now so problematic that they contribute to a so-called patent tax that adds as much as 20 percent to companies’ research and development costs, according to a study conducted last year by two Boston University professors.

Supporters of suits initiated by Apple say that the litigation is vital to the company’s success and that Apple is sued far more often than it sues, as do all major tech firms.

“If we can’t protect our intellectual property, then we won’t spend millions creating products like the iPhone,” a former Apple executive said, noting that some of Apple’s patents, like the “slide to unlock” feature on the iPhone, took years to perfect. The concept “might seem obvious now, but that’s only after we spent millions figuring it out,” the executive said. “Other companies shouldn’t be able to steal that without compensating us. That’s why the patent system exists.”

But others challenge that logic, given the huge profits the technology industry enjoys. Apple collects more than $1 billion a week in iPhone and related sales. “I am skeptical whether patents are needed in the software industry to provide adequate incentives,” Judge Posner wrote in an e-mail.

One consequence of all this litigation, policy makers and academics say, is that patent disputes are suffocating the culture of start-ups that has long fueled job growth and technological innovation.

“Think of the billions of dollars being flushed down the toilet,” said Ms. Heinen, the former Apple general counsel, who left the company and paid $2.2 million in connection with a federal investigation of stock option backdating. “When patent lawyers become rock stars, it’s a bad sign for where an industry is heading,” she said, adding that she had no issue with the lawyers themselves.

There are some indications that the big companies themselves are growing weary of this warfare.

In its response to The Times, Apple addressed “standards-essential” patents, which companies are obligated to license to competitors at reasonable rates, and wrote that it was “deeply concerned by the rampant abuse of standards-essential patents by some of our competitors.”

“Standards-essential patents are technologies which these companies have volunteered to license to anyone for a reasonable fee,” the statement said, “but instead of negotiating with Apple, they’ve chosen to sue us.” Samsung, Motorola, Nokia and HTC have sued Apple, claiming it violated standards-essential patents.

Another sign of fatigue is the frequency with which executives and lawyers from Apple and Google speak to one another about patent disputes. Earlier this year, Google proposed a cease-fire, according to people familiar with the conversations. And when Google withdrew its Motorola suit last week, it was widely seen as a peace gesture.

But Apple has been hard to pin down, said one person from Google who was not authorized to speak publicly. “Sometimes they’re asking for money. Then they say we have to promise to not copy aspects of the iPhone. And whenever we get close to an agreement, it all changes again.

“Our feeling is they don’t really want this to end. As long as everyone is distracted by these trials, the iPhone continues to sell.”

Apple declined to comment on the negotiations.

The Patent Bureaucracy

The application by Apple that eventually became patent 8,086,604 first crossed desks at the Patent and Trademark Office on a winter day in 2004.

In the next two years, a small cast of officials spent about 23 hours — the time generally allotted for reviewing a new application — examining the three dozen pages before recommending rejection. The application, for a voice- and text-based search engine, was “an obvious variation” on existing ideas, a patent examiner named Raheem Hoffler wrote. Over the next five years, Apple modified and resubmitted the application eight times — and each time it was rejected by the patent office.

Until last year.

On its 10th attempt, Apple got patent 8,086,604 approved. Today, though the patent was not among those Vlingo and Nuance fought over, it is known as the Siri patent because it is widely viewed as one of the linchpins of Apple’s strategy to protect its smartphone technologies.

In February, the company deployed this new patent in a continuing lawsuit against Samsung that could radically reorder the $200 billion smartphone business by giving Apple effective ownership of now-commonplace technologies, software experts say.

Patent 8,086,604’s path to approval “shows there’s a lot wrong with the process,” said Arti K. Rai, an intellectual property expert at Duke University School of Law who reviewed the patent application for The Times. That patent, like numerous others, is an example of how companies can file an application again and again until they win approval, Ms. Rai said.

When Apple submitted the first application for 8,086,604, the iPhone and Siri did not exist. The application was aspirational: it described a theoretical “universal interface” that would allow people to search across various mediums, like the Internet, corporate databases and computer hard drives, without having to use multiple search engines. It outlined how such software might function, but it did not offer specifics about how to build it. It suggested that some people might speak a search phrase rather than use a keyboard.

The ideas contained in the application would blossom at Apple, Google, Microsoft, Nuance, Vlingo and dozens of other companies. All the while, the application traveled quietly through the patent office, where officials rejected it twice in 2007, three times in 2008, once in 2009, twice in 2010 and once in 2011.

The patent office has a reputation for being overworked, understaffed and plagued by employee turnover, and employees concede that some of their work is subjective.

“When I get an application, I basically have two days to research and write a 10- to 20-page term paper on why I think it should be approved or rejected,” said Robert Budens, a 22-year patent examiner and president of the examiners’ labor union. “I’m not going to pretend like we get it right every time.”

To receive a patent, an invention must be novel (substantially different from what exists), not obvious (one can’t patent a new toaster simply by expanding it to handle five slices of bread), and useful (someone can’t patent an invisibility machine if invisibility is impossible).

“If you give the same application to 10 different examiners, you’ll get 10 different results,” said Raymond Persino, a patent lawyer who worked as an examiner from 1998 to 2005.

After patent 8,086,604 was first rejected in 2007, Apple’s lawyers made small adjustments to the application, changing the word “documents” to “items of information” and inserting the phrase “heuristic modules” to refer to bits of software code. A few years later, the inclusion of the word “predetermined” further narrowed Apple’s approach.

These changes had little substantial impact, said experts who reviewed the application for The Times. But the patent office slowly began to come around to Apple’s point of view.

Though submitting an application repeatedly can incur large legal fees, it is often effective. About 70 percent of patent applications are eventually approved after an applicant has altered claims, tinkered with language or worn down the patent examiners.

One consequence is that patents are sometimes granted for ideas that already exist.

In 1999, for instance, two men received a patent for a crustless, sealed peanut butter and jelly sandwich. (The J. M. Smucker company acquired the patent and used it to sue other food makers. In 2007, after press scrutiny, federal officials canceled the patent.)

A year earlier, the patent office had awarded an Illinois company effective ownership of many of the basic systems that power the Internet. That firm sued a number of tech giants, persuading many to sign multimillion-dollar settlements, until a jury declared some of the patents invalid last year.

For Apple’s 8,086,604, the examiners finally relented last December and issued a patent.

“Apple got another warhead in its arsenal, but there’s no big invention here,” said David J. Pratt, president of M-CAM, the patent analysis firm, who analyzed the application for The Times.

The patent office declined to discuss 8,086,604. Officials pointed out that the agency’s 7,650 examiners received more than half a million applications last year, and the numbers have kept climbing.

By all accounts, there have been improvements in the patent office since David J. Kappos took over as director in 2009. In an interview, Mr. Kappos said the lengthy back-and-forth between examiners and Apple was evidence that the system worked.

“It’s called the patent office,” he said, noting that issuing patents is the agency’s job. In a statement, the agency said it had spent the last three years strengthening policies to improve patent quality. Besides, Mr. Kappos said, “we realize that only a handful of these patents will be really important.”

However, patent 8,086,604 has proved very important. In February, Apple sued Samsung in a California court, arguing that 17 of Samsung’s smartphones and tablets violated 8,086,604. In June, a judge banned sales of Samsung’s Galaxy Nexus phone, validating 8,086,604 and ruling that the phone infringed on Apple’s patent because it featured a “Google quick search box” that allowed users to enter one search term, either typed or spoken, that returned results simultaneously from the Internet, contacts stored on the phone and recently visited Web sites. (The ban has been stayed while under appeal.)

Searching for Fixes

Some experts worry that Apple’s broad patents may give the company control of technologies that, over the last seven years, have been independently developed at dozens of companies and have become central to many devices.

“Apple could get a chokehold on the smartphone industry,” said Tim O’Reilly, a publisher of computer guides and a software patent critic. “A patent is a government-sanctioned monopoly, and we should be very cautious about handing those out.”

Others say the system works fine.

“Intellectual property is property, just like a house, and its owners deserve protection,” said Jay P. Kesan, a law professor at the University of Illinois. “We have rules in place, and they’re getting better.

“And if someone gets a bad patent, so what?” he said. “You can request a re-examination. You can go to court to invalidate the patent. Even rules that need improvements are better than no rules at all.”

Five years ago, Congress was debating how to fix the patent system when an inventor named Stephen G. Perlman went to Capitol Hill.

Mr. Perlman worked at Apple in the 1980s. Today, he runs a start-up incubator called Rearden in San Francisco. He holds 100 patents — including for the software behind the reverse aging in the film “The Curious Case of Benjamin Button” — and has about 100 more applications pending.

Patents are crucial to his business, Mr. Perlman said, particularly in raising money from venture capitalists and deterring large companies from copying his innovations. “When we file a patent application, it’s a big deal,” he said.

When Mr. Perlman went to Congress, he brought ideas to protect small inventors. He wasn’t alone in suggesting solutions. Thousands of companies, from start-ups like Vlingo to large technology firms, have argued that a well-functioning patent system is essential to their success. The problems with the current system are so pervasive, they say, that the courts, lawmakers and Silicon Valley must find their own fixes.

One option is judicial activism. This year, Judge Posner, in an Illinois federal court, tossed out patent arguments made by both Apple and Motorola Mobility in a 38-page opinion that dismissed a lawsuit between the two companies. Cleaning up the patent mess, Judge Posner said in an interview, might also require reducing the duration of patents on digital technologies, which can be as long as 20 years. “That would make a big difference,” he said. “After five years, these patents are mainly traps for the unwary.”

Ideas have also come from policy experts and Silicon Valley. The Federal Reserve Bank of St. Louis recently published a working paper calling for the abolition of patents, saying they do more harm than good.

Another idea is to create different classes of patents, so that some kinds of inventions, like pharmaceuticals, would receive 20 years of ironclad protection, while others, like software, would receive shorter and more flexible terms.

A third suggestion was made by the Internet company Twitter, which released an “Innovator’s Patent Agreement” this year intended to give software engineers some control over how their creations are used. Under the terms of the agreement, companies pledge that patents will be used only for defensive purposes.

“We’re just trying to do something modest,” said Benjamin Lee, Twitter’s legal counsel.

Similarly, law school faculty at the University of California, Berkeley, have proposed a “Defensive Patent License” in which companies would contribute patents to a common pool that shielded participants from litigious aggressors. Companies would be allowed to participate as long as they did not become first-strike plaintiffs. The benefit is that “you don’t have to worry about your patent being weaponized” and used to attack competitors, said Jason M. Schultz, an assistant professor who helped design the license.

But to really make a difference, such ideas require the participation of large technology companies, and the incentives to cooperate are small. So some frustrated engineers have become outspoken advocates for reform.

Mr. Perlman, the independent inventor, for instance, was hopeful his voice would be heard on Capitol Hill. But alongside Mr. Perlman were hundreds of lobbyists from high-tech corporations and the pharmaceutical industry, which often push conflicting proposals. Big technology companies, in general, want to limit the financial damages juries can award for minor patent violations, while drug makers want to make sure they can sue for billions of dollars if a single patent is violated.

These and dozens of other narrow battles have paralyzed Congress’s ability to make real changes, lawmakers and lobbyists say. The last attempt, the America Invents Act, which was passed last year, achieved mostly administrative fixes, like making it easier for outsiders to challenge a patent’s validity.

The new law did make one fundamental change. Since the patent system was overseen by Thomas Jefferson, the United States has awarded ownership of an innovation to whoever created the first prototype, a policy known as “first to invent.” Under the America Invents Act, ownership will be awarded to whoever submits the first application, or “first to file.”

The shift, inventors like Mr. Perlman say, makes life harder for small entrepreneurs. Large companies with battalions of lawyers can file thousands of pre-emptive patent applications in emerging industries. Start-ups, lacking similar resources, will find themselves easy prey once their products show promise.

That is the concern of people like Mr. Phillips, the voice recognition specialist and one-time Siri partner who founded Vlingo. “Start-ups are where progress occurs,” he said in an interview. “If you spend all your time in court, you can’t create much technology.”

In June, Mr. Phillips started work at his new employer, and former courtroom adversary, Nuance. Theoretically, his job was to help manage the companies’ integration and find new technological frontiers to explore. With a background at M.I.T. and Carnegie Mellon, he is widely acknowledged as one of the most innovative thinkers in computer speech.

But he spent much of the summer on vacation, recuperating from the last six bruising years. And in September, he quit. He plans to leave voice recognition altogether, he has told friends, and find an industry with less treacherous patent terrain.
https://www.nytimes.com/2012/10/08/t...mpetition.html





So it Looks Like Samsung Might Not Have Tried to Copy the iPhone

Previously redacted documents presented in the Apple-Samsung case seem not to offer actual evidence that Samsung told its designers to copy the iPhone.Chris Matyszczyk

You remember the recent court case in which a vast amount of money was awarded to Apple?

Yes, the one in which Samsung was told to hand over $1.05 billion because quite a few of its products seemed to infringe on Apple's patents.

Well, those who like poring over these things have been spending long and, no doubt, sober nights examining the documents that were presented to the court -- documents that have now been unredacted.

What odd suggestions these documents make.

I am grateful to Groklaw for reading and reading and reading until its eyeballs were larger and more oblong than a Galaxy S3 screen.

Much of its reading seems to center on personal information about jury foreman Velvin Hogan and his bankruptcy issues.

However, the part that fascinated me concerned the allegations that Samsung might have told its designers to "make something like the iPhone."

Groklaw locates the fuller version of the Samsung internal documents in question and something peculiar appears. The senior executive at Samsung who presided over internal meetings actually is heard to say: "I hear things like this: Let's make something like the iPhone."

He goes on to lament: "When everybody (both consumers and the industry) talk about UX, they weigh it against the iPhone. The iPhone has become the standard. That's how things are already."

And yet there appear to no words that suggest the iPhone is to be copied.

Instead, one document ends with: "To everyone, he said you must think at least six months ahead; be the solution to the problems that related departments come looking for. Be people with creativity."

The document is full of exhortation to do better and to focus on "comfort and ease of use." Some would say that defines the iPhone.

Yet there seems no actual, well, evidence that there was a "copy Cupertino" order.

Indeed, Groklaw unearths further notes from the same meeting which say, for example:

Designers rightly must make their own designs with conviction and confidence; do not strive to do designs to please me (the president); instead make designs with faces that are creative and diverse.

Yes, there is mention of "a crisis of design." And, indeed, here is another phrase that might, for some, suggest a deeply iPhonic implication: "In regards to exteriors, do your best not to create a plastic feeling and instead create a metallic feel."

And yet, at the same time, there is the push toward what is now seen in the Galaxy S3: "Our biggest asset is our screen. It is very important that we make screen size bigger, and in the future mobile phones will absorb even the function of e-books."

How, then, could anyone imply that this was an exhortation to copy the iPhone, if Samsung executives were clear that a larger screen could be their brand differentiator?

Groklaw suggests, rather shockingly, that Apple's lawyers might have been a little selective in how they presented some of this evidence to the court, by picking little parts of it that offered a different shade of nuance.

The part about asking designers to be creative was allegedly omitted, for example.

I know that this one will run and run like a mediocre musical on Broadway. There's that awful mixture of pride, ego and (current and future) money at stake.

But there remain some lay observers who really do look at some of the Apple-Samsung product comparisons and wonder just how much intention to copy there really might have been.
http://news.cnet.com/8301-17852_3-57...py-the-iphone/





U.S. Court Clears Samsung Phone, Hands Apple Setback
Diane Bartz and Dan Levine

A U.S. appeals court overturned a pretrial sales ban against Samsung Electronics Co Ltd's Galaxy Nexus smartphone, dealing a setback to Apple Inc in its battle against Google Inc's increasingly popular mobile software.

Apple is waging war on several fronts against Google, whose Android software powers many of Samsung's devices.

The ruling on Thursday from the U.S. Court of Appeals for the Federal Circuit is not expected to have an outsized impact on the smartphone market, as the Nexus is an aging product in Samsung's lineup. Apple's stock closed down nearly 2 percent at $628.10.
However, the court's reasoning could make it much harder for companies that sue over patents get competitors' products pulled from the market, said Colleen Chien, a professor at Santa Clara Law school in Silicon Valley.

Such sales injunctions have been a key for companies trying to increase their leverage in courtroom patent fights.

"The Federal Circuit has said, 'Wait a minute,'" Chien said.

Apple declined to comment, while Samsung did not immediately respond to requests for comment.

Apple scored a sweeping legal victory over Samsung in August when a U.S. jury found Samsung had copied critical features of the hugely popular iPhone and iPad and awarded Apple $1.05 billion in damages.

The Nexus phone was not included in that trial, but is part of a tandem case Apple filed against Samsung earlier this year.

District Judge Lucy Koh issued a pretrial injunction against the Nexus in June, based on an Apple patent for unified search capability. The appeals court then stayed that injunction until it could formally rule.

In its opinion on Thursday, the Federal Circuit reversed the injunction entirely, saying that Koh abused her discretion.

Apple failed to prove that consumers purchased the Samsung product because of the infringing technology, the appeals court ruled.

"It may very well be that the accused product would sell almost as well without incorporating the patented feature," the court wrote. "And in that case, even if the competitive injury that results from selling the accused device is substantial, the harm that flows from the alleged infringement (the only harm that should count) is not."

The court considered a single patent - one which allows the smartphone to search multiple data storage locations at once. For example, the smartphone could search the device's memory as well as the Internet with a single query.

The appeals court has sent the case back to Koh for reconsideration. A separate pretrial sales ban Apple had managed to win against Samsung - targeting the Galaxy Tab 10.1 - was dissolved earlier this month after Samsung won at trial on that patent.

Beyond the Nexus, Samsung also has a collection of new tablets and smartphones intended for launch before the holidays.

On Wednesday, Google executive chairman Eric Schmidt called the intensifying struggle between Apple and his company a "defining fight" for the future of the mobile industry.

The case in the Federal Circuit is Apple Inc vs. Samsung Electronics Co Ltd et al., 12-1507.

(Reporting By Diane Bartz; Editing by Gerald E. McCormick, Bernard Orr)
http://www.reuters.com/article/2012/...89A11C20121011





Court Rules Book Scanning is Fair Use, Suggesting Google Books Victory

Judge rules for Google's library partners in lawsuit brought by Authors Guild.
Timothy B. Lee

The Author's Guild has suffered another major setback in its fight to stop Google's ambitious book-scanning project. The Guild lost a key ally when Google settled with a coalition of major publishers last week. Now a judge has ruled that the libraries who have provided Google with their books to scan are protected by copyright's fair use doctrine. While the decision doesn't guarantee that Google will win—that's still to be decided in a separate lawsuit—the reasoning of this week's decision bodes well for Google's case.

Most of the books Google scans for its book program come from libraries. After Google scans each book, it provides a digital image and a text version of the book to the library that owns the original. The libraries then contribute the digital files to a repository called the Hathitrust Digital Library, which uses them for three purposes: preservation, a full-text search engine, and electronic access for disabled patrons who cannot read the print copies of the books.

There are four factors the courts consider in fair use cases. Judge Harold Baer sided squarely with the libraries on all four factors.

Probably the most important factor is the first factor: the "purpose and character" of the use. The courts have held that "transformative" uses are generally fair. For example, it's fair use for a search engine to display thumbnails of copyrighted images in search results. Judge Baer ruled that the libraries' intended uses for its digital copies are similarly transformative.

"The use to which the works in the HDL are put is transformative because the copies serve an entirely different purpose than the original works: the purpose is superior search capabilities rather than actual access to copyrighted material," wrote Judge Baer. "The search capabilities of the HDL have already given rise to new methods of academic inquiry such as text mining." Similarly, Judge Baer noted, the scanning program allows blind readers to read the books, something they can't do with the original.

Also key is the fourth factor: the impact on the market for the works. While a book search engine obviously doesn't undermine the market for paper books, the authors had argued that a finding of fair use would hamper their ability to earn revenue by selling the right to scan their books. But Judge Baer rejected this argument as fundamentally circular. He quoted a previous court decision that made the point: "Were a court automatically to conclude in every case that potential licensing revenues were impermissibly impaired simply because the secondary user did not pay a fee for the right to engage in the use, the fourth factor would always favor the copyright owner."

The libraries' fair use argument is somewhat stronger than Google's because they are non-profit organizations with fundamentally educational missions. But significantly, Judge Baer did not rely heavily on this fact in siding with the libraries. Instead, he focused on the transformative nature of the libraries' use. And since Google is making virtually the same use of its own scanned copies of the books, it's a safe bet that there are some happy lawyers in Mountain View this evening.

The copyright scholar (and sometime Ars contributor) James Grimmelmann called the ruling a "near-complete victory" for the libraries. Indeed, he said, the decision "makes the case seem so lopsided that it makes the appeal into an uphill battle. Perhaps together with the AAP [American Association of Publishers] settlement, this is a moment for a reevaluation of the Authors Guild’s suit against Google. My estimate of the likelihood of settlement just went up substantially."
http://arstechnica.com/tech-policy/2...books-victory/





Amazon Releases Kindle’s Lending Library In UK, Germany, France With 200,000 Books, Increases KDP Royalty Fund
Romain Dillet

Amazon continues to roll out its content offerings in Europe. Soon, Amazon Prime members will be able to borrow books from the Kindle owners’ lending library. 200,000 books are available at the time of this writing. Amazon will increase the KDP Select program fund to catch up with the increase of demand in book lending.

According to Amazon, authors who choose to enroll in the Kindle Direct Publishing program and skip the publisher step earns 77 percent more royalties on average than other authors.

Like in the U.S., Harry Potter e-books will be available in the lending library. In October, the KDP select fund has been increased by $100,000 to $700,000. Amazon hints at another increase coming in November. Every time a book is borrowed, the author earns on average $2.29.

Over the past couple of months, Amazon has been trying to bring its ecosystem to Europe ahead of Kindle Fire HD‘s release. Amazon makes little or no money on hardware devices and hopes that customers will actually use the device and buy content.

When it comes to book lending, other companies have been trying to move away from the traditional buying model for ebooks. For example, Oyster is trying to bring the unlimited subscription model to e-books, with community and curation features.

Yet, the lending library launched last year without any of the big six publishers in the U.S. Most of the books available to lend are self-published books. Some restrictions apply as well. For example, you can only read one book at a time. But when you are a Prime subscriber, it’s a nice addition.

The lending library will be available the U.K., Germany and France at the end of October.
http://techcrunch.com/2012/10/11/ama...-royalty-fund/





It’s Not Just Laws, but Also Private-Sector Rules
Kristin Eschenfelder

When publishers and other media companies decide that intellectual property law may not protect their products enough, they can now add their own “technological protection measures” or contract terms to prevent piracy and maximize profit. Most famously, Apple used such measures and contracts for songs sold through iTunes, making them more difficult to share with friends.

When the use of protection measures comes to the university library, the stakes are higher than a mix tape. If commercial collections of scholarly materials (like articles, book chapters or art images) bought by libraries contain restrictions like these technological protection measures, that could slow research, learning and teaching.

One way in which these restrictions affect learning is by making collaboration and group work, a common part of contemporary learning practices, more difficult. For example, in engineering classes in which students work together to design a product, they may share relevant papers in cloud-based group directories in order to make sure that all team members draw on the same materials. Students complain that protection measures make such team learning more onerous. In other examples like art history, restrictions on downloading images may make it impossible for a student to study them offline.

Equally important, the technological protection measures can drastically increase the cost of digital library collections for academic libraries. Implementation of a technological protection system is often tied to pay-per-use pricing, under which each use is billed to the library that hosts it: for instance, every time a student “checks out” a digital journal article, the library pays for it. This pricing model is dangerous in academic environments, given that use may surge unexpectedly – like if a professor assigns a particular reading to a lecture class of 900 students.

The pay-per-use pricing is also painful because of how academic reading works: students and scholars often browse through many chapters or articles to find the most relevant information, racking up charges for incidental use of texts that may not even be what they were looking for. The unpredictability and financial risk of pay-per-use pricing may stymie creativity and productivity, as libraries cancel access to assets in order to avoid uncontrollable costs. In this case, it is not the law, but the combination of protection measures and pricing models that may discourage innovation.

Other technology restrictions, combined with contract terms, may make common day-to-day learning tasks – like saving a copy of an article, or e-mailing the article to your research partner – more onerous. These restrictions are tied to the way collections of scholarly digital products are sold. Academic libraries buy rights for their populations of students, professors and staff to use the collections, but the licenses that govern use of most collections do not allow digital sharing of resources with outside others. In many cases, these contracts preclude me from e-mailing a copy of an article to a colleague at another institution, because she would not be an “authorized user” at my university. In this case, the restriction is tied to contract rather than intellectual property law or technology.
http://www.nytimes.com/roomfordebate...demic-research





Once Again, Seeing Double
Julie Lasky

THE Restoration Hardware showroom in the Flatiron district of Manhattan was a hive of activity last week, as lunchtime shoppers checked out furniture from the company’s new fall collection.

Many of the pieces had familiar silhouettes. There was a stack of what looked like Series 7 chairs by the midcentury Danish designer Arne Jacobsen. Around a plain oak table sat a group of what appeared to be metal Tolix bistro chairs. And crouched like a pair of house cats were dead ringers for Mies van der Rohe’s MR side chairs from the late 1920s.

Consumers familiar with these well-known pieces might have been pleasantly surprised by how cheap they were. A Series 7 chair usually sells for around $500; this one cost $79. But closer inspection revealed plastic pieces connecting the metal frame to the underside of the plywood seat. And if that weren’t enough of a giveaway, a glance at the tag would have shown that the chair was called Magnus.

Magnus is, of course, a reproduction. For decades, lovers of modern furniture, balking at the cost of authorized versions, have settled for inexpensive knockoffs. And companies like Restoration Hardware have been eager to meet the demand. The showroom also carried versions of Jacobsen’s Egg, Ant and Swan chairs, all with names that suggested midcentury Scandinavian origins and prices that defied them.

One ersatz classic you would not have found, however, was an aluminum chair that Restoration Hardware advertised in its catalogs and on its Web site. That piece, a copy of a 1940s chair originally designed for use on warships and submarines, was recently taken off the market, the company said. Coincidentally or not, this was around the time it became the subject of a lawsuit. (The company refused to comment for this article.)

On Oct. 1, lawyers for Emeco, a company based in Hanover, Pa., filed papers in district court in Northern California against Restoration Hardware and its former chief executive officer, Gary Friedman, for what they claimed was unauthorized reproduction of the Navy chair, which Emeco manufactures.

The aluminum chair, with its distinctive curved back supported by a trio of vertical struts, is at the core of Emeco’s business. Once a utilitarian object that could be picked up for $5 at Army/Navy stores, it is now often found in chic hotels and professionally decorated homes. The chair is made by hand at the Emeco factory in Hanover with a proprietary process that gives it exceptional strength. It is guaranteed over its lifetime, which the company estimates to be 150 years.

The Emeco Navy chair costs $455, but the nearly identical chair Restoration Hardware promoted as the Naval chair was just $129.

Knockoffs are to many furniture manufacturers what lice are to the parents of elementary schoolchildren: a perennial problem, and one that is devilishly hard to eradicate. Legal protections exist in the form of trade dress and trademark rights, the design equivalent of copyright protection.

And furniture manufacturers exercise these rights routinely. One example, among many: In 2009, two furniture companies, Alan Heller and Blu Dot, independently sued Design Within Reach for the unauthorized reproduction of their designs, effectively reforming the way the retailer had been conducting business.

But the expense of taking such action is often considered counterproductive. Instead, many manufacturers simply tolerate the competition from lower-priced look-alikes and seek to educate their customers about the value of owning the authorized version of a particular design. The superior materials and construction, the thinking goes, lead to a longer product life, so spending more may be more cost-effective in the end. And, of course, original designs produced by authorized manufacturers carry the stamp of authenticity.

But tell that to the shopper with sophisticated taste, who is on a recessionary budget — the one who isn’t so concerned that the Restoration Hardware Magnus chair’s wood might be a little rough, and who isn’t planning to duck under the seat anytime soon to inspect those fasteners. The very consumer who has helped transform Emeco’s Navy chair from military surplus to style paragon has also developed an insatiable taste for Mies or Jacobsen, even if it’s low-rent Mies or Jacobsen. Emeco and Restoration Hardware are vying for the soul of the same buyer.

The stakes are high for both companies. Restoration Hardware is preparing to take the company public in the wake of internal convulsions, namely the removal of Mr. Friedman from his chief executive position in August because of a romantic relationship he was alleged to be having with an employee. (Mr. Friedman is currently identified as chairman emeritus, creator and curator of Restoration Hardware. And because he retains aesthetic direction of the company and is the owner of up to 20 percent of its equity, he was singled out in the lawsuit, the court papers stated.)

Meanwhile, for Emeco, the threat of low-priced look-alike products is not just pestilent but potentially lethal. Speaking the day after the lawsuit was filed, Gregg Buchbinder, the chairman of Emeco, anticipated the possibility of spending millions of dollars to protect his intellectual property, but saw no alternative. “The Navy chair is what we center everything around,” he said. “It’s the heritage of our company.”

As of Oct. 5, the Naval chair was nowhere to be found on Restoration Hardware’s Web site or in the showroom this reporter visited. Mr. Buchbinder said that Restoration Hardware had begun negotiations to settle the suit. But he believes that cannot undo the damage of selling a reproduction Navy chair, even briefly, because the Naval chair continues to be displayed in Restoration Hardware catalogs, and his chair will be hard to sell to buyers who have seen the price of Restoration Hardware’s.

He was also concerned that the manufacturing juggernaut put in motion by Restoration Hardware may not be easy to halt. “Now that tooling is set up and production is in place in China, knockoffs will be popping up worldwide,” he said.

Trade dress and intellectual property challenges are plagues visited on other industries, of course, from fashion and software to candy. But the extraordinary expense of bringing out new furniture makes it especially nettlesome for companies to see the market flooded with cheap copies of their products. The span of development, from concept through distribution, can take several years and millions of dollars. Much of that investment is spared to the copyist of proven goods, allowing for deeper discounts.

Benefits accrue even more when the product has a heritage that pushes consumers’ authenticity buttons, even if the history they are buying is fraudulent. David Obel Rosenkvist, a vice president of Fritz Hansen, the Danish furniture company, which has fought many intellectual property battles, said it has been “in dialogue” with Restoration Hardware about the Jacobsen knockoffs.

“They’re not only stealing the design, they’re also trying to steal the design story and the background of the designers,” Mr. Rosenkvist said of the cheeky references to midcentury Scandinavia.

But is expensive legal action the best solution?

The British designer Tom Dixon, whose work is routinely knocked off, questions the value of legal action against copyists. “It’s almost impossible to control in the kind of environment we work in, mainly because of poor enforcement in some countries and confusion about some of the legalities and zero legislation or enforcement in most of Asia,” he said.

For Mr. Dixon, hope lies in a different design trend: digital production, which allows for easy customization and distribution. Speedy manufacturing and the ability to make quick changes in products, he believes, will keep designers ahead of the knockoff artists.

Mr. Dixon is also fighting copyists with hard-to-imitate design features. His new Lustre lights, for instance, are stoneware with a proprietary metal glaze that gives a different iridescent finish to each piece. Customers will find value in the uniqueness of each light, Mr. Dixon said, and it will be some time before copyists will crack the code.

Mr. Buchbinder of Emeco is also pushing innovation by incorporating humble, recycled materials like sawdust into his chairs. Still, the Navy chair remains at the heart of his business, and he sees no other recourse to protect it than a legal one.

“If I don’t fight,” he said, “it kills the company.”
http://www.nytimes.com/2012/10/11/ga...-hardware.html





Education Minister Faces Plagiarism Accusations

An anonymous blogger claims he has found 92 examples of plagiarism in the PhD thesis German Education Minister Annette Schavan wrote 42 years ago.

On a blog called schavanplag.wordpress.com, a blogger who calls himself 'Robert Smith' details the 92 alleged incidents of plagiarism in Schavan's dissertation at the University of Düsseldorf.

"I consider this number of violations inexcusable," Smith told Die Welt, adding that he had now completed his investigation.

"I think it's a case of deception," said the blogger, who has been collecting evidence since the spring.

The University of Düsseldorf said it was conducting an internal investigation into the matter.

For Chancellor Angela Merkel's Christian Democrats, the accusations are an unwelcome reminder of the 2011 plagiarism scandal that brought down the party's popular defence minister, Karl-Theodor zu Guttenberg, who was forced to resign when plagiarism in parts of his doctoral dissertation was uncovered.

But the accusations against Schavan are fundamentally different, according to Die Welt, and far less severe. In Schavan's case, most of the alleged plagiarism consists of instances where she pretended to have read the relevant primary literature, but instead cited extensive secondary literature.
http://www.thelocal.de/national/20121010-45459.html





'Friday Night Lights' Creator Accuses Mitt Romney of Plagiarism in Threatening Letter (Exclusive)
Matthew Belloni

"Your politics and campaign are clearly not aligned with the themes we portrayed in our series," Berg writes in the letter, challenging the GOP contender's use of

Peter Berg, the writer-director of the Friday Night Lights movie and television series, is not pleased that Republican presidential candidate Mitt Romney has co-opted a phrase from the show for his campaign appearances.

In a letter to the Romney campaign sent Friday and obtained exclusively by The Hollywood Reporter, Berg calls the use of "Clear Eyes, Full Hearts, Can't Lose" an act of stealing. "Your politics and campaign are clearly not aligned with the themes we portrayed in our series," Berg writes in the letter. "The only relevant comparison that I see between your campaign and Friday Night Lights is in the character of Buddy Garrity -- who turned his back on American car manufacturers selling imported cars from Japan."

Romney has used the "Clear Eyes" phrase — which originated as a rallying cry for the high school football team on the FNL television series — in several campaign speeches, and it appears on his Facebook page. The Republican presidential nominee and his wife, Ann, are fans of the series, which ended its five-year run on NBC and DirecTV last year. Romney said in Iowa earlier this week that the phrase is "compelling." "That's Americans," he told an audience. "We have clear eyes — we know what we believe. Full hearts — we love this country and we can't lose. This is a time for Americans to make a choice. We're going to take back this country."

But the low-rated, critically acclaimed series set in a Texas town dominated by football also featured several themes that might not necessarily be approved by a Romney administration. Among them: a character (Madison Burge) goes through with an abortion late in the show's fourth season. The decision follows a one-night stand the character had with a football star (Matt Lauria), and it is the school's principal Tami Taylor (Connie Britton) who guides the student through the decision process.

Another theme explored in the series is that of military parents. A character (Zach Gilford) is raised by his ailing grandmother after his mother departs, and his military father shows little sign of caring for his son.

In the letter, Berg challenges Romney and says that invoking the phrase "falsely and inappropriately associates Friday Night Lights with the Romney/Ryan campaign."

Berg is an outspoken Barack Obama supporter, as well as a successful writer-director (Battleship, Hancock). But in an interesting twist, Buzz Bissinger, who wrote the popular book about an Odessa, Tex, high school football team that formed the basis for the movie and TV series, recently wrote that he's supporting Romney.
http://www.hollywoodreporter.com/thr...accuses-378606





Business Matters: The Truth About Pandora's Payments to Artists
Glenn Peoples

Pandora mounted an effective publicity campaign Tuesday by revealing the amounts of royalties some artists' songs generate on its service (as opposed to how much money those artists are actually collecting). The company is putting its political and popular weight behind bills in Washington that would lower its royalty burden and, it argues, vitalize the Internet radio market.

Unfortunately, Pandora's message was easy to misunderstand and occasionally misleading: Take what you thought artists were getting paid and chop off half. The math is below.

Pandora doesn't actually pay artists. It pays SoundExchange, which then gives artists 45% of net royalties. Half of net royalties goes to labels, and a portion may find its way back to artists through its royalty accounting system.

Pandora's first comments came from Westergren speaking at the SF Music Tech conference in San Francisco. "There are a couple artists making over $2 million on Pandora," TechCrunch quotes Westergren as saying. "Some artists making over $100,000 a year." Those are pretty straightforward comments. Artists do indeed make money from streams on Pandora.

Next came a post at the Pandora blog that offered details on specific artists. Over the next 12 months, the post claims, the music of Donnie McClurkin, French Montana and Grupo Bryndis will generate performance royalties from Pandora of $100,228, $138,567 and $114,192, respectively.

Note the wording here. The post referred to "performance fees…for the music we play for their large and fast-growing audiences on Pandora." That's different from saying, "We're paying the artists this much money." And technically the wording is correct, because Pandora does not pay artists. Pandora pays SoundExchange.

But the post was already sending mixed messages. The title of the post is "Pandora and Artist Payments." The title and the contents of the post would lead any reasonable person without - and anyone with knowledge of the compulsory webcasting license - to believe Pandora will make these payments, in these amounts, directly to artists. As I'll explain below, that's exactly how blogs covering the post interpreted the numbers.

The post went on to specify how much in royalties Pandora is already paying for artists like Coldplay and Adele ($1 million each) and Drake and Lil Wayne ($3 million annually each). Again, Pandora worded the message to say the artists' songs generated those amounts of money. The wording is correct, but a reasonable person would have come away thinking those artists are receiving the amounts stated.

Later in the day, Pandora chief technology officer Tom Conrad crossed that fine line between technically correct and inaccurate. Conrad tweeted that Pandora is paying $670,000 per year to Rascal Flatts, $173,000 a year to Iron and Wine, $135,000 to Bon Iver, $574,00 to the Zac Brown Band, $609,000 to Ellie Goulding and $523,000 to Mumford and Sons. These numbers were included at the bottom of the "Pandora and Artist Payments" post, although the original post did not make Conrad's mistake.

There's little doubt Conrad know the details of the compulsory license and SoundExchange's payments to sound-recording owners and performing artists. A Pandora spokesperson told Billboard.biz Conrad had "mistweeted." (Conrad noted how SoundExchange pays out royalties to sound recording owners and artists in follow-up tweets.)

Many of the reports on this story got it wrong. TechCrunch had a typical interpretation. It wrote that "over 2,000 artists will earn over $10,000 in the next year from Pandora" and "extremely popular artists Drake and Lil Wayne are nearing a $3 million annual rate each." The headline at Mashable read, "Pandora Reveals How Much It Pays Artists."

Pandora does not pay artists - not directly. Because Pandora takes advantage of the Section 114 compulsory license for webcasters, the company pays all royalties for the performance of sound recordings to SoundExchange, the organization that collects digital performance royalties on behalf of sound recording owners and performing artists.

Here's how SoundExchange distributes net royalties: 50% to the owner of the sound recording, 45% to the performing artist and 5% to the session musicians and backup singers. Net royalties are royalties less SoundExchange's administration fee, which was 5.3% in 2011.

Pandora also pays performing rights organizations (PROs) for the performance of the songs' underlying compositions. In the U.S., PROs represent 4% of Pandora's revenue. But a Pandora spokesperson told Billboard.biz the figures shared by the company Tuesday represent only payments to SoundExchange.

Compare Pandora's numbers to what artists are actually receiving.

If Pandora pays $100,228 (the number cited in Pandora's blog post) over the next 12 months to stream the music of Donnie McClurkin, only $42,712 will go directly to McClurkin as the performing artist. McClurkin will not receive the share given to the owner of the sound recordings, since he has released albums on Warner Alliance, Verity Records and Zomba Label Group. Those labels will split $52,204. Other musicians and backup singers will receive $4,746.

If the music of Drake, for example, generates performance royalties of almost $3 million annually, as the "Pandora and Artist Payments" post claims, Drake would get $1,278,450 as the performing artist. The label would get $1,562,550. Other musicians get $142,050.

An artist that owns the sound recordings would get both the label and the performing-artist share paid to SoundExchange. The examples Pandora gave are all affiliated with record labels.

This is a complex and often confusing topic. People who work in webcasting are familiar with the issues; people who cover the business are better than others at sifting through these finer points. But the average person in the music business may not know when something like Conrad's tweet fails to pass the sniff test.

In a conversation Wednesday about the blog post, Westergren said the issue of how artists get paid is connected to the compulsory license Pandora depends on. He said some of his opponents would be happy to get rid of the compulsory license and require Pandora to negotiate direct licenses. Without a compulsory license, artists would not be paid 45% of net royalties through SoundExchange. Instead, performance royalties would be streamed through labels' accounting systems. "Artists are much better taken care of in a compulsory-licensing situation," he told me. "Very few people understand that."

Pandora should get credit for a highly effective publicity campaign that got people talking Tuesday. And, as Westergren noted, even half of some of those multi-million dollar figures are still big amounts, which are certain to grow larger as Internet radio grows. But Pandora shouldn't be given credit for money that won't end up in artists' pockets.
http://www.billboard.biz/bbbiz/indus...07978032.story





Howard H. Scott, a Developer of the LP, Dies at 92
Ben Sisario

Howard H. Scott, who was part of the team at Columbia Records that introduced the long-playing vinyl record in 1948 before going on to produce albums with the New York Philharmonic, Glenn Gould, Isaac Stern and many other giants of classical music, died on Sept. 22 in Reading, Pa. He was 92.

The cause was cancer, said his daughter, Andrea K. Scott.

In 1946, Mr. Scott was 26 and just discharged from the Army when he got a job at Columbia Masterworks, the label’s classical division. He was soon assigned to Columbia’s top-secret project: developing a long-playing record to replace the 78 r.p.m. disc, which could hold only about four minutes of music on each brittle shellac side.

The project had begun in 1940 and was nearing completion. But its engineers needed someone with musical training — particularly the ability to read orchestral scores — to help transfer recordings from 78s to the new discs, which played at 331/3 r.p.m., could hold about 22 minutes a side and were made of more durable vinyl.

Howard Hillison Scott fit the bill.

Born in Bridgeport, Conn., on May 31, 1920, he graduated from the Eastman School of Music in 1941 and had just begun graduate piano studies at Juilliard when he was drafted the next year. Back in civilian life in July 1946, he was hired by Columbia as a trainee.

In the days before magnetic tape came into wide use, the process of transferring music to the new discs (soon to be known as LPs) was complex. Long pieces of music, split among multiple 78 r.p.m. records, needed to be stitched together on the new discs without interruption.

To do that, Mr. Scott and his colleagues lined up overlapping segments of music on 78s, and — with Mr. Scott snapping his finger in coordination — switched the audio signal at just the right moment from one turntable to the other. As the industry began to use magnetic tape, beginning in the late 1940s, such work was no longer necessary.

As a staff producer at Columbia, Mr. Scott worked on hundreds of recordings by most of the major orchestras of the United States, including those of Boston, Cleveland, Philadelphia, St. Louis and Cincinnati in addition to the New York Philharmonic. He had a particularly close association with Gould, beginning with his historic recording of Bach’s “Goldberg” Variations in 1955.

Mr. Scott left Columbia in 1961 and worked at MGM Records, RCA Red Seal, the publisher G. Schirmer and the Rochester Philharmonic, where he was executive manager in the 1970s. He won a 1966 Grammy Award as the producer of the classical album of the year: Charles Ives’s Symphony No. 1, performed by the Chicago Symphony Orchestra, Morton Gould conducting, on RCA Red Seal.

From 1986 until his retirement in 1993, Mr. Scott worked for Sony, Columbia’s corporate successor, as a producer, once again transferring old albums to a new format: the CD.

In addition to his daughter, Mr. Scott is survived by a son, Jon; two sisters, Carol Ruth Shepherd and Elaine Silver; and two granddaughters.

In a 1998 interview with The New York Times, on the 50th anniversary of the introduction of the LP, Mr. Scott remarked about the durability of the format, and took note of a small renaissance taking root at the time.

“They lived from 1948 to 1978, when the CD came in,” he said. “Now they’re coming back. Small companies are issuing them. I’m still an LP fan.”
https://www.nytimes.com/2012/10/07/a...ies-at-92.html





Report: For The First Time In Decades, US Is Bleeding High-Skilled Immigrants
Gregory Ferenstein

“The period of unprecedented expansion of immigrant-led entrepreneurship that characterized the 1980s and 1990s has come to a close,” writes an ominous new Kauffman Foundation report from Stanford researcher and Washington Post columnist, Vivek Wadhwa.

He and his team of researchers are finding that, despite being the source of venerable American businesses, from Carnegie to Google, immigrants no longer see the United States as the only land of dreams, driven in large part by Congress’s inability to enact high-skill friendly immigration reform. In the words of immigrant and President of Xerox’s Innovation Group Sophie Vandebroek, with whom Wadhwa spoke for his new book, Immigrant Exodus: “Clearly the attraction the United States had on people like myself two to three decades ago is very different now. Countries all over the globe now have successful and growing research universities and labs.”

Both Wadhwa’s book and accompanying report continue his seminal research on the importance of immigrants to the high-tech sector. Nearly a quarter (24.3 percent) of engineering and technology companies had at least one foreign-born founder; in Silicon Valley, it’s nearly half (43.9 percent). Nationwide, they’ve helped employ more than half a million workers (560,000) who contributed $63 billion in sales just in 2012.

The faces behind the names make the impact all the more extraordinary, writes Wadhwa:

“Each decade has yielded top-flight entrepreneurs not born in this land, from Andrew Carnegie (Carnegie Steel Company) to Alexander Graham Bell (AT&T) to Charles Pfizer (Pfizer) to Vinod Khosla (Sun Microsystems) to Sergey Brin (Google) to Elon Musk (PayPal, SpaceX, Tesla Motors). A 2011 study by the Partnership for a New American Economy tabulated that first-generation immigrants or their children had founder roles in more than 40% of the Fortune 500. These companies had combined revenues of greater than $4.2 trillion and employed more than 10 million workers worldwide.”

But this foreign source of talent is now waning: After an impressively thorough sampling of 1,882 tech companies founded in the last six years, it was discovered that the immigrant’s usual contribution to the startup founder scene had stagnated, dropping from 25 percent to 24 percent. While that tiny number doesn’t seem to match Wadhwa’s (relatively) apocalyptic language, he sees it as an early warning sign. In Silicon Valley, the drop in foreign-born founders is far more pronounced, plummeting from 52 percent to 43 percent.

Behind the numbers, tales from immigrants are full of legalistic hamstringing and crippling uncertainty. Asaf Darash, founder of business website services firm Regpacks is the on the path to hiring a hundred workers this year. But those jobs are threatened by pending deportation after Darash’s work visa was denied due to a minor legal oversight he made while filing the petition. Though he tells TechCrunch the correction has been accepted, the legal system isn’t nimble enough to translate that correction into a timely path to a visa. So he waits “for months and months” for papers he hope will be approved, all while dealing with the normal chaos that goes into a technology startup.

Lawmakers are, at least, philosophically in agreement that foreign-born entrepreneurs are vital to the U.S. economy, but traditional partisan divides have stunted any meaningful reform. The last great hope for high-skilled immigration reform, the STEM Jobs Act, would have re-allocated the 55,000 visas reserved for underrepresented areas, such as Africa, and given them to foreign-born graduates from U.S. universities. Democrats, however, felt STEM Jobs, like other reforms, should not prioritize high-skilled immigrants at the expense of impoverished nations. “Republicans are only willing to increase legal immigration for immigrants they want by eliminating legal immigration for immigrants they don’t want,” said Illinois Representative Luis Gutierrez.

The next opportunity for reform is likely the Startup 2.0 Act, which also adds 50,000 new visas for foreign students and creates a new kind of entrepreneurship visa for 75,000 immigrants who found a business, employ Americans, or raise funding in the U.S. The bill had been put on hold in the Senate by Chuck Grassley, who said, “the H-1B visas program should complement the U.S. workforce, not replace Americans.” The hold has since been released and is awaiting the next Congress.

Until then, Darash, thousands of other immigrants, and the U.S. economy waits for reform. But if Wadhwa’s research is any indication, by the time the U.S. figures out a solution, the next Andrew Carnegie, Elon Musk, or Sergey Brin may have already moved on to another country.
http://techcrunch.com/2012/10/07/rep...ed-immigrants/





China's Huawei, ZTE Should be Banned: Draft House Panel Report
Jim Wolf and Lee Chyen Yee

China's top telecoms gear makers should be shut out of the U.S. market as potential Chinese state influence on them poses a security threat, the U.S. House of Representatives' Intelligence Committee said in a draft of a report to be released on Monday.

U.S. intelligence must stay focused on efforts by Huawei Technologies Co Ltd and ZTE Corp to expand in the United States, and tell the private sector as much as possible about the purported espionage threat, the panel leaders said, based on their 11-month investigation of the two firms.

Employee-owned and unlisted Huawei is the world's second-biggest maker of routers, switches and telecoms equipment by revenue after Sweden's Ericsson. ZTE ranks fifth. In the global mobile phone sector, ZTE is fourth and Huawei sixth.

Huawei generated around 4 percent of its group sales from the United States, while ZTE's U.S. revenues made up 2-3 percent of its overall figure. The bulk of both companies' U.S. sales comes from selling handsets through U.S. carriers such as Verizon, Sprint and T-Mobile USA.

"The impact will be quite limited if the report is referring just to telecoms equipment, but it's another story if handsets are included as well," said Huang Leping, an analyst at Nomura Securities. "Huawei and ZTE handsets have been consistently gaining market share in the United States."

In the U.S. handsets market where Apple Inc and Samsung Electronics dominate, ZTE ranks sixth and Huawei eighth, according to industry figures.

"POLITICAL DISTRACTION"

The broadside - just a month before U.S. presidential elections where the impact of China's growth on U.S. jobs has been a campaign issue - comes as Huawei mulls a possible initial public offering, sources said, as part of its efforts to allay suspicions that have all but blocked its U.S. ambitions, including business tie-ups.

Huawei has been looking at the listing issue for years, but there has been little progress due to its complicated share structure and whether a listing would actually help, given that U.S. lawmakers remain suspicious of ZTE even though it's a listed company, analysts said.

Huawei spokesman William Plummer rejected the committee's allegations in a statement emailed to Reuters.

"Baseless suggestions otherwise or purporting that Huawei is somehow uniquely vulnerable to cyber mischief ignore technical and commercial realities, recklessly threaten American jobs and innovation, do nothing to protect national security, and should be exposed as dangerous political distractions from legitimate public-private initiatives to address what are global and industry-wide cyber challenges," he said.

For its part, ZTE released a copy of the letter on Monday it sent to the committee after a hearing in September, stating it "profoundly disagrees" with the claim that it is directed or controlled by the Chinese government. "ZTE should not be a focus of this investigation to the exclusion of the much larger Western vendors," it said.

At a briefing in Beijing, Chinese foreign ministry spokesman Hong Lei said Chinese telecoms firms operate according to market principles. "We hope the U.S. Congress will set aside prejudices and respect the facts, and also do more that is beneficial to Sino-American economic and trade ties, rather than the contrary," he said.

ZTE's Hong Kong-listed shares closed down 6 percent on Monday in their biggest one-day drop in more than a month. The benchmark index fell 0.9 percent.

Separately, U.S. network equipment maker Cisco Systems Inc said it ended a longstanding sales partnership with ZTE after an internal investigation into allegations the Chinese firm sold Cisco networking gear to Iran.

"CREDIBLE ALLEGATIONS"

The U.S. panel's draft report faulted both Huawei and ZTE for failing to satisfy its requests for documents, including detailed information about formal relationships or regulatory interaction with Chinese authorities.

U.S. companies thinking about buying from Huawei should "find another vendor if you care about your intellectual property; if you care about your consumers' privacy and you care about the national security of the United States of America," panel chairman Mike Rogers said in comments broadcast late on Sunday on the CBS News program "60 Minutes."

Rogers and the committee's top Democrat, C.A. Ruppersberger, have scheduled a 10 a.m. Eastern time (1400 GMT) news conference to release the final, unclassified version of their report.

The panel said it received credible allegations from unnamed industry experts and current and former Huawei employees suggesting Huawei, in particular, may be guilty of bribery and corruption, discriminatory behavior and copyright infringement.

The committee plans to refer such allegations to the Justice Department and Department of Homeland Security, according to the draft made available to Reuters. "U.S. network providers and system developers are strongly encouraged to seek other vendors for their projects," it said.

The document cited what it called long-term security risks supposedly linked with the companies' equipment and services. Based on classified and unclassified information, Huawei and ZTE, which are both based in Shenzhen, China, "cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems," it said. Huawei and ZTE are rapidly becoming "dominant global players" in the telecommunications market, which is intertwined with computerized controls for electric power grids; banking and finance systems; gas, oil and water systems and rail and shipping, it noted.

ZTE's U.S. telecoms infrastructure equipment sales last year were less than $30 million. In contrast, two of the larger Western vendors alone had combined U.S. sales that topped $14 billion, ZTE told the committee in its September 25 letter, an apparent reference to Finland-based Nokia Siemens Networks and Paris-based Alcatel Lucent.

"It seems self-evident that the universe of companies examined by the Committee is so small as to omit most of the equipment actually employed in the U.S. telecom infrastructure system," the letter said.

"MEANS, OPPORTUNITY, MOTIVE"

Huawei and ZTE may not be the only companies that present a risk to U.S. infrastructure, the committee's draft report said, but they are the two largest Chinese-founded, Chinese-owned companies seeking to market critical network equipment to the United States. Beijing has the "means, opportunity and motive" to use them to its own ends, it added.

Top executives of both told a committee hearing on September 13 that their companies would never bow to a hypothetical Chinese government effort to exploit their products for espionage, equating any such move with corporate suicide. "Huawei has not and will not jeopardize our global commercial success nor the integrity of our customers' networks for any third party, government or otherwise," senior vice president Charles Ding testified at the time.

U.S. intelligence officials have publicly denounced China as the world's most active perpetrator of economic espionage against the United States.

Huawei has marketed its network equipment in the United States since last year, and has sold to a range of small- to medium-sized carriers nationwide, particularly in rural areas.

Founded by CEO Ren Zhengfei 25 years ago after he was laid off by the Chinese army, Huawei has marketed mobile phones through a broader range of U.S. carriers for the last four years. U.S. sales totaled $1.3 billion last year, out of overall sales of $32 billion, executives said.

(Additional reporting by Ben Blanchard and Steve Stecklow; Editing by Bernard Orr, Ken Wills and Ian Geoghegan)
http://www.reuters.com/article/2012/...8960NH20121008





China Rejects U.S. Accusations Against Telcoms Firms

China rejected on Tuesday as "groundless" U.S. accusations that two top Chinese telecoms equipment makers posed a security risk.

The U.S. House of Representatives' Intelligence Committee urged American companies on Monday to stop doing business with Huawei Technologies Co Ltd and ZTE Corp., warning that China could use equipment made by the companies to spy on certain communications and threaten vital systems through computerized links.

"This report by the relevant committee of the U.S. Congress, based on subjective suspicions, no solid foundation and on the grounds of national security, has made groundless accusations against China," Shen Danyang, a spokesman for China's Commerce Ministry, said in a statement on the ministry's website.

The U.S. recommendation would exclude Chinese businesses from carrying out their normal operations in the United States and participating in fair competition, Shen said.

"The Chinese side expresses its serious concern and strong opposition," he said.

The urging by the U.S. congressional committee comes at a very sensitive time for U.S.-China relations, ahead of the U.S. presidential and congressional elections and a transition of power to a new leadership in China. It has raised fears of retaliation by China.

The statement from the ministry came a day after the Foreign Ministry said that Huawei and ZTE operated according to market rules. Both companies have denied the allegations in the report.

The congressional report violates the rules of the free market espoused by the United States, Shen said, adding that it was not conducive to cooperation between China and the United States.

"I hope the United States will abandon the practice of discrimination against Chinese companies, act on the open principles of cooperation to earnestly create a fair and equitable market environment for the businesses of the two countries, and promote the smooth development of Sino-U.S. bilateral economic and trade cooperation," Shen said.

(Reporting by Sui-Lee Wee; Editing by Robert Birsel)
http://www.reuters.com/article/2012/...8980PS20121009





Shopping or Browsing on Main St? India's Big Data Firms Know
Harichandan Arakali and Raju Gopalakrishnan

Shopping in a U.S. department store? Surveillance cameras may be watching, and not because you might be a shoplifter.

In minutes, video of which aisles you visited, what products you picked up and put down, what you bought and the displays that caught your fancy will be sent to a company in Bangalore, India.

"These logs can be analyzed to determine propensity to purchase, what a customer's intent, satisfaction, sentiment is," said Dhiraj Rajaram, CEO of Mu Sigma, which says it is among the world's biggest pure-play data analytics companies.

The business of storing, decoding and analyzing unstructured data - think video, Facebook updates, Tweets, Internet searches and public cameras - along with mountains of facts and figures can help companies increase profits, cut costs and improve service, and is now one of the world's hottest industries.

It's called Big Data, and although much of the work is done in the United States, India is getting an increasing slice of the action, re-energizing an IT sector whose growth has begun to falter.

One reason for the emergence of Big Data as India's next big thing in IT is the dramatic fall in the costs of storing and working with huge volumes of data with the advent of cloud computing and open-source software programmes such as Hadoop.

"There are hundreds of (analytics) boutiques in India right now. Every other week I hear some of my friends have started on their own," said Santosh Nair, who quit a job in an IT services provider four months ago to open Analytic Edge.

The Bangalore firm has studied pharmacy sales, population trends and other data to help a U.S. funeral company pinpoint areas for its marketing campaigns.

SERVICES NATION

Others are getting into the business of data storage and processing as costs plummet.

"It doesn't mean I need a server which has 50 terabytes of space. Cloud technology helps me rent space which is cheap," Nair said. "Ten terabytes of space might cost me about $500 a month. It's not expensive."

That amount of data is equivalent to about 20,000 hours of CD-quality music.

Globally, data output last year was estimated at 1.8 zettabytes - 1.8 billion terabytes, or the equivalent of 200 billion full-length high-definition movies.

Millions of networked sensors in cameras, mobile phones and other devices, along with spiraling output from social media sites, are contributing to the data explosion, said a report on Big Data last year by the McKinsey Global Institute.

This has great potential for businesses, it said.

"We are on the cusp of a tremendous wave of innovation, productivity and growth, as well as new modes of competition and value capture - all driven by Big Data as consumers, companies, and economic sectors exploit its potential."

As India stakes its claim in the knowledge-intensive business of Big Data, however, it stands to lose much of the cost advantage that helped it to dominate business-process outsourcing.

Instead, industry officials say, India's success will depend on its large numbers of maths-savvy IT engineers and the skills its IT industry has picked up over 15 years as the world's biggest outsourcing destination.

"The Indian cost benefit is eroding significantly," said Mahinder Mathrani, operating partner at the Symphony Technology Group, a Palo Alto, California-based private equity firm that is in the software and services field.

"In the big data analytics space, it will be more about talent arbitrage," he said. "Good statisticians who have a blend of business acumen and analytic skills and also technical aptitude aren't inexpensive, even in India."

POOL OF TALENT

India's pool of talent will be in demand, with data analytics specialists seen globally in short supply for years to come as Big Data takes off.

But the Indian industry also believes it will gain an advantage from its broader expertise in services.

"We are a services nation," said Sundararaman Viswanathan, a manager at Zinnov, a software consultancy in Bangalore. "For example, we had the Internet and we built the outsourcing industry around it. We are extremely good at it."

"We can build a service which is around asking the right questions, and putting together the insights and giving it to the customer."

India's National Association of Software and Services Companies (Nasscom) forecasts that the Big Data business in India will be worth as much as $1.2 billion within three years, a six-fold increase from current levels.

That would be double the growth rate it expects for Big Data worldwide: to $25 billion from $8.25 billion.

"It's an industry where, because of cost, skill, language and ability to learn, India stands a very, very strong advantage," said Rajeev Baphna, CEO of Bangalore-based data services company Analyttica.

"India started to focus on creating a space in this field by leveraging a number of advantages it has: One, talent; two, the ability to have a very strong process-driven delivery at lower costs that the services industry has mastered."

It's not just boutique firms that have entered the field. The giants of India's outsourcing such as Infosys Ltd and Wipro Ltd have also moved into the Big Data business, but smaller firms may be better placed to deliver.

"The larger, well-established companies have a challenge," said Symphony Technology's Mathrani.

"Their existing business models preclude them from being nimble. This is not about migrating work already being done somewhere else. It's about solving business problems for which no specification exists."

GROWTH IN OUTSOURCING

Globally, Big Data is used in a multitude of applications.

IBM Corp has a team of 5,000 crunching data to help oil companies find, extract and process oil more efficiently.

General Electric Co said in May it could spend up to $1.5 billion to acquire data analytics companies, aiming to mine multiple data points and find ways to extend how long gas turbines, jet engines and other heavy equipment can run without unscheduled maintenance.

In retail, the scope of Big Data is enormous. McKinsey has estimated that a retailer using Big Data to the full, including trends from social media such as Twitter and Facebook, can increase operating margins by more than 60 percent.

Healthcare, insurance, banking and other financial services are also big users.

For India's IT industry as a whole, the surge in Big Data comes at an opportune moment.

India's exports of software and IT services, which make up the outsourcing industry, should grow 11 to 14 percent to $77 billion to $79 billion in the year ending March 2013, according to Nasscom. But this is a tapering off from 20-plus percent growth a few years ago.

In addition, outsourcing and offshoring in the financial industry - about 30 percent of the total - has come under fire and will likely face stricter supervision after recent lapses involving offshore units in India.

These include accusations by the New York State banking regulator in August that Standard Chartered Plc hid $250 billion in transactions with Iran and that the entire foreign asset compliance process of its New York branch was outsourced to Chennai, India, with no evidence of any oversight or communication between the Chennai and New York offices.

In Big Data, however, while the revenue numbers are still small, the mood is upbeat.

"We think this is just the tip of the iceberg," said Rajaram at Mu Sigma. "The world is only going to change faster and faster and faster. There will be more data, more algorithms, more applications, more new technologies."

His eight-year-old company is growing rapidly, and the average age of his 2,000 staff is about 25 or 26, he said.

"It's like hiring a bunch of Tony Starks, train them on the Iron Man Suit and they go out and defeat the bad guys." (Editing by John Chalmers and Edmund Klamann)
http://www.reuters.com/article/2012/...8960JU20121007





Worries Over Defense Department Money for ‘Hackerspaces’
Amy O’Leary

This fall, 16 high schools in California started experimental workshops, billed as a kind of “shop class for the 21st century,” that were financed by the federal government. And over the next three years, the $10 million program plans to expand to 1,000 high schools, modeled on the growing phenomenon of “hackerspaces” — community clubhouses where hackers gather to build, invent or take things apart in their spare time.

But the money has stirred some controversy. The financing for the schools program is one of several recent grants that the Defense Advanced Research Projects Agency, or Darpa, has made to build closer ties to hackers.

Unlike the hackers who cripple Web sites and steal data, the people the government is working with are more often computer professionals who indulge their curiosity at their local hackerspace. But the financing has prompted criticism that the military’s money could co-opt these workshops just as they are starting to spread quickly.

There are about 200 hackerspaces in the United States, a sharp jump from the handful that existed five years ago. The workshops, with names like the Hacktory, Jigsaw Renaissance and Hacker Dojo, have incubated successful businesses like Pinterest, the social networking site, and are seen as hotbeds for recruiting engineers and computer scientists.

“Magic comes from these places,” said Peiter Zatko, a program manager at Darpa, who is reaching out to these workshops, looking for cutting-edge ideas in cybersecurity. His program has entered into 74 contracts, and about 40 projects have been completed, work that he said would have been stymied by traditional government bureaucracy. (Mr. Zatko made a name for himself as a respected hacker before joining the government — he testified before a Senate committee in 1998, using the pseudonym Mudge, and told the panel that he could take down the Internet in 30 minutes.)

When his government colleagues see the results of his program, “their jaws just drop,” Mr. Zatko said.

Many people say that hackerspaces are promising incubators for innovation and should be cultivated. However, not everyone agrees that the Defense Department should be playing a role, especially in high school programs.

“Having these programs in schools is fantastic, but the military calling the shots in American education?” Mitch Altman, a co-founder of Noisebridge, a San Francisco hackerspace, said in an interview. “I don’t see that as a positive move,” added Mr. Altman, who, in an online post, was among the first to take a stand against the program.

The controversy over the government programs led to a tense session in a packed ballroom at the Hackers on Planet Earth conference this summer in New York, where recipients and critics of the Darpa financing gathered to discuss its implications.

“If you grow a piece of celery in red water, it’s going to be red,” said Sean Auriti, who is known as Psytek at the hackerspace Alpha One Labs in Brooklyn, which he runs. “I’m just wondering how this Darpa defense contract money is going to influence these projects.”

And yet Mr. Auriti himself is benefiting from the Darpa money as a member of SpaceGambit, a consortium of hackerspaces that won a $500,000 grant for research in space exploration and colonization technologies. He said he hoped that the grant would help him build a mini-thruster to launch backpack-size satellites into orbit.

But the debate over the financing has prompted him to establish a separate working group for the space research with Darpa. That way, none of his workshop’s members will feel as though they are unwillingly participating in government work, he said.

Some on the conference panel voiced concerns that Darpa financing would steer more hackers toward military projects. Mr. Altman, the Noisebridge co-founder, said he viewed the influence of military money as a threat because it would lead hackers to choose projects that might appeal to grant makers, as opposed to following their passions, however idiosyncratic.

Everyone on the panel agreed that hackerspaces could provide an exciting model for hands-on technical education in schools, and Dale Dougherty, the founder of Maker Media, which caters to the do-it-yourself movement, said he believed that the high school program that his company was managing would do just that.

“I think we’re looking at science and technology as content, not experiences,” Mr. Dougherty said. “We’re asking kids, ‘Do you want to be an engineer?’ and they don’t know what that means. But if you ask them, ‘What do you want to make?’ they start thinking about doing something.”

Darpa’s Web site describes the program’s goal as encouraging students to “jointly design and build systems of moderate complexity, such as mobile robots, go-carts, etc., in response to prize challenges.”

But Mr. Dougherty said that the fears about his program were unfounded, and that he wanted the students to work on projects of their choosing.

“We’re not asking kids to build weapons,” he said.

Darpa has a storied history of making long-shot bets and hoping that a handful of them will pay off. It financed the development of technologies that led to the creation of the Internet, GPS and stealth technology. This cluster of bets on low-cost, innovative manufacturing is part of a strategy by Darpa officials to reduce development times in a range of projects like armored vehicle construction and cybersecurity fixes.

When Lt. Col. Nathan Wiedenman, a Darpa program manager, appeared in Army fatigues this May at a San Francisco-area do-it-yourself festival, Maker Faire, he said the agency’s mission was to ensure that the United States would never again be surprised by the technical superiority of an enemy state, as it was when the Soviet Union launched Sputnik.

“To push the bounds of new technology, we have to physically make things,” he said.

Colonel Wiedenman is managing both the grant for the high school program and a $3.5 million grant to the retail start-up TechShop (it is a bit like a Kinko’s, but instead of copiers, members pay to use laser cutters). As part of that contract, Darpa employees will have access to TechShop’s tools after midnight, when the doors are closed to the public, since Darpa has no lab space of its own.

Matt Joyce, an early hackerspace member who has worked with NASA and has publicly voiced support for Darpa financing, said he believed that the agency’s interest in hackerspaces was a sign of their growing importance. But he acknowledged that the government financing would continue to provoke debate, because questions about ethics often loom large for engineers, even in cases in which the government allows them to retain commercial rights to their inventions.

“You never know when you build something where it might end up,” he said. “I think there’s a lot of folks getting the Darpa funding, and a lot of people watching on the sidelines to see what happens.”
https://www.nytimes.com/2012/10/06/u...kerspaces.html





Sweden Seeks Tougher Penalties for Hacking

In the wake of several cyber attacks targeting Swedish government websites, Justice Minister Beatrice Ask has called for a toughening of criminal penalties for hacking and other attacks against computer systems.

Cyber attacks like ones recently claimed to have been carried out by hacktivist network Anonymous rarely result in convictions, but an ongoing parliamentary inquiry into IT-related crimes will now be tasked with taking a closer look at the penalties associated with hacking and other forms of cybercrime.

"The rules that Sweden has were designed for operations in a different era," Ask told Sveriges Radio (SR).

Currently, the maximum penalty for anyone convicted of computer hacking in Sweden is two years in prison, and many of the 3,000 cases of hacking reported in Sweden last year involve the unlawful accessing of personal information or cases where young people take over others' Facebook accounts.

However, the recent trend of cyber attacks carried out by diffuse networks is something Ask is hoping the inquiry will address as well.

"We're seeing a trend whereby attacks occur against companies, banks, and government agencies which is cause for great concern," she told SR in urging the inquiry seek tougher penalties for hacking crimes.

"We have to find different ways to mobilize resources to ensure in part that we are better protected, and in part that we signal how seriously society views these types of attacks which undermine the functioning of modern society."

A toughening of the maximum sentence associated with hacking would allow police to deploy more sophisticated surveillance techniques as well as make it easier to have a suspect held on remand, explained Anders Ahlkvist, an IT-crimes expert with the National Police Board (Rikspolisstyrelsen).

"It would also make it easier for to have relationships with law enforcement authorities in other countries in order to get information," he told SR.
http://www.thelocal.se/43722/20121010/





Reading Someone's Gmail Doesn't Violate Federal Statute, Court Finds

SC court says Gmail not "electronic storage" by Stored Communications Act.
Cyrus Farivar

In a case decided on Wednesday, the South Carolina Supreme Court ruled that accessing someone’s online e-mail without their permission doesn’t violate the 1986-era Stored Communications Act (SCA). Though they differed in their reasoning, the justices were unanimous in ruling that e-mail stored in the cloud (like Gmail or Yahoo Mail) does not meet the definition of electronic storage as written in the statute.

This new decision creates a split with existing case law (Theofel v. Farey-Jones) as decided in a 2004 case decided by the Ninth Circuit Court of Appeals. That decision found that an e-mail message that was received, read, and left on a server (rather than being deleted) did constitute storage "for purposes of backup protection," and therefore was also defined as being kept in "electronic storage."

Legal scholars point to this judicial split as yet another reason why the Supreme Court (and/or Congress) should take up the issue of the Stored Communications Act.

"This [South Carolina] decision is more evidence of how intractable and inconsistent our statutory electronic surveillance regime has become," Woodrow Hartzog, a professor at the Cumberland School of Law at Samford University, told Ars.

"All of the discussions regarding backups, temporary copies, and the read/unread distinction seem to have very little to do with the way that most people perceive their use of e-mail. Ultimately, this problem is likely best resolved by the legislature, but the specifics of a politically palatable update to the SCA have yet to be fully agreed upon."

Hertzog pointed out though, that in a case like this, there could still be federal liability under the Computer Fraud and Abuse Act.

Under the SCA, cops can go after anyone’s e-mail so long as its deemed to be "relevant to an investigation," which is a low legal threshold. The logic, at the time, was that prior to webmail with large amounts of online storage, everyone had to download their e-mail—so, if you hadn’t bothered to actually download your e-mail, it was deemed to have been effectively abandoned.

A tale of love, gone awry

The case here, known as Jennings v. Jennings, involves a woman (Gail Jennings) who suspected her husband (Lee Jennings) was cheating on her. The wife’s daughter-in-law (Holly Broome) managed to access Lee’s e-mail by correctly guessing his security questions, and got a hold of messages between him and his paramour. Broome shared those messages with Gail’s divorce attorney, and her private investigator that she had hired for the purpose of advancing her own divorce case.

Lee Jennings sued his wife, her attorney, and her investigator, under several laws, including the Stored Communications Act, which only allows for a civil suit if the e-mails that were accessed without authorization were in "electronic storage."

The district court granted summary judgment in favor of the defendants on all claims—a decision that was then overturned on appeal. The Supreme Court of South Carolina has now reversed that decision, albeit for varying reasons.

What exactly is "electronic storage" ?

The United States Code defines "electronic storage" under the SCA as:

"(A) any temporary, intermediate storage of a wire or electronic communication incidental to the electronic transmission thereof; and (B) any storage of such communication by an electronic communication service for the purposes of backup protection of such communication."

Because the definition of "electronic storage" has two components, the storage clause (A), and a purpose clause (B), Justices Hearn and Kittredge found that because Jennings had no other copies of his e-mail (they only existed through the Yahoo e-mail online interface), they could not have possibly been a backup.

"We decline to hold that retaining an opened e-mail constitutes storing it for backup protection under the Act," the two judges wrote.

"The ordinary meaning of the word ‘backup’ is ‘one that serves as a substitute or support.’ Thus, Congress's use of ‘backup’ necessarily presupposes the existence of another copy to which this e-mail would serve as a substitute or support. We see no reason to deviate from the plain, everyday meaning of the word "backup," and conclude that as the single copy of the communication, Jennings' e-mails could not have been stored for backup protection.”

Chief Justice Jean Hoefer Toal, with Justice Donald Beatty concurring, ruled that the e-mails here are not a backup, because they were not created by the ISP for the purpose of actually creating a duplicate file.

"In my view, electronic storage refers only to temporary storage, made in the course of transmission, by an ECS provider, and to backups of such intermediate communications," Justice Toal wrote. "Under this interpretation, if an e-mail has been received by a recipient's service provider but has not yet been opened by the recipient, it is in electronic storage."

The fifth justice, Costa Pleicones, agreed in his opinion. However, he articulated a distinct definition between the relationships of the two clauses in question here.

"I view these two types of storage as necessarily distinct from one another: one is temporary and incidental to transmission; the other is a secondary copy created for backup purposes by the service provider," he wrote.

"Therefore, an e-mail is protected if it falls under the definition of either subsection (A) or (B). It does not end the inquiry to find that the e-mails at issue were not in temporary storage during the course of transmission (subsection (A)). Accordingly, because the e-mails in this case were also not copies made by Jennings’s service provider for purposes of backup (subsection (B)), they were not protected by the SCA. I therefore concur in result."

No clear judicial standard

While this case deals with a fairly narrow subsection of the SCA—what constitutes electronic storage—it’s yet another example that the Stored Communications Act needs more judicial review at the very least, and possibly an entire overhaul.

"This is an issue that really calls out for US Supreme Court review," writes Orin Kerr, a privacy expert and professor of law at George Washington University.

"Internet providers often have a national customer base. A provider in one state or circuit can have millions of customers in any other state or circuit. Given the national customer base, any disagreement among lower courts causes major headaches: ISPs don’t know which rule to follow. Making matters even more worrisome, it’s not at all clear whether the legal standard should be based on where the litigation arises or where the ISP is located. United States v. Weaver, 636 F. Supp. 2d 768 (C.D. Ill. 2009), nicely raised the problem: If the rights concerning records held by an ISP in California are litigated in Illinois, Weaver held, the Illinois court is not bound by the interpretation of the Ninth Circuit. Under that approach, the privacy protection varies based on where the litigation arises, which can be almost anywhere. That kind of dynamic creates a strong need for a uniform reading of the statute."
http://arstechnica.com/tech-policy/2...e-court-finds/





Ahead of Spyware Conference, More Evidence of Abuse
Nicole Perlroth

This week, at ISS World Americas, an annual surveillance trade show in Washington, law enforcement agents from around the world will gather to learn about the latest in computer spyware. What they will not hear is how, in several cases, that software is being used by oppressive governments to keep tabs on political activists.

On Thursday, executives from the Gamma Group, based in Hampshire, England, and Hacking Team, based in Milan, are scheduled to speak in consecutive presentations about their latest surveillance technologies. Both companies sell spyware to governments that they say is used exclusively for criminal investigations, but mounting evidence suggests that their spyware has been used to monitor dissidents.

In August, an article in The New York Times outlined how spyware sold by the Gamma Group had been used to monitor Bahraini activists and spy on people via servers in more than a dozen countries — many with questionable human rights records, like Brunei and Turkmenistan. At first, the Gamma Group denied that its software was being used this way. Then it said several copies of its spyware had been stolen.

On Wednesday, Morgan Marquis-Boire, one of the first security researchers to discover Gamma spyware in e-mails sent to Bahraini activists, released new evidence suggesting that spyware sold by Hacking Team had also been used to monitor political activists.

Such spyware gives governments that previously had no cybersurveillance programs a sophisticated plug-in monitoring operation that can track a citizen’s location, record their every keystroke, read e-mails, social networking and instant messenger chats, and even remotely switch on a device’s camera or microphone to record their conversations.

The market for such technologies has grown to $5 billion from “nothing 10 years ago,” Jerry Lucas, president of TeleStrategies, the company behind ISS World, told The Times in August.

In his most recent findings, Mr. Marquis-Boire, a security researcher with the Citizen Lab at the Munk School of Global Affairs at the University of Toronto, said he had discovered Hacking Team’s government-grade spyware included in a Microsoft Word attachment sent to a political activist in the United Arab Emirates, and also embedded in a link posted to a Moroccan news Web site.

A member of Hacking Team’s finance department said he was not aware of Mr. Marquis-Boire’s findings and that executives at the company were not available for comment on Wednesday.

In July, Ahmed Mansoor, an outspoken blogger from the United Arab Emirates and a member of the “U.A.E. Five” — a group of Emirati activists jailed last year for criticizing government leaders — opened a suspicious e-mail with a Microsoft Word attachment that, when opened, deployed spyware that could monitor his every keystroke, record his passwords, social networking and instant messenger chats and even his voice conversations through his computer’s microphone. Mr. Mansoor told Bloomberg that because of that innocent mistake– clicking on a malicious e-mail attachment– he was inexplicably beaten by unknown assailants.

That same month, a suspicious message was posted to a submission page on Mamkafinch.com, a Moroccan news Web site that has been critical of Morocco’s government. The message, which was posted in French, translated roughly as: “Please do not mention my name or anything I do. I do not want any shenanigans,” and included a link that, if opened, took control of the person’s device.

Mr. Marquis-Boire said he had been able to match the spyware contained in both the e-mail attachment and malicious link to a demonstration copy of Hacking Team’s spyware, which the company markets this way: ”Remote Control System is a stealth investigative tool dedicated to law enforcement and security agencies for digital investigations. It is an eavesdropping software which hides itself inside the target devices. It enables both active data monitoring and process control.”

In the case of Mr. Mansoor, the spyware eavesdropped from a server that, as of August, was registered to a post office box in Abu Dhabi that matched the corporate headquarters of the Royal Group, a U.A.E. conglomerate. In the case of Mamfakinch, the spyware was controlled by an I.P. address hosted in Rabat, Morocco’s capital.

Executives at the Royal Group could not be reached for comment. A representative at Morocco’s consulate in New York did not respond to a request for comment.

The release of Mr. Marquis-Boire’s findings is timed just one day before executives at the Gamma Group and Hacking Team are scheduled to take the stage at ISS World. On Thursday, Martin J. Muench, a Gamma Group managing director, will deliver a presentation titled “Government I.T. Intrusion: Applied Hacking Techniques Used by Governments.” After his presentation, three Hacking Team executives will talk about their latest government-grade surveillance technology.

Mr. Marquis-Boire said the timing of his release was coincidental. In an interview on Tuesday, he said, “These companies say they only sell this spyware to governments and intelligence and law enforcement agencies, but the key takeaway is ‘Know thy customer.’ “
http://bits.blogs.nytimes.com/2012/1...ence-of-abuse/





Saudi Arabia Suggests Global Internet Regulations To Preserve 'Public Order'
Jacey Fortin

When an anti-Islam video sparked deadly protests all across the Muslim world last month, it raised new questions about the role of the Internet in a divided society. How do we regulate a medium that opens up global lines of communication? What happens when acceptable discourse in one country is considered blasphemy in another?

And if free speech leads to a loss of human life, should it be abridged?

The Kingdom of Saudi Arabia is one of many nations searching for answers to these tough questions. And as one of the most tightly controlled conservative Muslim countries on earth, it has quite a stake in the issue.

The kingdom recently called for an international discussion to lay down new guidelines for Internet accessibility. This marks a new approach for the Saudi Arabia, which has already resorted to drastic measures to limit free communication within its own borders.

Under Wraps

The current uproar began in September, when a YouTube clip produced in America was dubbed in Arabic and went viral in the Middle East. The video, called "Innocence of Muslims," was created by an Egypt Coptic Christian residing in California.

The 55-year-old Mark Basseley Youssef -- who was once known as Nakoula Basseley Nakoula and produced the video under the pseudonym Sam Bacile -- first uploaded the clip in July. It portrayed Mohammed, the prophet of Islam, as a buffoon and sexual deviant. Protests erupted in countries as diverse as Bangladesh, Sudan and Oman. Dozens have died as a result of the ensuing clashes.

In Saudi Arabia, the government demanded that Google, which owns YouTube, block its citizens’ access to the video. Google complied on Sept. 19; it had already done the same for Libya, Egypt, India and Indonesia.

For Saudi Arabia, that was nothing new. Hundreds of thousands URLs are currently blocked by domestic telecommunications companies, including "immoral" sites that feature pornographic material, as well as sites that allegedly threaten national security.

This Internet censorship is line with the kingdom’s muzzling of its national media. Overall restrictions have worsened since the Arab Spring popular revolutions of 2011, one of which occurred -- but did not succeed -- in neighboring Bahrain.

A Broader Approach

Saudi Arabia is now seeking a broader approach -- not only to prevent its people from seeing the "Innocence of Muslims" clip, but to head off similar incidents in the future.

The country is looking ahead to the World Telecommunication/Information and Communication Technology Policy Forum [1], or WTPF. This annual gathering is put on by the International Telecommunications Union, a branch of the United Nations.

The WTPF will convene for the fifth time next year in Geneva, and the ITU has begun preparing the necessary documents. One of these is the Secretary-General’s Report, which says it “aims to provide a basis for discussion at the Policy Forum, incorporating the contributions of ITU Member States and Sector Members.”

Three drafts of this far-reaching report have already been sent to participating countries. When Saudi Arabia received the version [2] released on July 3, its representatives took issue with a sentence on page 7, which reads as follows:

“Some take the view that the Internet, as a decentralized and open system, must be allowed to enable the world’s citizens to connect freely and express themselves consistent with fundamental principles of freedom of expression, while taking into consideration national security or of public order, or of public health or morals.”

Editors in Saudi Arabia highlighted the piece and inserted a lengthy comment [2] in the margin, and this amended version was sent back to the ITU on Aug. 1.

“Bearing in mind that countries cannot apply their own laws to acts in another country, there is a crying need for international collaboration to address ‘freedom of expression’ which clearly disregards public order,” said the comment.

It went on to denounce the "Innocence of Muslims" video, noting that it was “created with the clear intent of conveying hatred.”

“This behavior,” concluded the Saudi comment, “must be addressed by states in a collaborative and cooperative environment and strongly underscores the need for enhanced cooperation.”

A New Direction

It is important to note that the word "censor" does not come up once in the entire 27-page draft, nor in any the comments made by Saudi Arabia. The kingdom’s comments will be addressed during the WTPF in Geneva next year, but for the time being, Saudi Arabia’s recommendations remain vague outlines rather than concrete plans.

What the comments signify is a greater interest in joining the global discussion regarding Internet regulation, something the WTPF was designed to facilitate.

If Saudi Arabia’s current strict regulations on free speech are any indication, next year’s forum is unlikely to yield changes that will satisfy the government’s desire for control. But joining a global conversation should open up some important new lines of communication.

In some ways, then, this is encouraging news for those who oppose the kingdom’s strict controls over its society.

In a concurrent development, Saudi Arabia is reducing the power of its feared religious police, the Commission for the Promotion of Virtue and Prevention of Vice -- or, more colloquially, the mutawa. These police, who enforce strict dress codes and prosecute Saudis who exhibit allegedly sinful behaviors, will adhere to new codes and refrain from making arrests and raids, according to a statement [3] from the group’s leader, Abdul Latif Abdul Aziz al-Sheikh, on Oct. 3.

These events do not signify a brand new day for free speech in Saudi Arabia -- far from it -- but they could be early signs of emerging trends. Censored though it is, the Internet has already enabled a freer exchange of ideas in Saudi Arabia. And that trend is likely to continue.

The WTPF will give Saudi Arabia a chance to air its concerns in an international forum next May, and the world will be watching to see how the promise of global telecommunications can be made to coexist with divergent cultural norms in various countries around the globe.
http://www.ibtimes.com/saudi-arabia-...c-order-845179





Snooper's Charter: 19,000 Emails Against, 0 In Favour
Glyn Moody

Back in August, I urged people to respond to the consultation on the truly dreadful Draft Communications Bill, aka Snooper's Charter. Obviously, I wasn't alone in doing that: many organisations concerned about the impact on civil liberties in this country have done the same. For example, both 38 Degrees and Open Rights Group (ORG) provided suggested texts and asked people to contact the Joint Parliamentary Committee that has been considering the Bill - and doing rather a good job of it, I must say.

A document from the Committee, pointed out by Simon Phipps, provides some stats for the impact of these campaigns:

At 12.42 on 21 August the Committee’s website received the first of over 18,000 emails generated in response to a call by the website 38 Degrees.

Pretty impressive. Here are the numbers for ORG:

At 12.34 the following day the Committee received the first of some 600 emails generated by the Open Rights Group whose Director, Jim Killock, gave oral evidence to the Committee on 11 July.

An order of magnitude lower, but still useful.

The Joint Parliamentary Committee makes a comparison to an earlier campaign against a proposed bill, the Assisted Dying for the Terminally Ill Bill, and comments:

The distinction is that while in the case of that Bill opinion was fairly evenly divided, we have not seen a single email supporting the draft Communications Data Bill, or even agreeing that there may be a case for the security services and law enforcement agencies having greater access to communications data than they do at present.

Got that? Out of 19,000 emails received by the Committee on the subject of the proposed Draft Communications Bill, not a single one was in favour of it, or even agreed with its premise. Has there ever been a bill so universally rejected by the public in a consultation? Clearly, it must be thrown out completely.

Unfortunately, I can't give a link to the document itself, because the address I used less than an hour ago brings up this:

The link you gave does not work, either because the page it points to has been deleted or moved. If you clicked on a link, please inform the site’s webmaster that the link is faulty.

Probably just a temporary glitch - you know how these things happen...

Update: Luckily, it seems Simon Phipps kept a copy of the document.
http://blogs.computerworlduk.com/ope...vour/index.htm





Govt Censors Pre-Prepared Data Retention Bills
Renai LeMay

The Federal Attorney-General’s Department has rejected a request by the Pirate Party of Australia to release draft legislation associated with the Government’s controversial data retention and surveillance proposal, with the department stating that public interest factors did not outweigh the need to keep the material private as it was still being deliberated on.

The Federal Attorney-General’s Department is currently promulgating a package of reforms which would see a number of wide-ranging changes made to make it easier for law enforcement and intelligence agencies to monitor what Australians are doing on the Internet. For example, one new power is a data retention protocol which would require ISPs to retain data on their customers’ Internet and telephone activities for up to two years, and changes which would empower agencies to source data on users’ activities on social networking sites.

The Pirate Party, which is an activist and political organisation which lobbies to maintain and extend Australians’ digital rights and freedoms, issued a media release this morning noting that it had filed a Freedom of Information request with the department, seeking draft national security legislation which had been prepared in 2010 with respect to the current proposal. The draft legislation had been mentioned by the Sydney Morning Herald in an article in August.

However, the Attorney-General’s Department wrote back to the organisation this weke, noting that the request had been denied. Logan Tudor, a legal officer with the department, wrote that he had decided that the draft legislation was exempted from being released because it contained material which was being deliberated on inside the department. “… the release of this material would, in my view, be contrary to the public interest,” Tudor wrote.

In the Pirate Party’s statement, its treasurer Rodney Serkowski described the response by the Attorney-General’s Department as “disgraceful and troubling”.

“They have completed draft legislation, prior to any transparent or consultative process, and are now denying access to that legislation, for reasons that are highly dubious and obviously politically motivated,” wrote Serkowski. “The Department is completely trashing any semblance or notion of transparency or participative democratic process of policy development.”

The Parliament’s Joint Committee on Intelligence and Security commenced an inquiry into the proposed reforms several months ago, following a request by Federal Attorney-General Nicola Roxon to do so. However, the inquiry has not been provided with the text of any associated legislation, and is only discussing the issues on the basis of a discussion paper provided by the department on the proposal.

“Where the legislative proposals almost certainly mean the complete erosion of fundamental freedoms like privacy, it is in the public interest that we are able to access the text of such proposals so as to properly inform public debate,” wrote Serkowski. “We want transparent government and private citizens, not the opposite.” The party noted that it would appeal the department’s decision to the Office of the Australian Information Commissioner, seeking to have the draft legislation and associated preparatory texts released.

On a related issue, the Pirate Party noted that a supplemental it made regarding the National Security Inquiry to the parliamentary committee in response to an open letter made by Attorney General Nicola Roxon and a submission made by ASIO had not yet been accepted by the parliamentary committee. “Despite being received by the Committee Secretary over a week ago, it is yet to be accepted by the Parliamentary Joint Committee on Intelligence and Security,” the organisation wrote. “The Pirate Party notes that ASIO were able to make a submission after the deadline.”

“The so-called clarifications of the data retention regime by both ASIO and Nicola Roxon did nothing to allay our fears of having everything we do online tracked,” said Simon Frew, Pirate Party Australia’s Deputy President. “We felt it necessary to respond explaining how meta-data amounts to tracking every website every person visits, not by content, but by providing the IP address or web domain.”

“The fact that our supplemental submission has yet to be accepted heightens concerns that the Committee will rubber stamp legislation that we are being denied access to. The whole Inquiry is starting to look like a charade of a consultation with the result being pre-ordained long before the terms of reference were even announced.”

Background

The denial of the Pirate Party’s FoI request comes as opposition to the data retention and surveillance proposal continues to grow. This week, Shadow Communications Minister Malcolm Turnbull broke his silence regarding the package, declaring that he has “grave misgivings” about a project which he feels “seems to be heading in precisely the wrong direction”.

“Without wanting to pre-empt the conclusions of the Parliamentary Committee, I must record my very grave misgivings about the proposal,” Turnbull told the audience. “It seems to be heading in precisely the wrong direction. Surely as we reflect on the consequences of the digital shift from a default of forgetting to one of perpetual memory we should be seeking to restore as far as possible the individual’s right not simply to their privacy but to having the right to delete that which they have created in the same way as can be done in the analogue world.”

In general, the Government’s data retention and surveillance package has attracted a significant degree of criticism from the wider community over the past few months since it was first mooted. Digital rights lobby group Electronic Frontiers Australia has described the new powers as being akin to those applied in restrictive countries such as China and Iran, while the Greens have described the package as “a systematic erosion of privacy”.

In separate submissions to the Parliamentary Joint Committee on Intelligence and Security inquiry into the reforms, a number of major telecommunications companies including iiNet and Macquarie Telecom, as well as telco and ISP representative industry groups, have expressed sharp concern over aspects of the reform package, stating that “insufficient evidence” had been presented to justify them. And Victoria’s Acting Privacy Commissioner has labelled some of the included reforms as “being characteristic of a police state”.

The Institute of Public Affairs, a conservative and free market-focused think tank, wrote in its submission to the parliamentary inquiry on the matter that many of the proposals of the Government were “unnecessary and excessive. “The proposal … is onerous and represents a significant incursion on the civil liberties of all Australians,” wrote the IPA in its submission, arguing that the data retention policy should be “rejected outright”. And one Liberal backbencher, Steve Ciobo, has described the new proposal as being akin to “Gestapo” tactics.

In addition, several weeks ago The Australian newspaper reported that about a dozen Coalition MPs had bitterly complained about the data retention proposals in a passionate party room meeting, with Opposition Leader Tony Abbott being urged to directly pressure the Government on the issue.

Roxon and agencies such as the Australian Federal Police have attempted to justify the need for a data retention scheme by stating that the increasing use of the Internet by criminals has made traditional telecommunications interception powers less useful.

“The need to consider a data retention scheme has come about because of changes in technology that have affected the behaviour of criminal and national security suspects,” said Roxon recently. “Targets of interest now utilise the wide range of telecommunications services available to them to communicate, coordinate, manage and carry out their activities. The ability to lawfully access telecommunications data held by the telecommunications industry enables investigators to identify and build a picture of a suspect, provides vital leads of inquiry and creates evidence for alibis and prosecutions.”

It’s hard not to conclude that the whole data retention and surveillance issue, the so-called ‘National Security Inquiry’, is rapidly descending into a farce.

The Federal Parliament is examining the issue but does not have any access to the draft legislation which details how the proposal will actually be implemented. The Federal Attorney-General’s Department wrote the legislation several years before it even asked the Parliament to examine the issue, and now won’t release that draft legislation. And meanwhile, the Federal Attorney-General continues to insist she is maintaining an objective stance on the issue, despite having pushed it publicly. In the meantime, at least one commentator has alleged – and I agree – that the whole proposal has nothing much to do with the current politicians running the Federal Government, but is in fact being backed by the Attorney-General’s Department itself, which is using Roxon herself as a front for its data retention plans.

At the same time, almost every organisation or individual which has commented on the proposal has stridently opposed it, and the only organisations actually pushing for it are law enforcement bodies such as the Australian Federal Police and Australian Security and Intelligence Organisation, both of which have not provided evidence for how the current data retention system is failing. To make matters worse, the Government only boosted its data retention powers several months ago with the enactment of new cybercrime legislation. Meanwhile, the proposal remains unpopular with the general population, who are overwhelmingly opposed to it. Is there anything else which could demonstrate that this whole situation is a farce?
http://delimiter.com.au/2012/10/10/g...tention-bills/





High Court in Philippines Suspends Contentious Internet Law
Floyd Whaley

The Supreme Court of the Philippines suspended a new Internet law on Tuesday that critics had said could lead to imprisonment for sharing posts on social media.

“We respect and will abide by it,” Justice Secretary Leila de Lima wrote in a text message to reporters on Tuesday, referring to the court’s unanimous decision to suspend enforcement of the law for 120 days. “Our advocacy for a safe cyberspace and interdiction of organized crime will continue.”

Fifteen petitions were filed with the court opposing the law, the Cybercrime Prevention Act of 2012, which took effect Oct. 3. A spokeswoman for the high court, Maria Victoria Gleoresty Guerra, said the government had 10 days to file an initial response to the petitions. Oral arguments are scheduled for Jan. 15, she said.

The law establishes penalties for various computer-related crimes, including child pornography, identity theft, online fraud and illegally accessing computer networks. It also makes online libel punishable by imprisonment, which critics said could result in the criminalization of common activities like sharing Facebook and Twitter posts.

Critics also said that the law gave the government wide-ranging powers to amass information on Internet users and to block Web sites. The passage of the law was followed by a public outcry, including street protests, social media campaigns and the hacking of government Web sites.

Senator Edgardo J. Angara, the author of the legislation in the Senate, said he welcomed the suspension so that the law could be publicly debated and better understood.

“What the Cybercrime Prevention Act does is only to regulate socially destructive acts,” Mr. Angara said, “because you cannot enjoy your right fully and confidently if others have an equal right to interfere with your right.”

Others pledged to fight until the law is repealed or struck down by the Supreme Court.

“A temporary restraining order, unanimously issued, is the first victory in our battle to defend our freedom and right of expression,” said Senator Teofisto D. Guingona III, who voted against the measure. “For a court to issue a T.R.O. unanimously is a strong message of its belief that the dangers and fears of the people are real and must be addressed.”

Human Rights Watch called Tuesday for the high court to strike down the law and for any new Internet legislation to be debated openly.

“All provisions in Philippine law that allow for imprisonment for peaceful expression should be repealed,” said Brad Adams, the organization’s Asia director.
https://www.nytimes.com/2012/10/10/w...ernet-law.html





German Police Monitors Skype, GoogleMail and Facebook Chat
Anne Roth

The German government a while ago answered questions about expenditures by the federal ministry of home affairs for private service providers – hardly noticed by the English speaking world. The parlamentary enquiry (“Minor interpellation”) no. 17/10077 by Jan Korte, MP of The Left party, has now been translated into English.

The answers were far more detailed than one would expect.

There’s 43 pages (this includes questions), 20 of which are tables that list who was contracted, how much money was paid, what for and how each paid item was used. Even though 12 out of 30 answers were defined as classified information – e.g. questions regarding Germany’s domestic and foreign intelligence services or the Federal Office for Information Security (BSI) - there’s still some interesting news to be found.

The German ministry for home affairs and thus the German police clearly state that they are monitoring Skype, Google Mail, MSN Hotmail, Yahoo Mail and Facebook chat if deemed necessary. Money is spent on trojan viruses and we can be quite certain which company produces the IMSI catchers used by German police. We know how much money was spent by the Federal Police on border control biometrics, on passenger information systems and telecommunications surveillance. Digitask, a company whose reputation was clearly damaged after its trojan virus was found and analysed by the Chaos Computer Club in 2011, seems to still be a regular contractor of German authorities. Altogether more than a billion Euro was spent on private services by German police and other public authorities in the realm of the ministry of home affairs in the years 2002 – 2012.

The translation into English, commissioned by MP Korte, leaves out the 20 pages that contain tables with data who was paid how much for what exactly. If your preferred translation website can’t be of help, let me know and I’ll do my best. I noticed one mistake in the translation of question no. 10: “Federal Agency for the Protection of the Environment (BfV)” should instead be the domestic secret service “Bundesamt für Verfassungsschutz BfV”.
http://annalist.noblogs.org/post/201...facebook-chat/





Panetta Warns of Dire Threat of Cyberattack on U.S.
Elisabeth Bumiller and Thom Shanker

Defense Secretary Leon E. Panetta warned Thursday that the United States was facing the possibility of a “cyber-Pearl Harbor” and was increasingly vulnerable to foreign computer hackers who could dismantle the nation’s power grid, transportation system, financial networks and government.

In a speech at the Intrepid Sea, Air and Space Museum in New York, Mr. Panetta painted a dire picture of how such an attack on the United States might unfold. He said he was reacting to increasing aggressiveness and technological advances by the nation’s adversaries, which officials identified as China, Russia, Iran and militant groups.

“An aggressor nation or extremist group could use these kinds of cyber tools to gain control of critical switches,” Mr. Panetta said. “They could derail passenger trains, or even more dangerous, derail passenger trains loaded with lethal chemicals. They could contaminate the water supply in major cities, or shut down the power grid across large parts of the country.”

Defense officials insisted that Mr. Panetta’s words were not hyperbole, and that he was responding to a recent wave of cyberattacks on large American financial institutions. He also cited an attack in August on the state oil company Saudi Aramco, which infected and made useless more than 30,000 computers.

But Pentagon officials acknowledged that Mr. Panetta was also pushing for legislation on Capitol Hill. It would require new standards at critical private-sector infrastructure facilities — like power plants, water treatment facilities and gas pipelines — where a computer breach could cause significant casualties or economic damage.

In August, a cybersecurity bill that had been one of the administration’s national security priorities was blocked by a group of Republicans, led by Senator John McCain of Arizona, who took the side of the U.S. Chamber of Commerce and said it would be too burdensome for corporations.

The most destructive possibilities, Mr. Panetta said, involve “cyber-actors launching several attacks on our critical infrastructure at one time, in combination with a physical attack.” He described the collective result as a “cyber-Pearl Harbor that would cause physical destruction and the loss of life, an attack that would paralyze and shock the nation and create a profound new sense of vulnerability.”

Mr. Panetta also argued against the idea that new legislation would be costly for business. “The fact is that to fully provide the necessary protection in our democracy, cybersecurity must be passed by the Congress,” he told his audience, Business Executives for National Security. “Without it, we are and we will be vulnerable.”

With the legislation stalled, Mr. Panetta said President Obama was weighing the option of issuing an executive order that would promote information sharing on cybersecurity between government and private industry. But Mr. Panetta made clear that he saw it as a stopgap measure and that private companies, which are typically reluctant to share internal information with the government, would cooperate fully only if required to by law.

“We’re not interested in looking at e-mail, we’re not interested in looking at information in computers, I’m not interested in violating rights or liberties of people,” Mr. Panetta told editors and reporters at The New York Times earlier on Thursday. “But if there is a code, if there’s a worm that’s being inserted, we need to know when that’s happening.”

He said that with an executive order making cooperation by the private sector only voluntary, “I’m not sure they’re going to volunteer if they don’t feel that they’re protected legally in terms of sharing information.”

“So our hope is that ultimately we can get Congress to adopt that kind of legislation,” he added.

Mr. Panetta’s comments, his most extensive to date on cyberwarfare, also sought to increase the level of public debate about the Defense Department’s growing capacity not only to defend but also to carry out attacks over computer networks. Even so, he carefully avoided using the words “offense” or “offensive” in the context of American cyberwarfare, instead defining the Pentagon’s capabilities as “action to defend the nation.”

The United States has nonetheless engaged in its own cyberattacks against adversaries, although it has never publicly admitted it. From his first months in office, Mr. Obama ordered sophisticated attacks on the computer systems that run Iran’s main nuclear enrichment plants, according to participants in the program. He decided to accelerate the attacks, which were begun in the Bush administration and code-named Olympic Games, even after an element of the program accidentally became public in the summer of 2010.

In a part of the speech notable for carefully chosen words, Mr. Panetta warned that the United States “won’t succeed in preventing a cyberattack through improved defenses alone.”

“If we detect an imminent threat of attack that will cause significant physical destruction in the United States or kill American citizens, we need to have the option to take action against those who would attack us, to defend this nation when directed by the president,” Mr. Panetta said. “For these kinds of scenarios, the department has developed the capability to conduct effective operations to counter threats to our national interests in cyberspace.”

The comments indicated that the United States might redefine defense in cyberspace as requiring the capacity to reach forward over computer networks if an attack was detected or anticipated, and take pre-emptive action. These same offensive measures also could be used in a punishing retaliation for a first-strike cyberattack on an American target, senior officials said.

Senior Pentagon officials declined to describe specifics of what offensive cyberwarfare abilities the Defense Department has fielded or is developing. And while Mr. Panetta avoided labeling them as “offensive,” other senior military and Pentagon officials have recently begun acknowledging their growing focus on these tools.

The Defense Department is finalizing “rules of engagement” that would put the Pentagon’s cyberweapons into play only in case of an attack on American targets that rose to some still unspecified but significant levels. Short of that, the Pentagon shares intelligence and offers technical assistance to the F.B.I. and other agencies.

Elisabeth Bumiller reported from New York, and Thom Shanker from Washington.
https://www.nytimes.com/2012/10/12/w...berattack.html





U.S. Suspects Iran Was Behind a Wave of Cyberattacks
Thom Shanker and David E. Sanger

American intelligence officials are increasingly convinced that Iran was the origin of a serious wave of network attacks that crippled computers across the Saudi oil industry and breached financial institutions in the United States, episodes that contributed to a warning last week from Defense Secretary Leon E. Panetta that the United States was at risk of a “cyber-Pearl Harbor.”

After Mr. Panetta’s remarks on Thursday night, American officials described an emerging shadow war of attacks and counterattacks already under way between the United States and Iran in cyberspace.

Among American officials, suspicion has focused on the “cybercorps” that Iran’s military created in 2011 — partly in response to American and Israeli cyberattacks on the Iranian nuclear enrichment plant at Natanz — though there is no hard evidence that the attacks were sanctioned by the Iranian government.

The attacks emanating from Iran have inflicted only modest damage. Iran’s cyberwarfare capabilities are considerably weaker than those in China and Russia, which intelligence officials believe are the sources of a significant number of probes, thefts of intellectual property and attacks on American companies and government agencies.

The attack under closest scrutiny hit Saudi Aramco, the world’s largest oil company, in August. Saudi Arabia is Iran’s main rival in the region and is among the Arab states that have argued privately for the toughest actions against Iran. Aramco, the Saudi state oil company, has been bolstering supplies to customers who can no longer obtain oil from Iran because of Western sanctions.

The virus that hit Aramco is called Shamoon and spread through computers linked over a network to erase files on about 30,000 computers by overwriting them. Mr. Panetta, while not directly attributing the strike to Iran in his speech, called it “probably the most destructive attack that the private sector has seen to date.”

Until the attack on Aramco, most of the cybersabotage coming out of Iran appeared to be what the industry calls “denial of service” attacks, relatively crude efforts to send a nearly endless stream of computer-generated requests aimed at overwhelming networks. But as one consultant to the United States government on the attacks put it several days ago: “What the Iranians want to do now is make it clear they can disrupt our economy, just as we are disrupting theirs. And they are quite serious about it.”

The revelation that Iran may have been the source of the computer attacks was reported earlier by The Washington Post and The Associated Press.

The attacks on American financial institutions, which prevented some bank customers from gaining access to their accounts online but did not involve any theft of money, seemed to come from various spots around the world, and so their origins are not certain. There is some question about whether those attacks may have involved outside programming help, perhaps from Russia.

Mr. Panetta spoke only in broad terms, stating that Iran had “undertaken a concerted effort to use cyberspace to its advantage.” Almost immediately, experts in cybersecurity rushed to fill in the blanks.

“His speech laid the dots alongside each other without connecting them,” James A. Lewis, a senior fellow at the Center for Strategic and International Studies, wrote Friday in an essay for ForeignPolicy.com. “Iran has discovered a new way to harass much sooner than expected, and the United States is ill-prepared to deal with it.”

Iran has a motive, to retaliate for both the American-led financial sanctions that have cut its oil exports nearly in half, and for the cybercampaign by the United States and Israel against Iran’s nuclear enrichment complex at Natanz.

That campaign started in the Bush administration, when the United States and Israel first began experimenting with an entirely new generation of weapon: a cyberworm that could infiltrate another state’s computers and then cause havoc on computer-controlled machinery. In this case, it resulted in the destruction of roughly a fifth of the nuclear centrifuges that Iran uses to enrich uranium, though the centrifuges were eventually replaced, and Iran’s production capability has recovered.

Iran became aware of the attacks in the summer of 2010, when the computer worm escaped from the Natanz plant and was replicated across the globe. The computer industry soon named the escaped weapon Stuxnet.

Iran announced last year that it had begun its own military cyberunit, and Brig. Gen. Gholamreza Jalali, the head of Iran’s Passive Defense Organization, said the Iranian military was prepared “to fight our enemies” in “cyberspace and Internet warfare.” Little is known about how that group is organized, or where it has bought or developed its expertise.

The United States has never acknowledged its role in creating the Stuxnet virus, nor has it said anything about the huge covert program that created it, code-named Olympic Games, which was first revealed earlier this year by The New York Times. President Obama drastically expanded the program as a way to buy time for sanctions to affect Iran, and to stave off a military attack on the Iranian facilities by Israel, which he feared could quickly escalate into a broader war.

In advance of Mr. Panetta’s speech in New York on Thursday, senior officials debated how much to talk about the United States’s offensive capabilities, assessing whether such an acknowledgment could help create a deterrent for countries contemplating attacks on the country

But Mr. Panetta carefully avoided using the words “offense” or “offensive” in the context of American cyberwarfare, instead defining the Pentagon’s capabilities as “action to defend the nation.”

“We won’t succeed in preventing a cyber attack through improved defenses alone,” Mr. Panetta said. “If we detect an imminent threat of attack that will cause significant, physical destruction in the United States or kill American citizens, we need to have the option to take action against those who would attack us to defend this nation when directed by the president. For these kinds of scenarios, the department has developed that capability to conduct effective operations to counter threats to our national interests in cyberspace.”

The comments indicated that the United States might redefine defense in cyberspace as requiring the capacity to reach forward over computer networks if an attack was detected or anticipated, and take pre-emptive action. These same offensive measures also could be used in a punishing retaliation for a first-strike cyberattack on an American target, senior officials said.

One senior intelligence official described a debate inside the Obama administration over the pros and cons of openly admitting that the United States has deployed a new cyber weapon, and could use it in response to an attack, or pre-emptively.

For now, officials have decided to hold back. “The countries who need to know we have it already know,” the senior intelligence official said.

Nicole Perlroth contributed reporting from San Francisco.





Lone Packet Cripples Telco Networks

Telecommunications networks an unsecured "sandwich" of technology.
Darren Pauli

Telecommunications infrastructure is riddled with security holes so severe that a handful of malformed packets could take down GSM communications systems, according to veteran pen tester and founder of Qualys, Philippe Langlois.

He said the security flaws persisted due to inaction by telco equipment manufacturers, the complexity of networks, and a lack of security oversight.

In January 2010, Langlois, now director of P1 Security, discovered that a single malformed packet could disable one of the Home Location Register server clusters which store GSM subscriber details as part of the global SS7 network.

This packet could be sent from within any network or even femtocells, he said.

"We were able to remotely crash HLR frontend for two minutes each by sending one malformed packet," Langlois told SC.

"That means with 20 packets a minute, you would crash the world's HLR. This means there is no communication possible for a country."

He said 83 per cent of telco operators do not apply traffic filtering over the SS7 network.

In further research to be released within weeks, Langlois will detail how similar attacks could cripple GRPS systems. The world-wide SS7 report was a product of Langlois' 15 years of telecommunications research.

Tech sandwiches

The SS7 attacks were but one example of how large holes in telecommunications infrastructure could be exploited.

Telcos the world over were running networks tantamount to "technology sandwiches" where layers of legacy kit had created such high complexity that operators were unaware of glaring holes which Langlois regularly revealed in penetration tests.

Other operators were less fortunate, and had such flaws exploited by malicious actors.

Recently in Eastern Europe, a telco had routed half of its telecommunications traffic through its rival's network, forcing the company to fund a significant bandwidth burden. It had not yet settled the case.

Such attacks were most common within Eastern Europe but the region was also home to the most security-savvy telcos who had the best understanding of their network exposures, according to Langlois.

He said most vulnerabilities existed because equipment providers suppressed knowledge of them to avoid what could amount to hundreds of millions of dollars in cash from network outages.

"It is troubling to see very talented, expert people [at telcos] who are shielded from the reality of their network by the vendor who has no interest in educating them about the telecom security and exposure of their own networks."

"It feels like the 1980s in terms of security."

Langlois said he often accessed telco networks using services that administrators were unaware were active.

"We accessed [an operator's] systems through their x25 network which they never knew was running because the network vendor never disclosed it -- it was just underlying technology."

"All of these change management, configuration management and monitoring systems are specific to one kind of equipment, and you need to access several of these to get a clear vision of what is on your systems."

Langlois and MegaPay director Emmanuel Gadaix spoke at Hack In The Box Malyasia. His presentation slides are available (pdf).
http://www.scmagazine.com.au/News/31...-networks.aspx




Apple Has Quietly Started Tracking iPhone Users Again, And It's Tricky To Opt Out
Jim Edwards

Apple's launch of the iPhone 5 in September came with a bunch of new commercials to promote the device.

But Apple didn't shout quite so loud about an enhancement to its new mobile operating system, iOS 6, which also occurred in September: The company has started tracking users so that advertisers can target them again, through a new tracking technology called IFA or IDFA.

Previously, Apple had all but disabled tracking of iPhone users by advertisers when it stopped app developers from utilizing Apple mobile device data via UDID, the unique, permanent, non-deletable serial number that previously identified every Apple device.

For the last few months, iPhone users have enjoyed an unusual environment in which advertisers have been largely unable to track and target them in any meaningful way.

In iOS 6, however, tracking is most definitely back on, and it's more effective than ever, multiple mobile advertising executives familiar with IFA tell us. (Note that Apple doesn't mention IFA in its iOS 6 launch page).

Users can switch off that targeting, but it's tricky, as we discovered a couple of days ago. Although at least iOS 6 users are able to turn off tracking, which they weren't before.

Here's how it works.

IFA or IDFA stands for "identifier for advertisers." It's a random, anonymous number that is assigned to a user and their device. It is temporary and can be blocked, like a cookie.

When you look at an app, or browse the web, your presence generates a call for an ad. The publisher's site that you're looking at then passes the IFA to the ad server. The advertiser is then able to know that a specific iPhone user is looking at a specific publication and can serve an ad targeting that user. IFA becomes particularly useful, for instance, if an ad server notices that a particular IFA is looking at a lot of different car sites. Perhaps that user is interested in buying a new car. They'll likely start seeing a lot of car ads on their iPhone.

More importantly, IFA will allow advertisers to track the user all the way to "conversion" — which for most advertisers consists of an app download. Previously, advertisers had no idea whether their ads actually drove people to download apps or buy things. Now IFA will tell them.

The IFA does not identify you personally — it merely provides a bunch of aggregate audience data that advertisers can target with ads.

Tracking is on by default

The new iPhone operating system comes with three things that make tracking easier for advertisers and reduce the likelihood that you'll opt out.

• iOS 6 comes in a default "tracking on" position. You have to affirmatively switch it off if you do not want advertisers to see what you're up to.
• The tracking control in iPhone's settings is NOT contained where you might expect it, under the "Privacy" menu. Instead, it's found under "General," then "About," and then the "Advertising" section of the Settings menu.
• The tracking control is titled "Limit Ad Tracking," and must be turned to ON, not OFF, in order to work. That's slightly confusing — "ON" means ads are off! — so a large number of people will likely get this wrong.

Those three factors combined mean that a huge proportion of iPhone users are unlikely to ever opt out of tracking.

"It's a really pretty elegant, simple solution," says Mobile Theory CEO Scott Swanson. "The biggest thing we're excited about is that it's on by default, so we expect most people will leave it on."

(His take on IFA's capabilities was confirmed by two other mobile ad execs at rival companies.)

Again, IFA doesn't identify you as a person to advertisers. What it does do, however, is provide advertisers with "a really meaningful inference of behavior," Swanson says. "We haven't had access to that information before."
http://www.businessinsider.com/ifa-a...6-2012-10?op=1





Do Not Track? Advertisers Say ‘Don’t Tread on Us’
Natasha Singer

Do Not Track mechanisms are features on browsers — like Mozilla’s Firefox — that give consumers the option of sending out digital signals asking companies to stop collecting information about their online activities for purposes of targeted advertising.

First came a stern letter from nine members of the House of Representatives to the Federal Trade Commission, questioning its involvement with an international group called the World Wide Web Consortium, or W3C, which is trying to work out global standards for the don’t-track-me features. The legislators said they were concerned that these options for consumers might restrict “the flow of data at the heart of the Internet’s success.”

Next came an incensed open letter from the board of the Association of National Advertisers to Steve Ballmer, the C.E.O. of Microsoft, and two other company officials. Microsoft had committed a grievous infraction, wrote executives from Dell, I.B.M., Intel, Visa, Verizon, Wal-Mart and other major corporations, by making Do Not Track the default option in the company’s forthcoming Internet Explorer 10 browser. If consumers chose to stay with that option, the letter warned, they could prevent companies from collecting data on up to 43 percent of browsers used by Americans.

“Microsoft’s action is wrong. The entire media ecosystem has condemned this action,” the letter said. “In the face of this opposition and the reality of the harm that your actions could create, it is time to realign with the broader business community by providing choice through a default of ‘off’ on your browser’s ‘do not track’ setting.”

So far, Microsoft has shrugged off advertisers’ complaints. In an e-mailed statement, Brendon Lynch, Microsoft’s chief privacy officer, said a recent company study of computer users in the United States and Europe concluded that 75 percent wanted Microsoft to turn on the Do Not Track mechanism.

“Consumers want and expect strong privacy protection to be built into Microsoft products and services,” Mr. Lynch wrote.

The tone of the industry offensive may seem a bit strident, given that the W3C has yet to decide how to implement the don’t-track-me mechanisms — or even what they signify. For the moment, that means the browser buttons are little more than digital bumper stickers whose sentiments companies are free to embrace or entirely ignore.

But what is really at stake here is the future of the surveillance economy.

The advent of Do Not Track threatens the barter system wherein consumers allow sites and third-party ad networks to collect information about their online activities in exchange for open access to maps, e-mail, games, music, social networks and whatnot. Marketers have been fighting to preserve this arrangement, saying that collecting consumer data powers effective advertising tailored to a user’s tastes. In turn, according to this argument, those tailored ads enable smaller sites to thrive and provide rich content.

“If we do away with this relevant advertising, we are going to make the Internet less diverse, less economically successful, and frankly, less interesting,” says Mike Zaneis, the general counsel for the Interactive Advertising Bureau, an industry group.

But privacy advocates argue that in a digital ecosystem where there may be dozens of third-party entities on an individual Web page, compiling and storing information about what a user reads, searches for, clicks on or buys, consumers should understand data mining’s potential costs to them and have the ability to opt out.

“If you are looking up the word ‘cancer’ ” on a health site, says Dan Auerbach, a staff technologist at the Electronic Frontier Foundation, a digital rights group in San Francisco, “there’s a high probability that you have cancer or are interested in that. This is the sort of data that can be collected.” He adds: “Consumers absolutely have a right to know how their information is being used and to opt out of having their information used in ways they don’t like.”

But the two sides seem to have reached an impasse. When the W3C met recently in Amsterdam to hammer out Do Not Track standards, as my colleague Kevin J. O’Brien reported in an article earlier this month, advertising industry executives and privacy advocates accused each other of trying to stymie the process.

“There is a strong concern that the W3C is not the right forum to be making this decision,” says Rachel Thomas, the vice president of government affairs at the Direct Marketing Association, a trade group based in Manhattan. “The attempt to set public policy is entirely outside their area of expertise.”

During the Amsterdam meeting, Ms. Thomas proposed that Do Not Track signals should actually permit data collection for advertising purposes, the very thing the mechanisms were designed to control. That provocative idea went over with European privacy advocates about as well as a smoker lighting up in a no-smoking zone full of asthmatics.

Indeed, some prominent consumer advocates have interpreted the industry’s proposal as an act of bad faith.

“While many advertisers do support privacy, there is clearly a rogue element of advertising networks that wants to subvert the process,” says Jon D. Leibowitz, the chairman of the Federal Trade Commission. “Or so it seems to me.”

Earlier this year at a White House event, the Digital Advertising Alliance, or D.A.A., an industry consortium, pledged to honor don’t-track-me signals so long as the systems required consumers to make an affirmative choice. But last Tuesday, the consortium published guidelines saying that it viewed Microsoft’s latest browser setting as an automatic, machine-driven choice preselected by a company — not a choice actively made by an individual consumer. During the installment process, Microsoft’s new software actually does give users a choice of whether to keep the mechanism on, or to turn it off. Nevertheless, the consortium said it would not require members to honor the forthcoming browser’s don’t-track-me signals.

Besides, the D.A.A. has already established its own program for consumers who want to opt out of receiving ads tailored to their online behavior, says Mr. Zaneis, whose own group is a member of that consortium. The consortium remains committed to incorporating browser signals into its program, he says, provided that the systems require consumers to make affirmative choices and give them information on the potential effects of eschewing tailored ads.

“We have self-regulation. It’s working very well,” he says. “Why don’t we give that a chance to succeed?”

SOME government officials vehemently disagree. In a letter to the F.T.C. earlier this month, Senator John D. Rockefeller IV, Democrat of West Virginia, called the industry program an “ineffective regime” riddled with exceptions.

“To date, self-regulation for the purposes of consumer privacy protection has failed,” Mr. Rockefeller wrote.

Now regulators are warning that opposition to Do Not Track could backfire on advertisers, by giving browsers more incentive to empower frustrated users.“We might see a technology arms race with browsers racing to see — by letting consumers block ads — who can be the most privacy-protective,” says Mr. Leibowitz of the F.T.C. “Maybe that’s not a bad thing.”
http://www.nytimes.com/2012/10/14/te...sers-fire.html





Students Refusing Tracking ID Cards Unable to Vote for Homecoming?
Mikey McCollor

John Jay High School in San Antoni, Texas, has launched a new program to increase attendance. The "Student Locator Project" requires students to wear their microchip-embedded school IDs around their necks at all times and have their location tracked and monitored.

And now, apparently, the students refusing to use the new IDs are not going to be allowed to vote for Homecoming court. One objector, Andrea Hernandez, has been told that if she continues to refuse the new IDs, she won't be allowed to vote for homecoming royalty. This is, of course, deplorable, as the most vital, inalienable right of any high school student is the right to choose which popular kid is the MOST popular and will therefore rule over them.

At the same time, there are a number of parents] in favor of the system, saying they want to know that their child is safe and in school. But no one is acknowledging the hidden cost of that knowledge. These kids are going to grow up with the knowledge that there is someone looking over thier shoulder. They're going to grow up thinking that they're numbers being tracked in a system, not people. And maybe not conciously, they're going to grow up thinking that they are doing something WRONG.

I'm not saying that this might be a worthy trade-off. But those hidden costs are important and need to be acknowledged. It's like ordering a concert ticket from Ticketmaster — a 25 dollar ticket STARTS OUT at 25 dollars, but once you add in the hidden charges like tax, convenience fees, order processing fees, service fees, dervice fees, proprietary costs, and all appropriate tariffs, your concert ticket may end up costing over 32,500 dollars.
http://www.smosh.com/smosh-pit/artic...ote-homecoming





How to Replace Missing Start Button in Windows 8

Three utilities produce a reasonable facsimile of the legacy Windows Start button
Susan Perschke

Whatever you might think of Windows 8, at startup there is something missing that can vex, or at least perplex, users from the get-go. By default, Windows 8 now boots to a “Start Screen” that displays “tiles” that link to a limited set of programs and features for various options such as mail, video, music, and somewhere among the 16-20 tiles, a desktop option. Clicking the desktop option opens a Window that contains – actually not much. The familiar start button went missing in Windows 8 and instead users are left staring at an empty space with no apparent way to access programs and applications. Early testers considered this an alpha or beta glitch, but Microsoft has confirmed that the missing start button will not be making a re-appearance in the release version of Windows 8.

In this review I tested three different Start button replacements (Power8, Start8 and Classic Start Menu). The tests were run on Windows Preview version build 8400. Each product produces a reasonable facsimile of the legacy Windows start button. Overall I thought Classic Start was the best of the three, as it contains many more configuration and customization options than the other two products.


Start8

Stardock's Start8 is installed using an executable file and like the other two products I tested, it installs quickly with no options presented during the install. Once the installation is complete, the familiar round start button you remember from Windows 7 appears. Not only is the button identical, but the entire start menu looks just like Windows 7 with the same options in the same location.

As mentioned in the intro, Windows 8 boots to the new Start Menu by default. Once the Start Screen tiles are displayed the status bar we have known since Windows 95 is also hidden, but Start8 adds a panel you can use to quickly get back into familiar territory. Start8 has limited configuration options, but there are a few choices such as the ability to use a metro style start menu, which is a hybrid between the old Windows start menu and the new Start Screen with tiles. It essentially takes the tiles and organizes them into a start menu like configuration, which really is only an option with larger screens in high resolution. As to look and feel you cannot make changes to colors and themes, but the start menu automatically matches the color scheme you have selected. The documentation claims that Start8 can be configured to boot directly to the desktop. Although I selected the option to boot directly to the desktop, I was not able to make this work correctly on a virtual machine. The vendor informed me that they do not support their software in a virtualized environment, which I found to be a rather surprising limitation in a world where virtualization is now so prevalent.
Start8 has a compact footprint that uses less than 1 MB of memory.

Pricing:The Beta version is currently free to download or you can pay $4.99 and receive the full version once it becomes available after Windows 8 is released.

Pros: Nice interface with ability to switch between regular start menu and metro start menu

Cons: Limited configuration and customization options, limited documentation, lacks support for virtualized environments


Power8

I installed Power8 using the available MSI file and except for the installation path there were no other options presented during the install. Upon completed installation, a large white arrow directs you to the newly available start button. When clicked, the start menu looks very much like what you see in Windows 7 with shortcuts to recently used programs, the Control Panel, including the familiar options to lock, shutdown, hibernate and log off the computer. One of the features I found especially useful is the ability to drill-down Explorer style right from the start menu without opening Windows Explorer. On my copy the start button was a bit narrow and although I tried to modify this, I could not find any configurable options except for the option of auto-starting Power8 when the Windows starts. Even with auto-start, Windows 8 still loads the Start Screen first and you have to click the desktop panel to see access the desktop and start menu.

Of the three products, this is the one that looks the least like to the start button in Windows 7. However, the difference does not detract from the overall functionality. The transparency of the start menu made it difficult to read against a light background. However this was only an issue for the initial menu, as once you expand any of the menu items they all become opaque.

Power8 bills itself as a small footprint solution, however I found it to use quite a bit of memory, running two processes totaling over 35 MB.

Pricing: Power8 is open source and free to download.

Pros: Open source, no system file integration

Cons: Very limited documentation, no configuration options


Classic Start Menu from ClassicShell

The Classic Start Menu is part of the ClassicShell package which also includes the Classic Explorer and Classic IE9. During the install you can select which features to install and although I was only reviewing the Start button replacement in this article, I installed all three. Classic Start Menu offers three style options: Windows Classic (a la vintage Windows 95/98), Windows XP or the Windows Vista/7 look. I decided to go with the Windows 7 menu and also selected one of the seven available skins. This created a start menu that is essentially identical to the Windows 7 menu with a few variations. For instance, the Control Panel has been placed under a Settings group, which also contains printers and network settings. This is not a bad idea as most users do not necessarily need these features that often. Other features such as the My Documents, Recent items, search and help are available from the immediate start menu.

By default, once installed, the Classic Start Menu does boot to the desktop as opposed to the new Start Screen tiles. Of the three products I tested this one was the only one where this feature actually works as advertised. Another neat feature of the Classic Start Menu is the ability to save the settings to an XML file or import from an XML file. This way you move your custom start menu to a different computer.

Classic Shell was the only one of the products that installed an entire program group for its product. It also has a handy link to the configuration page from the start menu itself. Of the three products tested, this one had by far the most options; there are no less than 13 different configuration tabs on the settings page. This is probably overkill for most users, but it is nice to know you can tweak certain settings such as the style and which items to display in the start menu. Uses about 2 MB of memory.

Pricing: ClassicShell is open source and free to download, but donations are accepted through PayPal

Pros: Multiple configuration and customizations options, open source

Cons: None that we could find

A note about open source

Both Power8 and Classic Start Menu are open source products, which means you can download and inspect the code before installing it. The safest way to use open source is to compile the source code yourself, as this ensures nothing else can be ‘injected' into the binary distribution, so long as you compile every release. If you don't have the tools, time or inclination to compile the source, at the very least use the vendor-provided hash file to verify the download.

What if your company doesn't allow third-party software?

While it's encouraging to see third parties step up to the plate to help users make the transition to Windows 8, not everyone will be able to take advantage of third-party products, no matter how useful they may be. If your organization disallows third-party software, you could well be sitting back at the blank screen wondering how to do simple tasks that used to be at your fingertips, such as configuring your printer. Fortunately, there is a feature built in to Windows 8 that you can use in a pinch to restore some basic functions associated with the start button in Windows 7. While not as elegant as the solutions provided in the products I reviewed, if you right click the task bar and open the Taskbar Properties you can choose to display a built-in ‘Desktop Toolbar'. This is a simplified basic start menu that allows you to access some Windows features such as the Windows Explorer, Control Panel and view other computers on the LAN. It does not, however, provide access to applications, which is a very limiting restriction. We hope Microsoft will reconsider after it encounters the inevitable push back from users who need to use their computers for more than streaming videos and listening to tunes – some of us actually have to work.
http://www.itworld.com/data-centerse...tton-windows-8





Microsoft Rolls Out Windows 8 "Service Pack" - Before Its Launch
Mark Hachman

Is a service pack still a service pack when it's called by another name? For Windows 8, it might be. In a highly unusual move, Microsoft is now offering a “Windows 8 Client and Windows Server 2012 General Availability Cumulative Update” via Windows Update, that rolls up changes and improvements Microsoft has made to Windows 8 and makes them available to users even before the official launch of the new operating system.

Normally, of course, service packs wait at least a few weeks or months following the release of an operating system, and they’re a major event. Windows XP had three; Vista has two, and Microsoft has released just one for Windows 7, to date.

Steven Sinofsky, president of the Windows and Windows Live division at Microsoft, explained that the period of time between the release of a new operating system to manufacturing, and the time it is released to retail, had been used to match PCs with the new software components, drivers and companion software they needed to properly function. In some cases, that meant fundamental changes to Windows, too. But early purchasers might not get access to those chanes and updates.

“We would often create dozens of changes for each [manufacturer] for these new PCs,” Sinofsky wrote in a blog post. “Those changes would be deployed during manufacturing of those PCs and thus would be invisible to customers. While those changes could potentially apply to a broader range of PCs, we did not have in place the testing and certification to broadly distribute these updates. As a result, customers would have to wait until the first service pack to see these enhancements. We know many folks would spend time working to uncover these... enhancements in a desire to have the most up to date Windows.”

Now, however, Microsoft has managed to improve its processes so that its manufacturing partners aren’t the only ones seeing the benefits. “By developing better test automation and test coverage tools we are happy to say that Windows 8 will be totally up to date for all customers starting at General Availability,” Sinofsky wrote.

What Do You Get?

Microsoft said that the “General Availability Cumulative Update” would include four major elements:

• Increased power efficiency to extend battery life
• Performance improvements in Windows 8 applications and Start screen
• Improved audio and video playback in many scenarios
• Improved application and driver compatibility with Windows 8

To apply it, perform the following steps:

• Open the Charms bar by swiping in from the right edge of a touch screen. (If you use a mouse, move the mouse to the upper- or lower-right corner of the display.)
• Click “Search,” and type in “Windows Update.”
• Click “Settings,” and install the optional updates.

Is This A Good Thing?

On the surface (so to speak), Microsoft’s “mini service pack” appears to be a good thing: Yes, there are major revisions that Microsoft needs to make with Windows 8, but the performance improvements would roll out anyway, over time. The early adopters can simply take advantage of them before Windows 8 rolls out. And who doesn’t like a free upgrade?

Still, users posting comments to Sinofksy’s post have identified other problems, such as slowdowns after applying the patch, probably due to nagging driver issues. A more serious one is that which Microsoft has identified itself: that when you turn a Windows feature - such as Remote Access - on or off, the computer may require a restart. So far, there doesn’t seem to be many people, if any, who have encountered this problem. If you do, let us know in the comments below.

More Work Needed?

Otherwise, some users say that Microsoft still has more work to do.

“Yeah, fix your apps!” “Marcus” wrote. “Photos and Mail STILL crash every time during loading after the updates. Thankfully the real apps, aka desktop apps, don't have issues running.”

Microsoft is addressing some of those requests, quietly rolling out updates to its core SkyDrive, Mail, Calendar, People and Messaging apps, as well as Photos, Maps, Bing, Finance and News. Microsoft recommends that Windows 8 users keep an eye on the Store tile, which will indicatewhen updates are available. users can then open it and click the updates link in the top right corner to see the list and install the desired updates.

Notable changes will include, according to Microsoft, a conversation view of your inbox in Mail, plus complete IMAP account support; indoor venue maps in Maps, plus integration with its Travel app; and a SmartDJ feature for its Music app.
http://www.readwriteweb.com/archives...its-launch.php





Eric Schmidt: Android-Apple Is the Defining Fight in the Industry Today
Liz Gannes

The fight between Google and Apple over mobile devices is great for consumers, but the patent wars that have resulted are awful, said Google Chairman Eric Schmidt, in conversation tonight with our own Walt Mossberg and Kara Swisher.

“The Android-Apple platform fight is the defining fight in the industry today,” he said.

“We’ve not seen platform fights at this scale,” he said. “The beneficiary is you guys (i.e., consumers). Prices are dropping rapidly. That’s a wonderful value proposition.”

As for patent battles, Schmidt said he couldn’t talk about them, for two reasons. First, he said, he doesn’t understand all the details; and second, the topic makes him too upset.

“These patent wars are death,” Schmidt said, noting that software is always overlapping, and that there are an estimated 200,000 patents covering the software industry.

Schmidt said the impact is worse for small companies than it is for companies like Apple, Google and Samsung that can afford to protect their technolopgies.

“I think this is ultimately bad, bad for innovation. It eliminates choices.”

As for the latest skirmish between Google and Apple — Apple’s default map application on iOS used to use Google data, until the latest version — Schmidt said he thought Apple made a mistake.

“Apple should have kept with our maps,” he said. “The fact of the matter is they decided a long time ago to do their own maps, and we saw this coming with their acquisitions. I think Apple has learned that maps are hard. We invested hundred of millions of dollars in satellite work, airplane work, drive-by work, and we think we have the best product in the industry.”

So will Google make a new maps app for Apple devices? Schmidt gave the same non-answer he has given before.

“I don’t want to preannounce products, but I can tell you that were we to do that, Apple would have to approve it,” he said.

Schmidt said he still believes there to be a “Gang of Four” technology platform leaders — Google, Apple, Amazon and Facebook — as he first proposed in an interview with Walt and Kara a couple of years ago.

Besides Apple and Google, he said, “Facebook is attempting to become the world’s communications hub, and Amazon is attempting to become the world’s largest store.”

Shouldn’t Microsoft be included in there, Mossberg asked? No, Schmidt said. “It’s a well-run company,” he said, “but they don’t make state-of-the-art products.”
https://allthingsd.com/20121010/eric...ndustry-today/





Insight: Frugal Amazon Opens Checkbook for Streaming Video
Alistair Barr

Amazon.com Inc's deal to purchase streaming movies from cable network Epix could transform the way such deals are done, thanks to a pay-for-performance sweetener that had not been previously disclosed.

According to an executive directly involved in the deal, Amazon agreed to an earn-out provision payable to Epix over time if the number of subscribers to Amazon's Prime Instant Video service rises above a certain threshold. That comes in addition to a fixed upfront fee, the basis for most subscription video-on-demand deals up to this point.

The generous terms of the deal, announced in September, provide the strongest evidence yet that Amazon is willing to pay up to be a player in this market as it faces a dwindling demand for DVDs - once its core entertainment offering - and tough competition for its Kindle Fire tablets.

Film studios and TV network executives, meanwhile, now have a worthy foil to play against Netflix - once the only major streaming player - and possibly a template for future deals.

"This could be considered online video deals 2.0. After doing 1.0 deals mostly with Netflix and a few with Amazon, it dawned on the media companies that they may want to get a piece of any future growth too," said Goldman Sachs media analyst Drew Borst.

The deal with Epix - a partnership between Hollywood studios Paramount Pictures, Metro-Goldwyn-Mayer, and Lionsgate - was structured so studios could capture any rapid Prime Instant Video growth, according to the executive involved in the transaction.

Amazon did not respond to a request for comment on details of the deal. An Epix spokeswoman also declined to comment.

But Epix Chief Executive Mark Greenberg did say of Amazon: "Internet delivery of content is a way in which a new, emerging younger audience wants to view content, and they know they can be a significant player in the space, we are happy to help them get there."

Epix previously had a deal with Netflix, which had been paying $200 million a year since 2010 for exclusive rights to the network's movies. When that exclusivity period expired, Amazon swooped in and quickly struck a three-year partnership to add about 3,000 movies from Epix to Prime Instant Video.

The deal sent a message that Amazon, which has not had a reputation for paying richly for anything, was serious about its digital video ambitions and was willing to spend hundreds of millions of dollars to secure content.

"There are times when it's frugal to make big productive investments," said Roy Price, head of Amazon Studios, Amazon's Hollywood studio. "When there are opportunities to do that we will do that."

HOLLYWOOD'S NEW BEST FRIEND

The studios are going to benefit.

"Hollywood loves it because they can say Amazon is paying us X and we want more from you," said Michael Pachter, an analyst at Wedbush Securities in LA. "It's a club they can use to beat Netflix over the head."

A Netflix spokesman declined to comment on the structure of its content deals.

"We never thought that we were going to operate without competition," Ted Sarandos, Netflix's chief content officer, said during an investor conference last month. "We were surprised that it has taken this long for anyone to really emerge in a meaningful way."

Amazon's Prime Instant Video service has more than 25,000 titles now, but that is still about half the number available on Netflix.

In addition to Netflix, Amazon also competes with Hulu, run by Jason Kilar, one of Amazon's former executives, which has a subscription video service called Hulu Plus. Earlier this year, Comcast Corp launched a rival called Streampix and Verizon and Coinstar's Redbox are expected to launch a competing service soon.

While Amazon's streaming deals cost less than Netflix's in raw dollar terms, it pays more on a per-subscriber basis, according to media executives and Wall Street analysts.

Amazon offers its streaming-video-on-demand service (SVOD) as a feature of its Prime program, which charges $79 a year in the United States for free two-day shipping on most products the company sells.

The company does not disclose subscriber figures for its Prime service. But some media companies that have done streaming video deals with Amazon have seen the data. One executive who has seen the figures told Reuters Amazon has about 9 million Prime subscribers. Prime Video subscribers - Prime members who have used the streaming service - total between 3 million and 4 million, this person said.

Netflix's larger customer base - it has about 25 million streaming video subscribers in the United States - means its total cost in licensing deals is typically higher than Amazon's, said the executive. But Amazon's cost basis, when adjusted for subscribers, is typically higher since its customer base is smaller.

Amazon does not disclose how much it pays for content. Barclays analyst Anthony DiClemente estimates that Amazon spends about $1 billion a year on content for its streaming service while Netflix spends close to $2 billion a year.

Netflix shares dropped as much as 11 percent the day Amazon's Epix deal was unveiled, although they have recovered since then.

Netflix stock jumped more than 10 percent on Monday after Morgan Stanley upgraded the company, saying Amazon was unlikely to separate its streaming video subscription service from its broader Prime offering, making it less of a direct competitor.

However, keeping Prime Instant Video packaged with its Prime shipping program will help Amazon pay more for video content, because it can subsidize content costs from profits made when Prime customers buy more physical products through the company, Wedbush's Pachter said.

THE IMPORTANCE OF PRIME

Amazon, which ranks as the world's largest Internet retailer, has been a leading purveyor of DVDs, but sales are falling as more viewers download and stream video instead.

The downward spiral of DVDs sales dovetails with Amazon's face-off against Apple Inc in tablet computing. Amazon is pricing its Kindle Fire devices lower than Apple's iPad with the aim of using it as a loss-leader to generate profit from the products and services consumers buy on its site, including digital movies, TV shows and books.

That means that gaining access to digital movies and TV shows is crucial for Amazon's future.

Since the middle of 2011, Amazon has announced streaming video deals with more than 10 media companies, including NBCUniversal, part of Comcast, News Corp's Fox, and ABC, part of Walt Disney Co.

Amazon has been selective about which content it will buy, in contrast to Netflix, which has opted to pursue a broader range, according to media executives who have done deals with both companies.

"The fact that they have spent a lot of money on a few things has been very interesting," said Netflix's Sarandos during last month's investor conference. "We're obviously keeping a good eye on it."

COMMODITY CONCERN

Some media companies are treading carefully with Amazon, though, given its track record of driving prices down.

In the book and e-book market, where Amazon grew to be the dominant player, it has battled publishers for the right to set its retail prices below wholesale.

Amazon will have more difficulty commoditizing movies and TV shows because it is competing for content with a growing list of streaming video on demand rivals. And Hollywood controls how and when its content is distributed more tightly, with big-budget films traditionally heading to theaters first, followed by DVD and pay TV.

For example, one media company has short-term agreements with Amazon that allow for quick exits if the deal does not go according to plan, said an executive.

(Reporting By Alistair Barr in San Francisco; Additional reporting by Lisa Richwine in Los Angeles; Editing by Peter Lauria, Martin Howell)
http://www.reuters.com/article/2012/...89803D20121009





Amazon Once Offered to Buy Netflix for $12 Million, Book Says

In late 1990s, Netflix was still a struggling start-up when CEO Reed Hastings flatly rejected Amazon's acquisition offer, according to an upcoming book.
Greg Sandoval

Jeff Bezos might have saved his company some money -- and a lot of trouble -- had he not tried to lowball Netflix back in 1999.

According to "Netflixed," a history of the DVD-and-streaming pioneer that's due to go on sale Thursday, founders Reed Hastings and Marc Randolph met with the Amazon CEO in 1999, after he indicated he might want to partner with Netflix in some way.

"Hastings also wanted to discuss selling Netflix to Amazon if the price was right," writes Gina Keating, the former Reuters reporter who authored the book. The only problem was that Hastings was "less than impressed with Amazon's $12 million offer."

Last week, a Netflix representative said the company would not comment about the book, but Jonathan Friedland, chief communications officer for the company, called this afternoon to deny that Amazon made such an offer.

We do know that Variety and others reported Hastings offered to sell to Blockbuster for $50 million. Blockbuster declined.

At the time, not even Hastings was sure Netflix would find a successful business model, Keatings wrote. Still, talk about a missed opportunity.

Blockbuster would file for bankruptcy protection in 2010 and billionaire Charlie Ergen's Dish Network acquired Blockbuster's assets out of bankruptcy last year. On Friday, Dish gave up on a plan to try to turn Blockbuster into a Netflix rival once more.

During the period when Blockbuster's business was sinking, Netflix began an extended winning streak in which the company pioneered streaming Internet video, increased subscribers by at least 1 million in each of seven consecutive quarters and saw its market cap reach $16 billion. That was before Hastings tanked the stock last year by alienating customers with the clumsy handling of a price increase and an aborted attempt to split off its DVD operations.

For anyone thinking about buying "Netflixed," note that it isn't just a history lesson. The book offers clues to what may be going on today.

For example, Hastings has for much of the past two years politely dismissed the theory that Amazon Prime's video service was a serious challenger to Netflix's streaming business. But in her book, Keating suggests that Netflix has long been wary of Amazon.
Keating wrote that after Ted Sarandos, Netflix's content-acquisition chief, learned in 2004 that Amazon was preparing to launch a mail-order video rental service to compete with Netflix, Hastings responded by negotiating with Bezos to try to keep Amazon out of the business.

Keating also said in her book that Netflix's leadership feared Amazon at the time more than Blockbuster, though the video chain was a much larger player in home entertainment. According to "Netflixed" Amazon had the kind of e-commerce and technology chops that Netflix respected.

Fast forward to two weeks ago. Hastings stopped being polite when asked about Amazon v. Netflix. During an interview with The Wall Street Journal, the CEO called Prime video "a confusing mess."
http://news.cnet.com/8301-1023_3-57527124-93/amazon-once-offered-to-buy-netflix-for-$12-million-book-says/





Reddit, Freedom of Speech and the Dark Side of Community
Mathew Ingram

In addition to occasional acts of journalism, Reddit is also known for its less savory content, including a page featuring creepy photos of women taken without their permission — and the controversy over that kind of content says a lot about the nature of the community.

Unless you spend a lot of time on Reddit, the discussion-forum community that more or less took over after Digg sank beneath the waves, you may have missed the latest storm of controversy over content posted on the site’s various “sub-Reddits” or topic pages. Although Reddit has played host to some fascinating journalistic features recently — including the reporting of a mass shooting in Colorado and an open question-and-answer session with President Barack Obama — it is also well known for its less savory elements, such as a page devoted to creepy (but likely not illegal) photos of women. The way that this modern morality tale has played out over the past few days says some interesting things about free speech and the darker side of the open community that Reddit has become.

As Alex Hern at New Statesman describes it, the issue exploded into public view after the moderators of a Reddit page called r/politics said they were banning the posting of any links from Nick Denton’s Gawker Media network. Why? Because Gawker writer Adrian Chen was reportedly planning to expose the real identity of a moderator running a page devoted to creepy pictures of women called r/creepshots (the same person was also a moderator on another sub-Reddit called r/incest, which was deleted by Reddit last year, as part of an attempt to crack down on offensive and/or illegal content).
Banning links to protect freedom of speech

The moderator in question — who went by the name violentacrez — appears to have deleted the sub-Reddit and all of its posts, and has also deleted his Reddit account completely (Jessica Roy at Betabeat also has a good roundup of the story). And moderators of other pages, including r/politics, decided to block links from Gawker as a way of showing their displeasure at the attempts to force violentacrez to reveal his true identity. The moderators of r/politics posted a statement saying:

“We feel that this type of behavior is completely intolerable. We volunteer our time on Reddit to make it a better place for the users, and should not be harassed and threatened for that. We should all be afraid of the threat of having our personal information investigated and spread around the internet.”

As more than one person has pointed out, these comments are filled with unintentional irony on a number of levels, including the fact that a site which champions free speech is banning links to a specific news outlet for something it hasn’t even reported yet, and the outrage that it is complaining about is the act of revealing information about a person in public — a person who moderates a page where people post revealing photos of women without their consent. Even some Reddit defenders seemed to be taken aback by the hypocrisy of the r/politics moderators in this case.

To complicate the picture even further, a Reddit critic set up a Tumblr blog called Predditors, which posted photos and biographical information about the users who were active on the r/creepshots page, including photos from their Facebook pages, as well as racist and offensive comments made by them, details about their families, and so on. Some Reddit users responded to this attack with further outrage, saying their privacy was being invaded — even though (as Choire Sicha at The Awl pointed out) all of the information was already publicly available on the internet, and was just aggregated by the Tumblr blog’s author.
Can we count on communities to self-regulate?

The Predditors blog was removed by Tumblr, apparently because the site was afraid the photos were not legal, and then it was later reinstated, but it now it requires a password to access. The Jezebel blog (which is part of Gawker Media) spoke to the creator of Predditors, a 25-year-old woman who said she is a Reddit member but was outraged by the content on r/creepshots and decided to do something about it:

“Reddit’s defense of [CreepShots] is that it’s ‘technically legal.’ So I’m doing something that’s technically legal, but will result in consequences for their actions.”

If you’re an optimist about the power of online communities like Reddit and its cousin 4chan (which has been home to even worse content, if that’s possible), you could see this as a kind of self-regulating process at work. Given the ability to post anything whatsoever, with little or no oversight from any site editors — apart from periodic attempts to remove illegal content — it’s natural to assume that every dark element of human nature will be represented. And in some cases, moderators will actually trample on the principle of free speech even as they allegedly are trying to protect it.

At the same time, however, Reddit does self-regulate — and even the appearance of the Predditors blog could be seen as part of that process. The site has taken action in the past to crack down on offensive behavior, and it’s worth remembering that the Reddit community can also be a powerful force for good in the world, by calling attention to worthwhile causes like the fundraising for young Caine Monroy, or engaging in random acts of kindness such as arranging for strangers to send birthday wishes to a retired Army vet in a small town. Or random acts of journalism.

Maybe we should think of Reddit the same way we think about British tabloids — they contain all kinds of unseemly content, nude photos and ridiculous conspiracy theories, but occasionally they also have actual news in them, and so they are probably worth keeping around.
http://gigaom.com/2012/10/11/reddit-...-of-community/





Sex, Drugs and a Telephoto: Candid Car Photos Challenge Personal Privacy
Jakob Schiller

Spanish photographer Oscar Monzón sees two contradictory worlds colliding in photography today. On the one hand, cameras and photos are everywhere thanks to camera phones. On the other, restrictions about where photos can be taken have only been increasing. (Look at the battle between the NYPD and photographers at the Occupy protest and the numerous photographers hassled by private security guards.) People have also become more guarded about protecting their digital image and often don’t want their picture taken unless they have control of it.

“When I raise my camera in public people immediately want to know what I’m doing,” he says.

It’s a phenomenon Monzón, 31, has decided to confront head on with his ongoing project Sweet Car.

In the project Monzón takes photos of people at night while they sit unknowingly in their cars at stoplights in downtown Madrid. Standing on a bridge or the street he zooms in with a telephoto lens and pops them with a flash.

While some might call it voyeuristic, Monzón says he never tries to hide himself from view and argues that he’s not trying to steal private pictures but instead wants to remind people that photographs are legal in public spaces and cause no immediate harm.

“It’s definitely about confronting them,” he says.

He chose the car as a location to photograph because it’s a spot that blurs the lines between public and private.

“It’s an intimate space but the drivers are out in public,” he says.

The name for the project, “Sweet Car,” is a play on the saying “Home, sweet home.”

So far Monzón says no one has ever gotten out of their car and chased him but he has managed to piss a lot of people off.

“Their first reaction is fear and then it’s anger,” he says. “The photo where then man is throwing the finger sums the project up well.”

In addition to the reactions, Monzón has also nailed a surprising number of intimate frames that hold up well on their own as documentary work. Like the best of street photography, the photos reveals interesting slices of personality and capture some unexpected moments.

“Each photo has its own message,” he says.

Ultimately Monzón says he wants the project to be about people and their relationship to cameras. The shock value is meant to expand the conversation and he hopes that by over-doing it the public will realize photography is just like any other medium used to record, critique or analyze the world around us.

“Say I was a painter in a park, no one would react like that,” he says. “People should not get so upset.”
http://www.wired.com/rawfile/2012/10...zon-sweet-car/

















Until next week,

- js.



















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