ReedSmith
May 2005
Volume IV, Number 5
Serving Clients in
a Digital World
LegalBytes
The Internet Arrives at the Supreme Court (Again)
Light Bytes
“Nobody grows old by merely
living a number of years. People
grow old only by deserting their
ideals. Years may wrinkle the skin,
but to give up interest wrinkles
the soul.”
The U.S. Supreme Court will help decide how content providers will operate on the
Internet. The first case, involving more than 20 entertainment companies with names
like Viacom, Disney and Time Warner, involves the sharing of content such as movies,
videos and music by computer users who download the content from the Internet.
This case involves the issue of whether copyrighted material can be shared by users
on peer-to-peer networks and, if the court follows the reasoning in the Betamax case
which was decided back in 1984, there is a chance the court will decide that because
these networks have substantial non-infringing uses, the network operators cannot be
held liable for contributory infringement based on the conduct of individuals who use
the network. Stay tuned—film at 11:00!!
The Supreme Court is also deciding a ‘gatekeeper’ case related to broadband service delivery by cable operators. Today, cable operators control the broadband portal or gateway
that customers can use, and while a user can go through the portal and log on to another
website (say Yahoo! or AOL), they still must first go through the cable provider’s designated broadband operator. The case coming up challenges that gatekeeping role and seeks
to require cable operators to give consumers the right to pick the broadband connection
they wish to have through the cable. We will keep you posted as developments unfold.
— Douglas MacArthur
Legal Bytes Sponsors $1 Million Promotion——
No Purchase Required
If that got your attention, then Doug Wood, Jedi Master in the Advertising & Marketing
world, and Joe Rosenbaum (no he’s not the evil apprentice, he’s only a Yoda-like participant), proudly announce the addition of David Carlin to Reed Smith’s outstanding
lineup of lawyers. Now that should get your attention.
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Representing millions of star systems and galaxies in advertising and media isn’t easy,
but our team of professionals can do everything from ensuring that your advertising,
sweepstakes and contests comply with federal and state law, to negotiating film financing, celebrity talent and major media buying agreements. Yes, of course we do litigation
and protect your rights—from free speech to copyright infringement on and off the
’Net. Find out what we can do for you.
As an example, Doug, with a little help from Joe, recently conducted a Reed Smith
University CLE marathon of one-hour courses on such topics as General Principals
of Advertising Law, Sweepstakes and Promotions, Commercial Speech and the First
Amendment, Celebrity Talent Contracts, Agreements with Media, Rights of Privacy
and Publicity, Strategies in Comparative Advertising, Brand Protection, and Trademark
Counseling in Advertising. Do you and your staff need to know more about protecting your interests, negotiating better deals or just understanding how the law applies
ReedSmith
to your brands, your advertising and
promotional activity? Contact us. We can
tailor a course for you. We can help you
understand. We can help do the work.
By the way, we were just kidding about
the $1 million promotion.
Outsourcing Statistics
According to Technology Partners International as reported in CIO magazine,
Europe has now overtaken the United
States in major outsourcing deals (i.e.,
deals valued in excess of about $50mm).
In 2004, out of $76 billion in contract
value, Europe garnered 49 percent beating the United States and Asia. One of
the most important statistics behind those
numbers is the fact that more and more
outsourcing companies are becoming major players and the competition is heating
up. The article lists the big-six outsourcing companies (you’ll have to call me to
find out who they said they are) and notes
that in 2003 these companies accounted
for about 70 percent of the outsourcing
contracts, but in 2004 their share dropped
to just over 40 percent—a big drop in
one year. What that means is that if 26
providers shared the 100 best deals in
2003, 36 shared them in 2004, and only
time will tell if the outsourcing market is
saturated or if more providers will jump to
the front lines in 2005. One trend we are
seeing is the segmentation of outsourcing
arrangements by sophisticated end-user
customers. Not just seeking competitive
bidding among providers as in days past,
these customers are actually segmenting
their outsourcing requirements by function, business activity and operational
needs, and seeking niche-based outsourcing providers who are best in the class in
those areas.
It seems that the tempting idea of putting
all one outsourcing eggs in one basket in
order to make it “easier” to manage the
relationship has not proved to be very
smart after all. It appears that retaining the expertise necessary to manage
outsourcing relationships in-house and
being sure you have the right outsourcing provider with the right contractual
relationship for each function or activity is
the wiser course. Speaking of contractual
relationships—Reed Smith has a team
of international lawyers experienced in
outsourcing. You might want to call us if
your thoughts turn to outsourcing; we can
and are happy to help. You might also go
get a copy of the new book, Outsourcing
Agreements Line by Line, written by Joseph
I. Rosenbaum and published by Aspatore
Publishing—it’s available online (an unabashed plug for both the book and our
ability to assist with your legal needs).
Identity Theft Again?
Most of you have read about the security
issues that have confronted LexisNexis
and ChoicePoint, and each day we learn
more news about more systems and databases that have been or may have been
compromised. Here’s a secret, “Google
hacking” is easier. It’s a term used to
describe the simple act of using publicly
available search engines (no, not only
Google) to find information that criminals
and wrong-doers can use.
contest to demonstrate how good Google
hacking can be—they limited contestants
to using only Google’s search engine and
in less than one hour they unearthed
enough information to perpetrate financial fraud on about 25 million people—including useful combinations of names,
birth dates, credit card and social security
numbers. In one such experiment, a
team of contestants found a directory
of more than 70 million social security
numbers—all belonging to individuals
who are no longer alive.
Yahoo! and Google and similar search
engines are not the problem – these folks
are continuously refining and fine tuning their search capabilities and adding
more information. Why? Because we
demand it; we like it; we want it. It is
helpful; useful; convenient. So how do
we balance the desire to have more and
better information more easily available,
with the need to protect our people, our
customers, our society from abuses and
improper use of such information? I don’t
know. I do know that Reed Smith has
literally dozens of lawyers who can help
you with privacy, information security,
terms of use and guidelines; can alert
you to regulatory and legal issues; and
can provide you with solutions to your
problems, even when the simple answers
are not always easy to find. Let us help
you. Have an information security issue?
Privacy compliance problem? Fraud or
security breach? Now’s the time—before
you are part of the problem.
Several months ago, The Wall Street Journal
reported that some security experts held a
Useless But Compelling Facts
Do you know what common theme unites the words “civic,” “racecar” and “kayak”? Send
answers to [email protected]—Reed Smith employees are ineligible.
Last month we asked you what the only English word which has two synonyms that are also
antonyms of each other. The word is “cleave” which means both to adhere and to separate.
Congratulations to Jeff Schneider at MTV (Viacom) for getting the right answer, first—even
if he did say it was too easy. Jeff gets a prize and the blame for harder questions in the
future. Congratulations!
2
Quality Matters.
EDITOR-IN-CHIEF
Joseph I. Rosenbaum
New York
212.702.1303
[email protected]
If you would like to know more about the topics
in this issue, about Reed Smith or the ways we
can help serve your legal needs, please contact
Joe Rosenbaum, head of our New York-based
e-commerce practice.
The material is not intended to provide legal
advice to be used in a specific fact situation.
“Reed Smith,” which refers to Reed Smith LLP
and related entities, is a limited liability partnership formed in the state of Delaware.
©Reed Smith LLP 2005. All rights reserved.