Technology Legal Counsel

Africa: One of the safest places to surf the Web.

Wednesday, September 1, 2010 by Chris Stephen

Your friendly neighborhood technology legal counsel here: I recently saw an article over at PC World that security firm AVG recently did a study of the safest countries in which to surf the Internet. Seven of the top ten are in Africa, with Sierra Leone rated the safest. The study is based on incidence of attack by a compiled list of virus and malware attacks. The study found that Sierra Leone's average incident rate was one attack in every 692 surfers. Niger also fared well with 1 in 442 rate.

Now, I'm not going to get into the details of the survey, and there are obvious flaws. Particularly since you have a significantly lower number of users logging-on in Africa when compared to the U.S. or Europe. However, the results do bode well for that continent. Result like these may well attract private equity firms who are interested in doing more in the cloud or with SaaS.

Way back in January, 2009, David Castor wrote a good post entitled "Now is the Time to Invest in Africa" (blog.alerdingcastor.com/blog/business/0/0/now-is-the-time-to-invest-in-africa). I can only imagine that findings like the ones from AVG are only going to continue to continue to fuel the investment potential there.

For those interested, the worst places to surf are Turkey, Russia, and Armenia. The U.S. ranked ninth.

Memo from Uncle Sam: Die Hard 4 wasn't all that impossible; let us help you

Monday, August 30, 2010 by Chris Stephen

Another post that doesn't quite fit neatly into Indiana Internet litigation or privacy law, but that intrigues me. BusinessWeek, passing along a Tim Greene article from NetworkWorld (found here: www.networkworld.com/nwlookup.jsp), is reporting that the U.S. military has issued an essay in which it urges its expertise in defense be put to use in protecting civilian networked infrastructure, such as power grids, financial institutions, etc. The essay from Foreign Affairs sets out the concept that our military networks are probed and scanned by outside sources millions of time a day by enemies looking for weakness and access. The Pentagon fears that the civilian cyberstructure could also be at risk from cyber-terrorism and that the U.S. military can help by using its tools to protect those necessary networks.

This concept imposes a sense of fear and foreboding in your friendly neighborhood technology legal counsel. On one hand, I can recognize the importance of protecting those networks. If Bruce Willis and Justin Long taught us nothing, it is that a "fire sale" can cripple this country (and big props to Kevin Smith for his part in that flick). Other than our Amish citizens, we, as a people, rely so heavily on our networks that we need to protect them. However, the idea of the government and military putting their hands into the inner workings of those civilian networks also scares the heck out of me. There are too many "technology deciding it knows what's best for us" movies for me to not worry about increased presence of government and military in our cyberworld.

I guess, the reality is that I have no answer to this issue, but I thought it was interesting. Like many of the questions we see arising in the cyberlaw realm, the answer to military intrusion in your civilian networks is "how much are you willing to give up in order to be safe?"

Alerding Castor Hewitt on Corporate Blogging for Dummies

Monday, August 30, 2010 by Janet Monroe

Alerding Castor Hewitt, LLP is a law firm that does a substantial amount of legal work with clients in SaaS law and as technology legal counsel. So much so that we were asked to contribute to Corporate Blogging for Dummies, a best practices book that our friends Douglas Karr and Chantelle Flannery were approached to write.

As a law firm that utilizes blogging to reach our current and potential clients, the Alerding Castor Hewitt, LLP website was featured as an example within these pages. Partner David Castor contributed to the sections regarding legal services and our firm's blogging site. Using Compendium's blogware, we have been participating in blogging for over two years and have been able to connect with private equity investors and constituents in the realm of business law, including software litigation and SaaS legal consulting.

Check out Corporate Blogging for Dummies for more information on how you can use this SaaS tool to help grow your own business. Blogging is an effective way to help build a relationship with your audience. This book will show you how.

FTC settles case with paid reviewer

Sunday, August 29, 2010 by Chris Stephen

Back in October, 2009, I posted about the new endorsement / testimonial rules set out by the Federal Trad Commission (blog.alerdingcastor.com/blog/alerding-castor/0/0/ftc-makes-changes-to-blog-law). There has been some development since that time, but mostly everyone is still watching and waiting. The FTC did threaten to pursue Ann Taylor back in April, but otherwise, it has been relatively silent.

That is, however, until now. On August 26, 2010, the FTC reached a settlement with Reverb Communications regarding positive reviews that it left on iTunes for its clients' apps (FTC No. 092-3199). This is an instance where the FTC investigated and pursued an online review source that failed to disclose its material relationship with the party it reviewed.

Reverb Communication reached a settlement with the FTC in which it agreed to remove all product review or endorsement that is currently viewable by the public. There is also a five (5) year evidence maintenance component, including producing all complaints. Finally, there is a requirement that Reverb and its owner deliver copies of the settlement order to all of its current and future employees, agents, and representatives.

I don't really know whether this can be classified as software litigation, privacy litigation, or any other hot-button issue, but as a technology legal counsel, I find this order and settlement to be extremely important. With this very public order, the FTC is making a shot across the bow of all businesses that engage in on-line review of products as part of their business plan. The public nature of the Reverb order is, to me, more telling than any of the language contained therein. Thus, if you blog and '/ or make endorsements as part of your business plan, you need to have your eyes on the lookout for areas where your material connection can be questioned. If those areas, exist, you are exposed to the sanctions and reach of 16 CF.R. 255.0. BE AWARE!

One thing to remember is that the reviews posted by Reverb were not excessive or detailed, and could well have been completely true. "Amazing new game"; "ONE of the BEST"; "Really Cool Game", etc. Obviously, these were not voluminous diatribes expounding the virtues of their client. I almost wonder if the FTC would have scrutinized them as much if they had been more detailed, i.e. if it were more obvious they were paid, would the FTC care as much.

Another point to ponder is that the Reverb order does not go after any of the clients of the company who paid for these endorsements. But, the FTC has considered doing just that in the past. Thus, clients of businesses that are paid for building product and branding support need to be aware of these risks. You may wish to consult with your technology legal counsel to include language in your agreements that protect you against the ramifications of an FTC probe into your marketer. Or if you are a marketer, you may want to consider adding language to your agreements that detail what you will do or won't do with regard to this issue.

Here is a scenario that I can easily see playing out. Marketing Company X enters into an agreement with Client Y for, among other things, on-line marketing and endorsement. Marketing Company X doesn't comply with the FTC guidelines and gets an inquiry. Client Y also gets swept into the inquiry and the "scandal". Client Y then sues Marketing Company X for damages in lost profit, costs, and injury to reputation that it incurs as a result of the improper reviewing. And, I'm not sure that 47 USC 230 would give the Marketing Company X much protection. Thus, if you are Marketing Company X, I suggest that you make sure that such possibilities are clearly addressed in your upfront agreement.

The bottom line is that these laws are not new, but orders like the Reverb order are indicative of a new push by the government to regulate the Internet, and a wake-up call to the fact that the U.S. Government is watching the 'net. If you make your living through the online presence and word-of-mouth, you need to be aware and plan accordingly. Change your actions now to protect yourself down the road.

Firm Joins Innovation Summit as a Sponsor

Wednesday, August 11, 2010 by Lainey Scheetz

FIRM JOINS INNOVATION SUMMIT AS SPONSOR

For the second year in a row, the firm committed to this year’s Innovation Summit as the Plenary Panel Sponsor.

This annual event brings together entrepreneurs, executives and policymakers for learning, dialogue and debate on the central challenge of today’s economy – turning today’s ideas into tomorrow’s business breakthroughs. The Summit includes keynote speakers, breakout sessions on a variety of innovation related topics, and dozens of trade and industry booths.

Innovation Summit will feature iconoclastic technology writer Nicholas Carr as the keynote speaker, author of the recently released book, The Shallows: What the Internet Is Doing to Our Brains. Agree or disagree with him, Carr makes us think – and that’s the first step towards innovation.

“There is no other event in the city that brings together this unique blend of people. The end result is sure to be an unprecedented amount of thought leadership in the innovation realm. Alerding Castor Hewitt, LLP could not be more excited to be a corporate partner,” comments David Castor, founding partner of Alerding Castor Hewitt, LLP.

Annual attendees include: Chief Executive Officers, CIO, CFO, CTO Executives, University Presidents, Association Leaders, Marketing Executives, Leading Educators and Scientists & Engineers.

Firm at a Glance:

Practice Areas: business counsel, licensing and technology legal counsel, software litigation

Headquarters: 47 S. Pennsylvania St., Suite 700

Founded: April 2007

Partners: Michael Alerding, David Castor, Brian Hewitt

Employees: 17, nine of them attorneys

Clients: 300, including Compendium Blogware, Iasta, First Merchants Bank, Indiana Bank and Trust, MainSource Bank

Facebook ownership lawsuit results in asset-freezing TRO

Wednesday, July 14, 2010 by Chris Stephen

This one is a fun little piece of pseudo-software litigation. The basic facts are that Facebook and its majority stockholder Mark Zuckerberg have been sued by Paul D. Ceglia, who claims 84% ownership in the website juggernaut. The part of this story that has been clogging the Net is that a state court judge in New York actually issued a temporary restraining order ("TRO") prohibiting Zuckerberg and Facebook, Inc. from disposing or selling any of its assets. This has produced the viral "Facebook assets frozen". Interestingly, Ceglia has produced a written contract, making this suit slightly more interesting than prior software litigation involving Facebook ownership in which former students at Harvard claimed Zuckerberg stole the idea from them (which a court ultimately found to be "dorm room chit-chat").

One aspect that the technology legal counsel in me finds interesting is that the Court granted the TRO. Generally speaking a TRO is an injunctive mechanism that can be used to stop someone from doing something. In order to get a TRO, you generally have to show that you have a basis for your claim and that you have a likelihood of success on the merits. I don't know for sure that New York is the same standard as Indiana, but I suspect that it is. That means that a court looked at the documents and found that there might be something here. I find that very intriguing. I will note, however, that Facebook's attorneys filed a motion to dissolve the TRO and noted that it was ex parte, meaning that it was entered without Zuckerberg or Facebook being given the opportunity to respond. It also sets forth that the only evidence presented to support the TRO was a "scant" affidavit. But, one must conclude that the Court nevertheless did the appropriate analysis.

Also, having read the documents filed, there might be something to discuss. However, the biggest issue that I see at the outset is that the contract allegedly happened in April, 2003. It would seem to me that there are is a statute of limitations issue, which may kill this lawsuit before it gets into really fun electronic discovery.

Facebook has removed this case to Federal court, which I think is a smart move. We'll see what develops. But I would urge everyone to consider the reality that this case poses to the software developer or web-designer. From the "Zuckerberg" side, be extremely careful what terms you put in your contracts because you may have to rely on or defend them later (after you are a famous success). In this software litigation, Cegila is claiming 84% ownership in the company based on a damages provision that stated that he would get 1% ownership for each month after January 1, 2004 that the contract was fulfilled. And, if the case survives the statute of limitations issue, this may become hotly contested.

Thus, be careful that you hold tightly to your equity in your company. Don't give it away willy-nilly. And, above all else, get good technology legal counsel; specifically ones that understand what should be in a well-drafted contract and that have available the expertise to determine how that contract language will play out in court.

Imposing the long-arm of the law over the Internet

Wednesday, June 23, 2010 by Chris Stephen

Your friendly neighborhood technology counsel here: A couple of recent state court decisions are going to start personal injury attorneys frothing at the mouth, and might render some sleepless nights for defense attorneys. Both Ohio and Florida recently issued opinions in which they applied their state's respective long-arm statutes to garner personal jurisdiction over an out-of-state resident for tortious conduct that transpired over the Internet.

First, you need to know what a long-arm statute is. Essentially, it is a mechanism by which a state can obtain jurisdiction over an out-of-state resident for activities or actions undertaken that are related to an in-state resident or citizen. Without boring you with the legal details, they stem from the concepts of full faith and credit and due process and require a minimum amount of contact within the state to trigger. And, they have posed a pickle in Internet litigation because the Web allows access from out-of-state residents without actual presence or contact. At least that was the case until recently.

In Internet Solutions Corporation v. Marshall, the Florida Supreme Court, addressing a certified question from the Eleventh Circuit, determined that exercising jurisdiction over an out-of-state resident under Florida's long-arm statute did not violate due process. The basic facts are that Marshall ran a website based out of Washington, where she is a resident. She had no contact with Florida other than a short business related trip several years ago. However, she wrote a blog about a Florida based company and then she and some other posters trashed them online in the comment section. The Florida-based company sued for defamation in federal court under a diversity action (action between two citizens of different states). The district court found no personal jurisdiction and the Eleventh Circuit certified the question to the Florida Supreme Court. The Florida Supreme Court looked at two main analysis points: (1) whether the complaint alleged sufficient jurisdictional facts to being the action within the ambit of the statute, and (2) whether sufficient minimum contacts are demonstrated to satisfy due process requirements. The Court determined that both were satisfied. An interesting analysis point is that the Court reasoned that the long-arm statute had been applied to telephonic, electronic or written communications in the past and that the Internet is an extension of those rulings. Overall, it is a well-reasoned opinion applying a standard long-arm statute to the Internet.

Similarly, in Kauffman Racing Equipment, LLC v. Roberts, the Ohio Court of Appeals reached a similar conclusion when determining if an out-of-state residents comments over an Internet blog about an in-state plaintiff can be grounds for jurisdiction over the out-of-state resident in a defamation action. The Court utilized the same general analysis as in Marshall.

The obvious implications to Internet litigation of these opinions are pretty substantial. Until now, suing for tortious actions done over the Internet has been difficult because of those pesky due process minimum contacts, but that is slowly changing. These cases are a framework for an enterprising personal injury lawyer to sue someone that has never set foot in their state for tortious activities on the Web. And, right now we are only talking about defamation, but why wouldn't it extend to other torts. What about tortious interference with a business relationship, intentional infliction of emotion distress, and assault, to name a few. This is going to change the face of Internet litigation. We are going to see more lawsuits based on this. And, further, you, as a business owner, will need to be aware of what you are putting out on the cyberspace. You may be inadvertently exposing yourself.

And think of the other areas of technology litigation that this can be tied into. Two of the most predominant to me are privacy litigation and cloud computing law. Imagine that I have posted private information about you on the Internet in contravention to the law. We've never met and I've never been in your state, but the Internet has. Under these holdings, I can be hauled into the courtroom to address my actions. Or I've placed something into the cloud that doesn't belong. I've now exposed myself to multiple jurisdictions depending on to whom I have shown the material.

The ramifications are mind-numbing, but we'll see what other states start jumping on board. As I've always said, technology litigation and Internet litigation is in its infancy and we are going to see wide-spread changes from court's making decisions at the federal and state court level. It should be fun.

Social Networking and the Web - So much more than ambulance-chasing

Thursday, June 17, 2010 by Chris Stephen

Be prepared: I'm going to get on a bit of a soapbox. I read a recent article at WSJ.com entitled "Using Social Networking as Legal Tool" (Linked Below). There is nothing wrong with this article. It very succinctly and pleasantly explains how certain law firms are using social networking and the Web to find clients for high-value plaintiff cases. And I don't disagree with that approach. As an attorney posting on a blog, I too hope to use social networking to get business, and would be foolish to argue otherwise. Thus, I cannot fault the firms employing such tactics. And I am glad that a more "mainstream" press outlet would pick up a story of this nature; highlighting the use of technology by lawyers.

The fault that I find, and what, frankly, irks me, is that this article gives no credence to the more innovative aspects of technological use that are gaining hold in the legal community. The article highlights the practice of "ambulance chasing" for the 21st Century. But there is so much more happening in the cyberworld. Legal scholars like Eric Goldman are posting daily with the new and interesting ways that technology litigation and cyberlaw are being explored. Courts are posting their opinions on-line to further the pursuit of knowledge by the populace. Courts and communities are moving to on-line activity such as filing and case work to speed up the legal process and reduce our environmental impact. Technology legal counsel throughout the world are espousing the virtues and pitfalls of cyberlaw. Property rights are being generated in virtual worlds. Privacy litigation is defining what can and cannot be exposed in the real and virtual worlds. Software litigation is defining what can and cannot be done with these wonderful bits and bytes of information. Cloud computing law is going to dominate the future courtrooms of the world as more and more data is put into the cloud. All of these things are happening now.

Our world is becoming a smaller place as we all become more connected, and lawyers are at the forefront of those debates and discussions. Yes, I think it is very interesting that Law Firm X has 25 people on staff twittering and establishing domain names so that sufferers of acute hypersensitivity can find a law firm willing to represent them. PLEASE don't misunderstand me because I believe that allowing those people to easily find representation IS IMPORTANT. But it is not the only thing that is happening out there in the cyber-ether. Instead of focusing on the new and novel way that lawyers are getting business, let's shine light on how those in the legal community are using the Web to define, explain and expand our world.

WSJ article: (online.wsj.com/article/SB10001424052748704324304575306581598351428.html

Who are Alerding Castor Hewitt LLP

Friday, June 11, 2010 by Chris Stephen

Every once in awhile, I have the inkling to make a blog post that is not about developments in privacy litigation or technology litigation or cloud computing law or foreclosures or any of the other endless stream of ideas and legal thoughts that pass across my desk. This is one of those times. Because, while I think it is important for our readers to know that Mexico passed a new data privacy law or that litigation related to CAN SPAM is likely a rising field, I think it is equally important for our readers and clients to gain insight into the psyche of Alerding Castor Hewitt, LLP as it is viewed through the eyes of this humble writer. Thus the question: Who are Alerding Castor Hewitt, LLP.

First, I must note that I intentionally chose the plural tense in that question because, although I agree that Alerding Castor Hewitt, LLP is an entity that could be viewed as a singular, I fully believe that we are made of the people that permeate this place. Thus, we are a plural. Second, if what you are looking for is our resumes and the curriculum vitae of these Indiana technology counsel, you can check them out on our webpage.

Rather, I intend to discuss who we are in such a way that our readers and clients can relate to the ideals for which we stand. We are the rogues. We are the fighters. We are the fixers. We are the counselors. To a person, the attorneys at ACH are products of years of experience. We have all trudged through the mud of the legal profession in other locales before coming to this place. Which, inevitably, leads to the question of "why here?"

The answer to that simple question is that because here we can be what our clients need. We can be entrepreneurs. We can be fighters. We can truly embody the idea of counselor that so many of us sought when we went to law school in the first place.

Does that mean that I always give my clients the advise that they want to hear? No. My job, and the job of any great attorney, is to give the advise that is warranted in the situation. ACH not only gives its attorneys the ability to do that, but rather encourages it. I can honestly say that I have practiced from the biggest of big to the smallest of small, in the private sector and the public sector, and there is no place that I would rather practice law. I have told colleagues that ask me about ACH that I practice law in a way that every attorney wants to practice when they are honest with themselves as to what they want out of their profession.

This place is filled to the brim with spirit, humor, knowledge, and skill. And I think there are two quotes that best answer the question of Who are Alerding Castor Hewitt, LLP. The first is from Ulysses S. Grant. In a speech in London, Grant stated "Although a soldier by profession, I have never felt any sort of fondness for war, and I have never advocated it, except as a means of peace." The second is from Ode by Arthur William Edgar O'Shaughnessy, but was made famous (in my opinion) by Gene Wilder in Willy Wonka and the Chocolate Factory: "We are the music makers, And we are the dreamers of dreams."

Alerding Castor Hewitt Proud Sponsor of Adoptions of Indiana (AD-IN) Annual Golf Outing

Monday, April 26, 2010 by Lainey Scheetz

You might wonder why an Indiana law firm with a practice in several areas of technology (Indiana Internet Litigation, SaaS Legal Consulting to name just two) finds itself supporting a golf outing that raises money for adoption? "As a firm that prides itself on supporting the local community, we don't always align our charitable giving strictly to serve our immediate demographic. There are many organizations deserving of our support and Adoptions of Indiana is certainly one of them," comments Dave Castor, Founding Partner and lead counsel in the firm's involvement with Internet-based companies.

On Tuesday, August 31st Adoptions of Indiana will host it's third annual golf classic at the Golf Course of Indiana. Now in its third year, this event looks to build upon past successes and top past earnings to ensure that critical programming continues for birth parents and adoptive families alike.

Adoptions of Indiana was founded in 1995 by professionals in the fields of mental health and social work whose lives were personally touched by adoption. ADOPTIONS OF INDIANA is a not-for-profit 501(c)(3) corporation that is licensed by the State of Indiana as a child-placing agency.

The agency is a member of the Joint Council on International Children's Services, the North American Council on Adoptable Children, and Indiana’s Adoption Coalition. In addition to being licensed in the state of Indiana, they are also licensed and approved by the state of Connecticut to assist their families who are adopting children born in Indiana.

Adoptions of Indiana works with highly respected and well established adoption agencies and adoption attorneys throughout the United States. Our agency provides domestic and international adoption services to Indiana residents.

TECHNOLOGY LEGAL COUNSEL SPONSOR 2010 TECHPOINT MIRA AWARDS

Thursday, April 8, 2010 by Lainey Scheetz

Given the firm's technology legal counsel and software litigation practice, it only makes sense that the firm would support the prestigious 2010 Techpoint MIRA Awards Gala taking place on Saturday, May 15th, 2010. It makes for a positive synergy between the two groups.

The TechPoint Mira Awards, presented by BKD, is the premier technology awards program in the state of Indiana. Since the turn of the century, TechPoint has honored Indiana businesses, schools and universities, and individuals for their contributions to the state’s technology-related economy. TechPoint’s prestigious Mira Awards program recognizes leaders and innovators in 11 different business categories.

“As a firm that offers technology legal counsel, we appreciate the opportunity to support TechPoint in an effort to further their mission,” says David Castor, partner at Alerding Castor Hewitt, LLP. “We enjoy supporting our clients as much as we can.”

Firm at a Glance:
Practice Areas: business counsel, licensing and technology, litigation
Headquarters: 47 S. Pennsylvania St., Suite 700
Founded: April 2007
Partners: Michael Alerding, David Castor, Brian Hewitt
Employees: 17, nine of them attorneys
Clients: 300, including Compendium Blogware, ExactTarget, Iasta, First Merchants Bank, Indiana Bank and Trust, MainSource Bank

Venue Selection Clauses - The Hidden Danger (Part 2)

Wednesday, March 17, 2010 by Chris Stephen

Your friendly neighborhood technology legal counsel here for Part 2 of my riveting analysis of the dreaded "venue-selection clause" In Part 1, I scared you with the reality that when you absently click, "I agree" you are very likely binding yourself to litigate any dispute in a location that is likely not conducive to your case or your pocketbook. And I'm sure that the point you've been wondering about since last we interacted is, "what can I do about it". Unfortunately, the answer is not much.

Your first option is to unplug yourself from the Matrix and steadfastly refuse to agree to anything on-line that forces your hand. You and my Aunt Mildred can then spend your days playing Go Fish and Old Maid while the rest of us soldier on.

Your next likely option is to simply read your agreements. Look for language that gives you wiggle room and latch onto it. For instance, in the American Airlines v. Yahoo case, the language of the provision stated that the end user agreed "to submit to the exclusive jurisdiction of" the court Yahoo liked. This, however, doesn't force you to bring suit there. It simply states that if you are sued there, you have to submit to the jurisdiction. Thus, when Yahoo tried to enforce this provision, the District Court said "no". So, when faced with the daunting reality that you want to sue someone and there is a venue selection provision, go to your friendly neighborhood technology legal counsel and inquire as to the limitations that are actually going to be imposed on you. And if you actually have any negotiating power, you can work to resolve this issue beforehand.

Another option is to litigate where you want anyway and see what happens. You might get lucky, or your opponent may not care. And then, if you get faced with a motion to dismiss, move to transfer to the proper court. Most courts will agree to a transfer before simply dismissing the action. You will have lost some time while the case was pending in your state, but depending on your ultimate goal, you may not care.

My final suggestion is to wait. It is the humble opinion of this writer that as more litigation arises under the on-line contracts that we "sign" and force the hands of folks like you and me, the Powers that Be (i.e. courts and legislators) will undertake to protect your ability to file a suit wherever you darn well please, and you will see cases and laws that change the implications of venue-selection provisions in on-line contracts. The more software litigation and SaaS litigation that we see, the more realistic my "wait and see" option becomes. Of course, the question you'll have to answer for yourself is whether that is a result that you want.

One final - final point is that you should always remember that the venue-selection provision can cut both ways. If the law in your forum is contrary to your position, you too can utilize that pesky provision to haul your opponent to a court that might be better FOR YOU. Likewise, if your opponent sues you in a court you don't like, you can look to that little provision to seek dismissal or transfer yourself. Never forget that, particularly in the litigation arena, what is good for the goose is also good for the gander.

Venue Selection Clauses - The Hidden Danger (Part 1)

Sunday, March 14, 2010 by Chris Stephen

Your friendly neighborhood technology legal counsel here to discuss with you the hidden dangers lurking in your unassuming (and unread) terms of service agreements. Janet Croswell, one of our fabulous tech lawyers, posted back on February 10, 2010 about the pitfalls that businesses face related to the clickwrap agreement (here's a link for those playing along at home blog.alerdingcastor.com/blog/alerding-castor). Now for those of you scratching your head and wondering what a "clickwrap agreement is", the answer is simply those pesky agreements that we all have to agree to in order to do anything on-line and that none of us actually read. I'm fascinated by this stuff and I'll probably only read one in twenty that I ever click past. They are the superfluous hurdle that we fly past in order to enjoy our Internet-y goodness. But, as Janet so wonderfully pointed out, these hindrances are actually contracts to which we are binding ourselves, or worse, our companies. "What" you exclaimed under your breath, "You mean this is binding on me?" And I'm forced to tell you, "yes". Which leads to the inevitable "so what" question.

The "so what" in this scenario is that you are likely locking yourself into a venue-selection provision. I know the phrase sounds like you are making the decision of whether your play Deer Creek or Red Rock during the next summer tour cycle, but actually you are significantly limiting your options from a litigation standpoint. Venue is the place where a lawsuit can be brought. Obviously, you would like to bring a lawsuit near where you are located and where there is law that favors your position, but if you agree in contract that it will be brought in Poe-Dunk, North Dakota, well then friend, that's where you are headed.

Recently, several courts have concluded that venue selection provisions contained within a clickwrap agreement are enforceable. The most recent cases involve the venue-selection provision in the Google AdWords contract. In TradeComet.com v. Google, a New York District Court found that the language from Google that

"THE AGREEMENT MUST BE CONSTRUED AS IF BOTH PARTIES
JOINTLY WROTE IT AND GOVERNED BY CALIFORNIA LAW EXCEPT
FOR ITS CONFLICTS OF LAWS PRINCIPLES. ALL CLAIMS ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE GOOGLE
PROGRAM(S) SHALL BE LITIGATED EXCLUSIVELY IN THE FEDERAL
OR STATE COURTS OF SANTA CLARA COUNTY, CALIFORNIA, USA,
AND GOOGLE AND CUSTOMER CONSENT TO PERSONAL
JURISDICTION IN THOSE COURTS."

required the dismissal of an action brought in New York court. The District Court went through a very succinct analysis of the standards for enforcement of a venue-selection provision and then made its determination of both (a) the enforceability of this agreement and (b) the reasonableness of enforcement of this provision in the instant case.

Another court reached the same decision in Flowbee International, Inc. v. Google, again looking at this venue-selection provision in the Google clickwrap agreement. In that case, the District Court ordered transfer rather than simply dismissing the action, but it nevertheless did transfer the case to the Northern District of California.

These two cases illustrate the fact that when you click on that little box, you might be shoehorning yourself into a court that you don't want. To date, most courts have applied the same analysis to as these courts did to determine that you, my friend, are stuck. In fact, the District Court for Southern Indiana reached this decision in Appliance Zone, LLC v. Nextag, previously cited by Ms. Croswell.

Now if you're sitting there wondering, "Ok, Mr. Bigshot at the information technology law firm, what is a poor web-browser and member of the 21st century to do?" My only answer is: tune back in to Part 2.

Partners in Success - Den of Deliverability

Wednesday, February 24, 2010 by Chris Stephen

Your friendly neighborhood technology legal counsel here: One of the greatest aspects of our firm is the fact that we, as attorneys, get to partner with our clients to assist in the development of their dreams. Additionally, while we focus on being the general counsel for all business types and sizes, one of my personal areas of passion is seeing new technology based clients develop and partnering with them to see their success.

One such emerging company that I'm happy to say we are partnering with is Den of Deliverabilty (www.denofdeliverability.com) ("DoD"). DoD is a start-up for which we've done SaaS legal consulting. They are focused on assisting their clients in getting their e-mail messages to the end user and drawing the distinction between "ham" (mail that people requested and want to receive) and "spam" (unsolicited commercial electronic mail). This process can be much more arduous that one might initial think, but luckily, DoD can help any business maximize their marketability through the proper use of commercial electronic messaging.

I'm very excited to see this company take off. They have great ideas and really cool software components that I think are going to be essential to any business. And just for fun legal disclaimer (what do you expect, I'm a lawyer) as I mentioned, I, and this firm, have done legal work for them, but we are not otherwise compensated by them.

So if you think this is something that your business might benefit from, check these guys out.

2010 Top 50 Indiana Super Lawyer: Brian Hewitt

Thursday, February 18, 2010 by Janet Monroe

Indiana Probate Litigation, Indiana Entrepreneurial Law

Congratulations are in order to Brian Hewitt, the newest parter of Alerding Castor Hewitt, LLP, who was recognized this week as one of Indiana's 2010 top 50 Super Lawyers.

Brian concentrates his practice on estate, trust, and guardianship planning, administration, and litigation; and mediation and business law.

He is a Certified Estate Planning and Administration Specialist, a Fellow of the American College of Trust and Estate Counsel, and a member of the Probate Litigation Committee of the American College of Trust and Estate Counsel.

Brian has spoken widely at continuing education seminars on estate planning, business succession, litigation, and mediation.

Congrats Brian!

We are proud that you have chosen to join us as a named partner of Alerding Castor Hewitt, LLP, an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, and business and Internet litigation.

Where Have I Been? - 2010 Update

Thursday, February 18, 2010 by David Castor

I have taken a few weeks off of blogging. Honestly, I felt like I needed the break, but I am excited about getting back on the saddle and writing again.

Since it has been a few weeks, let me give a brief update on what we have been up to. Alerding Castor Hewitt has had an exciting beginning to 2010. On January 1, Bill Boncosky joined us. Bill is a business attorney / technology and SaaS law attorney working with privately held companies, primarily in technology industries. Bill has spent the last seven years as General Counsel at ExactTarget. We all have much to learn from him and are thrilled to have him as part of the team. The IBJ put out a nice article in January on our firm's focus on entrepreneur law and Bill's joining us in this field.

This week Scott Kreider joined our business litigation group. Scott adds to a team headed up by Mike Alerding that handles a difficult and necessary discipline for any full service business law firm – handling business disputes. It is great to have him aboard. Also, Mike made the IBJ's 40 under 40 the other week. Good stuff.

Over the last few weeks our firm has helped four clients through capital funding processes - three from angel investors or private equity firms and one from a venture capital firm. It is always encouraging to see business clients grow, and we count it as an honor to be part of their process.

We have also been involved with many businesses and business owners through customer deals and strategic business growth matters. We will write more on some of those matters in future posts.

I was a guest lecturer the other week at Purdue’s entrepreneurship capstone course. Man I felt old, but I was very encouraged by the enthusiasm, drive and smarts from this class.

So there is the fire hose version of the last few weeks. 2010 is off to a strong start for ACH. I am looking forward to what is coming down the pike.

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Alerding Castor Hewitt, LLP is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, and business and Internet litigation.

What Does Your Attorney Know about SEO?

Tuesday, February 16, 2010 by Janet Monroe

SaaS Litigation, SaaS Legal Consulting, Software Litigation, ASP Law

Keeping up with software clients can be a challenge for technology legal counsel.

The software as a service industry evolves quickly, time-lines are condensed, and the playing field yesterday can look decidedly different than it looks today. The name of the game for a SaaS company is to stay ahead of the pack and become known as THE leader in its industry.

I recently read an article in Entrepreneur magazine about Search Engine Optimization titled What You Don't Know About SEO.

What I DO know is that many of our clients could have written this article.

For those of you interested in Internet marketing, here's an excerpt about targeting keywords to help drive search results that our friends over at Compendium Blogware could have written:

"Google, of course, is the web-search alpha dog. But all the others--Bing, Yahoo, Ask.com, Lycos--are sniffing out the same stuff.

What gets their attention? Good, fresh, focused content. Adding a blog is one of the easiest and most straightforward ways to bulk up on content. If you sell hair-removal devices, for instance, start a blog that explores all aspects of waxing, plucking, threading, electrolysis and so on. Over time, your site will accrue searchable heft.

The trick is to be hyper-conscious of your keywords. For example, if you want web surfers on the prowl for "eyebrow waxing" to find your site in search engine results, organically work the exact phrase "eyebrow waxing" into each blog post (maybe multiple times), and use it on all static pages related to eyebrow waxing. Lather, rinse and repeat with every term and phrase you want to rank for.

Before you start writing content, though, research and plan your keyword attack. Is geography important to finding your customers? Then maybe "California eyebrow waxing" is the phrase you want to home in on."

Just a brief example of the world I'm living in by working in the area of SaaS legal consulting, I have the absolute privilege of working with high-tech, fast growing companies. Truly partners in success, I and the other attorneys of Alerding Castor Hewitt, LLP who practice in the area of technology legal counsel welcome the challenge of keeping up with the pace of this industry.

Bill Boncosky Joins the ACH

Monday, January 4, 2010 by Janet Monroe

Alerding Castor Hewitt, LLP, Indiana Technology Litigation, SaaS Litigation

Alerding Castor Hewitt, LLP is proud to announce the addition of Indiana technology lawyer Bill Boncosky to the firm.

The former General Counsel for ExactTarget, Bill has tremendous experience as technology counsel for one of the most successful technology start ups based right here in the heart of Indianapolis. A company that had just over a dozen employees when he joined, Bill has substantial experience in licensing agreement negotiations, ASP Law and Cloud Computing Law serving in that role for over seven years. He will be able to provide significant guidance based on solid experiences to many of our clients operating within this industry.

If you're looking for SaaS legal consulting, the attorneys at Alerding Castor Hewitt, LLP can help. The newest attorney to join the firm, Bill Boncosky, is no exception.

The other cloud hanging over L.A. - developments in cloud computing law

Monday, December 14, 2009 by Chris Stephen

Google announced in its blog today that Los Angeles has officially switched to using Google Apps for e-mail and collaboration. 34,000 city employees will now be using the Google cloud to do their work and, more importantly, their communication. This is a substantial development in cloud computing law. This will highlight the pros and cons of cloud computing for the future,and is likely to shape the success of other municipalities going the same way. Data issues and privacy litigation is likely to start popping up even more predominately related to the cloud. Plus the bloggers will get to continue to discuss the impact of Google taking over the technology world.

Overall, I think that cloud computing is the future, but as a technology legal counsel, I can't help but watch this development with youngster-like anticipation. As goes the cities, so goes the country. Keep your eyes on the horizon for developments from this jump by L.A.. The litigation that is possible from this decision by L.A. will be delectable.

Who Owns My Website?

Tuesday, December 1, 2009 by Janet Monroe

Indiana Internet Litigation, Indiana Technology Counsel

So you've launched your company and hired a web-developer to breathe life into the idea you've poured your heart and soul into developing over the past several months, perhaps even years...

Maybe you never even thought to ask the question, but at the end of the day who actually owns "your" website? You or the web designer?

Indiana software litigation in a ruling by the Supreme Court of Indiana, Conwell v. Gray Loon Outdoor Marketing Group, points to the fact that hiring a contractor for the development of content and programming of a website is considered a service rather than a purchase of a good.

In this case, the Indiana Supreme Court ruled that the independent contractor owns the property, while the hiring party owns a non-exclusive and perpetual license to use such property, unless of course, there is an agreement specifying otherwise.

Looking towards prior Indiana technology litigation the Supreme Court applied the definition of an implied non-exclusive license to the development of a website:

An implied non-exclusive license is granted when (i) a person (the licensee) requests the creation of a work; (ii) the creator (the licensor) makes that particular work and delivers it to the licensee; and (iii) the licensor intends that the licensee copy and distribute the work.

This definition applied to the facts surrounding the website development in this particular case ultimately led the court to its conclusion.

So, expect this to be the case (at least in Indiana) the next time you hire a webdesigner for your next project: upon final payment, the webdesigner owns the property, while you own the right to use it... forever.

(Unless, of course, you involve technology legal counsel first and negotiate otherwise.)

For an example of a newly developed Indiana-based website check out: GlobalToaster