U.S. Supreme Courts Rules Against Software-Based Business Method Patent

On June 19, 2014 The United State Supreme Court handed down its ruling in the case of Alice Corporate Pty. LTD, v. CLS Bank International, a long anticipated case dealing with the viability of so-called “business process” or “business method” patents, even when that process is implemented with the assistance of a computer. In an opinion written by Justice Clarence Thomas, the Court, in a unanimous decision, ruled that where “[a] method claim does no more than simply instruct the practitioner to implement [an] abstract idea… on a generic computer… [it] is not ‘enough’ to transform the abstract idea into a patent-eligible invention.”

The Alice Corporation case centered around the patentability of a method for reducing risk that the parties to a financial transaction will not pay what they owe, making use of a computer based implementation of the methodology. Alice Corporation had argued in the case that, because the the process “required a substantial and meaningful role for the computer” that the process whet beyond being a mere abstract idea. Justice Thomas’ opinion, however, clearly declared that use of a computer added nothing to the abstract idea, and thus the process in question was non-patentable.

This Alice Corporation follows in the steps of the Supreme Court’s 2010 ruling Bilski v. Kappos, in which the Court that a method for hedging risk was “a fundamental economic practice long prevalent in out system of commerce” and that it was, in nature, an abstract idea and, thus, not subject to being patented.  In his opinion in Alice Corporation, Justice Thomas drew a parallel to the Bilski case, stating clearly that both kinds of processes are squarely within the realms of abstract ideas.

It is clear that this case, along with Bilski and the 2012 case of Mayo Collaborative Services v. Prometheus labs, will be thoroughly scoured by technology companies in an attempt to triangulate the point at which specific technology products implementing processes can become eligible for patent protection. While the precise line or demarcation for this is by no means clear yet, it is clear that the Supreme Court is setting and increasingly high bar, ostensibly in the hope of avoiding he creation of unreasonable bars to continued technological innovation.

IRS Issues Guidance on Taxation of Virtual Currencies

The IRS has issues a notice, Notice 2014-21, providing guidance on its position regarding how virtual currencies such as Bitcoins should be taxed. Under this new guidance notice, the IRS has taken the position that virtual currencies and crypto currencies, such as Bitcoins, are taxable as property, and transactions occurring using virtual currencies will be treated as property transactions for tax purposes.

While this Notice does not solve all of the concerns and issues inherent in the use of virtual currencies, it at least answers nagging questions regarding the U.S. federal tax treatment for the currencies and for transactions carried out using such virtual currencies.

Beacons And iBeacons Create A New Market – Business Insider

Beacons And iBeacons Create A New Market – Business Insider.

An upcoming trend for business to look out for is the “Beacon”. This is small device which businesses can place within their business to either gather information on its customers or push information to the customers by interacting with their smart phones (typically by a low-energy Bluetooth connection).

While this is not new technology, recent advances in the cost and power-efficiency of such beacons and the greater prevalence of smartphone users in general and smartphone users who use their devices while shopping, dining, or otherwise engaged in commerce in specific has made beacon deployment a far more attractive proposition for data-savvy businesses. Beacons allow businesses to not only engage in very accurate location tracking of customers, but to push messages directly to customers based upon their location (ex. As customer walks by a rack of clothing, a message can be pushed to them, letting them know that everything on that rack is 20% off for today only.). Likewise, businesses can track the flow of customer traffic, where they do and do not go, what order they visit places within an establishment, and even, potentially what items they stop an look at. This can, clearly, be powerful data for businesses to use, not only for interacting with customers, but in choosing layout of a business and other “customer experience” considerations.

On the downside, there are potential privacy and security implications of this technology, not only for the customers / consumers, but also for the businesses collecting this data. The more intrusive (and non-anonymous) the data a business collects on its customers, the greater the need for policies, procedures, and infrastructure for dealing with this data safely, securely, and withing the parameters of what the law requires. That having been said, this is very exiting technology that can open many new doors for businesses in terms of business intelligence and customer interaction.

Ford Exec: ‘We Know Everyone Who Breaks The Law’ Thanks To Our GPS In Your Car – Business Insider

Ford Exec: ‘We Know Everyone Who Breaks The Law’ Thanks To Our GPS In Your Car – Business Insider.

While Ford’s VP of Global Marketing and Sales has since tried to retract his statements, it is fairly obvious that his original assertion that “[Ford] know[s] everyone who breaks the law, we know when you’re doing it. We have GPS in your car, so we know what you’re doing.”  is, in fact, spot-on the truth. While Ford may not be currently doing nefarious things with the data is collects from the GPS devices is it now installing in all of its vehicles, it does highlight the fact that companies that create products we buy and own are now collecting data on us over which we, as consumers, have zero control or ownership.

Data collection of this scope and nature raises huge privacy concerns, and certainly offers even further potential in-roads for the government to collect surveillance data on individuals. As you may be aware, recent court decisions have held that law enforcement cannot palce GPS trackers on automobiles without first obtaining a warrant from a court to do so. With the collection of this kind of data by car companies such as Ford, there is now no deed for law enforcement to obtain a warrant to track a suspect. They can simply demand the records maintained by Ford, for which, based on current case law, there is no requirement for a warrant.

While I am neither a Luddite decrying the dangers of technology, nor a paranoiac assuming that either the Governement or “Big Business” are out to get us, this sort of widespread and pervasive data collection clearly points out the need for a robust public debate over the meaning and boundaries of privacy in the digital age. While there is immense good (economic, social, and otherwise) that we can do with all the data we are now capable of (and are in fact) collecting and analyzing, there comes with it significant dangers of destroying personal privacy altogether and eroding the civil rights accorded to U.S. citizens under the U.S. Constitution.

While this debate had begun to come to the forefront of many people’s consciousness with the revelations of the activities of the NSA by Snowden, it is increasingly clear that the definition of privacy and privacy rights of individuals (and even businesses) is something that requires wide ranging thought, analysis, robust public debate, and in the end decisive legal action. Both our economy and our personal freedoms depend the outcome of the process. We cannot simply afford to sit by and “see what happens”. The statekes are far to great.

Read more: http://www.businessinsider.com/ford-exec-gps-2014-1#ixzz2q0Y51SBy

Google Chromes cache makes data easy to steal – Is you credit or business at risk?

Google Chromes cache makes data easy to steal.

For those using the Google Chrome web browser, it is important to know that a critical privacy bug has been found in the browser software which has not yet been fixed by Google.

 

Specifically, Chrome routinely stores sensitive information, such as names, e-mails, contact information, and/or even credit card information which are typed by users into web forms at trusted websites. It appears that Chrome stores this information within the program in plain text which can be easily accessed by anyone with access to the user’s computer.

 

As such, until Google addresses this vulnerability, users should be extremely cautious in entering private data into websites using the Chrome browser if there is any chance that the user’s computers can be accessed by others. Furthermore, because the information is cached in the program without any encryption or any other security measures, any trojan horse or similar malware on a user’s computer could potentially access this information and forward it on to identity thieves.

While this clearly has serious potential repercussions for individuals using Chrome, the situation is even more serious for businesses, who could, as a result, be out of compliance with PCI-DSS security rules which are usually mandated by credit card processing companies, if the business wants to be able to accept payments by credit card.

As such, individuals and businesses alike need to take this vulnerability very seriously.

The Lavabit Shutdown and IT Security

How Lavabit Melted Down : The New Yorker.

The New Yorker has an excellent piece online which discusses in detail the events leading up to the shutdown of Lavabit, a secure e-mail provider which was used by Edward Snowden.

 

The article details the pressure placed upon Lavabit and its owner not just to turn over information that would shed light on Edward Snowden’s activities, but rather, information which would give the government wholesale access to all email passing through the services.

 

This article raises serious issues for IT companies who have committed to safeguard the privacy and/or security of its customers. It also raises serious concerns regarding the extent to which the U.S. Government is willing to (and in fact does) compromise the privacy of innocent U.S. citizens as a routine matter.

 

Adobe says hackers accessed data for 2.9 million customers – Oct. 3, 2013

Adobe says hackers accessed data for 2.9 million customers – Oct. 3, 2013.

If you have purchased products directly from Adobe, you need to be aware of this and (i) be on the lookout for notification for Adobe about whether this affects you, and (ii) monitor your identity (particularly with respect to any card used to purchase the Adobe product), to ensure you are not a victim of identity theft.

The dark side of Apple’s iBeacons

Interesting. I can see the interesting things that can be accomplished with this technology, but the specter of getting barraged with adds on my phone when I walk into a mall is not attractive. I, for one, can say: if a place starts spaming based on proximity, that is one of the fastest ways to keep me from going to that location. Ever.

1-800-Hackers: Why cyber crime is no longer a dark art | Marketplace.org

1-800-Hackers: Why cyber crime is no longer a dark art | Marketplace.org.

Marketplace has aired an interesting piece on the growing trend of using “white hat” hackers as a part of corporate IT strategy as a means of testing and improving IT security.

It is well worth a listen, and is an excellent starting point for consideration of your businesses security and privacy measures. If some form of auditing of your security and privacy measures (not just hardware and software, but policies, procedures, and practices, as well) then your company may needlessly be laying itself open to significant liability, expenses, and damage to business reputation.

As F.B.I. Pursued Snowden, an E-Mail Service Stood Firm – NYTimes.com

As F.B.I. Pursued Snowden, an E-Mail Service Stood Firm – NYTimes.com.

This is an interesting piece on the IT company Lavabit, which, before its shutdown, provided secure e-mail services to its customers. The story details the steps taken by the FBI to force Lavabit to turn over encryption keys and take other steps which would not only provide the FBI with access to Edward Snowden’s e-mail account on the service, but would render vulnerable the accounts of any individual or company making use of the service, without warrant and without court oversight.

In pressuring Lavabit to capitulate to its requests for “technical assistance” including divulging the private encryption keys used by the service, the owner of the company was pursued for contempt of court, fined $10,000.00, and then threatened with arrest when he publicly announced his intention to shutter the company.

The tale of Lavabit is something of a cautionary tail for companies that provide IT services. But even more, it should be a wake-up call to both users and providers of IT services regarding the boundaries of privacy and the lengths to which the government is willing to steamroll even legitimate businesses which seek to guard their customer’s privacy.