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About 4,000 years ago, the ancient Babylonians celebrated the New Year upon seeing the first new moon after the vernal equinox. Today, festivities in New York's Times Square are televised around the world. Although my traditions don't date back nearly as far as either of these, each year at this time I try to create a Legal Bytes piece intended to be more thoughtful and philosophical. So this posting will contain no hypertext links to distract you; it will not have citations to offer more information about a snippet; nor will it dazzle you with factoids or intrigue you with today's news. It's just me philosophizing, about where we've been and where we're going. My one chance during the year to simply ramble about where we've been and where I think we might be headed – without any credentials, qualifications or expertise to do so.

So, loyal Legal Bytes' readers, just pull up an easy chair, put away your other distractions for a moment, pour a glass of your favorite beverage, sit back and enjoy . . . and again, thank you.

Much has been written about social media. Whether it's the Facebook phenomenon, now with 1 billion "friends" in sight, or the Twitter tweets that either rock or knock the world – everyone's talking about it. I just read an interesting blurb from a powerhouse of a social media strategist I follow on Twitter, describing the social media and corporate world as an example of "orthogonal bliss," and I thought, that's interesting, but not quite right. Why, you ask? (You did ask, right?) Hang on.

Much has also been written about privacy and data protection. Online behavioral advertising, geo-targeting and location-based services, tracking, identity theft, the buzz words go on and on. I keep reading how advertisers capable of more accurately determining my preferences represent a massive invasion of my privacy and my rights. Wait a minute. That's not quite right either. Why, you ask? (You did ask again, right?)

Well, let's put these in perspective, because all of these inter-relate with cloud computing and mobile and wireless technology and, yes, drive-up windows! When Henry Ford introduced mass-production assembly lines in the early 1900s, prices of automobiles dropped, making personal transportation more affordable. Closed body construction, first available on General Motors' Cadillac Model Thirty in 1910, as well as the first use of an electric starting motor (invented by Charles Kettering), also in the Cadillac sold in 1912, made the automobile easy for anyone to start and capable of being used in all sorts of weather.

More than just trivia, society as we know it in the industrial age has largely been based on the rapid increase in personal transportation: Drive-up windows, shopping malls, suburbs, gasoline/petrol stations, rumble seats, not to mention paved roads, interstate highways and so much more. Try to imagine not just the vehicles themselves, but also the lifestyles that have changed, the culture and society that has arisen around personalized transportation. The airplane has shrunk the globe, and the automobile has enabled us to go where and when we like on it!

Thirty years ago, computers were largely mainframe monoliths, connected to dumb terminals requiring rocket scientists with punch cards and a working knowledge of Boolean algebra to do anything. Raised floors for cabling, sophisticated air conditioning cooling systems – 1 megabyte of memory in 1978 cost more than $30,000. Why would anyone ever need more than 64K!

Today, personal information systems are transforming our society and our culture as well: Everything from how we work, play, game, learn, research, find things and, yes, interact with each other and the world around us. Rapidly. Our appetite for personalized capabilities has created successful companies that have learned the skills of "mass customization" – yes, there's an app for that! Devices become smaller and more powerful. I can take my toolkit, my work, my school books, my roadmap, my address book, my email and my phone with me wherever I go. I can keep in touch and shop with one device. "Clouds" and wireless devices proliferate – in the next year or so, estimates indicate there will be more than 5 billion active mobile phone contracts, most Web enabled and most with GPS tracking capability.

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Having just posted the Super Bowl answers, let's turn our attention to another sport – initial public offerings, or IPOs. Hearing the news that a Facebook public offering is in the works, and that analysts are prognosticating it might be worth US$100 billion, I thought I would do a little digging of my own about how this all got started.

So our trivia questions to bring 2011 to a close relate to the world of IPOs. Let's see how business savvy you all are and perhaps we'll let you ring in the New Year with a bottle of bubbly as the prize.
What was the name of the first company in the world that ever issued stock? Just so we don't make it too easy, you need to also tell us where it was incorporated, the year the stock was issued, whether it paid a dividend (some of you are saying, "You’re kidding, right?") and whether it – or actually a successor corporation – is still around.

If you think you know the answers, send me an email at jrosenbaum@reedsmith.com, and if you are first with the complete, correct answer, you'll win.

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For you Super Bowl football fans (as in U.S. football, not as in soccer, as football is known in the rest of the world), here are the answers to our last Useless But Compelling Facts contest:

The team that has scored the most points in Super Bowl games is the Dallas Cowboys (221), and the team that has had the most points scored against it is the Denver Broncos (206). The only team that didn't score a touchdown in a Super Bowl game was the Miami Dolphins in Super Bowl VI.

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In The Wall Street Journal online, Carl Bialik, The Numbers Guy writer and blogger, analyzes the numbers behind advertised versus actual broadband Internet download speeds, and government efforts to measure what the consumer receives compared with what is promised by the ISPs.

In his posting entitled, "How Speedy Are High-Speed Internet Lines?", Mr. Bialik examines the issue of whether statistics derived from a report commissioned by the Federal Communications Commission (www.fcc.gov) are used in a way that is meaningful to consumers when evaluating the offerings of Internet service providers.

Notably, Mr. Bialik's article also compares the approach taken by the UK's Office of Communications (Ofcom) in measuring the speeds offered on the other side of the pond, which maintains the panel of tested carriers in secret to prevent any "gaming" of the test process and system.

Joseph I. ("Joe") Rosenbaum is quoted in the posting in connection with some of the legal issues that arise when statistics and factual information contained in government or other reports are used in advertising. Truth (facts) may not, as in the case of defamation, be an absolute defense.

The government may feel that consumers can't handle the truth. Or at least the truth, depending on the context and the manner in which it is used in advertising. When, for example, can statements that are literally true become false or misleading? As has been previously noted in Legal Bytes, using old facts can be deceptive and misleading when facts are outdated and new facts are available, or when the old facts clearly don’t apply.

In some cases, even current facts can be misleading. If I advertise that an article will be posted on Legal Bytes once a month and I post two, can I claim that Legal Bytes beats its own advertised promise to consumers by double? If you and I enter a race and I win, can you advertise that I came in next to last and you came in second? Is that true? Yes. Is it misleading? Yes. I've omitted facts that are material to the information quoted and that are material to the context for you to evaluate.
The truth, after all, is not always that simple and I am grateful for that. As in the words of William Jennings Bryan: "If it weren't for lawyers, we wouldn't need them."

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Many thanks to the International Law Office (ILO) for publishing a derivative of our Legal Bytes article. You can download and read a personal copy of the ILO posting FTC Targets Ads That Target Kids, or you can read the original Legal Bytes blog posting at "Mom, is it OK for them to follow me?" FTC Targets Ads That Target Kids.

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A few days ago (October 17), the Mobile Marketing Association released its MMA Mobile Application Privacy Policy, which the MMA asserts is the first industry guideline to deal with data protection and privacy specifically related to mobile and wireless applications. The guideline being made available for comment is slated to be finalized sometime after November 18, 2011, when the MMA’s comment period is scheduled to close. The press release notes that there are currently more than 425,000 iPhone/iPad apps available from Apple’s App Store, and more than 200,000 available for Android.

The document is intended to deal with some of the basic privacy principles and text that developers should consider incorporating into mobile apps to let consumers know how their data is collected and used, as well as information regarding confidentiality and the security of information that becomes available when a consumer installs and uses a mobile app. Obviously, legal disclaimers and disclosures and issues related to privacy and data protection are quite jurisdiction-specific, and compliance will always require consultation with legal counsel to be sure mobile, and all other online and other applications and processes, conform to the legal requirements of each jurisdiction that applies to consumers for that application or process.

Reed Smith’s offices around the world are open, coordinating with our Advertising Technology & Media law practice group, ensuring that lawyers knowledgeable in data protection and privacy, as well as in mobile technology and marketing, are available to help you. As always, if you want to know more about how lawyers who understand can help your business, feel free to contact me, Joe Rosenbaum, or any of the Reed Smith attorneys with whom you regularly work.

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Well we just posted the answers for our July and August Useless But Compelling Facts, and as football season is underway, I thought we would switch gears and turn to some sports trivia.

This year’s Super Bowl (46), scheduled to be held February 5, 2012, is a first – the first to be played in Indianapolis (at Lucas Oil Stadium) and among the few (four) played in a cold weather city. So, anticipating a fiercely competitive season, let’s ask some historical Super Bowl questions.

Which team has scored the most points and which has allowed the most points against it in Super Bowl games (and how many points applicable to each)?

Which team never scored a touchdown in a Super Bowl game? And can you identify the game (which Super Bowl, which teams and where played)?

If you think you know the answers, send them directly to me at jrosenbaum@reedsmith.com, and if you are first with the complete, correct answer, you’ll win.

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In July we asked you two questions – our regular trivia question and a bonus question.
First we asked why you might have considered staying indoors if you were visiting the village of Pueblito de Allende in the State of Chihuahua in Mexico, the night of February 7, 1969. Well, late that night (actually at about 1:05 a.m. February 8), the Allende fell over the Mexican state of Chihuahua. Often described as "the best-studied meteorite in history," the Allende meteorite is notable for possessing abundant, large calcium-aluminum-rich inclusions, which are among the oldest objects formed in the solar system. The bonus question, also in the astronomical vein, asked what’s special about July 12, 2011? Galileo, mistakenly believing it was a star, may have actually "discovered" it in 1613; but since its official discovery by German astronomer Johann Galle September 23, 1846, we have known that Neptune, 2.8 billion miles from the sun, moves through its huge orbit at a snail’s pace, slowly completing one revolution around the sun approximately every 164.8 (Earth) years. On July 12, 2011, Neptune completed it’s first full orbit around the sun since its discovery.

In August, we asked about different types of stars in the solar system. Motion picture stars. We asked you to identify both husbands, former and current, of Barbra Streisand, and to name the film – the only film in which both men appeared. The amazingly talented singer, actress, producer, etc., etc., was married to Elliott Gould from 1963 to 1971, and since 1998 has been married to James Brolin. In 1977, when Ms. Streisand was not married to either of them, both Mr. Gould and Mr. Brolin starred in the 1977 motion picture, Capricorn One, although they were actually ONLY on screen together in the final scene of the picture.

The first with the right answers to both July and August questions was none other than Sharri Gottesman, long-time Legal Bytes reader, who faithfully tries to answer almost every one of these and has done so correctly before. Thank you Sharri.

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When it comes to advertising, lawyers are bound not only by laws and regulations that apply to all advertisers, but also by the rules set by the professional licensing authorities in each state in the United States, as well as by many “Bar” Associations (Bar as in Barrister, not barista or your local tavern). These authorities and associations often set more stringent advertising standards and rules, based on ethical guidelines and professional standards.

Florida has some of the most stringent restrictions on attorney advertising in the United States. For example, Florida’s rules prohibited ads that were “manipulative” (whatever that means) or that included “background sound other than instrumental music” – presumably to prevent the sounds of ambulance sirens or jail cell doors slamming.

The restrictiveness of attorney advertising, including Florida’s tough rules, has been the subject of criticism, as noted in a previous Wall Street Journal article.

Yesterday, a federal judge in Jacksonville, Fla., ruled that these restrictions are vague and violate the First Amendment rights of lawyers, and must go! The judge’s ruling noted that, “The term ‘manipulative’ is so vague that it fails to adequately put members of the Bar on notice of what types of advertisements are prohibited” – declaring the standard void. The judge also overturned the prohibition on background sounds, noting that such a rule violates the free speech rights of attorneys. Here is the entire Harrell v. Florida Bar decision [PDF] if you are interested.

In honor of the occasion, one clever individual decided to create a “lawyer ad” parody, which, by the way, has sounds previously banned by the Florida regulations. Enjoy.

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I have to thank Carl Bialik, The Numbers Guy writer and blogger for The Wall Street Journal, for including a quote in his recent (September 23, 2011) column, Bag Battle Takes a Statistical Turn.

The column focuses on the use of statistics by competitors and analysts alike – in this case statistics that related to claims made by Chicobag about the environmental impact of reusable plastic bags that many retail stores use to bag items, from groceries to clothing, when you check out with your purchases. It seems that Chicobag made some claims – citing statistics – about its products. Mr. Bialik's column notes that Hilex Poly and some other competitors challenged the claims being made by Chicobag, and were unable to come to grips with either the numbers or the claims; litigation ensued.

Although Mr. Bialik focuses on the way numbers are used and the difficulties inherent in accumulating and using statistics – often when the subject matter may actually be a moving target – the legal issue is similarly complex. More often than not, false, misleading, deceptive advertising claims challenge the explicit veracity of a claim and whether that claim can be substantiated or whether the "net impression" or implicit claims (e.g., pictures or activities) can mislead or potentially deceive consumers. This claim, brought as an action under the Lanham Act – seeking an injunction and damages for false advertising and unfair competition for both a violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and under a state statute (South Carolina Unfair Trade Practices Act, South Carolina Code Annotated § 39-5-10, et seq.) – really revolves around whether the veracity or inaccuracy of claims (even if they can be substantiated or derived from facts that were believed to be true when stated) makes any difference at all in the minds of consumers. 

Without giving away The Numbers Guy's secrets (or forgetting the Federal Trade Commission Act that prohibits "unfair or deceptive acts or practices in or affecting commerce"), the legal claim, in my view, hinged not on whether the statistics claimed by Chicobag were incorrect or even in some cases materially inaccurate, but whether the particular claims as made using those statistics, were material to a consumer. Whether a consumer was likely to make a different purchasing decision – or might at least be informed enough to consider doing so – based on the degree of inaccuracy.

So when you think of my blog Legal Bytes, I'll close with a claim that everyone sees on those pizza cartons around the country – maybe the world: "You've tried the rest. Now try the best!" Can you say "puffery"?

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This time, the law of unintended consequences is bringing scientists and online gamers together in a crowd sourcing manner hitherto unimaginable.

An article in this month’s edition of the journal Nature Structural & Molecular Biology has announced (citing both research scientists and online gamers as co-authors of the article) that through a 2008 purpose-oriented video game developed at the University of Washington in 2008 – Foldit – the structure of an enzyme, one used in complicated customizing of retroviruses, was accurately modeled. 

Who cares and how does this affect us? Well, as a former biochemist wannabe, if you can model the structure of these proteins, you can better understand how diseases are caused and correspondingly develop drugs to block or stymie the progress of those diseases.

Amazingly, gamers were able to produce an accurate model of an enzyme whose structure had eluded scientists for a very long time in only three weeks and the report notes, referring specifically to medication against the human immunodeficiency virus (HIV) for which an understanding and design of antiretroviral drugs is absolutely critical. Seth Cooper, one of the creators of Foldit noted that "Games provide a framework for bringing together the strengths of computers and humans. The results in this week's paper show that gaming, science and computation can be combined to make advances that were not possible before."

If you thought the intellectual property, licensing, user generated content, crowd sourcing, cloud sourcing, social media legal issues were already enough arising from scientific research, online gaming and crowd sourcing alone were enough to make your head spin, conjure up the implications when the term ‘convergence’ is applied to any two or three of these disciplines. Isn’t it time you had legal counsel and representation who can seamlessly help navigate them while your teams are busy solving the health care and medical problems of the world?

If you want to know more about how lawyers who understand can help your business, feel free to contact me, Joe Rosenbaum, or any of the Reed Smith attorneys with whom you regularly work.

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Many of us remember when kids were actually worried about being caught misbehaving. Back in those days, parent’s concern over children’s behavior dealt with whether the kids were ‘fresh’ or ‘mischievous’ or talked too much in school. I was perennially the subject of “he would do so much better in class if he just stopped horsing around and paid attention.” Dear Mrs. Frohman, Mrs. Handel, Mrs. Flynn and Mrs. Bernstein – thanks! It took me several decades, but I finally got the message. Today, however, when we hear the terms children and behavior – well, at least according to the FTC, it ain’t the children that are misbehaving.

In a proposed amendment to rules that have been in effect since 2000, the Federal Trade Commission (“FTC”) is proposing amendments to COPPA (the Children’s Online Privacy Protection Act”) that “would require parental notification and consent prior to the collection of persistent identifiers where they are used for purposes such as amassing data on a child's online activities or behaviorally targeting advertising to the child." In describing the proposed changes (the proposed  Amendment runs 122 pages long), the FTC notes that these new rules would apply to any identifying or tracking technology (cookies) that would link a child’s browsing behavior across multiple web pages and services – ostensibly including advertising networks and metric/measurement/analytical service providers who routinely have access to such information.

Although a ‘safe harbor’ for compliance with self-regulatory programs is included within the FTC’s proposal, it did suggest that these programs (and individual company compliance with these programs) be more closely monitored and supervised – including mandatory audits every 18 months and reports detailing actions taken by the self-regulatory body against the companies that do not comply. Clearly, one of the FTC’s objectives is to not only ensure a mandatory review of compliance, even for those companies that have not been subject to proceedings, but also to create a record-keeping and reporting system that gives the FTC the ability to obtain detailed information about the proceedings and the compliance efforts of individual companies.

Comments, which are due by November 28, 2011, may be filed with the FTC using it’s COPPA Rule Review Form. If you are interested, concerned, want your voice heard, or otherwise need to be guided by experienced counsel in this area, please feel free to contact me, Joseph I. Rosenbaum, or the Reed Smith lawyer with whom you regularly work. We would be happy to help!

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The August 29, 2011 issue of BNA’s Health IT Law & Industry Report (Vol. 3, No. 36), describes some of the major legal and contractual issues raised when health care industry companies and professionals are considering moving to a cloud computing environment. Joseph I. (“Joe”) Rosenbaum was interviewed by the author, Kendra Casey Plank, for her article, entitled, “Attorney: Cloud Services Offer Affordable Solutions but Raise Privacy, Security Risks.” The article not only quotes Rosenbaum extensively, but also refers to Reed Smith’s White Paper series “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing,” which began in June 2010 (see "Transcending the Cloud" - Reed Smith Announces White Paper Series & Legal Initiative on Cloud Computing). The series is updated regularly with individual articles on topics ranging from government contracting and state tax, to the most recent White Paper entitled, “Health Care in the Cloud – Think You Are Doing Fine on Cloud Nine? Hey, You! Think Again. Better Get Off of My Cloud,” which Rosenbaum and Reed Smith Associate Vicky G. Gormanly wrote and which was posted on the Legal Bytes blog August 5, 2001 (Transcending the Cloud - Health Care on Cloud 9? Are You Doing Fine?). What’s the state of your health care compliance? Are you doing fine?

Read the White Paper and, if you have any questions or need help, contact Joe Rosenbaum or Vicky Gormanly, or the Reed Smith attorney with whom you regularly work.

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Late this past June, the Federal Trade Commission indicated it was launching an investigation into Google’s search engine technology and whether it pushes consumers to Google’s other services in a manner that is unfair to competition.

That also means that the FTC will not only be asking Google for records and information about the way it conducts its business, but it will also be asking for information from Google’s competitors (presumably who would provide information gleefully, except that they best be careful about celebrating too prematurely when they hand over information to the government), AND – here it comes – lots of companies who do business with Google: The host of third parties that are advertising and marketing networks, publishers, services, sponsors and, yes, even advertisers and agencies themselves. 

What should you do? Well we’ve prepared a handy reference guide – What Should You Do When the FTC Calls About Google? to explain what the FTC can ask, to explain a few of the basic legal principles that apply to the "asking" the FTC may engage in and, frankly, a warning that you should be calling your lawyers—lawyers knowledgeable in this process—and protecting your interests. For you in-house lawyers out there, if you aren’t familiar with handling these inquiries and third-party requests, perhaps you should consider engaging the services of outside lawyers who know how to help. So whether you know you need help, before or after receiving an inquiry from the FTC – formal or informal – or if you aren’t sure, you might just want to call Joseph I. Rosenbaum, Rachel A. Rubin or the Reed Smith lawyer with whom you regularly work. We would be happy to help!

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