More on Identity Theft & Social Networking Sites

 In the June 2008 issue of the National Law Journal (out today), Tresa Baldas reported on the increasing number of law suits involving allegedly fake MySpace or Facebook pages -- click here (subscription required) for the story.  Among other cases, Baldas discusses the town of Cicero's efforts to identify the creators of two MySpace pages containing false and allegedly defamatory statements about Cicero Town President Larry Dominick and claiming to be authored by him, which I posted about last week.

As I said in my post last week, the increasing number of disputes regarding false social networking pages raises questions about the problems with the anonymity of the internet that are equally interesting and difficult. And while your first reaction may be that courts should not be asked to resolve these disputes, the courts may be a necessary part of the process, as I discussed in the National Law Journal article:

Free speech issues aside, fake online profiles have pushed the age-old problem of schoolyard rumors into the courtroom, said Dave Donoghue, an attorney with DLA Piper who specializes in intellectual property litigation.

"The internet gives [a rumor] an air of credibility that it used to not have," Donoghue said. "It forces the schoolyard into the courtroom. And how the courts deal with youthful mistakes and transgressions is a very difficult issue."

Another difficult legal issue arising from fake postings, he said, is privacy rights. Specifically, when should Web sites turn over information about who is creating questionable profiles?

"They owe their users whatever protections they promised them, and so it's important that the court system be used in those cases," Donoghue said, adding that Web sites can't and shouldn't turn over personal information based upon a private request.

Donoghue warned that those requests could be falsely created, "just like you can't always trust that the creator of the page is who they claim to be."

Baldas discusses many of the most prominent social networking identity theft cases and does a good job of crystallizing the issues.  But one other case with particular international impact is that of Bilawal Bhutto Zardari.  As explained in the New York Times' Lede Blog (click here for the post), Bhutto Zardari took over as chief of the Pakistan Peoples Party after his mother, Benazir Bhutto, was killed late last year.  Because Bhutto Zardari was "relatively unknown" many reporters turned to Facebook.  While some found his profile, created using his first name spelled backwards for privacy reasons, many found and reported statements from one of two other false pages claiming to be Bhutto Zardari's.  The creator of one of the pages even anonymously posted about his fake Bhutto Zardari  page on an internet bulletin board.  Of course, the false pages were eventually taken down, but some copies of the newspapers and magazines that ran the false quotes and information still exist.

Patents -- Profit or Cost Centers?

Two patent professors, James Bessen and Michael Muerer, have published portions of their upcoming book, Innovation at Risk, online.  The book promises an empirical study showing that the current patent system discourages innovation and suggesting ways to fix the system, presumably to encourage innovation.  The suggested fixes are not fully described online yet, but some of the empirical basis for the problem is and it is generating a fair amount of conversation -- see the New York Times, Wired, Patently-O and Wired GC, for example.  The authors say they have analyzed emperical patent litigation data from 1974 until 1999 (the last for which information was fully available).  Their numbers show that profits/damages from pharmaceutical and chemical patent litigation have generally increased as patent litigation costs have increased and maintained a substantial profit margin -- in 1999, patent litiation resulted in worldwide profits of over $12B (in 1992 USD) with US litigation costs of just over $4B (in 1992 USD).  For all other technology areas, however, patent litigation profits/damages have remained relatively flat while patent litigation costs have increased substantially -- profits have hovered around $2-3B per year (in 1992 USD) while costs have gone from a little more than $2B in 1994 to almost $12B in 1999.

These numbers could be terrifying to a casual reader, and they fit nicely with the current Patent Reform Act efforts in Congress.  But I suspect that much of the increased patent litigation costs come from companies that are bringing questionable cases based upon inflated damages theories or refusing to settle infringement cases against them despite the fact that the facts do not support their case.  One of the most important skills in patent litigation is self-reflection.  You have to be able to take a step back and review your case with a disinterested eye to truly determine your strengths and weaknesses.  An outside counsel who has the ability and the courage to do that for a company is an invaluable asset, who will likely save you far more than he or she will ever cost the company in legal fees.

Patent Reform Enters the Spotlight

Wednesday, the Senate held its first hearings regarding the Patent Reform Act.  Both the main stream media and the legal blogs are busy handicapping the battle over the legislation and the Act's chances of success.  Here are some of the highlights:

The WSJ Law Blog handicaps the big players in Patent Reform's Battle Royale

The WSJ print edition featured the Senate hearings in a page-one story (subscription required).

FileWrapper provides a nice summary of each witness's positions.

The New York Times also ran a Business section story.

Patent Prospector takes a very strong position

The thankful result of today's Senate hearing is watching the Patent Reform Act of 2007 appear the statutory tub of lard that it is.