Tag Archives: Media

One year later – DRM-free ebooks hugely positive for Tor

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New York Times technology columnist David Pogue discussed the decision last year by Tor Books UK and US to drop copy protection. It just released a statement regarding the effect of the DRM-free ebooks after one year.

His column deftly discusses the tension between consumers who want the inconvenience of encryption eliminated and concerns that DRM targets lawful consumers far more than those acquiring illegally distributed copies. Although he does not address the plethora of DRM-free versions on bit torrent sites, he notes that the changes to DRM for commercial products might affect the rate of piracy, but not the existence of piracy.

The Tor announcement highlighted a few other features of their strategy. First, the strategy was about their authors and the goals of the authors to engage more effectively with their readers. Secondly, as a science fiction imprint, their readership is among the most capable of getting DRM-free copies, so the publisher needs to make the consumer happy more than it needs to protect itself from the consumer. And finally, the decision to eliminate DRM does not mean that the works are not for-profit, on-sale copies. This statement captures many of Tor’s concerns:

We had discussions with our authors before we made the move and we considered very carefully the two key concerns for any publisher when stripping out the DRM from ebooks: copyright protection and territoriality of sales. Protecting our author’s intellectual copyright will always be of a key concern to us and we have very stringent anti-piracy controls in place. But DRM-protected titles are still subject to piracy, and we believe a great majority of readers are just as against piracy as publishers are, understanding that piracy impacts on an author’s ability to earn an income from their creative work. As it is, we’ve seen no discernible increase in piracy on any of our titles, despite them being DRM-free for nearly a year.

Pogue suggests but does not state outright that DRM is an ineffective strategy for reducing piracy. But he is very explicit that the point of an anti-piracy policy is to increase sales and revenue. DRM-free does not mean without cost. iTunes sells its music even though it dropped DRM. He also points out that his own books have had fared similarly in the market.

If book consumers thought that everyone in the household could easily read the same book (in the manner that a family can share a physical book), it might be more willing to spend money to own the ebook. For works that have no physical cost, the increase in unauthorized copies is not the right metric. The right question is whether more customers will purchase the work. If more copies are sold, the work is more successful, even if more copies are also pirated.

Pogue makes another strong point that the ease of the transaction directly impacts sales. “Friction also matters. That’s why Apple and Amazon have had such success with the single click-to-buy button. To avoid piracy, it’s not enough to offer people a good product at a fair price. You also have to make buying as effortless as possible.” High transaction costs are reasonable only for expensive, infrequent purchases. Weight is a normal force on friction; only weighty purchases should have high friction.

Finally, Pogue addresses the pricing of ebooks. Frankly, he is more generous to the publishers than I would be on this issue by acknowledging the costs associated with “author advance, editing, indexing, design, promotion, and so on” but like the music industry, the investments are declining. The public is likely to value the fair price point of an ebook as a percentage of its physical counterpart. If the physical copy has a secondary market in the used bookstore, then the loss of resale also needs to be factored in for the consumer. Otherwise the consumer is only paying for the convenience of instant access, and if the instant access is undermined by cludgy DRM, there is no value to be had.

Tor heard this from its constituents:

But the most heartening reaction for us was from the readers and authors who were thrilled that we’d listened and actually done something about a key issue that was so close to their hearts. They almost broke Twitter and facebook with their enthusiastic responses. Gary Gibson, author of The Thousand Emperors tweeted: “Best news I’ve heard all day.” Jay Kristoff, author of Stormdancer, called it “a visionary and dramatic step . . . a victory for consumers, and a red-letter day in the history of publishing.”

Tor never says it has become more profitable, but the company does relish the role it is taking in leading the publishing industry towards a more consumer-friendly business model.

The move has been a hugely positive one for us, it’s helped establish Tor and Tor UK as an imprint that listens to its readers and authors when they approach us with a mutual concern—and for that we’ve gained an amazing amount of support and loyalty from the community. And a year on we’re still pleased that we took this step with the imprint and continue to publish all of Tor UK’s titles DRM-free.

So the lesson from Tor is simple – for low-cost impulse purchases DRM doesn’t add value. High quality, fairly priced, and easy to access works will continue to attract a growing market. These are the points of emphasis and differentiation for the marketplace. DRM may be a legal solution, but it is not a sound business strategy.

Cyber Defense Strategies and Responsibilities for Industry Call for Papers Now Open

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The Northern Kentucky Law Review and Salmon P. Chase College of Law seek submissions for the third annual Law + Informatics Symposium on February 27-28, 2014.

2014 Law + Informatics Symposium on

Cyber Defense Strategies and Responsibilities for Industry

 The focus of the conference is to provide an interdisciplinary review of issues involving business and industry responses to cyber threats from foreign governments, terrorists, and corporate espionage. The symposium will emphasize the role of the NIST Cybersecurity Framework and industries providing critical infrastructure.

The symposium is an opportunity for academics, practitioners, consultants, and students to exchange ideas and explore emerging issues cybersecurity and informatics law as it applies to corporate strategies and the obligations of business leaders. Interdisciplinary presentations are encouraged. Authors and presenters are invited to submit proposals on topics relating to the theme, such as the following:

Cyber Warfare

  • Rules of Engagement
  • Offensive and defensive approaches
  • Responses to state actors
  • Engagement of non-state actors
  • Distinguishing corporate espionage from national defense
  • Proportionality and critical infrastructure
  • Cyber diplomacy
  • Cold War footing and concerns of human rights implications

Front Lines for Industry

  • Role of regulators such as FERC
  • Legacy systems and modern threats
  • NIST guidelines
  • NIST Cybersecurity Framework
  • Engaging Dept. of Homeland Security
  • Implications on various industries (electric power,  telecommunications and transportation systems, chemical facilities)
  • Health and safety issues
 Global Perspectives

  • Concepts of cyber engagement in Europe
  • Perception of Internet and social media as threat to national soverignty
  • Rules of engagement outside U.S. and NATO
  • Implications for privacy and human rights
  • Stuxnet, Duqu, Gauss, Mahdi, Flame, Wiper, and Shamoon
  • Cyber engagement in lieu of kinetic attacks or as a component of kinetic engagement

 

Corporate Governance

  • Confidentiality and disclosure obligations
  • Responsibilities of the board of directors
  • Staffing, structures and responses
  • Data protection & obligations regarding data breaches
  • Corporate duty to stop phishing and other attacks for non-critical industries
  • Investment and threat assessment
  • Litigation and third party liability

 

Other Issues

  • Executive orders and legislative process
  • Lawyer responsibility in the face of potential threats
  • Practical implications of government notices
  • Perspective on the true nature of the threat

Submissions & Important Dates: 

  • Please submit materials to Nkylrsymposium@nku.edu
  • Submission Deadline for Abstracts: September 1, 2013
  • Submission Deadline for First Draft of Manuscripts: January 1, 2014
  • Submission Deadline for Completed Articles: February 1, 2014
  • Symposium Date: February 27-28, 2014

Law Review Published Article:  The Northern Kentucky Law Review will review, edit and publish papers from the symposium in the 2014 spring symposium issue.  Papers are invited from scholars and practitioners across all disciplines related to the program. Please submit a title and abstract (of 500-100 words) or draft paper for works in progress. Abstracts or drafts should be submitted by September 1, 2013. Submissions may be accepted on a rolling basis after that time until all speaking positions are filled.

Presentations (without publication) based on Abstracts:  For speakers interested in presenting without submitting a publishable article, please submit an abstract of the proposed presentation. Abstracts should be submitted by September 1, 2013. Submissions may be accepted on a rolling basis after that time until all speaking positions are filled.

Publication of Corporate Handbook on Cyber Defense: The Law + Informatics Institute may edit and publish a handbook for corporate counsel related to the topics addressed at the symposium. Scholars and practitioners interested in authoring book chapters are invited to submit their interest by September 1, 2013 which may be in addition to (or as an adaptation of) a submitted abstract for The Northern Kentucky Law Review. Submissions may be accepted on a rolling basis after that time until all chapter topics are filled.

About the Law and Informatics Institute:  The Law + Informatics Institute at Chase College of Law provides a critical interdisciplinary approach to the study, research, scholarship, and practical application of informatics, focusing on the regulation and utilization of information – including its creation, acquisition, aggregation, security, manipulation and exploitation – in the fields of intellectual property law, privacy law, evidence (regulating government and the police), business law, and international law.

Through courses, symposia, publications and workshops, the Law + Informatics Institute encourages thoughtful public discourse on the regulation and use of information systems, business innovation, and the development of best business practices regarding the exploitation and effectiveness of the information and data systems in business, health care, media, and entertainment, and the public sector.

For More Information Please Contact:

  • Professor Jon M. Garon, symposium faculty sponsor and book editor: garonj1@nku.edu or 859.572.5815
  • Lindsey Jaeger, executive director: JaegerL1@nku.edu or 859.572.7853
  • Aaren Meehan, symposium editor, meehana2@mymail.nku.edu or 859-912-1551

Journalism audience, revenue, and depth all in decline suggests Pew Center study

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The Pew Research Center’s Project for Excellence in Journalism paints a dismal picture regarding the transformation of American news media. The Center describes “a news industry that is more undermanned and unprepared to uncover stories, dig deep into emerging ones or to question information put into its hands” than any time in recent history. Among the findings:

  • Sports, weather and traffic now account on average for 40% of content
  • Newsroom cutbacks in 2012 put the industry down 30% since its peak in 2000
  • Some media outlets, such as Forbes magazine, use technology by a company called Narrative Science to produce content by way of algorithm
  • Media campaign reports were primarily megaphones, rather than investigative journalism

In response to the declines, the Center reports, “nearly a third of U.S. adults, 31%, have stopped turning to a news outlet because it no longer provided them with the news they were accustomed to getting.”

Pew InfographicThere is some financial restructuring of the industry as well. In most cases, however, the restructuring moves revenue away from news media and towards aggregators such as Google and Facebook. Economically this is another situation where the company providing the conduit for content receives the revenue rather than the individuals and companies providing the actual content. The other good news is the slight increase in Sunday newspaper subscriptions and the end to the decline in overall newspaper sales.

In total, however, the report makes clear that while there is more information than ever before, there is less in-depth news coverage.

In a report published last year, the Pew Center reported found that “for every $1 newspapers were gaining in digital ad revenue, they were losing $7 in print advertising” and the gap grew to $16 in print losses for every digital dollar gained by the end of the 2012. Some papers are returning to pay walls to offset the losses; others are accelerating their cost-cutting in print and reporting expenses to pay the gap.

While digital revenues continue to grow, the income is not fueling journalism. Instead, it pays for mobile devices, social media and search. While each of these has benefits, journalism has a uniquely important role in society – unfortunately that role will continue to shrink as budgets wane, reports become more superficial, audiences erode, budgets shrink in response – and the cycle goes inexorably downward.

iPad Newsstand provides some revenue to the publishers, but at a steep price to the Apple newsstand vendor. Zinio and Kindle are also out there.

Perhaps it is time to rethink what we pay for with our home entertainment dollars. Maybe the bundle of services will cover a few dozen fewer unwatched cable channels and put a few cents into the digital edition of the local paper. Certainly it is time to rethink media ownership and financing rules for the digital market.

Netflix Wins Congressional Protection to go Social in US under New Law

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An amendment to the 1988, Video Privacy Protection Act provides videotape services the ability to allow their customers to opt in for video rental and viewing data. Under the new legislation, companies such as Netflix, Hulu, and Crackle will be able to let their users share what they have been watching through their social media services.

President Obama is expected to sign the bill into law this week.

netflix1Video companies will use the new law to encourage their users to post what they are watching to their friends and family – encouraging greater viewership on that platform. Netflix already provides this option on its European platform, but concerns over the reach of the Video Privacy Protection Act limited the company’s use of social media in the U.S.

Earlier this year, Hulu lost a claim in which it argued the Video Privacy Protection Act did not extend to online content suppliers. The California District Court hearing the case disagreed, stating “a plain reading of a statute that covers videotapes and “similar audio visual materials” is about the video content, not about how that content was delivered (e.g. via the Internet or a bricks-and-mortar store).” The decision to allow the class action against Hulu to proceed (and a settlement by Netflix in a similar situation) set the stage for legislative action.

The law was originally enacted in response to the disclosure of Supreme Court Nominee Robert Bork’s videotape records. The law extended similar protections for library records. (The American Library Association reports that 48 of the 50 states have such statutes.) In addition to the federal law, many states also have laws protecting rental and viewership records, so compliance at the state level may somewhat deter the roll-out of the automated “frictionless sharing” of viewership data.

At the heart of the privacy rules stand a constitutional assertion that free speech often starts with unmonitored access to information. The freedom to read divergent, controversial, or even antisocial and seditious materials is essential to develop an open, robust and unfettered political debate. To punish a person merely for accessing controversial content will ultimately stifle expression, creating a far greater evil than the content being discouraged.

Perhaps because this form of privacy is rooted in First Amendment protections, it was the one privacy rule in which U.S. residents had greater legal protections than their European counterparts.

The law provides consumers the ability to withdraw consent at any time. Nonetheless, expect to see a great many status updates about your acquaintances’ viewing habits by the end of the year. Opting out of those might not be as easy.

IP for Creative Upstarts papers available for conference on Nov. 9-10, 2012

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Presented by Michigan State University College of Law

Intellectual Property, Information & Communications Law Program

Co-sponsored by

       NKU Chase College of Law, Law + Informatics Institute

Copyright Alliance

This conference considers how law and policy can nurture diverse creative industries—”Creative Upstarts”—in the U.S. and abroad. “Creative Upstarts” encompass a range of commercial enterprises from independent artists and producers in developed countries to emerging content industries such as Nigeria’s “Nollywood,” Jamaican dancehall, Brazilian tecnobrega music, and Chinese digital publishing. Their interests have been overlooked in recent debates on intellectual property and information policy. This conference seeks to remedy that gap. Read More …

Papers

More Information:

                   

Sponsors

Contact Information

Professor Sean Pager

spager@law.msu.edu

Copyright Anti-circumvention provisions published; jailbreaking for phones okay but not tablets; access to DVDs for comment and criticism in education and documentary filmmaking increase

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In 1998 Congress updated the copyright law with the Digital Millennium Copyright Act with hopes that it provided a forward-looking approach to the rapidly changing technologies affecting movies, music, television, publishing, the artists and all manner of creative endeavors. Among its two key provisions are the Section 512 take-down provisions[1] and the Section 1201 anti-circumvention provisions.

Section 1201(a)(1)(A) makes it a crime (and a tort) to “circumvent a technological measure that effectively controls access to a work protected” by copyright. Put another way, if a work protected by copyright is accessed through a digital lock, such as encryption or a digital authentication handshake, then the steps to get around that process violate sec. 1201. The law has some specific exemptions built in for library research, law enforcement, reverse engineering, and encryption research. But these exemptions are highly limited. As a result, Congress also called upon the Librarian of Congress, in consultation with the Register of Copyright to provide a review every three years to publish a list of additional exemptions.

The fifth such list has just been published: Section 1201 Rulemaking: Fifth Triennial Proceeding to Determine Exemptions to the Prohibition on Circumvention. A copy of the final rule is here.

To be successful, an applicant seeking an exemption had to establish by a preponderance of evidence on a factual record that  “(1) uses affected by the prohibition on circumvention are or are likely to be noninfringing; and (2) as a result of a technological measure controlling access to a copyrighted work, the prohibition is causing, or in the next three years is likely to cause, a substantial adverse impact on those uses.”

In most cases, the exemptions are modification of the petitioner’s actual request. Here is a summary of approved exemptions:

  1. Literary works distributed electronically – assistive technologies: Literary works, distributed electronically, that are protected by technological measures which either prevent the enabling of read-aloud functionality or interfere with screen readers or other applications or assistive technologies for the blind or persons with a disability under 17 U.S.C. 121.
  2. Wireless telephone handsets – software interoperability: Jailbreaking of smartphones – but not tablets – to allow for apps from outside the provider app store.
  3. Wireless telephone handsets – interoperability with alternative networks: phone unlocking to allow a handset to be redeployed on another phone network.
  4. Motion picture excerpts – commentary, criticism, and educational uses: circumventing the DVD Content Scrambling System for the traditional fair use purposes of comment and criticism where “where circumvention is undertaken solely in order to make use of short portions of the motion pictures for the purpose of criticism or comment in the following instances: (i) in noncommercial videos; (ii) in documentary films; (iii) in nonfiction multimedia ebooks offering film analysis; and (iv) for educational purposes in film studies or other courses requiring close analysis of film and media excerpts, by college and university faculty, college and university students, and kindergarten through twelfth grade educators.” The exemption for motion picture capture makes fairly clear that screen capture is not a circumvention prohibited by the statute. The Register also supported the exemption because “[d]espite the commercial aspect of uses by documentary filmmakers and multimedia ebook authors, … when a short excerpt of a motion picture is used for purposes of criticism and comment, even in a commercial context, it may well be a productive use that serves the essential function of fair use as a free speech safeguard.”
  5. Motion pictures and other audiovisual works – captioning and descriptive audio: permits the circumvention of motion pictures and other audiovisual works contained on DVDs or delivered through online services to facilitate research and development of players capable of rendering captions and descriptive audio for persons who are blind, visually impaired, deaf, or hard of hearing.

In addition to this list, the report specifically identified a number of categories of works that did not earn an exemption.

Works in the public domain

Of greatest note is the ongoing refusal to provide an exemption to circumvent a digital protection measure to obtain a work in the public domain. The Register correctly notes that it is not a violation of section 1201 to circumvent a technological protection measure unless there is a copyright work being sought. Therefore no exemption is required.

This is more than parsing language. To create an exemption would suggest an expansion of section 1201 that is unwarranted. As a result, the report that the exemption is not needed provides ample protection to the public.

Space-shifting for DVDs

The other significant rejection was the space-shifting of DVD content to devices without DVD players such as iPads and other tablets. The U.S. has been behind Europe in providing that non-physical versions of movies are generally offered in streaming mode rather than download format. The ability to acquire a second format of the same content is also generally sold at a premium price. An exemption to section 1201 would have put significant pressure on the motion picture industry regarding this transition. It is likely that this will become of greater economic and legal importance by the next rule-making.

Jailbreaking Limited to Phones – No Tablets, Video-Game Consoles or Computers

The report also rejected the desire to permit video game console interoperability. Much like the rejection of tablet jailbreaking, the report refused to exempt console jailbreaking so that lawful third-party games could be used on a particular platform. In both instances, the Register rejected the evidentiary record on the matter. There is likely little evidence to be developed because the practice may be quite common and the benefits of enforcement are too limited.

The report similarly rejected a desired exemption for jailbreaking computers to allow installation of unauthorized operating systems. This appears to fail for the reasons stated in the other jailbreaking proposals. In contrast to the smartphone app stores, the Register takes the position that the other categories of interoperability limitation have not developed sufficient economic concerns to merit an exemption.

Taken together, the rule-making continues to reflect a very conservative, incremental approach to the development of new technology and the appropriateness of anti-circumvention self-help. The Register has made great strides regarding fair use in the educational and documentary filmmaking environments but was probably overly conservative on iPads and tablet computers.

Conclusion

As a whole, the report is thoughtful and predictable. The process restarts with each triennial review.

In each rulemaking proceeding, the Register and Librarian review the proposed classes de novo. The fact that a class previously has been designated creates no presumption that redesignation is appropriate. While in some cases earlier legal analysis by the Register may be relevant to analyzing a proposed exemption, the proponent of a class must still make a persuasive factual showing with respect to the three-year period currently under consideration. When a class has been previously designated, however, evidence relating to the costs, benefits, and marketplace effects ensuing from the earlier designation may be relevant in assessing whether a similar class should be designated for the subsequent period.

As the Register describes the process, it becomes clear how important the evidentiary record and the economic significance of the particular issue must be. Unless Congress has itself shown a preference for a class of users, such as persons with disabilities, the exemptions are limited to very large classes of users.

Of course, if you did not get what you wanted, start preparing your petition for rule-making VI – coming in just two years.

[1] Known as the DMCA Takedown Provisions, section 512 provide ISPs immunity from copyright liability if the ISP provides an effective method of accepting copyright infringement notice allegations and responds to those notices in a timely manner. Though highly criticized by some organizations, these provisions do not have a triennial review process.

COPPA Rule Supplemental Comments Extended to Sept. 24th

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In an earlier post, I discussed the significance of proposed changes to the Children’s Online Privacy Protection Rule (COPPA Rule) recommended by the FTC. The FTC has extended the comment period regarding the revisions to the COPPA Rule until September 24, 2012.

The COPPA Rule is designed to protect children under 13 from unwanted privacy intrusion by providing parents control over what information websites and online services may collect from these children.

The revised rule expands the websites covered by the COPPA Rule, makes clear that targeted or behavioral advertising geared at protected minors is covered and expanded the definition of personal information to include persistent identifiers.

Some comments have already been filed. They can be read online.

According to the FTC, the extension was “in response to requests from several organizations.” The FTC now anticipates that “public comments on the Supplemental Notice of Proposed Rulemaking will now be accepted until September 24, 2012.”

Significant revisions to Children’s Online Privacy Protection Rule triggers supplement review

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In 1998 Congress responded to the growing demand for protection from invasions of privacy and the potential for marketers or predators to target young children by passing the Children’s Online Privacy Protection Act (COPPA). The Children’s Online Privacy Protection Rule (16 CFR part 312) provides the rules governing the implantation of the law.

As described in the Federal Register, the COPPA Rule include three key features:

Among other things, the Rule requires that operators provide notice to parents and obtain verifiable parental consent prior to collecting, using, or disclosing personal information from children under 13 years of age. The Rule also requires operators to keep secure the information they collect from children and prohibits them from conditioning children’s participation in activities on the collection of more personal information than is reasonably necessary to participate in such activities. The Rule contains a ‘‘safe harbor’’ provision enabling industry groups or others to submit to the Commission for approval self-regulatory guidelines that would implement the Rule’s protections.

In April 2010 the FTC began a process to update the Rules. A notice was sent out in September 2011, generating 350 comments regarding the proposed changes. After receiving the comments and reviewing its own proposal, the FTC substantially changed the proposed update to the Rule. As a result, the FTC has issues a Supplemental Notice of Proposed Rulemaking under which comments will be accepted until September 10, 2012.

Instructions for submitting comments are found in the Notice. Comments can be submitted electronically by clicking here.

The FTC explains the changes as follows:

The proposed modifications to the definitions of “operator” and “website or online service directed to children” would allocate and clarify the responsibilities under COPPA when third parties such as advertising networks or downloadable software kits (“plug-ins”) collect personal information from users through child-directed websites or services. The Commission proposes to state within the definition of “operator” that personal information is “collected or maintained on behalf of” an operator where it is collected in the interest of, as a representative of, or for the benefit of, the operator. This change would make clear that an operator of a child-directed site or service that chooses to integrate the services of others that collect personal information from its visitors should itself be considered a covered “operator” under the Rule.

The Commission also proposes to modify the definition of “website or online service directed to children” to:

  1. Clarify that a plug-in or ad network is covered by the Rule when it knows or has reason to know that it is collecting personal information through a child-directed website or online service;
  2. Address the reality that some websites that contain child-oriented content are appealing to both young children and others, including parents. Under the current Rule, these sites must treat all visitors as under 13 years of age. The proposed definition would allow these mixed audience websites to age-screen all visitors in order to provide COPPA’s protections only to users under age 13; and,
  3. Clarify that those child-directed sites or services that knowingly target children under 13 as their primary audience or whose overall content is likely to attract children under age 13 as their primary audience must still treat all users as children.

Finally, the Commission proposes to modify the Rule’s definition of “personal information” to make clear that a persistent identifier will be considered personal information where it can be used to recognize a user over time, or across different sites or services, where it is used for purposes other than support for internal operations. In connection with this change, the Commission proposes to modify the definition of “support for internal operations” in order to explicitly state that activities such as: site maintenance and analysis, performing network communications, use of persistent identifiers for authenticating users, maintaining user preferences, serving contextual advertisements, and protecting against fraud and theft will not be considered collection of “personal information” as long as the information collected is not used or disclosed to contact a specific individual, including through the use of behaviorally-targeted advertising, or for any other purpose.

Taken together, these changes attempt to deal with the increasing use of cross-platform sign-ins and authentication. They do not, however, deal directly with social media or other websites that have no provisions for compliance with the Rule but instead encourage users under the age of 13 to mis-identify themselves to the benefit of the website operator.

As the Washtington Post noted, “vague language … could allow companies supplying online ads — or even Facebook and Twitter which sometimes appear as little icons on Web sites — to avoid the parental consent process.”

Still, the update addresses at least some of the important changes to the structure of internet communications and the importance of mobile apps as a platform for communications.

September 10th is coming fast. Public comments will be critical in effectively shaping the update to the Rule.

Ethics in Informatics – Assessing ABA’s Ethics 20/20 Commission

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May 4, 2012 the NKU Chase Law & Informatics Institute presents an ethics program focusing on the proposed changes to the ABA Model Rules of Professional Responsibility and similar changes to SEC Guidance for disclosure of cybersecurity risk. Dean Dennis Honabach and Professor Jon Garon will lead the conversation.

In 2009, The American Bar Association created the Ethics 20/20 Commission (“Commission”) to “perform a thorough review of the ABA Model Rules of Professional Conduct [(“MRPC”)] and the U.S. system of lawyer regulation in the context of advances in technology and global legal practice developments.”[1] The Commission held hearings and developed draft statements regarding a number of topics, including the effect of technology on a lawyer’s duty of confidentiality and client development.[2]  Having completed its review on several key proposals, they will be brought to the ABA for approval in August 2012:

The ABA Commission on Ethics 20/20 is pleased to release for comment by April 2, 2012, along with a Cover Memo from Co-Chairs Jamie S. Gorelick and Michael Traynor, final revised drafts of Commission Proposals scheduled to go to the ABA House of Delegates in August 2012.  These six revised draft proposals cover the subjects of Technology (Confidentiality), Technology (Client Development), Outsourcing, and Uniformity/Mobility (including Model Rule 5.5 and Practice Pending Admission), Admission by Motion, and Model Rule 1.6 (Duty of Confidentiality).

In addition to the materials provided by the ABA, we have created a Summary Analysis as well as a CLE Powerpoint presentation.

To summarize the program:

The practice of law has largely gone digital in the past decade. Remote access to one’s office, reliance on smart phones to share data, email and social media to communicate with clients, and other emerging technologies to conduct overseas cloud-based outsourcing or operate virtual law offices have transformed the mechanics of practicing law.

The American Bar Association’s Commission on Ethics 20/20 is examining technology’s impact on the legal profession. In proposals recommended for adoption this year, the Commission proposes adoption of a new Rule 1.6(c) which would require that a “lawyer shall make reasonable efforts to prevent the unintended disclosure of, or unauthorized access to, information relating to the representation of a client.” While this duty has existed under the prior rules, the modifications make clear that this affirmative duty extends to data privacy, security and reliability.

These proposals also address issues of screening electronic information accessible to a law firm assure that confidential information known by a personally disqualified lawyer remains protected from inappropriate access by other attorneys; an affirmative duty to “keep abreast of changes in the law and its practice, including the benefits and risks associated with technology;” and many others.

Not to be outdone, the Corporate Finance Division of the Securities and Exchange Commission has taken steps of its own to require greater awareness, disclosure and reporting of issues relating to technological knowledge held by a company – including its lawyers. The guidance identifies that “a number of disclosure requirements may impose an obligation on registrants to disclose such risks and incidents. In addition, material information regarding cybersecurity risks and cyber incidents is required to be disclosed when necessary in order to make other required disclosures, in light of the circumstances under which they are made, not misleading.” Lawyers drafting these disclosures – and lawyers dealing with the risk assessment for their clients – as well as regarding their own practices – have an increasingly external standard of care and responsibility to meet the cyber-risks inherent in the modern digital practice of law.

While it is likely that many of the revised Rules of Professional will be adopted, the changes primarily codify the existing duty to maintain a lawyer’s ongoing duty to remain competent. These materials are intended to assist with that effort by providing an update to the ethical rules and the technologies at the heart of these changes.

The Commission has distributed its recommendations and solicited final comments through April 2, 2012. Final hearings were held April 13-14, 2012 and the Commission will be releasing the final versions of these proposals for approval at the August 2012 ABA Annual Meeting.

Blown to Bits – Britannica no longer in Print

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Encyclopaedia Britannica, which was first published in Scotland in 1768 will no longer be in print. The paid, online version will continue, as will the iPad and iPhone apps. The encyclopedia became a Chicago-based U.S. company in 1902 and is presently owned by Swiss financier Jacob Safra. For generations of adults, the Encyclopaedia Britannica part of growing up. It was sold door-to-door for most of the twentieth century to families on the promise of a brighter future, lit by the compendium of knowledge necessary for the modern age.

In their pioneering work on disintermediation, Boston Consulting Group members Philip Evans and Thomas S. Wurster highlighted the “near-demise” of Encyclopaedia Britannica as an example of “the new economics of information will precipitate changes in the structure of entire industries and in the way companies compete.” The Harvard Business Review article in 1997 received a 1997 McKinsey Award and their 1999 book, Blown to Bits, captured the transformation of media at its economic core, anticipating the new business models that supported Amazon.com, Apple and Google.

Britannica was not caught entire flat-footed by the information age, but as noted in works on disruptive innovation, being a market leader sometimes makes it difficult to respond. Britannica created its first digital collection in 1981. Although it had its own multimedia CD by 1989, its sales were eclipsed by Microsoft Encarta when it launch in 1993. (Ironically, Microsoft had initial sought to work with Britannica but was rebuffed.) Microsoft essentially gave Encarta away for free to help justify the price of the personal computer, making the PC and disk close in price to the cost of just the home set of Britannica. The strategy work, helping to fuel the growth of the PC industry.

In 2001, along came Wikipedia, a crowd-sourced free collaborative encyclopedia which has come to exemplify the collaborative movement for an always-networked age. Britannica decided that it could not compete with the free business model. Microsoft ended the CD run of Encarta in 2009.

The Britannica sales strategy could never justify pricing and marketing the CD properly because it created too much damage to the print product. Although the accuracy comparisons continue between Wikipedia and Encyclopaedia Britannica, studies tend to find them comparable or Britannica to have only slightly fewer errors.

“At Encyclopaedia Britannica we believe that the announcement that we will no longer print the 32-volume encyclopedia is of great significance, not for what it says about our past, but for what it projects about our vibrant present and future as a digital provider of general knowledge and instructional services,” posted Jorge Cauz, president of Encyclopaedia Britannica.

By the end, the print edition accounted for less than one percent of revenue. Subscriptions represent 15 percent, which academic sales represent the rest. The books available were actually printed in 2010. 4,000 copies of the 32-volume set remain available.

The end to this chapter of Britannica serves as an important marker to this chapter in the history of the Information Age.