Tuesday, September 23, 2014

The Price of New gTLDs

Last September 17th, the Internet Corporation for Assigned Names and Numbers (ICANN) held an auction for 3 new generic top level domains (gTLDs); namely .BUY, .TECH, and .VIP.

The results of the auction are as follows:
  • .buy was won by Amazon-EU S.a.r.l for $4,588,888, beating out 3 other applicants.
  • .tech was won by Dot Tech LLC for $6,760,000, beating out 5 other applicants and
  • .vip was won by Top Level Domain Holdings for $3,000,888, beating out 4 other applicants.
There are no details on what Amazon plans to do with the .buy gTLD yet, but they can enforce strict requirements for new registrants if they want, such as restricting it for use by online merchants or web stores.

Currently, there are many active sponsored TLDs that are strictly regulated. For instance, you won’t be able to get a “.gov” address unless you’re going to use it for a site that will represent a U.S. government entity at the federal, state, or local levels. You can’t get a “.aero” TLD either unless you’re going to use it on a site related to the air-transport industry.

Many gTLDs that are “restricted open” tend to belong to highly regulated industries such as .pharma (pharmaceutical industry) and .bank (banking industry, apparently launching in 2015).

The very fact that there was an auction explains why the bids reached the current numbers. ICANN auctions are usually considered as a last resort – even by ICANN itself – in case the group of applicants weren't able to resolve the matter through community priority evaluation, direct negotiation, or a private auction not affiliated with ICANN. The auction indicates the parties were not able to reach a private arrangement.

Other auctions are scheduled on a monthly basis until early 2015. ICANN, a non-profit organization, has not yet provided details on where the proceeds will go. President of ICANN’s global domains division Akram Atallah has so far stated that the proceeds will be separated and reserved until the board comes up with a plan for the appropriate use of the funds through consultation with the community.

Risks in 100% technology transfers in defence technology: Saab’s Jas-39 Gripens to Indonesia and submarines to Australia

Swedish aerospace company Saab has recently begun a marketing campaign designed to promote their Jas-39 Gripen to South East Asian countries, with an eye towards Indonesia. The aircraft is already operational in Thailand, butSaab is pushing hard to supply the TNI-AU (Tentara Nasional Indonesia Angkatan Udara) with 44 Gripens as a replacement for their now-obsolete Northrop F-5E Tiger IIs (which they are planning to replace before the end of the decade).

The Jas-39 Gripen (Griffin) is a light single-engine multirole fighter aircraft that served as an upgrade to the 35 Draken and 37 Viggen, both of which were used effectively by the Swedish Air Force. The Gripen's biggest selling point is that it’s a small aircraft yet the payload it carries is relatively large compared to its size. It is said that the aircraft matches the performance of an F-16, but has a considerably lower operating cost.

Gripen 3

Saab is even offering “100% technology transfer” as part of their bid. (The industrial cooperation offer is the same one that Saab offered to Brazil and India.)

That is a departure from how high technology manufacturers normally deal with their intellectual property. It opens the door to Indonesia learning Saab’s proprietary trade secrets and sets up Indonesia not to need Saab for maintenance with its ongoing revenue stream beyond the sale. The offer reminds me of concerns about Ford Motor Company’s sale of Volvo to Chinese car firm Geely in 2010. Why?

Tuesday, September 16, 2014

Does a “seat” limitation in a software license mean a specific machine or any number of machines?

This dispute is one to watch: it is ongoing and hopefully leads to a decision on a perennial issue that irritates software vendors.

In June 1999, the Commonwealth Department of Defence and software vendor Attachmate Australasia Pty Ltd signed an agreement by which the Department of Defence had the rights to use Attachmate’s Extra! IBM 3270 terminal emulation software on 8000 machines. The licence was under an automatic renewal under the same terms, but during an audit in October of 2009, Attachmate found that their software was used in more than 8000 machines.

As a result of this, Attachmate filed a copyright infringement complaint at the Copyright Tribunal. Defence argued that it could use the software without a seat limitation, provided that it did not do so on more than 8,000 machine at once. Defence also argued delay and acquiescence, citing that Attachmate already knew what was going on from a very early date yet did nothing.

The Commonwealth also sought additional information from Attachmate pertaining to licensing and copyright compliance revenue received by the company since 1999. The allegations is that Attachmate incentivises its license compliance team, which encourages those personnel to ignore breaches of the terms of the license. The Commonwealth was successful in their application for further discovery, having managed to obtain an order that requires Attachmate to file an affidavit explaining matters related to the allegations that their incentive structure encourages unfair practices by the company’s license compliance team.

I was involved in a similar matter in Racing & Wagering Western Australia v Software AG (Australia) Pty Ltd [2008] FCA 1332, in which a software vendor argued (unsuccessfully) that a disaster recovery site which mirrored software was a second use of the software and therefore attracted a second license fee (in this case, totaling AUD 3 million). These two matters underscore the need to ensure software procurement documents have a high level of precision in order to avoid ambiguities around how the software is used in technical contexts.

Monday, September 15, 2014

ALRC Releases New Report on Serious Invasions of Privacy in the Digital Era

In June 2013, then-Australian Federal Attorney-General Mark Dreyfus tasked the Australian Law Reform Commission (ALRC) to draft recommendations on how legislation can be tailored for the digital era and the serious invasions of privacy that seem to now be a constant source for tabloid gossip.

This was no surprise. The increased use of Internet capable portable devices like smartphones and tablets, the widespread use of cloud services to store private data, companies’ use of geolocation to custom-tailor delivery of content based on an internet user’s location, and, significantly, the United Kingdom’s Leveson Inquiry into “the culture, practices and ethics of the [British] press” had drawn global public attention to the relative ease in which privacy could be invaded through technological means.

The ALRC’s final report has just been published. Entitled “Serious Invasions of Privacy in the Digital Era,” the report contains recommendations for a new tort for intentional and/or reckless invasions of an individual’s privacy. This is a departure from the established Australian position made clear in the 1993 decision of Cruise v Southdown Press. In that case, Tom Cruise and his then wife Nicole Kidman sought to stop publication of images of their newly adopted child taken on board a boat in Sydney Harbour from a distance using a telescopic camera. The Court found that this did not give rise to a cause of action under Australian law, although the Court expressed sympathy for the plaintiffs. Other Australian cases have also rejected a right of privacy. (A 2003 Queensland District Court case, Grosse v Purvis, which laid out rules for a tort of privacy, does not seem to have been followed by any other court since.)

Commissioner in Charge Barbara McDonald has stressed that even though effort has been made to make the tort impartial to technology (as it is the act that is considered wrongful and not the means), the technological medium is important because its use will decide whether an intrusion was made: invasion of privacy would not have been possible if only using a person’s “own sight and hearing.”

The report also recommends conducting a public interest test, as this will give the court means to weigh in on whether the collection of private data is covered by freedom of expression, media, open justice, or a matter of national security. The onus will be on the defendant to prove that the act was in the public interest.