Apple Music versus Spotify

Apple Music versus Spotify

Apple is perhaps one of the most popular and successful companies in the world right now. However, this may come at a price. Several months ago we heard about Apple versus Samsung. After the San Bernadino shooting, we heard about Apple taking on the Federal Government. Now, there is something else Apple can add its its list, Apple versus Spotify. Spotify, the music streaming service, says Apple is making it harder for the company to compete by blocking a new version of its iPhone app. Apple cited “business model rules” when rejecting Spotify’s app and said they would approve it if Spotify agreed to use Apple’s billing system. Spotify claims the real reason Apple is not allowing their app to be accessible for users it because they are attempting to promote Apple Music, which launched June 2015 and has not been too successful. They believe Apple is using the App Store as a weapon to harm its competitors.

Spotify is not alone in claiming that Apple’s subscription policies punish third-party music services that use Apple’s platform. Many other music streaming services have complained about the same thing. Apple’s comment about the billing system may also be an attempt for the company to make more money. Apple charges a monthly billing fee of up to 30% for those who use its billing system. These policies were introduced in 2011 and after much hesitation, most publishers agreed to them. If Apple does not change its App store policies, Spotify has no real market to go to in order to sell to iPhone users. Having only Android users may not be enough for the company to thrive. Spotify, possibly knowing that they would have problems with Apple in the future, started asking users to visit their website to get a three months of service for $0.99 in Fall 2015. In June 2016, Spotify revived its offer for new users. Although Spotify did not promote this offer, they turned off the App store billing option. This is what really started the dispute.

Spotify published the letter it wrote for the public to see and even handed it out to members of Congress. Spotify is powerful voice in the streaming media market. In June 2016, Apple Music had 15 million paid subscribers, while Spotify has 30 million. This may be one reason for Apple to take a step back and consider what they are requiring of Spotify. Both Apple and the music streaming service declined to comment on the debate over the App store billing option. We look forward to seeing how this debate unfolds.

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Source referenced: Recode

The Landmark Case of Riley v. California

The Landmark Case of Riley v. California

This Supreme Court case from 2014 brought the Fourth Amendment into the digital age. David Leon Riley belonged to a gang in San Diego, California. In August of 2009, Riley and other gang members opened fire on a rival gang member while driving past him. Everyone fled in Riley’s car. A few weeks later, Riley was pulled over for an expired license registration tag in a different vehicle. Riley’s license turned out to be suspended and his car was going to have to be impounded. According to police policy, a car must be searched for all of its inventory to protect against the police department from liability claims  in the future. During the search, the police located two guns and arrested Riley for possession of firearms. The police also confiscated Riley’s phone and a detective analyzed his pictures and videos. He found that Riley was a gang member and was tied to the shooting earlier that month. Riley was charged with shooting at an occupied vehicle, attempted murder, and assault with a semi-automatic firearm. As the case progressed through different courts, the issue became whether or not the information/evidence gathered through Riley’s phone was admissible. The California Courts said it was okay to admit evidence from Riley’s phone. The Supreme Court differed and their decision made this case one of America’s landmark cases.

The ruling now requires that authorities obtain a warrant before searching a seized cell phone after an arrest. A warrantless cell phone search violates the Fourth Amendment right to privacy. Although this ruling may not seem like anything extraordinary to the average person, it hints at the fact that the Court is ready to engage with challenges it will face in the digital age ahead. This ruling also signals that the Court is concerned with the privacy of its citizens in this age of technology. We may see the court taking a pro-privacy approach in the future as well.

The Court identified many reasons for affording cell phones greater Fourth Amendment protections than physical records. Chief Justice Roberts explained these reasons:

  1. Cell phones have an immense storage capacity and can store millions of texts, pictures, and videos.
  2. Cell phones are able to aggregate many distinct types of information in one place.
  3. Data on cell phones usually includes “private information never found a home in any form.”
  4. Cell phones can serve as a portal to private records stored on remote servers. One click on a phone can give someone access to data stored elsewhere. This refers to cloud computing.

Not only did the Justices focus on the quantity of data stored in cell phones, they also looked at the quality of personal information. The Fourth Amendment was put in place by the Founding Father’s in order to maintain the privacy of the colonists. When British officers started rummaging through the home of people looking for criminal activity, the Founding Fathers knew there was a problem. This Supreme Court decision shows the privacy of Americans still needs to be protected. Many of the statements Chief Justice Roberts made along with the unanimous court showed that the NSA’s bulk record collection program may not be the best route for increased national security either.

Chief Roberts concluded the unanimous court decision by saying something that will definitively go down in the history books, “The fact that technology now allows an individual to carry such information in his hand does not make the information any less worthy of the protection for which the Founders fought.” We hope this in-depth analysis of Riley has helped our readers better understand their rights.

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Sources referenced:

  1. SCOTUS Blog
  2. Oyez
Insurer Found Liable for Settlement Negotiated by Insured

Insurer Found Liable for Settlement Negotiated by Insured

San Diego Apartment Brokers prohibited riding bikes in the complex’s parking lot and other common areas after receiving complaints from several residents. Despite the new changes in policy, Juse Urista’s child continued to ride his bicycle in common areas. Brokers noticed that Urista was not complying with the new policy and served him an eviction notice. Urista sued Brokers claiming the eviction was wrongful and discriminatory. He also claimed negligence and violations of the Federal Fair Housing Act. Urista said the eviction also caused him depression and bodily injury.

Brokers received the claim and tendered it to its general liability insurer California Capital Insurance Company (CCIC). Brokers had not yet evicted Urista from his apartment at this point. CCIC refused to defend Brokers because Urista had not been evicted. Brokers’ attorney said CCIC could not refuse to defend his client without a valid defense. CCIC reviewed the case once again, but concluded that they did not have the authority to defend Brokers under the policy. They provided four reasons for not defending Broker’s action.

  1. Urista did not claim a separate physical injury
  2. Broker’s actions leading to the incident were decisions, not accidents
  3. A wrongful eviction had not taken place
  4. Even though Urista’s family had moved out, Urista’s continued residence precluded coverage

After CCIC refused to defend Brokers, Brokers ended up settling the case with Urista for $20,000. Then, Brokers sued CCIC for breach of contract and bad faith. The jury found in Brokers’ favor and awarded them $30,552. CCIC appealed the verdict by arguing that they never acted in bad faith because there was no genuine coverage dispute. However, the court rejected CCIC’s argument by saying Broker’s wrongful evictions claim clearly fell under potentially covered lawsuits.CCIC was being unreasonable by not defending Brokers. CCIC also ignored many of the other claims made by Brokers. CCIC’s refusal to defend Brokers was not in good faith. This case showed that an insurer can be held liable for settlement costs of its insured when the insurer refused to fends it insured in bad faith.

Sources referenced:

  1. JD Supra
  2. San Diego Apartment Brokers, Inc. v. California Capital Ins. Co., No. D062945, 2014 WL 1613449 (Cal. Ct. App. Apr. 22, 2014).
4th Circuit: No Warrant Needed to Track Cellphone Location

4th Circuit: No Warrant Needed to Track Cellphone Location

A three-judge panel in the 4th Circuit Court had previously ruled that police officers needed a warrant to track location services and access information on a subject’s cellphone. The court was split on this decision, but the three-judge panel prevailed in limiting law enforcement authority. On May 30, the en banc 4th Circuit Court reversed its own decision and said no warrant is required for law enforcement officials to track location information for a subject’s cellphone. The court said all that would be required would be showing the court that the cell phone is relevant to the subject’s case. As long as the cell phone is relevant, law enforcement authorities will be able to get information about the cell towers through which the calls were made and received.

The US Supreme Court mandated precedent saying that information voluntarily provided to third parties, such as cell phone service providers, lacks requisite confidentiality. Therefore, no warrant is needed to access this information. Cellphone location information can be seen as similar to hotel bills and credit card statements, which are also not considered confidential. The Supreme Court did mention that this “third-party doctrine” may be modified or eliminated in the future. Congress has the power to require a warrant for cell-site location, but the controlling law does not require a warrant for cellphone location. It has been argued that allowing authorities to gain access to a subject’s cellphone does not violate the Fourth Amendment.

Many attorneys and legal scholars are concerned that this decision by the 4th Circuit gives law enforcement authorities unlimited power to gain access to every American cellphone user without a warrant. Cellphones for many Americans contain intimate information and they may not want the government to see everything they see on their personal devices. Attorney Meghan Skelton intends to appeal the 4th Circuit decision to the Supreme Court. As an attorney for the defendants in the Baltimore case the 4th Circuit ruled on, Skelton believes her appeal to the highest court in the nation will better protect Americans. Although Skelton is optimistic, it is unlikely the Supreme Court will even hear the case. All of the circuit courts in the nation now agree that cell tower information is not private and it is very unlikely the Supreme Court will disagree with them.

We have previously blogged about a Supreme Court decision where they found that GPS tracking does count as a search and therefore must require a warrant. In that case, a unanimous decision said that if the government attaches anything to your body or your property, it counts as a search. Once again, the Fourth Amendment and advances in technology seem to be contradicting. However, tracking the location of your cellphone is different from attaching something to your body to track you. Perhaps this was the reason the 4th Circuit Court reversed their previous decision and now allows law enforcement officials to get cell tower information without a warrant. While unlikely to succeed, it would be interesting to how an appeal to the Supreme Court would play out.

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Source referenced: ABA Journal

Is Cloud Computing Ethical?

Is Cloud Computing Ethical?

In this age of increased technology, attorneys are turning to “virtual law offices” (VLO) and cloud technologies to maintain office files and information. There have been concerns raised about whether maintaining files online still complies with an attorney’s ethical obligations. Cloud computing is accepted by the Business and Professions Code and the Rules of Professional Conduct, but attorneys may be required to take additional steps to confirm that he or she is fulfilling ethical obligations with the cloud. There are no new or greater duties imposed on VLO, but attorneys are asked to be more cautious when taking this approach.

In a VLO, attorneys are able to communicate with clients through a secure internet portal. The attorney’s website can store information regarding the client’s case. The information on the client matters are password protected and encrypted. The State Bar of California understands the flexibility and convenience of legal services provided through VLO. However, this does not mean a client’s confidentiality could be sacrificed. Every lawyer, they believe, has a duty to “maintain inviolate the confidence, and at every peril to himself or herself, preserve the secrets of his or her client.”

Whether or not an attorney violates his or her duties to confidentiality when using technology will depend on the particular technology being used. Before using an technology in the course of representing a client, an attorney must evaluate:

  1. The level of security attendant to the use of that technology, including considerations of whether reasonable precautions may be taken using it.
  2. The legal ramifications to a third party who intercepts or accesses the electronic information.
  3. The degree of sensitivity of the information.
  4. The possible impact on the client of an inadvertent disclosure of confidential information.
  5. The urgency of the situation.
  6. The client’s instructions and circumstances.

We hope both our clients and other attorneys found this post useful in understanding the changing nature of the legal field. While the State Bar does not impose additional rules or restrictions on VOL, attorneys are asked to be more cautious when using a cloud. The information provided above comes from specific ethical guidelines from California’s State Bar. Opinions by other Bar Associations may vary.

Sources referenced:

  1. State Bar of CA Formal Opinion 2010-179
  2. CA State Bar Formal Opinion 2012-184
Spirit v. Led Zeppelin: “Stairway To Heaven” Infringement Lawsuit

Spirit v. Led Zeppelin: “Stairway To Heaven” Infringement Lawsuit

There were many issues surrounding the Spirit lawsuit against Led Zeppelin and we will try to break down those issues in this post. Spirit claimed that Led Zeppelin infringed on its copyright with the iconic guitar arpeggio opening of “Stairway to Heaven.” Spirit believes their instrumental track “Taurus” is very similar to Led Zeppelin’s track. In order to better understand the case, let us first take a look at the issues that may come forth at trail.

Statute of Limitations

Led Zeppelin released their song about 43 years ago. The US Copyright Act says action must be “commenced within three years after the claim accrued.” This means Spirit would not be able to recover for any alleged infringement during the first 40 years of the song’s release. Recovery of new formats or new releases of the song would also be limited. Since the song has historically performed well, Spirit may still be able to recover a large amount of money. However, Spirit is concerned with more than just money. The band is also seeking an injunction to prohibit a new Led Zeppelin’s album by Jimmy Page.

Copyright Infringement

Many listeners are conflicted on whether Led Zeppelin copied Spirit’s song or whether the two bands just used the same instruments. To determine whether or not actual infringement took place, it is necessary to look at the court’s two-prong test:

  1. Copying of a prior work; and
  2. A substantial similarity to the prior work sufficient to constitute improper appropriation.

(1) Copying

This first element can be proven by either direct or circumstantial evidence. The more access a party had to prior work, the easier it becomes to prove similarity. In this case, proving access will not be a problem because Led Zeppelin and Spirit performed together the day after Christmas 1968 and many times in 1969. Spirit played “Taurus” at many of these concerts and music festivals. Since there is evidence of both access and similarity in this case, it must now be determined whether the second element is met.

(2) Substantial Similarity

In addition to proof of copying, there must also be a substantial similarity to the work. Substantial is defined as “qualitatively or quantitatively” and similarity means “similar in the ears of the ordinary member of the intended audience.” If the case reaches the trial court, both parties will present expert witnesses to show the similarities and dissimilarities between the two songs. Ordinary members of the listening audience may also be called upon to give their opinion.

Possible Affirmative Defenses by Led Zeppelin

  • The chord progression in “Taurus” is not original.
  • The chord progression in “Taurus” is not protectable under copyright law.
  • “Stairway to Heaven” was independently developed by Led Zeppelin without referenced to “Taurus.” Any borrowing from Spirit’s song would be seem as so minor that is it disregarded by the law. This would be “de minimis use.”
  • Since only short portions of “Taurus” were used by Led Zeppelin, the recording could be covered under the “fair use” limitations. However, this may not be the best defenses since copyright owners are entitled to as sales and licenses of their work.

Likely Outcome

If the court and ordinary members of the listening audience see enough similarities in the work to fulfill the two elements of copyright infringement, Led Zeppelin will be held strictly liable. It does not matter whether or not the copying with intentional or accomplished subconsciously.

It is very unlikely this dispute will makes its way deep into the legal system. Led Zeppelin has resolved prior claims of copyright infringement brought by third parties outside of court. In the case, Led Zeppelin is most likely to conclude the dispute with a confidential settlement agreement. The agreement may involve payments to Spirit and writing credit for the song “Stairway to Heaven.” However, Jimmy Page testified on behalf of his band on June 16, 2016. The trial is heating up and may not turn out as previous copyright infringement lawsuits have worked out for Led Zeppelin the past.

Source referenced: Forbes

California’s Commisioned Employee Exemption

California’s Commisioned Employee Exemption

In a 2014 ruling, the California Supreme Court said that employees must be paid premium wages for any overtime worked in pay periods not qualifying for the exemption. This decision significantly impacts employers with commissioned salespeople. After this ruling, employers must be sure their employees receive 1.5 times minimum wage in every bi-monthly paycheck. To better understand the implication of this ruling, let us first take a look at the case that forced the California Supreme Court to split from federal law on commissioned employee exemption compliance.

Peabody v. Time Warner Cable, Inc.

Susan Peabody worked for Time Warner Cable as a commissioned salesperson. She received approximately $9.61 per hour for her 40 hours per week. In addition to her wages, Peabody received her commission wages every other pay period. Time Warner did not pay Peabody overtime as a commissioned employee. If Time Warner did not exclude Peabody from overtime pay, she would have earned at least 1.5 time minimum wage and half of their compensation in commissions.

When Peabody filed a class action suit against Time Warner for not paying her 1.5 times minimum wage in all pay periods, Time Warner responded by saying Peabody’s “periodic commission payments brought her monthly earnings above that threshold.” While the US District Court and 9th Circuit Court of Appeals agreed with Time Warner and granted their summary judgment motion, they asked the CA Supreme Court to review the case.

Very unexpectedly, the CA Supreme Court reversed the federal court’s decision and ruled in favor of Peabody. The Supreme Court found that commissioned employee exemptions depend on each pay period, not monthly wages as Time Warner has calculated. They said each employee must be paid bi-monthly and each bi-monthly pay period must include compensation equal to no less than 1.5 times minimum wage. Federal law allows commissioned employees to be paid monthly and qualify for the exemption based upon monthly compensation, but the California Supreme Court deviated from this.

In light of this ruling, we recommend all employers take a careful look at their commission programs and consider whether their program is in need of modification. Employees must be paid on a bi-monthly basis and the commission pay must be adequately spread to ensure compliance with this decision.

Source referenced: JD Supra