It's not such a happy time over at Sony these days thanks to the bull's-eye on its back.

But why is Sony -- a major player in the worlds of gaming, movies and music -- suddenly in the crosshairs of hackers?

Sony's reputation for aggressively trying to protect its intellectual property rights may provide some clues.

Purdue University security expert Gene Spafford, who testified before Congress about Sony's security problems, said there are plenty of examples. He cited Sony banning users who modded their PlayStations, the infamous case of installing "rootkits" on PCs of users as copy control for CD, and lawsuits it has filed against the likes of George Hotz andJammie Thomas.

Hotz, a hacker known for unlocking the iPhone, riled up Sony when he started a blog to document his progress hacking the PlayStation 3, which was regarded as being a locked and secure system. Thomas got caught up in a music piracy case, accused by the recording industry of sharing songs on the file-sharing site Kazaa.

"The image that has emerged from all this is that Sony is a rapacious corporation with no heart," Spafford said. "Thus, it is not surprising that they might be a target for hackers."

Fast-forward and you have the malicious attack on the PlayStation Network that compromised millions of user accounts and identities. And once word got out that Sony was not doing as good a job on the security side as it should be, the sharks could smell blood in the water.

Sony became snarled in almost constant attacks on all fronts, from phishing sites running on the servers of its Thai website to the most recent breaches by the merry hacksters known as LulzSec.

Here's a quick timeline of the attacks:

*June 2 -- Lulzsec attacks Sonypictures.com, gains access to user information.

*May 24 -- Sony confirms hackers stole 2,000 records from Sony's Canadian site.

*May 23 -- Sony BMG server in Greece hacked, user account info stolen.

*May 19-20 -- $1200 worth of virtual tokens stolen from So-Net, a Sony subsidiary; phishing site found on Thai Sony server.

*May 2 -- Sony acknowledges over 12,000 credit card numbers were stolen during initial PSN attacks.

*April 17 -- PlayStation Network hacked, hackers gain access to personal info of over 77 million users.

Computer security expert and former hacker Gregory Evans said Sony would be well-served to hire ex-hackers instead of IT managers to help secure its networks.

"Anyone can configure a firewall, but (it) does not mean you are a security expert," he said.

By Dan Rowinski

Do you have an embarrassing moment in your past? Did it turn out to be newsworthy? There is a good chance it made it to the Internet and now is forever searchable by Google and the other search engines.

Google is being hit with a "Right To Forget" lawsuit in Spain as the country's Data Protection Agency has ordered the Web giant to take down search links on 90 people. According to The Associated Press, Google is fighting five of those lawsuits in Spain's National Court and in January refused Spain's request on all 90 of the claims.

Almost everybody has something on the Internet that they would rather people not see. For example, I would love if a message board post I did in the band No Doubt's forum when I was a teenager could be stricken from the record. No such luck. Search technology has lowered the bar for obtaining information on people on the Internet. In the Spain suit, the AP gives the example of a plastic surgeon, Hugo Guidotti, where the first search result is an example of his work but the second is of a lawsuit from 1991 accusing him of surgery that went bad (Guidotti was acquitted).

The European Union has introduced legislation to protect Internet users' data online that would also allow for the right to be forgotten, according The Telegraph.

In the EU law, individuals would have to opt-in for companies to use their data. That could mean companies like Google could not use their information in search results unless permission is expressly given. The United States has introduced legislation recently that would follow the EU lead in privacy such as the National Strategy for Trusted Identities in CyberSpace and the Commercial Data Bill Of Rights.

Google has argued that erasing personal search results would compromise the integrity and objectivity of its search results. The point is fair. There are historical influences to be considered when talking about search results.

For instance, a lot of American history scholars use old broadsides, pamphlets, published letters and news articles to decipher and uncover pertinent historical data that helps us better understand our history. In the current era of technology the equivalent of such data are searchable news records, blog posts, tweets and more. In many ways, Google is the first line of historical preservation.

On the other hand, search can be skewed and manipulated by parties with an agenda. For instance, during the recent 2010 mid-term elections political activists used SEO tactics to raise the search rankings of embarrassing articles of political opponents. Businesses have used similar tactics when a competitor makes a gaffe, a sort of proxy war marketing technique. Granted, politicians and businesses are not private citizens but the same power for abuse still exists.

Via:mashable

Facebook’s tangled founding story is about to get more complicated, thanks to a man named Paul Ceglia.

Anyone who has seen The Social Network knows about Eduardo Saverin and the Winklevoss twins. Facebook co-founder Saverin was forced out, sued Facebook and settled for a 5% stake of the company. Tyler and Cameron Winklevoss contracted Zuckerberg to build a Harvard-based social network for them, but when Mark Zuckerberg launched “TheFacebook.com” instead, the twins sued. That case was also settled, though the twins have been trying hard to rescind it in court.

But there’s more to Facebook’s legacy of lawsuits than the movie mentioned. Last year, Ceglia claimed he and Zuckerberg signed a contract giving Ceglia 50% of Facebook. Most legal experts dismissed Ceglia’s lawsuit as outlandish, but it has resurfaced this week with evidence that promises to make this a messy affair.

So what exactly happened at Harvard in 2003 and 2004? Why have so many people claimed an ownership stake in Facebook? Who is Paul Ceglia, and does he actually have a case?

To answer that, we need to explore Facebook’s complicated ownership history.

Eduardo Saverin

Until 2009 Saverin wasn’t even acknowledged as a co-founder. It took a lawsuit and a settlement to make that happen.

Both sides dispute the details of the case, but here are the basics. In 2003, Zuckerberg (then a sophomore at Harvard) approached Saverin (a junior) about TheFacebook.com. He asked Saverin to become his business partner and to put down $15,000 for the servers needed to run the site. In return, he’d get about 30% of the company.

When Facebook took off in 2004, Zuckerberg and another co-founder, Dustin Moskovitz, decided that they had to move to Silicon Valley. They got a place in Palo Alto and started coding. Saverin had an internship with Lehman Brothers in New York. According to Business Insider, Zuckerberg asked Saverin to take care of the paperwork, to get funding and to figure out a way to make money.

But Saverin was slow to make decisions and slow to sign off on the paperwork. Eventually, his role was taken by entrepreneur Sean Parker, who quickly secured a $500,000 investment by PayPal co-founder Peter Thiel. Zuckerberg was able to reduce Saverin’s stake in the company from 30% to less than 10% in short order. His equity was diluted from that point onward.

As detailed in The Social Network, Saverin eventually sued Facebook. The matter was soon settled. Saverin got about 5% of the company (worth more than $2.5 billion today) and signed a non-disclosure that has essentially kept him quiet since.

Tyler and Cameron Winklevoss

Zuckerberg just can’t seem to get rid of the Winklevoss twins.

In 2003, the Winklevosses and their business partner Divya Narendra approached Zuckerberg about their new project, HarvardConnection, a social networking site for Harvard students. Zuckerberg allegedly entered into a verbal contract with the Winklevosses, promising to help build the site in return for equity.

Meanwhile, Zuckerberg was deep in the development of TheFacebook.com. Between November and 2003 and February 2004, he communicated with the twins through a series of 52 emails and several in-person meetings. Zuckerberg launched TheFacebook.com in February 2004 and, two days later, the Winklevosses learned of the site in The Harvard Crimson. A few days later, the Winklevosses and Narendra sent Zuckerberg a cease-and-desist letter.

While HarvardConnection eventually launched a few months later, as ConnectU, it failed to gain traction. ConnectU’s founders filed a lawsuit against Zuckerberg in 2004, prompting a legal battle that dragged out for years. In February 2008, the two sides finally settled. Facebook acquired ConnectU’s assets in exchange for 1,253,326 shares (worth around $180 million today) and $20 million in cash.

That wasn’t the end, however. In March 2008, the ConnectU founders filed another lawsuit, attempting to rescind the settlement. They argued that Facebook misled them over the true value of the stock. The twins also sued their law firm, Quinn Emanuel, for malpractice. That’s not all: Wayne Chang, founder of a file-sharing service called i2hub that had partnered with ConnectU, sued the twins for 50% of the Facebook settlement.

It’s a confusing tangle of lawsuits, but the bottom line is that the Winklevoss twins settled their case with Facebook years ago. Their recent attempts to change that settlement are falling flat. A U.S. judge ruled this week that the settlement still stands. The twins, of course, are appealing that ruling.

What About Paul Ceglia?

Now for the question that has been causing headlines this week: did Zuckerberg potentially sell a 50% stake in Facebook for $1,000?

That’s the notion that Ceglia, owner of a wood pellet fuel company, put forth in a lawsuit filed last July. In the suit, he claimed that he and Zuckerberg had an agreement in which Ceglia would receive 50% of Facebook for a $1,000 investment, in addition to 1% of the company each day until a site called “the face book” was completed. Since the project was allegedly 34 days late, Ceglia says he was entitled to 84% of the company.

The story sounded outrageous on the surface, especially as Ceglia had waited a full six years before speaking up. Furthermore, Ceglia is a a convicted felon.

This week, however, the lawsuit resurfaced. Ceglia refiled his case with prominent law firm DLA Piper and said he has produced email conversations that support his claims. The lawsuit now claims that Ceglia offered Zuckerberg $1,000 to work on a project called StreetFax, as well as $1,000 to fund “the face book.” The suit claims the two met in Boston and signed a contract with a witness present.

Allegedly, Zuckerberg and Ceglia discussed details such as the site’s domain name and business model. The suit says Zuckerberg mentioned the Winklevoss twins in November 2003, telling Ceglia that he had “stalled them for the time being.” Eventually, according to the suit, Zuckerberg told Ceglia he thought that 1% of equity for each day of delay was unfair, and the two agreed to split the project 50/50.

Things allegedly blew up in April 2004, two months after Facebook’s blockbuster launch. Zuckerberg is supposed to have told Ceglia he was thinking of taking the server down and wanted to give Ceglia his money back. Ceglia responded negatively, claiming that Zuckerberg was pulling “criminal stunts.” The DLA Piper lawsuit asks for 50% of Zuckerberg’s stake as compensation.

Facebook insists that the emails and contract are fabricated. In an email to Mashable a Facebook representative said:

“This is a fraudulent lawsuit brought by a convicted felon, and we look forward to defending it in court. From the outset, we’ve said that this scam artist’s claims are ridiculous, and this newest complaint is no better.”

Next Steps

Facebook is seeking to dismiss this case, but the emails — fraudulent or otherwise — may be compelling enough for the case to move into discovery. It’s at this point that Facebook will be able to look at the evidence, including Ceglia’s emails and hard drives. If they can show that there was any tampering with the evidence, the case will be thrown out. But if not, the company may be forced to dish out money for yet another settlement, just to make Ceglia go away. DLA Piper, one of the world’s largest law firms, has agreed to take on the case — which is a sign that this dispute could be stuck in the courts for a long time.

The most closely watched lawsuit in the music industry asks this question: how much should a song on iTunes or another digital music service be worth to the performer?

The artist at the center of the suit is Eminem, but some of the biggest beneficiaries of the case may be thousands of older artists who have not released an album in decades.

Four years ago, the producers who discovered Eminem sued his record label, the Universal Music Group, over the way royalties are computed for digital music, which boils down to whether an individual song sold online should be considered a license or a sale. The difference is far from academic because, as with most artists, Eminem’s contract stipulates that he gets 50 percent of the royalties for a license but only 12 percent for a sale.

“As of now it’s worth $17 million or $20 million, but on a future accounting basis, five or 10 years from now, it could easily be a $40 million to $50 million issue,” said Joel Martin, the manager of F.B.T. Productions in Detroit, which first signed Eminem and continues to collect royalties on his music. (Marshall Mathers himself, who performs as Eminem, was not a party to the suit, although he stands to earn millions from it.)

The suit reached its apparent end last week when the Supreme Court refused to hear an appeal, letting stand a lower court’s decision that digital music should be treated as a license. Lawyers and music executives say that few younger artists are likely to be affected by the decision because since the early 2000s record companies have revised most of their contracts to include digital sales among an artist’s record royalties. Eminem’s first contract was signed in 1995.

Many older artists, however, whose contracts predate digital music and have not been renegotiated, stand to profit significantly from the decision.

“This is life-changing,” said Joyce Moore, the wife of Sam Moore of Sam & Dave, the duo that had hits in the 1960s like “Soul Man.” “If we were being paid a nickel a download, as opposed to 35 cents — that’s a huge amount of money for a guy that is on a fixed income or has to run up and down the road at 75 years old.”

The lawsuit argued that record companies’ arrangements with digital retailers resembled a license more than it did a sale of a CD or record because, among other reasons, the labels furnished the seller with a single master recording that it then duplicated for customers.

“Unlike physical sales, where the record company manufactures each disc and has incremental costs, when they license to iTunes, all they do is turn over one master,” said Richard S. Busch, a lawyer for F.B.T. and Mr. Martin’s company, Em2M. “It’s only fair that the artist should receive 50 percent of the receipts.”

A federal jury ruled in favor of Universal in 2009, but that decision was overturned on appeal last year. The label petitioned to the Supreme Court, which declined to hear the case.

Universal said the implications of the decision were limited.

“The case has always been about one agreement with very unique language,” the company said in a statement. “As it has been made clear during this case, the ruling has no bearing on any other recording agreement and does not create any legal precedent.”

Although current hits get more attention, older music still represents a huge portion of overall music sales, and over time durable hits can rack up significant sales. Last year there were 648.5 million downloads of “catalog” singles in the United States, meaning songs more than 18 months old, compared with 523 million for current tracks, according to Nielsen SoundScan.

Fred Wilhelms, a lawyer in Nashville who specializes in collecting royalties for musicians, said that sales of older music had provided the labels with steady income at low cost.

“The labels make tens of millions of dollars a year from the deep catalog without paying a penny in promotion costs,” said Mr. Wilhelms, who estimates that the Eminem ruling might apply to tens of thousands of artists. “Anybody who ended their recording career before 1978, and probably before 1992, is in the decision,” he added.

Royalty rates vary, but today most acts get 10 to 15 percent of their music’s net sales, minus packaging and other deductions, lawyers say. In the 1970s and before, the rates were often even lower. But for decades, licenses of music — to movies, television or other third parties — gave artists a 50 percent share, without the same deductions, on the principle that a third party was bearing the relevant costs.

Jason M. Schultz, an assistant professor of law at the University of California, Berkeley, who helped write a friend of the court brief on behalf of the Motown Alumni Association — a group that represents Motown acts but is not associated with the label — said that recording contracts made in the early days of digital music reflected the labels’ failure to recognize that technology’s potential.

“The record companies would strike these deals with artists in a way that favored them,” Mr. Schultz said. “But when the digital revolution came around, those contracts ended up favoring artists. The record companies guessed wrong.”

Although sales of digital music around the world now represent 29 percent of record companies’ revenue, according to the International Federation of the Phonographic Industry, the Eminem case, and several others like it, stem from the mid-2000s, when the potential value of digital music was first becoming clear. According to court papers, the Eminem case had its origins in an audit of accounting records that F.B.T. and the rapper conducted in 2005, two years after Apple opened the iTunes store.

In separate cases, the Allman Brothers have sued Universal and Sony BMG Music Entertainment over similar contractual issues. The Sony case, filed in 2006, was expanded to a class-action suit, and earlier this month the parties informed the judge in the case that they had “reached an agreement in principle.” (The Allman Brothers and Cheap Trick, which joined the case, both settled their claims.) The Allmans’ suit against Universal, filed in 2008, is still pending.

For million-selling acts like Eminem and the Allman Brothers, the stakes are high. But plenty of other artists stand to gain from the decision as well.

“For people who had a single hit, who couldn’t afford to chase $100 in owed royalties,” Mr. Wilhelms said, “they are now looking at a couple thousand. It’s worth a couple phone calls and an angry letter or two.”

Via:Techcrunch

Earlier this month, we broke the news that funny blog Lamebook was seeking judicial declaration that the operation and maintenance of its website and the use of the name ‘lamebook’ do not infringe or dilute the trademark rights of Facebook.

In response to the complaint, Facebook deemed it “unfortunate” that Lamebook had turned to litigation after “months of working with Lamebook to amicably resolve what we believe is an improper attempt to build a brand that trades off Facebook’s popularity and fame”.

Unsurprisingly, it only took Facebook a couple more days to file suit against Lamebook.

The lawsuit was filed November 8 in federal court in San Jose, California and follows a letter that the social networking giant’s lawyers sent Lamebook in July, describing their infringement claims. Lamebook claims its site, which was launched by two graphic designers in April 2009, is legally protected by the First Amendment, but Facebook contends that it isn’t because it doesn’t “provide any critique or comment of Facebook itself”.

Lamebook, meanwhile, is actively soliciting donations from visitors for its ‘Legal Fund’:

We really love running Lamebook.

Aside from the laughs, it represents an opportunity to work on an incredibly fun project with our buddies that makes a lot of people happy and still allows us to make rent at the end of the month. So while we’re definitely not getting rich off of this, it still represents our livelihood. Beyond that, it represents a way for us and lots of fans to express ourselves and poke some fun at the world’s most popular social network.

Problem is, Facebook didn’t get the joke. They’ve decided to pick on the little guys: small business owners who seem to be no match for a multi-billion dollar behemoth. But this is one website that’s not going down without a fight.

I really hope Lamebook prevails in this particular case, mainly because I think it’s silly for Facebook to start pretending that they own the rights to anything on the Web that happens to have a name that ends with ‘book’ (see Teachbook and Placebook).

And because I would really, really like my daily Lamebook fix to keep coming.

In what could prove to be a precedent-setting case, the National Labor Relations Board has issued a complaint against a Connecticut company for firing an employee after she posted critical, derogatory comments about her supervisor on Facebook.

The company, ambulance service American Medical Response, says emergency medical technician Dawnmarie Souza was fired because of "multiple, serious complaints about her behavior," not because she took to a social networking site to describe her supervisor in various unflattering terms, among the mildest of which was comparing the supervisor to a psychiatric patient.

The labor board, a federal agency that oversees union elections and investigates claims of unfair labor practices, accuses the company of illegally terminating Souza and denying her access to union representation during an investigatory review.

The labor relations board argues that workers' criticism of their bosses on social networking sites like Facebook is generally "a protected concerted activity."

"You are permitted to talk about terms and conditions with employees or anyone else, it's public because you are protected under the National Labor Act," says Jonathan Kreisberg, the board's regional director in Hartford, Connecticut.

Kreisberg says that in addition to describing her supervisor in unflattering and sometimes vulgar terms on her Facebook page, Souza also wrote about "how the company allows a 17 to be a supervisor." The 17 reference is the company's jargon for a psychiatric patient, Kreisberg says.

The National Labor Act gives workers the right to form unions and it prohibits employers from taking action against employees -- union or non-union -- for discussing working conditions, says Kreisberg. He adds that the case could be "ground-breaking" because it is in the uncharted legal territory of social networking sites on the internet.

"It was Souza's ... own page; she did this on her own time in her own home. This case is different because in this situation it happened online and the company's rules were unlawfully broad," says Kreisberg.

In a statement to CNN, American Medical Response says it believes that the offensive statements made against the co-worker were not activities protected under federal law.

The company "denies the allegations made by the NLRB and believes the facts will show that they are without merit. The employee in question was discharged based on multiple, serious complaints about her behavior," the statement says.

An attorney representing the ambulance company adds, "This is not about Facebook."

"This employee was terminated after the company received complaints on two separate incidents in 2009. All pointed to Souza's rude and discourteous behavior with patients," says attorney Jackson Lewis.

Souza, who was fired last December and who is seeking reinstatement to her job, declined comment to CNN, saying only that granting an interview would "jeopardize her case at this point."

On the issue of assistance from a union representative, the labor board says Souza wanted help from the union representing the company's workers when she wrote up a response to the company.

The company's lawyer says she was not denied union representation. "Before submitting her response, she checked in with her union representative," says Lewis.

A labor board hearing for the case is scheduled for January 25.

Post By:Samuel Axon

Hollywood film studios and record labels aren’t the only people filing lawsuits against illegal downloaders. As of a few weeks ago, porn producers banded together to file lawsuits of their own, but there’s a unique spin: embarrassment.

It’s tough to say whether or not the lawsuits filed by movie studios and record labels against a small number of users have proven effective as a deterrent to piracy, but the added embarrassment of exposing sexual fantasies to friends, family and colleagues might make the method more effective for owners of adult content.

The producers have targeted users who downloaded titles that prominently feature transsexuals and “barely legal” 18-year old girls. Since the lawsuits are on public record, the defendants’ porn-viewing habits would be exposed.

Pink Visual President Allison Vivas told the AFP, “When it comes to private sexual fantasies and fetishes, going public is probably not worth the risk that these torrent and peer-to-peer users are taking.”

The initial barrage of lawsuits began a few weeks ago, and the producers are also targeting YouTube-like streaming video sites (YouPorn and XTube come to mind) that deal in owned content and only remove it after receiving a take-down notice.

There’s a certain irony to the situation. Many of these producers built their careers by distributing their goods through web-based channels that challenged traditional distribution models. Now those technologies have developed to the point that the average user can simply acquire the goods for free.

Apple Inc.'s control over its iPhone and other devices via its iTunes store was undercut Monday by a federal ruling legalizing jailbreaking, or altering the devices to install unapproved software, a practice used now by a small number of customers.

The Library of Congress, which helps oversee copyright law, removed a legal cloud over altering of iPhones, iPads and iPods, to install and run software not purchased from Apple.

Jennifer Granick, civil liberties director at Electronic Freedom Foundation, the digital-rights organization that pushed for the change, said the ruling could open the door for third-party app stores. "Innovators now know that there will be customers for them," she says.

It's unclear how many companies will take advantage of the ruling, which affects a law called the Digital Millennium Copyright Act. By one estimate just 8% of iPhones have been altered to allow such downloads.

"I don't think it's that big a deal," said Charles Golvin, an analyst at Forrester Research Inc. "The mainstream iPhone customer isn't complaining about apps they can't get because of Apple's restrictive policies."

Apple has reviewed and maintained veto power over apps for the iPhone since it opened the device to outside developers in 2008. These apps can only be downloaded from Apple's App Store. Monday's ruling applies to other smartphone makers but only Apple now restricts what apps can run on its devices.

Computer experts have found ways to get around the code that tethers iPhones to the App Store, however, allowing device owners to download and run programs that haven't been approved by Apple. The legality of the practice was not clear, so it hasn't caught on widely.

Mario Ciabarra, president of Rock Your Phone Inc., which sells apps for jailbroken iPhones, says close to $2 million worth of about apps for about four million iPhones have been downloaded from his store. He said the company felt that what it was doing was legal, but was not eager to argue that point in court. What this ruling does "is make it very clear that it is okay," he said.

Apple, which says it has sold about 50 million iPhones worldwide, has discouraged jailbreaking. A spokeswoman did not address the ruling directly, but explained the company's policy.

"Apple's goal has always been to insure that our customers have a great experience with their iPhone," she said, adding that "jailbreaking can severely degrade the experience" of the iPhone and that it "can violate the warranty and can cause the iPhone to become unstable and not work reliably," she said.

In 2008 the EFF, asked the Library of Congress to authorize jailbreaking, arguing that the rights of Apple and other smartphone makers wouldn't be infringed because any changes to the devices are for the personal use of the phone owner. Apple disagreed, arguing that jailbreaking its iPhone would open up consumers and Apple to harm and that the practice was a violation of the law.

The U.S. Copyright Office, a unit of the Library of Congress, on Monday said that Apple's objections appeared to be rooted partly in the potential "harm to its reputation" which isn't protected by copyright law.

It said that phone owners have the right to run whatever legal programs they want on their devices and that "modifications that are made purely for the purpose of such interoperability are fair uses."

The action was in the form of a final rule, which would require a legal challenge to overturn.

The Library of Congress also ruled that it was legal to modify software on a used phone so that it can run on a different carrier's network, although other technical barriers make it difficult to use an iPhone with networks other than that of AT&T Inc., the sole carrier authorized by Apple in the United States.

The government said the use of snippets of DVDs and other videos for use in universities and schools have fair use protections under the law. However, it rejected other applications for fair-use protections, including a request that consumers be allowed to use their own software to access streaming online video from Netflix Inc. or other providers.