Legal

Two bills that could jolt Apple

Written by

Mark Gurman, Bloomberg:

There are currently two major bills on the table: The Open App Markets Act (S. 2710) and the American Innovation and Choice Online Act (S.2992).

Mark makes the case that neither bill is likely to pass, but this seems more of a reprieve than a sure to fail. Both bills are worth knowing about.

The first bill is The Open App Markets Act. From the bill itself:

The bill prohibits a covered company from (1) requiring developers to use an in-app payment system owned or controlled by the company as a condition of distribution or accessibility, (2) requiring that pricing or conditions of sale be equal to or more favorable on its app store than another app store, or (3) taking punitive action against a developer for using or offering different pricing terms or conditions of sale through another in-app payment system or on another app store.

A covered company may not interfere with legitimate business communications between developers and users, use non-public business information from a third-party app to compete with the app, or unreasonably prefer or rank its own apps (or those of its business partners) over other apps.

In effect, this would force Apple to allow sideloading. As Mark Gurman states:

If passed into law, this would put more than $20 billion per year in Apple revenue at great risk.

The second bill is The American Innovation and Choice Online Act. From that bill:

This bill prohibits certain large online platforms from engaging in specified acts, including giving preference to their own products on the platform, unfairly limiting the availability on the platform of competing products from another business, or discriminating in the application or enforcement of the platform’s terms of service among similarly situated users.

Further, a platform may not materially restrict or impede the capacity of a competing business user to access or interoperate with the same platform, operating system, or hardware or software features. The bill also restricts the platform’s use of nonpublic data obtained from or generated on the platform and prohibits the platform from restricting access to platform data generated by the activity of a competing business user. The bill also provides additional restrictions related to installing or uninstalling software, search or ranking functionality, and retaliation for contact with law enforcement regarding actual or potential violations of law.

The first paragraph of the bill talks about Apple giving preference to its own apps over third party apps (think App Store ratings, exposure).

But to me, the second paragraph has the bigger potential impact. Feels like this would open the door for third party apps to use Private APIs, typically forbidden by Apple. It also opens up any data gathered by Apple, and addresses what seems to be whistleblower retaliation.

Reporter views source on a public site. Criminal “hacking” investigation announced.

Written by

Jack Suntrup, St. Louis Post-Dispatch:

A Post-Dispatch reporter in October alerted the state to a data issue contained on a Department of Elementary and Secondary Education website that left Social Security numbers of educators vulnerable to public disclosure.

After alerting the state, the newspaper didn’t publish its report until after the officials moved to protect the vulnerable information. The newspaper did not disclose any personal information.

The reporter simply did a “view source” on a public facing web page, saw that student social security numbers were embedded in the source. The reporter did the absolute right thing. They alerted officials, did not report on the issue until the vulnerability was fixed.

Missouri Gov. Mike Parson:

“If somebody picks your lock on your house — for whatever reason, it’s not a good lock, it’s a cheap lock or whatever problem you might have — they do not have the right to go into your house and take anything that belongs to you,” Parson said.

Also:

Capt. John Hotz, spokesman for the Missouri State Highway Patrol, said Monday the agency had finished its probe of the Post-Dispatch and had turned the case over the Cole County Prosecuting Attorney Locke Thompson.

This is chilling. So very misguided. Can’t imagine this going very far, but if it does, a terrible precedent will have been set.

DoJ arrests hacker involved with REvil Group that stole Apple’s MacBook Pro schematics

Written by

Juli Clover, MacRumors:

The United States Justice Department today announced that it has arrested Ukrainian Yaroslav Vasinskyi for his involvement with REvil, a group that executed ransomware attacks against businesses and government entities in the United States.

And:

REvil in April targeted Apple supplier Quanta Computer and stole schematics of the design of the 14 and 16-inch MacBook Pro models that were later released in October. The schematics unveiled MacBook Pro features like additional ports and the design of the notch, and REvil extorted Apple by threatening to release additional documents if the Cupertino company didn’t pay a $50 million fee.

And:

REvil continued on with its illicit activities and in May, was responsible for a cyberattack on the Colonial Pipeline that caused gas shortages on the East Coast of the United States. In July, REvil took advantage of a vulnerability in management software designed for Kaseya, targeting between 800 and 1,500 businesses worldwide.

Also interesting, from Krebs on Security:

The U.S. Department of State is now offering up to $10 million for the name or location any key REvil leaders, and up to $5 million for information on REvil affiliates.

Here’s a link to the indictment itself.

Apple announces App Store settlement that lets “reader” apps set up external account management

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At the core of this agreement is Apple’s definition of a “reader” app:

Reader apps provide previously purchased content or content subscriptions for digital magazines, newspapers, books, audio, music, and video.

And:

Because developers of reader apps do not offer in-app digital goods and services for purchase, Apple agreed with the JFTC to let developers of these apps share a single link to their website to help users set up and manage their account.

Apple’s announcement:

Apple today announced an update coming to the App Store that closes an investigation by the Japan Fair Trade Commission (JFTC). The update will allow developers of “reader” apps to include an in-app link to their website for users to set up or manage an account. While the agreement was made with the JFTC, Apple will apply this change globally to all reader apps on the store.

The change goes into effect in 2022. Feels like Apple is breaking down the overall App Store structure so they can make changes to individual categories to address the wave of anti-trust scrutiny/legislation.

Apple vs Epic, Day One: Three reads

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There’s an absolute torrent of things to read about Apple vs Epic Games, or Epic Games vs Apple (which is more proper, IMO, since Epic Games is the plaintiff here).

Here are three relatively short reads that bring up the major points at the heart of this case:

There’s too much to try to snapshot any of this here. But if you are interested in the blow-by-blow of this case, start with these three, and you’ll quickly get a sense of the major players, as well as the key issues in the case.

Apple facing new $5m class action lawsuit for alleged role in illegal/unlicensed online gambling

Written by

Gambling Industry News:

Apple faces a new $5m class action lawsuit filed by a group of over 100 social casino game players. This is the second lawsuit of its kind filed against Apple so far this year, however, this particular lawsuit is focused on Zynga’s poker and casino apps.

The lawsuit was filed in US District Court for the Northern District of Columbia and alleges that Apple is making a profit from illicit gambling apps that have in-game purchases.

Lots of lawsuits filed against Apple. This one struck me as particularly interesting in that it attempts to pierce Apple’s App Store protections, protections that shield Apple as a vendor of goods, not a creator of those goods.

If they lose this lawsuit, will that open a liability crack for those scam subscription apps that make their way into the App Store?

Apple owes retail workers for time spent in security screenings — 9th Circuit

Written by

Reuters:

The 9th U.S. Circuit Court of Appeals on Wednesday said Apple Inc must pay more than 12,000 retail workers in California for time they spent going through security screenings at the end of their shifts.

A unanimous three-judge panel reversed a judge who had tossed the case and ordered him to enter summary judgment for the plaintiffs, after the California Supreme Court in response to certified questions in the case said in February that time spent undergoing security checks is compensable under state law.

I’ve always felt that retail workers who had to wait in line to be able to leave their job (to be screened for theft, for example) should be paid for the time they wait in line. This the end of the road for this case?

Epic judge will protect Unreal Engine — but not Fortnite, an issue of “irreparable harm”

Written by

The Verge:

Epic Games just won a temporary restraining order against Apple — at least in part. Effective immediately, Apple can’t retaliate against Epic Games by terminating the company’s Apple developer accounts or restricting use of Epic’s Unreal Engine by developers on Apple platforms.

That’s half of what was at issue. And, to the massive community of developers who depend on Unreal Engine, a critical ruling.

But in the same ruling, Judge Yvonne Gonzalez Rogers decided that Apple will not be required to bring Fortnite — which it had banned after Epic added an in-app payment system in violation of Apple’s rules — back to the App Store.

And that’s the other half. Impacting Fortnite fans, perhaps, but not much more than a tiny ripple in the ocean of iOS apps.

This battle is just beginning. A few more things to read:

  • The New York Times: To Fight Apple and Google’s Grip, Fortnite Creator Mounts a Crusade, a profile on Epic CEO Tim Sweeney (thus the “Battle of the Tims” tag you might encounter).

  • The legal order itself. Scroll down to the Analysis section on page 4. Key to the whole thing is the issue of “irreparable harm”. In a nutshell, the judge ruled that Fortnite would not suffer irreparable harm if it was blocked from the App Store. At the same time, the judge ruled that Unreal Engine would suffer irreparable harm if Epic’s developer account was terminated.

More to come. Much more.

Apple pulls Fortnite from the App Store, Epic Games files legal action

Written by

First things first, here’s the link to Fortnite on the App Store. Unless the change has not yet propogated, this link should now be dead. Do a search for Fortnite on the App Store, that’s a dead-end too.

If you are new to this fast moving story, a bit from this backgrounder from CNBC’s Kit Leswing:

Fortnite maker Epic Games on Thursday announced new payment options that allow customers to buy in-game credits direct from Epic Games on both Android and iPhone.

The direct payment option to Epic appears to skirt Apple’s App Store and Google’s Play Store rules, which require Epic to give those firms a 30% cut of revenue made through the app.

Push came to shove, Epic challenged Apple (and Google), and Apple pushed back.

And now Epic Games has responded with this just-filed legal action.

Feels like a boiling pressure cooker, about to blow.

Prosecutors can force defendants to give up cellphone passcodes, NJ Supreme Court rules

Written by

NorthJersey.com:

The New Jersey Supreme Court ruled Monday that a criminal defendant can be compelled to reveal his cellphone passcode to investigators, rejecting the argument that such a move violates the right against self-incrimination guaranteed by the Fifth Amendment of the U.S. Constitution.

In a closely watched case, the state’s top court narrowly sided with prosecutors seeking access to the phone data of a former Essex County sheriff’s officer accused of secretly working with a Bloods street gang. The court ruled 4-3, in a case that could have far-reaching implications for criminal investigations in New Jersey.

Click the headline link for details on the case. But this is an important piece of the ruling:

The state argued that even if the passcodes were considered testimony, Andrews should be required to provide them under a body of case law known as the “foregone conclusion exception” to the Fifth Amendment. The Prosecutor’s Office said Lowery told investigators about the text messages, which it used as a basis to obtain the search warrant. Thus, the texts were a “foregone conclusion” — they were known to exist — and the only thing stopping the state from seeing those potential pieces of evidence was Andrews, who knew the passcode.

This narrows the precedent. Still, a big ruling. Fascinating read. I expect this case to come up as an argument in future cases in other jurisdictions. A matter of time before an argument based on this case makes its way to the US Supreme Court.

Apple’s official response to AG Barr over unlocking Pensacola shooter’s phone

Written by

Input:

Earlier today Attorney General William Barr called on Apple to unlock the alleged phone of the Pensacola shooter — a man who murdered three people and injured eight others on a Naval base in Florida in December. Apple has responded by essentially saying: “no.”

I disagree with this characterization. Read Apple’s response. It’s more nuanced. If I had to capture it simply, I’d quote this paragraph:

We have always maintained there is no such thing as a backdoor just for the good guys. Backdoors can also be exploited by those who threaten our national security and the data security of our customers. Today, law enforcement has access to more data than ever before in history, so Americans do not have to choose between weakening encryption and solving investigations. We feel strongly encryption is vital to protecting our country and our users’ data.

Follow the headline link, read Apple’s response for yourself.

The unvarnished Q&A between Apple and the House antitrust subcommittee

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I’m a big fan of getting things straight from the horse’s mouth wherever possible. In this case, here are the official questions from the House antitrust subcommittee (technically, the Subcommittee on Antitrust, Commercial and Administrative Law of the Committee on the Judiciary, but who has time for that mouthful?) along with Apple’s official responses.

This is surprisingly easy to read, especially if you are a regular Mac/iOS user.

This is surprisingly easy to read, especially if you are a regular Mac/iOS user. It’s chockfull of interesting tidbits.

Oregon judge ordered woman to type in her iPhone passcode so police could search it for evidence against her

Written by

Aimee Green, Oregon Live:

Police wanted to search the contents of an iPhone they found in Catrice Pittman’s purse, but she never confirmed whether it was hers and wasn’t offering up a passcode. Her defense attorney argued forcing her to do so would violate her rights against self-incrimination under the Fifth Amendment of the U.S. Constitution and Article 1 Section 12 of the Oregon Constitution.

But a Marion County judge sided with police and prosecutors by ordering Pittman to enter her passcode. On Wednesday, the Oregon Court of Appeals agreed with that ruling — in a first-of-its-kind opinion for an appeals court in this state.

This is a precedent that will resonate, make it more likely that courts will order defendants to unlock their phones.

Side note, I found this sequence very interesting:

Scott said the ruling won’t affect many Oregon defendants whose phones are seized by police because police already have technology that allows them to crack into most of those phones.

But:

The latest iPhones, more often than other phones, have proven difficult, Scott said.

“For people who want their information private, I would recommend getting an iPhone,” Scott said. “And Apple is not paying me to say that.”

Yet another reason to buy an iPhone.

Supreme Court allows blind people to sue retailers if their websites are not accessible

Written by

LA Times:

The Supreme Court cleared the way Monday for blind people to sue Domino’s Pizza and other retailers if their websites are not accessible.

In a potentially far-reaching move, the justices turned down an appeal from Domino’s and let stand a U.S. 9th Circuit Court of Appeals ruling holding that the Americans With Disabilities Act protects access not just to restaurants and stores but also to the websites and apps of those businesses.

This is a pretty big deal. Far-reaching indeed. Is your web site accessible?

Justice Department to open big tech antitrust review, puts out a press release

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From the Wall Street Journal:

The Justice Department is opening a broad antitrust review into whether dominant technology firms are unlawfully stifling competition, adding a new Washington threat for companies such as Facebook Inc., Google, Amazon.com Inc. and Apple Inc.

The review is geared toward examining the practices of online platforms that dominate internet search, social media and retail services, the department said, confirming the review shortly after The Wall Street Journal reported it.

Not seeing anything specific to Apple here, though they did just testify to Congress last week as part of the big tech gang of 4 (Google, Facebook, Amazon, and Apple).

Interestingly, the Department of Justice Antitrust Division did put out a press release announcing the review:

The Department of Justice announced today that the Department’s Antitrust Division is reviewing whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers.

Read the rest of the release here.

Apple ruling opens a can of worms for digital storefronts

Written by

Rob Fahey, GameIndustry, writing about this week’s Supreme Court ruling against Apple:

When I walk into a convenience store to buy a cold drink, I’m a customer of the convenience store, not of the Coca-Cola Company, so why should different logic apply when I open the App Store on my phone? Yet Apple’s argument wasn’t entirely without merit either (that’s why it made it all the way to the Supreme Court, I guess). Apple isn’t buying the software from the developer and reselling it to you (as a convenience store does with your Coke Zero), it’s providing a storefront to the developer, who has responsibility for how the software is presented, what they put into it, how it’s priced, and so on.

And:

The precedent is now set; if Apple’s digital distribution consumers are considered to be direct customers of the company, and thus to have standing to challenge its business practices in court, this also holds true for every digital software or media store out there.

That’s a pretty big deal.

This writeup is one of the clearest explainers I’ve seen of the issues at work here and the potential for tipping over a major legal apple cart.

How Apple’s Supreme Court loss could change the way you buy apps

Written by

The Verge’s Adi Robertson pulled together an excellent explainer on this week’s Supreme Court ruling with potentially huge implications for Apple.

The biggest takeaway is that this is allowing a lawsuit to move forward and not a specific finding against Apple itself. That fight will likely take a long time, and Apple might still prevail.

But a good backgrounder, easy to follow.

How hackers and scammers break into iCloud-locked iPhones

Written by

Motherboard:

In each of these muggings, the perpetrator allegedly held the victim up at gunpoint, demanded that they pull out their iPhone, and gave them instructions: Disable “Find My iPhone,” and log out of iCloud.

And:

A stolen iPhone which is still attached to the original owner’s iCloud account is worthless for personal use or reselling purposes (unless you strip it for parts), because at any point the original owner can remotely lock the phone and find its location with Find My iPhone. Without the owner’s password, the original owner’s account can’t be unlinked from the phone and the device can’t be factory reset. This security feature explains why some muggers have been demanding passwords from their victims.

And:

In practice, “iCloud unlock” as it’s often called, is a scheme that involves a complex supply chain of different scams and cybercriminals. These include using fake receipts and invoices to trick Apple into believing they’re the legitimate owner of the phone, using databases that look up information on iPhones, and social engineering at Apple Stores. There are even custom phishing kits for sale online designed to steal iCloud passwords from a phone’s original owner.

Fascinating read, especially the coverage of phishing. Incredible balance, with the makers who make valuable things on one end, and the people seeking to convert those efforts into illicitly gotten cash on the other.

Apple lawyer charged in insider case released on $500,000 bond

Written by

Chris Dolmetsch, Bloomberg:

A former Apple Inc. lawyer was released on a $500,000 bond after entering a not-guilty plea to insider-trading charges.

And:

Apple fired Levoff in September after placing him on leave two months earlier, according to a filing in a related lawsuit by the Securities and Exchange Commission. Over his decade-long career at Apple, he was one of the most senior executives, reporting directly to the general counsel.

Amazing watching this unfold. Apple must think he’s guilty as charged. They fired him.

From the original breaking story from last week:

Levoff, who until last year was Apple’s senior director of corporate law, repeatedly traded on non-public revenue-and-earnings filings dating back to 2011, the Securities and Exchange Commission and federal prosecutors said Wednesday. The illegal investments led to about $227,000 in profits, while allowing him to avoid $377,000 of losses.

Such a small gain, relative to what he must have lost in salary and bonuses, not to mention the lost future with Apple.

Incredible.

Oh Samsung

Written by

The Verge (via DF):

Samsung is getting criticized by hypebeasts everywhere after it claimed to be collaborating with Supreme; in reality, it partnered with a Supreme rip-off. Samsung is actually partnering with a fake legal brand, a rival company based in Barletta, Italy, that beat Supreme NYC in a court case this summer regarding who can use the brand name in Italy.

Supreme is a well known fashion brand, established in New York City. To get a sense of the brand, take a look at the jacket on this page, as well as their iconic logo.

A copycat Supreme brand sprung up in Italy. SupremeNYC sued them, the Italian court ruled for the copycat, with the words:

For an action to be a crime it is not sufficient the confusion between the two brands, nor the actual external similarity of the product.

So Samsung announced a deal with Supreme, but were actually partnering with the copycat. Oh, Samsung.

Apple, App Store antitrust lawsuit going to the Supreme Court today

Written by

Reuters:

When iPhone users want to edit blemishes out of their selfies, identify stars and constellations or simply join the latest video game craze, they turn to Apple Inc’s App Store, where any software application they buy also includes a 30 percent cut for Apple.

That commission is a key issue in a closely watched antitrust case that will reach the U.S. Supreme Court on Monday. The nine justices will hear arguments in Apple’s bid to escape damages in a lawsuit accusing it of breaking federal antitrust laws by monopolizing the market for iPhone apps and causing consumers to pay more than they should.

Major implications here for Apple and the App Store.

From the Supreme Court document summarizing the case:

Electronic marketplaces such as Apple’s App Store present a new wrinkle on this doctrine, because the marketplace sponsor (e.g., Apple) interacts with and delivers goods “directly” to consumers, but as an agent on behalf of third party sellers.

And:

Whether consumers may sue for antitrust damages anyone who delivers goods to them, even where they seek damages based on prices set by third parties who would be the immediate victims of the alleged offense.

Gonna keep my eye on this one.

This guy is suing Adobe for a bug that deleted years of his work

Written by

Motherboard:

At issue is a feature in Premiere Pro called clean cache. Editing video takes up a lot of hard drive space as video editing software creates various redundancies and backups during the editing process. Programs such as Premiere Pro store those redundancies in a cache and, once a project is finished, users can clear that cache to free up disk space.

The knee-jerk reaction here? Why didn’t you backup your work? Why depend on Adobe’s backup process?

And those are probably fair questions. But the complaint seems more nuanced than that:

“The ‘Clean Cache’ command permanently deleted substantial and numerous Files and Data that were not within the ‘Media Cache’ folder or any of its subdirectories, including but not limited to Files and Data that had never been associated with [Premiere Pro]”

And:

The mass deletion isn’t a one off and Cooper likely isn’t the only user effected. Adobe itself acknowledged the bug. “With 11.1.1, only files that are within the Media Cache folder’s subdirectories will be deleted,” a blog post from Adobe said when they fixed the bug. “Files that sit next to it will no longer be affected. However, we still strongly recommend keeping the Media Cache folder separate from your original media.”

From Adobe post on unintended deletion:

Premiere Pro CC 2017 (11.1) introduced a new feature to manage and automatically remove aging and unnecessary media cache files. This feature was designed to assist users in managing existing project media cache files more easily. In the default location for media cache preferences, there is no issue. However, incorrect usage of this feature has the potential for unintentional file deletion.

Whose fault is this loss? Ultimately, I suspect a backup would have saved the day, and will be at the heart of Adobe’s response to this lawsuit.

Woman remotely wipes iPhone being held as evidence

Written by

Daily Gazette:

A cellphone seized by police as part of an investigation into a drive-by shooting last month was remotely wiped by its owner, authorities said this week.

Police believe Juelle L. Grant, 24, of Willow Avenue, may have been the driver of a vehicle involved in an Oct. 23 drive-by shooting on Van Vranken Avenue, near Lang Street, so they obtained her phone, according to police allegations filed in court. No one was injured in the shooting.

After police took her iPhone X, telling her it was considered evidence, “she did remotely wipe” the device, according to police.

What’s the law here? It’s her phone. Does she have the right to wipe it after it is taken from her? Do the police have the legal right to prevent this?

Fascinating story.

Apple rolling out web portal to respond to government, law enforcement customer/data requests

Written by

Apple:

We believe security shouldn’t come at the expense of individual privacy.

And:

Apple receives various forms of legal process requesting information from or actions by Apple. Apple requires government and private entities to follow applicable laws and statutes when requesting customer information and data. We contractually require our service providers to follow the same standard we apply to government information requests for Apple data. Our legal team reviews requests to ensure that the requests have a valid legal basis. If they do, we comply by providing the narrowest possible set of data responsive to the request. If a request does not have a valid legal basis, or if we consider it to be unclear, inappropriate, or overly broad, we challenge or reject the request. We report on the requests every six months.

We’ll continue working for greater transparency and data security protections on behalf of our customers.

And, most importantly:

Apple has never created a backdoor or master key to any of our products or services. We have also never allowed any government direct access to Apple servers. And we never will.

The site has links to Apple’s Transparency Reports, as well as links to Legal Process Guidelines, both for US and non-US requestors.

That “And we never will” is a powerful statement. The portal is said to be rolled out by the end of the year.

Apple accused of copying new Shortcuts logo, hit with $200,000 demand letter

Written by

The Sun:

The largely unknown company claims to have issued a cease and desist letter to Apple, asking the company to stop “infringing on our intellectual property” with the Shortcuts logo.

And:

A Shift spokesperson said: “It’s mind-blowing that Apple, the firm with the biggest cash pile in history, the firm that is so design oriented, had to copy our logo.”

First things first, follow the link and look at the two logos side-by-side. Judge for yourself.

I do see a strong resemblance, can’t imagine a universe where someone at Apple copied the logo. Cash grab? Fair demand?

E-waste recycler Eric Lundgren loses appeal on computer restore disks, heads to federal prison

Written by

Washington Post:

A California man who built a sizable business out of recycling electronic waste is headed to federal prison for 15 months after a federal appeals court in Miami rejected his claim that the “restore disks” he made to extend the lives of computers had no financial value, instead ruling that he had infringed Microsoft’s products to the tune of $700,000.

I recognize that there are two sides to every story, but this reads to me like this guy is going to jail specifically because judge and jury do not understand the technology.

Before he launched his company, IT Asset Partners, Lundgren lived in China, learning about the stream of e-waste and finding ways to send cheap parts to America to keep electronics running. One of his projects was to manufacture thousands of “restore disks,” usually supplied by computer-makers as a way for users to restore Windows to a hard drive if it crashes or must be wiped. The disks can be used only on a computer that already has a license for the Windows operating system, and the license transfers with the computer for its full life span. But computer owners often lose or throw out the disks, and though the operating system can be downloaded free on a licensed computer, Lundgren realized that many people didn’t feel competent to do that, and were simply throwing out their computers and buying new ones.

Lundgren made 28,000 Windows backup CDs, sold them for 25 cents apiece to computer refurbishers. The disks had no licenses, they could only be used to restore a computer with an existing license.

Key to this is the value of those disks. They determine the level of the crime (if this is even a crime):

Initially, federal prosecutors valued the disks at $299 each, the cost of a brand-new Windows operating system, and Lundgren’s indictment claimed he had cost Microsoft $8.3 million in lost sales. By the time of sentencing, a Microsoft letter to Hurley and a Microsoft expert witness had reduced the value of the disks to $25 apiece, stating that was what Microsoft charged refurbishers for such disks.

BUT:

Glenn Weadock, a former expert witness for the government in its antitrust case against Microsoft, was asked, “In your opinion, without a code, either product key or COA [Certificate of Authenticity], what is the value of these reinstallation disks?”

“Zero or near zero,” Weadock said.

The $25 value is for disks with a product key or COA. The disks Lundgren sold had neither. So with Weadock’s expert testimony, all is good, right?

[U.S. District Judge] Hurley decided Lundgren’s 28,000 restore disks had a value of $700,000, and that dollar amount qualified Lundgren for a 15-month term and a $50,000 fine. The judge said he disregarded Weadock’s testimony. “I don’t think anybody in that courtroom understood what a restore disk was,” Lundgren said.

Two sides to every story, and there is an element of harm to Microsoft, in that they do sell backup disks. But is sending this guy to prison what they were after here? Was this about setting a precedent?

Just one more thing, then I’m gonna’ let you go:

Lundgren, 33, has become a renowned innovator in the field of “e-waste,” using discarded parts to construct things such as an electric car, which far outdistanced a Tesla in a test on one charge. He built the first “electronic hybrid recycling” facility in the United States, which turns discarded cellphones and other electronics into functional devices, slowing the stream of harmful chemicals and metals into landfills and the environment. His California-based company processes more than 41 million pounds of e-waste each year and counts IBM, Motorola and Sprint among its clients.

Something seems wrong about this whole thing.

UPDATE: From this article in a local Washington state paper covering the story:

Lundgren argued that because he never ended up selling any discs, Microsoft did not lose any money. But the federal court found that the discs were worth $25 each and therefore Lundgren infringed on Microsoft’s property by $700,000. In addition, the court found that the discs had labels on them that “falsely said the discs contained authorized copies of copyrighted software,” according to court records.

That last bit did not come up in the Washington Post story.

James Comey’s new book, privacy, and Apple

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9to5Mac’s Ben Lovejoy just finished reading James Comey’s new book, A Higher Loyalty. Politics aside, a section of the book deals with the FBI’s battle with Apple to access an iPhone used by a San Bernardino gunmen, detailed on this Wikipedia page.

Ben briefly excerpts Comey’s book, interleaving his own take with relevant passages. Short and worth the read.

FTC says ‘warranty void if removed’ stickers are BS, warns manufacturers they’re breaking the law

Written by

Motherboard:

As we’ve reported before, it is bullshit and illegal under federal law for electronics manufacturers to put “Warranty Void if Removed” stickers on their gadgets, and it’s also illegal for companies to void your warranty if you fix your device yourself or via a third party.

And:

Companies such as Sony and Microsoft pepper the edges of their game consoles with warning labels telling customers that breaking the seal voids the warranty. That’s illegal. Thanks to the 1975 Magnuson-Moss Warranty Act, no manufacturer is allowed to put repair restrictions on a device it offers a warranty on. Dozens of companies do it anyway, and the FTC has put them on notice. Apple, meanwhile, routinely tells customers not to use third party repair companies, and aftermarket parts regularly break iPhones due to software updates.

Interesting. Going to do more reading on the Magnuson-Moss Warranty Act.

Apple must pay $502.6 million to VirnetX, federal jury rules (but don’t hold your breath)

Written by

Bloomberg:

VirnetX Holding Corp. won $502.6 million against Apple Inc. after a federal jury in Texas said the maker of iPhones was infringing patents for secure communications, the latest twist in a dispute now in its eighth year.

VirnetX stock went up as much as 44% on the news, Apple stock not so much. Makes sense, since VernetX reported about $1 million in revenue last year, Apple a bit more than $200 billion.

The patents in question?

VirnetX claimed that Apple’s FaceTime, VPN on Demand and iMessage features infringe four patents related to secure communications, claims that Apple denied.

But don’t hold your breath waiting for Apple to write that check:

For VirnetX, the jury verdict in its favor could be a short-lived victory. The Patent Trial and Appeal Board has said the patents are invalid, in cases that are currently before the U.S. Court of Appeals for the Federal Circuit in Washington.