Cloud-based e-discovery can mean big savings for smaller firms (ABA Journal, 26 March 2014) – Smaller law firms may be able to save a significant amount of money by ‘renting’ e-discovery applications in the cloud rather than bringing a full-fledged hardware and software solution in-house. “Only a few years ago, e-discovery in the cloud wasn’t even available,” said Gareth Evans, an Irvine, Calif.-based partner at Gibson, Dunn & Crutcher, adding that these days, even the smallest law firms have a wide variety of e-discovery firms they can source. Evans spoke as part of a panel at LegalTech New York 2014 in February. Panelist Alan Winchester, a partner at the New York City firm Harris Beach, agreed: “For firms without robust IT departments, it grants them the experts to manage the technology operations and security.” While renting e-discovery services a sliver at a time may cause some firms to worry about the security of their data offsite, the panelists advised that with a good contract, those concerns can be minimized. [ Polley : Interesting story that sounds about right. This might just be a first step.]

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US notified 3,000 companies in 2013 about cyberattacks (Washington Post, 24 March 2013) – Federal agents notified more than 3,000 U.S. companies last year that their computer systems had been hacked, White House officials have told industry executives, marking the first time the government has revealed how often it tipped off the private sector to cyberintrusions. The alerts went to firms large and small, from local banks to major defense contractors to national retailers such as Target, which suffered a breach last fall that led to the theft of tens of millions of Americans’ credit card and personal data, according to government and industry officials. “Three thousand companies is astounding,” said James A. Lewis, a senior fellow and cyberpolicy expert at the Center for Strategic and International Studies. “The problem is as big or bigger than we thought.” The number reflects only a fraction of the true scale of cyberintrusions into the private sector by criminal groups and foreign governments and their proxies, particularly in China and Eastern Europe. The estimated cost to U.S. companies and consumers is up to $100 billion annually, analysts say. In most cases, the company had no idea it had been breached, officials say. According to Verizon, which compiles an annual data-breach survey, in seven out of 10 cases, companies learn from an external party – usually a government agency – that they’ve been victimized.

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Revelations of NSA spying cost US tech companies (NYT, 21 March 2014) – Microsoft has lost customers, including the government of Brazil. IBM is spending more than a billion dollars to build data centers overseas to reassure foreign customers that their information is safe from prying eyes in the United States government. And tech companies abroad, from Europe to South America, say they are gaining customers that are shunning United States providers, suspicious because of the revelations by Edward J. Snowden that tied these providers to the National Security Agency ‘s vast surveillance program. Even as Washington grapples with the diplomatic and political fallout of Mr. Snowden’s leaks, the more urgent issue, companies and analysts say, is economic. Tech executives, including Eric E. Schmidt of Google and Mark Zuckerberg of Facebook, are expected to raise the issue when they return to the White House on Friday for a meeting with President Obama. It is impossible to see now the full economic ramifications of the spying revelations – in part because most companies are locked in multiyear contracts – but the pieces are beginning to add up as businesses question the trustworthiness of American technology products. Despite the tech companies’ assertions that they provide information on their customers only when required under law – and not knowingly through a back door – the perception that they enabled the spying program has lingered. “It’s clear to every single tech company that this is affecting their bottom line,” said Daniel Castro, a senior analyst at the Information Technology and Innovation Foundation, who predicted that the United States cloud computing industry could lose $35 billion by 2016 . Forrester Research, a technology research firm, said the losses could be as high as $180 billion , or 25 percent of industry revenue, based on the size of the cloud computing, web hosting and outsourcing markets and the worst-case scenario for damages.

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Treasury Dept. issues license on exchange with Iran (InsideHigherEd, 21 March 2014) – The U.S. Department of Treasury on Thursday issued a general license allowing accredited U.S. universities to enter into academic exchange agreements with Iranian universities and permitting the export of some educational services, including university entrance examinations. The guidance also permits American universities and their contractors to enroll Iranian students in certain online undergraduate-level courses, including massive open online courses, or MOOCs. In January, Inside Higher Ed reported that the U.S. government had blocked access to the MOOC provider Coursera for individuals in Iran and other economically sanctioned nations.

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Illinois Supreme Court strikes down broad ban on audiorecording conversations (Eugene Volokh, 20 March 2014) – Under Illinois law, any person who “knowingly and intentionally uses an eavesdropping device for the purpose of hearing or recording all or any part of any conversation” is committing a crime “unless he does so … with the consent of all of the parties to such conversation or electronic communication.” This isn’t limited to conversations that the parties reasonably intend to be private: “conversation” is defined as “any oral communication between 2 or more persons regardless of whether one or more of the parties intended their communication to be of a private nature under circumstances justifying that expectation.” DeForest Clark was indicted for violating this law; here’s how the ACLU of Illinois amicus brief describes the facts: [The] charges arose from a September 17, 2010 child support hearing before Judge Robert Janes in Kane County Circuit Court. Mr. Clark represented himself pro se at the hearing. The hearing was conducted in open court and no court reporter was present. Mr. Clark recorded the hearing in order to preserve a true and accurate record of public proceedings in which he was representing himself without the assistance of counsel and without the benefit of a court reporter. For the same reason, Mr. Clark also allegedly recorded a conversation between himself and opposing counsel, Colleen Thomas, prior to the hearing in a public hallway in the Kane County Judicial Center. Thursday, the Illinois Supreme Court held that the statute violates the First Amendment ( People v. Clark (Ill. Mar. 20, 2014) )

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Can you sue a robot for defamation? (Ryan Calo at Forbes, 17 March 2014) – Life moves pretty fast. Especially for journalists. When an earthquake aftershock shakes America’s second largest city, news outlets scramble to be the first to cover the story. Today the news itself made news when various outlets picked up on a curious byline over at the Los Angeles Times : “this post was created by an algorithm written by the author.” The rise of algorithmically generated content is a great example of a growing reliance on “emergence.” Steven Johnson in his book by this title sees the essence of emergence as the movement of low-level rules to tasks of apparently high sophistication. Johnson gives a number of examples, from insects to software programs. As I see it, the text of the earthquake story likewise “emerged” from a set of simple rules and inputs; the “author” in question at the Los Angeles Times, Ken Schwencke, did not simply write the story in advance and cut and paste it. I imagine Schwencke had a pretty good sense of what story the algorithm would come up with were there an earthquake. This is not always the case. Even simple algorithms can create wildly unforeseeable and unwanted results. Thus, for instance, a bidding war between two algorithms led to a $23.6 million dollar book listing on Amazon. And who can forget the sudden “flash crash” of the market caused by high speed trading algorithms in 2010. I explore the challenges emergence can pose for law in my draft article Robotics and the New Cyberlaw . I hope you read it and let me know what you think. I’ll give you one example: Imagine that Schwencke’s algorithm covered arrests instead of earthquakes and his program “created” a story suggesting a politician had been arrested when in fact she had not been. Can the politician sue Schwencke for defamation? Recall that, in order to overcome the First Amendment, the politician would have to show “actual malice” on the part of the defendant. Which is missing. But, in that case, are we left with a victim with no perpetrator? If this seems far fetched, recall that Stephen Colbert’s algorithm @RealHumanPraise -which combines the names of Fox News anchors and shows with movie reviews on Rotten Tomatoes-periodically refers to Sarah Palin as “ a party girl for the ages ” or has her “ wandering the nighttime streets trying to find her lover .” To the initiated, this is obviously satire. But one could readily imagine an autonomously generated statement that, were it said by a human, would be libelper se .

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