Vintage Filings Legal Blog

By Benjamin Blascoe

I grew up in the Midwestern metropolis of Chicago, IL but my college days were spent amidst the beautiful Rocky Mountains of Colorado. As a cash-strapped, full-time student I had to milk the best possible utilities friendly to the wallet –obviously including travel. Holidays, marriages and the unfortunate funeral could have proven problematic if it weren’t for my cost-savvy airline Frontier.

I can’t begin to tell you how many times other airlines were delayed for hours on end while flights on Frontier operated like the gears of a well-oiled machine. And if delayed, via human error or weather – Frontier offered up free cable for all! What more could a college-student ask for?

That is why I was so disappointed to hear that Frontier Airlines asked for bankruptcy protection in early April of 2008. Ever since, I’ve been watching the airline closely and this morning my hopes were answered as I was extremely delighted to hear that Southwest put in a bid.

Southwest Airlines placed a $113.6M bid to acquire the Denver-based airline. Frontier has received a couple of other offers but was allowed the stipulation to attract other bids if any proved more beneficial to the company. Southwest is a good purchaser because both Frontier and Southwest’s reputation for low-rates and stellar customer service – not to mention the stronghold on the continental U.S.

Taken from the New York Times this morning, Frontier has 5,000 employees and 51 aircraft, while Southwest has 35,000 employees and more than 500 aircraft. It would be a pretty lucrative purchase for Southwest considering that Frontier uses Denver as its hub – a trait shared with United Airlines. If Southwest acquires Frontier, it won’t surpass United in sales but will definitely have a larger presence.

The only foreseeable conflict would be the contract for who will build the planes. Frontier Airlines’ aircrafts are all made my airbus and Southwest operates on the Boeing 737. Let the battle begin….

By Benjamin Blascoe

Despite the layoffs, the financial insecurities, the pay-cuts and even the hiring freezes there is one facet of American Law Firms that is booming – pro bono.

According to the Pro-Bono Institute in Washington DC, pro-bono hours increased by roughly 13% in 2008 as compared to the previous years – a figure both representative and a bit bloodcurdling. Is it that clients simply cannot afford the law services they once could, or have the soldiers of the law turned a new cheek and began helping in this time of need?

The findings come with a lot of concern because as history has taught, in times of economic recession, pro-bono cases are usually the first to leave. But in America’s current crisis, it seems quite the opposite. Esther Lardent of the Pro-Bono Institute feels that it may be due to the “slowdown” of work for lawyers. Americans are using the larger firms less and less in effort to save money leaving the door wide open for some of these major firms -  and  many are taking on pro-bono cases to develop better or new skills.

Another reason may also be that pro-bono cases are becoming more readily accepted in today’s world of law. In the past, pro-bono cases were only taken on under specific circumstance. However, as the old systems of law scoot over to make room for the new, there is a different outlook on pro-bono cases. Taken from Law.com, “We’re seeing a different attitude about pro bono,” Lardent said. “Firms are being much more proactive. They’re taken on big-time signature projects.”

By Benjamin Blascoe

We have come a long way since Napster first opened the floodgates of peer-to-peer file sharing in June of 1999. Since then we have seen more and more technology and creative platforms that allow access to a copious amount of digital media for anyone who can harness the power of the web.

Yet, since Napster’s inception the debate around the legality of peer-to-peer file sharing hasn’t really changed. Especially this week as Boston University graduate student Joel Tenenbaum, only the second ‘downloader’ to reach the court level, faces trial for copyright against several major record labels for illegally downloading music and sharing it on the network Kazaa.

Even more astounding is the amount of money these labels are asking Tenenbaum to fork over. The first individual brought under the eyes of the law for peer-to-peer file sharing was forced to pay the gargantuan sum of $1.92m. So as the court case in Boston gets rolling this week, stakeholders are keeping an ever vigilant watch.

But what are the logistics of this incredible lump sum? A few songs here and there, how can that add up to $1.92 million?

It is obvious that the courts are throwing the book at these people, to disillusion young and old alike from downloading ‘illegally’. The argument from the con side is obviously rooted in copyright but also the direct heist of earnings from the artist. On the other hand, the music industry has changed drastically in the past 20 years, specifically the routing of earnings. With all the corporate bureaucracy involved in the music industry now days, how much money is actually being taken out musicians’ pocket? Are they really being affected? Or is there more to the story….

“The internet was an opportunity for everyone to be treated fairly, for the consumer to get a fair price, for the artist to be paid fairly, for the record companies to make some money,” said infamous musician and bad boy Kid Rock. “But iTunes is an old system, where iTunes takes the money, the record company takes the money, and they don’t give it to the artists.” Rock believes that ‘illegal’ downloads don’t hurt musicians because of such corporate hijackings. “I was telling kids: download it illegally, I don’t care. I want you to hear my music so I can play live,” he said.

While Rock is one of the more outspoken critics of the Tenenbaum court proceedings, he is not alone in his beliefs. Many smaller local bands enjoy putting their music up for download because it draws buzz around the band. Andrew Scarborough, of the local Los Angeles band the Black Apples, believes that putting music up for everyone puts shoes on the dance floor. “We still sell CDs but when we put all our music available for download we had much better turnouts at our shows. We play for people who love music, who shouldn’t have to pay $14 for 10 songs – that’s just ridiculous. People need to get their priorities straight.”

But while some can ally under musicianship, a lot of artists still enjoy reaping the fruits of their labor. Metalica and their notorious bout with Napster are the first that come to mind. It seems that most of the lashing comes from the corporate end – those who truly make money off of album sales. Regardless of personal belief, there is still a major copyright factor that the law will hold above any moral argument, as well as past precedence.

As things are sure to get heated in Boston this week, a lot of this banter will surface. And by the end of the proceedings I’m sure we will either have some new legislation concerning peer-to-peer file sharing or one very broke college graduate.

Does it seem like your online marketing campaigns aren’t hitting their goals? You may be the victim of click fraud. Click Forensics today released industry pay-per-click (PPC) fraud figures for the second quarter 2009 from the search advertising industry’s leading independent click fraud reporting service – the Click Fraud Index. Now in its fourth year, the Click Fraud Index provides statistically significant industry PPC data collected from online advertising campaigns for both large and small advertisers across all leading search engines. Traffic across more than 300 ad networks is also reflected in the data. Key findings for Q2 2009 include:

• The overall industry average click fraud rate was 12.7 percent. That’s down from 13.8 percent for Q1 2009 and from the 16.2 percent rate reported for Q2 2008.
• Click fraud traffic from sophisticated sources and scripted programs rose again in Q2 2009. This included a rise in the incidents of publisher collusion fraud on ad networks.

“The increased diligence of online ad networks to detect and block invalid traffic sources has contributed to the decline in the overall click fraud rate this quarter,” said Tom Cuthbert, president of Click Forensics. “However, increasingly sophisticated attacks, such as publisher collusion fraud, continue to be a concern. Ad networks should pay close attention to such threats in the coming months.”

The data in Q2 also showed that many of the new click fraud schemes identified last quarter continue to increase in number and sophistication. Publisher collusion fraud was one example. This scheme occurs when online publishers use rotating IP-addresses or botnets to click ads on their own sites in order to generate inflated commissions from unprotected ad networks. Ad networks have difficultly differentiating such attacks from valid clicks.

By Ben Blascoe

In these tumultuous financial times, everyone is watching their money like a loose offspring in deep end of the swimming pool. People are consuming less, staying in more and learning about different priorities in life. Even those who allegedly had the most secure jobs, most stable income and most “worth” are falling like dominoes off the end of the economy’s kitchen table. I’m speaking in terms of our lawyers – the soldiers of the law, the consultants of charter. All over the United States, huge law firms are being forced to cap salaries, institute pay cuts and lay-off countless practicing attorneys and paralegals.

Take Michael P. Rumore, 50, of New Jersey for example. He is headed to state prison for 15 years for blowing $4 million of his clients’ money in Atlantic City. Four million dollars – not a dime to be claimed anywhere but Atlantic City (gambling capitol of the east coast). Have times gotten that bad where even lawyers are forced to break the rules in order to ensure a nice nest-egg for themselves? The answer: Yes and No

Of course Rumore is a specific case study, he also has a history of depression and bipolar disorder, but I believe his story speaks to the current situation our practicing law community is facing. With unemployment only expected to rise, what does that say for huge law firms? And also, what does that say for the small-time lawyer, living case-to-case?

According to Lawshucks.com (who runs a lawyer layoff tracker for some reason), as of July 26, 2009, roughly 13,311 lawyers and staff have been laid-off by major law firms, 11,000 of them from 2009 alone. No wonder Rumore booked it to Atlantic City in a last ditch effort for some financial security.

The reasoning is specific to each individual case. Katharine C. Patterson of LawJobs.com claims that young lawyers have it the worst stating “…the current generation of young lawyers and law students is cursed not just by its lack of experience of hard times, but by an egocentricity born of good times.” This idea makes a lot of sense if we look at the employment and personality traits on fresh college graduates typical of the quote-on-quote boomerang generation (the children of the baby boomers).

But the problem with this disproportionate lawyer lay-off era is that the recession is affecting those young and old. Nobody is safe!

No no, that wasn’t an entirely accurate statement. Even though the laid-off-lawyer figures are staggering and expected to rise, many practicing attorneys are still doing fine. In these rough financial times, it’s important to realize that everyone is being affected – the fluctuation level may be a bit different but reality the concurrent.

Unemployment for people with disabilities reached its highest rate in nine months, according to a quarterly study by Allsup.  At the same time, the Allsup Disability Study: Income at Risk shows the number of people applying for Social Security Disability Insurance (SSDI) benefits continues to climb, and the backlog of SSDI claims continues to slow people’s ability to receive their financial benefits.

Specifically, the quarterly Allsup study shows that for the second quarter of 2009, people with disabilities experienced an unemployment rate 53 percent higher than people without disabilities. Specifically, the unemployment rate for the second quarter averaged 13.6 percent for people with disabilities, compared to 8.9 percent for people with no disabilities, according to non-seasonally adjusted data from the U.S. Department of Labor.

For June, the unemployment rate for people with disabilities reached 14.3 percent, the highest since the Bureau of Labor Statistics (BLS) began reporting data on unemployment rates for people with disabilities last October. This compares to a 9.5 percent unemployment rate for people with no disabilities, also the highest during this same period. However, people with disabilities consistently continued to experience higher rates of unemployment.

BLS also reported that during June, three in 10 of the unemployed had been jobless for 27 weeks or more.

“People who may have been holding on to their jobs despite mild disabilities in the early stages of the recession may now have been out of work for several months,” said Paul Gada, personal financial planning director for Allsup. “Their health may have continued to deteriorate with the stress of no income and potentially no health insurance coverage further exacerbating their condition and putting them at significant financial risk. They may now be recognizing that even if they could find work, they are physically unable to work.”

The Allsup Disability Study: Income at Risk shows that the number of people with disabilities unable to work and applying for SSDI continues to climb. Disability applications rose to more than 727,000 in the second quarter of 2009, up 7 percent from the first quarter. Year to date there has been a 22-percent jump in initial disability applications compared to year to date 2008.

The number of people applying for Social Security disability benefits has a direct impact on the ability of the Social Security Administration (SSA) to process claims. For example, Allsup’s analysis of the Social Security disability 2008 backlog showed that more than 1.4 million people had applications pending. The average time to receive an award was more than 2.5 years (942 days). For the hundreds of thousands awaiting a review of their case by an administrative law judge, the wait can take two to four years, based on additional Allsup analysis.

“It’s crucial that people know the SSDI eligibility criteria before they apply for SSDI benefits,” said Gada. “This helps minimize further bottlenecks in the SSDI process and ensures qualifying people begin receiving monthly SSDI benefits as soon as possible.”

Deciding to Apply for SSDI Benefits

Eligibility for SSDI is determined by the SSA. Generally, applicants are considered disabled by the SSA if:

• They cannot do the work they did previously;
• They cannot do other work because of their disability; and
• Their disability has lasted or is expected to last at least one year, or result in death.

To qualify for SSDI, a person also must have worked and paid into the program (via FICA payroll taxes) for five of the last 10 years and be under retirement age.

“If you do qualify, it’s important to apply as soon as possible and to ensure your application is as thorough as possible,” said Gada. “Delaying the application process or not providing the detail needed will prolong the process and leave you without essential benefits.”

Gada noted that applying for SSDI benefits entails an extensive amount of paperwork. This includes completing an initial Social Security disability application and, in most instances, a detailed activities of daily living questionnaire. This requires detail on the person’s work history and the impact of the disability on his or her day-to-day activities. A doctor must verify information and additional medical exams may be required if there is not enough information to make a decision.

Only 35 percent of initial applications are approved on average, requiring those who are denied to apply for reconsideration and advance further in the SSDI process. Individuals can improve their chances of securing benefits earlier in the process by getting help. For example, more than 54 percent of those who hire Allsup for SSDI representation receive their awards at the initial application. Overall, 98 percent of people that complete the SSDI process with Allsup receive awards.

More than 70 percent of consumers surveyed said they would no longer do business with a company that exposed their sensitive, personal information as result of a data security breach, according to research conducted for Identity Theft 911.

Approximately 77% of respondents said they were “somewhat” or “very” concerned that identity theft could happen to them or someone close to them, and nearly 30% said they had received at least one data breach notification letter in the past two years, with half of those getting more than one letter.

“Businesses have a fiduciary obligation to treat personally identifiable information like assets,” said Matthew Cullina, CEO of Identity Theft 911, America’s leading identity theft resolution and education services provider. “They wouldn’t leave money unprotected, and they should take the same approach with personal data they are entrusted with. Every week, we read about another data breach, and consumers are not only angry, they feel violated when companies do not safeguard their personal information.”

Results of the survey, conducted by GfK Custom Research, include the following:

• If their personal information was exposed, respondents said they would feel “angry” (33%), “violated” (27%), “annoyed” (21%) or “anxious” (14%).
• Depending on their age, 72% to 81% of those surveyed said they were concerned identity theft could happen to them or someone close.
• If their data was exposed, the majority of respondents said they would want: a letter from the company explaining what happened and what was being done to respond (80%); free access to “live” expert fraud specialists providing one-on-one assistance (76%); free credit monitoring tools (70%); and identity theft insurance (55%).

Dow Jones & Company has prevailed in a lawsuit it brought to defend its businesses against unjustified patent licensing demands.  In a case concerning technology to personalize Web sites, a federal district court in Washington, D.C., declared two patents held by Ablaise Ltd. invalid. The court said that although Ablaise generated revenue from one of the patents “it admits that it has done so through a coercive licensing scheme that has more to do with the costs of litigation than the novelty of the patent.”

“Dow Jones vigorously fights unwarranted demands for patent licensing fees,” said Dow Jones General Counsel Mark Jackson.

In 2006, Ablaise demanded that Dow Jones pay a licensing fee to provide personalized content on Dow Jones Web sites. Ablaise claimed those features were possible only by use of its patented technology.

In response, Dow Jones filed a lawsuit against Ablaise asking the court to declare that Ablaise’s patents are invalid or that Dow Jones’s Web sites do not infringe Ablaise’s patents. The court agreed in a decision issued July 15 that the patents are invalid, saying that what Ablaise claimed it had invented was obvious or anticipated by existing technology.

Steven Lieberman of Rothwell, Figg, Ernst & Manbeck represented Dow Jones in the matter.

Performance Designed Products, a video gaming accessory manufacturer, announced today that it has amicably settled its recent patent infringement lawsuit against dreamGEAR.

The lawsuit, filed in April of this year, alleged patent and trade dress infringement by dreamGEAR’s tennis rackets contained in its Soft Sports Kit Tennis Doubles Pack for use with the Wii video game system. Under the settlement, dreamGEAR agreed to cease further production of the accused tennis racket designs, and pay PDP an undisclosed monetary payment. In return, PDP granted dreamGEAR a license to sell the remaining inventory of its Soft Sports Kit Tennis Doubles Pack containing the accused tennis rackets.

“The settlement demonstrates the value of PDP’s intellectual property, which is the result of years of effort in the development of new and innovative products,” said John Moore, PDP’s senior vice president of marketing. “PDP’s NERF Sports Pack received three U.S. design patents alone, one of which was the subject of the lawsuit with dreamGEAR, and PDP has many other patents and patent applications in its portfolio as well.”

PDP recently announced that it sold more than one million units of its NERF Sports Pack in North America in 2008.

More than just unhealthy, California’s increasing girth is crippling the state’s economy, according to a study of the economic cost of obesity in California released today by the California Center for Public Health Advocacy (CCPHA). In just six years, reported economic costs of adult overweight, obesity and physical inactivity have nearly doubled and are now costing California an estimated $41 billion a year.

An update of a 2000 report, the study shows a 33 percent rise in obesity rates contributed to sharp increases not only in health care costs but also in lost productivity. The report is based on the latest available data and scientific research on the relationship between overweight, obesity, and physical activity, and their collective impact on health care expenditures and worker productivity.

“To put this in perspective, the economic cost to California of adults who are obese, overweight and physically inactive is equivalent to more than a third of the state’s total budget,” says California State Controller John Chiang. “Think of the programs we could protect, the children we could educate and the families we could help if we could recapture those dollars by investing in prevention. These figures demonstrate the real and very unsettling financial impact of the obesity epidemic on a California economy already in crisis.”

A leading national health econometrics consulting firm based in North Carolina, Chenoweth & Associates, was commissioned by the California Department of Health Services in 2000 to generate the first cost of obesity study. CCPHA hired the firm to update the study to get a more contemporary picture. Chenoweth and Associates found that overweight and obesity claimed a slightly larger percentage of the annual costs ($21 billion) than did physical inactivity ($20.2 billion). They also predict that the trend for dramatic growth in costs will continue and conservatively project that by the year 2011 costs will climb to $53 billion.

“These rapidly escalating costs paint an alarming picture for our state,” says Dr. Harold Goldstein, executive director of the CCPHA, which commissioned the study. “They underscore the need to build community health and prevention into public policies at every level, from national health care reform and the state’s use of federal stimulus funding to regional growth and local policies that help people to eat healthy food and be more physically active.”

In addition to a new statewide figure, today’s study provides an accounting of obesity costs by county. While it is not surprising that the largest counties have the largest costs, the numbers nevertheless are staggering: Los Angeles County – $11.9 billion; Orange County – $3.3 billion; San Diego County – $3 billion; Alameda County – $2.2 billion; Santa Clara County – $2.1 billion; and Sacramento County – $1.7 billion.

As dire as the report’s findings may be, the authors point out that even small improvements in health can have a considerable impact. A 5 percent improvement in the rate of physical activity and healthy weight over five years could trim almost $12 billion from the state’s obesity costs.

“The obesity crisis may seem overwhelming, but California has successfully tackled big health issues before,” says, Kim Belshé, Secretary of California Health and Human Services Agency, who helped design and lead the state’s nationally recognized tobacco programs. “The key is to establish concrete changes at the federal, state, and local level to make it easier for people to make healthier choices. This study shows that if those changes can help just one Californian in twenty reduce their weight and become more physically active, we could realize significant savings and begin to turn this crisis around.”

Echoing the need to address environmental issues that encourage poor diet was the study’s funder. “There are many communities where it is easier to get a cheeseburger than an apple. Communities such as these are designed for disease because of poor planning and policies that actually contribute to the epidemic,” says Robert K. Ross, M.D., president and CEO of The California Endowment, which funded the study. “In order to address the obesity epidemic effectively we must take a cogent look at what is driving it. We must move toward local, state and federal policies that seek to improve community environments and develop opportunities for physical activity.”