After more than a year of uncertainty, the case of the stolen iPhone 4 has been brought to something like a conclusion. San Mateo County Assistant District Attorney Morley Pitt announced that charges would not be filed against Gizmodo’s Jason Chen, whose liberty has been in question since the police raided his house shortly after the alleged theft.

Pitt said that “it is a very gray area,” but that regarding journalist protection laws, “this was not the case with which we were going to push the envelope.” Not the most precise statement of exoneration, but very sensible.

On the other hand, Brian Hogan and Sage Wallower, who found the next-generation phone incognito at a bar, will be charged: misappropriation of lost property (i.e. selling something you found), and possession of stolen property (it becomes stolen once you decide to sell it) respectively. They face a maximum of a year in jail plus fines and probation; I don’t want to speculate too much on their fates, but hopefully the association with a freshly-deemed-legal journalistic endeavor will cause the judge to look more favorably on them.

Now seems as good a time as any to link to my If I Did It post, in which you can learn a few missteps to avoid if you should come across a top-secret piece of hardware. And don’t forget that our tip line is anonymous. Exercise discretion, friends.

Update: here’s the official statement from the DA’s office.

[image source]

It’s no secret that an employer can, and probably should, do a little check-up on your internet presence before hiring you, and possibly afterwards. But as several unhappy people have found out, sometimes they look pretty hard, and have access to information you thought private. It can result in foot-in-mouth moments and occasionally punitive action. That was certainly the case when five workers were fired for their conduct on Facebook.

The post in question was a complaint about someone else’s complaint, and other employees joined in, including the person being complained about. A few days later, they were sacked; their employer said that the posts constituted harassment.

The workers felt their rights had been violated, and took it to the National Labor Relations Board. And incredibly, an NLRB judge has just ruled that all five must be hired back. I say “incredibly” becuase judicial comprehension of tech issues is a serious problem. Judge Arthur J. Amchan seems to have a head on his shoulders, though. He stated that the employees had not forfeited the protection of the law in their speech, which was well within the bounds of normal discussion of workplace conditions for which one can’t easily be fired.

The size of the precedent being set isn’t clear. It’s certainly a victory, but to blow it out of proportion would be a mistake. This was a one-time offense with some coffee-break jabbering — a fairly easy thing for the judge to see. But questions abound. What if it was systemic? What if it was in private messages? What if it had been going on for weeks? Months? What if the person being harassed has left the company?

It’s entirely possible that a company could institute a contract policy in which employees essentially do forfeit their right to private communication. And the line past which behavior becomes not just undesirable but a fireable offense isn’t clear at all. Like many other areas where communication is moving to new platforms, the boundaries have to be tested, and this ruling extends the safe zone by a little bit.

The much-maligned SOPA bill is facing a lot of heat as much of the tech industry sets its weight against it. But while the legislation is being discussed, its extreme solutions to criminal online sites are already being adopted. A judge in Nevada has ordered that 228 websites be seized, their domain names transferred, and their listings removed from search engines.

There are several serious problems with this ruling, and law blogger Venkat Balasubramani sums them up well. Essentially it is unclear how and why this Nevada judge purports to exert powers over hundreds of separate defendants internationally and order relief from parties only tangentially related to the case, such as search engines. The jurisdiction, evidence, and punitive actions all seem to be have had their scope exaggerated.

In brief, Chanel investigated 228 sites it suspected of counterfeiting goods, ordered from 3 of them, internally confirmed the counterfeit, and then extrapolated from that. The judge ordered all 228 domains to be seized.

Immediately the reasonable thing to wonder is what did the 228 sites have to say in their defense? Apparently nothing, since it wasn’t 228 separate suits. Yet for 228 different sites, presumably with a number of different owners, hosts, registrars, countries of origin, and so on, it seems there might be some individual defenses, pleas for time or clemency, or what have you. Torrent lawsuits have failed because it was ruled that a suit could not be leveled against so many individuals as a generalized entity when clearly the actions of those individuals were not acting in concert or even aware of each other. Apparently this judge feels otherwise.

The peremptory and broad nature of the actions required by the ruling are troubling as well. Can a Nevada judge really order Google and Facebook to delist these sites? Can he compel a plethora of registrars to give up control of the domains? It’s a bit like ordering a criminal to be imprisoned on the Moon.

True, it would be time-consuming and troublesome for Chanel to go around suing every fake goods site. But surely there is a way more in line with existing laws, US and international, than fleecing a naive judge into ordering instant and out-of-place punishments with global implications. Although it’s just one of many similar seizures, as <a href="http://arstechnica.com/tech-policy/news/2011/11/us-judge-orders-hundreds-of-sites-de-indexed-from-google-twitter-bing-facebook.ars"Ars Technica points out.

Challenges to this ruling will likely come from the companies involved at the fringe, not at the questionably legal operations selling fake handbags, which can easily set up again at a different domain and count up this seizure as the cost of doing business. But Google and the registars are likely to resent being treated as Chanel’s playthings. Google has already stated its intention to not comply with SOPA requirements. Will they comply with requirements that are in all but name SOPA requirements? I sincerely doubt they’ll allow a precedent to be set by such a ridiculous case.

As Balasubramani points out, plaintiffs don’t need SOPA to ask for SOPA-like remedies, and many judges, sad to say, are ignorant enough to grant them. But without the visibility of SOPA, individual cases will have to be policed for unreasonable actions like this one. Luckily the parties that must take action for these remedies to have any effect are aware of the threat, whether it’s federal or otherwise.

In July, we wrote about an ongoing case wherein a woman accused of fraud was being asked by the prosecution to provide the password to access her computer’s data, which otherwise would remain encrypted and unreadable, weakening their case. They got permission to compel her to reveal the password, but the defense said that it was unconstitutional to do so, as providing that information was essentially self-incriminating testimony.

The defense and the prosecution disagree, there is no single compelling precedent, and even the Supreme Court, which has weighed in on a similar topic, isn’t quite sure what to make of the situation. So, doing what Judges are made to do, Judge Robert Blackburn made a decision: “the Fifth Amendment is not implicated by requiring production of the unencrypted contents of the Toshiba Satellite M305 laptop computer.”

His opinion, which is embedded at the end of the post, is not a poorly informed or foolish one (like some inevitably are in tech), though it isn’t very transparent. One earlier decision in a child pornography case, though the situations are not particularly analogous, is more lucid and describes its reasoning in more detail, something that may be important in a potentially major precedent-setting case.

The interpretation he gives, notably, eschews analogies (the battle has been over whether providing the password is an expressive act or more akin to simply handing over a key) and sticks to what he feels are the more relevant legal realities: the location and nature of the data is known by the prosecution, the owner of the data and the laptop have also been established, and whatever documents are discovered will be authenticated not by the defendant’s production of the password but by other means. To him, it seems, everyone is arguing over the wrong aspects of the case. It’s a practical decision, but because it is so practical (and specific to this case), it probably won’t live long as a serious precedent.

The question everybody is asking is not whether Ramona Fricosu will be convicted of fraud, but how access to data should be considered in a courtroom. It’s long, long past time when this should have been settled definitively.

But the debate over whether access is “more like” one thing or another, over which there are precedents already, doesn’t seem very forward-thinking. This doesn’t seem like an issue that’s going to be settled by this kind of decision, unfortunately, because as the debate shows, nothing is really an adequate comparator for something like a password to an encrypted drive. The parallels are only superficial, and building legal precedent on superficial similarities just because it’s easier for some people to grasp is no way to build the future.

Unsurprisingly, Fricosu’s lawyers are fighting the decision, asking for a stay of execution on the order so they can take it to the next level, the 10th Circuit Court of Appeals. No doubt the debate will go on for some time, but this case will certainly be considered one of the key documents.

The dispute between Apple and Proview over the “iPad” trademark has just gotten a lot more domestic. Proview, which owned the “iPad” trademark in several countries until they sold the rights to Apple, has been alleging shenanigans, specifically that part of the company never authorized the sale. Apple, for their part, says that everything is in order, and they have the signatures of the recalcitrant Shenzhen branch of Proview to prove it.

A Chinese court found that while the ownership of the trademark was not yet able to be settled, there wasn’t enough evidence to support a sales ban on the iPad. But now Proview has brought the court to California, alleging that Apple defrauded them of the trademark by approaching them as a fictional company: IP Application Development Ltd., or IPAD Ltd.

IPAD Ltd apparently applied to Proview for the trademark as an abbreviation of its name, and promised future products wouldn’t compete with Proview’s. If true, this is a fairly serious offense, and Apple’s ownership of the trademark could be overturned. The legitimacy of the emails (which the Wall Street Journal claims to have seen) will surely be contested, but if it’s all on the record, it could be curtains for the iPad in China — at least, unless Apple wants to pay Proview’s extortionate fees for the privilege.

The suit was filed in California on the 17th, and the China case was suspended yesterday. There is no word on when the U.S. case will go to court.

Just hours before Apple is due to unveil what many think will be a new version of its best-selling iPad tablet, Samsung has tried to steal a little thunder by filing a lawsuit against the Cupertino company over patent violations in the newest models that Apple has on the market as of this morning, the iPhone 4S and the iPad 2. The suit was filed in Samsung’s home market of Korea.

Given how these patent suits have come to represent almost as much in public mindshare as they have in terms of actual licensing deals (and, more loftily, questions of originality in device design), this could be seen as a well-timed and key move by Samsung. But it also appears to be a reversal of strategy…

On the one hand, Apple has been storming the smartphone market since re-energizing with its iPhone 4S launch last autumn, and we could well see a similar effect in tablets if it launches a new iPad today — as many believe it will. Putting in a lawsuit before the launch is one way of Samsung keeping up its challenge against that onslaught.

But on the other hand, lodging a suit in Korea seems to mark a change in strategy in terms of how Samsung has decided to approach these legal battles.

Korea is actually one of the few markets that has seen Samsung drop suits against Apple: in November 2011, Samsung dropped a separate patent suit over the iPhone 4S, and at the time it looked like one of the main reasons was because it actually looked more like negative rather than positive PR for Samsung’s spin doctors.

At the time, a senior Samsung official, quoted in the Chosunilbo daily, noted, “We concluded that we should engage in legal battles with Apple only in the global market, but not in order to gain more market share in Korea.”

Fast-forward to today, and it may well have been that PR just formed one part of the decision (and maybe even a small part), while Samsung worked out a better and more powerful suit against Apple. While the original suit only pertained to Apple’s iPhone 4S, this latest, according to an article in Reuters, covers the infringement of three patents in both the iPhone 4S and the iPad 2.

The three patents pertain to data display, user interface and short text messages. While the first two sound very general, the third is a bit more specific but it’s still not clear exactly what that last one means: possibly the abbreviations that Apple lets you program to expand into longer phrases?

On a wider level, Samsung and Apple are still actively going after each other in a number of other countries, including Australia, Germany, France, Italy and the U.S — 30 cases in all covering 10 countries, covering technical as well as design patents used in their respective ranges of mobile devices.

Those cases are not proving to be one-sided in their outcome although there have been some notable and possibly debilitating injunctions on Samsung tablets in the process, specifically in Germany and Australia. Apple is also involved in patent cases against other Android-based device makers, most notably HTC and Motorola Mobility.

To be sure, Samsung and Apple have been fairly liberal with the amount of suits they have going on against each other right now, but it’s probably also worth pointing out that Samsung also got a bit more active in its filings around the time of the iPhone 4S launch (particularly in Europe) so we may see more coming from the company in the days and weeks ahead.

We have reached out to both Apple and Samsung for comment and will update this story as we learn more.

Update: Samsung has provided TechCrunch with a statement on its position in the case in Korea. It says that the patents here are different from those in the case filed in April 2011, which pertained to telecoms standards (those that fall under so-called FRAND licensing):

“Samsung has today (March 6) filed a lawsuit against Apple in the Seoul Central District Court over its continued infringement of three utility patents in its iPhone 4S and iPad 2.
 
This lawsuit is separate from the proceedings filed against Apple in Seoul in April 2011 regarding infringement of telecommunications standards-related patents.
 
Samsung will continue to assert its intellectual property rights and defend its investment in innovation in order to ensure our continued growth in the mobile industry.”

Update 2: An Apple spokesperson declined to comment on this today.

The lawsuit filed on Monday by Yahoo against Facebook over alleged infringements of certain “method” patents was a high profile step for Yahoo to take in the lead-up to Facebook’s IPO.

But although Facebook has seen patent suits against it double in the last year, don’t necessarily take this as a sign that Yahoo will necessarily extend its fight to more jurisdictions, nor that social media will be come the next battleground, after mobile, in patent wars, says one senior patent lawyer in London.

Myles Jelf, a partner at the UK law firm Bristows — which works with a number of multinationals in the telecoms, media and technology sector on patent and intellectual property cases, including Samsung in its patent dispute with Apple — says that he would be “surprised” if Yahoo began to broaden out its case beyond the U.S.

“The cost goes up by an order of magnitude once you spread across the globe,” he said, but he added that other jurisdictions might not be so sympathetic on “method” patents describing different functions, and what they are supposed to protect. “Outside the U.S., it’s much harder to make claims like that stick,” he said. “It’s generally a lot easier to get one granted than it is to uphold it in court, so I think Yahoo should think quite hard before exposing itself in a number of other jurisdictions.”

He also notes that if it is the case that Yahoo is banking on Facebook being inclined to make a deal pre-IPO, “a big piece of litigaion is all you have to put in play.”

Nor does he think that patents around social media will ever have the same currency as those around mobile technology — a field that has spawned a number of suits between Apple and Android device makers (like Samsung), as well as other companies including Microsoft, Nokia and many others.

“In the Apple/Samsung cases, for example, it’s a global battle for consumers, and it’s a matter of life and death,” he said. “It’s like the two competing against each other on the supermarket shelf, and that’s why you have to go into every court.”

In contrast, he explained, “Yahoo is not saying Facebook is a competing service, and it should be pulled. It’s saying: you are using my technology and so we want a revenue stream.”

Beyond that, in the mobile world, he noted that the players who have huge patent portfolios have them because they’ve invested often billions in research money to make something work. “All of this — 3G and 4G technology — costs billions of dollars to create and so there’s a greater driver to produce income from that. In social media it’s not R&D billions but neat packaging.”

However, he does note that the market for internet services significantly more saturated now than it has been in years past — in the case of Yahoo that has meant difficulty in getting an edge over Google in search, or competing against them as effectively in advertising. That means companies that work in these fields “will need to find new income streams, and so if there are any possibilities in that patent portfolio” to do that, this could change the outlook significantly.

And — as if almost on cue — Tim Armstrong, CEO of AOL, TechCrunch’s owner, came out with a line on its own portfolio of 700-800 patents:

“You should assume we understand that portfolio, and assume we have a strategy on it,” he said at a Barclays investor conference (via AllThingsD). Activist investor Starboard Value has said in the past that those patents could earn AOL in excess of $1 billion annually if “appropriately harvested and monetized.”

Here we go again: today brings another mobile patent infringement suit — this time against T-Mobile USA, and over a technology that has had very little use to date, but a lot of potential.

On Track Innovations says that the carrier is selling, “or offering to sell”, “at least” two handset models — the HTC Amaze 4G and the Nokia Astound — that it claims violate a near-field communications patent owned by OTI. NFC is the technology that is the centerpiece for a number of contactless mobile payments services and data sharing other applications.

The case was filed today in the United States District Court for the Southern District of New York, OTI says.

OTI says that it holds some 100 patents — both approved and pending applications — covering a pretty wide range of areas, from NFC and other contactless payments technologies, to secure ID, and  “petroleum and parking solutions.”

OTI says in its suit (embedded below) that T-Mobile has been damaging OTI’s business “by selling and/or offering to sell data transaction devices having contact and contactless modes of operation enabling Near Field Communications capabilities, including at least the following such devices: HTC Amaze 4G, Nokia Astound.” That could leave the door open for other devices to be named. There are no damages specified in the suit. The patent in question here is number 6,045,043.

OTI has been enforcing its patents already and says it has signed a licensing deal “multibillion dollar” corporation, covering a different patent, 8,090,407, for contactless smart SIM cards. It doesn’t specify the name of the licensee.

“We believe in the strength and value of our intellectual property and have the resources to protect it,” Oded Bashan, chief executive of Rosh Pina, Israel-based OTI, said in a statement.

OTI says that its technology is supported by MasterCard and Visa. Among the products it sells itself are NFC devices and readers, including a product, the COPNI (Contactless Payment and NFC Insert), that can be attached to a phone to make it NFC-capable, even if it does not have an NFC chip built into the device itself.

Although some companies like Google, Nokia and RIM have committed to implementing NFC, there are others that have not and some have seen these “bolt-on” solutions as one way forward to speed up usage and adoption. There were just 30 million NFC-equipped handsets sold in 2011, says Berg Insight, but it predicts that number will go up to 700 million by 2016.

Up to now, many of the mobile patent suits have been against device and component makers although there seem to be an increasing number of digital media suits covering services (for example, the infringement case Yahoo has brought against Facebook) that widens the net of plaintiffs and defendants.

We are contacting T-Mobile for a comment and will update this story as we learn more. Update: T-Mobile has responded: “T-Mobile does not provide comment on pending litigation,” a spokesperson said in an email.

Filing is here:

Last year, Alexia covered a funny Chrome web browser extension called “Defaceable” that allowed you to comment anonymously on Facebook and on other websites using Facebook Comments. Instead of having to associate your comment with your real name and identity, the Defaceable extension let you once again post your troll-isms to friends’ walls and blogs like TechCrunch (which uses Facebook Comments) using the names of fruits. For example, instead of “John Smith,” your comments would identify you as “Peach” or “Watermelon.” Oh ha ha.

As it turns out, Facebook didn’t think it was so funny, and has since taken legal action against the company for violating its Terms of Service. But it hasn’t stopped there. Facebook also went after one of the commenters on that blog post, too – a guy named Rick Stratton, who gleefully discovered he made it into the screenshot used to accompany the post. Stratton doesn’t work at Defaceable, to be clear, he was just commenting on the post. Apparently, posting “Hey! I made TechCrunch!” is now worthy of legal action.

Stratton tells us he received a four-page letter via FedEx on April 2nd which came from Facebook’s lawyers, the Seattle-based firm Perkins Coie. Stratton, who’s actually the founder of Feed.Us, says he’s in “no way related to this Defaceable company,” but confirms he made a comment on the TechCrunch article about Defaceable’s software.

“My face appears in the image uploaded to the article,” Stratton tells us. “And I made a comment on the story. And so now these dumb lawyers are coming after me,” he says.

What happened was that a screenshot of Defaceable in action was used to illustrate the post. It was a screenshot taken from an older Facebook comment thread where a user named “Peach” was poised to troll the discussion. Above “Peach” was Stratton’s profile pic and comment, and that of another user. Neither of these comments were what set Facebook’s lawyers into action, however. They were fairly innocuous, even somewhat generic examples of blog commenting.

But after TechCrunch’s Defaceable post went live, Stratton says he received nearly a dozen tweets and DM’s telling him that he “made it” onto to TechCrunch. That is, he was in the screenshot.

“It was completely ironic – Feed.Us is a great software service that TechCrunch should write about but the only way we make it on TC is when Alexis [sic] takes a screengrab of my face,” explains Stratton. “So I replied to the story with a new comment ‘Hey I finally made it onto TechCrunch.’”

He was being funny.

Get it? He made it onto TechCrunch…as a screenshot.

Stratton tells me that he understands how the law firm might have made the initial mistake.

“I could see how they would think I was somehow involved from the text of my comment, but I was only commenting on the fact that Alexis [sic] used a screenshot in the article that had my picture in it,” he says.

After contacting the firm, he was told he will need to hire a lawyer to prove he’s not involved with Defaceable. “She [the lawyer from Perkins Coie] basically grilled me and became irate and told me to get a lawyer to prove that I’m not involved with this ‘Defaceable’ company…I don’t know what to do other than to hire a lawyer on this. She seems pretty adamant about coming after me.”

We reached out to the law firm ourselves to confirm, and they’ve directed us to Facebook’s public relations department. After multiple inquires, a Facebook spokesperson told us “the company’s legal team will be following up with the commenter.”

Stratton says that the social networking firm hadn’t disabled his Facebook account, though, so maybe there’s hope yet.

Below, the original letter sent to Stratton via email in March. After getting no response, the firm sent it via FedEx:

On the heels of a payout from the owners of P2P filesharing site Limewire, another claim finally settled for Merlin, the group that represents independent music labels in licensing negotiations and legal actions: the group says that Sirius Satellite Radio has settled for $1.6 million in a copyright infringement suit brought against Sirius by the agency.

Merlin says the claim concerned Sirius’ Stiletto product as well as other recording devices, and was years in coming: Sirius had settled similar claims brought by the major record labels in 2007 and 2008.

Merlin says the court has approved the settlement, which had been brought originally as a class-action suit. This means that Merlin members and other independent labels that had sound recordings transmitted by Sirius Satellite Radio between November 2005 and August 26, 2011, are entitled to get some proceeds. Merline represents labels like Warp Records, Epitaph, Naïve, Tommy Boy, One Little Indian,  Beggars Group, Merge, !K7, PIAS, Domino and Koch/E1; and artists like Adele, Arctic Monkeys, Vampire Weekend, Arcade Fire, The xx, The National, Tom Waits, DJ Khaled, Dorrough and Tiësto.

However, considering the size of the total settlement, this is probably more of a symbolic victory than something that will actually mean a windfall for individual musicians. On the positive side, along with other settlements achieved by Merlin, this also lays the groundwork for future negotiations over licensing music from smaller players.

“At a time where market consolidation is swallowing up more independent interests, delivering even more power into the hands of the largest major labels, adding this settlement to the growing list of litigation successes achieved by Merlin on behalf of its members is gratifying,” Charles Caldas, Merlin CEO, said in a statement. “Actions such as this further underline the enormous value that Merlin provides to the ever growing list of independents that have chosen to enhance their business by joining our organisation.”

Merlin says it had reached a similar, separate settlement over copyright infringement with XM Satellite Radio (now merged with Sirius) back in April 2011. Other settlements include a deal with Grooveshark.

Merlin says that collectively the labels it represents currently account for about 10 percent of the music market in the U.S. In the UK, where Merlin is based, the proportion is slightly higher at 11 percent. It has signed licensing deals with Spotify, YouTube, Google Music, Rdio and others.

You might not think that something like a website’s Terms of Service would be all that interesting, but you’d be wrong. After that post about how awesome 500px’s Terms of Service are (tl;dr: they translate them into human speak), the inbox kind of blew up with questions. Is anyone else doing this?, emailers wanted to know, can I talk to them? (Also: hey, stupid, Aviary has done this forever. Thank you, thank you, and yes, the post is updated.)

Regardless, one email stood out from the crowd. It described a newly launched legal service called SnapTerms, which provides startups with simple, reasonably priced, and personalized Terms of Service and Privacy Policies.

The Sarasota-based company, only a few months old, was founded as a side project by legal entrepreneurs Mike Kolb and Aaron Kelly, the latter who’s an attorney specializing in Internet law. With the SnapTerms service, startup founders on limited budgets have an alternative to the naughty little practice of copy-and-pasting from another website’s Terms of Service or having to dive deep into their own pockets to pay a lawyer thousands of dollars via billable hours.

Explains Kolb, SnapTerms is sort of the sweet spot right in between the copy-and-pasting and paying big bucks.

At SnapTerms, users can choose from one of the three different packages: a Pro plan ($149) offering Terms of Service and a Privacy Policy; a Pro Plus plan ($299) that adds a few things like a complete site review, support for sites that take credit cards, and a 30 minute consultation; and finally, a Custom Plan (starting at $299), which adds COPPA compliance support, and support for SaaS companies.

The plans offer different levels of support for revisions, too. For example, on the basic plan, you get one revision within the first 48 hours. On the mid-level plan, it’s one within the first three month. (Custom plans vary).

Oh, and they can also make your Terms funny, so your customers will actually read them. For an example of how funny legalese can get, you can check out SnapTerms’ own Terms here.

Kelly has experience writing terms for sites other than startups, including celebrity fan sites, affiliate, e-commerce, diet sites, and more, so the company isn’t limited to supporting early stage startups, although it does have a couple of startups that have been featured here on TechCrunch as paying customers.

Attorney-client privilege means I can’t blog about which ones unless they give word, so we’ll update if any agree to come out of hiding. In the meantime, you can check out Photodropper, Sevacall, or Murderdate for some current, legally-approved examples. SnapTerms has about 100 clients to date, despite not having done press or having advertised (save for once on Startups.com). Almost all the sign-ups have been word of mouth, Kolb tells me.

Assuming this takes off, Kolb says they may expand to offer a network of lawyers, many of whom would likely do the work on the side.

Address a need. Fulfill it for an affordable price.

Not a bad idea, SnapTerms. Not bad at all.

Another legal tangle for Apple in Portugal? Just days after a consumer rights group in the country said it was preparing to bring legal action against Apple over the wording of its AppleCare warranty service, it has emerged that an IT reseller and distributor called Taboada & Barros is already suing Apple over claims of price fixing and unfair trade practices, asking for €40 million ($49 million) in damages.

According to a report in the Portuguese-language Apple blog iPhoneTuga – citing details first reported in the Portuguese weekly newspaper Sol – the suit stretches back to February but seems to have only been made public now, in light of the action being taken by the Portuguese Association for Consumer Protection (DECO). Unlike the DECO case — which has a precedent in Italy, where Apple was fined $1.2 million over a similar matter — this lawsuit is less cut and dry.

Taboada & Barros, which also controls a large Apple distributor called Interlog, alleges that Apple’s intentional restrictions on the quantity of products it distributes through third parties led to the failure of Interlog. And this has coincided with Apple getting more active in the country, it says:

“Apple arrived in Portugal in 2007 and the following year, usurped the distribution channels that were assembled by Interlog for over 20 years, taking over from our distributors.”

Apple has a dedicated site for Portugal but relies on resellers for physical sales.

A post on Portuguese business news site Economico, dating back to May 2011, underscores how demand has outstripped supply at resellers. With iPhone handsets, iPad tablets and other devices and peripherals not arriving after March (presumably due to Interlog failing), some claimed unfilled orders for devices like the iPad tablet.

A source at TB, speaking to Sol, says that on top of restricting the flow of products to third parties, Apple renegotiated the margins that resellers can take on products down to 4 percent from a previous 12 percent. “Apple unilaterally established products, prices and quantities to be sold to large retailers,” it said.

It’s likely that the margin reduction and lost sales over supply issues are both factors in the request for €40 million in damages.

Given that in other countries Apple has played a strong role on the retail side, with its own direct presence in the form of physical and online stores, if all this is accurate, it should be unsurprising to hear Apple cracking the whip and attempting to bring more of the sales effort in Portugal under its wing. Regardless, coming as it does alongside the DECO action, even raising the issue of unfair practices can end up being damaging to Apple’s reputation in the country.

We are contacting both TB and Apple for comment on this story and will update as we learn more.

UPDATE: Kleiner Perkins has responded to us and tells Pao’s departure story a bit differently.

Another dramatic turn of events in the case of Ellen Pao, who has been suing the VC firm Kleiner Perkins Caufield & Byers over gender discrimination. Pao was fired on Monday — a development Pao herself revealed in a Quora post this week, picked up by AllThings Digital. Up to now, KPCB had still employed her as an investment partner, something that Pao herself had confirmed, also in a message on Quora, back in June. KPCB, meanwhile, is still listing Pao on its site as an investment partner as of the time of this writing. Both Quora statements were made from Pao’s verified Quora account.

Pao has also updated her Twitter bio, now describing herself as a ”former” KPCB partner.

Back in June, when someone had asked on Quora if Pao had been fired, she responded directly. “No, and I don’t plan to quit,” she wrote. Now, that original message has been given a chilling (and equally terse) revision: “Update: I have been terminated from my job at KPCB. On Monday afternoon, senior management told me to clean out my office, leave, and not come back.”

Pao alleges that the discrimination and acts of retaliation took place over seven years with the firm. Her original complaint outlines in specific detail how that was directed at her both at a personal level as well as across the whole of KPCB. It is unclear what damages Pao is specifying in her case.

For its part, KPCB has been equally strong in its denial. In a legal response in June, it said it refuted “each and every material allegation of the Complaint and further denies that [Ellen Pao] has been damaged in the manner alleged, or in any manner or amount. KPCB vigorously denies that it discriminated against Plaintiff, retaliated against Plaintiff after she complained about harassment or discrimination, or that it violated its obligation to take reasonable steps to prevent discrimination from occurring.”

Given the clear impasse between the two sides, continuing on as a partner, even if only in name, could not have been anything but awkward, so this latest development, if it is definitely correct, should not come as too much of a surprise.

We are reaching out to both Pao and KPCB for comment and will update as we learn more.

[Image: Sam Pullara, Flickr]

Apple and HTC today announced jointly a settlement of all ongoing patent litigation between the two, in a licensing agreement with a 10-year term, any further terms of which were not released. The companies both released canned statements from execs expressing their pleasure at the arrangement and both mentioning “innovation” as key goals going forward. Many will be wondering: Might this be a sign that Apple’s hard-line stance with regards to its IP and patent litigation may be experiencing a general softening, and might we then see similar agreements coming soon in the more bitter rivalry between Apple and Samsung?

The answer to that lies in the history of the HTC/Apple legal action, and also in how HTC stacks up to Samsung as one of Apple’s competitors. First, looking at the trail of breadcrumbs detailing the back and forth litigation between Apple and HTC, you see that on the surface, Apple has indeed had some wins, delaying the release of HTC devices in the U.S. and getting phones banned from import to the country thanks to an ITC order.

The two companies were ordered by a Delaware court in May to begin discussing a potential settlement, but as early as September HTC was threatening to have the LTE iPhone and iPads banned for sale in the U.S., based on patents it holds regarding LTE technology. Meanwhile, Apple is said to have spent around $100 million on its efforts to get the import ban on HTC phones put in place, only to have it side-stepped via a relatively minor software change.

Apple also experienced a reversal in the U.K. in July, when that body ruled that HTC had not infringed four of its key patents, related to gesture-based unlocking, multitouch interfaces, multilingual keyboards and bounce-back transition animations. In other words, Apple was not seeing many definitive victories in its ongoing actions against HTC and was reportedly spending a lot on its efforts.

As for HTC, it acquired S3 Graphics specifically to provide itself with ammunition against Apple, thanks to patents S3 owns that related to graphics processing which were used to claim infringement by Macs, the iPhone and iPad. That $300 million acquisition began looking like a waste of money last November, however, when the ITC dismissed S3′s complaint against Apple. It was a costly mistake for a company that’s not exactly seen as being able to afford costly mistakes, given that HTC’s revenue and net profit have fallen for four quarters in a row, viewed against year-ago results.

Apple likely could have kept up its fight against HTC for a very long time, even with a number of reversals and $100 million expenditures on legal actions that bear no fruit. But HTC is a company that’s seen as being in an accelerating tailspin, and that’s no position from which to wage a massive, global legal battle with the wealthiest consumer electronics company in the world. If I had to guess, I’d wager that this isn’t a deal that overly favors HTC in terms of the structure of its terms.

That’s a very different picture than the one you’d paint if you were discussing Apple and Samsung. Apple has scored some significant wins in that battle, and so has Samsung. Samsung is a much more successful and profitable company, with recently quarterly performance that not only sets records but also beats analyst expectations. Apple has offered Samsung terms for settlement in the past, which Samsung found unpalatable, but unlike HTC, Samsung has the resources to avoid accepting any deals that it doesn’t fully agree with.

Apple has simple goals with its patent litigation: Make Android unattractive or untenable as a platform to handset OEMs, and shut down competitors they feel are building success on the back of their own IP. This settlement with HTC is essentially a sign that Apple considers it a competitor neutralized, and that’s far from the case with Samsung. So don’t expect a similar easing of tensions in patent litigation between those two, or between Apple and other companies where Cupertino hasn’t yet achieved one of those two goals mentioned above, statements regarding innovation notwithstanding.

Tuesday afternoon in federal court in Newark, NJ, a jury convicted Andrew “Weev” Auernheimer for his role in a 2010 exploit that caused an AT&T account maintenance website to leak 114,000 email addresses of iPad owners. Auernheimer was convicted on both counts for which he was charged: conspiracy to access a computer without authorization (18 U.S.C. § 1030(a)(2)(C), part of the Computer Fraud and Abuse Act of 1986) and fraud in connection with personal information (18 U.S.C. § 1028(a)(7)).

As I suspected, the jury—likely with Thanksgiving turkey on its collective mind—deliberated for only an hour or two before reaching a unanimous guilty verdict. Auernheimer’s lawyer, Tor Ekeland, said the verdict was “not unexpected” and that he will file an appeal for Auernheimer soon. Auernheimer himself tweeted similar thoughts:

On his way home after the verdict, Ekeland told me he thinks “Any legitimate security researcher should be concerned” by the case because Auernheimer didn’t bypass any security on the poorly designed AT&T website. The focus of the appeal will be on the Computer Fraud and Abuse Act itself more than on the facts of the case, which didn’t appear to be significantly contested.

Auernheimer is out on bail until his sentencing, which will be in about 90 days. Each conviction carries a sentence of up to five years.

Nokia may be struggling to reach a critical mass of users to adopt its Windows Phone-based smartphones instead of Android or iPhone devices, but today it got a little light relief in its bigger battle: it’s had a class action suit over its choice of the Windows Phone platform formally dismissed, with no compensation paid.

“After further investigation, the plaintiffs have agreed to dismiss the case against all defendants without any compensation being paid to any plaintiff or their counsel by any defendant,” Nokia notes in a statement. “The complaint has been withdrawn and dismissed with prejudice by the court.”

The case, Chmielinski v. Nokia Corporation, was first filed in the U.S. District Court for the Southern District of New York on May 3, 2012. At the time, Nokia had already said the case had no merit and that it would seek to fight the charges: the plaintiffs alleged that Nokia had overplayed how well Windows Phone and Lumia devices would do.

Nokia, they said, had claimed that Microsoft’s Windows Phone platform adoption would halt sales declines at the company. But a month before the suit was filed, Nokia had to issue a warning to investors that it would be reporting lower-than-expected device sales.

It’s a small victory but perhaps a significant one as the company continues to work hard at both selling more Lumia/Windows Phone devices, and also at convincing investors and the wider public not to lose all faith in the company. Nokia has also faced several ratings downgrades by the credit agencies, concerned also over declines in the company’s core business of handsets.

It’s turning out to be a longer struggle perhaps than some expected for Nokia to turn the big ship around. Once the world’s most dominant handset maker, Nokia had done disastrously in smartphones. Since dropping Symbian as its flagship OS, its share in smartphones, already struggling in the face of stiff competition from Android and iOS, has declined even further. In November, Kantar WorldPanel Comtech reported figures that showed that Windows Phones accounted for less than 5% of all device sales across major markets over the last 12 weeks.

In Q3, reported in October, Nokia said it had sold 2.9 million Lumia devices. More recently, the company has been rolling out more high-end and less expensive Lumia devices to target different segments of users, one example being the Lumia 620 unveiled last week.

Nokia reports its next quarterly results, for the fiscal fourth quarter, on January 24.

Good news for Amazon, and for consumers on the lookout for bargain prices for e-books in Europe. Apple, along with the publishers Simon & Schuster, Harper Collins, Hachette and Holtzbrinck (Macmillan), have reached a settlement over e-book pricing in Europe. That deal had become the subject of an antitrust probe initiated in December 2011: the European Commission believed it gave Apple and the publishers an unfair advantage over how they priced e-books. Ironically, the biggest winner in this antitrust settlement might be the biggest e-book retailer of them all, Amazon.

Before laying out the details of the settlement reached today, it’s also worth pointing out that Apple, along with the publishers Penguin and Macmillan, are still duking it out with the Department of Justice in the U.S.

In the U.S., Simon & Schuster, Hachette and HarperCollins have already settled with the DoJ in a similar price-fixing case first lodged in April. In May, Apple called that case “fundamentally flawed” and “absurd.”

I think there is a good chance that Apple, Penguin and Macmillan will also settle in the U.S. For starters I can’t imagine the publishers and Apple would want to run two different pricing regimes. And second of all, the EC notes that it’s been working closely with the DoJ on its case:

“The Commission has worked closely with the US Department of Justice (DOJ) in this case in order to seek a global solution to the identified horizontal concerns,” it writes in today’s statement.

We reached out to Apple earlier today to ask if today’s settlement might be a signal for what might happen next in the U.S.; we’ll update when we learn more.

The details of today’s settlement:

Apple and the publishers have terminated their existing agency agreements for the next five years. The legally-binding commitment follows on from an announcement in September, in which Apple and the four publishers said they would terminate their agency deal. The so-called “agency model” moved away from the pre-existing “wholesale model” where retailers were able to set the price for books. The agency model gave Apple specifically preferred pricing on e-books for the iBookstore in a “most-favored nation” arrangement that featured “maximum retail price grids and the same 30% commission payable to Apple,” says the EC.

The implication here is that retailers like Amazon had been heavily discounting books in its operation. The agency deal would let those publishers pump the price back up, and to potentially strong-arm Amazon and others to accept the same terms, otherwise they would not be able to sell the same books.

The EC said no way: “The Commission was concerned that the switch to these agency contracts may have been coordinated between the publishers and Apple, as part of a common strategy aimed at raising retail prices for e-books or preventing the introduction of lower retail prices for e-books on a global scale.”

The publishers will let retailers set discounted e-book prices for the next two years. They call this a “cooling off period.” Effectively, this will let Amazon and others discount e-books as it chooses to do. While this may continue to commoditize the price of e-books, it will also make it hard for Apple to charge premium prices on the iBookstore. It’s not clear how pricing will proceed after that. The EC says that the discounts can be equal to the amount of commission that a retailer receives from the publisher over a one year period

Joaquín Almunia, Commission VP in charge of competition policy, makes it clear that the point of this is to give the best value for consumers more than for publishers with artifically inflated prices. ”While each separate publisher and each retailer of e-books are free to choose the type of business relationship they prefer, any form of collusion to restrict or eliminate competition is simply unacceptable,” he said in a statement. “The commitments proposed by Apple and the four publishers will restore normal competitive conditions in this new and fast-moving market, to the benefit of the buyers and readers of e-books.”

Penguin, which is merging with Bertlesmann’s RandomHouse, was also named in the EC probe. It is not part of this settlement, but Apple has already agreed to terminate agency agreements with Penguin, and the EC says it’s actively engaged in settlement discussions with Penguin to close its investigation of the publisher.

What happens after five years? Presumably the EC feels that the e-book market will have grown and stabilized enough by that point that pricing will not need to be so carefully managed. One thing that is implied here is that the publishers will be allowed to do at that point, at least for now, restore the most-favored nation status.

The settlement in full is here.

Facebook has been cooperating with law-enforcement officials for some time when it comes to handing over user data as evidence in court cases. But the situation is less clear when those legal requests are made by others — a predicament being highlighted right now in a murder case in Oregon, where the social network has (so far) refused to comply with requests from the defense team of a murder suspect to provide data that could prove beneficial to the defendant’s case.

The case has some potentially big consequences. If Facebook gets held in contempt of the court for not handing over the data, it could be required to pay up to one percent of its profits as a penalty. Facebook reported $1 billion in profits in 2011, and for the first three quarters of 2012 has reported profits of $811 million.

On the other hand, if Facebook does end up providing the data as requested by the defense team, it could end up setting a precedent for how it and other companies like Google and Twitter will be required to share private user data in the future in legal defense cases, with or without user consent. That could be a boost for defense teams, but a potential setback for individual users whose data may be in question.

“As you can imagine, Facebook gets countless orders and subpoenas like this from courts throughout the country,” Facebook lawyer Randy Tyler told the court, according to a report in the Oregonian.

Or, this could also end in a fizzle with no data provided, and no action taken, as was the outcome of another data request last year in Oregon. In that case, a judge ordered a prosecuting team to request from Google the search history of a woman who had been raped. When prosecutors refused, the judge did not challenge it.

In the current case, lawyers for murder suspect, Parrish Bennette Jr., want to obtain an online conversation between two friends of his, in which one of them apparently says he lied to the police about the Bennette’s role in the murder.

Facebook has refused for what looks like two reasons: Tyler and another Facebook lawyer, Misha Isaak, say that the defense didn’t follow correct procedure in their subpoena. And they have cited the Stored Communications Act, which protects a users’ Facebook data, tweets, Google searches and other online data held by third parties from being shared with others.

The Act has a clause in it that excepts requests for the data made by the authorities. That means when public prosecutors, police or other officials make requests — a search warrant issued on probable cause — Facebook complies — as it did in this robbery-and-murder case in Boston last year.

In the Bennette murder case, the prosecutors had not requested the data, but the judge, Richard Baldwin, on a request from the defense team led by Thaddeus Betz, had already ordered Facebook to provide the data of the conversation. Facebook would not comply with the subpoena.

Part of the argument for not complying with the subpoena goes like this: while search warrants (issued by the court)

• come after the review of a sworn application by law enforcement, in which the court finds probable cause supporting a search; subpoenas can be issued by any party to any litigation and there is no sworn application, no judicial review and no probable cause requirement. In short, the argument is that that they are less rigorous and have more loopholes for abuse.

Since Facebook refused to comply with the subpoena, another judge, Youlee You, has taken over the case. Betz has now asked her to hold Facebook in contempt of court — but so far she has not done so. She is instead letting Betz make his request again, and is letting Facebook submit documentation proving that correct procedures have not been followed. She is also planning to examine the correspondence between Facebook and the defence team.

One route out of this is for the defense to make an appeal to the court to order the users in question to hand over the data communications, rather than Facebook itself.

“Directing subpoenas to the parties of the communication eliminates a service provider ‘short cut’ and ensures that the person has knowledge of, and an opportunity to resist, the demand for their communications,” a legal expert close to the situation notes.

This doesn’t mean that Facebook data is not already getting regularly used in courts in Oregon, however. In one case from just earlier this week, an 18-year-old man in another part of Oregon was arrested for drunk driving, busting up others’ property, and then ditching the scene, after two people passed police a status update of his confessing to it.

We have contacted Facebook for further comment on the case and will update as we learn more.

The Aaron Swartz tragedy has unleashed an intense debate about computer “crime” and the US criminal justice system. Heavyweights like Lessig, Doctorow, Greenwald, Masnick, Wu and Kerr have all written with great passion about the case. But the one article that really resonated with me was written by the Harvard Business Review blogger James Allworth. Provocatively entitled “Aaron Swartz’s “crime” and the business of breaking the law”, Allworth compares Swartz’s “crime” with crimes committed by money launderers and deadly corporate criminals. As he told me, there appears to be a “systemic” problem with an American legal system in which an activist hacker like Swartz faced personal bankruptcy and 35 years in jail, while a healthcare executive guilty of bringing a product to market that killed innocent people only got 9 months in jail. It’s “extremely unfair” Allworth told me, arguing that the Swartz case proves that the American criminal justice system can be bought by powerful corporations.

So is Allworth right? Has the Swartz case exposed the flagrant unfairness of the legal system? And do we need an “Aaron’s Law” to, at least, ensure that the Swartz tragedy will never happen again?

According to InsideSocialGames, Zynga and EA have settled their legal dispute over the former’s alleged copying of EA’s popular game “The Sims.” It was clear to many that once Zynga started teasing “The Ville,” it took some major elements from EA’s classic. A source has told TechCrunch that no money has exchanged hands as part of the settlement.

At the time of the lawsuit, companies threw barbs back and forth with EA alleging that Zynga “doesn’t understand copyright.” Details as to what the terms of the settlement are haven’t been made available, but we’ve reached out to both companies, and people familiar with the case, for more information. At one point, Zynga countersued for “anti-competitive” practices, turning this into an online gaming bloodbath of epic proportions.

Things quieted down since August, and today it appears that both lawsuits are resolved.

EA and Zynga spokespeople have issued the following statements:

EA and Zynga have resolved their respective claims and have reached a settlement of their litigation in the Northern District of California.

Here is the copy of the proposal to dimiss the case, via AllThingsD:

eavszynga

This is developing.

[Photo credit: Flickr]