Tag Archives: Law & Disorder

Senate report shows Apple avoided billions in taxes on foreign income

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A new Senate report (PDF from The New York Times) shows that Apple has been employing potentially sketchy business methods to avoid heavier tax burdens. According to the investigation, the company dodged billions in potential taxes on $44 billion in foreign income during the past four years.

Some of the interesting bits from the Senate’s report: three Apple subsidiaries in Ireland claim no responsibility to pay income taxes to any country. Apple Operations International, one of the Ireland three, reported $30 billion in income during 2009 to 2012 despite having no employees and not filing income taxes anywhere within the last five years. Apple did not violate any laws during this time according to the Senate investigation.

As The Chicago Tribune notes, many of the tactics Apple employed are common for multinational corporations (see cost-sharing arrangements). Google and Amazon were slammed by British parliament last year for their own tax-tiptoeing practices abroad. Nevertheless, the information released today cannot be welcomed by Cupertino with its CEO set to speak in front of Congress tomorrow. The Tribune quoted written testimony for that hearing which addresses this new tax spotlight. According to those statements, Apple does not utilize “tax gimmicks” and “has substantial foreign cash because it sells the majority of its products outside the US.” The company also reiterates that it pays plenty of US taxes, a defense it used in the face of tax accusations last year.

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Brocade and A10 settle patent case one hour before a jury hears it

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One of the longer-running, and higher stakes, high-tech patent disputes has been laid to rest. Brocade and A10 Networks settled their patent and copyright dispute over their competing application delivery controllers today. The deal was struck just one hour before a San Jose jury was about to hear opening statements in a damages trial, according to Mike Swift, a reporter for the MLex legal and regulatory news service.

Brocade won a huge court victory against A10 last year when a jury ruled that A10′s AX line of “load balancers” infringed both Brocade copyrights and patents. The case became even more noteworthy after trial when a judge ruled that Brocade would win an injunction because of patent violations. In the past several years, changes to patent case law have made it much harder to win an injunction.

Overall, A10 took a walloping. The company was found liable not just for patent infringement but also for copyright infringement, trade secret violations, and unfair competition. A10 was ordered to pay Brocade $60 million, and the company had to change the design of its flagship networking equipment in view of the court’s injunction. A10 was facing a separate jury trial, starting today, on the issue of damages, which could have been up to an additional $50 million. That’s not pocket change for an organization that had $92 million in revenue in 2011.

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Prenda lawyer Paul Hansmeier asks appeals court to delay sanctions

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A mosaic of Lady Justice at the 9th Circuit in San Francisco.
Thomas Hawk

Four lawyers linked to the embattled copyright-trolling Prenda Law operation were slapped with a sanctions order earlier this month, ordering them to pay more than $80,000 in penalties and referring them to state bar investigators as well as the US Attorney’s office.

The only one who has spoken publicly, John Steele, said he will appeal. Now, papers have been filed by Steele’s comrade-in-arms Paul Hansmeier, asking the US Court of Appeals for the 9th Circuit to stay the sanctions issued by US District Judge Otis Wright while Hansmeier puts together a proper appeal. Hansmeier filed the motion late Thursday, just days before the May 21 deadline to pay the $81,319.72.

“The district court failed to afford Appellant even the most basic due process protections, such as the ability to cross- examine adverse witnesses or to object to the introduction of improper evidence against him, let alone the strict due process protections that would be available in a criminal contempt proceeding,” writes Hansmeier in his plea to the appeals court. “The impending actions of the district court threaten to damage Appellant’s reputation in the legal community, in turn damaging his ability to attract clients and to represent them effectively, in a manner that will be irremediable through the normal appellate process without a stay of execution.”

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Aussie government tries to block two sites, takes down 1,200

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Australia’s government is under fire after it appears to have introduced web censorship without warning and expanded already controversial powers to block access to child pornography into a wider web filtering system.

The reluctance of the government to release information about who has requested sites be blocked, and lists of those sites, has also alarmed many Australians. Two convenors from Melbourne Free University (MFU), whose site was blocked without warning or explanation on 4 April, have described it as a “glimpse [of] the everyday reality of living under a totalitarian government.”

For a country that perhaps has a reputation for taking it easy, Australia’s governments have been particularly keen on web censorship. In 2008 a web filter was proposed that would have potentially blocked as many as 10,000 sites by placing them on a blacklist. Years of criticism from industry, political and public groups—including Anonymous “declaring war” on it, and Wikileaks publishing the confidential blacklist to show it included some sites that were only, contrary to government assurances, subjectively offensive—led to the idea being dropped in November 2012.

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MP to Google: “You do do evil” when it comes to tax

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Pressure is mounting on web giants Amazon and Google as a series of whistleblowers have put a question mark over their UK tax arrangements. Both companies have been accused of disguising the full extent of their UK-based activities to avoid paying tax.

At a Public Accounts Committee hearing on May 16 chairperson Margaret Hodges accused Google of “deliberately manipulating the reality of their business” and claimed to have whistleblower evidence that UK Google staff had sold advertising and invoiced UK-based customers.

“You are a company that says you do no evil,” she told Google vice-president Matt Brittin. “I think that you do evil in that you use smoke and mirrors to avoid paying tax.”

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Congress sends Google a list of questions about privacy and Glass

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Today a bipartisan Congressional privacy caucus sent Google a letter with eight questions regarding a topic that’s caused a lot of speculation: how will privacy be protected by Google Glass? The headsets can take photos and video in a more discreet manner than raising a smartphone or a camera and pointing it in the direction of a subject. Advances in facial recognition technology, as well as the wealth of data that Google has collected through increasingly consolidated user accounts, have raised the possibility that a stranger could see you on the street and access considerable data about you.

Co-Chairman of the privacy caucus Joe Barton (R-TX) and seven other members of the caucus signed the letter, which said, “we are uncertain of Google’s plans to incorporate privacy protections into the device.” The caucus demanded that Google address how it would deal with getting consent from non-users who might have their information collected by Glass, how facial recognition would factor into Glass, and whether Google will allow people to store any personal information on Glass itself.

The caucus members also asked if the company would limit its technology to protect user and non-user privacy and wanted to know what specific information about users Google intended to collect (Google’s current privacy policy says that it may “collect device-specific information”). Google has been given until June 14 to send a response to the caucus.

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Nintendo kicks “Let’s Play” videos off YouTube then slaps ads on them

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Alibaba

Once it became simple to record, upload, and share digital video over the Internet, gamers quickly became interested in recording themselves playing games—especially with humorous or profane commentary. The phenomenon of creating and sharing so-called “Let’s Play” videos took off around 2006 and today has its own channel on YouTube. Practitioners of this self-recording art sometimes refer to themselves as LPers for short.

Now, it looks like Let’s Play videos are one more piece of content that’s being caught up in YouTube’s Content ID system. It’s an automated copyright-enforcement system that’s been glitchy from the start and often criticized for taking down legitimate content. Remixes of cultural icons have been taken down with no good explanation, as well as NASA content that should be in the public domain. Political satire didn’t stand a chance either. Until October, there wasn’t even a meaningful appeal system for owners of wrongly removed videos.

It looks like LPers are the latest victims. A prolific LPer named Zack Scott took to Facebook yesterday to complain that several LPers had experienced takedowns of the videos including Nintendo games. A company fan like himself wasn’t the right target for automated takedowns, Scott complained, and he said he’d stop playing Nintendo games until the situation was straightened out. “It jeopardizes my channel’s copyright standing and the livelihood of all LPers,” he wrote.

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Blogger writes about predatory publishing, is threatened with $1B suit

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Metadata librarian Jeffrey Beall runs the popular industry blog Scholarly Open Access. The site maintains a list of open-access journals and publishers that Beall believes engage in predatory practices. For journals and publishers these acts include things like spamming scholars or charging faulty fees for content. The site is known simply as “Beall’s list” to followers and its notoriety has earned Beall ink in places like The New York Times. (And yes, now he even receives pseudo-spammer journals who request to be featured on the site without really understanding.)

Today The Chronicle of Higher Education reports on a less amusing letter Beall received Tuesday. An Indian intellectual property management firm called IP Markets informed Beall that they would be suing for $1 billion in damages and that he could face up to three years in prison for his “deliberate attempt to defame our client.” That client is OMICS Publishing Group, an India-based operation profiled several times on the blog. The group requested that Beall remove the posts and e-mail updates to anyone who published his work, yet IP Markets still intends to go through with the suit either way.

“All the allegation [sic] that you have mentioned in your blog are nothing more than fantastic figment of your imagination by you,” the six-page letter reads according to The Chronicle. “Our client perceive the blog as mindless rattle of a incoherent person and please be assured that our client has taken a very serious note of the language, tone, and tenure adopted by you as well as the criminal acts of putting the same on the Internet.”

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