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The Law Developer

Where Software Meets Law

     With a pending Supreme Court decision in the Bilski case and a couple of high profile patent cases, patents issues are again coming to the forefront of discussion. I decided that I should write a few posts discussing what software patents are, what their impacts are on innovation, and what I believe should be done (if anything) to the patent system as it relates to software. But before you read my stuff, read this. This is an article by former Sun CEO Jonathan Scwartz discussing how his company and other large software companies use software patents. It’s not an opinion piece, it’s just the reality of software patents in the real world. You should read that before continuing.

     Article I, Section 8, Clause 8 of the U.S. Constitution gives Congress the power “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” From this line, Congress and the courts have created a massive body of law that includes patents. In simple terms, a patent gives an inventor the right to keep other people from copying their invention. This slightly outdated article gives a good summary of patent law. According to the article, there are five requirements to have a patent issued on an invention: (1) patentable subject matter, (2) utility, (3) novelty, (4) non-obviousness, and (5) enablement.

     The first issue for software comes with (1) the patentable subject matter. Some inventions are easy to understand as they are physical things. Software is not a physical invention, but rather instructions. It tells the computer how to accomplish a task. Think of software as the description of the process that a computer uses to solve a problem (these processes are typically called algorithms). But are these process inventions patentable? State Street Bank held that a process is patentable if it “produces a useful, concrete and tangible result.” So in the case of software, if the program produces something useful, it is good to go. Think of a program that gives a starting point and an ending destination, producing a travel route. The travel route is useful, concrete, and tangible so it would meet the first test under State Street Bank.

     But all is not quiet on the software patent front. The Bilski case was decided by the Court of Appeals for the Federal Circuit and, in all practicality, threw out the test from State Street Bank. The court held a few things, two of which are important for this discussion: first, “[a] claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” And second, “to the extent that signals are involved and are transformed, they are not ‘representative of any physical object or substance.’” So, would the travel route example hold up under Bilski? The example as stated isn’t tied to any particular machine or apparatus. So it seems to fail this part. And depending on how you think about it, there is no real transformation as the user is still left with the same computer. But I think that there really is a transformation: the user started with two geographical points and ended up with a travel route. That’s pretty transformative if you ask me. But the court states that signals are not representative of any physical object and computers do nothing more than transform electrical signals. So are software patents doomed under Bilski? According to the Wikipedia article, four of the five initial patent rejections due to the Bilski case came from IBM for software-type patents. But Gene Quinn believes that Bilski only requires patent attorneys to rephrase software patents in a way that ties it to the computer. Mr. Quinn is a patent attorney and an electrical engineer and neither engineers nor lawyers like to let the impossible stand in their way. While he doesn’t explicitly say it, the feeling I get from the article is that short of an explicit ban of patents involving any type of software, patent attorneys will figure out a way to work within the law to patent software regardless of what the court or Congress does.

     There are still four other requirements for an invention to be patentable. I’ll discuss the others later in regards to how I believe the patent process should work concerning software, especially the non-obviousness and novelty requirements. I hope this gives you some sort of an idea as to what software patents are. It will give my discussion tomorrow about the effects that software patents have on innovation (good and bad) a little more context. And it’s topical. As I write this, patent attorneys around the U.S. are on the edge of their seats waiting for the U.S. Supreme Court to announce their decision in the Bilski case.

Stephen Burch

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“Blame it on a computer.

Embarrassed cops on Thursday cited a “computer glitch” as the reason police targeted the home of an elderly, law-abiding couple more than 50 times in futile hunts for bad guys.”

     Those are the first two lines of this story. The rest of the story goes on to explain that somebody put the homeowners’ address into the system as a test and the cops showed up to the house over 50 times looking for criminals.

     Now sure, computers were involved, just like cars are involved in drunk driving. The real problem, however, is the idiot behind the machine. The worst part being that no one in the entire police force was able to figure this out and when they finally did three years ago, they weren’t able to fix it correctly. Besides the article, the newspaper has a poll asking readers if the homeowners should be compensated for their ordeal. My personal feelings: of course! I read recently about California’s anti-spam law. It allows a person who receives spam to sue the sender for $1000 per message. In the linked article, the man won $7000. Now compare and contrast. A computer sends you an email that you have to click and delete and the sender is liable for $1000. A computer sends armed men to your house sometimes three times a week and the sender will eventually get around to fixing the problem ten years later and apologize. It seems painfully obvious that homeowners should be compensated, but for what?

     Could the homeowners file a 42 USC Sec. 1983 action? These actions are reserved for when the government violates the civil rights of one of its citizens and would probably be inapplicable here. There doesn’t seem to be a civil right that has been violated. The police knocked on the homeowners’ door and asked questions, but any person can do that. They did not illegally search or seize any of the homeowners or their property. From the news article, it doesn’t seem as if the police did anything illegal, whether they had been police or not.

     How about negligent infliction of emotional distress? From Wikipedia: “The underlying concept is that one has a legal duty to use reasonable care to avoid causing emotional distress to another individual.” Most states will not recognize this tort and with good reason, but if there was ever a time to apply it, this is the case. Ignoring the numerous hurdles of suing the state government, this is a case of extreme neglect on the part of the state that has led to great emotional distress on the part of these elderly homeowners. The previous homeowner, who endured thirty similar visits in three years from police and fire crews, thought that someone was out to get him and moved trying to escape his tormentors. One of the current homeowners has suffered high-blood pressure and dizzy spells when the police knocked. All of this because a negligent computer system tester used a real address in a test and no one on the entire police force could be bothered to fix it over the course of ten years. But in reality, with the disfavored status of this tort and the hurdles of suing the state, the odds of the homeowners ever seeing any compensation from the negligence are slim.

     So what can the homeowners do? Embarrassing the police in the local newspaper seems like a good start. Other than that, I don’t know. I doubt a city commissioner will fire an otherwise competent police chief over this (I would, but I’m not a nice guy), so complaining won’t accomplish much. They are pretty much left in the same position of every other person who suffers at the hand of government incompetence, having to suck it up and move on.

Stephen Burch

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     This article discusses how a doctor caught the daughter of a patient recording their conversation with an iPhone. The doctor was giving post-surgery options to the patient and discussing his various concerns. So what was the problem? The doctor was discussing important issues with the mother right after she had surgery. Having had surgery myself, I’m sure she wasn’t able to fully comprehend everything that was being discussed and her daughter was probably just trying to help. In fact, I think all doctor appointments should be recorded. While many blame my future profession on the high cost of health care, no one denies that health care is expensive. The patients are paying that high price for the doctor’s advice, why shouldn’t they record it for future reference? When my daughter had surgery, we had numerous visits with the doctor both before and after the surgery. Many times after leaving his office, there were disagreements about what exactly was said. While I am sure that my version of the events was the correct one (because, well, I’m me and have yet to find a way to be wrong), I had no way to prove it. And this was concerning vital information about my daughter’s health.
     But the doctors don’t want patients to be able to do this. The advice the doctor in the article received: fire the patient. Really? I know that doctors, much like teachers, are supposedly perfect and above reproach- at least until they sleep with their students or amputate the wrong leg. But they provide a service just like any other worker and they need their clients to pay the bills. They should embrace the technology that helps their clients. Doctors record their version of events after the visit, why shouldn’t patients? What really scares me the most from this whole story is that doctors are apparently giving out advice that constitutes medical malpractice all the time and the only way to keep them from doing so is to record them. The doctors would much rather fire patients that hold them accountable than just, oh i don’t know, NOT say things that constitute malpractice. If this was any other profession, there would be outrage. Image if a lawyer was upset that his client recorded the conversation he payed $250 an hour for. That lawyer would get no sympathy and neither should the doctors.

Stephen Burch

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Just Doing My Job

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     Two programmers were indicted for their role in Bernie Madoff’s Ponzi scheme (via slashdot). They allegedly created software that faked trade blotters and made phantom records. They also took hush money.
     The ‘I was just doing my job’ defense won’t work for these guys and it shouldn’t work for anyone, especially professionals. When you do something you should be proud to put your name on it. If your boss asks you to do something that you feel is unethical, don’t do it. If your employer becomes involved in business areas that go against your beliefs, quit. There is no price high enough to sell your integrity. It will always end up costing you more than you could ever receive. Now these guys will most likely use up all of their savings defending themselves, spend quite a bit of time in prison, and when they finally get out, they will have no prospects for jobs. Their lives are ruined and rightfully so. Be proud of your work. Don’t let the lure of fast, easy money fool you – you will pay for it in the long run. A good reputation will allow you sleep easy at night and continue to pay off long after the easy money has disappeared.

Stephen Burch

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DMCA and YouTube

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     Viacom is suing Google, owner of the popular Internet video site YouTube, for alleged copyright infringement. While the DMCA provides a safe-harbor provision to website owners when their users post infringing content, it also provides a take-down notice procedure which provides for a copyright holder to request that a site remove infringing content before taking any legal action. As long as the website owner obliges this request, they are usually not liable for the infringing content of their users.

     So, assuming Google followed this protocol, why is Viacom suing Google? Well, it is claiming that Google did not do enough to stop infringing content. But it didn’t stop there. Viacom claims that YouTube was built on infringing content and that one of its founders was intentionally stealing videos to get more traffic. This is from an email from YouTube founders:

“We’re going to have a tough time defending the fact that we’re not liable for the copyrighted material on the site because we didn’t put it up when one of the co-founders is blatantly stealing content from other sites and trying to get everyone to see it.”

     That doesn’t sound good. In its own defense, Google writes a blog post that explains the measures it takes to protect copyright holders. Google also tells an interesting story of how Viacom has secretly uploaded videos of its shows (Viacom owns, among others,  MTV and Comedy Central) to YouTube from different computers and under different user names. Google claims that Viacom even went through the trouble of degrading the videos beforehand so that it would look pirated.

     So should Google be immune from liability for copyright infringement? The Safe Harbor Provision was meant to provide immunity to sites like YouTube, provided that certain conditions are met. The condition that Viacom claims Google doesn’t meet (as illustrated in the email above) is the “Knowledge of Infringing Material”. If the offending site’s owner knows of the infringing material and does not remove it, he can be held liable. Viacom is trying to show that YouTube not only knew that infringing material was on its site, but that it put the material there itself. The major problem with this argument is that the email is from 2005 and the infringing material it discusses has not been shown to be owned by Viacom. In its memo (pdf) and blog posts, Google discusses the measures it uses to screen for copyrighted content and alert the video’s owner. It also discusses the fact that almost every video on YouTube is copyrighted (including that “video of your cat playing the piano”). Google claims the real issue is whether or not the copyright owner wants the video to appear on the site. And it seems like Google has a very sophisticated system that tries to identify the copyright owner of media company videos and alert them to the existence of an uploaded video. This is clearly above and beyond what is required by the Safe Harbor Provision.

     According to the Reuters article, users of YouTube upload more than 24 hours of video every minute. Google even goes so far as to take active measures to review the voluminous amount of video footage and flag potentially infringing material. Legally, I believe it should be immune from copyright liability. More importantly though, I believe that sites like YouTube actually help make Viacom money. When somebody sees something on TV that they find entertaining, the next day they will show their friends and coworkers the video on YouTube. In an age where viewers fast-forward through commercials, companies are spending significant amounts of money trying to figure out how to market their shows. YouTube has created a way for viewers to market the show to their friends for free. YouTube helps build viewership. If the allegations made by Google are correct, Viacom is also well aware of this fact. That is why it continues to upload its own videos. The Internet is constantly changing  how people seek out their entertainment and some companies, although enjoying the benefits of the Internet, are really taking issue with some of the drawbacks. In this case, Viacom is using YouTube to promote its content while simultaneously suing YouTube for promoting its content. For the sake of the Internet, I hope this case is decided quickly in favor of Google.

Stephen Burch

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     With the USPS facing budget problems and considering dropping a day of service, it seems very suspicious that the 11th Circuit makes a ruling that basically removes any 4th Amendment protection for email correspondence (Rehberg v. Paulk). In this post, Professor Kerr discusses this decision and why he believes it is wrong. For those non-legal types reading, the 4th Amendment provides:

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

     Here is a condensed version of the case and the verdict. The Government was investigating someone and wanted to gain access to his email. So, the Government subpoenaed his ISP requesting the emails and the ISP complied. This subpoena was issued without a search warrant. The person then sued claiming this violated his 4th Amendment rights. Currently, a person has 4th Amendment protection in regards to a letter that is sent by the USPS (or any other carrier) until the letter reaches the recipient. Upon delivery of the letter, the sender’s rights expire and the 4th Amendment protection now vests in the recipient. The court reasoned that once an email is received by the recipient, the sender no longer has an expectation of privacy and therefore is no longer afforded the protections of the 4th Amendment in regards to the email. The problem with this, as Professor Kerr explains, is that this analogy is not correct. Professor Kerr creates a better analogy of a person writing a letter, making a copy of the letter, putting the original in his home, and mailing the copy. While the person may have lost 4th Amendment protection of the mailed letter, the police cannot barge into his house and take the original without probable cause and a warrant. This is precisely what happened here. The police did not subpoena the recipient’s inbox, they subpoenaed the sender’s outbox. While doing either may have been a violation of the recipient’s 4th Amendment rights, the court reasoned that doing the latter was not a violation of the sender’s 4th Amendment rights and therefore he has no standing to bring suit.

     While I joke about the integrity of the 11th Circuit, the problem is not integrity. They are probably some of the most incorruptible people in the country. And they are probably among the most brilliant legally minds in the country as well. So what went wrong?

     First, I believe that many people involved in the legal field do not actually understand technology, especially people of an age old enough to earn them the prestige of a judgeship at the Federal Circuit level. This is one of the things that attracted me to the legal field. I would read slashdot.org (look for the keyword yro – ‘your rights online’) and see cases and laws that made me believe that nobody involved in the legal decision making understood the technology they were trying to litigate or regulate. But judges are there to interpret the law, and it is up to the lawyers in the case to explain the facts in a way that the judges and juries understand. In this case, the lawyers failed at their jobs. Most lawyers do not have a technical background, and those that do usually end up working in the intellectual property arena. Very few go into criminal law or civil rights law. Yet with technology permeating every aspect of our lives, the need for lawyers who understand how technology works is becoming increasingly important in every area of law.

     Second, I believe that people do not take their online privacy very seriously. If someone is sending important emails, they should be encrypted. Especially if those emails contain information that may be incriminating (better yet, don’t send incriminating emails). Encryption software is free and fairly easy to use. This tutorial explains how to set up encryption on GMail. While this encryption requires that the recipient also use the same encryption software, this minor inconvenience is more than outweighed by the peace of mind provided by knowing that nobody, including the police, can read these sensitive emails unless the sender wants them to. This applies to more than just 4th Amendment rights. Hackers have been known to break into email accounts. Keeping sensitive information safe protects people not only from an over-aggressive government, but from hackers looking to steal their identity.

     I believe the judges got it wrong in this case, and I think the Plaintiff should appeal and hopefully the Supreme Court will get it right. But no matter what happens, I would like to see more people encrypt their data to keep both the government and criminals out of their personal lives. And for those who believe that the 4th Amendment is only there to help criminals, it is interesting to know that the person being investigated by the government had his charges dismissed. This was a fishing expedition by the authorities and it could happen to anybody.

Stephen Burch

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     While I was very impressed with the quality of this legal advertisement, and the advertising campaign of ‘The Thugs Lawyer‘  definitely made me envious, I have finally found an ad campaign I want to mimic. Ladies and Gentlemen, I present to you the Alien’s Lawyer. Apparently this firm sued the New York Bar to remove rules that prevented this type of advertising. And to them I say “bravo!” This from the court:

“Alexander & Catalano’s wisps of smoke, blue electrical currents, and special effects-do not actually seem likely to mislead. It is true that Alexander and his partner are not giants towering above local buildings; they cannot run to a client’s house so quickly that they appear as blurs; and they do not actually provide legal assistance to space aliens.”

     Seriously, who wouldn’t run out to retain a giant lawyer who represents space aliens? So I salute you, Alexander & Catalano… Real Lawyers of Genius.

Stephen Burch

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FCC vs Apple

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This is a quick final post on the Apple iPhone developer license agreement regarding the FCC’s investigation into Apple’s rejection of the Google Voice application. According to the FCC chairman, the FCC “has a mission to foster a competitive wireless marketplace, protect and empower consumers, and promote innovation and investment.” (link) So to further this mission, the FCC requested that AT&T, Apple, and Google all respond with their version of the events with respect to the rejection of the Google Voice application. Their responses can be read here.
Everything that can be said about this has already been said by others when the event was ongoing, but did the investigation yield any results? Well, it did help one of my favorite apps, Sling Player. For those of you that don’t know, Sling Player is a box that hooks up to a cable box and the Internet and allows users to watch and control their television anywhere they can get an Internet connection. When Sling Player submitted their iPhone app to Apple, it was initially rejected. Sling was told that their app could not work over the AT&T cellular network. So Sling resubmitted the app with a modification that only allowed it to work over wireless connections and not the cellular connections.
Then the FCC investigation happened. So in February, AT&T announced that they had been working with the Sling Player developers to optimize the app for their cellular network and were pleased that Sling Player would now be allowed to work over the cellular network. Sounds all well and good right? Except for that Sling stated that they made no technical changes to their application and that AT&T never discussed any specific requirements with them.
So, did the FCC’s investigation have any impact? Maybe. Maybe not. But it does show that regulatory agencies are looking at Apple and AT&T’s conduct. And more importantly, I can now watch my TV anywhere I go. And in the end, isn’t that what is really important?

Stephen Burch

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Google vs Apple

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In my previous two posts (here and here), I discussed the Apple iPhone Developer license agreement and its effect on developers. I also discussed how some of its provisions might not be enforceable. Since Google has been on the receiving end of some of Apple’s onerous terms, why didn’t it make any challenges?
First, let me talk about a happier time. When the iPhone first came out, Apple looked to Google as its default search engine provider and its sole Maps provider. Google’s Voice Search even violates terms of Apple’s developer license agreement and Apple approved it anyways. But then Google’s Android began to compete seriously with the iPhone. Since then, Apple has cooled to Google. It has purchased a mapping company, leading people to speculate that it is looking to replace Google as its Maps provider. And more relevant to this discussion, Apple has refused to accept Google’s Voice application.
So if I’m right and Apple’s developer license terms aren’t enforceable, why didn’t Google challenge Apple in court over Voice’s rejection? I have a couple of ideas, one is legally based and the other is business based. The legal argument is pretty simple. When a court tries to determine if a contract term is unconscionable, it looks to the disparity in the bargaining power of the parties. While most app developers don’t have equal bargaining power with Apple, it is hard to argue that Google, which is a larger company than Apple, has less bargaining power. Although one could argue that there is a big disparity when it comes to Google’s bargaining power with Apple in relation to iPhone apps, I don’t think Google even wants to challenge Apple on this issue.
Google makes its money by getting people to do things on the web instead of in separate applications. When Apple rejected Google Voice, Google recreated the application as a web app, eliminating an iPhone lock in. Google cannot and does not want to compete with Apple or Microsoft on the operating system market. It wants people to treat the browser as the operating system. Google Maps revolutionized what people thought was possible in the browser by using AJAX. It continues to bring applications that were once thought of as exclusively desktop applications to the web (just look at Picasa and Docs). And it has done so by providing all of the tools for free, furthering its core business, advertising. Even more importantly, Google’s Android is now competing with the iPhone.
Google Voice is an awesome application. Apple’s exclusion of the application doesn’t hurt Google, it hurts Apple. Android has a much more open development environment and is just more developer-friendly all around than the iPhone. The only real difference between the two is the audience. The iPhone can still earn the developer more money than any other phone platform, and at the end of the day, Google wants to see the iPhone’s popularity decline. The harder it is for developers to work with Apple, the easier it will be to get them to develop for Google’s Android. Spending precious Google time and money to force Apple to be more open works against its long term goal. And besides, the FCC has decided to review Apple and AT&T (Apple’s exclusive iPhone provider in the US) all on their own. More on this tomorrow.

Stephen Burch

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In my previous post, I discussed Apple’s iPhone Developer license agreement which was obtained by the Electronic Frontier Foundation (EFF)  and the effects that it has on developers who have had their app rejected by Apple. Now I turn to the other part of the license agreement that really bothers me: Apple holding developers liable for any breach while simultaneously disclaiming any liability for its own actions.

Section 2.6 of the license agreement is entitled “No Other Permitted Uses.” Before I discuss some of these prohibited uses, let’s look at the legal repercussions for breaching this section. “If You breach any of the foregoing restrictions, You may be subject to prosecution and damages.” Good to know. Be sure to notice that: 1) there is no limit to the damages and 2) elsewhere in the contract they reserve the right to seek an injunction. So what can you do that is so awful that Apple will seek to sue and enjoin you? Well, if a developer owns a computer from Pystar, a company that used to sell computers that run the Mac OS (OS X), he wouldn’t want Apple to find out. In fact, anyone who tries to run this software on any non-Apple branded computer is in breach of this agreement. Basically, if a developer wants to write software for Apple’s iPhone, then he must buy and use an Apple computer as well. Or Apple will sue you. It’s the Apple way. For non-developers, I don’t know if I can convey the absurdity of this. You develop a piece of software.  You submit that completed application to Apple. As long as it is compiled with the same OS and processor, the company that packaged that hardware makes absolutely no difference. But Apple knows that the iPhone has a huge app market and developers want in. So why not get the developers to buy a Mac along with an iPhone if they want the privilege to work with Apple? To be fair, the rest of the other prohibited uses don’t seem as arbitrary or onerous as this one. But let me be clear- if you break any of these provisions you are subject to “prosecution and damages.”
Is Apple really so wrong? It is Apple’s software, after all. Why can’t it control the terms of the sale? It can, to an extent. But Section 14 – “Limitation of Liability” seems a little over the top considering the liability that developers can face:

“IN NO EVENT WILL APPLE BE LIABLE FOR [pretty much anything you can think of] NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF
ANY REMEDY.”

I read this a few times and each time the failure of essential purpose clause makes me laugh. For those who don’t know, “failure of essential purpose” relates to warranties. For example, imagine if someone buys a new car with a 50,000 mile power-train warranty. Then, 10 miles into the ownership of the car, something on the power-train breaks. She then takes it to a dealer who agrees that, yes, the car is covered under warranty – BUT only up to $10. This warranty suffers from a failure of essential purpose. But at least it covers $10.  Apple basically says that it can even breach the contract and you have no claim under contract law for any amount. I still am not sure what warranty it thinks could fail at its essential purpose, as it warrants nothing. But the best part is the next line:

“IN NO EVENT SHALL APPLE’S TOTAL LIABILITY TO YOU UNDER THIS
AGREEMENT FOR ALL DAMAGES (OTHER THAN AS MAY BE REQUIRED BY APPLICABLE
LAW IN CASES INVOLVING PERSONAL INJURY) EXCEED THE AMOUNT OF FIFTY
DOLLARS ($50.00).”

If Apple actually believed their disclaimer to be valid, this clause would be pointless. But just in case, it goes ahead and limits its liability to $50. Liability for what you ask? Beats me. It just stated it isn’t liable for anything.

What bothers me the most about this is the disparity of liability between the parties (Apple and the potential developer).  Not too long ago, there was a discussion about App Store apps ‘racing to the bottom’, in regards to most of the top selling apps costing only $.99. But how many independent developers want to invest lots of time and money developing a large, complex app only to be at Apple’s mercy when it comes to being accepted at the App Store and the potential target of Apple’s lawyers if the attempt to sell it elsewhere. They have no recourse with Apple and they can’t sell it anywhere else. They just have to just suck up the losses.

I could rant about this for hours. If I taught a Commercial Law (UCC) course, these two sections of the license agreement would be the subject of my entire exam. I would image most students would have a hard time discussing all of the legal implications in the three hours allotted for the exam.  But that’s enough for now. Monday I will continue the discussion with my thoughts on Apple and Google.

Stephen Burch

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