Kikabink News

The United States Securities and Exchange Commission (SEC) has charged billionaire web entrepreneur (and Dallas Mavericks owner) Mark Cuban with insider trading.

Mark Cuban, who co-founded Broadcast.com, a leading provider of multimedia and streaming on the Internet which was later sold to Yahoo, is accused of using inside information back in June 2004 to dump his 6.3 percent stake in meta search engine Mamma.com. Cuban sold his stock just hours before the company announced a round of fund raising that caused the value of stock in the company to plummet.

Evidently, the CEO of Mamma.com called Mr Cuban on June 28, 2004 to let him know about the capital raising. Cuban was, according to the SEC, unhappy with the plan and subsequently sold his stock before the new fund raising was announced to the public. The SEC alleges that by selling when he did, Mark Cuban avoided losses in excess of $750,000.

For his part, Mark Cuban says the SEC’s case has no merit and is “a product of gross abuse of prosecutorial discretion.” He plans to contest the allegations and demonstrate that the SEC’s claims are “infected by the misconduct of the staff of its Enforcement Division.”

Said Mr Cuban in response to the charges:

“I am disappointed that the Commission chose to bring this case based upon its Enforcement staff’s win-at-any-cost ambitions. The staff’s process was result-oriented, facts be damned. The government’s claims are false and they will be proven to be so.”

Sources: Marshall Kirkpatrick, “Mark Cuban Charged With Insider Trading of Search Engine Mamma.com”, ReadWriteWeb, November 17, 2008, Mark Cuban, “The SEC”, Blog Maverick, November 17, 2008

A class action lawsuit has been brought against NebuAd and Internet service providers (ISPs) including CenturyTel, WOW, CableOne, Embarq, Knology and Bresnan Communications.

The suit, which was filed in the California Federal District on behalf of 16 plaintiffs, claims NebuAd and the ISPs committed illegal privacy and computer security breaches against Internet subscribers.

The aforementioned ISPs retained NebuAd earlier this year to trial its behavioral advertising platform. In doing so, the complainants allege, NebuAd and the ISPs violated two federal laws (the Electronic Communications Privacy Act and the Computer Fraud and Abuse Act) as well as two California laws (the California Invasion of Privacy Act and the Computer Crime Law).

Source: Zachary Rodgers, “NebuAd, ISP Partners Targeted in Class Action Suit”, The ClickZ Network, November 12, 2008

“I am so stupid!”

That’s what I was thinking back in 2000. I was a fresh-faced IT lawyer and Internet business owner, sitting in a seminar with an expert patent attorney as he explained business method patents or, as they’re known in Australia, business process patents.

My goodness, I thought, we could have patented our online service (we sold an online IT security subscription service at the time). An opportunity lost.

But I couldn’t help but think how all too easy it was to patent software or a business method. I mean, was it really possible to patent a process that was so… so… obvious?

Apparently it was, given the avalanche of business method patent applications and patents issued over the last decade.

But a decision by the U.S. Court of Appeals in Washington D.C. may stop all that. Last week, the Court of Appeals ruled that business methods were NOT patentable unless they met rather narrow rules.

According to TechDirt’s Mike Masnick, the U.S. courts will now apply a two-pronged test to determine whether a software or business method process patent is valid:

1. It must be tied to a particular machine or apparatus, or

2. It must transform a particular article into a different state or thing.

The implication is that pure software or business method patents that are neither tied to a specific machine nor change something into a different state are not patentable.

If you’re thinking this has major implications… you’re right. Many patents that have been issued in the past few years are unlikely to be upheld if they ever get appealed.

Source: Erick Schonfeld, “Your Business Method Patent Has Just Been Invalidated”, TechCrunch, October 30, 2008

Google will pay $125 million to settle two lawsuits with authors and publishers. The settlement effectively gives the company the go-ahead to digitize millions of in-copyright books and other written materials in U.S. libraries participating in Google Book Search.

Subject to approval by the U.S. District Court for the Southern District of New York, the agreement - reached after two years of negotiations - resolves a class-action lawsuit brought by book authors and the Authors Guild, as well as a separate lawsuit filed by five large publishers as representatives of the Association of American Publishers (AAP).

Under the settlement, Google will make payments totaling $125 million which will be used to establish the Book Rights Registry, to resolve existing claims by authors and publishers, and to cover legal fees.

Holders worldwide of U.S. copyrights will be able to register their works with the Book Rights Registry and receive compensation from institutional subscriptions, book sales, ad revenues and other possible revenue models, as well as a cash payment if their works have already been digitized.

Source: Google, “Authors, Publishers, and Google Reach Landmark Settlement”, Google Press Release, October 27, 2008

Russia’s Federal Anti-monopoly Service (FAS), has blocked Google from acquiring ad network, ZAO Begun.

In a deal worth $140 million, Rambler Media, Begun’s British holding company, had agreed to sell the six-year-old contextual ad network to Google in July, with the parties expected to close the transaction in September. Rambler owns 50.1 percent of ZAO Begun and was aiming to acquire the remaining 49.9 percent stake from Bannatyne Limited before selling all of Begun to Google.

Not any more. Seems like Russia takes its competition laws pretty seriously.

Source: Jack Marshall, “Google’s Russian Deal Blocked by Regulators”, The ClickZ Network, October 23, 2008