Following a recent U.S. district court’s ruling, foreign companies operating cloud-based services may find themselves subject to federal long-arm jurisdiction under the Federal Rules of Civil Procedure 4(k)(2), even if they have no physical presence in the United States. In reaching its decision, the court noted that the question was ripe for consideration by the court of appeals; thus, it remains to be seen whether the decision will stand if appealed.

In Plixer International, Inc. v. Scrutinizer GMHB, the District Court of Maine ruled that, while jurisdiction would not exist under Maine’s long-arm statute, the court had specific personal jurisdiction over a German company under federal long-arm statute. Rule 4(k)(2), the federal long-arm statute, provides that serving a summons or filing a waiver of service establishes personal jurisdiction over a defendant if the defendant is not subject to jurisdiction in any state’s courts of general jurisdiction as long as exercising jurisdiction is consistent with the U.S. Constitution and laws.

Continue Reading Foreign Cloud-Based Service Providers May Be Subject to Personal Jurisdiction in the United States

The U.S. Supreme Court on Oct. 16, 2017, announced it had granted the government’s petition for certiorari in United States v. Microsoft and will hear a case this Term that could have lasting implications for how technology companies interact with the U.S government and governments overseas. At issue is a consequential Second Circuit decision from last year that held that warrants issued under the Stored Communications Act (SCA) do not reach emails and other user data stored overseas by a U.S. provider.

While no federal appellate court besides the Second Circuit has squarely addressed the issue, multiple district courts outside the Second Circuit have declined to follow the Second Circuit’s reasoning in similar fact patterns involving other technology giants. The result is that U.S. law enforcement has different authority to access foreign-stored user data depending on where in the United States a warrant application is made. Google, for example, has expended significant resources to develop new tools to determine the geographic location of its users’ data so as to be in accord with the Second Circuit’s approach. Yet the company currently faces a hearing on sanctions for its alleged willful noncompliance with law enforcement requests in the Ninth Circuit based on a district court ruling that parted ways with the Second Circuit.

Continue Reading SCOTUS to Resolve Lower-Court Dispute Over U.S. Warrants Seeking Foreign-Stored User Data

Recent challenges to the Federal Trade Commission’s (FTC) authority to police data security practices have criticized the agency’s failure to provide adequate guidance to companies.

In other words, the criticism goes, businesses do not know what they need to do to avoid a charge that their data security programs fall short of the law’s requirements.

A series of blog posts that the FTC began on July 21, 2017, titled “Stick with Security,” follows promises from acting Chair Maureen Ohlhausen to provide more transparency about practices that contribute to reasonable data security. Some of the posts provide insight into specific data security practices that businesses should take, while others merely suggest what, in general, the FTC sees as essential to a comprehensive data security program. Continue Reading More Insight From the FTC on Data Security—or More of the Same?

Nearly all companies—whether they’re focused on the B2C market or the B2B market—have embraced social media as a way to promote their goods and services and to interact with customers and potential customers. The growing use of social media has, however, created challenges for federal securities regulators who must enforce antifraud rules that were written prior to the digital age.

Our Guide to Social Media and the Securities Laws summarizes how regulation has evolved in the face of the growing use of social media. It discusses the principal areas of focus for SEC-reporting companies, registered investment advisers, registered investment companies and registered broker-dealers that use social media.

Read our Guide to Social Media and the Securities Laws.

On July 21, 2017, following last June’s announcement that the Delaware House of Representatives had passed (with near unanimity) blockchain-related provisions proposing to amend several sections of the Delaware General Corporation Law (DGCL), the Delaware Governor officially signed the legislation into law.

The newly enacted legislation provides, among other things, specific statutory authority for Delaware corporations to use “distributed electronic networks or databases,” aka distributed ledgers or blockchain technology, for the creation and maintenance of corporate records, including the corporations’ stock ledger.[2]

1. The Use of Blockchain Technology for the Creation and Administration of Corporate Records

Section 219(c) of the DGCL provides that a stock ledger of a Delaware corporation is the only evidence of the identity of stockholders of the corporation who are entitled to inspect the list of stockholders and to vote at meetings.

Until now, under current recordkeeping practice, the stock ledger of a corporation could only be created and maintained by a corporate secretary or a corporation’s transfer agent. Often, a stock ledger consists of a capitalization table, i.e., electronically encoded data on a computer program like Microsoft Excel, which is producible in printed form. Continue Reading Delaware Governor Signs Groundbreaking Blockchain Legislation into Law

In the most recent edition of his CyberSide Chat series, Socially Aware contributor Andy Serwin discusses emerging cybersecurity issues including:

  • The need to strike a balance between the efficiencies of the Internet of Things and the increased cyberattack vulnerability that usually goes along with using extra devices;
  • The pre- and post-cyber-breach steps a company can take to mitigate the damage that could be caused by a theft of the company’s data or an attempt to shut down its systems;
  • The factors companies should consider when determining how much of their resources to dedicate to preventing a cyberattack.

Check out Andy’s insightful presentation:

In the wake of a successful social media conference in San Francisco, Socially Aware co-editors John Delaney and Aaron Rubin are revved up and ready to chair (John) and present (Aaron and John) at another Practicing Law Institute (PLI) 2017 Social Media conference! This one will be held in New York City on Wednesday, February 15, and will be webcasted.

Attendees and webcast listeners will learn how to leverage social-media-marketing opportunities while minimizing their companies’ risks from entirely new panels of industry experts, lawyers and regulators.

Topics to be addressed will include:

  • Key developments shaping social media law
  • Emerging best practices for staying out of trouble
  • Risk mitigation strategies regarding user-generated content and online marketing
  • Legal considerations regarding use of personal devices and other workplace issues

Other special features of the conference include:

  • Regulators panel: guidance on enforcement priorities for social media and mobile apps
  • In-house panel: practical tips for handling real-world issues
  • Potential ethical issues relating to the use of social media by attorneys

The conference will end with a networking cocktail reception—a great way to meet others who share your interest in social media, mobile apps and other emerging technologies.

Don’t miss this opportunity to get up-to-date information on the fast-breaking developments in the critical area of social media and mobile apps so that you can most effectively meet the needs of your clients.

For more information or to register, please visit PLI’s website here.  We hope to see you there!

SociallyAware_Vol8Issue1_Thumb2The latest issue of our Socially Aware newsletter is now available here.

In this edition,we examine a spate of court decisions that appear to rein in the historically broad scope of the Communications Decency Act’s Section 230 safe harbor for website operators; we outline ten steps companies can take to be better prepared for a security breach incident; we describe the implications of the Second Circuit’s recent opinion in Microsoft v. United States regarding the U.S. government’s efforts to require Microsoft to produce email messages stored outside the country; we explore the EU’s draft regulation prohibiting geo-blocking; and we take a look at UK Consumer Protection regulators’ efforts to combat undisclosed endorsements on social media.

All this—plus an infographic highlighting the most popular social-media-post topics in 2016.

Read our newsletter.

Social media is transforming the way companies interact with consumers. Learn how to make the most of these online opportunities while minimizing your company’s risk at Practicing Law Institute’s (PLI) 2017 Social Media conference, to be held in San Francisco and webcasted on Thursday, February 2nd.  The conference will be chaired by Socially Aware co-editor John Delaney, and our other co-editor, Aaron Rubin, will also be presenting at the event.

Topics to be addressed will include:

  • Key developments shaping social media law
  • Emerging best practices for staying out of trouble
  • Risk mitigation strategies regarding user-generated content and online marketing
  • Legal considerations regarding use of personal devices and other workplace issues

Other special features of the conference include:

  • Regulators panel: guidance on enforcement priorities for social media and mobile apps
  • In-house panel: practical tips for handling real-world issues
  • Potential ethical issues relating to the use of social media by attorneys

Don’t miss this opportunity to get up-to-date information on the fast-breaking developments in the critical area of social media and mobile apps so that you can most effectively meet the needs of your clients.

For more information or to register, please visit PLI’s website here.  We hope to see you there!

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The beginning of a new year is a time for resolutions and predictions. We won’t bother Socially Aware readers with our resolutions for 2017, but we thought that we would share some predictions for the new year from our editors and contributors. As our predictions below indicate, 2017 promises to be an eventful year for social media and other emerging technologies. Here we go:

From John Delaney, Co-Founder and Co-Editor, Socially Aware, and Partner at Morrison & Foerster:

As we enter 2017, one of the greatest question marks for the social media and content marketing industries is what impact will Donald Trump have on the legal landscape. He’s been dubbed the country’s first social media president, and there is no doubt that his use of social media platforms such as Twitter and Facebook played a key role in his upset election victory. At the same time, he’s had an often antagonistic relationship with Silicon Valley, and one can imagine tech giants such as Google and Facebook having a far less prominent voice within the Trump administration than was the case for the Obama administration. And although Trump’s promised focus on reducing business regulations may benefit the U.S. technology companies, his apparent skepticism toward globalism and free trade could prove a challenge to the country’s social media industry, perhaps the most global of all U.S. industries.

My other prediction for the coming year is that we’re going to see a number of disruptive new technologies emerging from the hype phase to having a real impact on businesses and consumers—perhaps more likely with respect to the latter than the former, at least initially. For example, blockchain technology generated a big buzz in 2016, but look for companies to actually begin embracing and implementing this technology in a B2B context in the never-ending drive to reduce transaction fees. By eliminating the need for trusted middlemen, the transitioning of traditional payment and recordation platforms to blockchain-based platforms holds the promise of generating significant cost savings for companies. We’re also going to see the pace of disruption accelerate as each of these new technologies—such as artificial intelligence, big data analytics, cloud computing, blockchain, the Internet of Things and so forth—combine and mutate in expected and unexpected ways.

Continue Reading 2017: Predictions From Socially Aware’s Editors and Contributors