Social media sites are transforming not only the daily lives of consumers, but also how companies interact with consumers. Here at Morrison Foerster, across all of our practice groups, we are seeing complex, cutting-edge legal issues arising out of social media. As with the Internet boom during the mid-to-late 1990s, social media is generating new legal questions at a far faster pace than the law’s ability to provide answers to such questions. In an effort to stay on top of these emerging issues, and to keep our clients and friends informed of new developments, Morrison Foerster publishes this blog devoted to the law and business of social media.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.Aaron’s practice focuses on advising both established and emerging companies in a variety of data- and technology-intensive sectors, including software, SaaS, cloud-based technology, digital media (social media, AR/VR, gaming, streaming media, AdTech), AI, healthcare, consumer electronics, e-commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on branding and marketing, trademark licensing, and content-related transactions, as well as the intellectual property aspects of mergers, acquisitions, asset spin-offs, and private equity investments.He has represented clients such as Autodesk, Meta, OpenAI, Splunk, Konami, Kaiser Permanente, SoftBank, Visa, and Yahoo, among others.Aaron has been recognized by numerous publications for his work on market-defining technology transactions. He is currently ranked by Chambers USA for “Technology Transactions.”Aaron also serves as co-editor of Socially Aware, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics. Aaron is also a sought-after speaker on new and emerging areas of law, and is a frequent presenter and panelist at conferences and legal services programs. In addition to his active practice, Aaron regularly provides pro bono assistance to various nonprofit and charitable organizations such as Common Sense Media and the Starlight Children’s Foundation. He is a member of the board of directors of California Lawyers for the Arts.While in law school at the University of California, Berkeley, Boalt Hall School of Law, Aaron served as executive editor of the California Law Review and was elected to the Order of the Coif. Following law school, Aaron served as law clerk to the Honorable William H. Orrick and the Honorable Martin J. Jenkins, both United States District Judges for the Northern District of California.

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Aaron is the chair of our Technology Transactions Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals. Aaron’s practice focuses on advising both established and emerging companies in a variety of data– and technology–intensive sectors, including software, SaaS, cloud computing, AR/VR, AI, gaming, healthcare, consumer electronics, social media, e–commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on the intellectual property aspects of mergers, acquisitions, asset spin–offs, and private equity investments.

Aaron P. Rubin

Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.Lawrence focuses his practice on technology transactions and licensing matters. His diverse experience includes advising on SaaS agreements, cross-licensing agreements, research and collaboration agreements, development agreements, and distribution agreements. He counsels a broad range of companies across the software, hardware, life sciences, biotech and FinTech spaces, as well as other entities including universities.He advises clients in connection with general corporate matters including contract negotiations, and leasing and technology placement agreements.Lawrence also serves as co-editor of <a href="https://www.sociallyawareblog.com/" target="_blank">Socially Aware</a>, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics.Prior to joining the firm, Lawrence was counsel at another major law firm. Before earning his law degree, Lawrence was a web consultant, project manager, and web developer in Portland, Oregon, where he managed and consulted on projects using industry methodologies and performed custom development and integration of content management systems.Lawrence was named a Super Lawyers “Rising Star” in 2015 and 2018–2022, and is licensed in both California and New York. Lawrence earned his J.D. from the University at Buffalo School of Law, where he was the electronic systems editor for the Buffalo Law Review and awarded the ABA-BNA Award for Excellence in the Study of Intellectual Property Law.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster.Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions. His clients include technology, digital media and content for television and music, financial services, and communications companies with diverse intellectual property assets and issues.His practice focuses on the legal aspects of developing, licensing, and commercializing technology and intellectual property, as well as negotiating general commercial contracts, including outsourcing transactions, as well as content and data licenses. He regularly assists clients with legal issues relating to licensing and commercialization of digital media and content, digital content that is distributed over the Internet or streamed, mobile applications and social media, as well as the licensing of recorded music for distribution via digital platforms. Anthony is also experienced with issues relating to open-source software, software development, artificial intelligence and machine learning, cloud-based technology, and protection of proprietary information.Anthony has extensive experience working on matters involving disruptive technologies, such as blockchain. He has helped fintech clients with general intellectual property issues in connection with terms of service for online financial products and services.Anthony is an integral part of the outside pro bono legal team for nonprofit organizations based in New York, including advising clients on legal issues regarding entertainment, social media, privacy rights, and the negotiation of outsourcing and service agreements. Anthony received his J.D. from the University of Michigan Law School in 2009. He received his B.S. from Cornell University in 2004.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. He advises clients on general commercial and transactional matters. His clients include technology, media, and communications companies with considerable intellectual property assets. His practice focuses on the legal aspects of licensing and commercializing technology and intellectual property, as well as negotiating general commercial contracts. He also regularly assists clients with legal issues relating to mobile applications and social media.

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Lawrence W. Gallick

Social Links: Statehouse v. Smartphone

Federal Court Enjoins California Teen Privacy Law . . . Again

All Your Sale Are Belong to Us - Mitigating IP and Payments Risk in In-Game Economies (Part II – User-Generated Content and In-Game Payment Models)

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The Fifth Circuit Court of Appeals recently considered in <a href="http://law.justia.com/cases/federal/appellate-courts/ca5/16-10510/16-10510-2017-03-27.html" target="_blank" rel="noopener">BWP Media USA, Inc. v. T&S Software Associates, Inc.</a> whether volitional conduct is required to establish a claim for direct copyright infringement against an Internet service provider (“ISP”). The defendant ISP, T&S Software Associates (“T&S”), hosted a website that included a public forum called “HairTalk” where users could post content about hair, beauty, and celebrities.HairTalk users posted photographs of Ke$ha, Julianne Hough, and Ashlee Simpson that were owned by the plaintiffs, BWP Media USA and National Photo Group (“BWP”), without BWP’s authorization. The plaintiffs sued T&S for direct and secondary copyright infringement based on the users’ posts. The district court granted summary judgment in favor of T&S as to both direct and secondary infringement and BWP appealed the judgment as to the direct infringement claim.On appeal, the Fifth Circuit found that the determinative issue was whether a claim of direct infringement required volitional conduct by the defendant. The court looked to two past cases where courts implicitly, if not explicitly, required volitional conduct—<a href="https://www.law.cornell.edu/copyright/cases/907_FSupp_1361.htm" target="_blank" rel="noopener">Religious Tech v. Netcom</a> and <a href="http://www.ca4.uscourts.gov/Opinions/Published/031911.P.pdf" target="_blank" rel="noopener">CoStar v. LoopNet</a>. In Netcom, the California district court held that an ISP that provided Internet access for an online bulletin board was not liable for infringement based on a user’s posting of copyrighted works to the bulletin board. The Netcom court reasoned that “[a]though copyright is a strict liability statute, there should still be some element of volition or causation which is lacking where a defendant’s system is merely used to create a copy by a third party.”Similarly, in CoStar, the Fourth Circuit found the defendant ISP not liable for direct copyright infringement based on its subscribers’ posting of copyrighted photographs on its website. The court reasoned that the ISP was “simply the owner and manager of a system used by others who [were] violating CoStar’s copyrights and [was] not an actual duplicator itself[.]”BWP argued that the Supreme Court’s 2014 decision in <a href="https://www.supremecourt.gov/opinions/13pdf/13-461_l537.pdf" target="_blank" rel="noopener">American Broadcasting Cos. v. Aereo</a> rejected the volitional-conduct precedent in Netcom and CoStar. In Aereo, the petitioners alleged that Aereo infringed their exclusive right to publicly perform their copyrighted television programs by providing a service that allowed subscribers to stream the programs. Subscribers to Aereo’s service could request to stream a particular television program. After receiving the subscriber’s request, Aereo would record the broadcast of the selected show, transform the signals into data, and transmit the data through the Internet to the subscriber.In distinguishing the Aereo decision from Netcom and CoStar, the Fifth Circuit noted that Aereo never addressed the volitional-conduct requirement and instead based its holding on the technology at issue. Looking to the distinction the Aereo dissent drew between engaging in infringing activity and merely supplying equipment that allows others to do so, the Fifth Circuit concluded that T&S fell in the latter category—it merely hosted the forum on which the users posted the copyrighted photographs. The court pointed out that, unlike T&S, Aereo played an active role in the infringement by providing the means to obtain and transmit copyrighted content and by routing the copyrighted content to its subscribers.Regular Socially Aware readers may be wondering at this point where do the safe harbors under the Digital Millennium Copyright Act (“DMCA”) fit into this case? Unfortunately for T&S, it did not qualify for the Section 512(c) safe harbor because it did not have an agent designated to receive takedown notices during the relevant time period, as the statute requires. BWP seized on this fact to argue that the DMCA superseded the Netcom line of “volitional conduct” cases, and that the Section 512(c) safe harbor now serves as the exclusive means of protection for ISPs against copyright infringement liability based on hosting user content. Because T&S was not eligible for protection under Section 512(c), BWP asserted T&S’s hosting of the celebrity photographs constituted copyright infringement regardless of whether or not there was volitional conduct.The Fifth Circuit flatly rejected this argument and noted that the DMCA explicitly provides that the failure to qualify for limitation of liability under the DMCA “<a href="https://www.law.cornell.edu/uscode/text/17/512">shall not bear adversely</a>” on any of the ISP’s other defenses under the law. The court concluded that T&S’s lack of eligibility for the Section 512(c) safe harbor did not preclude T&S from arguing and proving that it was never liable for copyright infringement in the first place.While this case will surely comfort ISPs hoping to avoid liability for copyright infringement arising from hosting user-generated content, it also serves as a cautionary tale to double check that DMCA agent designation, as it’s always better to have two lines of defense rather than just one. *         *          *For other Socially Aware posts relating to the DMCA safe harbors, please see <a href="http://www.sociallyawareblog.com/2017/02/06/repeat-infringer-policy-requirement-for-key-copyright-safe-harbor-for-online-service-providers/" target="_blank" rel="noopener">Second Circuit Clarifies “Repeat Infringer” Policy Requirement for DMCA Copyright Safe Harbors</a>; <a href="http://www.sociallyawareblog.com/2016/12/06/new-copyright-office-rule-creates-potential-gotcha-for-blogs-and-websites-hosting-user-generated-content/" target="_blank" rel="noopener">New Copyright Office Rule Creates Potential “Gotcha” for Blogs and Websites Hosting User-Generated Content</a>; <a href="http://www.sociallyawareblog.com/2016/01/14/new-court-decision-highlights-potential-headache-for-companies-hosting-user-generated-content/" target="_blank" rel="noopener">New Court Decision Highlights Potential Headache for Companies Hosting User-Generated Content</a>; <a href="http://www.sociallyawareblog.com/2014/06/24/court-holds-that-dmca-safe-harbors-do-not-extend-to-infringement-prior-to-designation-of-agent/" target="_blank" rel="noopener">Court Holds That DMCA Safe Harbor Does Not Extend to Infringement Prior to Designation of Agent</a>; and <a href="http://www.sociallyawareblog.com/2015/03/16/first-ever-award-of-any-damages-for-fraudulent-dmca-takedowns-under-section-512f/" target="_blank" rel="noopener">First-Ever Award of “Any Damages” for Fraudulent DMCA Takedowns Under Section 512(f)</a>.

Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.

Aaron Rubin

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5th Circuit: ISP Not Liable for Infringement Due to Lack of Volitional Conduct, Despite Ineligibility for DMCA Safe Harbor

5th Circuit: ISP Not Liable for Infringement Due to Lack of Volitional Conduct, Despite Ineligibility for DMCA Safe Harbor

The Fifth Circuit Court of Appeals recently considered in BWP Media USA, Inc. v. T&S Software Associates, Inc. whether volitional conduct is required to establi

Broker-dealers have been reluctant to fully embrace social media due to regulatory concerns. Although the industry regulator, the Financial Industry Regulatory Authority, Inc. (“FINRA”), has issued regulatory notices relating to the use of social media and the application of <a href="http://www.finra.org/industry/advertising-regulation" target="_blank" rel="noopener">FINRA Rule 2210</a> (Communications with the Public), many gray areas have remained, dampening the use of Facebook, LinkedIn and other social media platforms by industry participants.FINRA’s recent release of <a href="http://www.finra.org/sites/default/files/notice_doc_file_ref/Regulatory-Notice-17-18.pdf" target="_blank" rel="noopener">Regulatory Notice 17-18</a> may help to remedy that problem, however. Presented in the form of 12 FAQs commenting on the earlier regulatory notices, this latest notice provides the broker-dealer industry with greater guidance on its use of social media to communicate with customers and potential customers. Specifically, the FAQs expand on the areas of recordkeeping, third-party posts and the use of hyperlinks to third-party sites. FINRA acknowledged that the use of social media and digital communications has expanded in the time since its last regulatory notice on the use of social media by member firms, which was <a href="https://www.finra.org/sites/default/files/NoticeDocument/p123794.pdf" target="_blank" rel="noopener">Regulatory Notice 11-29</a>, issued in 2011.Recordkeeping The requirement that member firms retain records of communications that relate to their “business as such” under <a href="https://www.law.cornell.edu/cfr/text/17/240.17a-4" target="_blank" rel="noopener">Rule 17a-4(b) of the Securities Exchange Act of 1934</a> applies to digital communications, including those that are made through text messaging and chat services, if the content of the communication relates to the firm’s business. Before using such services, the firm must first ensure that it can retain those business communications.Personal Versus Business Communications Information or links to content shared by an associated person of a member firm that do not relate to the products or services of the member firm are not subject to Rule 2210.Adoption of or Entanglement with Outside Content Generally, a third-party post on a social media site established by a firm or any of its personnel would not be considered a communication by the firm or its personnel and to which the Rule 2210 requirements would not apply. However, <a href="http://www.finra.org/sites/default/files/NoticeDocument/p120779.pdf" target="_blank" rel="noopener">under certain circumstances</a>, FINRA has viewed third-party posts as becoming attributable to the firm and considered communications with the public subject to Rule 2210. For example, after the third-party content was posted, if the firm or its personnel explicitly or implicitly endorsed or approved the post, then, under an adoption theory, the post would constitute a communication with the public by that firm. Or, if the firm or any of its personnel involved themselves in the preparation of the content of the third-party post, or paid for the post, then the third-party post would be considered to be a communication with the public by the firm or its personnel under an entanglement theory.FINRA discussed the adoption of third-party content by the member firm in several contexts:<ul><li>sharing or linking to specific content posted by independent third parties is an adoption of that content by the member firm; in that case, the member firm must ensure that the adopted content, when read in context with the statements in the originating post, complies with Rule 2210’s standards applicable to firm communications;</li></ul><ul><li>sharing or linking to content that in turn links to other content, if the member firm has influence or control over that other content, is an adoption by the member firm of that other content; and</li></ul><ul><li>sharing or linking to content that itself is primarily a vehicle for other links, or where the content available through such links forms the entire basis of the article, is an adoption by the member firm of the content accessed through such links.</li></ul>The FAQs clarify that simply sharing or linking to content that contains links to other content over which the member firm has no influence or control is not an adoption by the member firm of the content available at those other links.If a member firm includes on its website a link to a section of an independent third-party site, whether or not the member firm has adopted the content of the other site will depend on whether the link is “ongoing” or if the member firm has influence or control over the content of the third-party site. In the latter case, the third-party content will become attributable to the member firm through an entanglement theory.Content at a linked site will not be adopted by the member firm if the link is ongoing, which means that:<ul><li>the link is continuously available to investors who visit the member firm’s site;</li></ul><ul><li>investors have access to the linked site whether or not it contains favorable material about the member firm; and</li></ul><ul><li>the linked site could be updated or changed by the independent third-party, and investors would still be able to use the link at the member firm’s site.</li></ul>Nonetheless, if the firm has any influence or control over the content of the third-party site, the content of that site will be attributable to the firm through an entanglement theory. Any language used by the member firm to introduce the link must conform to the content standards of Rule 2210(d).If a member firm contacts a third-party publisher of an online business directory that includes information about the member firm or its registered representatives to correct factual information in the listing, and the listing was not made at the direction of the member firm or representative, then the corrected information would not be a communication by the member firm. If the firm posted a comment on the directory’s site to correct the information, the comment would not be deemed an adoption of the original, incorrect information.Native Advertising Those advertisements that magically pop up and try and sell you something relating to the subject matter you are reading about on the internet (“native advertisements”) may be employed by member firms, provided that they comply with Rule 2210’s requirements, including that all communications must be fair, balanced and not misleading. Native advertisements must also prominently disclose the member firm’s name, disclose any relationship between the firm and any other entity or individual who is named and disclose whether any products or services touted are offered by the member firm, all in compliance with Rule 2210(d)(3).Paid Comments or Posts Comments or posts paid for or arranged by a member firm are communications attributable to that firm under an entanglement theory. Consequently, any such post or comment should be clearly labeled as an advertisement by the member firm and include the firm’s name as well as any other information required by Rule 2210.Testimonials and Endorsements Unsolicited third-party opinions or comments posted on a business related site supervised and retained by a member firm or its registered representative are not communications of the firm or the registered representative for purposes of Rule 2210, nor are such unsolicited opinions or comments considered to be testimonials subject to the requirements of Rule 2210(d)(6).However, if a representative of the member firm “likes” or shares on a blog or social networking site favorable comments posted by third parties on the business-related site, then the comments would be adopted by the firm or its representative and would be subject to Rule 2210, including the content, supervision, recordkeeping and testimonial requirements. Disclosure of the testimonial requirements of Rule 2210(d)(6) may be made either in the interactive electronic communication itself, in close proximity to the testimonial or through a clearly marked hyperlink using language such as “important testimonial information.” Testimonials may not be false, misleading, exaggerated or promissory.FINRA also reminded firms registered under the Investment Advisers Act of 1940 about the <a href="https://www.law.cornell.edu/cfr/text/17/275.206(4)-1" target="_blank" rel="noopener">prohibitions against</a> fraudulent, manipulative or deceptive acts or the use of any advertisement that refers to a testimonial concerning an investment adviser or any advice, analysis, report or other service rendered by the investment adviser.BrokerCheck Member firm-created apps are not subject to the requirement to include a readily apparent reference and link to FINRA’s BrokerCheck because Rule 2210(d)(8) specifically references firm websites. However, if the member firm-created app accesses and displays a webpage that is on the firm’s website, and that is required to include the BrokerCheck link, the firm must ensure that the link is readily apparent when that page is displayed through the app.Conclusion In the six years since FINRA’s last regulatory notice on the use of social media, the digital landscape has changed at lightning speed and continues to evolve rapidly. Regulatory Notice 17-18 will help FINRA members and their registered representatives understand FINRA’s current approach to digital communications and which activities will fall within the scope of Rule 2210.*             *             *For more information about social media and financial regulations, please see the following Socially Aware articles: <a href="https://www.sociallyawareblog.com/2015/06/23/the-guide-to-social-media-and-securities-law/" target="_blank" rel="noopener">The Guide to Social Media and Securities Law</a>;  <a href="https://www.sociallyawareblog.com/2012/07/10/the-social-media-experiment-challenges-for-broker-dealers-and-investment-advisers/" target="_blank" rel="noopener">The Social Media Experiment: Challenges for Broker-Dealers and Investment Advisers</a>; <a href="https://www.sociallyawareblog.com/2014/01/07/ffiec-issues-final-guidance-on-social-media-usage-by-financial-institutions/" target="_blank" rel="noopener">FFIEC Issues Final Guidance on Social Media Usage by Financial Institutions</a>; <a href="https://www.sociallyawareblog.com/2015/03/26/uks-financial-services-regulator-no-hashtags-in-financial-promotions/" target="_blank" rel="noopener">UK’s Financial Services Regulator: No Hashtags in Financial Promotions</a>; and <a href="https://www.sociallyawareblog.com/2014/08/26/uks-financial-services-regulator-issues-draft-guidance-on-social-media-should-we-favorite-or-fail/" target="_blank" rel="noopener">UK’s Financial Services Regulator Issues Draft Guidance on Social Media—Should We Favourite* or #Fail?</a>

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FINRA Publishes New Guidance on Social Networking Websites and the Application of Rule 2210

FINRA Publishes New Guidance on Social Networking Websites and the Application of Rule 2210

Broker-dealers have been reluctant to fully embrace social media due to regulatory concerns. Although the industry regulator, the Financial Industry Regulatory 

The U.S. Department of Justice (DOJ) recently secured a notable victory against Google in a dispute over the enforceability of a U.S. search warrant seeking access to foreign-stored account data.The April 19 ruling—from Magistrate Judge Beeler in the U.S. District Court for the Northern District of California—is the latest sign that DOJ is continuing to rely on the <a href="https://www.law.cornell.edu/uscode/text/18/2703" target="_blank" rel="noopener">Stored Communication Act</a> (SCA) to seek overseas account data even after the Department’s <a href="http://www.sociallyawareblog.com/2016/10/25/email-outside-us/" target="_blank" rel="noopener">high profile defeat </a>in the Second Circuit’s <a href="http://law.justia.com/cases/federal/appellate-courts/ca2/14-2985/14-2985-2017-01-24.html" target="_blank" rel="noopener">ruling</a> in the Microsoft case.And the opinion suggests that DOJ’s litigation strategy may be working.The dispute arose after DOJ obtained a search warrant last year under the SCA directing Google to provide information related to specified Google user accounts. Google withheld some of the requested information and challenged the request. Google explained that it relies on algorithms to move user data around the world automatically to aid in network efficiency. Invoking the Second Circuit’s Microsoft ruling, which rejected DOJ’s efforts to obtain content stored on Microsoft servers in Ireland, Google argued that some of the requested data was stored exclusively overseas and therefore beyond the purview of an SCA warrant.In her <a href="https://dlbjbjzgnk95t.cloudfront.net/0915000/915244/https-ecf-cand-uscourts-gov-doc1-035115371508.pdf" target="_blank" rel="noopener">9-page opinion</a>, Judge Beeler declined to apply the reasoning of Microsoft and ordered Google to comply with the warrant “regardless of the data’s actual location.” Accepting that the SCA warrant provisions do not apply extraterritorially, the opinion concluded that the warrant at issue should be viewed as “a domestic application of the SCA” rather than an extraterritorial one.The opinion briefly noted a potential distinction between the Microsoft and Google cases—specifically, that Microsoft had been storing data in accordance with the user’s self-reported location in Ireland, whereas Google was moving data around the world based on efficiency-driven algorithms. Yet, the ruling appeared animated by the court’s decision to “follow[] as persuasive” the reasoning of the dissenters from the denial of rehearing en banc in the Microsoft case: Judge Beeler concluded that it does not matter where Google chooses to store the data as long as Google “is in the district and is subject to the court’s jurisdiction; [and] the warrant is directed to the only place where it can access and deliver the information that the government seeks.” Additionally, the opinion noted that “[o]ther courts [outside the Second Circuit] have reached similar conclusions after a similar analysis of the Microsoft decision.”U.S. companies have now received multiple warnings not to store user communications abroad if they hope to avoid U.S. law enforcement requests despite the Second Circuit’s Microsoft decision. U.S. courts remain willing to pierce the veil of global cloud storage practices in aid of a criminal investigation. The ruling suggests that DOJ will continue pressing arguments to distinguish (or otherwise reject) the Second Circuit’s Microsoft decision in future litigation. The development further compounds the legal complexity of cross-border data transfers, as U.S.-based cloud service providers may have a difficult time representing whether data based in the European Union would be exposed to U.S. government access.This decision also comes at a time of renewed public scrutiny of the SCA as a whole: a challenge by Microsoft to SCA warrant secrecy rules is currently working its way through the courts, and a pending bill in Congress could limit government access to communications older than 180 days without a warrant.Finally, the growing number of courts outside the Second Circuit that have broken with the ruling in Microsoft raises the chances that these issues may ultimately be headed to the U.S. Supreme Court. The Solicitor General’s Office could still ask the Supreme Court to review the Second Circuit’s Microsoft decision, having sought and received an extension of the time to petition for certiorari in that case until May 24.In addition, companies with a stake in these issues should watch for further litigation from Google over this order, as well as a forthcoming ruling from Judge Juan Sanchez of the U.S. District Court for the Eastern District of Pennsylvania. On April 18, Judge Sanchez heard oral arguments regarding Google’s ongoing challenge to Magistrate Judge Thomas Rueter’s order compelling the company to comply with an SCA warrant in a case raising similar issues.*             *             *For other Socially Aware posts addressing the U.S. government’s efforts to obtain user data directly from social media networks and cloud storage providers, please see the following: <a href="http://www.sociallyawareblog.com/2017/02/23/google-ordered-foreign-stored-user-data/" target="_blank" rel="noopener">Google Ordered to Comply with Warrant for Foreign-Stored User Data</a>; <a href="http://www.sociallyawareblog.com/2016/10/25/email-outside-us/" target="_blank" rel="noopener">Second Circuit: Email Stored Outside the U.S. Might Be Beyond Government’s Reach</a>; and <a href="http://www.sociallyawareblog.com/2012/07/23/weve-come-for-your-tweets-twitter-to-appeal-denial-of-its-motion-to-quash-district-attorneys-subpoena/" target="_blank" rel="noopener">We’ve Come for Your Tweets: Twitter to Appeal Denial of Its Motion To Quash District Attorney’s Subpoena</a>.

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Court Orders Google to Turn Over Foreign-Stored Data

Court Orders Google to Turn Over Foreign-Stored Data