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Archive for April, 2021

Google’s Use of Oracle’s java Application Programming Interfaces declared “Fair Use” by the United States Supreme Court

Posted on: April 30th, 2021

By: Kirsten Patzer

In a 6-2 decision, the Supreme Court of the United States(the “Court”) reversed the US Court of Appeals for the Federal Circuit in Google LLC v. Oracle America, Inc., holding Google’s use of Oracle’s Java Application Programming Interfaces (API) in its Android operating system was “fair use.”

The Court granted Google’s certiorari petition on two issues: 1) whether Oracle’s Java API is copyrightable; and 2) was Google’s use of the Java API “fair use.” The Court declined to undertake any analysis of the first question, rendering their opinion on the assumption that the Java API is copyrightable, and examined only whether Google’s use of 11,500 lines of programming code infringed on Oracle’s copyright or if Google’s use of the code was “fair  use” under US copyright law.

To establish whether Google’s employment of the Java API did, in fact, constitute “fair use” the Court examined the four factors set forth in the Copyright Act’s fair use provision: 1) the purpose and character of the use; 2) the nature of the copyrighted work; 3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and 4) the effect of the potential market value of the copyrighted work.

Justice Breyer, writing for the majority, began his assessment with the second factor, holding the nature of the copyrighted work favored a finding of fair use. The Court differentiated between the copied Java API “declaring code” and Google’s “implementing code” explaining the former is more “utilitarian” in nature, and is inherently bound together with the latter’s more “creative” counterpart, suggesting that the Java API code, standing alone, was not at the “core” of copyright protection.

The Court then determined Google’s “purpose and character” of the use was “transformative”, noting Google used the code to create an operating system for a different platform and computing environment. Thus, Google’s use of the code was “consistent with the creative process.” The Court also found the third prong, the amount and substantiality of the use, weighed in Google’s favor, noting the 11,500 lines Google copied were less than one percent of the code in the entire API.

Turning to the fourth factor, the Court determined Google’s Android smartphone platform did not replace Java and did not usurp its place in the market. Furthermore, Oracle would benefit from the reimplementation of their code into the market. The Court noted  Oracle “was poorly positioned to succeed in the mobile phone market” and Google’s Android platform differed from Oracle’s: “Google’s Android platform was part of a distinct (and more advanced) market than Java software.”

In sum, the Court concluded that Google took “only what was needed” to allow their programmers to “put their accrued talents to work in a new and transformative program” thus, Google’s copying of Java API code was fair use of that material as a matter of law.

For more information on this topic, please contact Kirsten Patzer at [email protected].

Departing Lawyers’ “Theft of Files” May Lead to a Violation of M.G.L.c. 93A

Posted on: April 29th, 2021

By: Nancy Reimer, Jennifer Markowski and Lori Eller

The Massachusetts Supreme Judicial Court recently held in Governo Law Firm LLC v. Bergeron, 487 Mass. 188 (2021), that the inapplicability of G. L. c. 93A, § 11, to disputes arising from an employment relationship does not mean that an employee never can be liable to its employer under G. L. c. 93A, § 11. Rather, where an employee misappropriates her employer’s proprietary materials during the course of employment and then later uses the materials in the marketplace, that conduct is not purely internal and it comprises a marketplace transaction that may give rise to a claim under G. L. c. 93A.

In this case, Governo Law Firm (GLF) sued to protect materials stolen by a group of its nonequity partners as they left GLF and prepared to start a new law firm, CMBG3 Law LLC. Governo had created a research library containing over 20 years of materials it had collected on asbestos litigation, along with an electronic database used to search the library. The nonequity partners secretly downloaded the library and databases, along with administrative materials such as GLF’s employee handbook and client lists while still employed with GLF. They then made an offer to GLF’s sole owner to purchase GLF and stated if the offer was not accepted that same day, they would resign. GLF’s owner rejected the offer and—too late—locked the attorneys out of GLF’s computer systems. The next day, those attorneys opened for business under CMBG3 and began using the stolen materials.

The jury in the Superior Court action found some or all of the attorney defendants liable for conversion, breach of the duty of loyalty, and conspiracy, but found none of them liable for unfair or deceptive trade practices in violation of G.L c. 93A, § 11. CMBG3 was found liable for conversion and civil conspiracy. GLF was awarded $900,000 in damages calculated by lost profits and a permanent injunction was issued enjoining the defendants from using the library and the databases.

GLF appealed the judge’s trial instructions and his posttrial rulings regarding the 93A claim, the scope of the injunction, and interest on the damages award. The SJC on appeal agreed with GLF and held the judge erroneously instructed the jury that the defendants’ conduct prior to their separation of employment, namely the stealing of the materials while still employed at GLF, was not relevant to GLF’s claim under G.L. c. 93A § 11. The SJC held that in order for the jury to resolve the G. L. c. 93A, § 11 claim the jury should have considered whether the attorney defendants’ theft and subsequent use of GLF’s materials amounted to unfair or deceptive conduct.

The SJC further determined it was an abuse of discretion for the trial judge to exclude the stolen administrative materials, such as the employee handbook and client list, from the scope of the permanent injunction.  

Regarding interest, the SJC held that while prejudgment interest was not required due to the non-compensatory nature of the damages, which were awarded on the basis of the defendant’s profits and not to make the plaintiff whole, post-judgment interest was appropriate and would accrue from the date of entry of initial judgment until payment in full. This was contrary to the position taken by the attorney defendants and the trial judge that the deposit of damages with the court, rather than directly to GLF, would terminate the accrual of post-judgment interest.

If you have any questions of would like more information, please contact Nancy Reimer at  [email protected], Jennifer Markowski at [email protected] or any other member of our Lawyers’ Professional Liability Practice Group, or Employment Law Group a list of which can be found at www.fmglaw.com

Client Update – MS Exchange Server Mass-Hack

Posted on: April 28th, 2021

By: John Ghose

In March 2021, government and private sector sources estimated that 30,000 U.S. organizations, and 100,000 organizations worldwide, were hacked by a Chinese state-sponsored group known as Hafnium.  The mass-hack exploited previously unknown “zero-day” vulnerabilities of Microsoft Exchange on-premises products as far back as January 6, 2021. (You can read more about this vulnerability in our prior post here.)  Since then, FMG’s cyber attorneys have worked on numerous MS Exchange matters and helped clients with their investigations of and responses to these incidents.  This client update provides initial reporting on what we have learned about this massive cybersecurity event.

The good news is that, from what we have seen initially, the threat actors exploiting the MS Exchange vulnerabilities have mostly probed without accessing or exfiltrating data. There are exceptions, of course, but in most cases our forensic partners have found China Chopper web shells – malicious interfaces that enable remote access and control to a web server – installed on affected systems, but have not found correlating system activities indicating access to or acquisition of data.  A likely explanation for this result is that the state-sponsored hackers were checking to see if the web shells were present and accessible, but had not yet performed additional activities by the time clients responded to the vulnerability. 

That said, organizations should remain vigilant.  Cybersecurity researchers believe that, when Microsoft reported the vulnerability, with attack details and patching instructions, non-state-sponsored hackers reverse engineered the patch to discover and exploit the vulnerabilities on unpatched systems.  Indeed, several weeks after the MS Exchange vulnerability was discovered, tens of thousands of affected systems remained unpatched.  Although the FBI recently conducted an unusual operation whereby it got court approval to issue commands forcing removal of these malicious web shells, systems that remain unpatched are still vulnerable to re-installation and exploitation.  There also is a new, albeit crude, strain of ransomware – DearCry – being used to exploit the MS Exchange vulnerability, which you can read about here

Based on past experience with zero-day vulnerabilities, we believe it could be six to eight months before experts truly understand the full impact of the MS Exchange vulnerability.  In the meantime, if you need assistance with this or other cybersecurity or incident response matters, please contact one of FMG’s Data Security, Privacy & Technology attorneys.

One Man’s Trash: Georgia Court of Appeals Weighs in on Respondeat Superior Following Homeowner’s Altercation with Garbage Employee in Advanced Disposal Servs. Atlanta v. Marczak

Posted on: April 28th, 2021

By: Steven Grunberg

Do you ever feel like your dedication to your job is questioned? For one employee of a garbage and recycling disposal company there is little doubt surrounding the answer to this question. In March 2018, Lorenzo Bucknor was driving an Advanced Disposal Services Atlanta, LLC (“ADS”) recycling truck when he arrived at Mark Marczak’s home to retrieve Marczak’s curbside recycling. Just before Bucknor’s arrival, Marczak had placed his recycling bin on the curb of his home and placed an extra bag of recyclables on top of the bin. Prior to Bucknor stopping at Marczak’s home, the extra bag had flown off onto Marczak’s driveway where it remained.

When Bucknor pulled up in his ADS truck he collected the recyclables from Marczak’s bin but did not pick up the loose bag in the driveway as he did not consider them to be “curbside” and were not in the appropriate location for pickup. Marczak noticed the bag lying in the driveway and approached Bucknor, with bag in hand he said, “[t]his goes too,” and tossed the bag in Bucknor’s direction while Bucknor was emptying a bin at a neighboring home. Bucknor cursed at Marczak, left the bag on the ground, and returned to his truck. Marczak followed Bucknor to his truck, stating “[n]o, you take it, it’s your job,” and threw the bag into the driver’s side of the truck cab. Bucknor then jumped out of the truck and punched Marczak in the face before getting back into the cab, but immediately returned to Marczak and proceeded to strike Marczak several more times until he was lying unconscious and face-down on the driveway. Marczak and his wife sued Bucknor and ADS under the theory of respondeat superior, among others. Advanced Disposal Servs. Atlanta v. Marczak, No. A21A0180, A21A0181, 2021 Ga. App. LEXIS 191 (Ga. Ct. App. Apr. 8, 2021). The trial court denied summary judgment for ADS as to the respondeat superior claim.

On the surface, it may come as a surprise that the Marczaks’ respondeat superior claim survived summary judgment. After all, a recycling truck driver beating a customer unconscious appears to be “for reasons unrelated to that employment (e.g., for purely personal reasons disconnected from the authorized business of the master[.])” According to the court of appeals, Bucknor was clearly carrying out his duties as a ADS employee when he first encountered Marczak and the initial decision to punch Marczak was a personal reaction to having a recycling bag tossed into his cabin. However, the critical fact allowing the Marczaks’ respondeat superior claim to move forward was Bucknor’s response when asked why he re-engaged after the initial punch:  “I had got out [of the truck] initially and, you know, I had — because he hit me, so I hit him, so now he’s walking away, so — and I’m in the area, I’ve got to finish this whole neighborhood, so I was thinking that he, I don’t know, was going to get a weapon or something, honestly, and follow me or something. So yeah, I still felt like I was in danger. He’s at home, you know, and I don’t know what he’s going to get.” The court held this testimony raised “a question of fact as to whether Bucknor’s actions were purely personal or connected, at least to some extent, with his effort to finish his recycling route.” Even if beating Marczak unconscious was motivated by personal malice, Bucknor’s response, according to the court, was enough to allow a jury to conclude that he acted “within the scope of [ADS’s] business and in furtherance of its interests.”

Employers should be aware that an employee’s testimony may end up slotting their conduct, beatings included, within the scope and in furtherance of its business. Simply because an employee’s conduct is personally motivated, this alone may not absolve his employer of liability under respondeat superior.

For more information about this topic, please contact Steven Grunberg at [email protected].

Clemson University Settlements Highlight Trends in Title IX Sports Claims

Posted on: April 27th, 2021

By: Candice Jackson and Wayne Melnick

As colleges and universities face budget shortfalls that may be especially sharp due to challenges posed by COVID-19, two pre-litigation settlements reached by Clemson University last week highlight the risks to educational institutions of patching budget deficits by cutting sports teams. Citing financial challenges caused by COVID-19, Clemson announced in November 2020 that it planned to discontinue its men’s cross country and track and field programs, projecting a cost savings to the university of about $2 million.

On March 12, 2021, attorneys for a group of Clemson men’s varsity outdoor cross country and track and field athletes sent a pre-litigation demand letter to Clemson, arguing that Clemson’s elimination of those teams violated Title IX (which prohibits sex discrimination in education programs and activities, specifically including athletic activities). The argument was that under Clemson’s status quo, Clemson’s provision of undergraduate intercollegiate athletics teams resulted in an almost-zero discrepancy between the number of male athletes and number of female athletes, which corresponded with Clemson’s overall undergraduate population of an almost-even split between male students and female students. The attorneys argued that if Clemson cut those teams, the discrepancy between number of male athletes and female athletes would increase by more than 1,300%, without the kind of circumstance under which such a disproportionality might pass muster under Title IX (such as where there is not significant enough “interest and ability” among athletes of one sex to achieve the “substantial proportionality” that Title IX compliance requires). Invoking the judicially implied right of private action under Title IX, the demand letter threatened a lawsuit seeking an injunction reinstating the varsity teams.

A few days later, attorneys representing members of Clemson’s women’s rowing, cross country, and track and field teams sent Clemson a demand letter threatening class action litigation under Title IX alleging that Clemson systematically failed to provide female athletes with equal athletic opportunities. The letter cited data showing that in the preceding year Clemson provided only 39% of its athletic financial aid to female athletes, and only 16.7% of Clemson’s recruiting expenses were dedicated to recruiting for women’s teams.

On April 22, 2021, Clemson entered into coordinated settlement agreements with both groups of potential plaintiffs. Clemson agreed to (1) restore the men’s cross country and track and field teams immediately; (2) conduct a review of all its intercollegiate athletic programs and formulate a “gender equity plan” by July 1, 2022; (3) publicly announce that Clemson was voluntarily retaining its men’s indoor cross country and track and field teams, and that it pledges to expand women’s opportunities on an equitable basis; (4) refrain from eliminating any men’s or women’s teams until its gender equity plan is finalized and such eliminations would not violate Title IX; and (5) institute policy changes designed to provide benefits more equitably to female athletes (e.g., equalizing as between male and female athletes the type of meal plans, sports equipment, pool access, flights to away games, sports medicine services, and other benefits provided by Clemson to its athletes).  

It is, to say the least, unusual for a significant, contested legal issue to be raised and resolved in the span of a few weeks. Several factors likely contributed to the quick, substantial resolution and illustrate trends in Title IX sports claims.

First, Clemson is the latest in a string of institutions of higher education to face similar claims that cuts to sports teams violate Title IX (although, interestingly, this appears to be the first time that male athletes have successfully argued Title IX violations based on sports program eliminations). Public and private institutions, such as the College of William and Mary, and UNC-Pembroke, have over the last couple of years resolved similar claims pre-litigation, and courts have not been shy about granting injunctions under Title IX for institutions that refuse to reconsider cuts that result in significant sex-based disproportionality. With tight-knit groups of lawyers on the look-out for these kinds of potential Title IX violations, and with social media sharpening student, alumni, and media interest in the topic of college sports generally, what used to be routine budget decisions now garner immediate, intense scrutiny.

Second, in Clemson’s case, its elimination decision in November 2020 led to charges that Clemson had selected teams with higher proportions of Black athletes for elimination, leading to a complaint filed with the U.S. Department of Education’s Office for Civil Rights alleging a Title VI violation (that complaint is still pending). This intersection between Title IX and Title VI (which is not confined to the realm of sports programs) doubles an institution’s risk of discrimination allegations.

Third, the female athletes who demanded sex-based equitable treatment from Clemson explicitly and publicly supported their male counterparts’ Title IX allegations, reflecting a new dynamic in Title IX sports situations: insistence by female and male athletes that their institution give more benefits to all athletes rather than pit male and female athletes against each other to compete for a university’s resources. This trend differs from the typical fact pattern throughout Title IX’s decades of spurring sex-based equality in athletic opportunity, where frequently Title IX sports enforcement has fostered a battle of the sexes, with excessive focus on sex parity resulting in reducing men’s opportunities rather than increasing women’s opportunities. While there is little legal significance to whether or not female and male athletes “team up” in these situations, this dynamic does increase the pressures an institution faces in the media and in the court of public opinion.

This pair of Clemson University Title IX settlements reinforces the challenges that educational institutions face when trying to make financial decisions without violating – or at least creating the perception of violating – non-discrimination laws that require equal treatment on the basis of sex (Title IX) and race (Title VI). While non-revenue generating sports programs may seem like low-hanging fruit to an institution facing severe revenue problems, and such decisions are almost always made without any purpose or intention of negatively impacting groups of athletes based on sex or race, the risks inherent in these decisions require careful consideration.

Freeman Mathis & Gary’s Education Practice Team advises educational institutions in risk identification and mitigation strategies. For more information about this topic, please contact Candice Jackson or Wayne Melnick.