TOP STORY:

Feds Shutter Black Market Website ‘Silk Road’

Federal agents took action against popular illicit marketplace Silk Road, which was reachable only over the anonymizing Tor network and where illegal goods and services were traded for Bitcoins. Some had previously estimated that Silk Road did upwards of $20 million in sales annually, but the criminal complaint in this case alleges that annual revenues were as high as $500 million (leading to about $40 million in commissions). The site has been called “the eBay of drugs,” referencing the ease with which it was possible to mail-order heroin, cocaine, and ecstasy. The alleged operator of the site was arrested in San Francisco last Wednesday and charged with criminal hacking, money laundering, drug trafficking, and hiring a contract killer. Authorities also seized the site’s Tor domain name, web servers, and about $3.5 million in Bitcoins. The value of the currency subsequently fell by about 15%, and cyber criminals quickly started to pick up the slack on other black market websites. [H/T Matt O'Brien (RT); Suzy Khimm; Justin Webb]

Cybercrime & National Security:

  • CNET reports that the NSA has used Google advertisements to track some Tor users, while The Register reports that the NSA is also using weaknesses in old versions of Firefox.[H/T @CyberExaminer]
  • One of Edward Snowden’s email providers, Lavabit, has had additional legal documents unsealed. Earlier this year, Lavabit shut down its operations in response to pressure to produce data, and the unsealed documents show the FBI requested access to encryption keys that would have allowed inspection of every Lavabit user’s connections to the Lavabit service, not just Snowden’s.
  • Thousands of civilians working for the NSA have been furloughed due to the government shutdown. Some lawmakers were not happy with the move.
  • The Department of Justice opposes several technology companies’ requests for the right to release more information about the requests they receive from the government to divulge customer information (for example, in ‘national security letters‘). Google has led several other companies in seeking the right to be more transparent about the government requests they receive.
  • Thirteen more people were indicted in the Anonymous-fueled ‘Operation Payback,’ which was conducted in 2010 against anti-piracy websites and used the popular DDoS tool “Low Orbit Ion Cannon.”

Privacy:

  • France’s data protection authority may follow through on its June threat to fine Google for issues  it sees with the search giant’s privacy policy. [H/T SANS]
  • Google has apparently told the Electronic Frontier Foundation (EFF) that it will begin encrypting all search traffic with SSL, the secure connection technology that protects bank websites (also the ‘S’ in https://). Google has long used SSL to protect usernames and passwords, Google Documents, and Gmail, and had enabled SSL for logged-in users’ searches in 2011. This move will protect even more traffic. [H/T SANS]

Antitrust:

  • European Commissioner for Competition Joaquín Almunia announces he will seek settlement concessions from Google that would better highlight competitors for some of Google’s services. According to the proposed terms, Google would auction off space for logos and brief text descriptions at the top of certain search results. Currently Google’s own products and services, such as YouTube and Google Maps, tend to top the list. [H/T Google News]

Sport & Entertainment:

  • Alex Rodriguez sues Major League Baseball and its commissioner Bud Selig for allegedly trying to “improperly” ruin his reputation and career.

Trademarks:

  • ExxonMobil sues Fox over the logo for its new FXX network, which uses interlocking X’s somewhat like the oil and gas giant’s. And while the ExxonMobil trademark is certainly ‘famous‘ for trademark purposes, the claim still seems a bit of a stretch: 

Patents:

  • The Supreme Court agreed to hear two patent cases, both of which implicate the award of attorneys in ‘exceptional’ cases under 35 U.S.C. § 285. They are: Highmark Inc. v. Allcare Management Systems, Inc. and Octane Fitness v. Icon Health and Fitness. [H/T Patently-O]
  • Disney lost on appeal after intervening in a bankruptcy case in which some of the liquidated assets were patents on 2D-to-3D conversion processes, which Disney has used for several films. The 3D technology company RealD acquired the patent, and because Disney’s prior license was narrow and did not survive the bankruptcy, RealD may be able to keep Disney from using the patented process going forward.
  • Non-practicing entity (abbreviated NPE, but sometimes referred to as a ‘patent troll’) Intellectual Ventures plans to raise another $3 billion after apparently spending the $6 billion it has raised since 2000.
  • Unexpected news from the massive Samsung-Apple patent battle: Samsung and its outside counsel could be headed for serious sanctions after apparently violating a protective order limiting the dissemination of the extremely confidential terms of an Apple-Nokia license agreement. United States Magistrate Judge Paul Grewal has ordered discovery on the issue and set an October 22nd hearing date to deal with this issue.

Copyright:

  • Universal Music Group dropped its DMCA takedown requests for removal of content from This Charming Charlie, a Tumblr site that remixes Peanuts comic strip frames (sans dialog) with lyrics to songs by The Smiths.
  • This interesting case looks at defamation in the context of a website scraper (the copyright claim–on the data itself–was dismissed long ago). What a crazy fact pattern: the defendant owned a website dedicated to a certain dog breed, and developed a database to support it. She made the website free to access, so the plaintiff scraped the contents of her entire database, then packaged it into a software product which it sold. The defendant personally contacted a number of other sites also dedicated to the breed and asked them not to do business with the plaintiff, accusing him of ‘stealing’ her database, ‘hacking.’ The court’s decision here finally lays the last claims over the 2004 events to rest. [H/T Venkat Balasubramani at Eric Goldman's blog]

E-Discovery:

  • This case is interesting, and it seems to me that it gets the relationship between the law and technology wrong, even if it’s not technically incorrect about the underlying file formats. After a requesting party in a fraud action asked for ESI in native format in almost all of its production request, and the responding party sent it thousands of pages in (admittedly searchable) PDFs, a magistrate judge in the Eastern District of North Carolina makes the requesting party live with it. The court hung its hat on the fact that the native-format metadata wouldn’t be destroyed (on my reading, this applies to the original files), but how is that relevant to what is actually produced? If you can’t get metadata in a fraud case, when you asked for it according to the rules and (presumably) the timing of events is important, when can you get it? [H/T Bow Tie Law]

Technology Companies:

  • Prominent software maker Adobe confirmed at least part of Brian Krebs’ previous announcement that the company had been the victim of a sophisticated cyber attack and that the source code for some Adobe products, as well as a significant portion of its customer data, may have been stolen.
  • Shareholders sued Blackberry over allegedly misleading claims about the company’s financial health and technological relevance (well, alleged claims–it’s not clear the statements in question were all that substantive).
  • Twitter reveals in its $1 billion IPO that it is growing both users and revenue, but has yet to turn a profit.

–Brad Edmondson

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