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illustration-card-1441198-m.jpgJust in case anyone thinks that cybersecurity is nothing more than an esoteric exercise for computer geeks and technicians, of no importance to the average person or business, the Heartbleed bug has come along to show us all how wrong that is. It was only just discovered two weeks ago and its impact was felt around the world almost immediately.

According to an article in the April 9, 2014 Daily Mail, the Heartbleed bug bypasses the normal safety features of websites. It can affect many of those sites that you might have noticed, which begin with an “https://” in front of their internet address, and which often appear with the symbol of a lock, both of which are supposed to mean they are safe. The bug, though, makes them vulnerable. It reportedly could affect more than 500,000 websites
The bug reportedly allows hackers to bypass normal encryption safety measures to get at encrypted information, including the most profitable types such as credit card numbers, user names, and passwords. The unauthorized user can even obtain the digital keys to impersonate other servers or users and eavesdrop on communications.

It’s not considered malicious software or malware because it is more of programing flaw; but that really is not important. What is important is that the flaw, and the vulnerability, went undetected for more than two years until it recently was discovered, independently, by researchers at Google and the Finnish company Codenomicon. A fix is possible, and reportedly fairly easily applied. The problem seems to be that the fix has to be manually applied by the people who run each individual site. That, unfortunately, will take time.
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question-1-1339413-m.jpgThere have been a few interesting recent news stories concerning the benefits and dangers of Big Data, for businesses and individuals alike. One even points out a possible middle ground, which can allow the continued use of the vast amounts of data at the disposal of government and businesses, while protecting individual privacy.

The benefits of Big Data are not as well-known as they should be. A recent study by Sean Young, assistant professor of family medicine at the David Geffen School of Medicine at UCLA and co-director of the Center for Digital Behavior at UCLA, showed one way that Big Data could be used to promote and protect public health. The researchers collected approximately 550 million Tweets; developed an algorithm, or set of instructions, that searched for words suggesting risky behavior or drug use; and located those words among the Tweets. Though they only identified just less than 10,000 such Tweets, they were able to match those Tweets with geographic areas with unusually high incidences of HIV cases. The researchers propose using real-time analysis of social media data to understand and maybe even predict where HIV and drug use will occur. That information could be used for disease detection and prevention.

The downside to collecting vast amounts of data about large numbers of people is that it is hard control who has access to it and how it is used. According to the British newspaper The Guardian, a management consulting firm recently uploaded the British National Health Service’s Hospital Episode Statistics to Google servers in order to work with the information to answer specific questions and even create interactive maps involving specific queries. It was a large amount of data; it took two weeks to upload and consisted of 27 DVD’s of information. The problem, reportedly, was that the data contained personal information including information about patient locations, since it was used to create maps, and the Google servers were outside Britain, evidently making its dissemination harder to control. This has increased criticism of another NHS plan, the care.data scheme, which will link general physician and hospital records, including a patient’s date of birth, NHS number, zip code, ethnicity and gender, and allow that information to be used by researchers, drug companies, and insurers. The problem, reportedly, is how to safeguard that data, which will be partially, but not totally, scrubbed of personal information.
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out-of-the-park-842657-m.jpgA recent news story caught my eye because it shows the importance of a win-win negotiation strategy and the need to accurately assess your BATNA, or best alternative to a negotiated agreement. Though it deals with personal injury claims in Kansas, it can teach a lot to businesses in New York and across the country.

The state legislature in Kansas is considering a few important changes to personal injury litigation: increasing the cap on non-economic damages while at the same time changing the rules of evidence to allow a jury to hear whether a plaintiff has had losses covered by other, or collateral, sources including insurance, and to make it more difficult to use questionable expert testimony. To put it another way, the proposed rule changes would allow personal injury plaintiffs to collect more for pain and suffering while arguably making those harder to prove.

According to the story in the February 28, 2014, Claims Journal, Kansas has not raised its cap on damages for pain and suffering since the 1980’s. Though the cap was found constitutional by the state’s highest court in 2012, the decision disapprovingly noted the long delay in raising the cap. The warning evidently was heard loud and clear. The story notes that the chairman of the state senate judiciary committee, Jeff King, considers it only a matter of time before the current cap, of $250,000, is overturned as being too low. That is why the current bill would increase the cap, in stages, to $350,000.
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snow.IMG_00000242 (3) - Copy.jpgAdvances in business technology are becoming routine, even in the most unexpected places. Each new advance comes with both risks and rewards. One of the more recent, the mobile payment app, accessed through a customer’s mobile phone, points out how the good and the bad often go hand in hand: big data, marketing, privacy, cybersecurity, biometrics, and liability all wrapped up into one. How to benefit from this technology, without being caught in its snares, is a lesson every business should learn.

We previously talked about the costs involved when digital information is stolen from a business. At approximately $188 per stolen record in the United States, the costs quickly add up, even for small and medium size businesses. At that price, think of how hard it would be for a parts supplier, a small manufacturer, or a retail store to cover the loss of a few thousand, or even a few hundred, customers’ payment records.

Customers like the mobile payment apps; they make the buying experience seamlessly simply. Their ease of use lets the customer pay for a purchase without much more than punching up the app and turning the smartphone towards the store’s scanner; all without the sting of paying with cash or the necessity of pulling out a credit card. Instead, the credit card information is tied to the app. That, however, is where the trouble begins.

Mobile payment apps offer even more advantages for businesses. Many, including Henry Helgeson, CEO of payment systems software provider Merchant Warehouse, in a June 18, 2013 article in Forbes, have touted the possibilities. If done properly, and widely, mobile payment apps can harness the big data capabilities of smartphones to help businesses:
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IMG_00000183.jpg Almost every New York Business uses digital information daily and therefore runs the risk of having it stolen. The potential costs involved are significant and the risks are real. How to protect against the dangers, consequences, and liability arising from data breaches, while still taking advantage of the benefits of using digital information, is a challenge every business, large and small, must become aware of and learn how to meet. In this post we’ll take a look at the dangers involved, and in subsequent posts we’ll examine the available remedies.

The most prominent data breach in the news recently, as we’ve discussed, is the one at Target stores. It alone involved the theft of credit and debit card information of more than 40 million people, or more than 1/8 of the total population of the United States. The potential costs, and liability, involved are huge: according to a report by Ponemon Institute, released in May, 2013, the average cost of a breach per stolen record, globally, was $136; in the United States it was even higher, $188. Multiplied by 40 million records compromised in the Target breach, the costs could run into the billions of dollars.
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SBUH.jpg Digital information can be both a blessing and a curse for modern day businesses. It’s seemingly everywhere because, it seems, people leave it everywhere, even unsuspectingly. Even a little can tell you a lot, if you know where to look. Apparently innocuous information, like where you are at any given moment, can tell more about you, and be more valuable, than you might think. A recent story in the Wall Street Journal drives this point home.

We’ve written a lot recently about the wealth of information available in the modern-day digital age: how it can be used to investigate insurance fraud; how it can help criminals steal; or even how it can be their target. What’s becoming ever more clear, however, is the tremendous impact this information can and will have on businesses and commerce as a whole.

The Wall Street Journal story deals with turning location into dollar signs. Published on Tuesday January 14, 2013, it focuses on how companies get a huge amount of specific, detailed, though anonymous, information about customers, just by knowing where they are and where they’ve been, each and every day. They use this information in targeted marketing campaigns to increase their profits. The kicker is that they get this information, about their customers’ travels, habits, and interests, all simply by tracking their customers location, and most people probably don’t even realize they’re doing it.
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notepad-1066735-m.jpgVacating a default judgement in New York, as we have previously discussed, is not always easy. Often it is up to the discretion of the trial court. There are certain times, however, when the defaulting party may not need a reasonable excuse for failing to appear, as long as it does not wait too long to ask the court to excuse the default. This can include parties, such as corporate defendants, who have failed to receive a summons and complaint at least partially through their own fault.

CPLR §317 provides in relevant part:

A person served with a summons other than by personal delivery to him or to his agent for service designated under rule 318, within or without the state, who does not appear may be allowed to defend the action within one year after he obtains knowledge of entry of the judgment, but in no event more than five years after such entry, upon a finding of the court that he did not personally receive notice of the summons in time to defend and has a meritorious defense. If the defense is successful, the court may direct and enforce restitution in the same manner and subject to the same conditions as where a judgment is reversed or modified on appeal. This section does not apply to an action for divorce, annulment or partition.

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pink-telephone-1353144-m.jpgTrademarks are tricky things. Everyone recognizes them when they see them. Who doesn’t know what the Golden Arches are? Who doesn’t think to themselves, “I’m Lovin’ It”? But did you ever think about why? What do arches really have to do with hamburgers? For that matter, what does a Coke have to do with a smile, or a sneaker with a swish? What does the Mercedes Benz emblem really have to do with a car? That is the key, the safety, and the difficulty involved in a good trademark, all wrapped up into one. And, if you get it right, your business, any business, can make sure it comes to mind every time someone sees its symbol or hears its song, and that’s priceless.

We previously wrote about Verizon Communications’ deal to buy out Vodafone’s minority stake in Verizon Wireless. That was a deal a long time in the making, in which Vodafone got its asking price even though Verizon Communications seemingly had the better bargaining position. Though Verizon might have overplayed its hand and negotiated itself out of several billion dollars in the process, it definitely got one thing right: its name.

Did you ever wonder where the name “Verizon” came from? Today it’s ubiquitous and everyone knows it’s a communications company. Though landline copper wired phones seem to be going the way of the payphone (does anyone else remember when payphones used to be on almost every corner?) Verizon Wireless is the country’s largest cellphone service provider and Verizon FiOs is a growing cable and internet service provider which provides significant competition to traditional cable companies in many areas, including here in New York. Its name and logo have become, to many, synonymous with communications.

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Posted in: Business Law
Tagged: Trademarks
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careful-899881-m.jpgWe’ve spent a lot of time this past summer talking about how important negotiations are to businesses and individuals alike, and how various negotiation strategies work together to produce desired, and sometimes unintended, results. This time, we’re coming back to one useful strategy in particular, which is known by the ever impressively indecipherable acronym BATNA, to show how it can be used, abused, and overplayed. Put another way: BATNA Beware.

BATNA is shorthand for Best Alternative to a Negotiated Agreement; i.e., your best fallback position if negotiations fail and you have to walk away from the negotiating table without getting a deal done. Everyone’s been involved in that situation before; no negotiator is immune from sometime, someday, someway, simply not being able to reach a deal. For years Verizon Communications and Vodafone could not reach an agreement to end their joint venture in Verizon Wireless. Started in 2000, after Bell Atlantic merged with GTE Corp., both of which had a large East Coast presence, and Vodafone purchased Air Touch Communications, which had a large customer base on the West Coast, Verizon Wireless is the largest cellular service provider in the United States. Verizon Communications reportedly owns 55% and Vodafone 45% of the joint venture. According to those same reports, Verizon Communications had a long standing desire to buy out Vodafone but did not want to pay Vodafone’s $130 billion asking price. It instead wanted to pay only $100 billion for the minority stake in the company. As a result, no agreement was reached until earlier this month when Verizon agreed to buy out Vodafone for the $130 billion Vodafone reportedly had been seeking all along. You can learn a lot by looking at the facts behind this apparent change of heart.

You would think that Verizon Communications had the better bargaining position. The way Verizon Wireless reportedly is structured, Vodafone has little say in the day to operations of the company. With effective control over the company, Verizon Communications apparently should have been able to operate the wireless carrier to its benefit with Vodafone having little say, or veto power, over the decisions. What Vodafone apparently had was an investment, with little opportunity to chart the path of the company to maximize the profits in its own interest. That’s a lot of trust to place in another company. You would think that Verizon Communications could have held out for as long as it needed to in order to pay what it wanted, $100 billion, to get what it wanted, sole ownership of Verizon Wireless. After all, Verizon Communications’ fallback position looked a lot better than Vodafone’s; if they couldn’t reach a deal, then Vodafone would be left with an investment it had little control over, but Verizon Communications would still have effective operational control over the nation’s largest wireless carrier, with its inherent possibilities for growth, marketing, and cross-promotion.

The problem apparently was that Verizon Communications overestimated its bargaining power and underestimated Vodafone’s fallback position. If no deal was done, and everything stayed the same, Verizon Communications would still be in charge, but Vodafone would still receive a large share of the wireless company’s profits. Reportedly, Verizon Communications wanted those profits on its books, not Vodafone’s. When you think about it from Vodafone’s point of view, is it really that bad to have a large investment in a profitable company with a good rate of return? Why walk away unless you can cash-out at or close to your asking price? After all, it might be difficult to find another place to put your money that will get you close to the same return. Maybe Vodafone really could afford to hold out longer than Verizon. What reportedly got the deal done was Verizon Communications’ concern about the effect rising interest rates will have on the cost of raising the money necessary to finance it. When you’re talking about purchases of about $100 billion, even minor fluctuations of bond prices and interest can quickly make a difference.
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fruit-and-veg-1421738-m.jpgAs we’ve spoken about in the past, negotiations are an important part of everyday life for businesses, consumers, and lawyers alike. Today we’re going to talk about how respect, trust, and confidence are the keys to successful business negotiations and how you can harness the natural urge to compare, and the common preference for choice, to attain them.

Chances are, you all have felt the urge to comparison shop; how else to tell whether you’re going to get your money’s worth out of the bargain? No matter what you are in the market for, be it clothes, groceries, a new car, or a home, most people want to take a look at multiple options before deciding which one to buy. How many people buy the first house they look at with a realtor, the first car they see in a showroom, or even the first pair of jeans they pick up in a store?

People’s urge to compare is strong, even when they are standing in one store. Think of the last time you bought a new cellphone. Picture yourself standing there, tied to one carrier, in front of a display with many different phones. Do you look at the cost and different features of each, to see which one you like better, before you make up your mind? When you finally make your decision, do you feel more confident that you bought the right phone because you made the effort to educate yourself by evaluating the choices first, or do you regret not buying the first decent looking phone that you saw? What if there is only one phone and the only choice you have is to take it or leave it? How confident are you that it is worth the money?

If having more choices to compare makes you feel more confident in your ultimate selection, then you’re not alone. Even Apple, which perennially has offered one new version of its iPhone at a time, apparently has recognized the power of choice; it reportedly is set to introduce two very different versions of its newest iPhone, one high-end and one low-end, at the same time this September.

A recent episode of the popular National Geographic Channel television show Brain Games points out just how strong the urge to compare is and how much more confident it makes people feel in their ultimate decision. To demonstrate how people make decisions, the show gave a few samples of the same type of clothing to small focus groups and asked each person to decide which one they would buy. Everyone diligently compared the items and every person had a well thought out reason for picking the item he did; the reasons inevitably had to do with the person’s decision that the particular item he chose was better than every other item he could choose from. The reason it was better was based on what the particular person considered to be important; for some it might have been that the clothing was softer, for others it might have been that the item was more durable or its colors were brighter. The reasons weren’t important, because, it turns out, each item was exactly the same as the others. The key was the way the reasons were arrived at; i.e., by comparing options and deciding which one was best, even if there was no real difference between them. If you use that urge to compare in the right way, as part of a win-win strategy, it can help you succeed in business negotiations.

According to Harvard Business School professor Max H. Bazerman, writing in Negotiation, the monthly newsletter of Harvard Law School’s Program on Negotiation, one way to successfully negotiate a deal is to present multiple simultaneous offers. Each offer should benefit you, but, importantly, each should give your negotiating partner something different in return. Let him decide for himself whether it would be better to have faster delivery, a lower unit price, or better payment terms. It’s one way to learn what is important to him; if he immediately knocks one or two of the offers off the table, at least you will know what you have to work with and what you have to work on; you can use it as a framework to better your offer and finalize a deal. When you make those offers, you also demonstrate your flexibility, confidence in your product or service, and commitment to make a deal. If he takes one of the offers, of course, then the deal is done.
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Posted in: Business Law
Tagged: Negotiations
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