Microsoft vs. Google: Waging War In-House Style
March 6, 2007 | Filed Under Compliance, In the News
Microsoft takes up the banner of copyright today against Google. It’s lead warrior is none other than one of its in-house lawyers, Associate General Counsel Thomas Rubin.
The New York Times reports that Mr. Rubin will give a speech today to the Association of American Publishers, and draw a bead on arch-nemesis Google:
“Companies that create no content of their own, and make money solely on the backs of other people’s content, are raking in billions through advertising revenue and I.P.O.s,” said Mr. Rubin, who oversees copyright and trade-secret law.
Google responded last night, before Mr. Rubin uttered a word:
David Drummond, Google’s senior vice president for corporate development and its chief legal officer, said in response that Google worked with more than 10,000 publishing partners to make books searchable online and had recently added the BBC and N.B.A. as YouTube video partners.
“We do this by complying with international copyright laws,” Mr. Drummond said, “and the result has been more exposure and in many cases more revenue for authors, publishers and producers of content.”
This copyright-fight by Microsoft against Google was carefully choreographed. The Financial Times seems to have broke the story, since it just happened to have an article by Mr. Rubin dated today on its web site last night (that link only works for FT subscribers). One excerpt:
Google, for example, says its book search technology will one day make available a copy of every book ever published in a vast online database of indexed content. A worthy goal, to be sure. But in pursuit of that goal, Google has taken a unilateralist approach by contending that it is entitled to grab books off library shelves and copy them wholesale without obtaining the permission of the publishers and authors who own the copyrights in those works.
It’s certainly a sign of the pressure that Microsoft feels from Google that it takes a public-service position before a publishers association. While one focus of Mr. Rubin is Google’s book indexing project, certainly YouTube is on its mind and in its cross-hairs.
The text of Mr. Rubin’s speech is here; the related Microsoft PressPass interview with him is here (where he mentions Microsoft’s own Live Search Books initiative).
In fact, this appears to me to be a sign that Microsoft has decided to use copyright as a legal weapon in this one battle as part of its larger war against Google. It’s almost as if Microsoft is taking on the entire business model of Google.
I bet Google already has a war room (or war-wiki?) going on this, as evidenced by the quick response from its CLO, Mr. Drummond. Perhaps ace Google copyright counsel William Patry will take this up on his copyright blog.
Game on! Maybe Microsoft will release “Halo 4 — Copyright Wars” for the XBox 360.
Wal-Mart Acts Fast On Taping
March 5, 2007 | Filed Under Criminal Liability, Compliance
In the post-HP pretexting era, companies need to move promptly when advised of potential wrongdoing. Wal-Mart today can be categorized as Exhibit A.
The New York Times reports (and the company has announced) that Wal-Mart uncovered that a company technician had intercepted messages and recorded phone conversations with company personnel and a reporter for the New York Times.
In this case, the board was promptly notified after an employee’s complaint in January, and the US Attorney was informed the next day.
The employment of the technician was terminated today. Other company managers have been disciplined. The company further stated that the US Attorney will conducts its own investigation. It will be interesting to see to what extent the feds take Wal-Mart’s voluntary disclosure into account in exercising prosecutorial discretion.
We are entering an era of compliance and regulatory disclosure that can be summarized in five words:
When in doubt, do it.
Running Out of Options
February 19, 2007 | Filed Under On The Dock, Compliance, In the News
You go away for a week, and you know something is different when you see a former GC doing a perp-like walk on the CNBC monitor in the airport.
A good summary of the GC angle on the options backdating mess is from Bloomberg News, via the Philadelphia Inquirer; here’s a highlight:
The exodus is unprecedented among the ranks of corporate attorneys, who ensure the legality of commercial transactions, said Susan Hackett, vice president of the Association of Corporate Counsel. The departures reflect added responsibility that in-house lawyers now bear for company actions, she said.
“I have never seen as much turnover in high-profile positions,” said Hackett, who has been at the Washington-based group representing 8,000 corporations for more than a decade. “This has been a watershed.”
One interesting point is the description of one of the duties of corporate attorneys (and by implication particularly GCs) to “ensure the legality of commercial transactions.” As we are seeing in the options backdating cases, the level of involvement of the GC and the legal department can vary. Rather than looking at just at legality, some of those involved could have started with propriety.
A former officer of ACC gets it right:
“Ten or 15 years ago, general counsels were mainly just asked whether a corporate action was legal or not,” said Al Gonzalez, 52, a past vice president of the Association of Corporate Counsel and currently general counsel at Tyson Foods Inc., based in Springdale, Ark., which is not involved in the scandal. “Today, the first questions they are asked is, ‘Is it ethical? Does it conform to the company’s code of conduct and core values? Is it the right thing to do?’ “
A sign that things may have gone way past “legality” is contained in today’s Wall Streeet Journal ($$$) which recounts alleged options practices at Mercury Interactive. The story quotes documents produced in a court proceeding as referring to “magic backdating ink,” presumably the sort that can lead to a change in an option grant date.
I don’t remember hearing about “magic backdating ink” in law school. But it doesn’t sound like something that would require much research. Perhaps a case study for this upcoming show on Fox?
You Can Take it With You
February 6, 2007 | Filed Under Technology, Compliance
Departing employees are apparently taking more than fond memories with them when they leave.
According to UK’s SecurityPark.net, McAfee research in Europe revealed that over 50% of employees surveyed said they would take company data with them when they walk out the door.
Even more troubling is the proliferation of portable memory devices (such as thumb drives) in the workplace, which makes it easy to remove large amounts of data and are easily concealed. What is interesting is that the most common method of removing documents is very old-school:
Company email remains the most common means of sending information externally with 86% admitting to forwarding documents regularly by email. However, many employees are also using methods which corporate IT departments have little or no control over. A quarter (26%) of those that have sent customer information outside of the business admit to using web-based email services such as Yahoo or Hotmail to do so while a significant proportion (83%) are printing customer records out to remove from the business.
Few companies have policies governing bringing portable memory devices into the workplace; fewer still have policies about the use of web-based mail services. In fact, some companies may unwittingly encourage the use of such services by warning employees against using company email for personal matters.
And it’s likely that company data is the least of compliance worries. The widely reported breaches of employee and retiree data can pose civil penalties and reputational risk.
There is a feeling out there that for every publicized data breach there are many others that are never reported. Or worse, detected.
Locking down company data will be an increasing headache for corporate IT departments. And corporate legal departments better be looking over their shoulders from time to time.
Dishing on Corporate Culture
January 29, 2007 | Filed Under Managing, Compliance
Lynn D. Lieber writes in the Corporate Counselor with some great ideas on how to advance compliance with a culture-based approach.
A few main points:
• Make ethics a priority;
• Set a good example of ethical conduct;
• Keep commitments;
• Provide information about culture and compliance;
• Consider ethics in decision-making; and
• Talk about ethics in the workplace.
One reality that a corporate counsel faces is playing with the hand that is dealt in the sense of the people in the company. One of the best long-term strategies for a strong ethical culture is hiring good people.
You can’t look over everyone’s shoulder all the time.
Ah, if creating the proper culture were only this easy:
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