The Short Names

Steve Balmer’s plans went really wrong with recent Linux patent auction. Instead of patents ending up with patent trolls, as Microsoft wished, AST acquired the patents, which was later sold to OIN, Open Invention Network. 
Up your Bolder
“Allied Security Trust is pleased that Open Invention Network had interest in acquiring the Open Source patent portfolio. OIN’s purchase ensures that these important patents will not be used by patent trolls or others seeking to disrupt Linux and the many companies and individuals advancing this important technology,” said Dan McCurdy, Chief Executive Officer of Allied Security Trust.
Following is the complete press release by OIN;

Durham, NC (September 8, 2009) – Open Invention Network (OIN), a collaborative enterprise that enables innovation in open source, today announced the acquisition of 22 Linux-focused patents that were marketed and sold by Microsoft. The patents were recently purchased by Allied Security Trust (AST) from Microsoft to ensure the patents did not fall into the hands of non-practicing entities (more information on non-practicing entities is available at http://en.wikipedia.org/wiki/Patent_troll, among other sites) that could seek to assert the patents against Linux products. OIN subsequently acquired the Microsoft patents from AST.

“Today’s announcement evidences OIN’s continued commitment to acquire patents that may be relevant to Linux,” said Keith Bergelt, Chief Executive Officer of Open Invention Network. “We are pleased to have purchased these patents and view this as a model of successful collaboration among defensive patent organizations that share a common goal of creating freedom of action for practicing entities across Linux and the broader technology sector. The prospect of these patents being placed in the hands of non-practicing entities was a threat that has been averted with these purchases, irrespective of patent quality and whether or not the patents truly read on Linux.
“Allied Security Trust is pleased that Open Invention Network had interest in acquiring the Open Source patent portfolio. OIN’s purchase ensures that these important patents will not be used by patent trolls or others seeking to disrupt Linux and the many companies and individuals advancing this important technology,” said Dan McCurdy, Chief Executive Officer of Allied Security Trust.
About Allied Security Trust
AST is a Delaware statutory trust currently with 15 member companies headquartered in North America, Europe and Asia. The Trust provides opportunities to enhance companies freedom to sell products by sharing the cost of patent licenses. To date, the Trust has invested $40 million in patent purchases over its 30 months of operations. Through such purchases, the Trust provides an excellent opportunity for patent holders of all sizes to generate a return on their rights by selling patents to the Trust.
AST is not an investment vehicle. Its purpose is freedom of operation and cost reduction. It generates no profits and does not engage in patent assertions against other companies. AST maintains a catch-and-releas; commitment that returns to the market in a timely manner patents acquired on behalf of Trust members after licenses are secured. The Trust also addresses the increasing need for innovative companies to defend against costly patent law suits. For more information, visit www.alliedsecuritytrust.com.
About Open Invention Network
Open Invention Network is a collaborative enterprise that enables innovation in open source and an increasingly vibrant ecosystem around Linux by acquiring and licensing patents, influencing behaviors and policy, and protecting the integrity of the ecosystem through strategic programs such as Linux Defenders. It enables the growth and continuation of open source software by fostering a healthy Linux ecosystem of investors, vendors, developers and users.
Open Invention Network has considerable industry backing. It was launched in 2005, and has received investments from IBM, NEC, Novell, Philips, Red Hat and Sony. For more information, visit www.openinventionnetwork.com.
Media-Only Contact:
Ed Schauweker
Ketchum for Open Invention Network
ed.schauweker@ketchum.com
(703) 963-5238

Motorola’s biggest success to date was when it released the thinnest and sexiest device the world had seen. Since then, the handset-maker has struggled to produce anything like it.

Yesterday, everyone was prepared to see Motorola’s latest form factor that would bring it back from the brink. Instead, what we got was an announcement about an innovative new user interface, or skin, that runs on top of the Google (NSDQ: GOOG) Android operating system. In fact, the big unveiling had little to do with the hardware, and in many ways, the upcoming CLIQ phone looks like any smartphone with a slide-out Qwerty keyboard. The interesting stuff is the Blur technology running under the hood.

This marks a huge cultural shift for the company, which in the past has always been driven by hardware design. While we didn’t get the entire story, the picture we gleaned during yesterday’s announcement and during a hands-on demo showed that much of transformation had to do with new Motorola (NYSE: MOT) management—and leveraging assets the company already had.

When Sanjay Jha was appointed CEO of mobile devices, he fast tracked a project being worked on by former employees from Good Technology, an enterprise email service that Motorola acquired, and then sold off in February. So, while other divisions back in Illinois were slashing staff, the Sunnyvale office was quietly picking up employees from Apple and Google in what has become a long two and a half year process to get to market. Rick Osterloh, Motorola’s VP of Product Development for Android Products, couldn’t help but talk about the project, which had been kept under tight wraps for the past year so well. He said it originated with Jha, who was interested in what the former Good employees were working on. “He liked what he saw and he gave it resources.”

Jha explained the importance of BLUR to GigaOm’s Om Malik at Mobilize and how it compares to Apple’s iPhone and RIM’s BlackBerry. He said the platform melds Apple’s idea of having access to tons of applications with BlackBerry’s niche of integrating the apps—like email—deeply into the phone. Together, they have the apps and the integration: “The iPhone has one, BlackBerry has the other, but we have combined them in a meaningful way for social networking.”

Essentially, the BLUR technology enables users to get all of their messages, status updates and other social networking components pushed to them. Motorola’s director of product marketing Dan Rudolph told me during a demo at San Francisco’s Museum of Modern Art that in order to accomplish this, there’s a lot of server-side technologies playing a role. All of the messages are compressed and then sent to the device. The process should help save on bandwidth and battery life, while the consumer will have all the information without having to go out and retrieve it.

Osterloh said the original idea stretches back as far as 2007 when Facebook and MySpace were just taking off. “We had all these people from Good…we thought we could really solve something.” He said the two keys were that messaging services on devices had gotten complicated. (Users had multiple email addresses and also SMS and MMS.) The other thing they looked at was making a consumer-friendly service that would be used by people who didn’t have support from an IT staff at work. “We redid everything. It was focused on business and this is 100 percent focused on the consumer.”

Some of the key services include an online portal, where users could log in and manage their device. If it’s lost, they can ping it and see where it’s located on a map. If it’s been stolen, they can wipe off all of their information and data. Likewise, if you get a new phone, all you would have to do is re-enter a BLUR user name and password and all of the consumer’s settings and preferences would be restored from the wallpaper to which widgets it has on the home screen—a significant time saver. Osterloh: “There was a big hole between what was happening with applications and what was happening with services on the BlackBerry. We see that there’s a need for both…The strategic part is the BLUR part.”

Motorola’s strong software platform may have increased its chances of making a comeback. But form factor is important, too. And, so far, it’s something that’s been neglected on the Google Android platform. To date, most of the devices are bulky, and while some have gotten sleeker, nothing still compares to the iPhone. Motorola’s new CLIQ also falls into this category. While solid and full of the latest hardware, it too is large and strays from Moto’s design background. INQ Mobile’s CEO Frank Meehan announced yesterday that his company was going to start building phones on Google Android’s OS, but pointed to one of the challenges with the platform: “Currently, Android phones on networks that are selling against the iPhone have not performed well. You need to get the experience better.”

So far, Motorola has announced that its first handsets will be sold via T-Mobile in the U.S. and also Orange, Telefonica (NYSE: TEF) and America Movil. How will it do? We’ll have to wait and see.

This is the moment in which Motorola (NYSE: MOT) shows us whether they have what it takes to turn the company around.

At GigaOm’s Mobilize in San Francisco today, Motorola’s CEO of Mobile Devices Sanjay Jha took the stage in front of a packed and energized auditorium, to say its answer to its problems is “Moto Blur,” a social-networking platform that the company has developed to run on top of the Google (NSDQ: GOOG) Android operating system. The first phone will be the Motorola CLIQ, which will be sold exclusively by T-Mobile USA. Jha: “The Android operating system gives us the platform to mobilize the internet. The bottom line is that it’s a modern, well-architected platform written from the ground up.” (Release.)

T-Mobile’s Cole Brodman joined Jha to announce that they will sell the phone exclusively starting in the fourth quarter. No word on how much it will cost. “Our customers are used to seeing innovation from T-Mobile and getting the must-have devices.” He stressed the network will be prepared to handle the additional traffic the device uses, which might become a determining factor going forward as consumers use data and weigh down networks. “Our network is equipped to handle increase in traffic. We have spent $9 billion on the network in the last four years. We have a modern 3G network that will reach 200 million people in the U.S. and reach 250 cities. It is a great time to be introducing a product like this.”

More on how BLUR works after the jump…

The Moto Blur concept aggregates all of your social networks, and then distributes the information into various widgets that are available on the phone’s home screen. Messages get one bucket and status updates in another. The address book also draws from all the networks, providing options for how you contact someone—via SMS, Twitter, email, etc. The phone is linked to a portal online that allows people to track a phone when its lost or from there you can wipe it clean. A user online only has to log back in to a device with a username and password to pick up where they left off.

Pricing for the device was not announced and its unclear what kind of data plan it will require, or whether there’s additional costs involved for the online back-up (Apple (NSDQ: AAPL) charges for a similar service, called MobileMe.). Clearly, the starting price for smartphones as of recently is $200, so to even have a chance at being competitive, Motorola will have to beat that—and better yet, they should beat it.

After the initial announcement this morning, Jha explained in a chat with GigaOm’s Om Malik the idea behind BLUR in terms we understand today—Apple’s iPhone and RIM’s BlackBerry. He said the platform melds Apple’s idea of having access to tons of applications with BlackBerry’s niche of integrating the apps—like email—deeply into the phone. Together, they have the apps and the tight integration. “The iPhone has one, BlackBerry has the other, but we have combined them in a meaningful way for social networking.”

A similar Motorola phone called DEXT will also be distributed internationally with Orange in the UK, Telefonica (NYSE: TEF) in Spain and America Movil in Latin America. Motorola will not stop there. Jha said a second Android phone using Blur will be announced shortly and will be launched in time for the holidays.

I’m currently en route to Facebook’s Mobile Media Mixer in Palo Alto, and what should happen to appear in the Android Market? The social networking company has finally launched its first application for the Google (NSDQ: GOOG) mobile-phone operating system.

So far, it sounds like a fairly simple application with initial feedback calling it more of a Twitter client, and many saying it’s light on features. The one noteworthy feature is the widget, which provides information directly on the homescreen. It is apparently gigantic and nearly takes up two-thirds of the page, reports AndroidandMe.com.

I’m sure I’ll hear more about it this evening, so I can provide an update later. UPDATE: Just met a handful of the 15-or-so people from the Facebook Mobile team on the company’s rooftop deck. Head of Mobile Henri Moissinac talked about the company’s momentum in mobile. Last week, they announced they have 65 million active monthly mobile users, and that’s mostly before updating the recent iPhone app, launching the Android app and adding location-based services to Nokia’s Ovi app. He said the momentum will continue with two new applications for devices coming soon. The reason for the company’s interest in mobile is clear: they say users are two times more engaged with Facebook if they use a mobile version.

The Facebook Android app does a good job at what Android does well. It alerts you to new comments on the Android notification drop-down window. It also allows you to click on a link from a browser and send it to your Facebook page—without ever loading the app. Pictures are also easily uploaded. The widget is big, but it does allow you to see the most recent status updates and place a call without loading the heftier version. However, as the critics have already said, it’s light on features—but the team promises more in future generations.

This is truly shaping up to be a big week for Android. First, the Facebook app launches, which is important because it has been one of the most popular downloads on other devices, such as the BlackBerry. And on Thursday we’ll hear more from Motorola (NYSE: MOT) at GigaOm’s Mobilize about its Android strategy.

In what appears to be a significant and somewhat groundbreaking decision, a federal court in Illinois ruled that a couple whose online access to their credit line was compromised could hold the bank liable for failing to adequately safeguard the account.  (Shames-Yeakel v. Citizens Financial Bank / Case No. 07-C 5387) (first blogged by the Digital Media Lawyer Blog here and picked by Wired’s threat level here).  Wired links to the ruling here: [pdf].

Background:  the facts are *somewhat* straightforward.  The plaintiffs were customers of Citizens Financial Bank.  In 2007, someone gained unauthorized access to plaintiffs’ credit line, obtained an advance of $26,500, transferred the amount to the plaintiffs’ account, then to a bank in Hawaii, and finally to an Austrian bank.  By the time the dust settled, and plaintiffs reported the situation to the bank, the miscreants were long gone, and the Austrian bank refused to refund the money.  Citizens (plaintiffs’ bank) was unable to retrieve plaintiffs’ funds and told plaintiffs it intended to hold plaintiffs liable.  Citizens sent plaintiffs statements when monthly payments became due, and when plaintiffs disputed and failed to pay, Citizens sent the matter to collections.  Plaintiffs brought suit (I think) seeking to hold the bank liable for the loss, and alleging violations of other rules, including the Fair Credit Reporting Act, Truth in Lending Act, and the Electronic Funds Transfer Act. 

What happened?  the bank moved for summary judgment.  The court denied the bank’s motion, holding that the bank could be liable in negligence for failing to adequately secure the plaintiffs’ account.  As the Digital Media Lawyer blog notes:

The aspect of the case that may have the largest precedential impact was its decision on the plaintiffs’ negligence cause of action.  A major basis for the negligence claim was the theory that financial institutions have a common law duty to protect their members’ or customers’ confidential information against identity theft.  While the court did not find controlling state law precedent on point…it noted that Indiana courts have held that a bank has a duty not to disclose information concerning one of its customers unless it is to someone who has a legitimate public interest.  The court then stated:  “[i]f this duty not to disclose customer information is to have any weight in the age of online banking, then banks must certainly employ sufficient security measures to protect their customers’ online accounts.

There were several other claims, some of which survived and some of which didn’t, and many factual disputes (was the account used primarily for personal or business purposes) , but the key portion of the ruling is on plaintiffs’ negligence claims.

****

The take aways? 

Out of Pocket Loss:  I guess the first one is that data breach claims may succeed where there is actual out of pocket loss.  This is pretty consistent with what the courts rejecting data breach class actions say, but to date, the claims (from a consumer standpoint) have not been presented in the context of actual money stolen. 

What Security Standards Should Have Been Used:  The court’s discussion of what standards the bank should have used is interesting.  Citizens just used a standard user name + password means of identifying the users, and the court was receptive (at least at the summary judgment stage) that the bank should have used more (e.g., an identifying question in addition to name and password, computer identification, tokens, etc.). 

How Was the Account Compromised:  The court didn’t discuss this much, but I was definitely curious as to how the plaintiffs’ password was compromised.  Maybe they were careless with it, or gave it to someone?  Maybe they used open wifi?  There wasn’t any actual evidence that the hacking occurred on the bank side.

What About the Terms of Use:  The bank pointed to exculpatory language in the terms of use, but this did not undermine plaintiffs’ claims.  The court didn’t go into detail on this point, but one way of looking at it is that contract language doesn’t always limit claims based on negligence.  There’s always some wiggle room as to whether a claim sounds in negligence, and some resulting uncertainty as to whether contract language sufficiently insulates against these claims.  Some duties cannot be disclaimed by contract.

State vs. Federal Law:  The court’s decision here is based on state law.  To the extent this represents any sort of a trend, companies operating across state lines will lobby for some sort of federal legislation governing this, at least as to particular industries, such as financial institutions?

Should Other Types of Online Providers Be Worried:  The court’s decision is based on recognition that “fiduciary institutions have a common law duty to protect their members’ or customers’ confidential information.”  What types of institutions does  this cover, in the internet era?  How about Facebook, for example?  Does it have a common law duty to protect its members’ confidential information?  Probably not, but I’m guessing this is something that will come up in the future for them.