The first ten years of my practice saw a need to learn copyright law, while the second ten years required a working knowledge of patent and trademark law, and some privacy law, with a little international trade law thrown in for good measure (including U.S. export control laws and regulations). It was also the time when state and federal legislators were beginning to craft a specialized field of computer crime laws.

By the late 1980s there was a convergence of sorts between the computer and entertainment industries, primarily through videogames and CD-ROM titles. As a result, computer lawyers needed to learn about how the entertainment industry worked – again, primarily in the contracting area — but also with regard to trademarks, Hollywood guilds and unions (e.g., SAG, DGA) and right of publicity issues. It also required computer lawyers to learn a lot more about copyright and contract law in areas that had previously been limited to entertainment lawyers.

Since the 1990s we have seen the subject matter of computer law expand rapidly. We have had to learn telecommunications law, expand our knowledge of trademark law to deal with domain name issues, cope with the ever-expanding body of federal and state laws that deal with the financial laws and regulations underpinning e-commerce, privacy issues, cybercrimes, and a host of other fields that computer lawyers (now called IT lawyers) never thought they would need to deal with.

Now, cloud computing may require us to learn another body of law – admiralty law. Google has recently filed patent applications for ocean-going data centers that would be housed on large merchant ships and could be moored off-shore or sail blissfully in international waters – avoiding the problems arising from pesky local or national laws. These ships would generate their own power, provide their own cooling, have Internet connectivity (presumably from satellites or undersea cables) and generally be subject to no country’s laws. But underlying this concept is still the fact that we are dealing with ships. And ships are subject to both national and international laws – namely admiralty laws.

Dang. Just when I thought I was done learning new laws, I now find myself having to delve into the esoteric area of admiralty law. Ships containing data centers are no different than, and are subject to the same laws as, any other ship. Thus, they are subject to such things as piracy, salvage and seizure (arrest). Yet their cargoes may be infinitely more valuable than any previous ship that has ever plied international waters – the data of thousands or tens of thousands of corporations, millions of individuals, and numerous governments from around the world. How much would that cargo be worth if it fell into the hands of Somali pirates? And what if the assets of even one customer (or the ship owner itself) were subject to a seizure (arrest) order, and the entire ship was seized and the computers taken off the grid?

Far fetched? It was only a couple of months ago that the FBI, looking for assets of a company that had allegedly defraud the local telephone company, raided and seized all of the servers in several Dallas-based data centers – putting all of the data centers’ customers, not just the target of the seizure, out of business. Now multiply that by thousands of customers whose access to their data could be lost if the ship on which their servers and data are housed is arrested under existing admiralty law.

So to all of you IT lawyers representing clients that have or will be entering into cloud computing “solutions” to their data processing needs – start boning up on your admiralty law. It looks like you’re going to need it.

Some fads, however, do seem to peak. While virtual worlds still seem to be growing, they are not expanding nearly as quickly as in their early days. Many of those who went into virtual worlds thinking that they would be as liberating as the Internet was in its early days have been disappointed and have scaled down their presence or left entirely.

Music-based videogames, like “Guitar Hero,” seem to have peaked and people are talking about “Guitar Hero burnout” – people seem to be tiring of the genre.

Today, “cloud computing” seems to be all the rage. Virtually every computer industry publication is filled with articles about the subject, even though people vary greatly on what they mean by the term. As stated in the IT Law Wiki:

Cloud computing involves the sharing or storage by users of their own information on remote servers owned or operated by others and accessed through the Internet or other connections. Cloud computing services exist in many variations, including data storage sites, video sites, tax preparation sites, personal health record websites, photography websites, social networking sites, and many more.

From a legal perspective, the critical factor in “cloud computing” is that the applications programs and your client’s data reside on computers that are not under your client’s control. This obviously raises security and privacy issues. One of the “benefits” of the “cloud” is that the user does not need to be concerned about where the computers are located. A given application could use computers in multiple jurisdictions to provide services and the user is unaware of where the computers are located. But since sensitive data is being processed in these cloud computing applications (e.g., corporate payroll, individual tax returns), the user must be concerned about where that data is being processed and stored.

Not all countries have the same data protection laws as the United States, yet U.S. laws may place a non-delegable legal obligation on your client to safeguard that data, no matter where it is physically located. Adding to the problem is the fact that many cloud computing applications are contracted for online using a clickwrap license, which does not give the client the opportunity to negotiate appropriate safeguards for the data to be supplied.

Another problem with cloud computing is the possibility that the vendor will cease doing business. Not only will the applications no longer be available to process the company’s data, but the data may disappear as well. And even if the client retains backup copies, the data may be useless without access to the applications needed to run it, display it, or even port it to a different vendor.

Whether cloud computing is a fad is still an open question. But whether or not it is, there are some real legal issues that exist today that clients need to be concerned about and must be dealt with before they jettison their in-house computer systems and move to the cloud. Clients cannot afford to bury their heads in the cloud!

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Here are the show notes for this week’s episode:

Shownotes for Singularity Law Podcast Episode 1 (September 29, 2008)

Our Panel for Today:

Cloud Computing

• “Cloud computing” (Wikipedia)
• “Cloud computing may draw government action”
• “Clouded in uncertainty – the legal pitfalls of cloud computing”
• “Cloud computing is a trap, warns GNU founder Richard Stallman”

Walmart and DRM

• “Wal*Mart shutting down DRM server, nuking your music collection — only people who pay for music risk losing it to DRM shenanigans”
• EFF: “And Walmart Makes Three: Another Music Service Plans to Shut Down DRM Support”
• Josh Kagan Writes: “Ten Reasons Why DRM Schemes Are Bad For Society”

Capitol Records v. Thomas

• Text of Court’s Decision (Sept. 24, 2008)
• Josh Kagan Writes: “Capitol v. Thomas: For RIAA, Better Than “Making Available” May Be Difficult To Prove”
• Michael Scott Writes: “Prove Our Case? . . . We Don’t Need to Prove Our Stinkin’ Case!! Just Fork Over the Money”
• EFF: “Capitol v. Thomas: Judge Orders New Trial, Implores Congress to Lower Statutory Penalties for P2P”
• National Car Rental v. Computer Associates, 991 F.2d 426 (8th Cir. 1993)
• Perfect 10 v. Amazon.com (9th Cir. 2007)

New Copyright Legislation (PRO-IP Act)

• Text of PRO-IP Act as passed by the Senate
• “Congress Passes PRO-IP Act, but Bush May Veto”
• “Intellectual property bill passes in the House”
• “Senate unanimously passes RIAA-backed bill”
• “Bush administration opposes RIAA-based copyright bill”

Talking Point of the Week — Banned from the Internet for Life

• EU Makes it Official: “You Can’t Randomly Ban People From the Internet”
• EFF: “The Struggles of France’s Three Strikes Law”
• EU: “Net Access is a Human Right, We’re Not Going To Take That Away”

This recording is an informational resource only. It is not designed to offer legal advice.