BizTech Law Blog

In a prior post we reported that in June the U.S. Supreme Court ruled that streaming television service, Aereo, violated U.S. copyright law in connection with its business and legal battle with the major broadcast networks. At the time, we posed the question of whether, despite losing the lawsuit, Aereo had a future as a cable company?

The answer, it seems, is no. On November 20, Aereo filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for for the Southern District of New York, listing assets of $20.5 million and debt of $4.2 million.

The term “offer” is broadly defined under the securities laws as "every attempt or offer to dispose of, or solicitation of an offer to buy . . . for value." An offer, even without completion of the sale of securities, can run afoul of the securities laws.

An interesting case from 2011 punctuates this point and demonstrates the risks of unknowingly violating securities laws. Two advertising executives hatched an innovative, although imprudent, plan to purchase Pabst Brewing Company by offering to sell shares on Facebook and Twitter to cover the $300 million cost of the transaction. The campaign, which may have begun as simply a publicity stunt, was wildly successful, attracting five million pledging $200 million. A bit too successful, it turns out.

The SEC soon took notice and halted the campaign via a Cease and Desist Order due to a violation of securities laws by the ad men. They failed to register the public offering with the Securities and Exchange Commission (SEC) and could not meet an exemption. A settlement was reached and the men, who never actually collected any money, paid a fine and agreed to stop selling shares to the public.

The SEC, which has an entire enforcement unit devoted to Internet surveillance, is paying increasing attention to online activity. By law, public offerings - online or otherwise - must be registered with the SEC or meet an applicable exemption before promoters begin to offer or sell shares.

Amazon and Hachette Book Group have officially reached a multi-year agreement announcing jointly that Hachette will be able to set the price of e-books. This settlement is important because it affects some of the largest players in the literary industry. Check out these articles delving into the conflict and much needed resolution.

• New York Times Article
• NPR Interview
• Forbes Article

Did you know that one court has ruled that a police officer can force a person to unlock a phone with Apple's Touch ID technology? Understand the risks with enabling this feature on your phone. Check out the story here.

Chris Holman interviews attorney John Mashni on the Michigan Business Network discussing social media policies.

On October 22, 2014, Governor Snyder signed Public Act 355 of 2014 into law.  The cardinal rule of securities laws is that a person cannot sell a security unless the security is: (A) registered, or (B) exempt from registration.  Public Act 355 creates a new exemption for secondary sales facilitated by a Michigan Investment Market.

On June 25, 2014, the Supreme Court ruled that streaming television service, Aereo, violated U.S. copyright law. In American Broadcasting Companies v. Aereo, Inc., the Court overruled the U.S. Court of Appeals for the Second Circuit, holding that Aereo performs TV broadcasters works publicly within the meaning of the 1976 Copyright Act (the "Act").

Kickstarter is a crowdfunding platform for creative projects. It has helped a wide range of people fundraise to help finance a variety of projects. Often time people overlook the tax implications to successful Kickstarter campaigns. Check out our Tax Law Blog post to learn more about the tax implications>

Microsoft may soon find itself being held in contempt of court after refusing to abide by a U.S. District Court Order, requiring it to produce customer e-mail data stored by the company in Dublin, Ireland.  The United States Department of Justice previously sought and obtained a search warrant for the production of customer e-mail data maintained by Microsoft as part of a criminal investigation relating to narcotics trafficking.

Judge Loretta Preska, chief judge of the United States District Court for the Southern District of New York, ordered Microsoft to produce the e-mail data in July, finding that, although the data was held overseas, it remained under Microsoft’s possession and control, over which the court maintained jurisdiction. Microsoft has yet to comply, claiming that the court lacks jurisdiction over the foreign e-mail data. The judge has since imposed a Sept. 5 deadline for the parties to inform the court on how they plan to proceed.

I know you've probably heard this before, but it's worth repeating: be careful what you post on social media.

It may be used against you.  For one NFL player, it cost $5 million.  

New Orleans Saints football player Jimmy Graham was recently in a contract dispute with the Saints over whether he should be designated as a "Tight End" or a "Wide Receiver."  While the distinction may seem trivial, it had huge repercussions in terms of salary.