IRS Gives $104 Million To UBS Whistleblower... Who The DOJ Put In Jail

from the mixed-messages dept

Sometimes it seems that the federal government's left hand has no idea what it's right hand is doing. Bradley Birkenfeld, a former banker for Swiss banking giant UBS, blew the whistle on UBS practices of helping Americans hide their money offshore. For his troubles, the Justice Department charged him, leading to a plea deal in which he plead guilty to fraud conspiracy and was put in jail for a few years. He just got out a month ago... and now the IRS has handed him $104 million for the whistleblowing, which resulted in UBS paying $780 million to the government to avoid prosecution itself. The IRS claims they're doing this to encourage others to blow the whistle on tax fraud... though they might want to warn the DOJ not to put their whistleblowers in prison. That said... $104 million seems somewhat insane. I realize that it may have resulted in the US government getting a lot more money, but $104 million still seems like a giant sum of money to give a guy who, as the government's own efforts show, participated in fraud. If the idea is to "get the word out" to whistleblowers, you would think that smaller sums, still in the millions of dollars, would do the trick...

Filed Under: awards, bradley birkenfeld, conspiracy, doj, irs, jail, whistleblowers
Companies: ubs

DailyDirt: Winners!

from the urls-we-dig-up dept

Summertime, and the living is easy... but if you're a teenager with an interest in science or engineering, don't waste away your summer watching cartoon re-runs. Here are some kids who've worked on some cool projects outside of school.

• Intel has honored some young innovators in science and engineering with awards and scholarships. Over 6 million young scientists apply to become one of the 1,500 finalists each year. [url]
• Microsoft has named its ImagineCup winners who competed with over 358,000 other students from around the world. The ImagineCup encourages students to build solutions that might help address problems such as: combating diseases, improving education, ensuring environmental sustainability, etc. [url]
• Google has picked three inaugural Google Science Fair winners. These winners were chosen out of over 7,500 entries -- so the odds of winning sound slightly better than some of the more established science/engineering competitions. [url]
• To find more interesting stuff on entrepreneurship, check out what's currently floating around the StumbleUpon universe. [url]  

By the way, StumbleUpon can recommend some good Techdirt articles, too.

Filed Under: awards, innovation, scholarships, students
Companies: google, intel, microsoft

Guy Agrees To Pay $250,000* Just Days After Being Sued For Uploading Movies

from the *-may-not-actually-be-$250,000 dept

TorrentFreak notes that a guy who was apparently sued for uploading some porn movies from Liberty Media agreed to settle the lawsuit just four days later with a settlement that claims he'll pay $250,000. What's odd, of course, is that seems like a rather large settlement -- especially done so fast, with no apparently legal fight. However, TorrentFreak noted a little semi-hidden caveat in the consent agreement:

Defendant has an opportunity to reduce the amount payable to Plaintiff if Defendant ceases any further content theft (whether the Plaintiffís content or anyone elses), and if he makes regular payments toward the judgment on a schedule which will be agreed upon between the parties in a separate settlement agreement.

Reading between the lines, it seems likely that the company and the guy worked out a much lower actual settlement amount, and basically the guy is really paying that. But this way, if he's found to infringe again, it'll jump up to $250,000. In the meantime, though, it gives Liberty Media the ability to claim it got a $250,000 settlement, even though it's unlikely to actually be anywhere near there.

Filed Under: awards, copyright, fines

Spamhaus Asks Court To Dump Even The $27,000 Award To Spammer

from the spam-spam-spam-spam dept

Back in June we wrote about how the years-long lawsuit between "email marketing" (i.e., "spam") company e360 and anti-spam group Spamhaus concluded with a judge reducing an $11 million award down to just $27,000 for e360. If you don't recall, e360 sued Spamhaus for naming it on its top spammers list -- despite an awful lot of evidence that e360 does, in fact, engage in spam. Spamhaus, which is based in the UK, ignored the proceedings, which is why it got hit with the $11 million award. While, e360 can't be happy about the lower award (one has to imagine its legal costs were much greater than that), $27,000 is still a lot of money for an operation like Spamhaus -- especially when the organization was just stating an opinion -- and one that it backed up with plenty of evidence.

So now, Michael Scott points us to the news that Spamhaus has filed a motion to reconsider even the $27,000 award, noting that it believes there are some errors in determining the $27,000 number. The filing notes that such motions are rarely successful, but lays out the reasons why it makes sense in this case. Specifically, the method for calculating the award was not one of the methods that e360 asked for, meaning Spamhaus had no chance to point out problems with the methodology. Spamhaus also makes it clear that if the court does not reconsider the $27,000, it will likely appeal the case back up to an appeals court. I can understand why Spamhaus is doing this, but it could backfire. I would imagine that asking the court to reconsider could potentially lead to a judge reconsidering in the other direction as well...

Filed Under: awards, defamation, spam
Companies: e360, spamhaus

Spammer's $11 Million Win Against Anti-Spammer Spamhaus, Reduced To $27,000

from the that's-a-bit-different dept

Many years back, an "email marketing" company called e360 Insight got upset that the anti-spam advocacy group Spamhaus included e360 on its list of biggest spammers -- a list that many service providers used for spam filtering. So, it sued claiming defamation. What followed was a bit silly, as Spamhaus (based in the UK) initially responded, but then started ignoring the lawsuit, claiming that a US court meant nothing to the UK-based operation. Because of that, a court awarded a default judgment to e360, and simply took its word on how much "damage" being on the list had caused. The end result? An award of $11 million for simply putting e360 on a list of spammers.

Spamhaus initially ignored the whole thing, again claiming US courts had no jurisdiction over it. However, after e360 sought an injunction to get Spamhaus shut down for failure to pay, Spamhaus got involved. Thankfully, a judge refused to shut down Spamhaus, and while an appeal didn't buy many of Spamhaus' arguments, it did throw out the $11 million award, and send it back to the lower court to recalculate the damages.

So, now, four years after the initial $11 million ruling, the court has reduced the damages award to $27,002. Quite a difference, huh? I would have to guess that e360's legal bills cost a hell of a lot more than $27k. It turns out that there were a bunch of problems for e360, and once it had to actually prove how much damage being on the list had done, suddenly it wasn't so interested in giving a straight answer or, at times, answering at all. As Venkat Balasubramani notes:

Despite litigating the case vigorously up to this point, when it came to damages, e360 seemed to muster a lot less energy. According to the court, e360 was "slow to provide information requested by Spamhaus . . . [and] missed several [d]eadlines." I'll spare readers a detailed discussion on damages, but the court's take can be summed up as follows:

The unreliability of [e360's] approaches is unmistakably demonstrated by the profound differences in claimed damages profferred at various points during these proceedings. Finally, it strains credulity that a company that made only a fraction of the profits [e360] asks for over the course of its five-year lifespan would have garnered profits in the amounts [e360] set out in [its] testimony or documentary evidence. The profit and loss statement [e360 provided] sets out the company's overall profits at $332,000. . . . .

At the time of default judgment, the damages claimed were $11,715,000. During discovery, Exhibit 5 was proffered reflecting damages of $135,173,577. At trial, proffered Exhibit 5(a) showed damages of $122,271,346. During final argument, the claimed amount was $30,000,000.

Yeah, if you've made a total of $332,000 in profits over the course of five years, perhaps don't claim $11 million in damages just because some company (most likely accurately) put you on a list of spammers.

As for that big question of whether or not the company was involved in spamming. Well, others have certainly thought so. In the past, we've noted that the company had been sued for violating CAN SPAM, and in another lawsuit e360 filed (against Comcast for filtering its spam), the judge stated pretty clearly that e360 fit the description of a spammer. On top of that, in the blog post above, Venkat points out that, just in going through this lawsuit, e360 appears to have now put on public record an awful lot of evidence that its activities fall under the definition of what most people would consider spam:

Ironically, through litigating this dispute, e360 caused to be memorialized in a court order, facts about its email practices (and the email marketing industry in general) that I'm guessing it would prefer not be in the public eye. Two facts jumped out at me from the order. First, e360 sent out 6.6 billion (!) emails through the course of its five year existence. Second, there were some familiar faces among the list of its customers: SmartBargains and Optinbig.

Filed Under: awards, defamation, spam
Companies: e360, spamhaus

Non-Practicing Patent Holders Winning Bigger And Bigger Awards -- And Why They Like East Texas

from the speed-or-success? dept

It's no secret that many non-practicing entities (i.e., patent holders who do not actually build anything, but just try to license their patent or sue others for infringement) tend to prefer jury trials. It's well-known that juries, who have been fed years of misleading (and sometimes blatantly false) stories of the mythic "sole inventor," are extremely sympathetic to stories of big bad companies "stealing" ideas from lone inventors. Of course, reality is a lot more complicated. It's extremely rare that there's any evidence at all that a practicing entity actually took the idea from the patent holder, and there's significant evidence that the use of patents by such NPEs is woefully inefficient and a drag on innovation. But juries sure do love those David vs. Goliath stories, and some new research shows how popular jury trials have become for such lawsuits -- and how the awards for NPEs have been growing rapidly because of that.

BearGriz72 points us to some new research on non-practicing entities from PwC that shows the end result of all of this:

Damage awards for NPEs have risen considerably in recent years. In fact, the median damages award for NPEs was more than triple the award for practicing entities over the last seven years ($12 million for NPEs, and $3.4 million for practicing entities). Contrasted with 1995-2001, the median damages award for NPEs was about the same when compared with practicing entities (roughly $5 million).

One obvious explanation could be that NPEs have become more sophisticated in selecting patents to litigate, and understanding the markets to sue against. However, another explanation may have something to do with the use of jury trials -- juries decided only 14 percent of the cases with damages awards during the 1980s and 24 percent during the 1990s. In this decade, juries have decided 51 percent of the cases with damages awards.

NPEs like juries -- trial success rates for patent holders are much higher when decided by juries as compared to bench trials. In fact, jury success rates have consistently outperformed their bench counterparts every year since 1995. Since 1995, 55 percent of trials involving NPEs have been jury trials, as compared to only 41 percent of trials involving practicing entities. In addition to the rate of success at trial, recent awards by juries have been significantly greater, running several multiples of the amounts awarded by judges.

It does seem quite odd that NPEs would generally win much larger awards than practicing entities. After all, it would seem like the clear losses for practicing entities should be much easier to establish than for NPEs. But, perhaps it has something to do with the fact that a real company suing another real company creates a less sympathetic story than a "lone patent holder" (rarely true in practice) suing a big company.

There's some other interesting data in the report. For example, it looks at the various district courts and how they handle patent lawsuits. As you know, it's become incredibly popular for non-practicing entities to sue in Eastern Texas because of the court's history of siding quite frequently with the patent holder. However, defenders of using the courts in East Texas claim it's actually because the "rocket docket" goes through patent cases much faster than other districts. Except, the new data suggests that's not the case. The Eastern Texas district actually came in ninth in time-to-trial. Interestingly, the report also suggests that the Eastern District of Virgnia may now be even more "patent friendly" than Eastern Texas, in a measure that tries to combine both time-to-trial and patent success rates. And yet, many more cases are still filed in Eastern Texas than in Eastern Virginia. Why? Well, if you separate out the two separate factors used in determining "patent friendliness" -- what the data shows is that while Eastern Virginia is much faster to get to trial, the success rate for patent holders is lower than in Eastern Texas. In other words, the claim that Eastern Texas is chosen due to speed? Bogus.

Filed Under: awards, east texas, juries, non-practicing entities, patents

Why Do We Let Juries Set Patent Award Damages? Appeals Court Throws Out Another Jury Award

from the dumped dept

There is a mythology in the US about the value and importance of patents -- and because of that, it's not surprising that patent trials involving juries quite often end with the patent holder being declared victor, and a huge amount being awarded by the jury. Microsoft and Alcatel-Lucent have been involved in a whole series of patent battles recently. Two years ago, a jury found for Alcatel-Lucent on a patent related to MP3 technology, and it awarded Alcatel-Lucent a stunning $1.5 billion. It didn't take long for a judge to toss out that award. More recently, in another patent dispute involving the same parties (but a totally different patent), a jury awarded Alcatel-Lucent $358 million because Microsoft included a "date-picker" calendar tool in Microsoft Outlook. Yet, once again, an appeals court has now tossed out the jury's award amount, noting how ridiculous it is that such a tiny, minor feature should get such a huge dollar value:

The portion of the profit that can be credited to the infringing use of the date-picker tool is exceedingly small.... In short, Outlook is an enormously complex software program comprising hundreds, if not thousands or even more, features. We find it inconceivable to conclude, based on the present record, that the use of one small feature, the date-picker, constitutes a substantial portion of the value of Outlook.

So why do we (as a matter of policy, not law) allow juries to make such decisions when they seem to have trouble picking reasonable amounts, given the nature of the patents and the lawsuits?

Filed Under: awards, patents
Companies: alcatel-lucent, microsoft

Online Only Investigative Reporting Group Wins Investigative Reporting Award

from the who-says-you-can't-do-investigative-reporting-online dept

We still haven't quite figured out why some newspaper folks insist that you need print newspapers to do investigative reporting. A few weeks ago, we noted that there were a growing number of quite successful online only investigative reporting organizations. One of which was VoiceOfSanDiego.com -- funded by a bunch of local businesses who felt there wasn't enough local investigative reporting in San Diego. Now Nick writes in to let us know that VoiceOfSanDiego.com has won a top award in investigative reporting, the IRE or Investigative Reporters and Editors award. The award was for online investigative reporting, but it clearly wasn't limited to just online-only publications, since at least one traditional newspaper was included in the finalists.

Filed Under: awards, investigative reporting, ire
Companies: voice of san diego

Vote Now For The Open Web Awards

from the it's-up-to-you dept

A few weeks ago, we asked everyone for nominations for the Open Web Awards. Thanks to all of those who nominated sites, they were tallied up. It is now time for the voting rounds. For each category, 11 sites were selected from all of the nominations from the 30 partner sites. We've created a voting page for each of these categories:

• Mainstream and Large Scale Networks
• Applications and Widgets
• Social News and Social Bookmarking
• Social Search
• Sports and Fitness
• Photo Sharing
• Video Sharing
• Start Pages
• Places and Events
• Music
• Social Shopping
• Mobile
• Niche and Miscellaneous Social Networks

This round of voting closes on Sunday, December 16th at 11:59pm PST. After this, the top three sites in each category will go up against each other to determine the final winner. Happy voting!

Filed Under: awards, openwebawards

Call For Open Web Awards Nominations

from the it's-award-time dept

The Open Web Awards have been created to recognize the best online communities on the web. In the spirit of collaboration, instead of building a central site to handle nominations and voting, Techdirt and its readers, along with 30 other blog communities, have been invited to be part of the nomination process. It sounded like a fun idea, so we decided to give it a try.

The contest recognizes sites in 13 different categories:

• Mainstream and Large Scale Networks
• Applications and Widgets
• Social News and Social Bookmarking
• Social Search
• Sports and Fitness
• Photo Sharing
• Video Sharing
• Start Pages
• Places and Events
• Music
• Social Shopping
• Mobile
• Niche and Miscellaneous Social Networks

If you would like to nominate a site for an award, please do so in the comments with a subject in the form of "NOMINATE: [category name]: [site name]" -- nominations will be compiled the evening of Tuesday, December 4th, after which a few rounds of voting will commence.

Filed Under: awards, openwebawards