Often, when a company suffers a data breach, it’s employees’ or customers’ personal information that’s stolen by hackers. Those cyber criminals will then usually try to use that information to commit identity theft or other kinds of fraud.

If individuals’ data is compromised, when can the companies responsible for protecting it be taken to court — and forced to pay damages?

The answer: It depends on what kind of damages the customers, employees or other affected people actually suffer.

Many data breach lawsuits have been filed, but the majority have been thrown out by the courts. In one case, a group of Aetna employees and job applicants tried to sue the company after a database was hacked, exposing those individuals’ Social Security numbers, phone numbers, addresses and employment histories.

One of the affected applicants filed a complaint and asked the court to approve a class action suit. However, the case was thrown out. The employee didn’t suffer any injury as a result of the breach — he was only exposed to “an increased risk” of identity theft, the judge said.

To hold the company liable for a data breach, the court ruled, the employee would have to show he suffered actual financial damage.

However, actually financial damage doesn’t just mean losses due to identity theft. In another case, a suit was filed against grocery chain Hannaford Bros. after 4.2 million credit card numbers were stolen from the company’s computer network.

Originally, Hannaford won the case because while some customers did have fraudulent charges made to their accounts, all of them were reversed by their respective banks.

However, an appeals court later overturned that ruling. The judge ruled that while actual fraud was prevented, many of the customers did suffer financial losses. Some of them paid for credit monitoring services, bought identity theft insurance or were charged by their bank to replace their credit cards. The judge ruled that Hannaford could be liable to cover those expenses and allowed those customers’ claims to move forward.

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A jury of nine awarded Apple about $1 billion in a recent case, but the company’s not satisfied with the amount. Invoking a legal clause that allows for triple damages if the patent infringement was willful, Apple’s going for $3 million.

One of the nine jurors who ruled in favor of Apple, Manuel Ilagan, tells CNET  he thought Samsung’s internal e-mails about incorporating some of Apple’s technology into its devices, and the evasive way Samsung executives answered questions, convinced him that Samsung was well aware it was swiping from Apple.

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The trio managed to wrest a $170 million settlement from Facebook back in 2008, and then sought to reopen the case and extract more money from the would-be ATM that is the social networking site.

But the judges in the appeals court shut them down and tossed the case last week. Of course there are other would-be Facebook founders waiting in the wings to sue for some of the site’s billions.

The bottom line seems to be that while Zuckerberg may have taken ideas and inspiration from any number of folks when he was starting the site at Harvard, he’s the guy who’s been running the show since it began it’s climb to the top of the social networking heap.

Other sites, like MySpace and Friendster, have fallen by the wayside, but Facebook only continues to soar in popularity and use.

And Zuckerberg’s been the guy leading it all along. That should be worth something, right?

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The ruling, by Magistrate Judge Joseph C. Spero  of the United States District Court  for Northern District of California gives Sony, the maker of PlayStation3,  the right to get its hands on logs for the site of George Hotz, a 21-year-old hacking wunderkind from New Jersey.

Hotz is accused of breaching the Digital Millennium Copyright Act (DCMA) and other laws following his creation and publication of an encryption key and software tools that let Playstation owners gain complete control of their consoles from the firmware on up.

What Sony wants, and has now gotten from the judge, is access to the visitor logs for geohot.com, where Hotz (who goes by the online moniker of GeoHot) distributed the key and tools.

Sony also got the judge to issue subpoenas for for Hotz-related data from YouTube and Google, as well as his Twitter account.

The ruling has Web privacy advocates up in arms, but Sony says it needs the info to both prove the extent of the damage Hotz exploit caused to its business, and establish where their lawsuit against him will take place. Although Hotz lives and works in New Jersey, Sony wants the lawsuit to happen in San Francisco,where it will be surrounded by businesses and developers who make their living designing systems and software.

The courts have been consistently allowing businesses to protect products and exclusivity schemes with access to confidential information found in visitor logs like the ones Hotz is being forced to turn over.

DMCA makes it illegal to distribute  so-called “circumvention devices” that are designed to get around copy-protection technology that’s built into systems. Hotz and hackers of his skill and expertise don’t have to get paid for the tools they develop to let gamers “jailbreak” a system so it’ll run pirated or homemade software, or use an alternative OS on the machine.

Does this give owners of protected technology pause? Or do they believe Sony’s only interested in the creators of such tools and not the folks who try to jailbreak a system using them?

For his part, Hotz is appealing to his friends and fans in the hacking community for support in fighting Sony. He’s made a plea via his website for help and defends his activities with assurances he’s not anti-DRM, but in favor of owners of these devices being able to do whatever they want with them after purchase.

Discuss.

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Now here’s what I call customer service gone wild: A Texas bank has decided to sue one of its commercial customers that was robbed by a gang of international cyberthieves.

Seems that the  Plano, Texas, based company — Hillary Machinery, Inc. — was targeted by criminals from Eastern Europe and Italy last year. The thieves swiped about $800,000 in 48 hours from Hillary’s PlainsCapital Bank accounts using electronic wire transfers.

While plenty of bank customers have sued their banks after cases like this, PlainsCapital is playing offense in this instance and suing its customer. What do they want? For the court to confirm that their security measures were adequate. That’s it.

The suit, however, has one gaping flaw that perhaps PlainsCapitals lawyers have missed: If their security procedures had been adequate, nobody could have stolen Hillary’s money in the first place.

The folks from Hillary are pointing out all the obvious flaws in the PlainsCapital system — for starters, the fact that computer authorization e-mails came from Romania when Hillary is owned and operated in Texas might have been something of a red flag.

The fact that Hillary’s money transfers were historically restricted to only a few other accounts, and that the accounts receiving transferred funds were foreign might have raised eyebrows at other banking security operations.

Of course the folks who own Hillary want all their money back. So far, about $600,000 has been recovered. But PlainsCapital is denying Hillary’s request for the rest of the cash to be restored to their accounts.

So whose fault is it when the a bank is robbed? The depositor who entrusted the assets to the bank, or the institution that promised to protect those assets?

And how dumb is it for a bank that’s been successfully targeted by online criminals to not only try to blame the victim who happens to be their customer, but to ask for public confirmation that their security was up to snuff — when it so obviously wasn’t?

To read more detail about the heist and the lawsuit, check out the excellent post on the topic by computer security blogger Brian Krebs.

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No, you don’t have to read the previous sentence again. Microsoft has to stop selling Word in the United States. In 60 days.

At least that’s what one judge in a rural corner of Texas says.

Judge Leonard Davis of the U.S. District Court for the Eastern District of Texas (Tyler Division) ruled that the software giant has infringed on the patent of i4i Limited Partnership and Infrastructures for Information,  Inc.

The suit brought by i4i back in March, 2007, alleges Microsoft willingly violated its 1998 patent (No. 5,787,449) on a method for reading XML.

XML is a programming language that lets users customize the underlying format of  word-processing documents and makes them readable across different word-processing programs.

The ability to read and write XML documents is an integral feature of Microsoft Word.

The judge also ordered Microsoft to pay i4i $290 million.

Davis’ injunction, which becomes effective in 60 days, also prohibits Microsoft from selling future Word products that use the allegedly patented technology.

The judge’s ruling also bars Microsoft from testing, demonstrating, marketing or offering support for those future products.

The company can, however, support current users of Word.

Thanks for that, Judge Davis.

It goes without saying that Microsoft plans to appeal the ruling. Stay tuned for more on this David v. Goliath saga.

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According to an Associate Press story, Horizon Group Management LLC accuses Amanda Bonnen of defaming the company in May when she “tweeted” about moldy apartments.

The lawsuit said she used Twitter to tell another user: “Who said sleeping in a moldy apartment was bad for you? Horizon realty thinks it’s okay.”

Jeff Michael, general counsel for Horizon, said Bonnen’s apartment was among several affected by an overnight leak in March when a contractor was making roof repairs. Michael said the company resolved all but Bonnen’s grievances and she moved out June 30 on her own accord.

The company claims her tweet was published “throughout the world” and severely damaged its good name.

That assumes, of course, that Horizon actually had a good name to begin with.

Although Bonnen’s account was set to public, meaning any Twitter user could see it, a Google-cache of the now deactivated account shows she had 17 followers.

The company’s lawsuit seeks $50,000.

Bonnen was already suing Horizon before they filed suit against her — but her complaint didn’t have anything to do with mold or tweeting.

Her suit, filed a few days before she moved out, claims the company violated Chicago leasing rules by not paying tenants interest on security deposits and failing to provide warnings about overloading porches.

Anybody out there really think Horizon’s upset about Bonnen’s tweeting?

The post ‘Moldy’ Tweet could cost $50,000 appeared first on Finance Tech News.

Yes, that’s right, they’re going to sue because their teenager couldn’t take her eyes off a critical text message long enough to see a big, gaping hole in the ground.

How important would a 15-year-old’s text message actually have to be to warrant that kind of attention?

Was she perhaps texting others to warn them of the impending danger, willingly sacrificing her own safety for the benefit of mankind?

Unlikely.

Seems that young Alexa Longueira was strolling along Victory Boulevard on Staten Island while a crew from the Department of Environmental Protection was flushing a high-pressure sewer line. Crew members briefly turned away to fetch cones (presumably to barricade the open manhole) when Longueira and her mobile phone happened along.

According to reports, the girl suffered a fright and some scrapes on her arms and back after she dropped into the hole.

“It was four or five feet, it was very painful. I kind of crawled out and the DEP guys came running and helped me,” Longueria told the Staten Island Advance. “They were just, like, ‘I’m sorry! I’m sorry!’”

Longueria’s parents will make sure they are. The teen’s folks say they intend to sue — although it’s not currently clear for what.

While their daughter was checked out at a local hospital and released, it’s the “gross” factor that seems to be driving at least her mom’s quest for legal revenge.

“Oh my God, it was putrid,” said the girl’s mother, Kim Longueria. “One of her sneakers is still down there.”

The burning question, however: Where’s that cell phone? My guess is that it emerged unscathed.

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Craigslist execs are heating up their battle to keep their ads for, ahem, “adult content” despite the very red state’s aversion to all things obscene or prostitution-related.

And the very public dust-up is a great lesson in “How to Grab Money and Power using the Internet,” so pay close attention. Here’s a classic case study in Web promotion:

First, a very troubled Boston med student gets accused of killing a prostitute he found on Craigslist. In the face of the lousy publicity, Craigslist comes up with some policy window dressing and a name change to make it look like they’re on top of the tawdry situation.

So far, so good.

Then, the politically ambitious South Carolina Attorney General Henry McMaster jumps into the ring, slagging Craigslist and making all kinds of threats about the site’s “adult services” ads. McMaster is shocked, shocked to find that prostitutes are soliciting customers using advertising on the site.

He starts threatening Craigslist folks for their nefarious business.

Two weeks ago McMaster handed Craigslist an ultimatum: “Remove the portions of the Internet site dedicated to South Carolina and its municipal regions which contain categories for and functions allowing for the solicitation of prostitution and the dissemination and posting of graphic pornographic material within ten (10) days.”

So the online classified admeisters announce they are suing McMaster  “seeking declaratory relief and a restraining order with respect to criminal charges he has repeatedly threatened against Craigslist and its executives.”

Take that, Mr. McMaster.

Craigslist contends that McMaster’s threats — to launch criminal investigations if the company refused his demands to remove portions of the Web site that could be used to solicit prostitution and disseminate pornographic material — are unconstitutional.

On May 20, the Craigslist folks fired back. In a blog post May 19, the company’s CEO Jim Buckmaster first demanded McMaster apologize. (Don’t hold your breath Jim, I know South Carolinians who still think flying a confederate flag over their capitol isn’t offensive.)

Since Buckmaster has obviously met a few South Carolinians and figured he’d never get the aforementioned apology, he brought out the big guns — his legal eagles.

But hey, let’s let the Buckmaster speak for himself — and Craigslist:

“Usage of Craigslist in South Carolina has exploded over the last two years, with some cities experiencing 2000% growth. South Carolinians clearly value Craigslist services, and appreciate finding jobs, housing, automobiles, for sale items, friends, romance, community information, local services, event listings, and just about everything else they need in their everyday lives, all in one place, and all for free.

“Mr McMaster has persisted with his threats despite the fact that Craigslist:

• is operating in full compliance with all applicable laws
• has earned a reputation for being unusually responsive to requests from law enforcement
• has eliminated its “erotic services” category for all US cities
• has adopted screening measures far stricter than those Mr. McMaster himself personally endorsed with his signature just 6 months ago
• has far fewer and far tamer adult service ads than many mainstream print and online venues operating in South Carolina
• has made its representatives available to hear Mr. McMaster’s concerns in person
• has politely asked Mr. McMaster to retract and apologize for his unreasonable threats.

To read all of Buckmaster’s post, click here.

Seems like all parties in this suit stand to benefit from the very public fisticuffs. McMaster will get conservative cred for his expected run to be governor of a state that makes most of its money off tobacco and sports one of the country’s most vibrant Klu Klux Klan chapters.

Craigslist will get plenty of free publicity for their adult content — which will drive lots of visitors/customers to their site, among them sure to be many South Carolinians.

And of course, the legal eagles will get to bill everyone for their trouble.

In the end, everybody will make money and the real driver is one thing: sex. Whether you’re for or against it, you can always make money by either selling it, decrying it or just plain enjoying the excitement that surrounds it.

The Internet, ain’t it grand?

The post Sleazy content wars: Craigslist v. South Carolina appeared first on Finance Tech News.

The lawsuit, filed in a Seattle federal court last Wednesday, stems from the $59.25  fee that a California woman had to pay when  she bought a Lenovo laptop and wanted to get XP instead of  Vista, which came with the machine.

Microsoft protests that it doesn’t get any added royalty if customers request a downgrade. It is the computer makers, not Microsoft, who charge users additional fees for downgrading a new PC from Vista to XP, they say.

It isn’t exactly true that Microsoft doesn’t profit from their downgrade policy, however. Only buyers of PCs with pre-installed editions of Vista Business and Vista Ultimate are allowed to downgrade, and then only to Windows XP Professional. All three editions are higher priced versions of the OS.

“Customers have been forced to purchase the most expensive version [of Windows XP] in order to ‘downgrade’ from the Windows Vista operating system,” the complaint read.

And plenty of folks are taking advantage of the downgrade policy. To date, only 10% of enterprise users have adopted Vista. XP still has a 71% share of the North American and European business PC.

Doesn’t it tell Microsoft something that its “new and improved” operating system is being so roundly and enthusiastically rejected that folks are willing to pay to avoid it?

And should they have to? If I want last year’s model of an automobile, should I have to pay more for it because I don’t like the features on this year’s model?

Even if Microsoft’s licensing arrangements aren’t illegal, aren’t they kind of dumb? If consumers/customers like your old product better than your new one, it might not be a bad idea to re-think your sales and marketing models.

As it is, seems to many folks like Microsoft are trying to avoid taking their  lumps for creating an unpopular product.

Coca Cola certainly learned that lesson quickly. Maybe the Microsoft folks are just slow learners.

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