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Crime

Court Orders Theranos Founder Elizabeth Holmes To Go To Prison (cnbc.com) 107

Disgraced Theranos founder Elizabeth Holmes has been ordered to report to prison while she appeals her fraud conviction and jail sentence of over 11 years for defrauding investors. She has also been ordered to pay $452 million to victims, which will be split with her former partner, Ramesh "Sunny" Balwani, who was also convicted and sentenced to 13 years in prison. CNBC reports: Elizabeth Holmes, the disgraced CEO of Theranos, must report to prison on May 30, according to a ruling issued Wednesday by U.S. District Judge Edward Davila. Holmes must report to prison no later than 2:00 p.m. local time on that day, and is expected to begin her sentence at a minimum-security facility in Bryan, Texas. On Tuesday, an appeals court rejected Holmes' bid to stay out of prison while she appeals her conviction. In another Tuesday ruling, Judge Davila ordered that Holmes and former Theranos executive Ramesh "Sunny" Balwani pay $452 million in restitution to victims. You can read more about the 'U.S. v. Elizabeth Holmes, et al.' case here.
Businesses

SEC Responds To Coinbase Request For Action: 'No' (blockworks.co) 58

The Securities and Exchange Commission has issued a response to Coinbase's complaint requesting that the agency establish regulatory clarity for the industry. From a report: In an April mandamus petition, Coinbase demanded federal courts to instruct the SEC to act and issue clear guidelines for crypto exchanges and companies. In its response, released Monday evening in New York, the SEC alleged Coinbase has no right to mandamus, which orders a government agency to fulfill certain duties.

"Perhaps recognizing this, Coinbase instead asserts that this Court should compel the Commission to act on Coinbase's recently filed rulemaking petition," the SEC wrote in its response. "But no statute or regulation requires the Commission to take such action on a specific timeline." The SEC, in its response, suggests that "mere months have passed since Coinbase's petition was filed and even less time has elapsed since Coinbase supplemented the record." The agency continued that "deliberating over the kind of significant changes sought by Coinbase, which could affect both crypto assets and the securities markets more generally, takes time -- including, as here, time to weigh whether or not to initiate a rulemaking proceeding about such topics in the first instance. This is particularly true given the Commission's active regulatory and enforcement agenda in this area..."
Further reading: US Chamber of Commerce Slams SEC, Backs Coinbase in Legal Fight.
Social Networks

Former ByteDance Exec Claims CCP 'Maintained' Access to US Data (axios.com) 26

An anonymous Slashdot reader shared this report from Axios: The Chinese Communist Party "maintained supreme access" to data belonging to TikTok parent company ByteDance, including data stored in the U.S., a former top executive claimed in a lawsuit Friday...

In a wrongful dismissal suit filed in San Francisco Superior Court, Yintao Yu said ByteDance "has served as a useful propaganda tool for the Chinese Communist Party." Yu, whose claim says he served as head of engineering for ByteDance's U.S. offices from August 2017 to November 2018, alleged that inside the Beijing-based company, the CCP "had a special office or unit, which was sometimes referred to as the 'Committee'." The "Committee" didn't work for ByteDance but "played a significant role," in part by "gui[ding] how the company advanced core Communist values," the lawsuit claims... The CCP could also access U.S. user data via a "backdoor channel in the code," the suit states...

In an interview with the New York Times, which first reported the lawsuit, Yu said promoting anti-Japanese sentiment was done without hesitation.

"The allegations come as federal officials weigh the fate of the social media giant in the U.S. amid growing concerns over national security and data privacy," the article adds.

Yu also accused ByteDance of a years-long, worldwide "scheme" of scraping data from Instagram and Snapchat to post on its own services.
News

UK Tech Entrepreneur Lynch Extradited To the US on Fraud Charges (reuters.com) 18

Mike Lynch, co-founder of UK software firm Autonomy, has been extradited to the United States to face criminal charges in a near decade-long legal battle and fall from grace for a man once hailed as Britain's answer to Bill Gates. From a report: Lynch faces 17 charges over Hewlett Packard's (HP) $11 billion acquisition of Autonomy, the company he grew into Britain's leading tech company, before it spectacularly unravelled after being bought by HP in 2011. Britain's interior ministry said on Friday that Lynch was extradited on May 11. He arrived in San Francisco on a commercial flight accompanied by U.S. Marshals, court documents show.

Appearing in court on Thursday, Lynch was ordered by a judge to pay a $100 million bond, hand over his passport and to be placed under 24 hour guard to secure his release. Lynch, 57, who has always denied any wrongdoing, could face 20 years in prison. Once lauded by academics, scientists and politicians for setting up a software giant from his ground-breaking research at Cambridge University, he has spent the last decade fighting lawsuits related to the HP takeover.

Technology

US Chamber of Commerce Slams SEC, Backs Coinbase in Legal Fight (decrypt.co) 36

The U.S. Chamber of Commerce called out the Securities and Exchange Commission (SEC) on Thursday, slamming the financial watchdog for its regulatory approach toward the digital asset industry. From a report: It filed an amicus brief in support of Coinbase, which took the SEC to court last month. The exchange wants a court to force the SEC to respond to its so-called "petition for rulemaking" filed last July. The petition asks the SEC to propose and adopt rules for digital assets and answer questions related to regulation. Now Coinbase has one of the largest business organizations in the world standing behind it.

The U.S. Chamber of Commerce represents the interests of more than 3 million businesses and organizations throughout the country, from small businesses to global corporations, according to its website. Amicus briefs are legal documents containing information or advice related to a specific court case and are provided by third parties. And the U.S. Chamber of Commerce accused the SEC of intentionally sewing uncertainty to keep the digital assets industry on ice. "The SEC has deliberately muddied the waters by claiming sweeping authority over digital assets while deploying a haphazard, enforcement-based approach," it wrote. "This regulatory chaos is by design, not happenstance."
Further reading: Coinbase CEO Says SEC is On 'Lone Crusade'
United States

EPA Proposes Crackdown On Power Plant Carbon Emissions (reuters.com) 138

An anonymous reader quotes a report from Reuters: The Biden administration on Thursday unveiled a sweeping plan to slash greenhouse gas emissions from the U.S. power industry, one of the biggest steps so far in its effort to decarbonize the economy to fight climate change. The proposal would limit how much carbon dioxide power plants, which are the source of more than a quarter of U.S. emissions, can chuff into the atmosphere, putting the industry on a years-long course to install billions of dollars of new equipment or shut down. Environmental groups and scientists have long argued that such steps are crucial to curb global warming, but fossil fuel-producing states argue that they represent government overreach and threaten to destabilize the electric grid.

The proposal sets standards that would push power companies to install carbon capture equipment (CCS) that can siphon the CO2 from a plant's smokestack before it reaches the atmosphere, or use super-low-emissions hydrogen as a fuel. The Environmental Protection Agency projects the plan would cut carbon emissions from coal plants and new gas plants by 617 million tons between 2028 and 2042, the equivalent of reducing the annual emissions of 137 million passenger vehicles. "Today we're proposing new technology standards that will significantly reduce greenhouse gas emissions from fossil fuel power plants, protecting health and protecting our planet," EPA Administrator Michael Regan told students at the University of Maryland on their last day of school on Thursday.

Regan said that the agency has wielded the power of the federal Clean Air Act to craft the new power plant rules, along with a suite of other measures aimed at tackling vehicle emissions, as well as potent greenhouse gases methane and HFCs, that would reduce the equivalent of 15 billion tonnes of greenhouse gas emissions between 2022 and 2055. The proposal, more than 18 months in the making, reflects constraints imposed on the EPA by the Supreme Court, which ruled last year that the agency cannot impose a system-wide shift from fossil fuels to renewable energy, but can regulate plants by setting technology-based standards applied on-site.

Encryption

Inside the Italian Mafia's Encrypted Phone of Choice (vice.com) 75

An anonymous reader shares an excerpt from a collaborative investigation between Motherboard, lavialibera, and IrpiMedia: Mafioso Bartolo Bruzzaniti needed everyone to do their job just right. First, the Colombian suppliers would hide a massive amount of cocaine inside bananas at the port city of Turbo, Colombia. That shipping container would then be transported across the ocean to Catania, in Sicily, Italy. A corrupt port worker on the mafia's payroll would wave the shipment through and had advised the group how to package the drugs. This was so the cocaine could remain undetected even if the worker was forced to scan the shipment. Another group of on-the-ground mafiosos would then unload the cocaine outside of the port.

In March 2021, Bruzzaniti, an alleged member of the infamous 'Ndrangheta mafia group and who says Milan belongs to him "by right," asked his brother Antonio to go fetch something else crucial to the traffickers' success. "Go right now," Bruzzaniti wrote in a text message later produced in court records. "It's needed urgently." Investigators know what Bruzzaniti said because European authorities had penetrated an encrypted phone network called Sky and harvested around a billion of the users' messages. These phones are the technological backbone of organized crime around the world.

The thing Antonio needed to urgently fetch was a phone from a different encrypted phone network, one that the authorities appear to have not compromised and which the mafia have been using as part of their operations. To that phone, a contact sent one half of the shipping container's serial number. A reporting collaboration between Motherboard, lavialibera, and IrpiMedia has identified that encrypted phone as being run by a company called No. 1 Business Communication (No. 1 BC). The investigation has found members of the mafia and other organized crime groups turning to No. 1 BC as authorities cracked down on other platforms. The collaboration has identified multiple key players in No. 1 BC's development, sales, and legal structure. "Take the bc1 right away," Bruzzaniti wrote in another text, referring to the No. 1 BC phone.

Crime

Ex-Ubiquiti Engineer Behind 'Breathtaking' Data Theft Gets 6-Year Prison Term (arstechnica.com) 22

An anonymous reader quotes a report from Ars Technica: An ex-Ubiquiti engineer, Nickolas Sharp, was sentenced to six years in prison yesterday after pleading guilty in a New York court to stealing tens of gigabytes of confidential data, demanding a $1.9 million ransom from his former employer, and then publishing the data publicly when his demands were refused. Sharp had asked for no prison time, telling United States District Judge Katherine Polk Failla that the cyberattack was actually an "unsanctioned security drill" that left Ubiquiti "a safer place for itself and for its clients," Bloomberg reported. In a court document (PDF), Sharp claimed that Ubiquiti CEO Robert Pera had prevented Sharp from "resolving outstanding security issues," and Sharp told the judge that this led to an "idiotic hyperfixation" on fixing those security flaws.

However, even if that was Sharp's true motivation, Failla did not accept his justification of his crimes, which include wire fraud, intentionally damaging protected computers, and lying to the FBI. "It was not up to Mr. Sharp to play God in this circumstance," Failla said. US attorney for the Southern District of New York, Damian Williams, argued (PDF) that Sharp was not a "cybersecurity vigilante" but an "inveterate liar and data thief" who was "presenting a contrived deception to the Court that this entire offense was somehow just a misguided security drill." Williams said that Sharp made "dozens, if not hundreds, of criminal decisions" and even implicated innocent co-workers to "divert suspicion." Sharp also had already admitted in pre-sentencing that the cyber attack was planned for "financial gain." Williams said Sharp did it seemingly out of "pure greed" and ego because Sharp "felt mistreated" -- overworked and underpaid -- by the IT company, Williams said.

Court documents show that Ubiquiti spent "well over $1.5 million dollars and hundreds of hours of employee and consultant time" trying to remediate what Williams described as Sharp's "breathtaking" theft. But the company lost much more than that when Sharp attempted to conceal his crimes -- posing as a whistleblower, planting false media reports, and contacting US and foreign regulators to investigate Ubiquiti's alleged downplaying of the data breach. Within a single day after Sharp planted false reports, stocks plummeted, causing Ubiquiti to lose over $4 billion in market capitalization value, court documents show. Williams had pushed the court to impose a sentence between eight to 10 years, arguing that anything less would be perceived by the public as a "slap on the wrist." Sharp's six-year term is slightly less than that, but in a press release, Williams described the sentence as imposing "serious penalties" for Sharp's "callous crimes." "He was disgruntled at his employer, planning to leave the company, and wanted to extort millions of dollars and cause damage on his way out," Williams said in his sentencing memo.

EU

EU Lawmakers Want More Talks To Strengthen Proposed US Data Transfer Pact (reuters.com) 7

EU lawmakers on Thursday urged the European Commission to continue talks to reinforce a proposed data transfer pact with the United States, saying there were still shortcomings in the agreement. From a report: The move could further delay an accord which is critical for thousands of companies. The EU executive in a draft decision in December said that U.S. safeguards against American intelligence activities were strong enough to address EU data privacy concerns. Such worries had prompted Europe's top court to strike down two previous data transfer pacts, affecting thousands of companies that move Europeans' personal data across the Atlantic for commercial use such as financial services, human resources and e-commerce. "This new proposal contains significant improvements, but unfortunately, we are not there yet," lawmaker Juan Fernando Lopez Aguilar said after the assembly voted in a non-binding resolution against the proposed pact.
Businesses

Judge Nixes Block Shareholder Suit Over 'Terrible Business Decision' To Acquire Tidal (apnews.com) 28

A Delaware judge has dismissed a shareholder lawsuit against financial technology company Block over its 2021 acquisition of majority ownership in Tidal, the music streaming service partly owned by rapper Jay-Z. From a report: A pension fund shareholder alleged that Block founder and CEO Jack Dorsey and the company's board of directors breached their fiduciary duties in agreeing to pay roughly $300 million to take control of Tidal as it was failing financially and the target of an ongoing criminal investigation. Chancellor Kathaleen St. Judge McCormick ruled Tuesday that the pension fund had failed to demand that Block's board pursue legal action itself before filing a derivative lawsuit on behalf of the company. Under Delaware law, shareholders must make such a demand or demonstrate that doing so would be futile because a majority of directors were self-interested, lacked independence or faced a substantial likelihood of liability.

McCormick noted that the demand requirement is a manifestation of Delaware's business judgment rule, under which courts defer to the decision-making of corporate directors unless there is an indication they acted in bad faith. That deference remains even if a corporate decision turns out to be unwise. "It seemed, by all accounts, a terrible business decision," the judge said of Block's acquisition of Tidal. "Under Delaware law, however, a board comprised of a majority of disinterested and independent directors is free to make a terrible business decision without any meaningful threat of liability, so long as the directors approve the action in good faith."

Crime

SBF Asks Court To Dismiss Most Criminal Charges Against Him (axios.com) 63

FTX founder Sam Bankman-Fried is seeking the dismissal of 10 of the 13 charges against him over the collapse of the cryptocurrency exchange. Axios reports: Lawyers for Bankman-Fried, who's pleaded not guilty to fraud, conspiracy, campaign finance law violations and money laundering, in a filing argued that several of the charges failed to properly state an offense. The motion that was filed to the U.S. District Court for the Southern District of New York is seeking the dismissal of 10 of the 13 charges against him. "Simply making a false statement, by itself, does not constitute wire fraud unless it is made for the purpose of obtaining money or property from the victim of the fraud," Bankman-Fried's lawyers wrote.

According to Ars Technica, SBF's lawyers are essentially arguing that there's no evidence of harm caused because fraud requires a "scheme to cause economic loss to the victim," which prosecutors allegedly haven't proved. Instead, SBF alleges that federal prosecutors have concocted "a hodgepodge of different intangible losses" suffered by banks and lenders -- including "the right to honest services," "the loss of control of assets," and "the deprivation of valuable information." [...] "In the end, the Government is trying to transform allegations of dishonesty and unfair dealing into violations of the federal fraud statutes," SBF's lawyers wrote. "While such conduct may well be improper, it is not wire fraud."

The 31-year-old Bankman-Fried, who is currently under house arrest on a $250 million bond at his parents' home in Palo Alto, California, faces more than 155 years in prison if convicted on all counts. A trial has been scheduled for October.
EU

EU Lawyers Say Plan To Scan Private Messages For Child Abuse May Be Unlawful (theguardian.com) 68

An anonymous reader quotes a report from The Guardian: An EU plan under which all WhatsApp, iMessage and Snapchat accounts could be screened for child abuse content has hit a significant obstacle after internal legal advice said it would probably be annulled by the courts for breaching users' rights. Under the proposed "chat controls" regulation, any encrypted service provider could be forced to survey billions of messages, videos and photos for "identifiers" of certain types of content where it was suspected a service was being used to disseminate harmful material. The providers issued with a so-called "detection order" by national bodies would have to alert police if they found evidence of suspected harmful content being shared or the grooming of children.

Privacy campaigners and the service providers have already warned that the proposed EU regulation and a similar online safety bill in the UK risk end-to-end encryption services such as WhatsApp disappearing from Europe. Now leaked internal EU legal advice, which was presented to diplomats from the bloc's member states on 27 April and has been seen by the Guardian, raises significant doubts about the lawfulness of the regulation unveiled by the European Commission in May last year. The legal service of the council of the EU, the decision-making body led by national ministers, has advised the proposed regulation poses a "particularly serious limitation to the rights to privacy and personal data" and that there is a "serious risk" of it falling foul of a judicial review on multiple grounds.

The EU lawyers write that the draft regulation "would require the general and indiscriminate screening of the data processed by a specific service provider, and apply without distinction to all the persons using that specific service, without those persons being, even indirectly, in a situation liable to give rise to criminal prosecution." The legal service goes on to warn that the European court of justice has previously judged the screening of communications metadata is "proportionate only for the purpose of safeguarding national security" and therefore "it is rather unlikely that similar screening of content of communications for the purpose of combating crime of child sexual abuse would be found proportionate, let alone with regard to the conduct not constituting criminal offenses." The lawyers conclude the proposed regulation is at "serious risk of exceeding the limits of what is appropriate and necessary in order to meet the legitimate objectives pursued, and therefore of failing to comply with the principle of proportionality".
The legal service is also concerned about the introduction of age verification technology and processes to popular encrypted services. "The lawyers write that this would necessarily involve the mass profiling of users, or the biometric analysis of the user's face or voice, or alternatively the use of a digital certification system they note 'would necessarily add another layer of interference with the rights and freedoms of the users,'" reports the Guardian.

"Despite the advice, it is understood that 10 EU member states -- Belgium, Bulgaria, Cyprus, Hungary, Ireland, Italy, Latvia, Lithuania, Romania and Spain -- back continuing with the regulation without amendment."
Security

Feds Seize 13 More DDoS-For-Hire Platforms In Ongoing International Crackdown (arstechnica.com) 17

An anonymous reader quotes a report from Ars Technica: The US Justice Department has seized the domains of 13 DDoS-for hire services as part of an ongoing initiative for combatting the Internet menace. The providers of these illicit services platforms describe them as "booter" or "stressor" services that allow site admins to test the robustness and stability of their infrastructure. Almost, if not all, are patronized by people out to exact revenge on sites they don't like or to further extortion, bribes, or other forms of graft. The international law enforcement initiative is known as Operation PowerOFF. In December, federal authorities seized another 48 domains. Ten of them returned with new domains, many that closely resembled their previous names.

"Ten of the 13 domains seized today are reincarnations of services that were seized during a prior sweep in December, which targeted 48 top booter services," the Justice Department said. "For example, one of the domains seized this week -- cyberstress.org -- appears to be the same service operated under the domain cyberstress.us, which was seized in December. While many of the previously disrupted booter services have not returned, today's action reflects law enforcement's commitment to targeting those operators who have chosen to continue their criminal activities." According to a seizure warrant (PDF) filed in federal court, the FBI used live accounts available through the services to take down sites with high-capacity bandwidth that were under FBI control.
"The FBI tested each of services associated with the SUBJECT DOMAINS, meaning that agents or other personnel visited each of the websites and either used previous login information or registered a new account on the service to conduct attacks," FBI Special Agent Elliott Peterson wrote in the affidavit. "I believe that each of the SUBJECT DOMAINS is being used to facilitate the commission of attacks against unwitting victims to prevent the victims from accessing the Internet, to disconnect the victim from or degrade communication with established Internet connections, or to cause other similar damage."
Bitcoin

US Crypto Exchange Bittrex Files For Bankruptcy (coindesk.com) 23

According to CoinDesk, crypto exchange Bittrex has filed for bankruptcy in the U.S. state of Delaware, "months after announcing it would wind down operations in the country and weeks after being sued by the Securities and Exchange Commission (SEC)." From the report: The exchange believes it has more than 100,000 creditors, with estimated liabilities and assets both within the $500 million to $1 billion range, according to a court filing shared by Randall Reese of Chapter 11 Dockets, a bankruptcy tracker. Bittrex's U.S. branch has had a rough 2023 so far, laying off 80 people in February and announcing in March that it would end all operations by the end of April. These changes have not affected Bittrex Global, the non-U.S. crypto exchange.

Despite Bittrex's impending exit from the U.S., the SEC sued it in mid-April on allegations it operated a national securities exchange, broker and clearing agency. The SEC also sued former Bittrex CEO Bill Shihara and Bittrex Global. Bittrex Global CEO Oliver Linch said last month that the exchange intended to fight these charges in court, but a bankruptcy proceeding may make this more difficult.

The Courts

Apple Fails To Revive Copyright Case Over iPhone iOS Simulator (bloomberglaw.com) 14

Apple failed to revive a long-running copyright lawsuit against cybersecurity firm Corellium over its software that simulates the iPhone's iOS operating systems, letting security researchers to identify flaws in the software. From a report: The US Court of Appeals for the Eleventh Circuit on Monday ruled that Corellium's CORSEC simulator is protected by copyright law's fair use doctrine, which allows the duplication of copyrighted work under certain circumstances. Apple argued that Corellium's software was "wholesale copying and reproduction" of iOS and served as a market substitute for its own security research products. Corellium countered that its copying of Apple's computer code and app icons was only for the purposes of security research and was sufficiently "transformative" under the fair use standard. The three-judge panel largely agreed with Corellium, finding that CORSEC "furthers scientific progress by allowing security research into important operating systems" and that iOS "is functional operating software that falls outside copyright's core."
Google

Google, Sonos Head To Trial in Contentious Smart Speaker Patent Fight (reuters.com) 8

Sonos and Alphabet's Google will face off in a San Francisco federal trial on Monday over claims that Google copied Sonos' patented smart-speaker technology in wireless audio devices like Google Home and Chromecast Audio. From a report: The case is part of a sprawling intellectual property dispute between the former business partners that includes other lawsuits in the U.S., Canada, France, Germany and the Netherlands. Sonos has asked the court for $90 million in damages from Google in the San Francisco case, down from $3 billion after U.S. District Judge William Alsup narrowed the case, according to a Google court filing. Sonos alleges Google infringed two of its patents related to multi-room wireless audio. Google spokesperson Jose Castaneda said the case relates to "some very specific features that are not commonly used," and that Sonos "mischaracterized our partnership and technology."
Security

Ex-Uber Security Chief Gets Probation for Concealing 2016 Data Breach (axios.com) 8

A judge sentenced Joe Sullivan, the former chief security officer at Uber, to three years' probation and 200 hours of community service on Thursday for covering up a 2016 cyberattack from authorities and obstructing a federal investigation. From a report: Sullivan's case is likely the first time a security executive has faced criminal charges for mishandling a data breach, and the response to Sullivan's case has split the cybersecurity community. In October, a jury found Sullivan guilty of obstructing an active FTC investigation into Uber's security practices and concealing a 2016 data breach that affected 50 million riders and drivers. Uber paid the hackers $100,000 to not release any stolen data and keep the attack quiet. Sullivan and his team routed the payment through the company's bug bounty program, which good-faith security researchers usually use to report flaws. The hack wasn't publicly disclosed until 2017, shortly after Dara Khosrowshahi stepped into the CEO role.

Khosrowshahi fired Sullivan in 2017, telling the jury last fall that he thought the decision to conceal the breach was "the wrong decision." Sullivan then joined Cloudflare as its chief security officer in 2018, and he stayed there until July 2022 when he stepped down to prepare for his trial. "If I have a similar case tomorrow, even if the defendant had the character of Pope Francis, they would be going to prison," Judge William Orrick said during the sentencing on Thursday. "When you go out and talk to your friends, to your CISOs, you tell them that you got a break not because of what you did, not even because of who you are, but because this was just such an unusual one-off," Orrick added.

The Courts

OpenAI Threatens Popular GitHub Project With Lawsuit Over API Use (tomshardware.com) 44

A GitHub project called GPT4free has received a letter from OpenAI demanding that the repo be shut down within five days or face a lawsuit. Tom's Hardware reports: Anyone can use ChatGPT for free, but if you want to use GPT4, the latest language model, you have to either pay for ChatGPT Plus, pay for access to OpenAI's API, or find another site that has incorporated GPT4 into its own free chatbot. There are sites that use OpenAI such as Forefront and You.com, but what if you want to make your own bot and don't want to pay for the API? A GitHub project called GPT4free allows you to get free access to the GPT4 and GPT3.5 models by funneling those queries through sites like You.com, Quora and CoCalc and giving you back the answers. The project is GitHub's most popular new repo, getting 14,000 stars this week.

Now, according to Xtekky, the European computer science student who runs the repo, OpenAI has sent a letter demanding that he take the whole thing down within five days or face a lawsuit. I interviewed Xtekky via Telegram, and he said he doesn't think OpenAI should be targeting him since he isn't connecting directly to the company's API, but is instead getting data from other sites that are paying for their own API licenses. If the owners of those sites have a problem with his scripts querying them, they should approach him directly, he posited. [...] Even if the original repo is taken down, there's a great chance that the code -- and this method of accessing GPT4 and GPT3.5 -- will be published elsewhere by members of the community. Even if GPT4Free had never existed anyone can find ways to use these sites' APIs if they continue to be unsecured. "Users are sharing and hosting this project everywhere," he said. "Deletion of my repo will be insignificant."

Piracy

Film Studios Lose Bid To Unmask Reddit Users Who Wrote Comments on Piracy (arstechnica.com) 39

Reddit doesn't have to identify eight anonymous users who wrote comments in piracy-related threads, a judge in the US District Court for the Northern District of California ruled on Friday. From a report: US Magistrate Judge Laurel Beeler quashed a subpoena issued by film studios in an order that agrees with Reddit that the First Amendment protects the users' right to speak anonymously online. The First Amendment right to anonymous speech is not absolute, but the precedent followed by US district courts only forces disclosure of anonymous users' identities "in the exceptional case where the compelling need for the discovery sought outweighs the First Amendment rights of the anonymous speaker," Beeler noted. After reviewing the facts and arguments, she found that the Reddit users' comments were irrelevant to the film studios' underlying case and that the studios could obtain relevant information from other sources.

Reddit has no involvement in the underlying case, which is a copyright lawsuit in a different federal court against cable Internet service provider RCN. Bodyguard Productions, Millennium Media, and other film companies sued RCN in the US District Court in New Jersey over RCN customers' alleged downloads of 34 movies such as Hellboy, Rambo: Last Blood, Tesla, and The Hitman's Bodyguard. In an attempt to prove that RCN (now known as Astound Broadband) turned a blind eye to customers illegally downloading copyrighted movies, the studios subpoenaed Reddit seeking identifying information for specific users who commented in piracy-related threads. While some of the comments were posted in 2022, other comments were made in 2009 and 2014.

AI

Can OpenAI Trademark 'GPT'? (techcrunch.com) 34

"ThreatGPT, MedicalGPT, DateGPT and DirtyGPT are a mere sampling of the many outfits to apply for trademarks with the United States Patent and Trademark Office in recent months," notes TechCrunch, exploring the issue of whether OpenAI can actually trademark the phrase 'GPT'... Little wonder that after applying in late December for a trademark for "GPT," which stands for "Generative Pre-trained Transformer," OpenAI last month petitioned the USPTO to speed up the process, citing the "myriad infringements and counterfeit apps" beginning to spring into existence. Unfortunately for OpenAI, its petition was dismissed last week... Given the rest of the queue in which OpenAI finds itself, that means a decision could take up to five more months, says Jefferson Scher, a partner in the intellectual property group of Carr & Ferrell and chair of the firm's trademark practice group. Even then, the outcome isn't assured, Scher explains... [H]elpful, says Scher, is the fact that OpenAI has been using "GPT" for years, having released its original Generative Pre-trained Transformer model, or GPT-1, back in October 2018...

Even if a USPTO examiner has no problem with OpenAI's application, it will be moved afterward to a so-called opposition period, where other market participants can argue why the agency should deny the "GPT" trademark. Scher describes what would follow this way: In the case of OpenAI, an opposer would challenge Open AI's position that "GPT" is proprietary and that the public perceives it as such instead of perceiving the acronym to pertain to generative AI more broadly...

It all begs the question of why the company didn't move to protect "GPT" sooner. Here, Scher speculates that the company was "probably caught off guard" by its own success... Another wrinkle here is that OpenAI may soon be so famous that its renown becomes a dominant factor, says Scher. While one doesn't need to be famous to secure a trademark, once an outfit is widely enough recognized, it receives protection that extends far beyond its sphere. Rolex is too famous a trademark to be used on anything else, for instance.

Thanks to Slashdot reader rolodexter for sharing the article.

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