canadian hacker puts judge in prison

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Odd where you find stuff and don’t find stuff. Noticed this story in The Inquirer. The nub:

The case was all started when a Canadian hacker Brad Willman broke into the judge’s Irvine home computer and discovered sexually explicit images of young boys and a diary that revealed Kline’s fantasies involving young boys. A subsequent police search of the Judge’s court computer revealed more images and more dodgy Web sites.

Kline is the judge in question. In Orange County. Apart from the irony of the situation I thought it was somewhat interesting that it didn’t (apparently) see much coverage in Canada, notwithstanding the origins of the hacker in question.

Startup Financing Article

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Interesting  article in Venture Law Lines on what usually takes too much time in startup financing deals and what is usually not given adequate attention. I’d tend to agree, particularly on one:

1. Registration rights (Some VCs still require these in early stage companies, although mercifully this is a declining trend)

I can’t recall a single instance of anyone actually invoking a demand right (or for that matter any other right) under a registration rights agreement. That being said, its primarily a US oriented document so there may be some in the US I’m not aware of (if you know of one please do let me know in the comments).

That being said, if too much time is spent on reg rights, the question still remains as to whether it should be cut out altogether, or, given the very low probability it will be exercised, whether to avoid a long drawn out debate and sign it and move on. Needless to say, these two perspectives are usually the ones that result in the discussion taking longer than it should…


Fair Use and the DMCA

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An article in Wired News with the dramatic title of “Lawmakers Tout DMCA Killer” describes the most recent attempt to: (a) water down the protections afforded to content owners by the DMCA; (b) ensure the preservation of fair use rights on the part of users. As is usual, each side has its own rhetoric to describe what is happening, so in fairness I took the liberty of offering to readers of this blog the two alternative descriptions above. The nub:

The Boucher and Doolittle bill (.pdf), called the Fair Use Act of 2007, would free consumers to circumvent digital locks on media under six special circumstances.

Librarians would be allowed to bypass DRM technology to update or preserve their collections. Journalists, researchers and educators could do the same in pursuit of their work. Everyday consumers would get to “transmit work over a home or personal network” so long as movies, music and other personal media didn’t find their way on to the internet for distribution.

And then of course on the other side:

“The suggestion that fair use and technological innovation is endangered is ignoring reality,” said MPAA spokeswoman Gayle Osterberg. “This is addressing a problem that doesn’t exist.”

Osterberg pointed to a study the U.S. Copyright Office conducts every three years to determine whether fair use is being adversely affected. “The balance that Congress built into the DMCA is working.” The danger, Osterberg said, is in attempting to “enshrine exemptions” to copyright law.

To suggest that content owners have the right to be paid for their work is, for me, a  no-brainer. That being said, I wonder whether the DMCA and increasingly more complex and invasive DRM schemes will ultimately backfire – sure they protect the content, but they sure as heck are a pain in the ass – just my personal take on it. For example, I’d love to buy digital music, but having experienced the controls that iTunes imposes and suddenly having all my tracks disappear, I just don’t bother with it now. Not to mention the incredible hoops one needs to go through to display, say, Blu-ray on a computer – at least in its original, non-downgraded resolution – why bother with all of that at all?

I wonder whether this is, in a way, history repeating itself in a way. I am old enough to remember the early days of software protection – virtually every high-end game or application used fairly sophisticated techniques (like writing non-standard tracks on floppies in between standard tracks) in attempting to prevent piracy. Granted, these have never gone away altogether, particularly for super high end software that needs dongles and and the like, and of course recently there has been a resurgence in the levels of protection that have been layered on in Windows, but after the initial, almost universal lockdown of software long ago, there came a period where it seemed many (if not most) software developers just stopped using such measures.  At least that’s what seemed to happen. I’m not quite sure why, but I wonder if this same pattern will repeat with content rather than software. I suspect not. But hey, you never know.

In the meantime, off I go, reluctantly, in the cold, cold winter, to the nearest record shop to buy music the old fashioned way…


Shares and How Not to Give Them Away

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Interesting post by Rick Segal on how a financing deal died mid-stream due to paperwork. The nub:

Last week I watched, live, a promising young start up die because of pesky paperwork and a VC that felt the need to go the distance when it came to covering thy butt. It was ugly and it will be nothing shy of a miracle if the lawsuits don’t come flying.

…

A VC offers up a term sheet, does due diligence, and decides, yep, we’re in, let’s go to legals.  The terms are negotiated, everybody appears happy, capital is ready to transfer.

…

VC lawyers offer up the shareholders agreement as one of the documents that needs to get signed off by all the shareholders.  No problem. Well, almost no problem.

…

All told, 42 shareholders which owned 22% of the company.  42 people spread out over three countries.  42 signatures required.  And, as fate would have it 21 missing shareholders.  Moved, not returning phone calls, no emails, etc.

…

The VC refused to close without the signatures and, to make a long (painful) story short, the company died for lack of funding.

Ouch. Rick suggests setting up a voting trust agreement as one way to avoid running into this issue. That’s definitely a good idea. Another would be to avoid, as much as possible, handing out shares to folks. Many entrepreneurs seem to think of their stock as an easy or cheap way to pay people. That’s only true if your company turns out to be worthless. If it doesn’t, then you can rest assured it won’t be as cheap as you thought.

Think of this way – every time you give someone shares, you are also giving them a little stake in your company and some ability to decide what your company does. So think of shares like bits of your body – before you give away your pinkie, or foot, think about what you are getting in return, and whether its really worth it. And keep very close track of it – before you know it, you might be missing a leg.

And I know this sounds a bit self-serving (at least for my profession) but please, please, please spend just a few minutes talking to a lawyer before you  ever give away shares, options to buy shares, or even promise anyone that you’ll give them shares. It may save you a world of trouble later on, as Rick’s story quite clearly illustrates….


XBRL Is Cool

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Just a very short one during my “lunch”. Ever heard of XBRL? Its short for Extended Business Reporting Language – basically a kind of sort of extension of XML or, perhaps more precisely, a subset of SGML. I like to follow developments on it because I think the potential ways in which XBRL will impact a variety of industries (primarily the financial sector) is huge.

To give you an idea, here’s a (rather old) excerpt from a speech that the CIO of the SEC gave at the last XBRL International Conference last May:

I think the agency can be proud of its use of electronic filing and information distribution. But we can aim higher. Today, the vast majority of EDGAR documents are filed in ASCII text, and another large fraction in HTML. That’s fine for reading about a company’s strategy and general issues, but if you want to do financial analysis or compare accounting policies between companies, you then have to do a lot of printing, searching, data entry, text parsing, and other mechanical work. Or, you can go to a third-party data provider, who can provide you with a database of financial information — but the data provider will have made a number of assumptions to simplify and standardize the financial information, and it may no longer be consistent with how the company intended to present its financials. And you won’t get any of the valuable information from the footnotes.

Since you’re at this conference, I know you can all envision the attractive alternative posed by XBRL and interactive data, so I won’t belabor the point. The potential benefits are persuasive enough — greater transparency of financial information, reduced costs for investors and analysts, potentially even deeper coverage of midcap companies by analysts, and ultimately more efficient markets.

Let me paint what I think is an interesting scenario. Wall Street types have been talking for a couple of years about algorithmic trading — basically, using computers to process real-time streams of market data and making fast, automated trading decisions. Today, that market data is mostly about stock prices and volumes, since that’s what’s available in real time. But at some point in the not-distant future, I envision a hedge fund starting to algorithmically trade with XBRL-based balance sheet and P&L data in real-time as it’s disclosed by companies. At that point, we will all know that interactive data has won the day.

Imagine that. And that’s just the tip of the iceberg. The number of tools that one can create to digest, compile, report and analyze numbers is limited only by one’s imagination. I can also imagine the potential impact that this could have on data vendors who charge quite a bit to provide archived financial information – often in rather archaic forms.

Surprisingly, I’ve not heard of many companies or startups that are working on new products (particularly on the software front) either to help in generating XBRL, translating information into XBRL, or crunching XBRL reports (though admittedly, I haven’t been following it that closely).

Anyway, if you’re in this space, and you haven’t yet looked into XBRL, you should certainly consider doing so.

Vista Capable – Capable of Booting – And Not Much Else

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Just a small quick one. Story in Computerworld about how 4GB is the optimal amount of RAM to run Windows Vista. Sure. Fine. Fair enough. Goes on to critique vendors like Dell who have “Vista Capable” machines. And what as does that mean, you ask?

For instance, Dell offers a Windows Vista Capable configuration that isn’t capable of much, according to what Dell says about it on its Web site: “Great for … Booting the Operating System, without running applications or games.”

I thought surely they must be leaving a bit out right? Nope. Not the case. That’s it. That’s all. Scroll down and see for yourself on the Dell site.

So, if you plan on buying a “Vista Capable” machine, enjoy, um, booting up your machine and, well, I guess, admiring the boot process as it boots.

A Really, Really, Really Good Reason to use Spybot

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Story from the Norwich Bulletin. The nub:

NORWICH — State Prosecutor David Smith said he wondered why Julie Amero didn’t just pull the plug on her classroom computer.The six-person jury Friday may have been wondering the same thing when they convicted Amero, 40, of Windham of four counts of risk of injury to a minor, or impairing the morals of a child. It took them less than two hours to decide the verdict. She faces a sentence of up to 40 years in prison.

Oct. 19, 2004, while substituting for a seventh-grade language class at Kelly Middle School, Amero claimed she could not control the graphic images appearing in an endless cycle on her computer.

“The pop-ups never went away,” Amero testified. “They were continuous.”

This all sounds somewhat incredible to me, to be honest. Not just the fact that she was convicted, and convicted so quickly, but also the maximum punishment of 40 years. Seems a bit high when one hears of killers being convicted of manslaughter and getting maybe 2-3 years.

Why I Love the Brits

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As history has clearly demonstrated, the British have no equals when it comes to keen and slightly caustic humour. At the risk of testing the limits of fair use, I excerpt some rather large chunks below from a brilliant article in the Guardian Unlimited about the British version of the Mac ads – I’m sure you’ve seen them (at least the US ones) – the ones with a rather geeky fellow being the poor PC, with the rather cool looking dude being the Mac. Well, one Mr. Brooker had this to say in response:

I hate Macs. I have always hated Macs. I hate people who use Macs. I even hate people who don’t use Macs but sometimes wish they did. Macs are glorified Fisher-Price activity centres for adults; computers for scaredy cats too nervous to learn how proper computers work; computers for people who earnestly believe in feng shui.

PCs are the ramshackle computers of the people. You can build your own from scratch, then customise it into oblivion. Sometimes you have to slap it to make it work properly, just like the Tardis (Doctor Who, incidentally, would definitely use a PC). PCs have charm; Macs ooze pretension. When I sit down to use a Mac, the first thing I think is, “I hate Macs”, and then I think, “Why has this rubbish aspirational ornament only got one mouse button?” Losing that second mouse button feels like losing a limb. If the ads were really honest, Webb would be standing there with one arm, struggling to open a packet of peanuts while Mitchell effortlessly tore his apart with both hands. But then, if the ads were really honest, Webb would be dressed in unbelievably po-faced avant-garde clothing with a gigantic glowing apple on his back. And instead of conducting a proper conversation, he would be repeatedly congratulating himself for looking so cool, and banging on about how he was going to use his new laptop to write a novel, without ever getting round to doing it, like a mediocre idiot.

Cue 10 years of nasal bleating from Mac-likers who profess to like Macs not because they are fashionable, but because “they are just better”. Mac owners often sneer that kind of defence back at you when you mock their silly, posturing contraptions, because in doing so, you have inadvertently put your finger on the dark fear haunting their feeble, quivering soul – that in some sense, they are a superficial semi-person assembled from packaging; an infinitely sad, second-rate replicant who doesn’t really know what they are doing here, but feels vaguely significant and creative each time they gaze at their sleek designer machine. And the more deftly constructed and wittily argued their defence, the more terrified and wounded they secretly are.

Ouch! And, skipping ahead to the finish:

Ultimately the campaign’s biggest flaw is that it perpetuates the notion that consumers somehow “define themselves” with the technology they choose. If you truly believe you need to pick a mobile phone that “says something” about your personality, don’t bother. You don’t have a personality. A mental illness, maybe – but not a personality. Of course, that hasn’t stopped me slagging off Mac owners, with a series of sweeping generalisations, for the past 900 words, but that is what the ads do to PCs. Besides, that’s what we PC owners are like – unreliable, idiosyncratic and gleefully unfair. And if you’ll excuse me now, I feel an unexpected crash coming.

I have just finished erecting a small miniature shrine in honour of Mr. Brooker. Bravo, sir. Bravo.

The Costs of Sarbanes-Oxley

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No, this post is definitely not what you’re thinking. Its not about how more and more companies are looking into going private or going to markets like AIM instead to try to avoid the increasingly greater burden of legislation like SOX.  In fact, quite different altogether. Its a story about how Apple will be charging a few dollars to unlock a feature already built into one of its products. That in itself is nothing particularly earth-shattering. What is a bit wonky is the reason Apple cites. According to another story at iLounge, its because of SOX:

Another Apple representative has added details on the Sarbanes situation: it’s about accounting. Because of the Act, the company believes that if it sells a product, then later adds a feature to that product, it can be held liable for improper accounting if it recognizes revenue from the product at the time of sale, given that it hasn’t finished delivering the product at that point. Ridiculous.

I don’t purport to be an expert on SOX but I thought it had to do with internal controls, rather than accounting standards, which I thought, if memory serves, were still at least primarily driven by the pronouncements of the Financial Accounting Standards Board in the US, and not SOX.

So, if you are the proud owner of Core 2 Duo Macintosh, you too will be personally experiencing the cost consequences of SOX, even if you are not a US public corporation. And you can’t even avoid it by going private. Very odd indeed.


ALPR is….

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short for Automatic License Plate Recognition. Sometimes I find mention of the most interesting things in the most unexpected places. Like this brief article on how police in British Columbia are currently using a system that can easily and quickly scan license plate numbers as they drive along that I saw in bookofjoe. Surprised I didn’t see see it anywhere else, oddly enough, particularly given the implications for privacy, etc. Not necessarily that there are any – after all, license plates are there so that they can be seen by the public at large and police officers. That being said, I find it interesting how the application of new technology (optical recognition) to old technology (license plates), significantly alters the implications of how the old technology is perceived.

Sure, its one thing to have police on the lookout for a particular license plate on a car with a known felon who is escaping, but it seems to be quite another for a police car to scan and process thousands upon thousands of license plates while driving around the city.