faustus@tartarus.uchicago.edu (Kurt Ackermann) (10/26/90)
Anyone hear about the stink between logistar (I think that's right), a small software firm, and Revlon of cosmetics fame?? Logistar had written software to maintain and keep track of Revlon's warehouses and distribution systems. revlon claimed that the programs didn't work as specified under the contract and they refused to pay for the software. Logistar begged to differ, and, in response to the lack of payment, REPOSSESSED ITS OWN SOFTWARE!!! They entered Revlon computers over telephone lines, and simply removed all Logistar software from the system. Needless to say, this paralyzed Revlon for a few days. Revlon is suing... What precedent will be set?? Does Logistar have the right to enter Revlon's computers and take back its software, even though it was unpaid for?? Is this illegal entry? theft?? Let's assume for the sake of argument that Logistar did fulfil the obligations of the contract. Are they acting correctly (i.e., do we want to encourage this kind of precedent to be set?), completely aside from the question of whether or not their actions are presently LEGAL per se (I think this will be decided by the precedent this case establishes). This one is going to have serious repercussions in the legal field, and I think we all have a stake in the outcome (at least in the long-run). Opinions?? (I got this information off of the morning news. Unfortunately, I hadn't had a cup of coffee yet, so I was too fuzzy-brained to remember if it was CBS or some other network... Sorry to propagate news without sources... But I think this one will be in the evening papers!) Kurt Ackermann "Grey, dear friend, are all your theories; --Mephisto. in the golden tree of life is green!" Goethe's Faust
ccastmg@prism.gatech.EDU (Michael G. Goldsman) (10/27/90)
this incident has GOT to be illegal... Unless there is something
in some sort of contract giving them (logistar ) the right to do this
I think that it would be equivalant to a rental agency breaking into
your house and repossessing your furnature without a court order
or anything nifty like that...
I'm not a law student type -o- guy and havn't heard anything about
this story, but Logistar is up shit's creek in my opinion..
-mike
--
Mike Goldsman
Georgia Institute of Technology, Atlanta Georgia, 30332
uucp: ...!{decvax,hplabs,ncar,purdue,rutgers}!gatech!prism!ccastmg
Internet: ccastmg@prism.gatech.edujet@karazm.math.uh.edu (J. Eric Townsend) (10/27/90)
In article <15913@hydra.gatech.EDU> ccastmg@prism.gatech.EDU (Michael G. Goldsman) writes: >this incident has GOT to be illegal... Unless there is something >in some sort of contract giving them (logistar ) the right to do this >I think that it would be equivalant to a rental agency breaking into >your house and repossessing your furnature without a court order I dunno, sounds legit to me. Ever see a repo man take back a car? Well, maybe there's some sort of "breaking and entering" clause. If your car is on the street it's one thing, but if it's in a locked garage, that's another. Hey Godwin, you got all case law on computer yet so that you can just grep these things out? -- J. Eric Townsend Internet: jet@uh.edu Bitnet: jet@UHOU Systems Manager - University of Houston Dept. of Mathematics - (713) 749-2120 EastEnders list: eastender@karazm.math.uh.edu Skate UNIX(r)
brad@looking.on.ca (Brad Templeton) (10/27/90)
We had a story about this in clari.tw.computers. Revlon is suing for lost business. They paid only 400K of a 1.2 megabuck contract, claiming the software is not up to spec. (Sound familiar?) They were shut down for 3 days, then the software house brought the system back up to limit their worst case loss, having made their point. I doubt the contractors will get away with this. Doesn't reposession in the real world require a court order? Particularly if it involves entering the premises of the debtor without permission? Now these folks no doubt used authorized logins and system permissions to do what they did. There is probably no system cracking involved. If there were, I expect they would be in the same boat as a person who breaks into your house without a court order to repossess your stereo. Still, it's pretty clear that deleting the work was not an activity they had permission to do even though their accounts might have been authorized. If I happen to leave write permissions on a file, that still doesn't imply an invitation to stomp on it. (A recent case here had a lawn service 'repossess' a seeded lawn for non-payment. They bulldozed it.) The concept of repossession of services is one the courts have probably dealt with before. -- Brad Templeton, ClariNet Communications Corp. -- Waterloo, Ontario 519/884-7473
mnemonic@eff.uucp (Mike Godwin) (10/27/90)
In article <1990Oct27.022442.16115@lavaca.uh.edu> jet@karazm.math.uh.edu (J. Eric Townsend) writes: > >Hey Godwin, you got all case law on computer yet so that you can just >grep these things out? Probably by the second quarter of 1991. --Mike -- Mike Godwin, (617) 864-0665 |"If the doors of perception were cleansed mnemonic@well.sf.ca.us | every thing would appear to man as it is, Electronic Frontier | infinite." Foundation | --Blake
riddle@hoss.unl.edu (Michael H. Riddle) (10/27/90)
In <1990Oct27.022442.16115@lavaca.uh.edu> jet@karazm.math.uh.edu (J. Eric Townsend) writes: [ original post related how Logistar entered the Revlon computers via dial-up access and "repossessed" software ] >>this incident has GOT to be illegal... Unless there is something >>in some sort of contract giving them (logistar ) the right to do this >>I think that it would be equivalant to a rental agency breaking into >>your house and repossessing your furnature without a court order >I dunno, sounds legit to me. Ever see a repo man take back a car? >Well, maybe there's some sort of "breaking and entering" clause. If >your car is on the street it's one thing, but if it's in a locked >garage, that's another. > Hmm. This is an interesting situation. Let's suppose a hypothetical. Vendor provides Customer with software on account. Software gets delivered. Written purchase agreement establishes a security interest in the "goods" and is either perfected by filing a financing statement in the appropriate office or filing is not yet required because any applicable "grace period" under the state law has not yet run. Customer defaults by refusing payment as specified in the agreement. Agreement is silent as to repossession of the goods. Section 9-503 of the Uniform Commercial Code provides: Unless otherwise agreed a secured party has on default the right to take possession of the collateral. In taking possession a secured party may proceed without judicial process if this can be done without breach of the peace or may proceed by action. * * * without removal a secured party may render equipment unusable, and may dispose of collateral on the debtor's premises under section 9-504. It would seem like Vendor may lawfully repossess. The bit about the financing statement may even be surplusage, since 9-503 only talks about a "secured party," and does not require a "perfected" secured party. I think that we have once again seen the extension of ordinary commercial law into the computer world, in a manner that few would have foreseen. How about it, Mike Godwin? Remember enough from Secured Transactions? -- riddle@hoss.unl.edu | University of Nebraska riddle@crchpux.unl.edu | College of Law mike.riddle@f27.n285.z1.fidonet.org | Lincoln, Nebraska, USA
mnemonic@eff.uucp (Mike Godwin) (10/28/90)
In article <1990Oct27.161200.18165@hoss.unl.edu> riddle@hoss.unl.edu (Michael H. Riddle) writes: >Section 9-503 of the Uniform Commercial Code provides: > > Unless otherwise agreed a secured party has on default the right to > take possession of the collateral. In taking possession a secured > party may proceed without judicial process if this can be done > without breach of the peace or may proceed by action. * * * without > removal a secured party may render equipment unusable, and may > dispose of collateral on the debtor's premises under section 9-504. > >It would seem like Vendor may lawfully repossess. The bit about the >financing statement may even be surplusage, since 9-503 only talks about a >"secured party," and does not require a "perfected" secured party. > >I think that we have once again seen the extension of ordinary commercial >law into the computer world, in a manner that few would have foreseen. >How about it, Mike Godwin? Remember enough from Secured Transactions? What I remember from secured transactions is not the right stuff--the bar course emphasized perfection of security interests, not the process of repossession. I suspect that a criminal-law issue may be raised by unauthorized entry into Revlon's computer, if in fact it was unauthorized. --Mike -- Mike Godwin, (617) 864-0665 |"If the doors of perception were cleansed mnemonic@well.sf.ca.us | every thing would appear to man as it is, Electronic Frontier | infinite." Foundation | --Blake
bzs@world.std.com (Barry Shein) (10/28/90)
I put into my software contracts that putting my software into
production, offering it for sale etc deems acceptance (meaning they
forfeit the right to do anything but pay up, plus or minus whatever is
promised to fix reasonable bug reports, "unable to print to these
nifty new printers we bought w/o mentioning it to you" is not a
reasonable bug report, for example.)
That seems to be what was missing here, maybe.
The whole software contracting biz stinks, actually. It's a
game-theoretic losing game. The customer is 100% motivated to bitch
and moan that they deserve more and withold payment. And the law tends
to side with them (mostly because good luck trying to explain your
side.)
They just list all the things they forgot to spec (oh, they didn't
really "forget", when you mentioned it they decided it would cost too
much) and how it prevents them from making use of the software and
you're basically fighting a losing cause. They only have to keep
reiterating that if they can't do this or that the software is useless
to them and worth $0, it's independent of how much of your work it
represents, or how much it fulfills the original specs.
Because of this sort of situation I'm slowly running the other way.
It's not worth it, unless you're a scoundrel at heart (or don't mind
being constantly accused of being one.)
It's possible logistar did something wrong, but having "been there" my
guess goes the other way. Revlon probably just decided the spec about
being able to "print out reports" should mean "analyze our business,
make good recommendations for management, fix our grammar and support
any printer we will ever buy...and be useable w/o 1 second training",
implicitly.
It does seem odd that Revlon has paid only $400K on a $1.2M contract
yet seems to be implying that there's enough software there that
losing it is a serious problem. They've only paid 1/3 of the price.
glork.
The point is, you're staring right down a rathole and looking for
rational behavior. Good luck! Next try to find out how murder inc.
work out contract problems. It's probably much more peaceful.
--
-Barry Shein
Software Tool & Die | {xylogics,uunet}!world!bzs | bzs@world.std.com
Purveyors to the Trade | Voice: 617-739-0202 | Login: 617-739-WRLDjgd@rsiatl.UUCP (John G. DeArmond) (10/28/90)
>I suspect that a criminal-law issue may be raised by unauthorized >entry into Revlon's computer, if in fact it was unauthorized. I'm not so sure it will. In fact, I don't think it will be considered unauthorized. A few years ago, I had the (ahem) opportunity to take possesion of some client's property as the result of my winning a collection suit. My lawyer explained in great detail what I could do. (Note that we did not have a seizure order; at that point, we had only an order to pay.) He explained that we could enter the client's office as long as we did not break any barriers; that we could take anything we could get our hands on as long as physical violence was not used; and that we could arm ourselves in order to protect ourselves against possible violence from THEM. We never got to test these instructions because after we recieved trivial payment, the company went bankrupt. In summary, repossesions and collections have extraordinary protection under the law. After being tutored in the law, I'd certainly not want to be in debt and have an agressive collection agent on my tail. John -- John De Armond, WD4OQC | "The truly ignorant in our society are those people Radiation Systems, Inc. | who would throw away the parts of the Constitution Atlanta, Ga | they find inconvenient." -me Defend the 2nd {emory,uunet}!rsiatl!jgd| with the same fervor as you do the 1st.
riddle@hoss.unl.edu (Michael H. Riddle) (10/28/90)
In <1990Oct27.220708.29825@eff.uucp> mnemonic@eff.uucp (Mike Godwin) writes: >>How about it, Mike Godwin? Remember enough from Secured Transactions? >What I remember from secured transactions is not the right stuff--the >bar course emphasized perfection of security interests, not the >process of repossession. >I suspect that a criminal-law issue may be raised by unauthorized >entry into Revlon's computer, if in fact it was unauthorized. Hmm. Interesting point, but then taking someone's car off the street can be either theft of repossession. Does the UCC language "except for breach of the peace" authorize "peaceful" breakins? -- riddle@hoss.unl.edu | University of Nebraska riddle@crchpux.unl.edu | College of Law mike.riddle@f27.n285.z1.fidonet.org | Lincoln, Nebraska, USA
riddle@hoss.unl.edu (Michael H. Riddle) (10/28/90)
The name of the software firm is LOGISTICON, according to several news reports I checked out on the NEXIS service. Unfortunately, none of the reports contained the legal arguments! :-( -- riddle@hoss.unl.edu | University of Nebraska riddle@crchpux.unl.edu | College of Law mike.riddle@f27.n285.z1.fidonet.org | Lincoln, Nebraska, USA
mnemonic@eff.uucp (Mike Godwin) (10/29/90)
In article <1990Oct28.123732.17333@hoss.unl.edu> riddle@hoss.unl.edu (Michael H. Riddle) writes: > >Hmm. Interesting point, but then taking someone's car off the street can >be either theft of repossession. Would you say that software resident in Revlon's computer was on "the street"? > Does the UCC language "except for breach >of the peace" authorize "peaceful" breakins? Not to my knowledge. Indeed, the notion of a "peaceful break-in" is probably an oxymoron in criminal law. Recall that if I open an unlocked door it's "breaking" as far as a breaking-and-entering charge goes. --Mike -- Mike Godwin, (617) 864-0665 |"If the doors of perception were cleansed mnemonic@well.sf.ca.us | every thing would appear to man as it is, Electronic Frontier | infinite." Foundation | --Blake
ee@lever.com (Edward Elhauge) (10/29/90)
Having been involved in contracting situations where I had difficulty getting
paid for work completed by the hour, I've often wondered if the
mechanic lean laws could apply to a software situation. In mechanic lean law
a workperson who is not paid for work completed can aquire a secured interest
in the property worked on.
If it works for carpenters and auto mechanics it should work for software
engineers. Can you imagine the sheriff knocking on Revlon's doors and seizing
all software media that contained Logisticon's software?
--
-----------------------------------------------------------------------------
Edward Elhauge | {hoptoad,uunet}!\ | "Pollution is a symptom
Lever Industries | lever!ee | of man's inability to
San Francisco | | transform waste"
Voice 415-550-6789 | ee@lever.com | -- Patti Smith --faustus@tartarus.uchicago.edu (Kurt Ackermann) (10/29/90)
In <1990Oct28.123854.17457@hoss.unl.edu> riddle@hoss.unl.edu (Michael H. Riddle) writes: >The name of the software firm is LOGISTICON, according to several news >reports I checked out on the NEXIS service. >Unfortunately, none of the reports contained the legal arguments! :-( Can anyone cite a written media (or televised media) article with this story? After seeing it on Thursday morning, I couldn't find a thing about it in the New York Times, Chicago Tribune, or on NPR. Considering the potential impact of this case, I would think that the media would at least MENTION it. But I guess that they see it as just another case of breach of contract/repossession (?) It would be much appreciated if someone could post/summarize/give reference to an article that spells out the details of the circumstances surrounding this event. Let's get chapter and verse on the Net so we can talk with greater certainty-- I couldn't even remember the name of the damn company and it had only been two hours since I saw the news report...! Kurt Ackermann "Grey, dear friend, are all your theories; --Mephisto. in the golden tree of life is green!" Goethe's Faust
riddle@hoss.unl.edu (Michael H. Riddle) (10/30/90)
In <faustus.657214762@tartarus.uchicago.edu> faustus@tartarus.uchicago.edu (Kurt Ackermann) writes: >Can anyone cite a written media (or televised media) article with this >story? After seeing it on Thursday morning, I couldn't find a thing >about it in the New York Times, Chicago Tribune, or on NPR. Considering >the potential impact of this case, I would think that the media would at >least MENTION it. But I guess that they see it as just another case of >breach of contract/repossession (?) >It would be much appreciated if someone could post/summarize/give reference >to an article that spells out the details of the circumstances surrounding >this event. >Let's get chapter and verse on the Net so we can talk with greater >certainty-- I couldn't even remember the name of the damn company and >it had only been two hours since I saw the news report...! The gist of the story appears to be that Logisticon supplied software to Revlon for inventory and process control. Revlon was using the software, but the product was not doing everything Revlon felt it should. Logisticon apparently was not making progess to Revlon's satisfaction in fixing the bugs, so Revlon witheld payments. Logisticon then used dial-in access, presumably supplied for trouble- shooting and updates, to disable the software and encrypt the data. The following articles were the best I found. I presume the Chicago Tribune and the Washington Post will be readily available. I don't know about the Financial Times. Chicago Tribune October 28, 1990, Sunday, FINAL EDITION SECTION: BUSINESS; Pg. 8; ZONE: C LENGTH: 540 words HEADLINE: Software supplier 'repossesses' Revlon's computer systems BYLINE: By Ken Siegmann, San Francisco Chronicle The Washington Post October 27, 1990, Saturday, Final Edition SECTION: FINANCIAL; PAGE C1 LENGTH: 666 words HEADLINE: Revlon Suit Revives the Issue Of 'Sabotage' by Software Firms; Manipulation of Computer Programs Damages Credibility SERIES: Occasional BYLINE: Evelyn Richards, Washington Post Staff Writer Financial Times October 26, 1990, Friday SECTION: SECTION I; Back Page; Pg. 20 LENGTH: 276 words HEADLINE: Software group sued over alleged hacking BYLINE: LOUISE KEHOE, SAN FRANCISCO -- riddle@hoss.unl.edu | University of Nebraska riddle@crchpux.unl.edu | College of Law mike.riddle@f27.n285.z1.fidonet.org | Lincoln, Nebraska, USA
archer@elysium.esd.sgi.com (Doctor Benway) (10/30/90)
In <faustus.657214762@tartarus.uchicago.edu> faustus@tartarus.uchicago.edu (Kurt Ackermann) writes: *In <1990Oct28.123854.17457@hoss.unl.edu> riddle@hoss.unl.edu (Michael H. Riddle) writes: * *>The name of the software firm is LOGISTICON, according to several news *>reports I checked out on the NEXIS service. * *>Unfortunately, none of the reports contained the legal arguments! :-( * *Can anyone cite a written media (or televised media) article with this *story? After seeing it on Thursday morning, I couldn't find a thing *about it in the New York Times, Chicago Tribune, or on NPR. Considering *the potential impact of this case, I would think that the media would at *least MENTION it. But I guess that they see it as just another case of *breach of contract/repossession (?) * *It would be much appreciated if someone could post/summarize/give reference *to an article that spells out the details of the circumstances surrounding *this event. * *Let's get chapter and verse on the Net so we can talk with greater *certainty-- I couldn't even remember the name of the damn company and *it had only been two hours since I saw the news report...! * * I read the story in the San Jose Mercury News last week, in the business section (sorry, I forgot the exact day). The sequence of events was pretty straitforward. Revlon contracted software, and then withheld payment, claiming that the software did not meet specification and that they could not use it to run their bus- iness. Logisticon tried to get them to pay for a period of time, and then logged into the computer and disabled the software, causing three Revlon warehouses to shut down. Three days later they re-installed the software. The president of Logisticon said it was the only leverage that he had to get Revlon to pay. I'll try to look up an exact reference. -- When artistic pretension is combined with abject | Archer Sully poverty the results are often VERY STUPID. | -- Crosley Bendix | archer@sgi.com
archer@elysium.esd.sgi.com (Doctor Benway) (10/30/90)
In <faustus.657214762@tartarus.uchicago.edu> faustus@tartarus.uchicago.edu (Kurt Ackermann) writes: *In <1990Oct28.123854.17457@hoss.unl.edu> riddle@hoss.unl.edu (Michael H. Riddle) writes: * * *Let's get chapter and verse on the Net so we can talk with greater *certainty-- I couldn't even remember the name of the damn company and *it had only been two hours since I saw the news report...! * It was in Newsbytes on Clarinet on Oct 25. It was probably in the San Jose Mercury News on the same day. -- When artistic pretension is combined with abject | Archer Sully poverty the results are often VERY STUPID. | -- Crosley Bendix | archer@sgi.com
sean@ms.uky.edu (Sean Casey) (10/30/90)
In this case though they had authorized accounts on the Revlon machine. Wouldn't that be the same as giving someone a key to my apartment and permission to go inside? Sean -- *** Sean Casey <sean@s.ms.uky.edu> *** "They probably have a data encryption algorithm. You'll never get in."
jet@karazm.math.uh.edu (J. Eric Townsend) (10/30/90)
In article <sean.657238413@s.ms.uky.edu> sean@ms.uky.edu (Sean Casey) writes: >In this case though they had authorized accounts on the Revlon machine. >Wouldn't that be the same as giving someone a key to my apartment >and permission to go inside? The real question is, what can legally happen during a reposession? If I don't pay my Visa bill for a while, can they (legally) come into my house and take stuff? If I didn't want to let my creditor in, I would assume there's some way to get an officer of the peace to legally force entry so that repossesion could occur. (Something like having an OotP evict a tenant.) -- J. Eric Townsend Internet: jet@uh.edu Bitnet: jet@UHOU Systems Manager - University of Houston Dept. of Mathematics - (713) 749-2120 EastEnders list: eastender@karazm.math.uh.edu Skate UNIX(r)