Health Care in the Clouds: Not Always Fine on Cloud 9

Many of you are already familiar with the series of individual and topical cloud computing white papers that we launched in 2011. We spent the next months and years compiling these articles into a comprehensive work entitled, “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing.”

The Consumer Finance Law Quarterly Report previously published two of our articles associated with “cloud-related” legal issues: The first applicable to financial services [65 Consumer Fin. L. Q. Rep. 57 (2011)] and the second related to advertising and marketing [65 Consumer Fin. L. Q. Rep 431 (2011)].

Recently, Joe Rosenbaum and Nancy Bonifant were privileged to have an article they wrote published as the third in the Consumer Finance Law Quarterly Reporter’s cloud computing series, and you can read the article right here: “Health Care in the Cloud: Think You Are Doing Fine on Cloud Nine? Think Again. Better Get Off My Cloud” [67 Consumer Fin. L. Q. Rep 367 (2013)]. The article represents an updated version of the article originally posted right here on Legal Bytes [See Transcending the Cloud – Health Care on Cloud 9? Are You Doing Fine?].

For more information about the implications of cloud computing and technology on health care, privacy compliance, and related legal matters, feel free to contact me, Joe Rosenbaum, or Nancy Bonifant or the Rimon attorney with whom you regularly work, and we can make sure you get the guidance and help you need to navigate the clouds.

Social & Mobile & Clouds, Oh My!

Joe Rosenbaum recently authored an article that has been published in the Small Business Journal highlighting some of the key issues that have arisen for small to medium-size businesses as a result of the emergence and convergence of these rapidly evolving technological platforms. Joe’s article, “Social & Mobile & Clouds, Oh My!” appears in the March 2014 issue of the Small Business Journal, and you can read “Social & Mobile & Clouds, Oh My!” [PDF] here as well.

If you require legal guidance, support or representation on the issues highlighted in the article, or on any other matters, you can contact Joe directly at joseph.rosenbaum@rimonlaw.com; or you should get in touch with the Rimon attorney with whom you regularly work. We are happy to help.

WOMD. Now Available at Your Nearby Staples!

I read with interest, recent reports of a 3-D printed hand gun, created by Defense Distributed, being test-fired at a gun range just south of Austin, Texas. Defense Distributed, whose website bills itself as “The Home of the Wiki Weapons Project,” fired the gun in front of an observer from Forbes, and you can view the gun, named The Liberator, being test-fired in a video taken during the test and posted on YouTube. Defense Distributed also announced it would post the gun’s blueprints and construction details on the company’s own DefCAD design site. For you history buffs, the “Liberator” was also the name of a single-shot pistol designed to be distributed by dropping them from airplanes flying over France during World War II.

The gun isn’t completely plastic – the firing pin is a common metal nail that can be purchased at a hardware store and can be detected by metal detectors – and that single metal nail apparently makes it legal under U.S. law (the Undetectable Firearms Act of 1988; Pub.L. 100–649, H.R. 4445, 102 Stat. 3816). The 3-D printer used to make the rest of the plastic components is a Dimension SST 3D printer made by Stratasys, which apparently now has a U.S. federal license to manufacture firearms.

Continue reading “WOMD. Now Available at Your Nearby Staples!”

New York E-Retail Ruling May Tax the Supreme Court

This post was written by Kelley C. Miller and Daniel M. Dixon.

On March 21, we posted Clouds Continue To Rain State Tax On Retailers, the most recent in a series of blog posts related to the U.S. state tax implications of cloud computing, e-Commerce and retailing. To keep the thread going, this past Thursday (March 28), the New York Court of Appeals, the highest state court thus far to consider the issue, issued a much-anticipated ruling in Overstock.com v. New York Department of Taxation and Finance (combining two similar cases brought by e-retailers Overstock.com and Amazon.com. At issue is the New York statute that requires the collection of sales or use tax from an e-retailer (a remote vendor) with no physical presence in the state, if, as part of its business model, it pays in-state residents to assist in business solicitation; and the question being litigated is whether that statute violates the Due Process Clause or Commerce Clause of the U.S. Constitution. The Trial Court—and now the Court of Appeals—have upheld the law.

Significant to the Court of Appeals’ decision is its deference to the bright-line requirement of physical presence necessary for a state to require sales or use tax collection. This standard was set forth by the United States Supreme Court in Quill v. North Dakota (504 U.S. 298; 1992). Although the Court of Appeals acknowledged that Quill is still applicable even though the “world has changed dramatically in the last two decades,” it nonetheless noted that changing the physical-presence requirement in light of the way e-retailers now conduct their business, “would be something for the United States Supreme Court to consider.” A key issue in the case was whether the in-state residents hired or engaged by Overstock and Amazon, and who were involved in soliciting business – they are often referred to as “affiliates” – were actively soliciting customers in the state or whether their actions were more akin to that of an advertiser seeking to influence buying patterns – conduct that might be seen as more passive and, accordingly, would not meet Quill’s physical presence standard.

Despite hopes that the Court of Appeals might address this issue in its decision, the majority deferred discussion of this important distinction in lieu of a more focused analysis of whether the New York statute was unconstitutional on its face. The court held that a discussion of the affiliates’ activities was not warranted as neither Overstock.com nor Amazon.com could prove there were no circumstances under which the statute could be constitutionally applied: “The bottom line is that if a vendor is paying New York residents to actively solicit business in this state, there is no reason why that vendor should not shoulder the appropriate tax burden.”

The dissenting opinion, however, does address the possibility that there could be significant distinctions between those who act as sales agents for a company and those who place advertisements for a company on websites. The dissent noted that mere advertising by a remote seller, through use of an in-state affiliate that might place advertisements on websites, does not meet the Quill test for physical presence. Placing links on websites from within the state to e retailers are advertisements and not solicitations.

Reacting to the decision, Overstock.com indicated that it may ask the United States Supreme Court to review the issue. In a press release issued yesterday by Overstock.com, Acting Chief Executive Officer Jonathan Johnson noted, “Given that courts in other states have upheld U.S. Supreme Court precedent, and struck down similar laws, the matter appears ripe for resolution by the U.S. Supreme Court.” To ask the Supreme Court to review the ruling in the case, a petition for writ of certiorari would be due on or before June 26.

The Rimon State Tax Team will be closely following developments in this case, including not only the possibility of an appeal to the United States Supreme Court, but also the status of The Main Street Fairness Act of 2013 – U.S. federal legislation currently pending in the House of Representatives (and recently given symbolic approval in the Senate) that would allow states to impose sales and use tax requirements on e-retailers (presumably engaged in inter-state commerce) even if the e-retailer does not have a physical presence in a state.

For more information regarding these developments and to stay on top of the legal wrangling in state taxation related to e-Commerce, contact Kelley C. Miller or Daniel M. Dixon directly. Of course, you can always find out more about our Cloud Computing initiative or get the assistance you need by contacting me, Joe Rosenbaum, or the Rimon attorney with whom you regularly work.

Clouds Continue To Rain State Tax On Retailers

As you may remember, this past January, Rimon presented a teleseminar entitled: State Tax Update: States Can Be Taxing in a Digital World, led by Dan Dixon and Kelley Miller, who are leading the charge in keeping clients informed as the worlds of cloud computing and state tax converge – or perhaps we should say “collide.”

Increasingly, states are scrutinizing the operations of cloud providers and their cloud-related business activities as they seek ways to force online retailers to collect sales tax from customers. Dan and Kelley have become recognized leaders in this area, closely monitoring all 50 state tax departments within the United States, and the dynamically evolving landscape. Dan and Kelley continue to assist clients, speak and write about new state tax developments, and have been quoted in a variety of media sources, including BusinessWeek, The Wall Street Journal, Forbes, NPR, NetworkWorld, E-Commerce Times and The Hartford Courant.

Dan and Kelley have prepared a recent Rimon Client Alert, entitled “The Wall Street Journal, Forbes, BusinessWeek and Fortune 500 Companies All Agree: No One Knows Taxing the Cloud Like Rimon State Tax!” You can read the full alert online “Cloud Computing is Taxing (Web)”, or you can download a PDF version “Cloud Computing is Taxing (PDF).”  As you may also recall, in 2010 Rimon launched a cloud computing initiative, commissioning a series of individual white papers, now compiled into a comprehensive work entitled, “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing.”

For more information regarding this alert or to stay on top of the developments in state taxation related to cloud services, products, and platforms, from Rimon lawyers who really know this area, contact Dan Dixon or Kelley C. Miller directly. Of course, you can always find out more about our Cloud Computing initiative or get the assistance you need by contacting me, Joe Rosenbaum, or the Rimon attorney with whom you regularly work.

State Tax Update: States Can Be Taxing in a Digital World

Please join Rimon lawyers Dan Dixon and Kelley Miller Thursday, January 31 at Noon EST (9 a.m. PST; 11 a.m. CST) for "Clouds, Codes, and Crunching Numbers: An Update on Current Multi-State Tax Developments in the Taxation of Electronic Goods and Services." Participants will hear about the latest state developments and trends, including affiliate nexus, “Amazon” legislation, states’ tax treatment of various digital products, software, cloud computing, web-based & web-hosting services, information services, data processing, and sourcing rules for digital goods and services transactions. Don’t miss this timely teleseminar!

Registration link: Click here to register for this seminar.

Annual Registrar Summit – Take the Fifth (Amendment or Bourbon – What’s In A Name?)

Just last Thursday, I had the joy of attending and presenting at the Fifth Annual Registrar Summit (2012) sponsored by GoDaddy.com. A great group of people gathered to discuss the current state of domain name registration. Kicked off by a terrific “how to properly hold a meeting of competitors without running afoul of anti-trust and competition laws” presentation by Chris Compton, the topics ranged from what ICANN is up to these days, to discussions of authentication, security, phishing, malware and what the domain name registration community is trying to do about it.

As I always attempt to do, when permitted, I post a PDF version of my presentation for all to read, and, if you choose, to download a personal copy in PDF form. So, without further ado – feel free to browse through “What’s in a Domain Name? Registration by Any Other Name Would Still Create Legal Issues (subtitled “Clouds, Mobile & Internet Domains – What Me Worry?” [PDF] (The embedded videos have file sizes that are too large to include – so next time show up in the audience and you’ll see them.)

If you want to know more about anything covered in the presentation, or if you need counsel or help navigating the legal issues, feel free to call me, Joseph I. (“Joe”) Rosenbaum, or any of the Rimon lawyers with whom you regularly work.

Taxing Storm Clouds Gather Over Utah

In June 2010, we announced the launch of an initiative focusing on Cloud Computing (‘Transcending the Cloud’ – Rimon Announces White Paper Series & Legal Initiative on Cloud Computing), showcased with a series of individual and topical white papers, in time being compiled into a comprehensive work entitled, “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing.” One of the first in our series was a paper on the state tax implications of cloud computing, entitled: “Pennies From Heaven”

Just as clouds have different shapes, sizes and shades of gray, different states are approaching taxation of cloud transactions differently. Well now, our State Tax practice reports that taxing storm clouds are gathering over Utah. In a marked about-face from the state’s previously issued guidance, the Utah Sales Tax Commission has ruled that web services that charge a fee constitute sale of a service, subject to sales tax. The implication being that mere access of or to an application is enough to subject the provider to a tax liability.

Notable for cloud computing providers, even though the product at issue was access to remotely hosted software that allowed users to conduct webinars "in the cloud," allowing customers to download a free device application for access to that service had the state seeing "software" (sales of which are subject to sales tax in Utah). With at least one state looking at clouds from the application side now, it will be interesting to see if other states quickly follow.

For more information about the Utah ruling, or to stay on top of the developments in the taxation cloud products and platforms, visit www.taxingtech.com. To get legal assistance and guidance from someone who really knows that state of state taxation of cloud computing, contact Kelley C. Miller directly. Of course, you can always find out more about our Cloud Computing initiative or get the assistance you need by contacting me, Joseph I. ("Joe") Rosenbaum, or the Rimon attorney with whom you regularly work.
 

BNA Highlights Health IT Issues Raised by Rimon Attorneys

The August 29, 2011 issue of BNA’s Health IT Law & Industry Report (Vol. 3, No. 36), describes some of the major legal and contractual issues raised when health care industry companies and professionals are considering moving to a cloud computing environment. Joseph I. (“Joe”) Rosenbaum was interviewed by the author, Kendra Casey Plank, for her article, entitled, “Attorney: Cloud Services Offer Affordable Solutions but Raise Privacy, Security Risks.” The article not only quotes Rosenbaum extensively, but also refers to Rimon’s White Paper series “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing,” which began in June 2010 (see "Transcending the Cloud" – Rimon Announces White Paper Series & Legal Initiative on Cloud Computing). The series is updated regularly with individual articles on topics ranging from government contracting and state tax, to the most recent White Paper entitled, “Health Care in the Cloud – Think You Are Doing Fine on Cloud Nine? Hey, You! Think Again. Better Get Off of My Cloud,” which Rosenbaum and Rimon Associate Vicky G. Gormanly wrote and which was posted on the Legal Bytes blog August 5, 2001 (Transcending the Cloud – Health Care on Cloud 9? Are You Doing Fine?). What’s the state of your health care compliance? Are you doing fine?

Read the White Paper and, if you have any questions or need help, contact Joe Rosenbaum or Vicky Gormanly, or the Rimon attorney with whom you regularly work.

Transcending the Cloud – Health Care on Cloud 9? Are You Doing Fine?

If you are a music aficionado, you will remember that years ago, The Temptations sang “I’m Doing Fine on Cloud Nine.”

 

https://youtube.com/watch?v=6aiYCuOzmcs

 

If you are a health care provider paying attention to the buzz about cloud computing, you may be concerned about migrating your technology, your data and your applications to a cloud environment.  Or, let’s say you are just confused about the implications. You are not alone.

That’s precisely why our Cloud Computing initiative exists. To provide you with a guidance system – navigational tools to allow you to see sunshine, even on a cloudy day. So, as part of our ongoing commitment to keeping abreast of legal issues, concerns and considerations in the legal world of cloud computing, here, from Vicky G. Gormanly and Joseph I. Rosenbaum, is the next chapter in Rimon’s on-going series, “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing,” entitled “Health Care in the Cloud – Think You Are Doing Fine on Cloud Nine? Hey, You! Think Again. Better Get Off of My Cloud.” This white paper examines the considerations and concerns that arise for the health care industry and the industry’s associated suppliers, vendors and providers in the wake of complex and evolving regulation and scrutiny – most notably, in the privacy and data protection of medical information – of electronic health records.

As we do each time, we have also updated the entire work, so that in addition to the single ‘Health Care in the Cloud’ white paper, you can access and download a PDF of the entire “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing” compendium, up to date and including all the previous chapters in one document.  After reading the article, instead of doing fine, you just may want to take the advice of The Rolling Stones and “Get Off of My Cloud” until you consult your legal advisors.

 

 

Of course, feel free to contact Vicky Gormanly or Joe Rosenbaum directly if you have any questions or require legal counsel or assistance related to this white paper. Make sure you subscribe via email or get the Legal Bytes RSS feed so you are always in touch with our latest information. Of course, if you ever have questions, you can always contact any Rimon attorney with whom you regularly work.