Certainly it belies Apple’s rank of last in a list of 29 multinational technology companies in terms of responsiveness and transparency. Forty percent of the suppliers included in Apple’s report said this was the first time their facility had ever been reviewed for social responsibility compliance. Which is worth noting. Surely Apple isn’t the only consumer electronics company they’re working with. Hear that HP? Nokia?

Anyway…

Detailed in the report are the findings of 127 facilities audits, including core violations of Apple’s Supplier Code of Conduct and Apple’s responses to them, which range from mandatory facility upgrades to the termination of business with violators (The company ended its relationship with 3 suppliers on 2010 for code violations). Sadly, Apple discovered 37 core violations in 2010, versus 17 the year before.

Also addressed, the sourcing of conflict-free “conflict minerals” like tantalum and tungsten, the n-hexane incident at Wintek and, of course, the suicides at Foxconn’s Shenzhen facility. Apple appears to have made significant headway on all three fronts, establishing a tantalum and tungsten smelter audit process, forcing Wintek to end its use of n-hexane and improve its ventilation systems and working with Foxconn to develop measures to prevent further suicides.

All good to hear, though obviously when an audit of 127 facilities turns up underage labor violations at nine facilities and hazardous chemicals at 80 more, there’s quite a bit more work to be done.

Nokia, for its part, doesn’t seem much worried by the action. “[We're] confident that all of the 37 patents [we have] asserted against Apple [are valid],” a spokesperson told Bloomberg. “We are examining the filing and will take whatever actions are needed to protect our rights.”

PREVIOUSLY:

• Nokia Sues Apple
• Did Nokia Sue Apple Before Apple Could Sue Nokia?
• Nokia’s New Focus Is Mobile Services? Sure It’s Not Lawsuits Against Apple?
• Apple Countersues Nokia for Copying iPhone (Plus Disputed Patents and Full Text of Counterclaim)
• ITC Investigating Nokia Over Apple Patent Complaints and Vice Versa
• Nokia Accuses Apple of “Legal Alchemy.” Stops Short of “Chymistry” and “Heresy.”
• Apple Vs. Nokia: The Battle of Britain

The music file-sharing service, which basically called it quits in October after losing a federal court case, is turning off or shelving most of its related products. But it has found a home for at least one of them: Its LimeExchange.com services marketplace is being swallowed by Freelancer.com, which describes itself as “the world’s largest outsourcing marketplace.”

Terms of the deal haven’t been released; Freelancer.com says it will “migrate” LimeExchange’s users to its own platform.

What’s that? You had no idea the people behind LimeWire also ran a freelance marketplace? Me neither.

But now that I’m looking, I see that Lime Labs, which formally ran LimeExchange, also lists a domain registration/hosting business and an open-source Web site-building service among its assets. Anyone know what’s become of those?

Big picture: New York-based LimeWire and its affiliated companies look like they will all be wound down by the end of the month.  Not coincidentally, the following month there are supposed to be federal court hearings in which the major music companies are going to try to extract millions from LimeWire owner Mark Gorton for copyright violations.

I don’t know that shuttering all the related companies will help Gorton hang on to his money. But anything that helps him focus on his legal problems can’t be a bad idea.

Not for much longer, it seems. The company is also closing its online music store at the end of the year. And I’m told that it has essentially abandoned efforts to launch a new, legal music service that it had spent much of the past year building.

A sign on the Web retailer’s homepage tells customers that it’s no longer accepting new payments, and the company has told vendors via email that the store will shutter on Dec. 31. (You can see a copy of the note at the bottom of this post.)

LimeWire hasn’t responded to my request for comment. And it’s not clear why the company is closing up the shop, because in this case, LimeWire shouldn’t be dealing with any legal issues. LimeWire operated the store the same way that Apple’s iTunes does–it took product that music labels (not the big ones, but small independents) wanted to sell and delivered it to customers.

Meanwhile, people familiar with the company tell me that it has also stopped pursuing plans to launch a new, legal music service that had been building throughout 2010.

As recently as October, the company had been talking up the prospects of the new service, and had invited me to see a preview of it even after the court ruling that shuttered its illegal file-sharing service. But LimeWire later rescinded the invitation, and said that its lawyers had advised it not to discuss the new service.

My hunch is that LimeWire is stripping down all of its remaining assets in advance of January court proceedings. Those are going to determine how much the company owes the major music labels that successfully sued it for copyright violations.

LimeWire had already laid off at least 30 percent of its workforce following the October court ruling.

You can read all of U.S. District Court Judge Louis Stanton’s decision at the bottom of the post, where I’ve embedded the ruling. Short version: Stanton buys Google’s longstanding argument–that the Digital Millennium Copyright Act protects YouTube from Viacom’s claims. And he seems to agree with Google (GOOG) on almost every point. There’s very little in his ruling that Viacom (VIA) will be happy about.

Even though YouTube and Google executives knew the site had plenty of clips that violated copyright, “mere knowledge of prevalence of such activity in general is not enough” to support Viacom’s claims, Stanton wrote in a 35-page decision.

That’s because the DMCA, signed into law early-on in the first Web boom in 1998, grants “safe harbor” to service providers that don’t know about specific copyright violations and that fix copyright violations when they learn about them. Since YouTube relies on users to upload clips to the service and takes down clips if copyright holders complain, it’s in the clear, Stanton says.

If the ruling holds up, it’s a big blow to traditional copyright laws. Or spun another way, it’s a huge victory for technology companies using the DMCA as a defense.

Google’s statement:

Today, the court granted our motion for summary judgment in Viacom’s lawsuit with YouTube. This means that the court has decided that YouTube is protected by the safe harbor of the Digital Millennium Copyright Act (DMCA) against claims of copyright infringement. The decision follows established judicial consensus that online services like YouTube are protected when they work cooperatively with copyright holders to help them manage their rights online.

This is an important victory not just for us, but also for the billions of people around the world who use the web to communicate and share experiences with each other. We’re excited about this decision and look forward to renewing our focus on supporting the incredible variety of ideas and expression that billions of people post and watch on YouTube every day around the world.

Viacom’s statement:

We believe that this ruling by the lower court is fundamentally flawed and contrary to the language of the Digital Millennium Copyright Act, the intent of Congress, and the views of the Supreme Court as expressed in its most recent decisions. We intend to seek to have these issues before the U.S. Court of Appeals for the Second Circuit as soon as possible. After years of delay, this decision gives us the opportunity to have the Appellate Court address these critical issues on an accelerated basis. We look forward to the next stage of the process.

So what about all of those interesting and entertaining documents both sides filed in the three-year suit and released to the public earlier this year? As I argued earlier, the bulk of them weren’t really relevant at all, and Stanton spends almost no time discussing them.

One worthwhile exception: He does use one email from Viacom attorney Michael Fricklas to help bat away the network’s complaint that YouTube was the equivalent of Grokster, the file-sharing network beaten down in a 2005 Supreme Court decision.

“The difference between YouTube’s behavior and Grokster’s staggering,” Fricklas wrote in a 2006 email. And Stanton agrees.

msj_decision

The gist: The two sides continue to make the same arguments they’ve made in the past. Viacom (VIA) says Google’s (GOOG) video site intentionally violated its copyrights. And YouTube says it is protected by federal law and that Viacom didn’t care about copyright violations until business negotiations broke down.

Don’t believe me? Feel free to check it out for yourself: The two sides have helpfully arranged most of their documents here and here. It’s cheaper than Ambien.

Or you can just enjoy this representative excerpt from YouTube’s filing, in which it argues that the court shouldn’t read anything into the fact that its employees referred to Viacom as “copyright bastards” and “a-holes” during chat sessions (click to enlarge the text, in all its PG-13 glory):

Have a great weekend!

In China, the search giant is battling hackers and the government, who may be one and the same. In Europe, the company is being hauled in front of an antitrust review. And Italy? Total disaster.

Yesterday, an Italian court convicted three Google (GOOG) executives of privacy violations in a case that stems from a clip uploaded to Google Video in 2006. The executives, who include former CFO George Reyes, have been sentenced to six-month prison sentences.

And that verdict follows a December ruling whereby an Italian court found the company guilty of copyright violations on YouTube, the video site it bought in 2006. Mediaset, the broadcaster that brought the suit–and which is controlled by Prime Minister Silvio Berlusconi–is looking for more than $730 million in damages.

Google has responded to the video convictions with an outraged blog post. Note that the language is more forceful than the company used to describe its China problem. But also note that the company isn’t threatening to pull out of Italy altogether. Maybe it should.

Serious threat to the web in Italy
2/24/2010 01:57:00 AM
In late 2006, students at a school in Turin, Italy filmed and then uploaded a video to Google Video that showed them bullying an autistic schoolmate. The video was totally reprehensible and we took it down within hours of being notified by the Italian police. We also worked with the local police to help identify the person responsible for uploading it and she was subsequently sentenced to 10 months community service by a court in Turin, as were several other classmates who were also involved. In these rare but unpleasant cases, that’s where our involvement would normally end.

But in this instance, a public prosecutor in Milan decided to indict four Google employees–David Drummond, Arvind Desikan, Peter Fleischer and George Reyes (who left the company in 2008). The charges brought against them were criminal defamation and a failure to comply with the Italian privacy code. To be clear, none of the four Googlers charged had anything to do with this video. They did not appear in it, film it, upload it or review it. None of them know the people involved or were even aware of the video’s existence until after it was removed.

Nevertheless, a judge in Milan today convicted 3 of the 4 defendants–David Drummond, Peter Fleischer and George Reyes–for failure to comply with the Italian privacy code. All 4 were found not guilty of criminal defamation. In essence this ruling means that employees of hosting platforms like Google Video are criminally responsible for content that users upload. We will appeal this astonishing decision because the Google employees on trial had nothing to do with the video in question. Throughout this long process, they have displayed admirable grace and fortitude. It is outrageous that they have been subjected to a trial at all.

But we are deeply troubled by this conviction for another equally important reason. It attacks the very principles of freedom on which the Internet is built. Common sense dictates that only the person who films and uploads a video to a hosting platform could take the steps necessary to protect the privacy and obtain the consent of the people they are filming. European Union law was drafted specifically to give hosting providers a safe harbor from liability so long as they remove illegal content once they are notified of its existence. The belief, rightly in our opinion, was that a notice and take down regime of this kind would help creativity flourish and support free speech while protecting personal privacy. If that principle is swept aside and sites like Blogger, YouTube and indeed every social network and any community bulletin board, are held responsible for vetting every single piece of content that is uploaded to them–every piece of text, every photo, every file, every video–then the Web as we know it will cease to exist, and many of the economic, social, political and technological benefits it brings could disappear.

These are important points of principle, which is why we and our employees will vigorously appeal this decision.

Posted by Matt Sucherman, VP and Deputy General Counsel–Europe, Middle East and Africa

Requested after Nokia accused Apple of unfairly benefiting from its wireless technology, the investigation will seek to determine whether the Finnish cellphone giant has violated 13 Apple patents and tried to copy the iPhone to maintain its status in the industry. As with Nokia’s complaint against Apple, the stakes here are quite high: A ban on importation of the products found to contain infringing technology.

News of the ITC action, which is to be completed in 45 days, comes as Apple (AAPL) steps up its legal campaign against Nokia (NOK). Last Friday, the company lobbed another court filing at Nokia, this one accusing it of antitrust violations.

Nokia, says Apple, misled industry standard-setting groups into including its patented technologies in things like Wi-Fi and then charged excessive royalty fees to license them. Apple’s position: If Nokia holds patents on technologies built into relevant standards, it has the power to raise their price and thereby exclude competition. And that’s exactly what the company did–according to Apple, anyway.

“Having suffered losses in the marketplace, Nokia has resorted to demanding exorbitant royalties from Apple for patents that Nokia claims are essential to various compatibility standards….” Apple said in the filing. “Throughout the negotiation process, Nokia blatantly attempted to circumvent its contractual obligation to offer non-discriminatory licensing terms to Apple.”

The complaint continues: “While Nokia said it was offering Apple its ‘standard’ royalty terms, Nokia repeated[ly] refused Apple’s request to substantiate that naked representation. Nokia refused to provide any information about what other licensees were for the same standards-essential patent rights and, indeed, demanded that any licensing terms between Nokia and Apple should shrouded in secrecy. Thus, despite its obligation to offer Apple non-discriminatory license terms, Nokia effectively denied Apple that opportunity.”

Apple’s legal counsel certainly seems to be earning its retainer this year.

• Orphan works–books whose copyright holders are unknown–will be overseen by an independent trustee who will administer their licensing, not by Google.
• Books published outside the United States, United Kingdom, Canada and Australia will be excluded from the settlement.

Those are substantive alterations, but they clearly haven’t placated critics who accuse Google (GOOG) of attempting an “end-run around copyright law as we know it.”

The Open Book Alliance–a coalition whose members include the Internet Archive, Amazon (AMZN), Microsoft (MSFT) and Yahoo (YHOO)–has blasted the revision twice already, decrying it as “a sleight of hand” intended to distract people from Google’s continued efforts to establish a monopoly over digital content access and distribution.

“The proposed changes fail to address this deal’s fundamental flaws,” Open Book Alliance Co-Chair Gary Reback said in a vitriolic statement. “Despite Google’s effort to spin this deal, it does nothing to promote competition nor does it reform Google’s exclusive access and monopoly hold on this digital database of books. Their proposed ‘unclaimed works fiduciary’ will have zero authority to promote competition or expand access. It is a cynical diversion away from the parties’ continued reliance on the discredited argument that competitors can obtain access through the very means Google did–getting sued for copyright infringement and abusing the class action process. This deal remains rife with anti-trust, class action and copyright violations.”

But perhaps those restrictions were better left in place. Because on Thursday, the DOJ opened a preliminary investigation into IBM’s business practices, seeking to determine if the company has abused its monopoly position in the mainframe market. The inquiry stems from a complaint filed by the Computer and Communications Industry Association that claims IBM (IBM) has undermined sales of competing mainframe hardware products by refusing to license its mainframe operating system and certain other intellectual property.

“IBM has used its power to resurrect and create a formidable set of barriers in the mainframe market by their misuse of intellectual property,” CCIA CEO Edward J. Black, told the New York Times. “Once IBM walls are taken down by the government enforcing the law, there will be a rush of people looking to get part of this marketplace.”

Perhaps. Certainly that’s not really the case now. As the CCIA and T3 Technologies–which filed an antitrust complaint against IBM in Europe earlier this year for similar reasons–would argue, IBM has essentially left the industry with a single mainframe vendor: itself. And if that sounds like an exaggeration, consider this: A few years back, a company called Platform Solutions attempted to license IBM’s mainframe software. IBM refused and then sued Platform, accusing it of a raft of IP-related violations. Platform countersued. And then, in 2008, IBM acquired the company and promptly shut down its operations.

“For decades, IBM licensed its system software and intellectual property to other computer manufacturers,” T3 president Steven Friedman said earlier this year. “However, for no reason other than to remove all competition from the mainframe market, IBM eliminated programs to allow customers to buy its mainframe software for use on non-IBM mainframe solutions….[Now] only IBM…offers IBM- compatible mainframes and, based on IDC reports, controls over 99% of all existing IBM-compatible mainframes in use today.”

But perhaps those restrictions were better left in place. Because on Thursday, the DOJ opened a preliminary investigation into IBM’s business practices, seeking to determine if the company has abused its monopoly position in the mainframe market. The inquiry stems from a complaint filed by the Computer and Communications Industry Association that claims IBM (IBM) has undermined sales of competing mainframe hardware products by refusing to license its mainframe operating system and certain other intellectual property.

“IBM has used its power to resurrect and create a formidable set of barriers in the mainframe market by their misuse of intellectual property,” CCIA CEO Edward J. Black, told the New York Times. “Once IBM walls are taken down by the government enforcing the law, there will be a rush of people looking to get part of this marketplace.”

Perhaps. Certainly that’s not really the case now. As the CCIA and T3 Technologies–which filed an antitrust complaint against IBM in Europe earlier this year for similar reasons–would argue, IBM has essentially left the industry with a single mainframe vendor: itself. And if that sounds like an exaggeration, consider this: A few years back, a company called Platform Solutions attempted to license IBM’s mainframe software. IBM refused and then sued Platform, accusing it of a raft of IP-related violations. Platform countersued. And then, in 2008, IBM acquired the company and promptly shut down its operations.

“For decades, IBM licensed its system software and intellectual property to other computer manufacturers,” T3 president Steven Friedman said earlier this year. “However, for no reason other than to remove all competition from the mainframe market, IBM eliminated programs to allow customers to buy its mainframe software for use on non-IBM mainframe solutions….[Now] only IBM…offers IBM- compatible mainframes and, based on IDC reports, controls over 99% of all existing IBM-compatible mainframes in use today.”

An impressive number when you consider that Apple (AAPL) employs only 40 full-time reviewers and requires at least two of them to scrutinize each app–or so says Apple’s reply to the Federal Communication Commission inquiry into why Google’s (GOOG) Google Voice hasn’t yet made it into the App Store.

That said, the volume of approved apps does make you wonder about just how thoroughly they’re are being vetted. Reviewers are charged with checking apps for buggy software, content and privacy violations and anything that “degrades the core experience of the iPhone,” among other things. For a team of 40 people to review and approve 1,394 apps based on these criteria, and presumably reject a few others, in a single workday seems at least a bit miraculous–unless, of course, someone accidentally hit the “Bulk Approve” button.

You know the ones I’m talking about, I’m sure. They’ve been occurring since 2007 and go something like this: “This is the second notice that the factory warranty on your vehicle is about to expire.” Hang up and the machine calls you again later. Transfer to a “warranty specialist” and ask to be taken off the call list and you’re either hung up on or, in my case, given an 800 number to call that turns out to be a phone sex line.

In complaints filed in United States District Court in Chicago, the agency accuses telemarketer Voice Touch and warranty outfit Transcontinental Warranty of deceptive sales practices and violating telemarketing rules with their relentless prerecorded sales pitches for extended vehicle warranties. Among the companies’ numerous violations: dialing every number in a given area code, including those listed in the National Do Not Call Registry; robocalling 911 emergency centers; regularly spoofing call recipients by transmitting phony Caller ID information so that call they can’t identify the originating number; and pressuring consumers into purchasing bogus extended service contracts for their cars.

“This is one of the most aggressive telemarketing schemes the FTC has ever encountered,” chairman Jon Leibowitz said in a statement. “I’m not sure which is worse, the abusive telemarketing tactics of these companies or the way they try to deceive people once they get them on the phone.”

Right on. One question though: If this is the most aggressive telemarketing scheme the FTC has ever encountered, why did it take the agency two years and 30,000 complaints to finally jump into action?

Anyway…

The FTC has asked for temporary restraining orders to halt the illegal robocalls, an asset freeze on both defendants and a permanent injunction that would force them to disgorge their ill-gotten gains.

UPDATE: A federal judge has issued temporary restraining orders against the companies halting their “robo-dialer harassment.” He has also frozen their assets until a May 29 hearing on the FTC’s request for a preliminary injunction.

I am a media-relations nightmare. I never prep, and I generally say what I think–and sometimes I say things before I think. I don’t know how many times people in the company have heard me say something to a reporter and later told me, ‘Jesus Christ, that’s going to be in the paper!’”

–Henry Nicholas, July 2004

According to Forbes, former Broadcom Corp. chief and founder Henry Nicholas ranks 677th on the list of the world’s wealthiest individuals. But according to a federal indictment unsealed today (full document below), he’d rank quite a bit higher on a list of the world’s most debauched. Scattered among charges related to improperly backdating stock options while he led the computer and cellphone chip-maker are some heavy drug violations. According to the indictment, it seems that while Nicholas was fraudulently backdating stock options that resulted in more than $2 billion of restated expenses, he was also conspiring to distribute controlled substances.

Those he didn’t use himself, that is. From the indictment:

In or around 2001, Nicholas distributed and used controlled substances during a flight on a private plane between Orange County and Las Vegas, causing marijuana smoke and fumes to enter the cockpit and requiring the pilot flying the plane to put on an oxygen mask.”

Nicholas also apparently had a habit of spiking the drinks of associates and customers with drugs. Generally ecstasy. Hell of a way to close a sales meeting, eh?

As noted here before, it’s hard to believe that an entrepreneur and philanthropist like Nicholas would conduct himself like a roadie on Zeppelin’s debauched 1973 tour. But then no one probably thought he was serious about building that subterranean sex lair, either. Anyway, here’s the drug indictment. Click on the box in the far right-hand corner to enlarge: