At first blush, it appears that terrestrial rules do apply to the virtual world, no matter what new media marketing gurus say. At the most basic level, the FDA said in its letter that Novartis ran afoul of agency rules:

The shared content is misleading because it makes representations about the efficacy of Tasigna but fails to communicate any risk information associated with the use of this drug. In addition, the shared content inadequately communicates Tasigna’s FDA-approved indication and implies superiority over other products.

At a higher level, the FDA said that the widget needed to be approved, though that raises several questions. While Novartis might resolve issues regarding risks and claims with proper disclaimer language embedded in the widget, it would be more difficult, given the unstructured nature of social media, to control comments that run off its pages. Again, the FDA letter:

FDA regulations require companies to submit specimens of any labeling or advertising devised for promotion of a drug product approved under Subpart H regulations at least 30 days prior to the intended time of initial dissemination per 21 CFR 314.550. Moreover, FDA regulations require companies to submit specimens of any labeling or advertising devised for promotion of the drug product at the time of initial dissemination of the labeling and at the time of initial publication of the advertisement for a prescription drug product.

At the highest level, how could Novartis submit in its application user comments — not yet written — that might be construed as testimonials? The drug maker could control comments on its Facebook page for Tasigna, but how would the company remove violations that appear on users’ pages as a result of a widget? And what can Novartis do about the community page for Tasigna, whose creator is unknown?

The FDA is struggling with the same questions and will likely continue to do so as long as innovations in communications outpace efforts to control speech about products. For now, the only answer may be to hire a lawyer who understands how old-world rules and new-world anarchy can be made to co-exist.

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The odds are pretty good that if you’re a big consumer of mobile apps, the private information on your phone has been collected and sent somewhere without your knowledge.

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That’s a scary thought for consumers and a tantalizing one for attorneys in the small but growing arena of apps security. San Francisco-based Lookout says in its Apps Genome project report that 1 in 3 free iPhone apps and 3 in 10 free apps on Android access the location of the phone user. The report also says that 14% of iPhone apps extract personal information, as do 8% of Android apps.

Permission may be written into the user agreement, but is it prominent enough? And what assurances do apps makers give that the information will be both protected from hackers and not shared without the user’s permission?

We already have read horror stories about how corporations such as Monster, Second Life and Hell’s Pizza have had their customer databases hacked. While we may feel better that Apple vets its apps, Android apps come from an unrestricted market.

An iPhone has been breached, and so it’s a matter of time before snoopers find their way into the databases of legitimate apps makers and operators. The people who gave permission — and especially the people who did not — may have cause for action. How large could damages be? How well insured or solvent are some apps makers whose software contains flaws? And is there any third-party liability from companies that sell tools for building faulty apps?

Small, inconsequential breaches will likely not produce large damage claims, but could set import precedents for manufacturers, software developers, systems managers and data warehousers. Watch for the full report from Lookout and keep an eye on the dockets.

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We are definitely seeing an increase in criminal activity.

The question is arising in articles such as the ominously headlined article, “Dark Side Arises for Phone Apps”, in the Wall Street Journal on June 4. While Apple and Blackberry vet their apps, Google acknowledges that it checks for problems only when notified. An assistant director of the FBI’s cyber investigations division told the Journal, “We are definitely seeing an increase in criminal activity.”

Who is responsible for damages from a malicious app that steals private information? Who is liable when software turns a mobile phone into a spamming machine or distributor of malware?

The technology is so new that there are few cases and even fewer precedents. If an online store for apps vets them before putting them on the virtual shelf, is there an implied liability for not taking proper care? What about Google, which operates a bazaar for apps?

Roel Schouwenberg, a senior malware researcher at Kaspersky Lab Americas, says that marketers and others could be blamed for those problem. In an interview with MobileMarketingWatch, he said he expects Google Wave, iPhone and Android could sustain heavy cyber-attacks throughout 2010. The victims, whether they be individuals or businesses, will look for legal help in recovering from losses.

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The level of industry and government interest demonstrates how far mobile phone apps have made their way into the consumer market. Companies and software developers aren’t arguing over an unproven technology; mobile apps have generated rich rewards and now the battle is over who gets the money.

U.S. anti-trust regulators are looking into whether Apple is stifling competition by banning Flash from its mobile devices. The Associated Press reported on May 4 that two federal agencies are deciding which of them should lead the investigation.

Beyond the corporate rhetoric, there are implications for Apple. The company could be forced to open up its mobile OS to Flash and other developers. Federal agencies could also look at Apple’s iAd practices and take action there as well. Just as important, federal scrutiny could bolster the fortunes of Flash-friendly phone types such as Google, HTC and the like.

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The conference will provide knowledge and technical training so that law enforcement officers can enter the social media world with confidence.  The meeting is significant in that that it shows how prevalent social media has become.  Speakers include members of the Boca Raton, Fla., Toronto and Dutch police forces, plus consultants and writers.

Among the session topics:

• Adapting to the New Media Era
• Use of Social Media in Proactive Investigations
• Using the Internet and Social Media to Prevent Violence
• The Other Side of the Coin: Understanding Social Media Attacks and How to Respond to Them
• UK Policing 2.0. – The Citizen and Digital Engagement

Law enforcement officials are not the only members of the courts system to study social media. At the end of February 2010, the law firm of Arnstein & Lehr held an online session on the proper way to use social media.  It’s becoming a tool both in and out of work and is so now popular that more and more employers are conducting training on it and professionals are holding conferences like SMILE.

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Several suits relate to new touch-screen abilities we have come to know and love with the newest generation of smart phones.  To get a better look at the confusing web of lawsuits, take a look at the New York Times graphic.

It is unfortunate to see this mess, as intellectual property is supposed to foster enhancements in our society. But now we are seeing companies trying to prevent enhancements by patenting work so no one else may pursue it.  Even worse, some companies have only profit in mind and thus seek to reap financial rewards from the lawsuits rather than from applying the patents to products or services.

As the New York Times reports, Apple recently sued HTC, potentially affecting current and future HTC Android phone owners. It seems unlikely that a court would issue an injunction against HTC or Google in part because of secondary effects such as rendering millions of cell phones useless.

But that will not stop Apple, which has sued not only in U.S. District Court in Delaware, but also with the U.S. International Trade Commission. Apple wants the commission to prohibit further imports of HTC phones that Apple claims infringe on its patents. Apple may be targeting HTC before or perhaps even instead of Google because is HTC is a smaller, more vulnerable company that cannot afford protracted litigation. HTC could be easier to take down first or, at least, settle with Apple.

With so many pending cases, the future of patents in the mobile technology and cell phone industry is murky. We can hope that suits will be settled and the companies will go back to producing technology. That is how the patents should be used: to inspire innovative technology, not limit it.

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The New York Times reports that Facebook plans to unveil updates at next month’s F8, the Facebook developer conference.

When Facebook updated its privacy policy in November 2009, it included statements regarding adding locations to posts and its treatment of the service.  This exemplifies a new trend in social networking, the desire to use location awareness via GPS, which is also being applied by Twitter and Google Buzz.

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The previous week, Apple filed a lawsuit against HTC, claiming the Taiwan-based phone maker infringed on 20 patents related to the iPhone.

The lawsuit was filed concurrently with the U.S. International Trade Commission and in U.S. District Court in  Delaware.  For the ITC claim and the complaint in the Delaware action, click here.

Ostensibly, the fight is between proprietary software and services (Apple) and open systems (Google).   But the Times describes the battle as intensely personal, with CEOs Steve Jobs and Eric Schmidt engaged in nothing less than World War III.  Who will win?

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However, it seems that Apple was acting more in its interest than that of the public. Apple is highly protective of all its properties, especially its Apps Store. And that could pose problems for the company.

According to one news source, Apple’s offical reason for banning these apps is because they were deemed “sexually inappropriate.”  Some seemed to deserve the “inappropriate” donning while others were simply shooting for a cheap laugh.

By rejecting or removing this many apps at once, Apple received a lot of criticism from iPhone users, apps developers and the media.  Apple promptly responded to the public outcry by posting new guidelines to submitting apps, which can be viewed at MobileCrunch.

The new rules are controversial and hypocritical, even for Apple.  What’s more concerning, however, is the thinking behind this list and the rejection or removal of these apps: censorship. Apple seems to be increasing its censorship in regard to its apps.

The harder that Apple clamps down, the more likely it is that the company could be challenged. As Apple censors more material, its users and developers alike will find that their First Amendment rights are being infringed upon.  And if there’s one thing Americans don’t like, it’s having their First Amendment rights stripped from them.  Thus, if Apple continues its path down this slippery slope, it will likely find itself steeped in Constitutionally-based lawsuits.  Also, the more Apple alienates its users and developers, the more likely it is that they will simply leave Apple for another, less restricting alternative.

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Mediapost reports that WAC’s goal is to unite the apps market. A wholesale platform would create a single point of entry for developers, which is exactly what a company like Apple would contest. Apple did not attend the Mobile World Congress’ Conference last month.  The aim would be for smaller and larger developers to become essentially one large, united community for the mobile operating systems, carriers and others.

Creating the alliance would require a set of common open standards that would allow developers to create apps for different platforms.  Doing so would likely utilize standards that some mobile carriers have already started to adopt, such as JIL and Bondi. Those would eventually merge into one common standard.

Although the goal is to create a platform, the alliance also appears to be challenging Apple and its App Store.  Even before the alliance, major U.S. carriers such as AT&T and Verizon, as well as large tech companies such as Google and Microsoft, launched their own app stores.  Apple still holds a large advantage, which seems to be the ultimate driving force behind teaming up: to close the gap with Apple by luring developers away with  the opportunity to reach many more customers through a common, global platform.

The alliance’s goal is easier said than done.  Putting aside the difficult task of creating and integrating a common app platform and standard for different carriers, there is still the equally difficult task of developing mobile content, which only Apple has successfully done up to this point.

Thus, the market is there, but will these companies be able to put everything together to compete with Apple?  Apple could decide that the new standard violates its apps development standards. Therefore, another question must be asked: could the alliance lead to a marketing or legal showdown with Apple?

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