Episode 199

The iPhone 4 is sold out around the country, with Apple estimating a three week delay for new orders but some telcos expecting new stock to arrive “over the coming days”.

Apple and its component suppliers, particularly the manufacturer of the iPhone 4’s touch screen, are struggling to keep up with worldwide demand for the device.

On Friday, the handset launched in 17 more countries including Australia, Canada, Hong Kong, Italy, Singapore, Spain and Sweden. A source said Australian telcos only received about 12-13,000 units in the first batch.

The iPhone 4 with free “bumper” case. Photo: Bloomberg

Enterprising Australians are taking advantage of the stock shortage and listing their iPhone 4 models on eBay, some at more than a 50 per cent markup. Those looking to pick one up on the auction site can expect to pay at least $1300.

Bought outright from the Apple store, the 16GB and 32GB models cost $859 and $999, respectively. On its website, Apple lists a three week delay for new orders and its stores around the country have run out of stock.

But some telcos, including Optus, believe they will be receiving new shipments of stock this week. The telco, which ran out of iPhone 4 models on the weekend, said it would be providing regular stock updates to customers through its website.

“We expect to receive shipments of stock over the coming days and an outlook on further supplies from Apple shortly,” an Optus spokesman said.

Thousands of people around the country lined up outside telco stores for hours on Thursday for the midnight launch of the iPhone 4. In Sydney, people at the front of the queue had been waiting for around 24 hours just to be among the first to own the device.

While the infamous “death grip” reception problems caused much controversy in the US, forcing Apple chief executive Steve Jobs to apologise and offer customers free “bumper” cases to fix the issue, it doesn’t seem to be as much of a problem in Australia.

The US issues appear to stem from the poor quality of the AT&T mobile network. Australian mobile networks are far more robust but Telstra, which has conducted its own tests, still advises customers to use the bumper for optimal coverage and network performance.

Users on the popular Australian Apple community website MacTalk say when performing the “death grip” on the device the phone will drop several bars of reception but calls generally do not drop out, in contrast to the US experience. Tests by this website reveal a similar experience.

A few users who are in very weak coverage areas, however, have said they have experienced dropped calls.

Apple has added a page to its Australian website advertising the iPhone 4 free case program. Those who buy the device before September 30 can get a free bumper by downloading the “iPhone 4 Case Program” app from the App Store.

Research In Motion (RIM), maker of the BlackBerry smartphone, plans to introduce a tablet computer in November to compete with Apple’s iPad, according to two people familiar with the company’s plans.

The device will have roughly the same dimensions as the iPad, which has a 9.7-inch diagonal screen, said the two people who wouldn’t be identified because the plans haven’t been made public. The device will include Wi-Fi and Bluetooth wireless technology that will allow people to connect to the internet through their BlackBerry smartphones, the two people said.

RIM is racing to come out with a product to rival the iPad in the fast-growing market for devices that bridge the gap between smartphones and notebook computers. Apple, based in Cupertino, California, last month said it sold 3 million iPad tablet computers in 80 days after they debuted in the US.

“They can’t wait for a second generation of devices from Apple or they’ll fall too far behind,” said Ashok Kumar, an analyst with Rodman & Renshaw in New York.

Marisa Conway, a spokeswoman for RIM, declined to comment, citing company policy not to comment on rumour or speculation.

Blackpad pricing

RIM plans to call the tablet Blackpad, according to one of the people familiar with the company’s plans. RIM, based in Waterloo, Ontario, acquired the internet rights to blackpad.com this month, according to the Whois database of domain names.

Pricing for the device will be in line with the iPad, which starts at $US499 , the person said. RIM is focused on reaping additional profits from the tablet effort, rather than competing on price to sell a large number of devices, the person said.

RIM is stepping up its competition with Apple on multiple fronts. The company is hosting an event in New York early this week at which it will debut its BlackBerry 9800 slider phone, according to one person familiar with its plans. The device will feature a full touchscreen like Apple’s iPhone and a slide out Qwerty keyboard to allow for easy email typing, the person said.

RIM plans to use the phone to regain the market share it has lost recently to its US. rival. RIM’s share of the smartphone market fell to 19.4 per cent of global shipments in the first quarter from 20.9 per cent a year earlier, according to researcher IDC, based in Framingham, Massachusetts. Apple claimed 16.1 per cent of the smartphone market, up from 10.9 per cent a year earlier.

Uphill battle?

In the tablet market, RIM will have to demonstrate how its device can stand out against products including the iPad, which has attracted buyers because of its integration with Apple’s iTunes service and many software applications, or apps. More than 225,000 apps are available for Apple devices, the company said in June. RIM said in April it had more than 6,000 apps.

“With the success of the iPad, RIM faces an uphill battle,” said William Power, an analyst at Robert W. Baird & Co., who has a “neutral” rating on the stock. “RIM really has yet to demonstrate that it can roll out touchscreen technology to match the leaders in the space, most noticeably Apple.”

RIM’s tablet will capitalise on the BlackBerry’s email capabilities and the phone’s popularity with corporate users, one person said. The tablet will be closely integrated with the smartphone’s email system and will have similar security for messaging, the person said.

Cameras for video

Wi-Fi would allow the device to connect to the internet anywhere the wireless technology is available, including a home, office or coffee shop. When not near such Wi-Fi “hotspots”, people could connect wirelessly to their mobile phone with Bluetooth and then to the internet. The device will not be able to connect directly to the mobile network the way some iPads can, the two people said.

The RIM tablet will also have front- and back-facing cameras for videoconferencing, Rodman & Renshaw’s Kumar said, citing sources at suppliers in Asia.

“I don’t think it’s a zero-sum game,” he said, saying that innovation by Apple, RIM and other competitors will increase the size of the tablet market.

Hewlett-Packard, which bought smartphone maker Palm this month, said it plans to produce a tablet device that runs on Microsoft’s Windows operating system. Korea’s LG Electronics said this month it plans to introduce a tablet computer in the fourth quarter that runs on Google’s Android software. Microsoft chief executive officer Steve Ballmer said recently the software company plans to increase its focus on tablets.

Australian security experts, consumer advocates and privacy campaigners have sounded the alarm over the hundreds of thousands of free smartphone applications that spy on their users.

Lookout, a smartphone security firm based in San Francisco, scanned nearly 300,000 free applications for Apple’s iPhone and phones built around Google’s Android software. It found that many of them secretly pull sensitive data off users’ phones and ship them off to third parties without notification.

That’s a major concern that has been bubbling up in privacy and security circles.

The data can include full details about users’ contacts, their pictures, text messages and internet and search histories. The third parties can include advertisers and companies that analyse data on users.

The information is used by companies to target ads and learn more about their users. The danger, though, is that the data can become vulnerable to hacking and used in identity theft if the third party isn’t careful about securing the information.

Lookout found that nearly a quarter of the iPhone apps and almost half the Android apps contained software code that contained those capabilities.

The code had been written by the third parties and inserted into the applications by the developers, usually for a specific purpose, such as allowing the applications to run ads. But the code winds up forcing the application to collect more data on users than even the developers may realise, Lookout executives said.

“We found that, not only users, but developers as well, don’t know what’s happening in their apps, even in their own apps, which is fascinating,” said John Hering, chief executive of Lookout.

Part of the problem is that smartphones don’t alert users to all the different types of data the applications running on them are collecting. iPhones only alert users when applications want to use their locations.

And, while Android phones offer robust warnings when applications are first installed, many people breeze through the warnings for the gratification of using the apps quickly.

Australian online users’ lobby group Electronic Frontiers Australia spokesman Colin Jacobs said the issue of applications spying on their users “was something that everybody needs to be aware of”.

Jacobs said that many did not think of their phone as a computer.

“Mobiles contain as much personal information as people’s everyday computers do,” he said.

“Ironically, Apple’s model of a very locked down app store which has caused a lot of controversy may provide more protection to users because each application is so carefully reviewed, but it has its downsides as well.”

Intelligent Business Research Services analyst Joe Sweeney said that many users had installed firewalls on their PCs, but weren’t doing so on their mobiles.

In many cases this is because they can’t. Apple, for example, doesn’t offer a firewall product on its iPhone.

“If the numbers in this report are correct, then obviously this is an issue,” Sweeney said.

“We may need to see firewall-type software on phones.”

However, he said that education of users had to come first.

“There are other ways of addressing this issue that doesn’t require a firewall.”

Sweeney said network providers, such as Telstra and Optus, could help out. Apple could as well, he said.

Choice spokesman Christopher Zinn questioned whether some of the apps using the code broke Australian privacy laws.

“One would ask whether it is a possible breach of some of our privacy laws,” Zinn said.

He said that, although Apple and some of the apps might stipulate in their contracts that they collect data and send it to third parties, “How many of us actually read the contracts and the small print that come with them?

“We know that people don’t read them. You just press OK,” he said.

“We know that, especially with Apple contracts – they’re so long – nobody reads them; you probably need a law degree to understand them.”

Zinn said that if something as significant as some of the data that was revealed in the report was being sent to a third party, it “shouldn’t be in small print”.

It should be something that a user has to consent to and be in “big print”, Zinn said.

Apple and Google did not respond to requests from the Associated Press for comment on Lookout’s research.

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http://www.theage.com.au/digital-life/mobiles/adult-industry-sees-pocket-porn-market-in-iphone-4-20100730-10ybi.html

It’s a maxim of technology: Invent the newest gadget and the porn industry will find a way to cash in.

So when Apple launched the iPhone 4 and its FaceTime videoconference feature, it didn’t take long for adult-entertainment companies to develop video-sex chat services and start hiring workers through Craigslist.

With more than three million of the phones already sold, the adult industry stands to make big money on this new way to reach out and touch someone – even if it puts Apple, which has always taken pains to keep its iPhone apps squeaky clean, in an awkward spot.

In at least five US cities, Craigslist ads seek models specifically for video sex chat on FaceTime. Many of the ads even offer to throw in a free iPhone 4 for the new employees.

FaceTime lets people call another iPhone 4 user and have live video conversations over a Wi-Fi connection through the phone’s camera and screen. In one TV ad, a soldier uses it to get a look at his faraway wife’s ultrasound pictures.

The adult industry wants its customers to share moments of an entirely different kind with its stars. And while the technology may be new, the idea is not. Porn providers have always been early adopters.

In the 1970s, the demand for explicit videos at home helped VCRs become widespread, and the industry was the first to embrace DVDs, too. Internet porn peddlers were some of the first to make wide use of streaming video and online credit card payments.

“The first time someone created a camera there was someone who said, ‘Wouldn’t it be good for someone to take off their clothes in front of this camera?'” said Michael Gartenberg, vice-president at Interpret LLC, a media research company.

And for years, cameras mounted on computers have helped connect people for racy online video sessions. But the portability and privacy of a mobile phone makes FaceTime a new frontier for the industry.

“A phone is such an intimate thing, you usually don’t lend it out or have someone else use it,” said Quentin Boyer, a spokesman for Pink Visual, an adult production company.

Boyer said his company began planning for iPhone 4 video services almost as soon as the device hit stores. They should be ready in a matter of weeks. Boyer said the company will offer FaceTime sessions with some of the same women who appear in its videos.

“It has a very personal feel – your mobile phone to hers,” he said.

Online exhibitionism is only growing. Take Chatroulette, which randomly connects strangers for video chats. While the service isn’t explicitly sexual, it’s common for users to stumble upon people looking for more than just conversation.

So far, most online video sex chat services have let the customer see the performer, but not the other way around. FaceTime may change that.

“We are seeing more and more that customers want to be watched as much as they want to watch,” said Dan Hogue, owner of an adult chat company called CamWorld, which is planning FaceTime services.

The rise of FaceTime porn puts Apple in an awkward position. Its competitors have products that allow video chat, too – HTC’s Evo 4G phone, for one. But Apple has made a big deal about keeping applications sold in its iTunes store clean.

Apple has rejected book apps for featuring sexual content and political satires for their potential to offend. While some rejected apps have been approved after revisions, Apple has kept one strict rule: No porn.

FaceTime isn’t even an outside developer’s app. It’s a main feature of the phone.

An email attributed to CEO Steve Jobs that was posted on technology blogs in April says it is Apple’s “moral responsibility” to keep pornography off the iPhone. Apple would not confirm that Jobs wrote it.

But just as Apple can’t control who iPhone users call, the company will have a hard time dictating how FaceTime is used. Internet experts say customers will understand that Apple cannot control what goes on in private video chats.

“Apple can’t be seen as responsible any more than makers of routers or hardware are responsible for the content you are looking at,” said Jonathan Zittrain, a co-founder of the Berkman Center for Internet & Society at Harvard University.

Still, advocacy groups worry that FaceTime could connect children to pornography or predators. Parents can put computers in public areas of the home to supervise Internet usage, but mobile phones go anywhere.

“Unfortunately, both children and sexual predators are often ahead of parents when comes to technology,” says Donna Rice Hughes, president of Enough Is Enough, a child safety group.

Apple, asked to comment on the emerging adult services, noted that people can choose whom they chat with, just like regular calls, and parents can turn off the FaceTime feature. Hughes said it would be better if parents could create a “safe list” of people their children could call.

For the adult-entertainment industry, FaceTime could be more than just another medium. It could actually change the business. For independent sex-chat workers, for instance, it could mean handing over less of their earnings to computer-based services.

But FaceTime presents its own challenges. It requires that both parties in a chat have each other’s phone numbers, which could expose video-chat workers to unwanted calls from their clients.

Another obstacle: The iPhone 4 camera was designed specifically for face-to-face chatting.

“You can have the phone on your face, or other body parts, but not both at the same time,” said Teagan Presley, who acts in adult films and performs in video chats. “Most customers want the full package, and it’s going to be difficult holding a phone.”

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Mobiles to take off on Aussie flights

http://www.theage.com.au/technology/technology-news/mobiles-to-take-off-on-aussie-flights-20100729-10xzf.html

Aussies will soon be able to “tweet” from their domestic airline seat after the communications watchdog gave the green light for mobiles to be used during flights.

The new ruling by the Australian Communications and Media Authority (ACMA) is set to revolutionise airline travel and bring Australia into line with other countries that have enjoyed the technology for some time.

After close consultation with the Civil Aviation Safety Authority (CASA), which has raised no technical objections to the new arrangements, airline passengers may soon be able to text, check email and use data during flights.

Although some telcos have concerns the market will be dominated by an international carrier that regulates communication through a device called pico-cell, ACMA has said it will consider alternative technologies, as long as they don’t compromise safety and meet approved standards.

“The Australian Communications and Media Authority has finalised radio communications licensing arrangements to facilitate mobile communication services on aircraft,” ACMA Chairman Chris Chapman told AAP in a statement.

“The licensing arrangements will allow airlines to deploy mobile communication services on their aircraft through special on-board systems, should they choose to do so.

“In developing these arrangements, the ACMA was conscious of the need for harmonisation with aviation safety regulations and the protection of terrestrial communications networks from interference.”

Terrestrial networks refer to the transmission vehicle telecommunications use to transmit mobile phone communication and calls to connecting directly to terrestrial networks are not authorised under the licensing arrangements.

The pico-cell control unit blocks onboard mobile handsets from receiving signals from terrestrial base stations and the pico-cell acts as a base station and transmitting to terrestrial networks via satellite.

So far, only one carrier, Aeromobile, a subsidiary of Norwegian telco Telenor, is able to provide the service, which will cost users international roaming charges – despite the communications taking place in domestic skies.

Texts alone can be five to 10 times the price of standards texts.

In its submission to ACMA, Telstra said the proposed licensing scheme would artificially restrict mobile traffic to one provider aboard each aircraft and deny Australian consumers access to the country’s highly competitive mobile market.

“We would welcome the ACMA and the airlines allowing people to use their mobile devices in flight, but consumers should not be restricted to any one technology or provider,” Telstra told AAP.

“Australia has a thriving and highly competitive mobile market and there is no reason why it shouldn’t extend to the skies as well.”

Vodafone Hutchison Australia, in its submissions, also cited the importance of non-exclusive agreements for carriers.

ACMA does advise that should alternative, safe methods of mobile communication on aircraft be proposed for commercial operation in the future – including those that access Australia’s terrestrial networks – the ACMA would move to consider those methods.

V Australia had announced plans to offer onboard SMS and data services subject to the ACMA making appropriate regulatory arrangements (which the licensing arrangements now facilitate), ACMA said.

The Australian Competition and Consumer Commission (ACCC) said it would not comment on another government agency however, ACMA revealed it consulted with the ACCC on the use of the control unit device which prevents mobile phones connecting with their carrier.

The ACCC advised that where a genuine safety issue exists, the use of the onboard system to force the handsets to connect only to the onboard base station wouldn’t constitute anti-competitive behaviour.

Paul Ceglia, who claims in a lawsuit that he owns 84 per cent of Facebook, said his case wouldn’t have been possible if police hadn’t come to his house in October to arrest him for fraud.

Ceglia’s arrest and a suit by New York Attorney General Andrew Cuomo two months later, both the result of complaints related to his startup wood-pellet business, got him looking through old files to find assets to pay back customers, he said in an interview in his home in Wellsville, New York. One of those files held a forgotten 2003 contract with Mark Zuckerberg, now chief executive officer of Facebook, he said.

Ceglia, 37, a self-described environmentalist from western New York who wants to legalise drugs and has views on the evils of central banks, claims the contract entitles him to most of the company. If true, the claim, which would give him control of the world’s most-popular social networking service, would be worth about $US21 billion ($23 billion), given estimates of the company’s value.

“If this thing hadn’t happened the way it happened, no way I would have ever started looking through these ancient folders,” Ceglia said of his pellet problems. “That contract would just be sitting in there gathering dust.”

In the weeks since Ceglia came to public attention with his lawsuit against Palo Alto, California-based Facebook and Zuckerberg, filed on June 30 in New York state court, observers have been asking why he took so long to make his claim. His answer, it turns out, was he forgot about it.

Facebook said a photocopy of the contract, filed as an exhibit to the lawsuit, is a phony.

‘Absurd’

“Ceglia’s claims are absurd and his lawsuit is frivolous, if not outright fraudulent,” Facebook said in an emailed statement. “Ceglia has refused to produce the original contract and the copy we’ve seen is a forgery, with inconsistent margin sizes, inconsistent font sizes, and other glaring discrepancies,” the company said.

Ceglia, one of whose lawyers said the original is in a safe place, said he is eager to take on Zuckerberg, 26, and let a jury decide whether the contract is genuine.

“I’m coming after him,” Ceglia said. “A deal’s a deal.”

Ceglia’s claim is based on a two-page “Work for Hire” contract he claims Zuckerberg signed in April 2003, when the Facebook CEO was an 18-year-old freshman at Harvard University. According to the copy of the contract, Ceglia agreed to pay Zuckerberg $US1000 to write computer code for StreetFax, a company Ceglia said he was trying to get off the ground at the time. The alleged contract also refers to a $US1000 investment by Ceglia in a project named in one place as “The Face Book,” and as “The Page Book” in another.

Ownership promise

In return, the alleged contract gives Ceglia a 50 per cent interest in “the software, programming language and business interests derived from the expansion of that service to a larger audience”. Another provision, Ceglia claims, gives him an additional 1 per cent interest for each day after January 1, 2004, that the launch of “The Face Book” was delayed.

Ceglia said he has more evidence of his claim than just the contract.

“We emailed each other for more than a year,” he said.

Lisa Simpson, a lawyer for Facebook, said at a court hearing on July 20 that Zuckerberg did sign some contract with Ceglia. Zuckerberg also worked for Ceglia on the StreetFax matter in 2003, she said.

What he didn’t do is sign over an interest in Facebook to Ceglia, she told US District Judge Richard Arcara at the hearing. Facebook argued in court papers that Zuckerberg couldn’t have given Ceglia a share of a project he didn’t conceive of until the following year.

2004 beginnings

Most book and journalistic accounts of Facebook’s short history say it was started in Zuckerberg’s Harvard dorm room in 2004 when he was a sophomore.

“Things change,” said Ceglia, standing outside the wood pellet-making shop he said he built himself, with the help of two local Amish men, in an enlarged two-car garage near his house. “Here I am in my little factory, and Zuckerberg is now a mogul. But it was a different story back in 2003.”

Ceglia said he found Zuckerberg by asking for bids for StreetFax coding work on Craigslist, the classified advertisement site. Zuckerberg was the low bidder, offering to do the work for $US1000, according to Ceglia. The two signed the contract at a hotel in Boston, he said. Ceglia claims that, in addition to the StreetFax work, Zuckerberg persuaded him to invest $US1000 in the “Face Book” idea.

By August 6 the parties are scheduled to give Arcara a proposed order setting deadlines for Facebook to answer the complaint or move to dismiss it and for Ceglia to move to have the case sent back to state court.

Deadlines

Ceglia said he remembers the 18-year-old Zuckerberg as “probably one of the most difficult people that ever worked for me, in the sense that he simply could not finish his work. He just could not keep a deadline.”

Zuckerberg often made excuses for getting his work in late, including that he had to wash his father’s boat and that he’d left his laptop charger at home, Ceglia said.

“The work he did was really good,” Ceglia said. “He could code. I’d hire him today as a coder.”

Ceglia said he looks forward to a day when he might employ Zuckerberg again.

“If at some point in the future I start running Facebook, I guess I’m going to have to hire him to keep running the company,” Ceglia said. “I really don’t have much interest in it.”

After he filed his lawsuit, Ceglia did take enough interest in the company to sign up for a Facebook account on July 22, his birthday.

‘Great service’

“I think it’s a great service,” he said.

Like many of the 500 million people who use Facebook, Ceglia said he’s gotten back in touch with some old high school friends.

“I like to think about myself as someone that is driven by trying to contribute in some way to increasing the consciousness on the planet,” Ceglia says on his Facebook page.

Ceglia said he’s surprised that his claim to own Facebook has gotten so much attention.

“I never expected it to get so much publicity,” said Ceglia. “It’s really gone sort of nuts.”

He said he mostly ignores the phone calls he’s been getting from journalists and radio talk-shows, such as those hosted by Howard Stern and Matthew Erich “Mancow” Muller.

“Once I picked it up because I thought I knew the number, and I’m like live on the Mancow show,” he said.

Wellsville

Ceglia, his wife Iasia, 31, and two sons, 6 and 7, live in a two-story, unpainted wood house on two acres near the top of a hill in Wellsville. The town, with a population of 8,200, is the biggest in rural Allegany County, about two hours drive southeast from Buffalo, where Ceglia’s suit against Zuckerberg and Facebook is pending in federal court after having been transferred from the state forum by Facebook.

Wellsville is also the hometown of Adelphia Communications founder John Rigas, whose Greek immigrant father started the Texas Hot restaurant that’s still open on Main Street. Rigas, 85, and his son Timothy Rigas were convicted in 2004 of conspiracy and securities fraud. John Rigas is serving a 12-year sentence in federal prison. Timothy is serving 17 years.

Ceglia said he and his wife started Allegany Pellets in February with the goal of making pellets from reclaimed wood that could be used for environmentally friendly home heating.

“We felt like we had heard Obama’s call to help America become energy independent,” Ceglia said.

The arrests

Nine months later, on October 30, state police arrested the Ceglias at their home after receiving more than two dozen complaints from customers who said they’d paid for wood pellets but hadn’t received any. Paul and Iasia Ceglia were charged in state court with one count of first degree scheme to defraud and 12 counts of fourth degree grand larceny.

According to Cuomo’s office, which won a court order to shut the business down in December, the Ceglias took in $US200,000 in prepaid orders from about 130 customers for 1,900 tons of pellets. Lawyers in the attorney general’s office said in a petition filed in state court that the Ceglias continued taking money and orders when they knew they wouldn’t be able to deliver as promised. They gave customers a series of fake excuses for why they weren’t getting their pellets, according to the petition. When they were arrested, Iasia Ceglia told police they’d filled only three orders and given refunds to 10 or 20 customers.

No intent

The Ceglias claim they never intended to defraud anyone. They worked long hours trying to fill the orders and would have done so, if not for numerous mechanical failures, they said. They’re doing everything they can to pay back their customers’ money, they both said.

“I feel terrible,” Iasia Ceglia said. “We had many sleepless nights.”

Paul Ceglia said his pellet machines are now up and running. If Cuomo’s office would just let him start selling pellets again, he said he’d be able to pay the money back. For now, as he challenges Cuomo’s injunction, he’s working to mortgage property he owns to help pay for the refunds.

“The state’s really put us in a heck of a bind,” he said.

Ceglia, born in Wellsville in 1973, moved with his family to Ireland for six years as a child before returning to the town. As a senior at Wellsville High, he said he opened a video store in nearby Bath.

After high school, Ceglia said, he spent two years teaching at an alternative school in Taos, New Mexico, where kids studied whatever they chose and could vote to remove teachers. Back in Allegany County, he opened an ice cream stand in Scio, he said.

Another arrest

In 1997 Ceglia was arrested in Carthage, Texas and pleaded guilty to possession of hallucinogenic mushrooms, according to court files. He was fined $US15,000 and permitted to return to New York. He said he regretted the incident.

In recent years, Ceglia said he’s bought and sold real estate and constructed and renovated homes in Wellsville and the Bahamas. He helped start a non-profit environmentally friendly cemetery in Ithaca, New York, and was a founding member of the local Green Party, he said.

In 2001, Ceglia was contracted by a Massachusetts company, StreetDelivery.com, to photograph street intersections in New England, according to a civil complaint the company filed against Cegla in 2003 over rights to the pictures. StreetDelivery uploaded the photos from Ceglia and other photographers into a database, then sold internet access to insurance companies investigating car accidents.

Florida effort

Ceglia registered StreetFax in Nevada in 2003 and began trying to duplicate StreetDelivery’s business in Florida. In addition to Zuckerberg, Ceglia said he contracted with more than 20 workers, including web designers, stenographers and photographers.

“We really struggled as a company,” Ceglia said.

“I don’t have much good to say about Ceglia,” Andrew Logan, StreetDelivery’s founder and CEO said in an interview. “He’s a nice enough guy, but man, he would talk one way and then do something completely different.”

Logan, who said StreetDelivery now does business in 27 states, claimed Ceglia was under contract to StreetDelivery in 2003 when he set up StreetFax and hired Zuckerberg. If Ceglia’s contract with Zuckerberg gives Ceglia an ownership interest in Facebook, that interest may belong to Logan, he said.

Logan, who called Ceglia “a real opportunist”, said his lawyers are looking at the old contracts and settlement papers with Ceglia.

“We’re going to lay claim that I own it,” said Logan. “He was under contract to me.”

Movie-goers are becoming more choosy about their 3D films, writes Garry Maddox.

Eight months after Avatar smashed box-office records around the world, Hollywood is asking serious questions about how much audiences want to see movies in 3D.

The dwindling 3D share of American box office for recent movies also released in traditional cinemas has dampened some of the enthusiasm for the format that followed James Cameron’s sci-fi epic.

Even though at least 24 movies are due to be released in 3D next year, sceptics have started to voice doubts about whether it will be as game-changing as Hollywood executives have been hoping.

New figures show that the proportion of American cinemagoers who opt to see new films in their 3D versions has been falling steadily, with more choosing instead to watch them in the traditional – and cheaper – format.

In March, when the animated fantasy How to Train Your Dragon was released, 68 per cent of the audience chose to see the film in 3D. By May that figure for Shrek Forever After was down to 61 per cent. In July only 56 per cent saw The Last Airbender in 3D, and a week later the proportion fell to 45 per cent for the animation Despicable Me.

It was a far cry from the 71 per cent who saw Avatar in 3D on its opening weekend.

”3D is a waste of a perfectly good dimension and Hollywood’s current crazy stampede towards it is suicidal,” the US critic Roger Ebert wrote recently.

But Australian cinema executives say that rather than turning away from the format, audiences have just become more sceptical about bad movies being released in 3D, especially if, like Clash of the Titans, they have been hastily converted in post-production with technically dubious results.

David Seargeant, the managing director of Amalgamated Holdings, which owns the Greater Union chain, believes Australian movie-goers remain enthusiastic about 3D movies. But because they are no longer a novelty, viewers are assessing their merits before paying the extra $3 to $4 for a ticket.

”Our customers are now perhaps reaching that point where they’re just being a little selective,” he says.

In Australia, 80 per cent of Avatar’s record takings of $114.7 million went on 3D sessions.

While the share was lower for two big recent movies, Shrek Forever After and Toy Story 3, Seargeant says it is still more than 60 per cent, even though audiences are used to seeing earlier instalments on conventional screens.

”With a brand new film, those numbers are probably going to be up at a similar level [as Avatar],” he says.

The chief executive of the Independent Cinema Association of Australia, Mark Sarfaty, says there is ”absolutely no evidence” of audience fatigue with 3D movies.

The only resistance to the format has come from parents of small children.

”Sometimes the kids have a hard time keeping the glasses on their faces,” he says. ”So during the holidays, we’ve seen with [movies for] young kids and families, a reasonably even split between 2D and 3D.”

In the US, though, the love affair with 3D seems to have cooled since the heady days when studio executives compared the 3D breakthrough to the development of the first ”talkies” almost a century ago. Now, some fear that the ”3D bubble” has already burst, at least for movies that audiences see as ”nothing special” or just cashing in on the trend.

Critics say part of the problem may be the technology itself.

While Avatar was made specifically in the new format, studios have hurriedly converted films that were originally made for two dimensions.

The process can cost more than $100,000 per minute of film but can be done in a matter of weeks, allowing for a quick release. However, a lot of the time it simply delivers murky pictures.

After seeing M. Night Shyamalan’s The Last Airbender, which will be released in Australia next month, Ebert said it ”looked like it was filmed with a dirty sheet over the lens”.

Hollywood’s infatuation with 3D was just an excuse to add surcharges to already expensive cinema tickets, he proclaimed.

Apple has been dealt a severe blow having been told that it no longer has a monopoly on the letter “i” as part of the name for its products.

A trademarks tribunal has knocked back Apple’s bid to stop a small company from trademarking the name DOPi for use on its laptop bags and cases for Apple products.

Apple argued that the DOPi name – which is iPod spelt backwards – was too similar to its own popular portable music player, which has sold in excess of 100 million units worldwide.

Apple has long since relied on its legal muscle to pursue any individual or company it sees as infringing on its copyright and trademarks.

But its ambitions to make widespread claims on the letter “i” came to a grinding halt when the tribunal rejected Apple’s claim that punters might be confused into thinking that they were buying an Apple product.

While the case does not affect Apple’s current trademarks, companies wanting to use the “i” prefix will have a better chance of getting away with it, lawyers say.

It is just the latest in a string of David and Goliath battles. In the one corner is Apple with a market capitalisation of close to $US200 billion, making it the fourth largest publicly traded American company, and, in the other, is Wholesale Central, based in Sydney’s western suburbs that, in the six months to the end of June 2007, had sales of $71,000.

In the tribunal hearing, IP Australia, the government body that oversees trademark applications, said Apple overlooked the fact that there were already a large number of products that have the “i” prefix, for example iSkin and iSoft to name just two, all of which are operating in the same class of electronic goods as Apple.

The registrar overseeing the case Michael Kirov, who confessed to being a tech head and a fan of Apple’s products, judged that Apple failed to demonstrate that a “person of ordinary intelligence and memory” would automatically assume that just because a product carries the letter “i” it is an Apple product.

A lawyer only has to prove that a person might have “cause to wonder” whether DOPi or iPod are made by Apple in order to mount a case.

Intellectual property lawyer Trevor Choy says this is possibly the first case in which IP Australia has said no on this issue.

“A competitor can sometimes get away with registering the reverse spelling of a registered trade mark – iPOD and DOPi. Here, they said that DOPi stands for ‘Digital Options and Personalised Items’,” said Choy.

He said this clears the way for potentially more trademarks with the letter “i” but that it doesn’t mean it is open season on Apple and its “i”.

“They can do so more easily,” said Choy. “But it is not guaranteed, because if they still steer too close, they can be stopped. For example, someone trying to register iPODE will still be seen as too close. “

Apple and the owner of the DOPi brand, Suzana Molnar, declined to comment on this story.

Apple is known for having an overzealous legal team that will relentlessly pursue people and companies that use any Apple trademarks or logos.

In December last year, Melbourne computer company Macpro Computers claimed Apple was “trying to burn us out” with legal fees in another David and Goliath battle over the iPod maker’s trademarks.

Peter McRae, managing director of Macpro Computers in Collingwood, has provided “Macpro”-branded computers and technical support to businesses for 26 years but has been jumping through legal hoops ever since Apple was preparing to launch its Mac Pro line of computers about 3½ years ago.

IP Australia found in McRae’s favour but Apple appealed against the decision to the Federal Court. The trial is set to run over three days in June this year.

Similarly, in November last year, the Sydney-based developer of the iPodRip software, Mathew Peterson, said he feared he might have to lay off most of his staff after Apple legal threats forced him to undertake radical changes to his business.

Despite the software being available for six years prior to the Apple threats and providing useful functions missing from iTunes, Apple’s cease and desist letter forced him to stop using “iPod” in his software’s name, to remove any Apple-related logos from his product and to relinquish control of his domain name, ipodrip.com.

In October last year, Apple in Australia disputed a trademark application for Woolworths covering its new logo, which featured a “W” fashioned into the shape of an apple.

In January 2007, Apple was sued by Cisco Systems over the use of the “iPhone” trademark. About a month later both companies announced an agreement whereby they were each allowed to use the iPhone name worldwide.

And way back in 1978, Apple Corps (the record label and holding company founded by the Beatles) sued Apple Computer for trademark infringement.

The two companies settled in 1981 but they were in and out of court over related matters until February 2007, when they agreed that Apple would own all Apple-related trademarks and license some of those back to Apple Corps.