To all those disgruntled former employees being laid off on Wall Street these days and thinking of revenge, just remember: your former employers have powerful lawyers, and those lawyers have powerful friends . . . in the government.

Take the case of Viktor Savtyrev. Yesterday morning the 29-year-old systems administrator was arrested for allegedly trying to extort New York-based Third Avenue Management, a mutual fund company that manages more than $15 billion in assets. TAM had laid off 14 employees last week, including Savtyrev, a Russian native.

According to this complaint filed by prosecutors in the New Jersey U.S. attorney’s office in Newark, Savtyrev didn’t take the news well. He allegedly emailed the firm’s general counsel and several others and threatened to damage the company’s servers if it didn’t beef up his severance package and give him “[e]xcellent” job references. Referring to himself as a “Crazy Russian,” he said he would expose the breach to financial publications. Here’s the story from the Star-Ledger.

The firm contacted its outside counsel, which then contacted the U.S. attorney’s office. Prosecutors contacted the F.B.I., which recorded subsequent phone calls between the company and Savtyrev, who further threatened to have his “comrades from Belarus” hack into the firm’s systems. (The Star-Ledger helpfully notes that Belarus, a former member of the Soviet Union, is among a handful of Eastern European nations from which cyber criminals have launched attacks against American companies in recent years.)

Bob Stahl, the lawyer representing Savtyrev, who is still being detained, told the Law Blog that his client said “unwise things . . . out of frustration” and that he had “no intention of pulling off” the threat. A spokeswoman for Third Avenue Management called the matter “a regrettable situation.” We’d like to give props to TAM’s outside counsel, but the company declined to identify its lawyer. Representing the government: AUSAs Seth Kosto and Erez Liebermann.

Photo: iStockPhoto

The embattled deal that would’ve allowed Yahoo to display search ads sold by Google and to share some revenue has finally found the dustbin. Here’s the WSJ story.

“Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners. That wouldn’t have been in the long term interests of Google or our users, so we have decided to end the agreement,” Google’s Chief Legal Officer David Drummond wrote on the company’s public policy blog.

The WSJ could not reach a Yahoo spokesman for comment.

In September, the DOJ hired Sandy Litvack, a former Walt Disney vice chairman and recently-resigned Hogan & Hartson partner, to handle a possible antitrust challenge to Google’s online advertising juggernaut. Then, last month, it looked like Google and Yahoo might strike a settlement with the government.

Google’s Drummond wrote on the blog that abandoning the bid wasn’t “legally necessary” but “the right thing to do because Google and Yahoo have been successful in online advertising and we realized that any cooperation between us would attract attention.”

Hey LBers, want to get out of your broadband Internet subscription, but don’t want to pay the early-termination fee? If so, you might pay attention to a lawsuit filed earlier today in Seattle federal court. Two former customers of Qwest Communications have filed a putative class-action lawsuit against Qwest, seeking to end early-termination fees for Internet subscribers.

Click here for the WSJ story, from Andrew LaVallee; here for the complaint. Qwest declined to comment on the suit.

In recent months, customers have fought similar charges for early termination of cellphone contracts with wireless carriers. The suit filed today is one of the first challenges to the practice of early-termination fees as it applies to broadband services.

As far as complaints go, this one ain’t a bad read. Robin Vernon and Rory Durkin were each charged $200 when they canceled their high-speed Internet service, even though they allege they hadn’t signed contracts to that effect. According to the complaint, Vernon was told that her husband signed a contract, which Qwest couldn’t provide a copy of. In another call, a customer-service rep said she agreed to the contract terms over the phone, but no recording was available. When Vernon pressed the issue, the customer-service rep told her “You’ll be sorry” and hung up on her.

The other plaintiff, Rory Durkin, canceled service because his computer broke down. He changed his mind when told of the fee, effectively paying for Internet service even though he didn’t have a computer to access it. Months later, when he attempted to cancel it again, he was told that he’d agreed to a fresh two-year commitment when he rescinded his first cancellation.

Qwest markets its “price-for-life” broadband plans as requiring a two-year agreement, but customers don’t sign a contract, said Michael Lieder, one of the firms representing the plaintiffs. The fee applies regardless of when they cancel service during those two years, he said.

Nathan Myhrvold — who began college at age 14, and went on to earn a master’s degree in mathematical economics and a PhD in theoretical and mathematical physics by age 23 — is perhaps the most mentioned Law Blog subject who doesn’t own a law degree. (See here, here and here.)

Why? One word: patents. Over the past few years, reports the WSJ’s Amol Sharma and Don Clark, Microsoft’s former chief technology officer has quietly amassed a trove of 20,000-plus patents and patent applications related to everything from lasers to computer chips. Myhrvold’s firm, Intellectual Ventures, now ranks among the world’s largest patent-holders, writes the WSJ, and is using that clout to press tech giants to sign some of the costliest patent-licensing deals ever negotiated. (For a recent New Yorker feature on Myhrvold by Malcom Gladwell, click here.)

In recent months Myhrvold’s firm, the eight-year old Intellectual Ventures — which is known, alternatively, but not necessarily inconsistently, as a patent troll and a hothouse of innovation — has secured payments in the range of $200 million to $400 million from companies such as Verizon and Cisco. Verizon, for instance, disclosed in a July filing with the SEC that it plans to pay as much as $350 million for patent licenses and an equity stake in a patent-holding investment fund. The company operating that investment fund is Intellectual Ventures, according to a person familiar with the terms of the deal.

As Intellectual Ventures has grown, reports the WSJ, its relationship with the tech industry has become increasingly adversarial. There is an “implicit threat” that if companies don’t agree to a licensing deal with Intellectual Ventures, they could face costly patent-infringement lawsuits, says Henry Gutman, a Simpson Thacher lawyer whose clients include companies that have been approached with licensing deals by Intellectual Ventures. Myhrvold’s firm holds so many patents, it is “operating on a scale where it becomes really difficult to just say ‘no,’” Gutman says.

Myhrvold told the WSJ that he acknowledges facing resistance from companies he targets for licenses. But his patent inventory gives him leverage to extract settlements without litigation. “I say, ‘I can’t afford to sue you on all of these, and you can’t afford to defend on all these,’” he said.

Last week, we posted on a situation involving a group of MIT students who were enjoined from giving a talk at a hackers conference, called Defcon. In the talk, the students planned to expose security flaws in the automated fare system used by the subway system in Boston, and describe how to get free rides.

To be honest, given the initial ruling, we never would have dreamed that the students would win the next fight against the Massachusetts Bay Transit Authority over whether a five-month injunction should be granted against the students. But how wrong we were! (Good thing we’re just bloggers, not judges, eh?) Today, Boston federal judge George O’Toole shot down the MBTA’s motion for the five-month injunction, ruling that a federal antihacking law doesn’t prohibit the public disclosure of computer-security flaws. Judge O’Toole dissolved the injunction and ruled the agency was not likely to win its case.

The ruling means the MIT students are now free to discuss more details of their research, which could allow an unscrupulous person to take free trips. Much of the students’ research was already revealed in a class presentation and was actually published at the Defcon conference earlier this month.

Last month, when H. Dean Steward, the lawyer for Lori Drew in the MySpace suicide case, filed his three motions to dismiss, he wrote: “If the government’s statutory construction is correct and the [Computer Fraud & Abuse Act] criminalizes violating a website [terms of service], then the statute is void for vagueness because it fails to provide warning of what is prohibited and ensures discriminatory enforcement . . .”

Yesterday, the government, represented by AUSA Mark Krause, shot back, filing three oppositions to the failure to state a claim motion, to the vagueness motion and to the unconstitutional delegation of prosecutorial power motion.

Find background on the MySpace suicide case here.

In the government’s opposition to dismiss for vagueness, AUSA Krause writes that terms in the CFAA, such as “access” and “unauthorized” are “not so imprecise that people of common intelligence must guess at their meaning.” As for claims that the statute is susceptible to being arbitrarily enforced, Krause writes: “Cyberbullying is a relatively new phenomenon, as is social networking. It is, therefore, not surprising that there have been relatively few prosecutions in this area. . . . the statute does not threaten to criminalize widespread conduct. Because the government must show that defendant acted with the requisite criminal scienter, there is no risk of criminalizing innocent, let alone negligent behavior.”

As for the particular MySpace terms of service — or TOS, as they’re commonly referred to — that Lori Drew potentially violated, Krause ticks off the following:

The trial in the MySpace case is set for October.

What happens in Vegas. . . can apparently be enjoined by a judge in Massachusetts. We learned that much on Sunday when a group of MIT students were prohibited from giving a talk at a computer-hacker’s conference, called Defcon, in Las Vegas. In the talk, the students planned to expose security flaws in the automated fare system used by the subway system in Beantown, and describe how to get free rides.

But the Massachusetts Bay Transit Authority seems to have gotten wind of the students’ Vegas plans and filed a motion for a preliminary injunction on Friday, which was granted by a Massachusetts federal judge Douglas Woodlock. Here’s the AP story.

In court documents, Gary Foster, chief technology officer for the transit system said the presentation would “inflict significant damage” if the Massachusetts Bay Transportation Authority did not have a chance to correct the flaws. “It is extremely important to maintain the security and integrity of the Fare Media systems,” Foster said in a court declaration. “With an insecure, compromised system, even basic revenue controls, to name one example, become significantly challenging.”

Jennifer Granick, the civil liberties director for the Electronic Frontier Foundation, lawyers for the MIT students, told the AP that the students were simply trying to share their research and planned to omit key information that would make things easier for anyone who actually wanted to hack the payment system.

“We believe that it’s an illegal prior restraint on speech and a violation of the First Amendment,” the EFF’s Kurt Opsahl told the Law Blog on Monday. “It’s also a misunderstanding of the Computer Fraud and Abuse Act.”

On the day trial was to begin between Qualcomm and Nokia, the companies settled, signing a 15-year agreement that includes Nokia making an up-front payment as well as on-going royalties to Qualcomm. Financial details are otherwise undisclosed. Here’s the WSJ report.

The litigation goes back to April of last year, when, after their previous licensing agreement expired, the two companies exchanged lawsuits.

Nokia, the Finnish cell phone maker, claimed it should pay a lower royalty rate to the San Diego-based company because, over time, it had acquired many patents of its own that could be used to offset those of Qualcomm, which makes more than half of its profit from licensing its patents. Cellphone makers typically pay Qualcomm close to 5% of the price of a handset.

“This is a landmark deal,” Timothy Luke, an analyst at Lehman Brothers, told the WSJ. “This removes a ton of uncertainty from the industry.” He said the initial payment to Qualcomm is likely to be hundreds of millions of dollars, and he estimates that Nokia would have owed Qualcomm about $600 million in 2008 alone under royalty rates it paid under the prior agreement.

Repping Qualcomm were Cooley Godward’s Steven Strauss, and Cravath’s Roger Brooks and Evan Chesler. Heading Nokia’s team: Quinn Emanuel’s Charles Verhoeven and William Urquhart.

Lori Drew appears in Los Angeles federal court, June 16, 2008. (AP Photo/Bill Robles)

For those keeping score in the MySpace suicide case, defendant Lori Drew’s attorney, H. Dean Steward, filed his motions to dismiss the indictment today in California federal court.

Here are the three motions to dismiss for: failure to state an offense, vagueness and unconstitutional delegation of prosecutorial power.

Steward — who’s also repping Orange County Sheriff Michael Carona, who last year was charged with conspiracy, mail fraud and witness tampering — recently told the Law Blog that, in the Drew case, the most important defense is a constitutional challenge for “vagueness” — i.e. an argument that the Computer Fraud and Abuse Act doesn’t give the defendant adequate notice to prepare to defend against the indictment.

H. Dean Steward. (AP Photo/Kevork Djansezian)

“It has to do with the definitions of ‘access’ or ‘protected computer’ or ‘unauthorized,’” said Steward. “They’re not defined in the statute, and no other federal statue defines them.”

Indeed, in the motion to dismiss for vagueness, he writes:

Interestingly, attached to the motion to dismiss for failure to state an offense is a redacted version of an interview that the FBI did with Ashley Grills, the young woman whom Lori Drew has called the mastermind of the fictional “Josh Evans” MySpace account. In an interview with ABC, Grills admitted to creating the “Josh Evans” account, but said Drew encouraged and participated in the hoax.

Emboldened, perhaps, by its big court win over rival ConnectU, Facebook, a social networking site that the Law Blog joined recently and is enjoying very much, has gone on the litigation offensive. On Friday, according to the Financial Times, the company sued StudiVZ, a German company that claims to be “the most successful social network in Germany, Austria and Switzerland”, alleging that StudiVZ copies “the look, feel, features and services” of the Facebook site.

As the FT notes, the suit comes several months after Facebook launched a German-language version.

In its complaint, Facebook accused StudiVZ of copying entire portions of the site’s design, including features such as Facebook’s distinctive “wall”, which allows users to leave messages on each other’s profile pages. Facebook reportedly claims that any differences between the two sites are “nominal,” and accuses StudiVZ of merely “replacing Facebook’s blue colour scheme with a red one.”

As for StudiVZ, which is based in Berlin and owned by German publishing company Verlagsgruppe Georg von Holtzbrinck, it’s not backing down. On Friday, StudiVZ asked a German court in Stuttgart to declare that Facebook’s claims are without merit.

According to this Reuters report, StudiVZ claims Facebook is suing them only because Facebook has failed to transplant its success to the German market. “Their strategy appears to be: ‘If you can’t beat them, sue them,’” said Marcus Riecke, StudiVZ’s CEO.

LB Food Recommendation: If Facebook lawyers travel to Germany this summer, they should know that they’ll be there on the tail-end of spargelzeit season, or asparagus time, when a thick, white variety of the vegetable is available. We urge them to sample this precious asparagus — reportedly a national obsession — and let us know if it’s really as good as President Bush says it is.