Homework Assignment 3
Ethical Analysis - Captchas Part 1
A. Read the following fact pattern (disclaimer -- this fact pattern is purely fictitious and any resemblance to any real person is purely coincidental):
KV Software is a small, privately-owned company that develops software that "reads" images from machine vision systems (that typically include lighting, optics, digital or "smart" cameras and software). One such application for this type of software is to read alphanumeric codes that are etched or stamped onto three-dimensional products for inventory control. Often, the alphanumeric code imprints are hard to read because of imperfections in the imprinting process or because the surface is not flat. Some alphanumeric codes become harder to read after further processing of the product through its manufacturing process. KV's software application is known for deciphering even severely degraded alphanumeric codes on three-dimensional products.
Al, a sales person for KV Software was manning the company’s booth at the machine vision tradeshow in Las Vegas. Pete, the product manager at Acme Company, approached Al at the booth. Pete told Al that he was at the tradeshow looking for a company to develop an application to "read" characters on a plastic film that may experience stretching or folding during the "reading" process. After talking with Pete for more than 20 minutes, Al thought that Pete sounded genuinely interested in KV Software’s services, so he invited Pete to go with Al and others from KV Software out for dinner and a show at a swanky hotel on the Las Vegas strip. They had a great time that night and stayed out past 2 a.m., ending the evening at a strip club, parting with the promis, “What happens in Vegas, stays in Vegas.”
The week after the tradeshow, Pete was sitting in his office talking to a co-worker when his phone rang. It was Al calling about Acme's interest in engaging KV Software to develop the special machine vision application. After putting Al "on hold", Pete told his co-worker , "This is the guy I was telling you about. Really great guy. Their products may not be the best, but their client entertainment budget must be HUGE." Pete returned to the call with Al and at the conclusion of their call, Pete agreed to provide a request for proposal (“RFP”) to Al in the next week outlining the requirements and specifications that Acme Company had for the machine vision application.
Pete sent out the RFP the next day to Al. It was the only RFP he sent out. The RFP made clear that Acme Company wanted the time to delivery to be as short as possible and asked about the cost. They were willing to consider a proposal that included modifying existing software.
Al prepared a response to the RFP, but had a hard time responding to question number 15, "Does your company have experience and expertise in machine vision applications that involve interpretation of imprinting on malleable plastic or plastic-like surfaces? Please provide references." Al went to his boss, Sheila, the vice president of sales and asked how to answer the question. Although KV Software had extensive experience in machine vision applications, they had not up to then specifically developed code for what Acme Company wanted. Sheila told him to answer "yes" to the RFP question and not to provide any references. Al was also worried that they could lose this contract to a competitor which was reported in a recent trade journal to have announced plans to release machine vision software for malleable surfaces. Al returned the response to the request for proposal and answered simply “Yes” to Question 15. The response apparently was sufficient for Acme Company, because Al and Pete negotiated a standard form contract for the development of the software and their CEO's signed the contract in a few weeks.
The contract required KV Software to develop, test, and deliver the application within three months. The specifications had already been included in the request for proposal and were incorporated into the contract. The contract required that KV Software complete a beta version of the application within six weeks and thereafter, to test and refine the software, based on samples provided by Acme Company. The fees were to be payable 50% upon completion of the beta version and 50% upon acceptance of the final application by Acme Company. The contract stated that KV Software would provide the application on a non-exclusive licensed basis (so that they could market it to other clients). The contract also had provision that stated “Vendor warrants that it has the skills and experience to deliver the services in a workmanlike manner.”
John, a project manager at KV Software was assigned to manage the development and testing work under the contract with Acme Company. In week five, John reported to Sheila that the project was running behind schedule and over budget, but without putting on two more developers over the next week, they could not get the application to the “beta” phase to make the deadline. Sheila reminded John that the first 50% of their fee was contingent on delivering the beta; if they failed to make the deadline, they would jeopardize the company’s revenue numbers for the quarter (that they had committed to their primary outside investor). Sheila suggested that John could either have his team work up a simulation of the software for the meeting with Acme Company to demonstrate the software or tell Acme Software that their specifications were too ambiguous and conflicting and needed further clarification.
The next week, John met Pete at Acme Company to “deliver” the beta version of the application. John had his team prepare data that would allow him to simulate the software in way that Pete would think he was looking at the actual application. Pete invited John into his office and excused himself for a quick break. While John was waiting for Pete, he walked Pete’s desk to look at the personal computer on Pete’s desk. John could see that Pete left his email open on his desktop computer. John could not resist reading the email that was displayed:
From: Elizabeth Date: August 13, 200X To: Pete Subject: Confidential Project Hey Pete:
Has that machine vision software been demonstrated yet? Have you got that other developer under contract yet? How long do you think it will take him to use K&V’s software to develop that software application to read the captchas? We have several email marketing firms that want to be able to create those free email accounts to use to send out emails, and our friend who wants to beat Ticketmaster, but they really need to be able to automatically read the captchas to get past those pesky security processes. We are really anxious to get captcha reader as we are losing BIG MONEY every day that we can’t use it.
Oh, and please remember that this project is HIGHLY CONFIDENTIAL. We don’t want that nosy outside lawyer who has been coming into the office to see your boss asking about this.
John thought this was so strange, that he quickly wrote down what was in the email, before Pete returned. John then demonstrated the software to Pete who was really excited to see how the software worked, but Pete cut the meeting short, saying “I’d love to dig into this deeper with you John, but I need to get out of the office early today. If I have questions, I’ll call you tomorrow.” Just before he left, John handed Pete an invoice for the first 50% of the fees, for which payment was to be wired within 48 hours. Pete said, “John, this great. I’ll get this invoice to our accounting department for payment right away.”
When John got back to his office, he got online to look up “CAPTCHA”. He found some interesting Websites that talked about CAPTCHA:
- Wikipedia entry for CAPTCHA (http://en.wikipedia.org/wiki/Captcha).
- Breaking a Visual CAPTCHA (http://www.cs.sfu.ca/~mori/research/gimpy/)
- The Official Captcha Site (http://www.captcha.net/)
That afternoon, John met with his direct boss, Kate, the vice president of operations to tell her about demonstrating the simulation software, delivering the invoice, what he learned from Pete’s computer that day from his visit to Acme Company, and his suspicion that Acme Company will be using K&V’s software to defeat CAPTCHAs for email spammers.
Kate took a drink from her now cold cup of coffee and sighed a long sigh.
B. Write a Memo.
Write a memo that identifies the issues that you see: legal, ethical, and merely troublesome. As to the legal and ethical issues, identify the stake-holders for each issue, the feasible alternatives for each issue and their impacts on each of the stakeholders. To help you write this memo, look at: