January 27, 2006
Allegedly Wrong VeRO Notice of Claimed Infringement Not Actionable--Dudnikov v. MGA Entertainment
By Eric Goldman
Dudnikov v. MGA Entertainment, 2005 WL 3693829 (D. Colo. Aug. 17, 2005) [see the earlier Magistrate report]
This one just showed up on my radar screen--not sure why it took so long to appear on Westlaw. However, this is an interesting case because it adds to the sparse 17 USC 512(f) caselaw. It's also the first case I know of that addresses the legal consequences of eBay's VeRO program.
Plaintiffs sell various items on eBay, including fleece hats with a "Bratz applique affixed to it." Defendant owns the IP rights in the Bratz brand and believes that the auctioning of the hats infringes their IP rights. [I don't know the Bratz brand and I'm not sure what it means to affix an applique, but the plaintiffs believe they are protected by the First Sale doctrine--which, depending on where the applique comes from, may be a legitimate argument].
Therefore, defendant submitted a notice of claimed infringement under eBay's VeRO program to shut down the plaintiffs' auctions. The plaintiffs then initiated a pro se action raising, among other things, that the defendant committed perjury and violated 17 USC 512(f).
The perjury claim goes nowhere; usually there is no civil recourse for perjury. However, the 512(f) claim has some potential bite. The law applies if someone "knowingly materially misrepresents under [17 USC 512] that material or activity is infringing." The court treat a VeRO notice of claimed infringement as a 512(c)(3) takedown notice which is thus subject to 512(f).
However, the 2004 Ninth Circuit Rossi case raised the bar on 512(f) claims, effectively defeating 512(f) claims if the copyright owner subjectively believed that infringement was taking place. Here, the defendant submitted a declaration that it had the requisite subjective belief. The plaintiffs didn't appear to introduce any contrary evidence, so plaintiffs lose.
Based on the facts/procedural posture, I think the court got it right. But this case might further remind us that perhaps the deterrents for submitting unsupported 512(c)(3) notices are too low.
January 25, 2006
Wasted Time as a Damage--Paglinawan v. Frey
By Eric Goldman
Paglinawan v. Frey, No. 2:06-cv-00099-RSM (W.D. Wash. complaint filed Jan. 19, 2006).
James Frey publishes the book "A Million Little Pieces." It's marketed as a non-fiction book, but some of it is actually fiction. Readers are upset by the deception. What recourse?
Marketing a fictional book as non-fiction is a material misrepresentation. Normally, a material misrepresentation should create a rescission right, but I'm not sure about the privity issues. The author knew it was fiction, but the readers don't have a contract with the author. The publisher may not have known the book was fiction, in which case the publisher might claim mutual mistake rather than misrepresentation. At that point, the readers might have recourse, but it's not clear that they would.
But even if the publisher knew that some of the work was fictional, the publisher has unilaterally offered rescission (at least to the buyers it had privity with). So what more could any aggrieved reader want?
The readers want their time back--the time spent reading a book they thought was non-fiction but was partially fictional. But since a court can't manufacture time, the readers want the next best substitute--cash. They want the author and publisher to pay them for their wasted time.
I'm not sure the time was really wasted. If the story was good, it doesn't really matter if the book was fiction or non-fiction. Entertainment is entertainment, after all.
But let's assume the readers truly wasted their time. Should we recognize wasted time as a damage under contract law or other theories?
This is hardly a novel request, especially in the marketing context. I haven't done exhaustive research of this, but I can think of a couple of junk mail cases where wasted time was specifically rejected as an actionable damage. [Harris v. Time, Inc., 191 Cal. App. 3d 449 (1987); Smith v. Chase Manhattan Bank, 741 N.Y.S.2d 100 (N.Y. App. Div. 2002)] And, in perhaps an analogous context, recall that the Hamidi court specifically rejected the time wasted by a spam was a recognizable damage under common law trespass to chattels. As a result, I'm skeptical that a court is going to be sympathetic to the aggrieved readers' requests for damages for their wasted time.
Hat tip: ContractsProf blog
UPDATE: Overlawyered provides a few details of 2 other related lawsuits.
January 24, 2006
DOJ Fishes for Search Records, and Google Fights Back--Gonzales v. Google
By Eric Goldman
Gonzales v. Google, Inc., No. 5:06-mc-80006-JW (N.D. Cal. motion to compel filed Jan. 18, 2006)
This event is a collateral consequence of Congress’ obsessive and relentless campaign against Internet pornography. In Summer 2004, the US Supreme Court upheld a preliminary injunction of the 1998 Child Online Protection Act (COPA) and remanded the case for trial. In preparing its defense of the law, the DOJ sought to prove that COPA would be more effective at blocking children’s access to harmful-to-minor materials than technological filtering.
But how could the DOJ get supporting data? Well, no one knows more about the comings-and-goings of Netizens than search engines. If only the DOJ could get its hands on their server logs….
So the DOJ sent a subpoena to several search engines. In Google’s case, the DOJ initially asked for:
• “All URL’s that are available to be located through a query on your company’s search engine as of July 31, 2005”
• “All queries that have been entered on your company’s search engine between June 1, 2005 and July 31, 2005, inclusive”
Google resisted this request, and after some discussions, the DOJ scaled back its requests to ask for:
• “a multi-stage random sample of one million URL’s from Google’s database, i.e., a random sample of the various databases in which those URL’s are stored, and a random sample of the URL’s held within those databases.”
• “the text of each search string entered onto Google’s search engine over a one-week period (absent any information identifying the person who entered such query)”
Google is still resisting this amended request, so the DOJ has asked a federal district court to compel Google to comply with the DOJ’s request.
From my perspective, there are five essential points to take away from this event:
1) This is a Big Deal. This is not the usual Cyberlaw flare-up that has a short shelf life (see, e.g., AutoLink). Instead, I think this will become a classic Cyberlaw moment we’ll be discussing for years. It’s got all the right indicia--hubris, privacy and porn. Regardless of how the courts rule on the DOJ’s request, I think this event will have lasting effects. This is a Big Deal.
2) The DOJ’s Initial Request Was Way Out-of-Bounds. The DOJ’s initial request was jaw-droppingly broad. How could the DOJ ask for so much? And how could some search engines give it to them without a fight?
I think the DOJ’s initial request is very typical of government investigative requests. I’ve been on the receiving end of a few such requests myself. In my experience, government investigators typically make broad initial requests because such requests are costless to the government. If the government does not bear the costs of producing the data, then it’s rational for government investigators to ask for any data that might have any possible benefit to them. (This is like a negative externality—the government overconsumes data because it doesn’t bear the true social costs of its production).
In my experience, however, government investigators will craft a more tailored request when someone resists the initial overbroad request. Basically, the resistance raises the government investigator’s cost, so often the investigator’s path of least resistance is to submit a narrower request reflecting exactly what the investigator really needs.
However, recipients of government investigative requests rarely push back for entirely logical reasons. Principally, recipients do not want to become the investigator’s next target. Government investigators can make someone’s life very miserable, so annoying them has a non-trivial risk of inviting suspicion or even outright retaliation.
Or, in Microsoft’s case, recall that the DOJ enforces Microsoft’s consent decree. Microsoft may have been legitimately concerned that resisting the DOJ’s request could have adverse consequences for the DOJ’s assessment of Microsoft’s compliance with the consent decree. If I work at Microsoft and the DOJ wants some data, I’m going to give it to the DOJ with a smile on my face—no questions asked. (MSN claims that they did push back a little).
One more consideration to explain why other search engines complied with the DOJ’s initial request without much fuss. I don’t have empirical evidence to back this up, but I suspect that large search engines like Google, Yahoo and Microsoft get dozens or even hundreds of government investigative requests a month—most or all of which the search engines dutifully fulfill. This DOJ request was just yet another government request—perhaps a little broader than normal, but not that different from the dozens or hundreds of recent requests the search engines had complied with.
3) Our Government is the Biggest Threat to Our Internet Privacy. Concerns about search engines and privacy are hardly new (this is an evergreen topic for this blog; see here and here). Not surprisingly, some privacy advocates are opportunistically using this event to complain yet again that we shouldn’t trust Google (see, e.g., Leslie Walker's Washington Post story and Rep. Markey's ill-conceived and opportunistic legislative proposal). This is a completely misdirected concern, especially in this case. We have no new or additional reasons to fear Google’s misuse of data about us. But, as this event points out, we have every reason to fear our government’s rapacious desire for information about its citizens.
Though we try to ignore it, deep down we know that our government is the biggest data slut around (it’s not even close). Consider some news from the last few months: Bush’s administration is engaged in domestic surveillance, the NSA and other agencies illegally use tracking cookies and even members of Congress breach their own voluntarily-adopted privacy policies. We don’t need tighter restrictions on search engine’s data management practices. Instead, we desperately need MUCH tighter restrictions on government data requests.
4) This Event May Backfire on the DOJ. The DOJ picked the wrong company to challenge publicly. I know that public attitudes towards Google are volatile (many of us have a love/hate relationship with Google). Despite that, Google has a great brand, and many people remain very passionate about Google. Go ahead, DOJ, mess with Yahoo or MSN or even Amazon and you won’t hear much public uproar. But targeting Google…well, that’s a fight that has a high risk of losing both the fight and popular support.
As a result, I expect that the DOJ will get unwanted public scrutiny about the propriety of its data requests. If the DOJ can’t convincingly defend its request, the DOJ’s gluttony could instigate public support for efforts to restrict government data-collection activities. Normally, in light of the USA Patriot Act and prevailing anti-terrorism/anti-porn rhetoric, such a suggestion would be laughable. But the DOJ picked on Google, one of the most cherished companies of our time. Bad move.
5) Google’s Motive May Not Be Entirely Pro-Consumer. Sure, Google’s resistance to the DOJ gives Google a chance to redeem its privacy standing after Gmail. However, I suspect Google’s principal motivations may have little to do with consumer privacy. Even as amended, the DOJ’s request would take valuable engineering time and would potentially expose some Google trade secrets to competitors or black-hat SEOs. We can laud Google for its pro-privacy stance all we want, but if the DOJ’s request required zero engineering time and did not expose any Google trade secrets, I’m convinced that Google would have quietly fulfilled the DOJ’s request a long time ago.
There's been a lot of commentary on this event, and I won't try to recap it here. However, a few pages I recommend:
* Danny Sullivan's level-headed and insightful post
* Dan Solove's insightful commentary on the applicable law that governs government's requests to third parties for data
UPDATE: As predicted, Sen. Leahy is asking the DOJ to explain what they are doing and why.
UPDATE 2: Google's response to the government's motion.
January 20, 2006
The NFL's SUPER BOWL Will Be Held on SUPER SUNDAY
A sports report on the local radio station broadcast this morning reminded me that we are in our annual period where the NFL causes all broadcasters to step “through the looking glass” and act in accordance with the NFL’s sometimes silly view of trademark law.
Several years ago, the NFL cracked down on the use of various trademarks relating to the “Super Bowl,” its annual professional football championship game. Understandably, the NFL was concerned about dilution of its marks, as well as losing the ability to enforce its marks by not policing uses where someone was trying to falsely suggest a connection with, or endorsement by, the NFL with their product or service (for example, the local supermarket’s, “Super Bowl Sale”). The NFL even went so far as to create a legal memorandum concerning “Broadcasts and Promotions Related to Super Bowl XXXVIII"), in which several phrases, including “Super Bowl,” “Super Sunday,” “National Football League,” “NFL,” and the NFL shield and Super Bowl logos, as well as team names, are listed, with an admonition that “an entity cannot legally say or print any of these protected words or use these protected logos in its marketing or promotions."
Now, I understand that the NFL does not want entities using these protected terms or logos for marketing or promoting their own goods and services. But saying that an entity “cannot legally say or print any of these protected words” goes far beyond the recognized boundaries of trademark law and the First Amendment. Whether one calls it “nominative fair use” or use that is not within the scope of the Lanham Act, there are clearly instances where one can say and use these words without fear of trademark infringement. For example, there should be no problem with the local sports broadcaster stating that the winners of the two football games this weekend will be playing in the “Super Bowl” on February 5th, instead of saying that the winners will be playing in “the big game in Detroit” or “the professional football championship game in Detroit.” One has always been able to legitimately use the name of a product or service to identify that product or service, and the NFL’s telling broadcasters otherwise is just plain silly.
UPDATE: Mike Madison discusses the problems of brand control due to the Internet.
Anti-Spyware Coalition Conference February 9
By Eric Goldman
The Anti-Spyware Coalition has released the agenda and schedule for its Public Workshop: Defining the Problem, Developing Solutions on February 9 in Washington DC. If you're interested in adware/spyware policy-making and can easily get to DC, this looks like an event worth attending. I hope to see you there.
Anti-Marketing Laws and the Commercial Speech Doctrine
By Eric Goldman
Prompted by the Supreme Court's denial of cert in the White Buffalo case, Chris Hoofnagle of EPIC posted a nice rundown of some recent cases where anti-marketing laws survived a First Amendment challenge. He calls the 1999 US West case (which struck down an FCC rule limiting resale of customer records) the "high water mark" of the argument that First Amendment rights trump "privacy" laws. [Chris' characterization of the laws as "privacy" laws confused me; all of the laws were intended to restrict marketing in some fashion.]
He then makes his case by discussing a number of opinions from the last 5 years where anti-marketing laws survived a First Amendment challenge. Chris concludes: "In light of the number of cases where privacy law has trumped commercial free speech, shouldn't we consider U.S. West to be an anomaly?"
Descriptively, I think Chris' characterization is generally correct. First Amendment challenges to anti-marketing laws have met with scarce success recently.
Normatively, I'm not sure we should be celebrating this corner of First Amendment jurisprudence. The commercial speech doctrine is incoherent, and I don't envy lower court judges having to apply the commercial speech doctrines to anti-marketing laws. I wouldn't know what to do either.
Personally, I rarely get excited by First Amendment defenses against anti-marketing laws. I would much prefer to focus on first principles--what rules make for good social policy, and why? Unfortunately, this type of policy-making is rarely possible, leaving First Amendment challenges as last-ditch (and often low-likelihood-of-success) efforts to correct shaky policy-making.
January 18, 2006
Copyrighting Sports Celebration Moves
By Eric Goldman
Hank Abromson is a former student/research assistant of mine and an all-around mensch. He recently started a website called "AbromsonOnSportsLaw.com" where he is posting content on various sports law issues.
Of particular interest is his belief that it's possible to register a copyright in sports celebration moves. He has found Peter Stine, a long-distance runner who has a celebratory dance called PS:I 1, and Hank has filed a copyright application for the moves.
Several commentators have expressed skepticism about the copyrightability of sports celebration moves. The concerns about fixation are a complete red herring (fixation is so easily corrected), but Patry gets to the point:
“I’d be skeptical that shaking your butt and jumping up and down in an end zone is really going to do it,” he said. “Small musical themes aren’t protected,” he added. “It could be that this would fall into that category”
We know that choreography is copyrightable, so the question is--how small/short can a dance be and still qualify as an original work of authorship? 100 steps? 20 steps? 4 steps (like PS:I 1)? There may not be a magic number that applies universally, and I agree with Patry that mere end-zone butt-shaking is neither original nor a work of authorship. However, I am also convinced that a sufficiently long and involved celebration can clear the copyrightability threshold. It will be interesting to see if the Copyright Office thinks a 4 step celebration move does so.
However, even if a copyright registration issues, I wonder--will any registrant ever sue to enforce it? First, there will need to be the requisite infringement, and I suspect courts will be sympathetic if a subsequent performer makes even minor variations in choreography. Second, a properly registered celebration move should be eligible for statutory damages, but I suspect that few courts will consider awarding damages at the high end of the range. (I also suspect that plaintiff rarely (if ever) will be able to prove actual damages.) So a sports celebration move copyright registration could turn out to be a pretty piece of paper that's not worth a ton of cash.
In any case, Hank is clearly positioning himself as the nation's expert in the topic. If you're an athlete who has a celebration move that involves more than end-zone butt-shaking and you think is worth protecting, you should contact Hank. And if the PS:I 1 copyright registration issues, marathoners beware!
January 16, 2006
Second Anti-Adware Lawsuit Survives Motion to Dismiss--Kerrins v. Intermix Media
By Eric Goldman
Kerrins v. Intermix Media, Inc., No. 2:05-cv-05408-RGK-SS (C.D. Cal. Jan. 10, 2006)
Blogging the latest developments in anti-adware/anti-spyware lawsuits has become a full-time job, which is why I've fallen behind. I'm now aware of 5 anti-adware class action lawsuits pending:
* Sotelo v. DirectRevenue
* Simios v. 180Solutions
* Michaeli v. eXact Advertising
* Consumer Advocates Rights Enforcement Society v. 180Solutions [sorry, I haven't had a chance to blog on this case yet, but you can find the complaint here]
* the newest one to emerge from the haze, Kerrins v. Intermix Media
All of this leaves me wondering--just how many of these anti-adware class action lawsuits are out there? I'm not even counting the FTC enforcement actions or any of the private litigation or government enforcement actions related to the Sony rootkit.
Back to the Kerrins case. On January 10, the judge ruled on Intermix Media's motion to dismiss Kerrins' putative class action. In a brief opinion, the court dismissed the unjust enrichment and California B&P 17200 claims.
However, the court refused to dismiss the trespass to chattels claim, saying that the "Plaintiff has alleged that Defendant's adware damaged his existing software and reduced the efficiency of his computer system. Plaintiff has also alleged that removal of the adware requires users to spend time and to hire a computer specialist."
Note that, in Intel v. Hamidi, the California Supreme Court were specifically rejected the latter two damages as non-actionable in common law trespass to chattels claims. Hamidi should be controlling precedent on this lawsuit, so it will be interesting to see if the court addresses Hamidi in future rulings.
The court also refused to dismiss the computer crime claim (Cal. Penal Code 502). Penal Code 502 is a quirky statute--like the old-line computer crimes statutes, it initially focused mostly on unauthorized access to/use of computer resources, but it has since transmogrified into a general anti-computer trespass statute with a civil cause of action. The court says that the plaintiff "alleges sufficient damage and interference to his computer system," so this cause of action survives the dismissal motion as well.
In discussing unjust enrichment and trespass to chattels, the court cites to the Sotelo case--reinforcing the importance of the Sotelo case as a precedent for these follow-on anti-adware lawsuits.
As a result of this minute order, Kerrins' trespass to chattels and computer crime causes of action will continue. (There may also be a third cause of action that survives--there is an internal inconsistency in the ruling, and the complaints and various motions/briefs are not in PACER). Of course, as with the Sotelo case, the plaintiffs have a lot more work to do before getting a payoff.
New Year Brings New 47 USC 230 Defense Win--Whitney Information Network v. Verio
By Eric Goldman
Whitney Information Network, Inc. v. Verio, Inc., 2006 WL 66724 (M.D. Fla. Jan. 11, 2006).
2005 was a great year for 47 USC 230 defense wins, so why not ring in 2006 with yet another? In this case, an education/training company discovers a competitive website that is allegedly using its trademarks and disparaging its services. The plaintiff goes after the website and its web host (in this case, Verio) for trademark infringement, defamation and interference with a business relationship. Verio moves for summary judgment on the latter two counts per 47 USC 230, and the court grants it in a typically pithy, no-nonsense and otherwise-unremarkable ruling.
This doesn't end the case, however. The trademark claims are still active, and they could raise the thorny and unresolved question of when a web host is liable for contributory trademark infringement based on a user's content/activities. (This question was expressly left open by Lockheed v. NSI).
Final note: this is the second time in the past 6 months that this plaintiff has lost a 47 USC 230 defense (the first time based on the ripoffreport.com website, this time based on johntreed.com).
January 15, 2006
My Own Wikipedia Page
By Eric Goldman
Previously, I found my own personal search engine spam page. That was surprising but it wasn't very thrilling. In contrast, I was pretty excited to find my own Wikipedia page. I recognize that Wikipedia is (mostly) open-access, so the barriers to getting a vanity Wikipedia page are virtually zero. But I didn't create this one myself, and I don't know "Ancheta Wis" (the page creator).
So, what did I do that was noteworthy enough to prompt a stranger to create a Wikipedia page about me? (This is one of those tough existential questions--what do I want to be remembered for in history?) Was it my brilliant contributions to legal scholarship? My unparalleled performance as a legal educator? My heart-felt devotion as a husband and father? My freakish Slinky obsession?
Of course it was none of that. Instead, it was my bet with Mike Godwin that Wikipedia will fail in 5 years. In other words, what got the attention of the Wikipedia editors was my discussion about their future. It appears that Wikipedians are as self-referential as law professors!
Now, I'm caught in the dilemma faced by Jimmy Wales--should I edit my own biography? I know LOTS of FASCINATING details about the page's subject matter... Actually, I don't currently plan to edit the page with one glaring exception. If, in 2010, it looks like my prediction is wrong, I'll edit the page to flip the bet around (i.e., so that Mike predicted that Wikipedia will fail).
January 14, 2006
Regulating Marketing Delivery Presentation
I've given yet another presentation of my paper on regulating marketing. You can check out my outline of the talk. This outline is pretty close to the current working draft of the paper, so I would gratefully welcome any comments.
Marquette's Link to the Father of Spam
By Eric Goldman
You may recall the story of the first spam. A guy named Gary Thuerk worked for Digital Equipment Company. In 1978, he sent unsolicited emails to over 400 Internet users inviting them to attend a demonstration of some new computer equipment. For this act, he is now sometimes called the "Father of Spam."
I recently learned something new--Gary is a Marquette alum of the business school. Learn more about Gary and his reflections on his role in birthing spam: Enterpreneur, LA Times, Brad Templeton, Guinness Book of World Records.
January 13, 2006
Web Term Paper Lawsuit Settles
By Eric Goldman
In September, I blogged about Macellari v. Carroll. In that case, a student sued a website that allegedly offered her term paper for sale. The case has settled under a confidentiality cloak (registration required). However, a defendant has said he is "happy with the outcome."
A quick settlement certainly seemed like a logical outcome, especially from the defendants' perspective. There was little upside to them to see this case through to a judgment. Of course, settlement also leaves open the risk of "me-too" litigation. One of the defendant's websites claims over 100,000 papers in the database--that's a lot of potential plaintiffs!
January 12, 2006
47 USC 230 Year-in-Review (and Landry-Bell v. Various, Another Defense Win)
By Eric Goldman
Landry-Bell v. Various
December was a busy month for 47 USC 230 cases (with at least 4 substantive rulings plus 1 procedural ruling). The latest case to emerge from the year-end rush is Landry-Bell v. Various, Inc., 2005 US Dist LEXIS 38741 (W.D. La. Dec, 27, 2005).
Landry-Bell is a lot like the recent Barnes case. Allegedly, an ex-boyfriend created a user profile saying that Landry-Bell would like to engage in (as the court puts it delicately) "lewd and obscene acts of perversion." The profile was posted to Various' adultfriendfinder.com web service (which bills itself as "The World's Largest Sex & Swinger Personals Site"--sorry, I can't put a link to them--probably not office-safe by most people's standards).
Landry-Bell sued both the ex-boyfriend and Various for invasion of privacy, defamation and intentional infliction of emotional distress. Various moved to dismiss under 230.
On its face, this is a textbook 230 case. User creates profile; web service publish content; case should be over. Landry-Bell tries to get around the defense using arguments similar to the recent Hy Cite case, claiming that Various was a content originator because Various:
* submitted the content to search engines
* added descriptors, such as "horny," to the content
* displayed titles
* organized the content by geography
* provided an internal search engine of profiles
* provided a mechanism to input data, and asking questions that elicit information from users
* performed internal computer testing to "determining purity and compatibility scores"
None of these allegations end up helping Landry-Bell. Various' user is still the content source even if these allegations are true, and Various' role in processing/managing that content is indistinguishable from the facts in Carafano (and, for that matter, Barnes). 230 shields all of this behavior, and the magistrate recommends granting the motion to dismiss.
The flurry of activity in December prompts me to reflect on the tally of 230 cases for the year. I maintain a comprehensive and regularly-updated list of 47 USC 230 cases here, but let's recap just the 2005 cases:
Defense Wins: Associated Bank v. EarthLink; Austin v. CrystalTech; Barnes v. Yahoo; Donato v. Moldow; Faegre & Benson v. Purdy; International Padi, Inc. v. Diverlink; Landry-Bell v. Various; Roskowski v. Corvallis Police Officers’ Association; Whitney Information Network v. Xcentric Ventures; Winter v. Bassett
Plaintiff Wins: Hy Cite v. badbusinessbureau.com
Note that this scorecard excludes procedural cases, like those where a state court defendant invokes 230 and then tries to remove the case to federal court. See, e.g., Cisneros v. Sanchez, 2005 WL 3312631 (S.D. Tex. Dec. 7, 2005) (saying that 230 does not give a basis to remove to federal court). It also excludes dicta and non-substantive references, like Huntingdon Life Sciences v. Stop Huntingdon Animal Cruelty USA (with a funky footnote pondering if a website could be an interactive computer service--even though this question has been well-litigated by several other cases). Finally, it excludes resolutions not based on 230, such as the dismissal of Batzel v. Smith for procedural reasons.
So, according to my tally, in 2005 there were 10 defense wins under 230 and 1 plaintiff win. And even the sole plaintiff win wasn't dispositive--the court refused to grant a motion to dismiss based on the factual allegations, but the 230 defense could still apply after discovery.
While the overwhelming success of defendants claiming 230 leaves little room for plaintiffs, the statistics are partially overshadowed by the pending California Supreme Court opinion in Barrett v. Rosenthal. That case is expected to squarely confront if 230 leaves open distributor liability. If the CA Supreme Court says that it does, then I have 2 predictions:
1) A brawl will ensue when defense interests try to overturn the case in Congress. The defense interests (eBay, Google, AOL, etc.) have some legislative influence (much more so than in 1996 when the safe harbor was enacted), and getting rid of a major contrary precedent should be a high lobbying priority. On the other side, the plaintiff-side interests are less coordinated but many plaintiffs (and several prominent commentators) would love to see the 47 USC 230 defense scaled back. I would expect to see some sparks fly between these groups in Congress.
2) We will see an epidemic of lawsuits against intermediaries. Right now, the bright-line rule of 230 surely discourages many plaintiffs from even bothering to chase intermediaries; but if there's hope that the deep pockets are on the hook, the frenzy should be breathtaking.
UPDATE: In a surprise, the judge in the Landry-Bell case rejected the magistrate's report. In the substantive explanation, the judge said:
"Although the complaint is scant in details and allegations that would result in liability for Various under the Communications Decency Act, 47 U.S.C. § 230, the allegations are sufficient, because of our notice pleading regime, to suffice under Rule 12(b)(6). See Gen. Elec. Capital Corp. v. Posey, 415 F.3d 391 (5th Cir.2005). Believing that greater factual development as to the actions of Various is necessary, this court rejects the Report and Recommendation." 2006 WL 273599 (W.D. La. Feb. 2, 2006)
Let's hope the judge didn't just waste everyone's time.
January 07, 2006
RipoffReport.com Loses 47 USC 230 Motion to Dismiss--Hy Cite v. badbusinessbureau.com
By Eric Goldman
Hy Cite Corp. v. badbusinessbureau.com, 2005 U.S. Dist. LEXIS 38082 (D. Ariz. Dec. 27, 2005)
This is the third 47 USC 230 ruling involving badbusinessbureau.com/RipoffReport.com. The first two were:
* MCW, Inc. v. Badbusinessbureau.com, L.L.C., 2004 WL 833595 (N.D.Tex. Apr 19, 2004).
* Whitney Information Network, Inc. v. Xcentric Ventures, LLC, 2005 WL 1677256 (MD Fla. Jul 14, 2005).
(In 2004, there was also an earlier Wisconsin district court ruling in this Hy Cite litigation involving Hy Cite's lack of jurisdiction--note the case has moved to Arizona).
The prior two 47 USC 230 rulings were a split. The defendants lost the 47 USC 230 claim in the MCW case and won it in the Whitney case. Completing the troika, this case resembles the MCW case in its reasoning--making these defendants a rare two-time loser of a 47 USC 230 defense.
Here's my understanding of the badbusinessbureau.com/RipoffReport business. The websites ask users to submit complaints about various businesses. The website operators then post the complaints, but the operators add their own headline to the posting. The operators also write various editorials/other content they originate themselves. Once a company has been targeted by website users, the operators then approach the company and offer various recourses to the targeted company for not-insubstantial fees. (The plaintiffs allege that this latter step is extortionate).
In this case, the targeted company was Hy Cite for its "Royal Prestige" dinnerware/cookware. There were 35 user-submitted reports complaining about this brand. After Hy Cite unsuccessfully demanded redress against these postings under defamation and trademark law, Hy Cite sued. The defendants claim the 230 defense.
In rejecting the 230 defense, the court points to the following allegations:
Plaintiffs alleg[e] that wrongful content appears on the Rip-off Report website in editorial comments created by Defendants and titles to Rip-off Reports, which Defendants allegedly provide. Moreover, Plaintiffs allege that Defendants "produce original content contained in the Rip-off Reports." Plaintiffs further allege that Defendants "solicit individuals to submit reports with the promise that individuals may ultimately be compensated for their reports.
On that basis, the court concludes that the defendants cannot claim that the information came from another information content provider.
There are 2 obvious flaws in the court's thin analysis. First, the last allegation--that the defendants solicit content for potential compensation--should be completely irrelevant to the 230 defense. The 230 defense should apply even if the ICS pays for the content (see Blumenthal v. Drudge) and even if the ICS owns the content (see Schneider v. Amazon.com).
Second, the court misconstrues the statutory language. An ICS isn't liable if the content is provided by another ICP. Someone is an ICP if they are responsible, even in part, for the content. Therefore, even if the ICS could be deemed an ICP with respect to a particular content item, that item could still provided by another ICP so long as any third party was partially responsible for its development.
The court reverses this reading, treating the ICS as responsible for the content if the ICS was even partially responsible for this content. (This mistake was also made by the MCW court). Not only does this court's reading contradict the express statutory language, but it contradicts a slew of precedent where the ICS was partially responsible for the content but still was eligible for the 230 defense (cases that come immediately to mind: Drudge, Schneider, Ramey v. Darkside Productions and the controlling 9th circuit Carafano v. Metrosplah ruling).
Despite this, I think the court got the ruling right. If the plaintiffs allege that they are suing based on content solely authored by the defendants (which apparently the plaintiffs did), then 47 USC 230 doesn't apply to that content and the motion to dismiss should be denied. Of course, the plaintiff ultimately has to prove its facts, and the predicate condition (solely authored by the defendants) should limit the items that are appropriately within the lawsuit's scope.
The ruling also addresses trademark/unfair competition claims. The court dismisses the Lanham Act claim because there's no way a gripe site can divert customers (cite to Bosley). However, the court does not dismiss the common law unfair competition claim because that doctrine covers commercially-detrimental false/misleading statements.
UPDATE: The attorney for Ripoffreports.com tried to post the following comment but the comments function is acting strange. Her comment:
"As the attorney who handled all three cases against Rip-off Report, I would just like to add one comment to Eric's insightful analysis of these cases. In both cases where the decisions were against us, the court was deciding a motion to dismiss under Rule 12(b)(6). That is important because the standard by which the court considers those motions is accepting all of the allegations of the complaint as true. In those cases, the complaint alleged that Rip-off Report was responsible for or helped create the content, and that was the basis for the ruling. The next step is for us to file a motion for summary judgment, where the court actually considers the evidence instead of just accepting the allegations. In Hy Cite, we are preparing to file a motion for summary judgment and we expect it to be granted. There is no dispute that agents of Rip-off Report did not author the content at issue. The MCW case was dismissed on other grounds and there was no need to file anything further. Thanks for keeping the public posted on these important free speech cases.
Maria Crimi Speth, Esq."
UPDATE #2: I received the following email, which I am posting without comment (the sender said he also had problems posting a reply via Typekey):
Dear Mr. Goldman:
Thank you for the opportunity to address Maria Speth's comment here:
While I understand that you are primarily concerned with 47 USC 230 immunity, the discussion of the Rip-Off Report misses many important facts and one crucial legal point: Please indulge me. Leave aside the allegations as to whether or not Mr. Magedson, himself authored the defamatory reports. He did, but forget that for a minute. The extortion and/or threatened extortion and/or fraud didn't occur online. These communications occurred in email and by telephone.
Florida Statutes provide:
F.S.836.05 Threats; extortion.--Whoever, either verbally or by a written or printed communication, maliciously threatens to accuse another of any crime or offense, or by such communication maliciously threatens an injury to the person, property or reputation of another, or maliciously threatens to expose another to disgrace, or to expose any secret affecting another, or to impute any deformity or lack of chastity to another, with intent thereby to extort money or any pecuniary advantage whatsoever, or with intent to compel the person so threatened, or any other person, to do any act or refrain from doing any act against his or her will, shall be guilty of a felony of the second degree...."
This conduct is not immunized in any way shape or form by 47 USC 230. Ms. Speth conflates the two issues and thereby misleads the public into believing that her client can extort with impunity.
We proved that Mr. Magedson "creates content" on his website in order to further his extortion scheme. In fact, the nation is replete with Mr. Magedson's extortion victims, and the Arizona Court has clearly held that threatened extortion is a predicate act in a well-pled RICO claim. The acts of extortion or threatened extortion, however, were not communicated on the website publication. No matter how factually probative the online material itself may be, CDA immunity has no relevance to the RICO claims in the Hy Cite case. Considering the legislative purposes for the CDA, and for 47 USC 230 immunity, it is clear that holding Magedson and Xcentric liable for threatened extortion will not undermine the legislative intent. I'll spare you, the expert, a discussion of those purposes, but if you look at these and consider the nature of the extortion in this case, I am certain that you will agree that such crimes should not be protected.
Although I believe Ms. Speth incorrectly claims that authorship isn't disputed, this misses the point that proof of authorship is not elemental to the extortion claims. There is more than one way to manipulate content to further this extortion, beyond simply authoring one's own statements, or having third persons submit reports in furtherance of this scheme. Magedson publishes only bad reports about my company: despite the efforts of many who tried to report favorably on our company without success. He freely admits he won't allow us to publish. Who can reasonably believe that the federal courts will sanction the use of the CDA to bar otherwise valid extortion claims?
Everyone must step back from this for a moment to consider this. Magedson and Xcentric committed the threatened extortion with communications in email and over the telephone. The comments on the website, themselves, are not the only actionable conduct.
Defamation is one act, the act of publishing, itself. Arguably there is immunity from a defamation claim where one can demonstrate a passive website with only third party "content" creation. But I can also make an excellent argument that the circumstances under which rip-off reports were filed in our case, for instance, leave no room for concluding that anyone not conspiring with Magedson could or would have authored the statements in question. To appreciate this, you would need to carefully consider the content and timing of these purported third party posts, as well as those defamatory insults which Mr. Magedson, himself, admitted to personally authoring in our case.
A far better case, however, and one that will certainly get to a jury, is the claim that Speth utterly fails to address, again, in laying her straw man. This unwillingness to address the extortion appears to be a favorite tactic of hers. The CDA website immunity simply isn't enjoyed for torts like extortion- or murder, for instance- that are based on conduct other than the act of publishing material on a website. This should be obvious. It is intrinsic to an understanding of the law in this case because the rip-off report extortion occurs after the material has been published (and prior to other threatened future publications). The actionable conduct isn't necessarily the publication, at all, although one should not overlook this type of claim. (In our case, Mr. Magedson was foolish enough to sign his own name to the original defamatory content about us, and in fact he later admitted authorship. I would argue that conduct of the website operator outside of the context of publishing, should also be considered in evaluating the propriety of the application of the CDA immunity, as well, but that is in regards to defamation, not extortion or threatened extortion. The claims are distinct, if not unrelated.)
The damages sought in an extortion and /or RICO claim based thereupon are unrelated to the conduct of publication, itself. Rather, it is the nefarious attempt to obtain compensation to which Rip-Off Report and its operator should and do enjoy no legal right or claim that constitutes threatened extortion. The Arizona Court said so quite clearly. The website operators have participated in a continuing crime, no element of which consists of simple publication.
It's like someone standing at your front door handing out false stuff about you. If I offer to insert favorable material every day for a hefty fee from you, it hardly matters what media the guy at the door uses. My conduct is illegal if I have a reasonable basis to believe the guy at the door is lying. This is true even if I have no idea on earth who that third party may be. Also, whether he is using a bullhorn, pamphlets, an internet website, or smoke signals really doesn't matter. No doubt, many coward extortionists throughout history have used "anonymous" third parties to make their threats through a variety of media. Many others have certainly threatened to refused to share a true alibi or to concoct a false one unless they were paid. The victim's motivation, the extortionist's mode, or the precise nature of the embarrassment or falsehood threatened- even the necessity of a falsehood- doesn't define the crime. These are less compelling elements of extortion than the shakedown. It's still extortion if I later shake you down to collect a fee to which I have no legal claim. There is no question as to who authored the shakedown in the Magedson case. It's not the false stuff alone that is actionable by Hy Cite. It's the shakedown. No matter who the "original" author is. Right? It's the criminal intent to llegally capitalize on the secret or on the embarrassment that defines the crime, the intent to "expose any secret affecting another, or to impute any deformity or lack of chastity to another, with intent thereby to extort money or any pecuniary advantage whatsoever, or with intent to compel the person so threatened, or any other person, to do any act or refrain from doing any act against his or her will...."
Surely, Ms. Speth doesn't feel as though Mr. Magedson's testimonial is so precious that his victims willingly pay him. Even they claim that his methods are "extortionate". Thus, the RICO claims survived in Hy Cite, and no civil immunity will save the Rip-Off Report. If there is still any serious disagreement on this, then perhaps the Arizona Federal Court could have been more clear in its legal analysis, but it certainly got the result right.
Really, it only makes common sense. Neither Magedson nor Xcentric should be permitted to demand fees to ameliorate defamatory content on a supposedly passive website. Think about it: the consideration and quid pro quo for the extortionate payments to Magedson are supposedly ...wait... and let this sink in...the website operator's promise of favorable content creation! Efforts to use the CDA to further this criminal scheme will inevitably fail. Ms. Speth acts like she doesn't know this, but the fact is that this is precisely why she came to your site making these straw man arguments. She probably knows her case is very weak.
Mr. Magedson's publications do not come strictly from third parties. He is the source of much of the more absurd material appearing on his website. That he may have conspired with others around the country whose IP addresses are also used for this purpose doesn't change the underlying factual issue. Even were Ms. Speth and her client to somehow establish third party authorship (highly improbable inasmuch as their own "expert" testified that he has no idea who authored any of the offending material in our case), this won't excuse or immunize threatened extortion. One may argue, as Speth tries to, that the burden is on the Plaintiff to establish authorship. I reiterate that this is not an element of the extortion claim, and therefore it should not be an element of the RICO claims for which threatened extortion is a sufficient predicate. Any other application of the law should be reversible because the extortion is so obvious and obnoxious here.
The fact finder will inevitably look at the content of the website in the context of the conduct substantiating the extortion claim and NOT after a fashion that assumes that Mr. Magedson ISN'T in the business of making money off lies about innocent individuals and businesses. No one seriously disputes the fact that he makes huge amounts of money to say nice things about those defamed on his website. In fact, our efforts first motivated him to disclose on his website that he is paid for testimonials...if you look for this you'll now find it on his website since earlier this year. Now he also admits he doesn't let us publish responses on his website. Consumer advocate that he is, he previously hid the source of his compensation from the public. He still asks for public donations on a web page that doesn't disclose that he accepts money from businesses maligned on his website. How it can be argued to be a passive website under all of the circumstances is beyond me.
Obviously, one may find that Magedson and Rip-Off Report have threatened extortion without necessarily treating them as the "publisher or speaker of any information provided by another information content provider." For instance, if I only agree to reveal the source of third party defamation if you pay me, that is extortion. If I refuse to remove the offensive material or to permit you to respond if you pay me, that is extortion. If I agree to not publish future defamation about you, but only if you pay me, that is extortion. If I suggest that I have several posts that are defamatory that I have not yet posted but will if you don't pay me, that is extortion. The publishing of the information online and the threat to extort are distinct acts, as much as Ms. Speth would like to conflate the two torts. Who authored the extortionate emails was never in dispute. The defendants are "rare, two-time" losers under 47 USC 270 because they are extortionists, and their pathetic claim that they are merely website operators who publish only third party remarks is both factually false and legally insufficient in any event. They just bank on outlasting litigants by making litigation as costly as possible or they settle the cases brought against them, when they can. So far, their strategy has succeeded, but we'll see how long this lasts.
In the interests of full and fair disclosure, I must add that the Rip-Off Report is still trying to silence me by publishing none-too-veiled threats against my wife, and me, on that website. http://www.ripoffreport.com/reports/ripoff38900.htm (Yes, that's my booking photo from a domestic disturbance that had nothing to do with Rip-Off Report, but they used it to try to intimidate me within days after I testified against them; scroll down to the bottom for their latest, unsuccessful, attempt to intimidate me on 3/19/06, by publishing private personal information about my wife and me and threatening us. They make the weak redaction and, in essence say to the public, "don't threaten or commit violence to the guy in the above photo! Wink, wink; nudge, nudge.") They've done this because I've exercised my right of free speech, first in testifying, and most recently in promoting online the legal opinions that bear directly on their illegal operation. You may recall that I wrote to you about the Hy Cite opinion when it was first published.) Also, this isn't the first time Ms. Speth and I have knocked heads online. She took the unusual step of personally attacking my credibility online after I gave testimony in a case against Magedson and the Rip-Off Report. (7/17/2005- http://www.my3cents.com/showReview.cgi?id=10378) I attempted to debunk her claims at that time: (7/27/06-http://www.my3cents.com/showReview.cgi?id=10464) They'll probably sue me for writing this, but rest assured I will be heard from again before all is said and done with this.
Chris McFarland, J.D.
800 527 0476 x311
PS My understanding is that the MCW case was quickly settled by confidential agreement after that opinion came down."
January 03, 2006
My Google Search History
By Eric Goldman
I use Google a lot. I've been using Google's personalized search now for a couple months, and this gives me a handy (and slightly-embarrassing) record of just how often I search Google. I think my December chart says it all:
In case you're wondering about the white or light green boxes, I was traveling and mostly offline December 2-4 and 19-25. Top number of searches in one day? 44, or about 3 searches every waking hour.
Add in my time on Gmail and with AdSense, and I routinely interact with Google multiple times an hour.
All of this is fantastic news for Google. The not-so-good news? I recall clicking on a sponsored link only once or twice all month. As a result, at most I may have made a buck for Google via CPC ads. (I probably also made Google some money from CPM ads displayed in search results and in Gmail, although I mostly ignore those). It takes a lot of users earning Google $1-$2 a month to justify a $115B market cap!
January 02, 2006
Tattoo Advertising/Human Billboards
By Eric Goldman
One of my contracts final exam questions last semester involved a person who sold tattoo rights to an advertiser. This prompted me to do a little research, and it turns out this phenomenon isn't all that new. Apparently it arose in 2001/2002 in the context of athletes selling tattoos.
Since then, tattoo advertising has become fairly commonplace. See here and here. People appear willing to brand just about any part of their body for the right price. (For a satire on the lengths people might go to, see this barely office-safe article).
Some companies, such as LeaseYourBody.com, TatAD.com (marginally office-safe), Body Billboardz, HumanBanner.com and LivingAdSpace.com, even claim to match tattoo sellers and advertising buyers. However, according to the Globe and Mail, there are more tattoo sellers than advertising buyers (although brand name advertisers like Toyota have used it).
Wisely, most sellers only promise to get temporary tattoos. (According to HowStuffWorks, up to 50% of people who get tattoos regret their decision). Some sellers also have very strict standards. For example, one seller's rules: no swastikas, nothing "racial," no adult stores and no "666, the mark of the beast".
In contrast, I think the bad-idea-for-cheapest-price winner is Kari Smith (a/k/a Karolyne Smith), a Utah woman who got a permanent GoldenPalace.com tattoo on her forehead for $10,000. Check out the photos here and here or, if you're really fascinated, watch the video. Others have auctioned off forehead space, but I believe most of them have either gotten temporary tattoos or got paid more. Note that out of the goodness of their hearts, GoldenPalace.com gave Kari an extra $5,000 for her troubles. For her part, Kari said she picked the online gambling site over other potential advertisers “because they work with a lot of charities.”
Meanwhile, the original auction listing on eBay paints a fascinating psychological picture. In some ways, the money seems secondary to Kari's quest for 15 minutes of fame (at the cost of a lifetime of bangs).
This tattoo-advertising phenomenon reminds me a little of the hype about driving free ad-wrapped cars during the dot com bubble. If there were ever any legitimate companies in that business, they all went bankrupt. I suspect the only people who actually made money were intermediaries who charged potential drivers a fixed fee to be listed in a database. Similarly, I notice that several of the existing sites charge potential sellers some upfront fees to participate (do these smell like a SCAM to you?), and some of the early sites (like Headvertise and Headvertisement), are already gone. Alas, I guess all good things must come to an end eventually.
January 01, 2006
2005 Blog Year-in-Review
By Eric Goldman
I generally avoid overly self-referential postings, but this post is a glaring exception. In this post, I'll recap some of the blog highlights (and lowlights) of the past year, covering both this blog and my personal blog. I hope you find this at least mildly interesting.
Top 10 Blog Posts (excluding category pages)
1. What Happens to BitTorrent After Grokster? (by Mark Schultz). This post got 50% more page views than the next closest post.
3. Important 2d Circuit Adware Case--1-800 Contacts v. WhenU. This is one of my favorite posts of the year.
5. Steinbuch v. Cutler Update--Cutler's Motion to Dismiss. This one got unexpectedly large traffic from a Wonkette link (Its tagline: "Politics for people with dirty minds").
10. Wikipedia Will Fail Within 5 Years. I think my statistics generally were distorted by referral spam, comment spam and other robotic activity, but this post's top 10 placement may be due to robots because it got 225 robotic comments in 3 days.
Some of my favorite blog posts that you may have overlooked.
There were some fantastic posts from guest bloggers that may have been overlooked as well--check out Mark Schultz's Stealing Mickey's Mojo, Mark McKenna's Branded Products as Ingredients, John Ottaviani's Federal Circuit Refuses to Register Pennzoil's Clear Motor Oil Bottle as a Trademark and Judge Patel: Maintaining An Index of Downloadable Files is Not "Distributing" the Files, and Ethan Ackerman's Law Enforcement Collection of DNA.
With almost 600 posts this year written at "blog speed," not surprisingly the bottom 1% of posts aren't that great. Among my least-favorite posts: low-value-added posts (e.g., here and here), inflammatory posts, and error-riddled posts (e.g., here, here and here). By definition, I'll always have a bottom 1% of posts, but in 2006 I'll endeavor to avoid such obvious mistakes.
Some Blog Statistics
* 573 posts this year, or about 2/day since the blogs began in early February. The most common topical categories include copyright (87 posts), adware/spyware (85 posts), search engines (77 posts) and trademarks (77 posts).
* 78% of the search engine referrals came from Google. The next closest was Yahoo with 10%. The top search keyword used to find the blog? "Law professor salary."
* Reflecting the blog's techie audience, about 10% of readers use a Linux OS instead of Windows, and less than half use Microsoft Internet Explorer as their browser.
AdSense (this also covers my personal website)
For the year, the websites had a clickthrough rate of 0.5% (i.e., 1 out of every 200 pages with ads generated a click) and an ECPM of about $3.75 (i.e., every pageview containing ads generated less than half a penny).
I'm not complaining too much about my modest AdSense earnings, but at the same time I think the websites have a lot of untapped revenue potential being obscured by AdSense's poor automated assessments. In particular, I'm frustrated by the omnipresent "Smart Link Marketing"/www.Text-Link-Ads.com display ads that are just not relevant or useful to this audience. I understand that presumably these ads generate more total revenue than other ads that Google might display, but this is because AdSense's algorithms are missing a lot of good keywords. For example, ads for anti-spam or anti-spyware/adware products would be very high CPC and relevant to the audience, but AdSense figures that out pretty rarely.
Thanks for Reading
If you've read this far, you're either a loyal reader or a voyeur (if you're the latter, sorry to omit the juiciest stats like total visitors, pageviews or AdSense earnings, but I don't want to embarrass myself by confirming that the blogs are small potatoes). Either way, thanks for reading in 2005, and I look forward to your continued readership in 2006. Have a wonderful new year!