August 31, 2006
Alaska's Anti-Adware Law--A One-Year Status Report
By Eric Goldman
So, what's happened in the past year? As far as I can tell, nothing. I've not heard of any preemptive challenges or any enforcement actions. Radio silence.
Contrast this with Utah's enactment of its problematic anti-adware law in 2004--the law was promptly challenged on Constitutional grounds, the court quickly issued an injunction, and the legislature amended the law within a year to render it largely irrelevant. As far as I know, Utah's law also sits unused. Overstock.com did sue SmartBargains under the initial version of the act; I'm not sure what happened to that claim after the law was enjoined.
I'm always fascinated when laws are passed with lots of fanfare and then sit dormant. Why hasn't the Alaska law generated any action (pro or con) yet? I think the secret may lie in some odd language that I overlooked when I initially dissected the statute. The law defines a pop-up ad as:
material offering for sale or advertising the availability or quality of a property, good, or service that is displayed on a user's computer screen, without any request or consent of the user, separate from an Internet website that a user intentionally accesses (emphasis added)
What does it mean that a user "requests" or "consents" to a pop-up ad? It could mean that the user must consent to each pop-up ad individually immediately prior to its delivery--a bizarre HCI process, but one that would be consistent with the apparent legislative intent. Alternatively, it could mean that a user's consent to receive pop-ups at the time of software installation suffices as consent for all subsequent pop-up ads delivered by that software. This interpretation is consistent with the express statutory language, but then it raises the question (like the question raised when Utah amended its Spyware Control Act)--what's the point of such a toothless law?
This statutory interpretation issue may explain why there hasn't been any action under the law. From the adware vendor's side, the express statutory language may provide them enough cover that there's no need to rally up the troops for a heavy-duty Constitutional challenge. Meanwhile, plaintiffs may be scratching their head trying to figure out if they have a valid cause of action.
There are, of course, other possible explanations for the seeming lack of action, including:
* there may be some lawsuit I'm not aware of (please let me know if I've missed something)
* 1 year may be too short a time period to evaluate the law.
* some adware vendors may be shunning Alaska. See, e.g., HotBar's license, which says "Special Notice to Alaska Residents: Unfortunately, according to Alaska's SB 140 Act, users who reside in Alaska may not install the Hotbar software. Therefore, by downloading or installing the Hotbar software you declare and represent that your computer is not located in the state of Alaska. To the extent that our system is able to recognize that your computer is located in the state of Alaska, we will not enable you to download the software." Superficially, perhaps the law has changed the behavior of some adware vendors. However, I don't know what Hotbar does to detect Alaskan IP addresses or otherwise detect Alaskan computers, but these procedures generally are imperfect. As a result, depending on the rest of Hotbar's interaction with users, it could be that some Alaskans may still be downloading the software in a manner inconsistent with the statute.
I can't resolve these alternative explanations yet, but for now, my vote is that this law is sufficiently poorly drafted that it will never be used by anyone. If so, consistent with other state-level attempts to regulate the Internet, Alaska may have muffed its effort. Fortunately, if this law is truly irrelevant, Alaska's muffing will be relatively harmless.
Nevertheless, Alaska's muffing may have some bearing on Congress' motivation to pass an anti-adware/anti-spyware law. For the most part, the other anti-spyware laws passed by the states add little to the legal regulatory environment (the "intentionally deceptive" standard is both duplicative of other laws and a very high threshold), so coping with them does not require vendors to do something special. However, putatively Alaska and Utah's laws were much broader, as they were intended to outlaw an entire industry--which motivates industry players to seek preemption of state laws. Yet, if both laws are effectively irrelevant, adware vendors have less incentive to push Congress for a preempting law.
August 30, 2006
Do Quotation Marks Matter? Yes (in the Ninth Circuit)--Picture It Sold v. iSOLD It
By Eric Goldman
Picture It Sold, Inc. v. iSOLD It, LLC, 2006 WL 2467552 (9th Cir. Aug. 28, 2006)
The plaintiff sued iSOLD for trademark infringement based on competitive keyword ad purchases, and it sought an injunction against continued keyword purchases of certain phrases. Judge Whyte in the district court denied a preliminary injunction, and the Ninth Circuit is dealing with an appeal of that denial.
The court doesn't lay out the facts in any coherent fashion, but here's the best I can tease together. Picture It Sold claims that iSOLD It is buying the term "picture it sold" as a keyword trigger for ads at Yahoo and Google. iSOLD It claims that it has not done so. Picture It Sold then refutes iSOLD's response by bringing in screen shots showing iSOLD's ads being displayed in response to various keyword searches, including "picture it sold" and the names of other competitors (including "auction drop," "quick drop" and "snappy auctions"). However, the plaintiff ran all of these searches without using quotation marks around the search terms, so in effect the plaintiff searched for ["snappy" and "auctions"] rather than ["snappy auctions']. Because iSOLD could have purchased keywords like "sold" and "auction," it might have shown up in the demonstration searches even if it never bought a competitor's name as a keyword.
(The court doesn't mention broad matching, nor does it seem aware of the possibility of broad matching. But I believe that if iSOLD It bought words like "sold" and "auction" broad-matched, then its ads would show up even if the plaintiff conducted those searches with quotation marks.)
Thus, the court cannot make the inference sought by the plaintiff that the defense made illicit keyword ad purchases. Without that inference, apparently there is no other basis to support the preliminary injunction.
The court goes on to say that even if the defendants had purchased the keywords, it is not clear what legal consequence should attach. It says that keyword purchases might be analogized to keyword metatags a la Brookfield, or it might not (cite to Berzon's concurrence in Playboy v. Netscape). This panel doesn't tip its hand, simply saying "it would  be necessary for the district court to resolve the somewhat difficult question." Best of luck on that, Judge Whyte! (Here's a tip: read the Merck case!)
August 25, 2006
Barrett v. Rosenthal Oral Arguments Scheduled for September 5
By Eric Goldman
The California Supreme Court has scheduled oral arguments in Barrett v. Rosenthal for September 5 at 2 pm in San Francisco. See the case record here. This case has the potential to define, as binding California precedent and as persuasive precedent elsewhere, whether or not 47 USC 230 preempts "distributor" liability as well as publisher liability. It's very possible that the Supreme Court will sidestep that question to resolve the case on its facts, but if the court does address the distributor v. publisher question, this case could be the most significant 47 USC 230 opinion since Zeran. At minimum, if the court says directly or indirectly that 230 doesn't preempt distributor liability, expect widespread rejoicing among the plaintiff's bar and a slew of new lawsuits against every intermediary that hosts user content.
I am planning to attend the hearing. If anyone else is going, please email me offline. If anyone knows how to get into a Supreme Court hearing, please email me offline.
August 23, 2006
August 2006 Quick Links (Volume 2)
By Eric Goldman
Some more things that caught my eye in the past month (see Volume 1):
* Wikipedia's entry on trademarks that have become generic. "Google" isn't listed...yet—instead, it’s listed as a trademark “often used generically”. HT: Marty. My list of favorite generic terms: Aspirin, Baby Oil, Brassiere, Cellophane, Celluloid, cornflakes, Dry Ice, Escalator, granola, Kerosene, Lanolin, Light Beer, Linoleum, Milk of Magnesia, Murphy Bed, nylon, octane, raisin bran, Shredded Wheat, Thermos, trampoline, Yo-yo, zipper. I would update the Wikipedia entry myself if I thought that those changes would actually stick rather than being reverted by a Wikipedian exercising dominion over the page--a blog post coming on that issue soon.
* Greg Linden has some insight thoughts about lawyers' role with start-ups that come from the voice of experience.
* Goofy article in the Washington Post romanticizing the sites enabled by AdSense and citing examples of people getting rich through AdSense. Two observations; (1) That's definitely not me! (2) Only a very quick mention of the splogs, typosquatting sties and junky content-free sites spawned by self-service AdSense programs.
* Fraudsters may have found the perfect technique to game eBay’s feedback. They use robots to build positive eBay reputations through a series of $0.01 buy-it-now transactions. If eBay’s feedback rating system becomes unreliable, what will happen to eBay? This seems like a bet-your-business issue for eBay.
* eBay isn't a "debt collector" under the Fair Debt Collection Practices Act, nor is eBay's feedback forum a "consumer report" under the Fair Credit Reporting Act. McCready v. eBay, Nos. 05-2450 and 05-3043 (7th Cir. July 10, 2006).
* "Nike: It's Not a Shoe, It's a Community." Another example of how a marketer has embraced its role as a content publisher.
* WSJ debate on search engines storing user data. Issues about the disposition of search engine data doesn’t seem to be going away any time soon! Big blog post coming on this topic shortly.
August 21, 2006
August 2006 Quick Links (Volume 1)
By Eric Goldman
So many good links this month, I'm breaking up this quick links post into two installments. The first installment:
* When Internet start-ups want to hire their first lawyer, they typically have three immediate legal needs—they want help with securing financing, procuring a domain name, and running a sweepstakes. Yes, sweepstakes typically make the “top 3” issues on an entrepreneur’s mind. Unfortunately, the world of sweepstakes and contests is pretty murky to those of us who don’t practice it regularly, which is why I always referred these matters to specialists. Fortunately, one of those experts, Tsan Abrahamson, recently published a nice primer on the subject in the Business Law Today.
* Web users are using the back button less frequently. I’m not sure what to make of this. Are search engines doing a better job delivering relevant results or giving previewing content, so that fewer searchers are "pogo-sticking"? Does this reflect the proliferation of toolbars so that unsatisfied searchers just conduct a new search in the toolbar window rather than hitting the back button? Some other explanation?
* The Federal Trade Commission released its Annual Report to Congress for FY 2005 Pursuant to the Do Not Call Implementation Act on Implementation of the National Do Not Call Registry. An amazing 107 million phone numbers are now registered on the registry.
* Information Week provides one person's perspectives on the 12 best software programs ever. I thought this was a pretty good list. I do think we should give even more credit to the early coders who worked for the space program—they wrote amazing and (usually) reliable software using limited lines of code operating in extreme environments (very low power, very limited processing power, cold as Hades).
* Brief recap from our roundtable discussion at the ABA Annual Meeting on blog law and virtual worlds.
* A blast from the past: the famous 1993 New Yorker cartoon.
August 20, 2006
Trademark Coexistence Agreement Article
By Eric Goldman
Marianna Moss (a friend/wife of my former colleague) has written an article entitled Trademark "Coexistence" Agreements: Legitimate Contracts or Tools of Consumer Deception?, 18 Loyola Consumer Law Review 197 (2005). To my knowledge, this is the first academic law review article on the subject of trademark coexistence agreements. In the article, Marianna points out the public policy interests of these arrangements, including possible antitrust consequences and consumer confusion arising from the coexistence relationship. Therefore, drafters of these agreements need to consider the interests of third parties not at the negotiation table. If you're doing a trademark coexistence agreement, this article is worth reading--it may help you draft an agreement that will survive third party scrutiny.
Coexistence agreements allow potentially confusing trademarks to coexist in the market without trademark infringement lawsuits. Although competitors frequently use coexistence agreements to avoid or settle lawsuits, there is no significant scholarship discussing the legal validity of such agreements in terms of antitrust and trademark law. This paper discusses the validity of coexistence agreements between manufacturers of similar products.
The discussion begins with historical reasons for trademark protection and goes on to explore whether trademarks are the property of their owners. The validity of coexistence agreements hinges on this concept. If trademarks are property of their owners, then coexistence agreements are valid despite the possible harm to the public interest. If, on the other hand, trademarks are not their owners' true property, then, in evaluating the validity of coexistence agreements, courts should consider the agreements' usefulness or possible harm to the public.
Another relevant aspect of trademark law is the law and economics of trademark protection. The main effect of trademark protection in terms of economics is the reduction of consumer search costs. If manufacturers keep the quality of their product constant, then consumers will use a trademark as a proxy for the product's quality. This gives manufacturers an incentive to invest in and maintain their products' quality.
Next, the paper explores views of various international tribunals on the validity of coexistence agreements. Courts' interpretations vary from validating an agreement based solely on its terms without considering public interest to invalidating an otherwise legitimate agreement because it violates public policy. The proposed explanation for this difference is that courts consider the type of products subject to a coexistence agreement. If fashion items are involved, the courts will not consider public interest even if the trademarks are confusingly similar. If, on the other hand, the product in question is medication, courts will invalidate a coexistence agreement between manufacturers who own confusingly similar marks to protect public health.
The next section of the paper discusses antitrust implications of coexistence agreements. Generally, coexistence agreements do not violate antitrust laws, but they nevertheless may affect competition between manufacturers of similar products. Two possible aspects of competition affected by coexistence agreements are the price and quality of products. However, the effect of a coexistence agreement on quality and price is unpredictable. Depending on the behavior of a manufacturer, a coexistence agreement may increase or lower the price of a product; the same goes for the product's quality.
Finally, the paper concludes that, in evaluating the validity of coexistence agreements, courts should consider public interest based on a sliding scale. The more vital the public interest implicated by the agreement (such as public health), the more strictly should the court scrutinize it. The standard for invalidating an agreement in case of a vital public interest is the likelihood of confusion. If the trademarks involved in the agreement are likely to be confusing to the public, the agreement should be invalidated. Conversely, if the trademarks involved are not likely to cause public confusion, then the court should allow the agreement to stand.
August 17, 2006
Can 512(f) Support an Injunction? Novotny v. Chapman
By Eric Goldman
Novotny v. Chapman, 2006 WL 2335598 (W.D. N.C. Aug. 9, 2006)
Chapman prepares a video showing how to cut women's hair. Novotny obtains a license to stream the video via the web. Later, Chapman has a change of heart and demands that Novotny stop streaming the video. Novotny refuses. Chapman then goes on a 512(c)(3) notice frenzy, sending takedown notices to Novotny's two Internet access providers, his payment service provider (PayPal) and, later, his streaming software provider (DivX). PayPal and one IAP cut off Novotny, so Novotny removed the video from his website. Novotny then turned around and sued Chapman seeking, among other things, a declaratory judgment of non-infringement and an injunction against Chapman sending more 512(c)(3) notices.
The court dismisses the injunction request easily, saying that there's no need for an injunction against further 512(c)(3) notices given that Novotny had already taken down the targeted file, which means that there is no reason why Chapman would continue to send 512(c)(3) notices. The judge appears to completely miss the point. A restriction on further 512(c)(3) notices would allow Novotny to restore the files without further fear of being cut off again. At this point, if Chapman can keep lobbing 512(c)(3) notices, Novotny can't restore the file--it would be futile, and it would jeopardize the distribution of any other content he might want to host at the same website.
However, I'm trying to find a legal basis that would support a court enjoining a putative copyright owner from continuing to issue 512(c)(3) notices. If the putative copyright owner lacks the right to send the notice, 17 USC 512(f) seems to directly apply. However, the statute is very explicit--it clearly says that if a person sends false notices, they are liable for the resulting damages. There's no reference to equitable relief, and the express reference to damages as the appropriate recourse seems to suggest that 512(f) could not support an injunction. So I can't find any statutory basis that authorizes a court to enjoin the issuance of 512(c)(3) notices. (Note that 512(j) expressly discusses injunctions, but this applies only to injunctions against service providers, not putative copyright owners.)
Despite 512(f)'s express limits on remedies, perhaps there is some other basis that enables courts to enjoin future 512(c)(3) notices. If not, maybe there should be as a way of giving content publishers more leverage than is provided by the relatively toothless 512(f) damages remedies. Based on the widespread abuses of 512(c)(3) taking place, it's become clear to me that putative defendants need stronger tools to go after over-zealous plaintiffs.
Three other observations about this matter:
* There's no reference that Novotny tried to use the 512(g) counter-notification procedures. This isn't surprising given the generally ineffectual nature of 512(g), but it does reinforce 512(g)'s deficiencies that Novotny sought judicial relief rather than the statutorily-provided extra-judicial recourse.
* Once again, 512(c)(3) notices are being sent to service providers who are not hosting content or providing bandwidth for the content's distribution--in this case, PayPal and DivX. I cannot construct a defensible theory under copyright law that would hold either PayPal or DivX liable for Novotny's infringement (compare the awful Perfect 10 v. Cybernet case with the Perfect 10 v. ccBill and Perfect 10 v. Visa cases), even with notice, yet PayPal went ahead and cut off Novotny (twice). (DivX didn't act because, by the time it got the notice, Novotny had already taken down the file). Clearly, putative copyright owners are using the 512 notification scheme to reach players far beyond those contemplated when the statute was enacted.
* In this matter, 512(c)(3) notices were used by a licensor in a commercial licensing dispute with a licensee. I'm sure this is not the first time that has happened, but I still think it is noteworthy. Typically, in commercial licensing disputes, a licensor has to go to court to force the licensee to stop, in which case a court evaluates the license terms. With 512(c)(3), the rules change in the online context--a licensor can get key service providers to "shun" the licensee and thereby enforce the license termination without a judicial interpretation of the license terms, subject only to the licensee's limited 512(f) recourse. This isn't news--we all know that 512(c) forces service providers to act as private judges, albeit one with massively skewed incentives to find for the plaintiff. Nevertheless, seeing 512 reach into private contractual arrangements still strikes me as interesting.
August 13, 2006
Fall 2006 Cyberlaw Syllabus
By Eric Goldman
I've posted the syllabus for my Fall 2006 Cyberspace Law course. As I have done for the past 11 years, I prepared my own materials. To do so, I cull through all of the action from the past year to see what changes I should make from the prior year's syllabus. In the late 1990s, a lot--1/3 to 1/2--of the pages would change from year-to-year. In the past couple of years, this pace has slowed considerably. This year, I added only 3 new cases and 1 new statute to the reader:
* the Lamparello case (which I actually substituted in last year after I prepared my 2005 syllabus)
* Perfect 10 v. Google and Field v. Google. They make an excellent compare-contrast unit. They also provide enough material to moot the 2003 Ticketmaster ruling, which I dropped this year.
* I substituted in the Alaska anti-adware law to replace Utah's anti-adware law.
Beyond those additions, I substituted in the 7th circuit ruling in the BMG v. Gonzalez case for the district court ruling, and I dropped the FTC v. Phoenix Avatar spam case and my short editorial on advertiser liability for adware (neither of which I had time to cover).
I could make an argument that the past 12 months have been comparatively slow in cyberlaw (by cyberlaw's historical standards), at least in terms of significant precedent. There have been some fairly important rulings (the KinderStart, JR Cigar, Merck v. Mediplan and Edina Realty cases come to mind) and interesting developments (the Sony DRM episode, click fraud lawsuits and the battles over search engine queries come to mind), but very few of these cases or episodes resulted in important/pedagogically useful precedent or statutes. Not that I'm complaining--it may just be a sign of cyberlaw's maturation.
Interestingly, although blog law is hot, I couldn't really find anything useful to teach on the topic. I think this reflects that blog law is just a seamless part of cyberlaw. As a result, I'm sure I'll integrate blog issues into the course throughout the semester.
August 12, 2006
Brand Spillovers Talk
By Eric Goldman
Yesterday, at the IP Scholars Conference at Boalt, I presented my paper currently titled "Brand Spillovers." This is the evolution of my project from last year I was calling Trademark Adjacency. I'm still trying to think through this issue, so I would welcome your comments/input.
August 09, 2006
Whitney Information v. Xcentric Update
By Eric Goldman
Whitney Information Network v. Xcentric Ventures, 2006 WL 2243041 (11th Cir. Aug 1, 2006)
I previously blogged on this case, where the operators of ripoffreport.com and ripoffrevenge.com won a 230 defense in district court. However, the judge gave the plaintiffs an opportunity to amend their complaint, which they did to allege, in essence, that the website operators wrote various product reviews rather than posting third party reviews. The defendants then moved to dismiss for lack of jurisdiction based in part on an affidavit from the defendants that they didn't write the reviews. Normally this affidavit would be irrelevant at the motion to dismiss stage, but instead under applicable law, the affidavit prompted a weird and complicated burden-shifting analysis. Based on this, the district court granted the motion to dismiss on jurisdictional grounds.
In this ruling, the appeals court reversed the district court's granting of the motion to dismiss on jurisdictional grounds. There is some substantive discussion about 47 USC 230 along the way, but the only item of note is that the 11th circuit, reinforcing its dicta from its recent ruling in Almeida v. Amazon case, appears to be laboring under the erroneous assumption that editing third party content would preclude eligibility for the 230 immunization.
There are still other grounds why jurisdiction may be infirm, so this ruling does not mean that the case will advance substantively in this circuit. However, the 11th circuit is in desperate and urgent need of a tutorial on 47 USC 230!
August 08, 2006
Blackboard Patent Suit Stirs Up Academic and Open Source Hornet's Nests--Blackboard v. Desire2Learn
By John Ottaviani
Blackboard, Inc. v. Desire2Learn Inc., No. 9:06-cv-00155-RHC (complaint filed July 26, 2006)
Although this story does not seem to have hit the mainstream press yet, there has been a firestorm in the academic and open source communities since Blackboard filed a patent infringement lawsuit against one of its competitors, Desire2Learn, in the Eastern District of Texas a couple of weeks ago.
For those who are not familiar with Blackboard, the company is a leading provider of learning management systems for colleges and universities. Blackboard's annual report claims that it has more than 2,200 clients in about 60 countries at the end of 2005. Blackboard's Internet-based systems typically permit instructors to post content and announcements for courses and communicate with students, and allow students to collaborate and communicate with each other and instructors.
On July 26, Blackboard announced that the United States Patent and Trademark Office had issued U.S. Patent No. 6,988,138 for an "Internet-Based Education Support System and Methods." On the same day, Blackboard filed its complaint against Desire2Learn. The complaint simply alleges that Blackboard's patent is valid and that Desire2Learn's products and services infringe the patent. Blackboard has also tossed in a claim that Desire2Learn contributes to and/or induces infringement of Blackboard's patent.
The academic community is outraged at the lawsuit. Most of the venom has been directed at the perceived breadth of the patent, which many feel is so broad as to cover any course-based on-line learning management system, including those in existence since the early 1980's. A number of efforts have already sprung up to identify so-called "prior art" (other learning management systems that were in existence prior to 1999 when Blackboard first filed its patent application), to prove that Blackboard did not invent what it has claimed (see examples here and here).
Blackboard claims simply that it is trying to protect its own innovations, not e-learning or course management systems in general. In a letter to Blackboard's clients, Michael Chasen, BlackBoard's President and CEO, states that "The Blackboard CMS patent covers only specific features and functionality contained in the Blackboard system that were developed by the Blackboard team. We certainly did not invent e-learning or course management systems, and I am personally embarrassed that this is what some people thought Blackboard was claiming."
Desire2 Learn has been circumspect in its response. In an e-mail circulated at its User's Conference in early August, John Baker, Desire2Learn's President and CEO stated "We are disappointed that Blackboard turned to the court system before discussing its claims with us. We intend to defend the action vigorously, but because we just received notice two business days ago, we are unable to comment further at this time."
Certainly, Blackboard must have anticipated the anxiety and resentment that its lawsuit has generated in the academic learning community. What Blackboard may not have anticipated, however, is the very negative reaction that the lawsuit has produced in the open source community. The lawsuit is perceived as threatening open source learning management projects such as Moodle and Sakai. Even if Blackboard does not sue these projects, Blackboard can use the threat of infringement to persuade colleges and universities not to consider these systems as competitive options to Blackboard's systems.
Blackboard's patent is written broadly, but contains 44 claims. We will need to wait for the court to decide how many of those claims are valid, but some of them may very well turn out to be valid. I expect that the valid claims will relate primarily to innovations Blackboard may have brought to existing learning management systems. Blackboard has every right under the patent system to protect its innovations against infringement by its competitors. But Blackboard does not have a right to stifle innovation and competition by trying to enforce invalid patent claims. Whether we ever find out which claims are valid and which are not may depend whether Desire2Learn has sufficient financial resources to defend the litigation. To this end, there appear to be a number of entities that have a stake in helping Desire2Learn defend the lawsuit, and that are willing to provide assistance. Perhaps this will turn into a collaborative defense project in the open source tradition.
Jews for Jesus v. Google Lawsuit Settles
By Eric Goldman
Jews for Jesus v. Google, Inc., 05-CV-10684 (SDNY voluntary dismissal filed July 26, 2006)
You may recall the lawsuit filed by Jews for Jesus against Google in December. The lawsuit involved a BlogSpot user who created a gripe site at jewsforjesus.blogspot.com. Jews for Jesus then sued Google for trademark infringement based on the use of its trademark as the third level domain name. Normatively, there were a lot of good reasons why this lawsuit should not succeed. However, descriptively, the law is sufficiently unclear that it was not possible to confidently predict an outcome. As a result, this case had the possibility of setting some important new precedent.
Instead, the parties have settled their dispute, filing a dismissal with prejudice on July 26. The official notice did not reveal any terms, but according to an announcement on the Jews for Jesus site, the user who registered the third level domain "had a change of heart." As a result, the blog has transferred to Jews for Jesus. This transfer has wiped out all of the old griping content. Plus, there is nothing in the Internet Archive either, and Google's cache has been wiped too. So it appears that Jews for Jesus has done a pretty effective job of shutting down this griper.
August 02, 2006
eBay Not Liable for Defamatory Feedback--Sturm v. eBay
By Eric Goldman
Your mother always said "if you can't say anything nice, don't say anything at all." This maxim may end up becoming the mantra of eBay users giving feedback about their trading partners. Say nice things, and everyone is happy. Leave negative feedback, and you may get sued. See, e.g., this article. This risk of liability is the dark side of the "Web 2.0" and the emphasis on "user-generated content." It's all fun and games until someone serves a subpoena--and when users realize that responding candidly to those seemingly innocuous requests for feedback might lead to the courthouse, we should expect to see either platitudes or silence.
As bad as this situation is, it becomes untenable if the website hosting the user's critiques can be liable as well. With the risk of liability, the website's incentives are very clear--if in doubt, take it down. After all, any individual item of content has very low value--far less than the cost of litigating (or even haggling). The result would be that the targets of critiques (such as merchants) could force websites to take down negative content and leave up positive content. With the public discourse so skewed, the feedback mechanism becomes worthless.
(I expand a little on these thoughts here).
Fortunately, eBay has beat the rap so far. The two reported cases are Gentry and Grace. Gentry was a straightforward 47 USC 230 win for eBay. In contrast, in Grace, the intermediate appellate court found that 47 USC 230 didn't apply (due to the silly publisher/distributor distinction) but eBay was nevertheless protected by a release of liability in its contract. The CA Supreme Court agreed to hear the case, but then dismissed the case summarily without an opinion. As a consequence, the funky Grace opinion was vacated.
The latest case on eBay's liability for its feedback forum is a CA trial court opinion, Sturm v. eBay. According to an email I got from Sturm (reposted with permission):
"I sued the guy who wrote it about a year ago and we agreed to settle on a retraction and no money. That wasn't good enough for eBay which required a court order. So I sued the guy again and won the order (but no money because we already settled). eBay didn't accept the order so I sued eBay."
The eBay lawsuit ran into the 47 USC 230 brick wall. With the Grace case wiped away, the court simply cites to the Gentry case. Sturm tries to overcome the adverse precedent by arguing that eBay adds a bunch of eBay-owed content to the defamatory feedback--eBay's logo, its navigation, its summary statistics, its compilation of the feedback in reverse chronological order. eBay also "takes ownership" of the feedback posting in the sense that users can't remove the posts once published.
No matter--as the court rightly points out, even if eBay adds all this content around the feedback, it doesn't change that the feedback is from a third party. Indeed, even if eBay took ownership of the feedback itself and edited it, 230 should still protect eBay (see, e.g., Schneider, Blumenthal, Ramey). So the court grants the demurrer without leave to amend.
UPDATE: I've edited the facts above to reflect Sturm's story. It does seem like Sturm ran into a bit of a jam. eBay says it won't retract feedback without a court order. Sturm got a court order but eBay still didn't retract the feedback. I'm not sure why eBay refused the order, but what else was Sturm supposed to do? Sturm writes to me: "Originally this was nontrivial because I was selling my gemstone collection and the guy posted that I sold fake gemstones and junk and, for example, I inadvertantly auctioned Columbian emeralds appraised in the thousands of dollars for eight bucks." I can imagine his frustration having complied with eBay's stated requirements and still not getting the expected results.
UPDATE 2: Elise Ackerman of the SJ Mercury News has a nice story explaining the situation in a lot more detail.
August 01, 2006
Amazon’s Display of Book Cover Doesn’t Violate Publicity Rights—Almeida v. Amazon.com
By Eric Goldman
Almeida v. Amazon.com, Inc., 2006 U.S. APP. LEXIS 17989 (11th Cir. July 18, 2006)
Product photos on e-commerce websites’ product pages are a notorious liability trap. During my tenure at Epinions, product page photos were the only reason why we actually got sued (twice…ugh).
Product photos can raise some pernicious copyright issues, but in this case, the plaintiff sues Amazon for publicity rights violations. Ultimately, the court rules in favor of Amazon, effectively creating a strong precedent that online booksellers are immune from right of publicity claims for displaying book covers, even if the publisher in fact violated the right of publicity. However, the court indulges in a sloppy analogy to offline bookstores that may limit the scope of this opinion to just online booksellers and perhaps a few other media vendors. The case is also noteworthy for a goofy but irresolute discussion of 47 USC 230.
A publisher published a child’s photo on the cover of a book. The publisher got the requisite publicity consent for the first edition, but there are differing views about whether the consent extended to a second edition. Amazon displayed the second edition's book cover on its product page for the book. The plaintiff sued Amazon for publicity and privacy rights violations (these ultimately merged) and civil theft.
Right of Publicity and 47 USC 230
The district court dismissed the publicity rights claim based on 47 USC 230. This was an interesting ruling because 47 USC 230 doesn’t preempt “intellectual property claims,” so the question arises—is a publicity rights claim an IP claim? A precedential case (Perfect 10 v. ccBill) expressly says yes, Black’s Law Dictionary includes publicity rights in the definition of IP, and I venture that most IP professors cover publicity rights (albeit briefly) in IP survey courses. So I think many of us have assumed/believed that 230 does not preempt publicity rights claims.
The appeals court discusses this issue in some detail but ultimately punts on the question. Instead, it explicitly says it’s not opining on the question, basing its ruling on other grounds. So a definitive resolution of 47 USC 230’s application to publicity rights claims will have to wait another day.
Along the way, the court drops some very unfortunate dicta into a footnote. Agreeing with some confusing dicta from the 7th Circuit’s Doe v. GTE case, this court says 230(c)(1) is “phrased as a definition,” even though the footnote acknowledges the extensive precedent treating it as an operative immunization. The court then continues:
there is no issue of actual or constructive knowledge because the Florida right of publicity does not impose upon interactive service providers an obligation to filter or censor content. Moreover, as a factual matter, there is no indication that Amazon had knowledge of the allegedly misappropriated image and it responded promptly to Almeida's notice by removing [the book] from its websites
This completely gratuitous language will unfortunately give plaintiffs a sense of false hope. As I’ve discussed repeatedly on this blog, actual or constructive knowledge is irrelevant to a 230 determination. See, e.g., Zeran. Yet, this court’s sloppiness will give plaintiffs more grist to try their tired and futile argument that scienter matters under 230. I’m very confident that the impending plaintiff frenzy will give the 11th Circuit the pleasure of revisiting this dicta to clarify itself.
Right of Publicity and Physical/Virtual Bookstores
Instead of 230, the court bases its dismissal on the text of the applicable publicity rights statute, which applies to using an image “for trade, commercial, or advertising purposes.” The court says that Amazon’s display of the book cover on a product page doesn’t qualify. Instead, the court analogizes the online bookseller to a physical space bookseller, where the product page is the equivalent of the bookseller placing books on its shelves:
Amazon's role as an internet bookseller closely parallels that of a traditional bookseller. Because internet customers are unable to browse through shelves of books and observe the actual book cover photos and publisher content, Amazon replicates the bookstore experience by providing its customers with online cover images and publisher book descriptions
The court also distinguished two Girls Gone Wild video cases because the defendants in those cases picked the women to showcase on the product packaging and advertising. In contrast, Amazon was reflected the book cover selected by the publisher.
The court concludes:
Amazon's use of book cover images closely simulates a customer's experience browsing book covers in a traditional book store. Thus, it is clear that Amazon's use of book cover images is not an endorsement or promotion of any product or service, but is merely incidental to, and customary for, the business of internet book sales
It’s always dicey to make analogies between physical space and online contexts, and this analogy is suspect as a factual matter. First, there is no question that Amazon’s product page plays a major role in Amazon’s marketing and sales strategy. It is designed to place well in the search engines and uses a variety of tricks to extract additional sales from the customer. So treating the product page as the equivalent of a store bookshelf is a very charitable view.
Second, and perhaps more importantly, Amazon displays book covers all over its website, not just on the product page. Amazon uses the covers on personalized recommendation pages, in search results, in merchandising emails to its customers, and in content it syndicates to its affiliates (and, I suspect, to other third parties). Basically, Amazon does a ton of marketing for itself using book covers, so Amazon absolutely uses book covers to increase its sales. This sounds a lot like advertising/commercial purposes to me.
Ultimately, as a policy result, I think the court got it right. Amazon is merely depicting the book cover chosen by the publisher, so this ought to be a “contributory” or secondary publicity rights claim—and I don’t think there should be such a doctrine (admittedly, I haven’t researched that topic).
In any case, by making its clumsy analogy to browsing an offline bookstore's shelves, the court effectively limits this precedent to websites that can analogize their pages to such shelves--online book retailers, online music sellers, maybe online poster sellers. However, I think it would be tough to stretch this analogy to, say, search engines—an issue I believe is still live in the Perfect 10 v. Google case.
Finally, the plaintiff alleged civil theft, which requires knowingly obtaining/using another’s property with the intent to appropriate the property for his/her use. In the context of physical goods, this makes complete sense. In the content of intangible goods, the scope of this statute is very confusing. In copyright cases, we normally don’t have to worry about this claim because it’s preempted by federal copyright law. However, in the context of a publicity rights claim, the copyright preemption doesn’t apply. Here, the court dismisses the claim for Amazon’s lack of scienter (because it didn’t pick the book cover). Even better for Amazon, the civil theft statute has a fee-shifting provision, so the court upholds an award of attorney’s fees to Amazon.