May 31, 2007
Perfect 10 v. CCBill Update: Ninth Circuit Denies En Banc Rehearing
By Eric Goldman
The Ninth Circuit has denied an en banc rehearing in Perfect 10 v. CCBill. In doing so, the court amended its opinion to reinforce that it really, really meant that 47 USC 230 preempts all state IP laws, including state trademark laws. The full text of the opinion/amendment:
On slip opinion page 3577, line 33, after “federal intellectual property.” insert the following footnote:
In its petition for rehearing, Perfect 10 claims that our decision on this point conflicts with Universal Communication Systems, Inc. v. Lycos, Inc., 478 F.3d 413 (1st Cir. 2007). But neither party in that case raised the question of whether state law counts as “intellectual property” for purposes of § 230 and the court seems to simply have assumed that it does. We thus create no conflict with Universal Communication.
We note that Universal Communication demonstrates the difficulties inherent in allowing state laws to count as intellectual property for CDA purposes. In that case, the district court struggled with the question of whether the “trademark dilution” claim brought under Florida Law counted as intellectual property for purposes of the CDA, and concluded that it was more like a defamation claim than a trademark claim. Id. at 423 n.7. Rather than decide how to draw the line between defamation and trademark, the First Circuit held that “because of the serious First Amendment issues that would be raised” if Lycos were found liable, defendant had not violated the Florida statute. Id. at 423.
The First Circuit was able to sidestep the question of what counted as intellectual property on First Amendment grounds. But we cannot do so here. States have any number of laws that could be characterized as intellectual property laws: trademark, unfair competition, dilution, right of publicity and trade defamation, to name just a few. Because such laws vary widely from state to state, no litigant will know if he is entitled to immunity for a state claim until a court decides the legal issue. And, of course, defendants that are otherwise entitled to CDA immunity will usually be subject to the law of numerous states. An entity otherwise entitled to § 230 immunity would thus be forced to bear the costs of litigation under a wide variety of state statutes that could arguably be classified as “intellectual property.” As a practical matter, inclusion of rights protected by state law within the “intellectual property” exemption would fatally undermine the broad grant of immunity provided by the CDA.
House Passes I-SPY Act
By Eric Goldman
The House passed the I-SPY Act, sending it on to the Senate. This is the House's third time passing anti-spyware legislation. The past two years, the House passed the SPY Act, only to have the bill die in the Senate. We'll see what the Senate does this year.
As regular readers know, I've opposed just about every anti-spyware/anti-adware law proposed/enacted. So, it may surprise you that I think the House's passage of I-SPY is good news. This doesn't mean that I-SPY is necessary or even wise. From my perspective, I-SPY's main operative provisions overlap existing provisions in the Computer Fraud & Abuse Act. Thus, I don't think the law creates any new limitations, which makes the law a harmless/ineffective trifle.
However, I-SPY is good news because it's unlikely the House and Senate will pass two anti-spyware laws this session (and perhaps for a very long time). Thus, I-SPY may displace further action on the SPY Act, which is positive because the SPY Act is a terrible bill. The SPY Act tries to codify a set of bad practices and banish them; but, the practices targeted by the SPY Act aren't universally bad, and the technological specificity of the SPY Act will render it useless in the face of new technology, social practices and business practices. So I'm hoping that the Senate takes up I-SPY, passes it, and closes this chapter on Congressional efforts to regulate spyware. They have plenty of other important things to worry about.
Pew 2007 Spam Survey
Pew has updated its periodic survey on user attitudes towards spam. Its conclusion:
Spam continues to plague the internet as more Americans than ever say they are getting more spam than in the past. But while American internet users report increasing volumes of spam, they also indicate that they are less bothered by it than before. Users have become more sophisticated about dealing with spam; fully 71% of email users use filters offered by their email provider or employer to block spam. Users also report less exposure to pornographic spam, which to many people is the most offensive type of unsolicited email. Spam has not become a significant deterrent to the use of email, as some observers speculated it might when unsolicited email first began flooding users’ inboxes several years ago. But it continues to degrade the integrity of email. Some 55% of email users say they have lost trust in email because of spam.
Deborah Fallows, the report writer, speculates on why users are less bothered by spam, She hypothesizes:
* users are receiving less porn spam
* users are savvier about identifying spam
* more users are using filters, hiding their email addresses and engaging in other smart practices
Interestingly, these explanations appear to be largely independent of legislative efforts to curb spam. Obviously CAN-SPAM targeted porn spam, and the FTC has brought some enforcement actions, but my gut tells me that any reduction in porn spam is due to improved technological filtering, not the law. Otherwise, it seems like technology and evolving social practices are helping users cope with spam.
Previous material on this topic:
* Where's the Beef? Dissecting Spam's Purported Harms. Lamenting the passage of CAN-SPAM, I wrote:
Even if CAN-SPAM beneficially affects the flow of unwanted e-mails, any legislative solution seems inherently empty. Without legislative intervention, society will find ways to cope with spam, just as we have with other media. Meanwhile, entrepreneurs will continue to develop better tools to sort wanted and unwanted communications. Thus, more patience with the spam “problem” might have facilitated the development of superior results organically.
May 30, 2007
Court Upholds Student Suspension For YouTube Video of Teacher
Requa v. Kent School District No. 415, 2007 WL 1531670 (W.D. Wash. May 24, 2007).
“The Court takes judicial notice that “booty” is a common slang term for buttocks.”
High school students secretly take video footage of a teacher at school in a classroom. The video footage is edited, graphics and musical soundtrack are added, and the result is posted on YouTube. According to the court, the completed product includes commentary on the teacher’s hygiene and organization habits, and also features footage of a student standing behind the teacher making faces, putting two fingers up to the back of her head, and making pelvic thrusts in her general direction. Additionally, there are several shots of the teacher’s buttocks as she walks away from the videographer and as she bends over, accompanied to a rap song entitled “Ms. New Booty”.
Eight months later, a local news channel discovers the video and airs a news segment featuring the video and others. Students responsible for the video are suspended for 40 days, with 20 days “held in abeyance” if the student completes a research paper while on suspension.
Student exhausts administrative appeals and tries to stop his punishment by filing a lawsuit in federal court alleging violations of his First Amendment rights and Constitutional right to due process. Student loses.
One would think that, given the number of these stories that have come to light in the past year or two, high school students would consider this practice “lame” and move on to some other form of amusement. However, the continuing stream of cases and news reports indicates otherwise.
A few thoughts:
• It looks like the court got this one right. The court went through a fairly standard analysis of the plaintiff’s claims. On the First Amendment issue, the main U.S. Supreme Court cases dealing with public school students is Tinker v. Des Moines Independent Community School District, where the U.S. Supreme Court held that public school students “don’t shed their constitutional right to freedom of speech or expression at the schoolhouse gate.” However, the Court’s decision does permit the free speech rights of students to be limited when the speech “materially disrupts class work or involves substantial disorder or invasion of the rights of others.” For example, in a later case, Bethel School District No. 403 v. Fraser, the Court held that a public high school student running for a student government position could be suspended after he gave a nomination speech that included “obscene, profane language or gestures.”
• Here, the court found that the School District properly suspended the students for their conduct in videotaping in the classroom against a written school policy, not for publishing the video to YouTube or for posting the link to the YouTube video. (In fact, other students who only republished the link and who were not involved in the filming were not suspended.). Apparently, the school’s conduct code contains prohibitions against sexual harassment as well as having cell phones or other video recorders turned on during school hours.
• The court had no difficult here finding that the video constitutes a material and substantial disruption to the work and discipline of the school. “The ‘work and discipline of the school’ includes the maintenance of a civil and respectful atmosphere towards teachers and students alike—demeaning, derogatory, sexually suggestive behavior towards non-suspecting teacher in a classroom poses a disruption of that mission whenever it occurs.”
• The court also found that the video could not be characterized as “criticism” of the teacher because of the footage of the students dancing behind the teacher’s back and making “rabbit ears” and footage of the teacher’s buttocks with the “Booty” rap song, characterizing these as “lewd and offensive and devoid of political or critical content.”
• The court was careful to state that the ability of students to critique the performance and competence of their teachers is a legitimate and important right, one that should not only be tolerated but encouraged by the schools whose mission it is to educate them. In this case, however, the court decided that the students needed to find another way to voice their opinions.
• While this case did not address the issue, the actions by the school district also served to protect them from claims of sexual harassment by the teacher in question. By doing nothing, a school district, like any other employer, risks being accused of creating a “hostile environment” and incurring potential liability for harassment claims.
Zango's Busy Litigation Docket
By Eric Goldman
I got a tip that Zango's lawsuit against PC Tools had been removed to federal court, which prompted me to search for "Zango" in PACER for the Western District of Washington. I learned that Zango has a surprisingly busy litigation docket, with 4 lawsuits filed in its home court in the past two months:
* I previously blogged on Zango v. PC Tools. That case has been removed to federal court (W.D. Wash., case no. 2:07-cv-00797-JCC).
* Zango filed a similar but less well-publicized lawsuit against anti-virus software vendor Kaspersky, which also has been removed to federal court. Zango Inc. v. Kaspersky Lab Inc., 2:07-cv-00807-JCC (W.D. Wash.). Because the lawsuit was initially filed in state court, PACER doesn't have the complaint. However, here's Zango's motion for a TRO.
In addition to these 2 lawsuits against anti-spyware software vendors, Zango claims it's been stiffed by two advertisers to the tune of about $1M:
* Zango Inc. v. Internet Brands Inc., 2:07-cv-00506-RSL (W.D. Wash. complaint filed April 6, 2007). See the complaint.
* Zango Inc v. Mainstream Advertising, 2:07-cv-00507-MJP (W.D. Wash. complaint filed April 6, 2007). See the complaint.
Looks like it's a rough-and-tumble world out there!
May 29, 2007
Zango Claims Spyware Doctor SE Surreptitiously Deletes Its Software
By Eric Goldman
Zango, Inc. v. PC Tools Pty Ltd., 07-2-15844-8SEA (Wash. Superior Ct. complaint filed May 15, 2007)
We've seen a fair amount of tussling between adware vendors and anti-spyware software vendors, including a battle over the incorporation of' "good samaritan" immunizations for anti-spyware vendors in proposed anti-spyware legislation (see, e.g., here and here). However, litigation between the two camps has been relatively rare, so this case (if it doesn't settle like most of the precedents) might help shape the contours of anti-spyware software vendors' duties as well as influence the pending anti-spyware legislation in Congress.
Here, Zango claims that PC Tools' software, Spyware Doctor Starter Edition, (1) mislabels Zango's software as an "elevated risk" and (2) automatically disables Zango's software from functioning without giving users notice, which prevents new installs and prevents current users from using existing installs--including those users who have paid a premium subscription allowing them to use Zango's software pop-up-free. While these effects alone would be problematic for Zango even if Spyware Doctor were an obscure program, Spyware Doctor SE has the added profile of being bundled in the Google Pack.
While I can see why Zango would be upset enough about this situation to sue, bringing a lawsuit has numerous downsides. First, the facts may not be in its favor; SunbeltBlog has had difficulty replicating some of the results. Second, lawsuits over classifications threaten anti-spyware vendors' editorial integrity (and PC Tools is claiming that was Zango's intent), but fortunately those editorial judgments should be completely protected by 47 USC 230(c)(2). Third, Zango isn't particularly popular in the anti-spyware crowd, so their enforcement actions bring extra scrutiny.
With the respect to the claim that Spyware Doctor disables Zango, this case reminds me of the fracas (that matured into a lawsuit) between Avenue Media and DirectRevenue back in 2004, where Avenue Media claimed that competitor DirectRevenue was surreptitiously kicking its software off users' hard drives (the case reached a detente).
While it would be tempting to dismiss the Avenue Media/DirectRevenue lawsuit as a piratical battle between untouchables, there are other examples where company A deletes company B's software with minimal notice. Most prominently, I still can't fathom how Microsoft gets away with unilaterally wiping software off users' hard drives (my recollection is that AOL has done the same thing, but I can't find my documentation of it now). At some point we're going to have reach a social consensus about what level of user authorization is required for one software program to annihilate another program. Maybe this case will help us understand that issue a little better.
May 28, 2007
Facebook's Lawsuit Against Competitive Email Harvesting Continues--Facebook v. ConnectU
By Eric Goldman
Facebook, Inc. v. ConnectU LLC, 2007 WL 1514783 (N.D. Cal. May 21, 2007)
A universal truth of the digital era: a website displaying user email addresses will be targeted by email harvesters sweeping up those email addresses to spam the users--either to poach a competitor or to send bona fide spam. This is hardly a new phenomenon; I can't believe it's been almost a decade since eBay's competitor Onsale harvested eBay users' addresses and sent competitive spam (an action which prompted eBay to encourage users to adopt handles that weren't the users' email addresses).
Social networking sites have lots of user contact info that makes them juicy targets for the harvesters, so they have had to be particularly vigilant against spammers. In this case, Facebook sued a competitive social networking site, ConnectU, for a harvesting/spam attack. (This isn't the only battlefront between the parties; in separate litigation, ConnectU claims that Facebook stole ConnectU IP). In this ruling, ConnectU moves to dismiss Facebook's claims, with limited success.
The most interesting ruling relates to California Penal Code 502. If you haven't looked at this statute recently, you'll be amazed at its breadth and the fact that it provides for civil remedies in the penal code. The operative provision here restricts "Knowingly accesses and without permission takes, copies, or makes use of any data from a computer, computer system, or computer network." Apparently, ConnectU provided a tool that enabled Facebook users to provide ConnectU with their login credentials, which ConnectU then used to grab data from Facebook's servers. (I tested on very similar facts in my 2006 Cyberlaw exam--see Q2). The court has no problem saying that, as alleged, ConnectU knew it was accessing Facebook's servers and took data without Facebook's permission. There have been other 502 rulings in California, but this ruling reminds us of the statute's scope and its utility as an anti-trespass doctrine.
The court also dismisses (with a grudging leave to amend) Facebook's various anti-spam statutory claims. First, the court holds that Cal. B&P 17529.4 and 17538.45 are both preempted by CAN-SPAM. I've lost track of all of the state anti-spam preemption cases, but I think it's significant that the court casually wiped these two California statutes off the books. Second, the court dismisses Facebook's federal CAN-SPAM claim because Facebook didn't allege that ConnectU's emails contained false/misleading header info. (Even if there was falsity, the Mummagraphics court suggests it would have to be material to be actionable).
May 24, 2007
At the Intersection of Copyright and Contract
A long simmering debate among museums and other visual archivists is whether (and how) one can charge for digital images of works in a collection that may or may not be covered by copyright any longer. The issue presented in a real life dispute last week. A non-profit organization, public.resource.org, has challenged the copyrights and restrictions on images being sold by the Smithsonian Institution. The non-profit group has not resorted to court action (at least not yet). Rather, the group downloaded over 6,000 photos online and posted them to the free-photo-sharing website flickr.com.
Generally, the archives and museums have felt that one could impose contractual restrictions on photographs and images that the entity owned. If one owns a painting that is no longer under copyright, one can still control who can view the painting. In fact, one does not need to make it available to the general public at all. Here, the argument is that control of the digital file (which may have cost the institution a great deal of time and money to create) is analogous to control of the physical object. Because we do not need to make it available to the public at all, then if we do, we can decide under what terms.
Of course, the opposing view is that images that are no longer covered by copyright should be publicly available to all or any purpose.
Many archives, libraries and museums are dedicated to making information in their collections as widely available as possible. Yet the staff is pushed by their governing bodies to try to use the collections to raise revenue. The debate presented by the Smithsonian dispute mirrors this internal debate.
We have known since the Federal Circuit’s decision in Bowers v. Baystate Technologies, Inc. that the Copyright Act does not pre-empt contractual restrictions on reverse engineering. This case may explore the boundaries of that decision and how far contract restrictions can go.
The Smithsonian debate has other overtones, which may not be applicable to private museums and archives. One of the issues in dispute is whether works created by Smithsonian employees are considered to be in the public domain as works made by federal government employees. We will need to see whether any precedent in this area is limited to government works, or spills over into the private sector. More likely, the parties will settle the matter privately. Hopefully, this will not expose the archives of others.
May 22, 2007
Click Fraud Resources
By Eric Goldman
I'm a little surprised that click fraud remains such a hot topic. Last summer, I thought the Google and Yahoo class action lawsuit settlements resolved the bulk of the problems, and most people would move on to a new hot topic du jour. Instead, everyone still wants to talk about click fraud; I'm giving three practitioner talks on click fraud in the span of a month. My presentation slides on click fraud. A collection of my blog posts on click fraud.
May 16, 2007
Summary of Perfect 10 Decision
Eric suggested that I post this brief summary of the Perfect 10 v. Amazon decision:
The 9th Circuit issued a lengthy opinion today, largely favorable to search engines and ISP's. In 2006, the district court made its findings on Perfect 10's motion for a preliminary injunction, so there has been little discovery and no trial yet. Google and Perfect 10 both appealed certain aspects of the district court's decision. Briefly, in today's decision, the 9th Circuit:
---affirmed the district court's finding that Perfect 10 was likely to prevail on its claim that Google's display of thumbnail versions of Perfect 10's copyrighted photographs constituted direct infringement of Perfect 10's display right, but reversed the district court's finding that this was not fair use (in other words, the 9th circuit said it was fair use)
---affirmed the district court's finding that Perfect 10 was not likely to prevail on its claim that Google's "in-line linking" to full size versions of the photographs on 3rd party websites infringed Perfect 10's display or distribution rights
---reversed the district court's finding that Perfect 10 was unlikely to prevail on its contributory infringement claim, because the district court applied the wrong test. The 9th Circuit remanded for the district court to determine whether Google knew of infringing activities yet failed to take "reasonable and feasible steps" to refrain from providing access to infringing images, and whether Google is likely to prevail on its defense under Section 512 of the Digital Millennium Copyright Act (DMCA). The 9th Circuit clearly stated that the Section 512 defense is available for both direct and secondary laibility claims (citing to its Napster decision).
---affirmed the district court's finding that Perfect 10 was unlikely to prevail on its vicarious infringement claim, because Perfect 10 was unlikely to be able to show that Google had a right and ability to stop or limit the infringing conduct of third-party websites
Overall, a win for Google and Amazon.com (but not a home run, given the specter of contributory liability). Look for some discovery and summary judgment motions on the contributory liability claim and the Section 512 defense in the upcoming year.
Ninth Circuit Opinion in Perfect 10 v. Google and Amazon
By Eric Goldman
Perfect 10, Inc. v. Amazon.com, Inc., CV-05-04753-AHM (9th Cir. May 16, 2007)
In yet another lengthy and highly technical opinion from the Ninth Circuit (fast becoming their specialty), the Ninth Circuit has addressed the crucial case of Perfect 10 v. Google and Amazon. The opinion summarizes its complex results:
We conclude that Perfect 10 is unlikely to succeed in overcoming Google's fair use defense, and therefore we reverse the district court's determination that Google's thumbnail versions of Perfect 10's images likely constituted a direct infringement. The district court also erred in its secondary liability analysis because it failed to consider whether Google and Amazon.com knew of infringing activities yet failed to take reasonable and feasible steps to refrain from providing access to infringing images. Therefore we must also reverse the district court's holding that Perfect 10 was unlikely to succeed on the merits of its secondary liability claims. Due to this error, the district court did not consider whether Google and Amazon.com are entitled to the limitations on liability set forth in title II of the DMCA. The question whether Google and Amazon.com are secondarily liable, and whether they can limit that liability pursuant to title II of the DMCA, raise fact intensive inquiries, potentially requiring further fact finding, and thus can best be resolved by the district court on remand. We therefore remand this matter to the district court for further proceedings consistent with this decision.
A few initial observations:
1) As the previous paragraph indicates, the ruling is a mixed bag. It overturns the most pernicious part of the district court opinion holding that Google was directly infringing for displaying thumbnails in its image search. On the other hand, it opens up the possibility of new secondary liability by the search engines. However, on balance, this opinion is much better for the search engines than the lower court opinion, so it's a mild win for them.
2) The opinion is highly technical and rather fact-specific, in many cases turning on the burden of proof/production in a preliminary injunction motion and whether sufficient factual evidence was introduced at this stage in the litigation. As a result, I don't think the opinion will have a lot of immediate impact as precedent because it can be read as limited to very specific facts. This also makes it a lousy teaching case (a little disappointing, because I was hoping we could replace the hard-to-teach district court ruling with a cleaner Ninth Circuit opinion--no such luck!).
Despite the omnibus and technical nature of this opinion, there were some interesting rulings that need further exploration. For example, I believe the court's holding that a plaintiff seeking a PI has the burden to disprove fair use is significant and could have widespread effects on copyright cases, both online and off. I'm sure there are some other similarly important nuggets we'll discover after a closer read.
May 15, 2007
Ninth Circuit Screws Up 47 USC 230--Fair Housing Council v. Roommates.com
By Eric Goldman
Fair Housing Council of San Fernando Valley v. Roommates.com, LLC, CV-03-09386-PA (9th Cir. May 15, 2007)
Just a couple months ago, in Perfect 10 v. CCBill, the Ninth Circuit issued an incredibly expansive 230 ruling. Today, in a highly fractured opinion, they go in the completely opposite direction, creating a significant exception to 230's coverage that's bound to spur plenty of new unmeritorious and ill-advised lawsuits from plaintiffs. Why the 180? Such is life in the Ninth Circuit.
This case involves the long-running Fair Housing Act lawsuit against Roommates.com, a website that allows users to advertise openings for roommates (a type of online classified ads). Roommates.com provides structured data fields with pull-down menus so that advertising roommates can provide consistent data and searchers can easily sort and compare data.
On the surface, it seems like it would be hard for Roommates.com to claim 230 protection for the resulting data, because the literal words are provided by Roommates.com. However, users select the words that describe their situation, so the words are really provided by the user but structured to ensure a more functional database. Further, in the Carafano case, the Ninth Circuit had given a free pass to another website operator that allowed users to select among structured data fields, so it seemed like there was directly defense-favorable precedent on point.
In this ruling, the Ninth Circuit found otherwise, based on a confusing part of the statute. Per 230, ICSs aren't liable for content provided by another ICP, and an ICP is defined as someone responsible in whole or in part for the content's development. There are two ways to read this part of the statute:
* Reading #1: So long as the ICS is responsible in part (any part, even 0.1%) for the development of the content, then the ICS is an ICP and 230 isn't available. This reading isn't very useful because it would apply whenever an ICS edited any third party content, which is exactly what 230 routinely has been held to protect.
* Reading #2: So long as any third party ICP was responsible in part for the content's development (even 0.1%), the ICS isn't liable for it. This means that the ICS could have a great deal of involvement in the content but still avoid liability. This is by far the dominant interpretation of the statute.
Here, the Ninth Circuit interprets 230 using Reading #1. Thus, where Roommates.com provides pull-down menus, it loses 230 protection for the users' responses. The court distinguishes the Carafano precedent by saying that the prankster in Carafano abused the system, while Roommates.com's users used it as designed:
Carafano provided CDA immunity for information posted by a third party that was not, in any sense, created or developed by the website operator—indeed, that was provided despite the website’s rules and policies. Id. We are not convinced that Carafano would control in a situation where defamatory, private or otherwise tortious or unlawful information was provided by users in direct response to questions and prompts from the operator of the website.
Kozinski points to compiling search results as another way Roommates.com manages its data. Roommates.com allows users to search for certain types of data, such as women seeking women roommates. Kozinski says "By categorizing, channeling and limiting the distribution of users’ profiles, Roommate provides an additional layer of information that it is “responsible” at least “in part” for creating or developing."
But Kozinski's view of "partial responsibility for content development" is highly expansive. He says "we do not read [Carafano] as granting CDA immunity to those who actively encourage, solicit and profit from the tortious and unlawful communications of others." Thus, he gives an example where a website actively encourages users to provide a target's personal information as a way of getting even. Per Kozinski, this website wouldn't get 230 coverage even if it requested certain categories of information but left the fields open (i.e., not using pull-down menus).
But, where Roommates.com provides an open field for "additional comments," Roommates.com gets 230 protection. So open-ended Qs appear to be OK, but specific Qs aren't. This is significant for the case on remand, as it appears that the most objectionable comments were in the "additional comments" field, and those will be excluded from consideration. However, the net result is that the case is going back on remand to determine if the pull-down menus and search functionality (now that 230 doesn't apply to those) violate the substantive provisions of the Fair Housing Act.
Reinhardt issues a concurrence/dissent saying that Roommates.com should lose all 230 protection. He restates Kozinski's opinion to hold that 230 can be lost either when "Roommate categorizes, channels and limits the distribution of information, thereby creating another layer of information," or "Roommate actively prompts, encourages, or solicits the unlawful information." He thinks the additional comments field satisfies both standards.
Ikuta concurs in part, saying that Kozinski's active encouragement example was unnecessary, and points to the expansive 230 readings in Carafano and Batzel to point out that the precedent has defined ICP narrowly (i.e., more like reading #2).
Yuck--what a hairball. With 3 largely inconsistent opinions from a 3-judge panel, and a lead opinion that significantly narrows a fairly clear and relatively on-point Ninth Circuit precedent (Carafano), this case seems ripe for an en banc rehearing. I could even see this case going before the Supreme Court (especially because it conflicts with so many other precedents, including Ninth Circuit precedent), although I think the pull-down menus would be a lousy test case for the Supreme Court.
Meanwhile, if the Ninth Circuit doesn't correct this opinion, and fast, I predict the following:
1) Websites will shy away from gathering structured data from users. This is silly, of course, because structured data can be more useful for users, but this ruling makes structured data much more risky.
2) Craigslist will lose its very similar case in the Seventh Circuit. The Seventh Circuit already had some bad 230 dicta in Doe v. GTE, and this opinion will give the Seventh Circuit judges all the ammo they need to hold Craigslist liable.
3) Plaintiffs are going to have a field day with the language in this opinion, especially as Reinhardt reformulated the test. I predict lots of new lawsuits probing this opinion.
In particular, this opinion can be read that any time a website reconstructs user data through its search engine, it loses 230 for that reconstruction. Read that way, this opinion could signal that Google and other search engines have no 230 protection for their search results. I trust this makes everyone nervous. If that issue ever made it back to the Ninth Circuit, I'm 100% convinced that Kozinski would clarify this opinion to provide 230 coverage to the search engines, However, in the interim, lots of plaintiffs and lower court judges could read this opinion differently, and that's not going to be very fun for defense lawyers or their clients.
All in all, this case is a very unfortunate Cyberlaw development. Let's hope the damage gets reversed pronto.
UPDATE: Commentary on the opinion:
* Eugene Volokh tries to make sense of this mess. The fact that he and I both can't really figure out what the court said (and who agreed with what) isn't a good sign.
* Laura Quilter makes a number of good points, including "I imagine that this case will be used by all who seek to limit Section 230's broad immunity for ISPs. Whether the case constitutes a high-water mark for limitations on that liability, or merely a beachhead, remains to be seen."
* Aaron Perzanowski, in a post entitled "Ninth Circuit Breaks Internet": "The court, in three separate opinions, offered a novel reading of the statute that, unless limited by future panels to the unique facts of this case, will prove a font of disastrously uncertain liability for websites and other web-based services....Hopefully, future Ninth Circuit panels interpreting 230 are as quick to ignore precedent as this one was."
* Joe Gratz is now the proud owner of "harrassthem.com," the domain used in Kozinski's misguided hypothetical. He's soliciting your suggestions of what to do with it.
May 10, 2007
Social Networking Sites and the Law
By Eric Goldman
On Monday, the High Tech Law Institute is co-sponsoring an event entitled "Friends, Lovers, Trust, Safety: The Present and Future of Social Networking." The principal audience is undergraduate students, but everyone is welcome.
One of the hot cyberlaw topics du jour is the legal liability of YouTube, MySpace, Facebook, Friendster, etc. Unfortunately (?), this event won't focus on the legal issues. However, as part of the event, I prepared a short primer for the undergraduates on Social Networking Sites and the Law. Two observations from my research supporting the primer:
1) As you'll see from my primer, I found 3 reported cases involving nearly identical facts: 14 year old boy created a fake MySpace page for his school's principal. There were yet other cases involving similar facts, and one can only assume that there are hundreds of unlitigated incidents for each reported case (see, e.g., this analogous situation).
I can understand how these fake websites happen. After all, I was a 14 year old boy myself (though that was a LONG time ago now) and I remember well the feeling of being imbued with the power of publication, though my publication reach was far narrower than MySpace now enables. However, it was a little breathtaking how common the "gag" appears to be. Hint to 14 year old boys: Fake MySpace pages for the principal are neither funny nor original. IT'S BEEN DONE...A LOT. (See my same observation about YouTube and Listerine).
2) There were a fair number of cases involving sexual predators on the social networking sites. Some of these cases we've heard about, but there were plenty more that were news to me. Once again, assuming there are hundreds of incidents for each reported case, I'm deeply troubled by the amount of sexual predation taking place via social networking sites. (If you want even more disturbing data of a high volume of sexual predation of kids, check out Teacher Smackdown). Regular readers know that I feel strongly that it's ultimately the responsibility of parents to protect their children from online sexual predation, but I'll confess that I don't yet have a good plan for how I'm going to protect my own children.
May 09, 2007
Another NY Court Says Keyword Triggering Isn't TM Use in Commerce--Site Pro-1 v. Better Metal
By Eric Goldman
Site Pro-1, Inc. v. Better Metal, LLC, 06-CV-6508 (ILG) (RER) (E.D.N.Y. May 9, 2007)
The possible rift between the Second Circuit and other circuits on keyword triggering and trademark use in commerce may be widening. The latest ruling from a Second Circuit court (in this case, the EDNY) votes that keyword triggering and metatag usage isn't a trademark use in commerce, ending the plaintiff's case on a motion to dismiss. The court says:
The key question is whether the defendant placed plaintiff’s trademark on any goods, displays, containers, or advertisements, or used plaintiff’s trademark in any way that indicates source or origin. Here, there is no allegation that Better Metal did so, and therefore no Lanham Act “use” has been alleged. Indeed, the search results submitted as an exhibit to the complaint make clear that Better Metal did not place plaintiff’s SITE PRO 1® trademark on any of its goods, or any advertisements or displays associated with the sale of its goods. Complaint, Ex. B. Neither the link to Better Metal’s website nor the surrounding text mentions SitePro1 or the SITE PRO 1® trademark. The same is true with respect to Better Metal’s metadata, which is not displayed to consumers.
Right. It's very nice to see the court reject the trademark claim on competitive metatag usage; the more standard "metatags = infringement" proposition has bothered me for years. And it's nice to have another vote that competitive keyword advertising isn't actionable. However, at this point, I don't feel all that confident that either result is likely to persuade future judges outside a Second Circuit jurisdiction, so consider this just another vote in a very divided poll.
Utah Trademark Protection Act Updates (from BNA)
By Eric Goldman
As I previously reported, Utah legislators met with industry representatives to discuss the Utah Trademark Protection Act on April 25. BNA [BNA subscription required] provides a fresh update on developments since the April 25 meeting. According to the BNA article:
the governor has directed the Division of Corporations and Commercial Code in the state Department of Commerce to hold off on implementing the law "for at least a couple of months" while changes to the legislation are considered....If an agreement is reached soon, changes could be enacted during a special session likely to occur this summer.
I like the way that Paul Rogers, a lobbyist for some of the technology companies, summarized his take-away from the April 25 meeting:
"I don't think they had thought it through, in terms of how it will affect the consumers' interests," he said. "We told them we're not going to comply--we're going to sue. They said, 'Don't sue--we get it, we've gone too far. Let us see if we can fix it or repeal it.' "
Personally, I recommend option #2.
Messing with Oscar -- Academy Sues Oscarwatch.com
By John Ottaviani
Academy of Motion Picture Arts and Sciences v. Stone, No. CV07-02846 RGK CA (C.D. Cal.)(complaint filed May 1, 2007)
Last week, the Academy of Motion Picture Arts and Sciences ("AMPAS"), the organization that organizes the Academy Awards, demonstrated that it still has no sense of public relations or perspective when it filed a trademark infringement law suit against Sasha Stone, the owner of the web site OscarWatch.com.
According to the Complaint (the first four pages can be found here [see update below]), the web site was initially operated as a "fan site," but later converted to a "commercial site." Apparently, what has the AMPAS concerned is the "recent transition of OscarWatch from a blog content only site to a commercial venture featuring paid advertising." All this, despite a prominent and explicit disclaimer above the masthead on the OscarWatch.com web site that it is not affiliated with AMPAS. The Complaint alleges claims for violation of the Anticybersquatting Consumer Protection Act, trademark dilution, trademark infringement, and false designation of origin under Section 43(a) of the Lanham Act.
If anyone has a copy of or a link to the rest of the Complaint [see update below], we would appreciate seeing it to see if there is anything else going on here. Otherwise, this sounds like the sports leagues all over again, forgetting that there are a whole host of uses of trademarks that are not infringing or dilutive. Whether these uses are called "fair use" or "not a trademark use" or something else, the fact remains that there is little, if any likelihood of confusion or dilution in this case. Moreover, it would seem that OscarWatch.com is generating advertising revenue, not from any perceived tie-in with the "Oscars" name, but from its compelling content about films and the industry that attracts loyal readers.
UPDATE: An electronic copy of the complaint.
May 08, 2007
Wikipedia and Search Engine Marketing (SEM) / Search Engine Optimization (SEO)
By Eric Goldman
As regular readers know, this is one of my favorite topics! In December 2005 (and renewed December 2006), I predicted that marketers would overrun Wikipedia, contributing to Wikipedia's demise. As further evidence of this effect, Danny Sullivan's new search engine marketing conference had a panel devoted to marketing via Wikipedia--and the session was "completely packed." From the recap:
With over 1.7 million articles in English alone, it is clear why the site ranks so well. And as the equation goes, with visibility comes pageviews, and with pageviews come marketers. Yet search engine marketers have been particularly fond of Wikipedia for an entirely different reason: its page rank. That is, until Wikipedia implemented a no-follow rule, indicating that outbound links should not be followed by search engine spiders. One would think that this move would kill all interest in Wikipedia’s value to the SEO crowd, yet a link is still a link, and many search engine marketers have realized that capitalizing on the original intent of a link (to secure traffic) can be just as good, if not better, than securing PageRank. (emphasis added)
For example, Comedy Central gets 90,000 visitors/month from Wikipedia, making it a top 10 referral source for them.
As for Wikipedia's future, the recap suggests that "it appears that optimizing a Wikipedia article internally and externally has become more important than optimizing one’s own site." Sounds to me like the future will include plenty of marketers swarming all over Wikipedia! Dedicated Wikipedians are standing tall against the challenge for now..but for how long?
Broad Matching Doesn't Violate Injunction--Rhino Sports v. Sport Court
By Eric Goldman
Rhino Sports, Inc. v. Sport Court, Inc., 2007 WL 1302745 (D. Ariz. May 2, 2007)
I've lamented before that courts don't seem to understand broad matching (see here and here). Today, I'm changing my tune. Broad matching arose squarely in this lawsuit, and the court nailed it. Hooray!
This case involves two competitors in the "recreational flooring business." In 2002, Sport Court went after Rhino Sports for trademark infringement, and about 4 years ago, the parties settled the matter and agreed to a permanent injunction restricting Rhino Sports from "directly or indirectly using in commerce the mark SPORT COURT...on or in connection with the Internet, such as in an Internet domain name, as a sponsored link, in connection with an Internet web page, or as HTML code for an Internet website in any manner, such as the title or keyword portions of a metatag, or otherwise."
Late last year, Sport Court discovered that Rhino Sports' ad appeared as a sponsored link in response to the search term "sport court" (without quotations) and went to court claiming that Rhino Sport was in contempt. However, the ad copy didn't contain the phrase "sport court," and Rhino Sports said it bought the broad-matched terms "court" and "basketball court." As the court correctly observes,
Whether a party appears as a sponsor depends upon a variety of factors, including the frequency with which the search term is used by consumers, the amount paid for and type of sponsorship, and the results of Google's expanded broad match search. Because these factors may change, a party can appear as a sponsor link one day and not appear the next day, or even appear for terms that were never purchased.
As a result, the court has little problem rejecting Sport Court's claim that Rhino Sports was in contempt. First, the literal terms of the injunction only restrict using the term "Sport Court...as a sponsored link." Arguably, invisible keyword triggering using "Sport Court" wouldn't violate this provision. Second, Rhino Sports didn't buy the keyword "Sport Court," and the injunction doesn't restrict Rhino Sports' purchase of generic terms like "court" or "basketball court."
This court's reasoning is solid, but I'm interested by the fact that the court didn't discuss Rhino Sports' ability to negative keyword match the phrase "sport court." This would be easy for Rhino Sports to do and it would appear to solve Sport Court's problem. Given that the court didn't bail the plaintiff out here, plaintiffs drafting injunctions may need to update their boilerplate injunction language to contemplate the different technologies offered by the ad networks, both now and in the future.
Finally, since it was in court anyways, Rhino Sports took a stab at trying to modify the injunction to let it buy the keyword "sport court," like numerous other Sport Court competitors are doing. Because the injunction was stipulated, the court wasn't that excited about disturbing the initial agreement. Further, although there have been some important developments about keyword advertising and trademark use in commerce in other circuits (such as the Rescuecom and JG Wentworth cases), the court repeatedly notes that unsettled nature of Ninth Circuit law as another reason not to change the initial deal. I don't blame the court for not wanting to touch the Ninth Circuit's hairball jurisprudence with a ten foot pole, but I think this reinforces how important it is that the Ninth Circuit fix its mess.
May 07, 2007
YouTube Sued Again--Football Association Premier League v. YouTube
By Eric Goldman
The Football Association Premier League Ltd v. YouTube, Inc., 1:07-cv-03582-UA (SDNY complaint filed May 4, 2007)
Hot on the heels of Viacom's lawsuit against YouTube, two new plaintiffs are leading a separate lawsuit against YouTube for copyright infringement. This time, they are seeking class-action status, putatively bringing along a lot of long tail content producers for the ride.
This lawsuit appears to be a frontal assault on the 512(c) safe harbor scheme. The complaint acknowledges that the plaintiffs tried to send 512(c)(3) takedown notices and didn't like the results, but then goes on to explain why sending takedown notices is ultimately futile and shouldn't be necessary. Some of this just reads like the sour grapes of copyright owners who don't like the economic deal Congress implicitly struck in 512(c), which puts some of the financial burden on copyright owners. I think most judges won't find that gripe all that sympathetic. However, as I've said before, 512(c) is unquestionably ambiguous about whether a copyright owner must send a 512(c)(3) notice before service providers can lose 512(c)'s coverage, and this lawsuit (along with the Viacom lawsuit) create the risk that the judges will read an ambiguous statute unfavorably.
Unlike the Viacom lawsuit, I don't think this case will settle as easily--it lacks the range of strategic opportunities that exist between Viacom and Google, and class action lawsuits are often more complicated (and expensive) to settle. Further, Google's efforts to mollify angry copyright owners with some tools to expedite takedown processes didn't stave off this lawsuit (the Premier League said it tried the tools and didn't like the results), so this reduces the chance of some non-cash product change being sufficient to satisfy these plaintiffs. As a result, at this point, perhaps it's inevitable that we will get some more court opinions on the ambiguities of 512(c) as applied to video-sharing sites.
May 05, 2007
Blogger Protected by Anti-SLAPP Statute--GTX v. Left
By Eric Goldman
GTX Global Corp. v. Left, 2007 WL 1300065 (Cal. Ct. App. May 4, 2007)
This is one of the first cases explicitly holding that a blogger is protected by anti-SLAPP laws. It's not really surprising that bloggers would qualify for anti-SLAPP protection, but still, it's nice to see a case confirm it.
In this case, the blogger operated stocklemon.com, a blog discussing stocks that Left (the blogger) believes are "lemons." He blogged on GTX a few times, for which he got sued for defamation, securities fraud and other claims. GTX isn't the only plaintiff going after stocklemon.com; it looks like the blogger had a knack for getting into trouble, and there have been numerous claims (including by GTX) that the blogger was a short seller deliberately publishing misinformation to manipulate the stock price in his favor. This whole situation is vaguely reminiscent of the problems experienced by the Rip-off Report.
In any case, in response to GTX's lawsuit, Left filed an anti-SLAPP motion to strike. In response, GTX did not adequately muster up sufficient evidence that Left's statements are false. As a result, the trial court dismissed the lawsuit, and in this ruling, the appeals court upholds the trial court's ruling and remands for a determination of Left's attorneys' fees (which GTX will now have to pay).
May 02, 2007
Utah's "Don't Email the Kids" Registry a "Financial Failure"
By Eric Goldman
A couple of years ago, Utah and Michigan adopted laws creating "don't email the kids" registries (called the "Child Protection Registry"--see Utah's and Michigan's). These laws allow parents to register email addresses held by kids and requires marketers sending email/spam that's inappropriate for kids to check the registry and screen out the kids' addresses.
Policy-wise, these laws are broadly appealing. First, everyone hates spam, so anything that might reduce spam is ipso facto a good thing. Second, this law is designed to protect kids from Internet evils—a politician’s nirvana!
However, I don’t think either of these rationales (reduce spam or protect kids) capture the real reason why these laws were enacted. Instead, I suspect pure-and-simple economic opportunism. In practice, the law is just an email tax. Legitimate companies concerned about legal compliance will pay to check the registry, creating a stream of new tax revenues mostly generated from out-of-staters. (Naturally, illegitimate spammers won’t comply with the law under any circumstance). You can imagine how politicians would eagerly leap at the opportunity to get a couple farthings' tax on email traffic. CA-CHING!
Meanwhile, only one company--Unspam, a for-profit company--operates a "don't email the kids" registry. I can imagine how this could be a great sales pitch to generate demand for Unspam’s services: Hey legislators, enact the law, generate new tax revenues on email traffic, you get an economic windfall, we get a cut, and EVERYONE WINS!
Despite this seductive pitch, we’ve learned that the "don't email the kids" laws are riddled with problems. For example, mechanically Unspam's registry doesn’t try to authenticate that registered emails are associated with kids, turning the registry into an across-the-board do-not-spam registry (something I think isn’t good policy). The law also suffers from the sheer illogic of trying to erect geographic borders on email traffic; a federal district court didn't agree with this concern, but we may not have heard the final word on this point.
Plus, there's the challenge of protecting the privacy of kids' email addresses in the database. As Wendy Davis of MediaPost reported last Fall:
It's now come to light that several weeks ago, a state employee in Utah released the e-mail addresses of four minors to the Email Sender and Provider Coalition. That gaffe occurred even though Unspam--the private agency managing the list--said it was inconceivable that the list would ever be divulged. "Even if ordered by a court or held at gunpoint, there is no feasible way that I, any Unspam employee, or any state official could provide you even a single address that has been submitted for compliance by any sender," Prince reportedly said in an affidavit.
Even more problematically, according to the Salt Lake Tribune, the law has been a "financial failure": the law was projected to bring $3-6M in revenues to the state, but gross revenues have been $187,224, split 80% to Unspam and 20% to Utah—netting Utah a grand total of $37,445. Worse, the law has cost Utah a lot of money, including the following directly attributable expenses:
* $58,000-a-year in prosecutorial fees (estimated cost in original law--not sure if this money has been spent)
* $75,000-a-year for a full-time Department of Commerce investigator (estimated cost in original law--not sure if this money has been spent)
* $100,000 for a private lawyer to defend the law in court (under a contract that could cost up to $200,000). Utah undertook this expense only after Unspam incurred $70,000 of defense costs itself and then cried “no mas,” although the Salt Lake Tribune article indicates that during pre-passage discussions, Unspam may have suggested that it would solely bear the defense costs.
I'm sure this law imposes other "soft" costs throughout the Utah governmental system, plus there are the transaction costs and deadweight losses inherent in any tax. But ignoring these indirect costs and evaluating the law strictly on a cash basis, this law still looks like a bad economic decision for Utah.
There is a meta-lesson here: legislatures rarely can add to state coffers via Internet regulation. Unfortunately, Utah hasn’t yet internalized this lesson despite two highly visible failures. First, in 1995, Utah enacted a digital signature law designed to capture a little piece of the e-commerce pie by becoming the safe haven for digital signature vendors--but there were no takers, so the law sat on the books unused for a decade before Utah repealed the law last year. Second, Utah tried again with this "don't email the kids" law and appears to have struck out financially as well.
Amazingly, despite these precedents, Utah keeps trying! Its latest attempt to get a little Internet gravy is the Utah Trademark Protection Act, where Utah plans to tax (mostly out-of-state) keyword advertisers. As Sen. Eastman told BNA, “Utah can be the trademark registration capital of the country, just as Delaware is the incorporation capital.” Not only would the registration fees flow back to Utah and perhaps to a Utah-based registry vendor such as Unspam (which expressed some interest in bidding on the registry contract), but Sen. Eastman thinks the law may stimulate demand for Utah’s trademark lawyers. However, there are good historical reasons to believe that the Utah Trademark Protection Act isn’t likely to fulfill these dreams of prosperity. This is yet another good reason for the Utah legislature to reconsider the law.
May 01, 2007
April 2007 Quick Links
By Eric Goldman
* Claria has taken its PersonalWeb tool out of beta. This tool creates a personalized navigation page for consumers by inferring their preferences rather than requiring them to proactively customize the personalization, which only 10% of users did.
* From BusinessWeek: To capture interest in a hot story, media entities buy keywords like "Virginia Tech massacre" immediately following tragedies.
* MailChannels' technology deliberately introduces latency into its server's handshakes, effectively creating a slow lane for spammers.
* Latest evidence that consumers don't always want to have their say: less than 0.2% of visits to YouTube and Flickr are for the purpose of uploading content.
* Todd J. Hollis' lawsuit against dontdatehimgirl.com has been dismissed for lack of jurisdiction. Unfortunately, the court deliberately sidestepped the 47 USC 230 issue, which would have been a simple way to clear the docket permanently.
* BusinessWeek article on how dictionary-makers are struggling to sort through the proliferation of new well-known words via the web.
* A historian raises some quality concerns about Google's book scanning efforts. I think the metadata issue is particularly serious, as many people will expect Google's metadata to be accurate and will cite it accordingly. HT Rebecca.
* New York councilman wants to ban "menu spam."
* Thyroff v. Nationwide Mutual Insurance Co., No. 41, 2007 N.Y. LEXIS 264 (N.Y. Mar. 22, 2007), holding that electronic records are protected by a state law against "conversion." This is certainly consistent with some precedent, such as Kremen v. Cohen, 325 F.3d 1035 (9th Cir. 2003) saying that domain names can be converted, but this broad holding seems plainly wrong. With respect to copyrightable electronic records, federal copyright law should preempt state anti-conversion laws. What am I missing?
* Some items that made me laugh this month:
- Dilbert on crowded trademark namespaces
- Comedy Central has the amazing story of My-T-Boy, the cute branded character who lapsed into the public domain
- Marge Simpson googles herself and doesn't like what she sees from the satellite image of her home. Very funny!