May 09, 2008
Ripoff Report Responds re. Xcentric Ventures v. Village Voice
By Eric Goldman
Last week I blogged about a lawsuit that some of the Ripoff Report folks brought against the Phoenix New Times and its reporter, Sarah Fenske, for defamation based on quotes attributed to attorney Christopher Sharp in an article published in February 2007. In my post, I pointed out some potentially ironic aspects of the lawsuit. Thomas Duffy, general counsel of Xcentric Ventures (the company that operates the Ripoff Report), was kind enough to send me a reply, which I am republishing below with his permission. (Note: I don't plan to let this blog become a new battleground to litigate the case in public, but I thought this response deserved airtime). I don't have much commentary to add to this response but I gratefully welcome thoughts from those of you who have faced similar litigation choices. In all cases, I sincerely hope the parties can find a prompt solution that doesn't involve wasted litigation expenses.
TEXT OF LETTER -----------------------------------------
Dear Professor Goldman:
Your analysis of the New Times suit is, as usual, very insightful. Rip-off Report not only saw the irony of a suit against New Times, but actually was loathe to even file the suit. In fact, we still have not even served it on the New Times. Here's the catch-22 that led to filing the suit: Sharp (the attorney quoted in the New Times) keeps saying he was taken out of context and the quote might not have been accurate. I am sure you have heard of the "empty chair" defense -- when a defendant points to someone not there to say it is their fault. Even with Sharp's statements that the quote was not accurate, we still did not want to involve New Times in a suit so we sent them a subpoena asking for the recording of the interview (if it exists), for any notes of the interview or to take Ms. Fenske's deposition. The answer we got was no, no and no. We will be filing a motion to compel. In the meantime, the statute of limitations would have run if we did not at least file the suit. Imagine if Fenske's testimony eventually is, "That's not what Sharp said at all and I intentionally misquoted him." Neither litigation counsel nor I wanted to explain to Ed nothing could be done because the statute of limitations has run. I am sure you understand this "in the trenches" litigation dilemma.
Even with all these litigation considerations, Rip-off Report would not have filed the New Times suit if they had simply published a retraction that what Attorney Sharp said was not supported by any evidence OR if New Times had proven to us that Sharp did actually say what was attributed to him. As you know, people assume newspapers have been fact checked and Ed and Rip-off Report just wanted a simple statement that Sharp's statement was unverified or, in the alternative, proof that Sharp was actually responsible for the statements in question.
As you point out, the irony was not lost on us that this situation is very similar to the usual attempt to get around Section 230 by claiming that Ed wrote the Rip-off Report in question. Proving that negative is never easy given that we guaranteed the report writer's anonymity. There are no such concerns here: there is a statement which has been attributed to Sharp and there may be a tape of the interview. There is no reason to keep a tape or notes private: the Shield Laws do not apply (Sharp was not an anonymous source and specifically waived any privilege), it is extremely relevant and, sooner or later, it is going to have to be produced. Given this doubt about who actually uttered the statements in question, I must respectfully point out that, even if New Times were solely an online provider, the suit against them would still be in exactly the same posture. There is an unfair dichotomy between print and online providers but this is not a case that shows the dichotomy: online or off, Ed and Rip-off Report will leave New Times alone if shown New Times is not responsible for the quote. Similarly, if New Times misquoted Mr. Sharp as he claims, there would be liability for both print and online media. Simply put, this is not a derivative liability case but Ed does want to get to the bottom of the issue of who made the statements.
I wish we could just assume that New Times had properly quoted Mr. Sharp. Unfortunately, there are some questions about New Times' motives in this. New Times knows Ed runs a legitimate site: they had listed Rip-off Report as the best consumer website in the past and Ed had assisted all the New Times newspapers around the country including the Village Voice before and after New Times purchased it. We have our suspicions about why New Times decided to do a hatchet job on Ed but we will leave that for another day. What I can tell you for sure is that Ed's contacts at several government agencies, such as the IRS, and members of the Corporate Advocacy Program independently told Ed that Ms. Fenske was only looking for dirt on Ed. When they had nothing but praise for Ed and Rip-off Report, she was not interested in what they had to say.
In summation, the problem here is New Times' lack of cooperation leaving us no choice in the particular (and, perhaps, peculiar) factual situation. For the sake of media accuracy, we hope New Times can show the statements are solely attributable to Mr. Sharp but, until they do, we have a client to protect.
Thank you for your commentary and for all your work keeping us all up to date on the latest in Internet Technology, Marketing and First Amendment Law.
END OF LETTER TEXT ----------------------------------
Sincerely,
Thomas B. Duffy,
General Counsel to Xcentric Ventures, LLC
Posted by Eric at 09:40 AM | Derivative Liability | TrackBack
May 08, 2008
Third Party Liability Presentation
By Eric Goldman
Last week I spoke at the "Center for Creativity and Commerce Symposium: New Media, New Markets, New Rights" at Georgia State University in Atlanta. This event was sponsored by four different departments within GSU (law, business, communications, digital media), which created an unusually heterogeneous audience that was heavy on content creators and their vendors (like their lawyers). As a result, after I did the audience assessment, I decided the most useful direction was a practice-oriented talk focusing on how rights owners can enforce against third party intermediaries. Of course, this topic should strike regular readers as odd/ironic: first, a law professor talking about practice issues, and second, a defense-side guy talking about bringing enforcement actions...?! With those caveats, my slides.
Posted by Eric at 04:49 PM | Copyright , Derivative Liability | TrackBack
May 07, 2008
April 2008 Quick Links
By Eric Goldman
Anti-Gaming
* Even though Ticketmaster won its lawsuit, Minnesota overreacted to the Hannah Montana ticket crush by banning software to circumvent an online ticket allocation process. See Sec. 609.806. Check out the hyperbole in this press release! What's next? Are legislators going to make SEO a crime?
* Google modified its relevancy algorithm 450 times in 2007. And yet courts still cite to Brookfield for how search engines operate!
* The UK cracks down on shill marketing online. ClickZ: "Under the new [UK] Consumer Protection from Unfair Trading regulations, it will be illegal to "Falsely claim or create the impression that the trader is not acting for purposes relating to his/her trade, business, craft or profession," or to "falsely represent oneself as a consumer."" See also AdAge.
IP
* Speaking of SEO....the latest pathetic attempt to grab a generic term and trademark it? "SEO." Sarah Bird is on the job.
* Do student notes of a professor's lecture constitute copyright infringement? We may find out.
* Atlantic v. Howell. More on the "making available" theory of copyright infringement.
* Sarah Bird on registering copyrights in websites and blogs.
* A for-profit T-shirt listing the names of deceased Iraq soldiers sparks a publicity rights lawsuit.
General
* Bowen v. YouTube, Inc., 2008 WL 1757578 (W.D. Wash. April 15, 2008). The court upheld the forum selection clause in YouTube's user agreement.
* eBay is ending its promotion of third party live auctions. Maybe because of this loss?
* Rebecca blogs on SuccessFactors, Inc. v. Softscape, Inc., 2008 WL 906420 (N.D. Cal.), an odd case involving the Computer Fraud & Abuse Act and an "attack PowerPoint" allegedly sent by a competitor to its prospective customers.
* Kate Kaye writes about the new Internet industry lobby group, the "State Privacy and Security Coalition," designed to fight laws like the Utah Trademark Protection Act.
* Kevin Werbach, The Centripetal Network: How the Internet Holds Itself Together, and the Forces Tearing it Apart, UC Davis Law Review, Forthcoming. An interesting paper applying "network formation" theory to show how the Internet came together as a unified network and how those unifying forces are under constant stress.
Posted by Eric at 08:52 PM | Content Regulation , Copyright , Internet History , Licensing/Contracts , Marketing , Publicity/Privacy Rights , Search Engines , Trademark | TrackBack
May 06, 2008
CDT Files Amicus Brief in Zango v. Kaspersky
By Eric Goldman
The Center for Democracy and Technology has authored a brief, for itself, anti-spyware vendors and other advocacy groups, in favor of Kaspersky in the Zango v. Kaspersky case. I thought this brief was a useful contribution to the discourse. The brief focuses heavily on the issue of empowering users' control over their desktops, which is the critical issue but a complicated one when users give instructions that may conflict with each other. The brief addresses this issue squarely:
Two scenarios illustrate the interplay of “consent” in the anti-spyware context. First, assume that a user did consent to the installation of Zango software, but later concluded that the software and resulting advertisements were harassing and objectionable. Kaspersky Lab (and most anti-spyware services and tools) offers the ability to disable Zango software, and for a user to choose to install Kaspersky software to block Zango’s advertisements is fully consistent with the user’s true choice (notwithstanding the assumed initial consent to install the Zango software).
Second, if the Kaspersky Lab software is installed on a computer before someone attempts to download and install the Zango software (and Kaspersky software blocks the Zango installation), that is quite possibly also fully consistent with the wishes of the user. By installing anti-spyware software, the user is asking to be protected from spyware even if the user does not immediately recognize certain downloaded software as spyware. Moreover, it may well be that the owner of the computer (such as a parent or an employer) decided to install anti-spyware software such as Kaspersky Lab’s, and then some other users (such as a child or employee) attempts to install Zango software (and that installation is blocked). In that scenario, the anti-spyware software is in fact doing precisely the job that it was asked to do.
I think both of these examples tell a story of how a user's putatively inconsistent instructions could be reconciled. But these examples are also pretty stylized, so minor changes in the facts would expose situations where the reconciliation might be tougher.
The case library:
* Kaspersky's answering brief [warning: 5MB file].
* National Business Coalition on E-Commerce and Privacy amicus brief in favor of Zango
* Zango's appeal brief [warning: 2.1MB file]
* The district court's dismissal and my commentary
* TRO Denial and my commentary
* Kaspersky's Response to TRO Motion
* Zango's TRO motion
Posted by Eric at 05:35 PM | Adware/Spyware , Derivative Liability | TrackBack
May 02, 2008
Spam Revisited: Virginia-style
By Ethan Ackerman
The Virginia Supreme Court revisits its First Amendment holding in Jaynes.
In what is likely a second stroke of luck for criminal spammer Jeremy Jaynes, the Virginia state Supreme Court recently granted a discretionary rehearing on the earlier 4-3 opinion. The Court limited review to First Amendment standing issues. These standing issues were the focus of skepticism in the dissent and in an earlier post on this blog.
The rehearing order is here.
This blog's earlier post discussing the ruling is here.
Posted by Ethan Ackerman at 03:26 PM | Spam | TrackBack
May 01, 2008
Adware is Dead. Long Live Adware!
By Eric Goldman
In late January, I attended the Anti-Spyware Coalition's Public Workshop entitled Spyware: What's Worked, What's Left, and What's Coming. I was on a panel entitled "Is Adware Dead?" with Alissa Cooper from CDT and Colin O'Malley from TRUSTe. This is a timely topic because I've been pondering this question myself for a while now. This blog post recaps some of my thoughts.
Adware Is Dead
At the workshop, everyone agreed that adware is dead, although we may have been using different definitions of adware. (Commissioner Leibowitz declared adware "mostly dead," invoking the phrase from the Princess Bride). I was a little surprised to see such broad consensus on this topic. Let's explore what happened.
Looking back, it's clear that the 2003-06 period was a wild time for the adware industry. Several new entrants sought to build "legitimate" businesses on client-side software that displayed advertising, and others were seeking technical exploits for more nefarious purposes.
Collectively, these efforts sparked the Great Adware Wars of the 2000s. This was a time of mania, with everyone scrambling for the largest network of installs. In turn, vendors attempted lots of aggressive practices, such as bundled installs with obscure notice/consent, difficult uninstalls, loosely controlled/uncontrolled third party distribution chains, and overgrazing of user attention once a desktop install was achieved.
I'm declaring that the Great Adware Wars of the 2000s are over, and the anti-adware forces won. The signs of a decline in the adware industry are everywhere. Most obviously, most of the entrants are out of the business. Of the players trying to run legit adware companies, arguably only Zango persists in its client-side software business model circa 2004.
Why Did Adware Die?
It's hard to tell exactly what ended the Great Adware Wars. Some possible contributing factors:
* enforcement actions by the FTC, state AGs and private litigants (including class action lawsuits)
* new laws, including the laws passed by Utah and Alaska
* technological responses, including enhanced filtering/labeling by anti-spyware vendors
* changes in the economics. In particular, paying third party distributors for installs spurred a lot of unprofitable behavior, so installation economics improved. At the same time, due to the enforcement actions and negative publicity, advertisers have become increasingly gun-shy about advertising via adware. There is some anecdotal evidence that advertisers are now including anti-adware policies in their agency agreements. It's not clear that such policies are actually being enforced, but collectively they send a signal that suppresses the demand for advertising inventory in adware.
* changes in user behavior, due to user education and press attention to adware. Adware has become a dirty/tainted word, and that taint suppresses demand up and down the chain.
Ultimately, I think the single biggest contributing factor to the demise of adware is that it often provides a lousy consumer experience. Even when adware doesn't carpetbomb users with ads, it is still largely based on interruption marketing (a term from Seth Godin's excellent book Permission Marketing
In the end, I believe lousy consumer experiences always fail in the marketplace. The adware being deployed during the Great Adware Wars didn't prove otherwise.
What Consequences from the Death of Adware?
The Great Adware Wars are over. Now what?
Regulatory Proliferation
Even though the war is over, regulators haven’t gotten the message. In fact, I predict that we will see continued efforts to regulate 2005-era adware. Why? If the threat has been neutralized, shouldn't regulators focus their attention elsewhere?
This is a classic public choice problem. Everyone hates pop-up ads and scary adware, so regulators can pander to their constituencies' fears. At the same time, no one is opposing these efforts--the adware companies have largely vanished (not that they were ever a potent lobbying force in the first place), and no one else will stand up in their stead. As a result, regulators seeking some publicity bounce for being “tough on Internet threats” can easily enact ineffectual laws to combat past problems. (As an example of this, see the continued unopposed efforts of the Humane Society to ban Internet hunting).
Long Live Adware!
Adware circa 2003-06 may be dead, but adware in the broad sense--client-side software that displays advertising--will never die. Instead, as I argue here, adware is an inevitable part of our future for several reasons.
First, client-side software can interact with the user whenever they are using their computer. As a result, the vendor doesn’t have to worry about Internet connectivity. Plus, each vendor wants to be able to reach the consumer 100% of the time, not just when the user is visiting its servers.
Second, client-side software has access to the very best data about a user. Server-side applications generally only see the data made available when users are communicating with it. This partially explains the Facebook Beacon offering; it's an attempt by Facebook to aggregate data about user behavior that's captured by third party servers (i.e., data that Facebook ordinarily wouldn't see). But even compared with Beacon, client-side software will see more--and better--data.
At the conference, it was pointed out that behavioral targeting doesn't necessarily improve with deeper datasets. While this is true, it also remains true that a website never knows if the user has transacted with its competitor (i.e., when I searched for flights at both American and United's websites, the losing company has no idea if I transacted with its competitor or not). Client-side applications can see all of this valuable information.
As a result, vendors will always want to get onto users' hard drives and watch the users' communication flows from there. Thus, the race for client-side installations will remain an omnipresent fixture of our technological environment.
At the same time, the residual legislative and regulatory efforts--made in a vacuum without a direct threat and without any counterbalancing lobbying--has a serious risk of inhibiting the development of beneficial client-side applications. Simply put, in the legislative grandstanding to put the "nail in the coffin" of adware, regulators might in fact distort the innovation cycles of software developers who can improve users' lives. It's this risk of collateral fallout that drives my objection to most types of anti-adware regulation, and when I see stupid and regressive state laws (like the Utah Spyware Control Act, or Alaska's anti-adware law, or the screwed up Utah Trademark Protection Act), the potential harm on innovation is palpable.
So here's my proposal. Let's take a moment to pause and celebrate the end of the Great Adware Wars of the 2000s, and congratulate the many people who worked very hard to contribute to its demise. Then, let's all collectively vow to move on and focus our energies on looking forward to the next round of bona fide and serious threats, instead of looking backwards at perceived threats already vanquished.
Posted by Eric at 08:10 AM | Adware/Spyware | TrackBack