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April 29, 2009
Two 47 USC 230 Defense Losses--StubHub and Alvi Armani Medical
By Eric Goldman
Even though both of these cases are a little dated, they both just showed up in Westlaw in the past couple weeks. Their juxtaposition, plus the recent Woodhull case, suggests a mini-trend against 230.
NPS LLC v. StubHub, Inc., 2009 WL 995483 (Mass. Super. Ct. Jan. 26, 2009).
This case involves an interesting cat-and-mouse game between StubHub and the New England Patriots regarding resales of Patriots' season tickets. The New England Patriots have done a number of things to clamp down on ticket resales, including stating on the ticket that they are revocable licenses, printing unique bar codes on each ticket to make them easily voidable, canceling season tickets holders who impermissibly resell them, and creating a single legitimate channel for ticket resales (operated by TicketMaster). For its part, StubHub allows ticket sellers to obscure the exact location of the seats (making it difficult for the Patriots and others to identify the offending season ticketholders without a court order, which they ultimately got) and offers quasi-insurance against StubHub-purchased tickets being denied at the gates.
Tiring of this cat-and-mouse game, the Patriots sued StubHub for several claims, including interference with contract. This ruling involves StubHub's summary judgment motion to dismiss that claim, which the court denies.
Among StubHub's arguments is that it is not breaking anti-scalping laws because if anyone is breaking those laws, it is StubHub's sellers. The court rejects this argument several ways, including saying that StubHub is inducing the sellers' illegal behavior (with a conspicuous cite to Grokster). StubHub replies that it is protected by 47 USC 230 for any seller behavior. Because of StubHub's alleged inducement, the court, citing Roommates.com, says StubHub isn't protected by 230:
there is evidence in the record that StubHub materially contributed to the illegal "ticket scalping" of its sellers. In effect, the same evidence of knowing participation in illegal "ticket scalping" that is sufficient, if proven, to establish improper means is also sufficient to place StubHub outside the immunity provided by the CDA
The case also mentions that StubHub's variable commission gives them incentives to see sellers increase their prices and thus break the anti-scalping law (more on Massachusetts's antiquated anti-scalping law here). In the end, the Patriots may have successfully engineered their anti-resale protections to block both sellers and facilitators like StubHub. If so, expect to see other ticket vendors jump on the bandwagon and deploy similar anti-resale techniques. Of course, the Patriots do have an authorized resale channel; I think if other ticket vendors similarly created one as well, there would be less angst about ticket resales.
Some other thoughts about this ruling:
* This is not the first time StubHub has had problems with a 230 defense. See Hill v. StubHub (but compare the Fehrs case)..
* To my knowledge, this is the first and only case so far to favorably cite the Roommates.com case for the plaintiff. Thus far, I have seen about a half-dozen cases citing Roommates.com for the defense.
* To my knowledge, this is the first case to expressly link the Grokster "inducement" standard with a possible 230 exclusion. While I am troubled by any 230 defense loss, an "inducement" theory does a nice job explaining a possible common theme between Roommates.com, the Woodhull case and this case. At the same time, an "inducement" exclusion to 230 could create significant trouble for future 230 defenses, so I am hoping these cases are the exception rather than an emerging rule.
* The specific facts at issue here (the intentional interference claim) isn't very likely to arise in many cases. At the same time, it appears that a prima facie case of intentional interference with contract may inevitably satisfy any "inducement" exclusion to 230. As a result, this case opens up a new path for plaintiffs to explore to bypass the 230 brick wall.
Other comments on this case:
* CMLP
* Lee Gesmer
Alvi Armani Medical, Inc. v. Hennessey, 2008 WL 5971233 (S.D. Fla. Dec. 9, 2008). The Justia page. See two blog posts (1, 2), apparently from the defendant.
The publication of online reviews of doctors and medical procedures appears to be a rough-and-tumble world right now. See, e.g., the Lifestyle Lift litigation, Medical Justice's scheme to silence patients, and this lawsuit.
The plaintiff is a hair restoration/transplant doctor. The defendant operates a website "Hair Restoration Network" that provides "information to the consumer public about the hair restoration and transplant industry." The plaintiff alleges that the defendant "knowingly posti[ed] disparaging and false statements about Dr. Armani and Armani Medical on the website" and created "the impression that posters on the website are bona fide disgruntled patients of Plaintiffs, when in fact the posters are either fictitious persons or undisclosed affiliates of doctors who are on the website's recommended list of "pre-screened" doctors." The plaintiff claimed these activities constituted defamation and deceptive/unfair trade practices under Florida law.
Among other defenses, the defendant claims 47 USC 230. On its face, the plaintiff's allegations of unfair business practices should (and did) survive a 230 dismissal motion because (among other things) (1) the complaint claimed that the website operator created fake content itself, and (2) the complaint claimed that the website did not adequately disclose its sponsorship relationship with rival doctors.
At the same time, the complaint's allegations on their face support a 230 dismissal to the extent any claim is based on postings by affiliates of site-recommended doctors. The court seems to miss this subtlety, apparently incorrectly treating those affiliates' content as if it were from the website operator's. This runs directly counter to a number of cases from last year, such as the Higher Balance and Furber cases.
The news wasn't all bad for the defense. The court dismissed with defamation claim with prejudice because the plaintiff failed to comply with the mandatory pre-litigation notification statute. There is some discussion about whether the Internet qualifies as a protected medium under the statute (the court says yes); this brought to mind the old It's In the Cards v. Fuschetto case from nearly 15 years ago (which reached a different result).
The case settled in February. Terms were not disclosed.
Posted by Eric at 12:34 PM | Derivative Liability | TrackBack
April 28, 2009
Promatek Redux: Software Consultant Enjoined from Metatag Usage and Other TM References--Deltek v. Iuvo
By Eric Goldman
Deltek, Inc. v. Iuvo Systems, Inc., 2009 WL 1073196 (E.D. Va. April 20, 2009). The Justia page.
Every year in Cyberlaw, I teach Promatek v. Equitrac, a Seventh Circuit metatags case from 2002 noteworthy for its multiple litigant and judicial errors typical of a cyberspace freakout case. Among the many mysteries of the case is how the court treats the fact that Equitrac advertised that it provided servicing of Promatek's equipment. The court says that Equitrac was free to say that, but it couldn't say it in the metatags...for reasons that I still don't understand.
Today's case raises similar issues to the Promatek case, and the resolution isn't much clearer. Deltek sells complex cost-accounting software. Iuvo includes three former Deltek employees who started a business providing consulting about Deltek software and other Deltek software-related services. Iuvo's websites advertise the fact that it provides servicing for Deltek software, but Deltek apparently doesn't like that or, apparently, the competition (not surprising because Iuvo was allegedly undercutting Deltek's price). Thus, Deltek launches a multi-prong attack on Iuvo, including claims that the site infringes its trademarks, the former employees misappropriated Deltek trade secrets, and the former employees violated their non-compete agreements.
With respect to the trademark claims, the defendants assert "fair use" (more precisely, nominative use). The court isn't convinced, in part because of the implied affiliation from Iuvo's references to Deltek's trademarks, even though the websites had an appropriate disclaimer of any relationship. Citing the doctrinally confused Axiom case, the court relies on the same implied-affiliation grounds for the metatags, saying "This use of Deltek's trademarks as metatags may cause a consumer to believe that Iuvo is affiliated or related to Deltek and may therefore constitute an improper attempt to trade on the commercial value associated with the marks." However, no one who understands metatags believes this statement is in the least bit credible.
Ultimately, the court crafts a split-the-baby injunction, restricting Iuvo:
from using in the "www.iuvosystems.com" website the phrases "Deltek Upgrade", "We Provide Deltek Solutions" and "Technology Consultants With Deltek Experience"; from using as metatags for any website associated with the Defendants' business activities any Deltek trademarks or trade names including, but not limited to, "Deltek Costpoint," "Deltek Time Collection," "Deltek Install," "Deltek Hosting" and "Deltek Consulting" and from using the web domain names "www.installdeltek.com" and "www.installdeltek.net."
Although the injunction is relatively narrow, it is still obviously problematic. First, the blanket restriction on including Deltek in the metatags makes no sense. See the Welles case. Second, I don't immediately see anything wrong with the phrase "installdeltek" in the domain name if Iuvo acts as a systems integrator and, in fact, installs Deltek software (a point I believe Deltek contested). Finally, I'm struggling to see what's wrong with the phrase "Technology Consultants with Deltek Experience," which seems completely accurate in describing both the former Deltek employees' experience as well as the company's accumulated experience.
Three observations about the case:
1) I hate metatag cases!
2) This is yet another example that the nominative use defense isn't very robust.
3) It's interesting that the court declined to issue an injunction based on the trade secret and non-compete claims, so Deltek's only victory came from its trademark claims. This is a good example of trademark's power to restrict competition, even when other anti-competition legal doctrines fail, and even when the competition may be in the consumers' best interest.
Posted by Eric at 09:31 AM | Trade Secrets , Trademark | TrackBack
April 27, 2009
Catching Up on Three Keyword Advertising Cases--Hearts on Fire, Romeo & Juliette, AAA
By Eric Goldman
Three trademark owner v. advertiser rulings from the past month:
Hearts on Fire Co. v Blue Nile, Inc., 2009 WL 794482 (D. Mass. March 27, 2009). The Justia page.
This is an interesting and potentially very important keyword advertising case.
The plaintiff is a diamond manufacturer which sells its products under the "Hearts on Fire" brand. The plaintiff does not sell its diamonds directly to consumers. The defendant is an Internet retailer that does not sell the "Hearts on Fire" brand of diamonds. The plaintiff alleges that Blue Nile bought the keyword "hearts on fire" at WebCrawler and then displayed an ad that included the words "hearts on fire" in the ad copy.
In this ruling, Blue Nile tries to dismiss the trademark claims for lack of use in commerce. The ruling came out before the Rescuecom case, but it doesn't matter. (The court did not feel bound by the First Circuit's Venture Tape case, which did not address use in commerce in a metatags case). After canvassing the statute and the precedent, the court says "there is little question that the purchase of a trademarked keyword to trigger sponsored links constitutes a "use" within the meaning of the Lanham Act." Post-Rescuecom, this is even more likely to be true.
The court also discussed consumer confusion. Noting that "there is no suggestion that diverted consumers inadvertently believed they were purchasing Hearts on Fire diamonds at Blue Nile's website," the sole possible basis of consumer confusion is initial interest confusion. In an understatement, the court notes that doctrine is a "somewhat ill-defined concept."
Unfortunately, the court proffers its own definition of initial interest confusion (one of dozens of different definitions), and its definition is a regressive throwback to 1990s legal conceptions of search processes:
[a] classic example [of IIC] is where a consumer sets out in search of one trademarked good, but is then sidetracked en route to his or her original destination by a competitor's advertisement or offering. He or she is never confused as to the source or origin of the product he eventually purchases, but he may have arrived there through either misdirection or mere redirection. In effect, initial interest confusion involves the diversion of the consumer's attention from one trademarked good to a competing good, even if he is not confused about the source of the products he ultimately considers or buys
As I've repeatedly explained, this definition (and its emphasis on attention diversion) is analytically corrupt because it overassumes a linear search process. How do we know when a consumer is "sidetracked" or, in fact, discovers more helpful information? And how can a court determine this?
Despite this odd and unfortunate construction of initial interest confusion, the court acknowledges an alternative story that searchers might be able to distinguish between competitive offerings, which would preempt any initial interest confusion. The court hypothesizes that some keyword advertising listings might be akin:
to a menu--one that offers a variety of distinct products, all keyed to the consumer's initial search. Sponsored linking may achieve precisely this result, depending on the specific product search and its context. When a consumer searches for a trademarked item, she receives a search results list that includes links to both the trademarked product's website and a competitor's website. Where the distinction between these vendors is clear, she now has a simple choice between products, each of which is as easily accessible as the next. If the consumer ultimately selects a competitor's product, she has been diverted to a more attractive offer but she has not been confused or misled
So where does Blue Nile fit on this spectrum between attention usurper and menu-option? The court isn't willing to let Blue Nile off the hook because it advertised on a trademark for a product it does not sell, saying a "consumer who had just entered a search for Hearts on Fire diamonds might easily believe that the Defendant was one such authorized retailer when presented with Blue Nile's sponsored link, even if the accompanying text did not contain the trademarked phrase."
As a result, the court reserves this case for a full multi-factor likelihood of consumer confusion analysis—but not the normal multi-factor analysis. Instead, the court plans to look at a bunch of additional factors beyond the normal ones:
under the circumstances here, the likelihood of confusion will ultimately turn on what the consumer saw on the screen and reasonably believed, given the context. This content and context includes: (1) the overall mechanics of web-browsing and internet navigation, in which a consumer can easily reverse course; (2) the mechanics of the specific consumer search at issue; (3) the content of the search results webpage that was displayed, including the content of the sponsored link itself; (4) downstream content on the Defendant's linked website likely to compound any confusion; (5) the web-savvy and sophistication of the Plaintiff's potential customers; (6) the specific context of a consumer who has deliberately searched for trademarked diamonds only to find a sponsored link to a diamond retailer; and, in light of the foregoing factors, (7) the duration of any resulting confusion.
This is a good news/bad news development. The good news is that this is a very productive inquiry for courts to make. It does not matter what judges or plaintiffs intuitively think will confuse consumers; it only matters what consumers think and how they process the information presented to them. The bad news is that I have no idea how the parties will provide credible evidence to support this inquiry, and a new and even more complex multi-factor test is destined to compound the existing judicial difficulties with the multi-factor likelihood of consumer confusion test.
Some implications of this case:
1) In the past, some language in First Circuit cases implied that the First Circuit did not recognize the initial interest confusion doctrine. This case offers more evidence that the initial interest confusion doctrine, like a virulent weed, has taken root (in some form or another) everywhere.
2) A ruling like this shows how courts are analytically tortured by keyword advertising cases.
3) Assuming that Blue Nile falsely advertised that it sold "Hearts on Fire" diamonds, isn't this a paradigmatic bait-&-switch? In other words, do we really need to go through these doctrinal contortions? On the other hand, if the Blue Nile ad copy had a clearer exposition that it sold diamonds but not Hearts on Fire branded diamonds, wouldn't that also be an easy case? Thus, the only difficulty is when Blue Nile keys its ads to Hearts on Fire but doesn't reference the trademark in the ad copy at all (which, for example, would be the result in any Google ads if Hearts on Fire blocks its trademark). Personally, I would love to see some empirical evidence about how consumers evaluate ads without any reference to the triggering brand. Meanwhile, for you SEMs, if you are not already doing so, you should be running your ad copy by your lawyers. Clear ad copy ought to reduce or eliminate the risk of lawsuits like this.
4) I will be interested to see if other courts embrace the court’s addition of new factors to the multi-factor consumer confusion test. If so, this could make these cases much more complicated and expensive, but it could also prevent quick plaintiff wins by trademark owners who have no evidence of consumer confusion/initial interest confusion/whatever.
Other opinions on the case: Wendy Davis, Ryan Gile and David Kelly at Finnegan,
Romeo & Juliette Laser Hair Removal, Inc. v. Assara I LLC, 2009 WL 750195 (S.D.N.Y. March 20, 2009). The Justia page.
The litigants are competing laser hair removal vendors. The plaintiff alleges that the defendant ran the following ad:
Romeo And Juliette Laser
Unlimited Laser Hair Removal
$599/Month. Free Consultations.
www.assaralaser.com
New York, NY
Clicking on the URL took consumers to a website where the second line allegedly read "romeo juliette laser Unlimited Laser Hair Removal-$599/Month. Free Consultations."
The defendant alleges that the offending website was operated by a third party, ReachLocal. The court doesn't describe the Assara-ReachLocal relationship in detail, but it does say that ReachLocal is a "third party that Assara hired to manage its advertisements."
In any case, the defendant also seeks dismissal based on a lack of use in commerce. Although this ruling was also pre-Rescuecom, it doesn't matter because the plaintiff's trademark was referenced in both the ad copy and the linked website, which easily satisfies the use in commerce requirement. See, e.g., the Hamzik case.
Ron Coleman has more to say on this case.
The American Automobile Association v. Darba Enterprises, 2009 WL 1066506 (N.D. Cal. April 21, 2009). The Justia page.
Normally I stay away from jurisdictional rulings. However, occasionally keyword advertising plays a key role in the jurisdictional analysis (see, e.g., the Optihealth Products case), and those cases can be a little more interesting.
The defendants operate "several websites that purport to match consumers seeking auto insurance quotes with third-party insurers." AAA complains that the defendants "displayed the AAA Marks without authorization for the purpose of tricking internet users into believing that the site was affiliated with AAA," bought keyword ads triggered by AAA marks, and displayed AAA marks in the ad copy. Further, AAA complains that consumers submitted the lead generation form expecting AAA to be included but the form did not actually get submitted to AAA for a quote.
The court has little problem establishing jurisdiction over the defendant. The court deems the site "commercial" and "interactive" for purposes of the Zippo jurisdictional test. There were also 2 California consumer complaints against the defendants, and the lead generation form had a zip code field to indicate when consumers were from California. "Moreover, by utilizing pay-per-click advertisements to ensure that its name would come up when internet users searched for "AAA insurance," defendant intended to lure internet users to its website, including California residents."
It’s difficult for advertisers on third party trademarks to avoid jurisdictional responsibility in the trademark owner’s home court, so this ruling is not very surprising. However, as discussed with the Hearts on Fire case, I hope the court rethinks its perceptions about advertisers “luring” consumers.
Posted by Eric at 09:56 AM | E-Commerce , Marketing , Search Engines , Trademark | TrackBack
April 23, 2009
Michael Savage Takedown Letter Might Violate 512(f)--Brave New Media v. Weiner
By Eric Goldman
Brave New Films 501(C)(4) v. Weiner, 2009 WL 1011712 (N.D. Cal. April 15, 2009). The Justia page.
In October 2007, radio personality Michael Savage (aka Weiner--hence the case caption) went on an anti-Muslim tirade on his radio show. This has become the source of at least 2 lawsuits.
The first lawsuit was brought by Savage against the Council for American-Islamic Relations, which posted 4 minutes of excerpts to its website as part of critical remarks about Savage. I previously mentioned that lawsuit here. In July 2008, the judge tossed Savage's lawsuit based on CAIR's fair use defense.
This ruling relates to a different critical video. Brave New Films created an 83 second video entitled "Michael Savage Hates Muslims," which included about 1 minute of audio from Savage's tirade (all of which had been in CAIR's post), some additional critical commentary and a promotion for the related site nosavage.com. In January 2008, BNF posted the video to YouTube. In September 2008, Savage's syndicator, Original Talk Radio Network, sent a "driftnet" takedown letter to YouTube covering 259 videos on YouTube, including BNF's "Michael Savage Hates Muslim" video. YouTube disabled both the video and BNF's YouTube channel. BNF filed a 512(g) counternotification and initiated a lawsuit against Savage and OTRN, seeking a declaratory judgment and alleging a 17 USC 512(f) violation that the takedown letter misrepresented the infringing nature of the video. This ruling deals with Savage's motion to dismiss the 512(f) claim.
Savage first argued that OTRN, not him, sent the letter, so he should not be liable for any misrepresentations in the letter. In fact, Savage has at least some copyright registrations to his show (including the episode containing his tirade) in his name only, so it is unclear what, if any, copyright interests OTRN could be asserting on its own behalf. However, the letter contained (consistent with 512(c)(3) notices generally) a declaration under penalty of perjury that OTRN was acting on behalf of the copyright owner. Indeed, by definition, every proper 512(c)(3) takedown notice creates apparent authority between the sender and the copyright owner (if they are different). This creates a possible conundrum. If OTRN was, in fact, a rogue independent contractor of Savage, it's a little unfair to Savage to hold him accountable for rogue acts. On the other hand, the court can allocate the financial responsibility between the principal and rogue agent.
Savage's second argument is that the takedown letter was not a 512(c)(3) notice and therefore did not satisfy 512(f)'s statutory requirements. For an analogous case (not cited), see the Dudnikov case. The court rejects the argument, saying that this takedown letter was substantially equivalent to a 512(c)(3) notice and therefore governed by 512(f).
Finally, Savage argued that the takedown letter was protected by statutory pre-litigation privileges. The court rejects this too, saying that the statutory privileges don't apply.
As a result, Savage remains potentially on the hook for a 512(f) violation. It will be interesting to see what the court does with the Lenz case, which seems relevant. If CAIR's use of the material had already been legally adjudicated as a fair use before OTRN sent the driftnet takedown letter for a clip containing a small fraction of the same material, there could be a good argument that OTRN did not adequately consider the fair use defense as required by Lenz.
Posted by Eric at 06:04 PM | Copyright | TrackBack
April 21, 2009
Certain Approval Program v. Rip-off Report Update: Misappropriation Claim Dismissed
By Eric Goldman
Certain Approval Programs, L.L.C. v. XCentric Ventures L.L.C., CV08-1608-PHX-NVW (D. Ariz. April 13, 2009).
Yet another update on Rip-off Report litigation. In March, a ruling in Certain Approval Program v. Xcentric caused a minor stir. The plaintiff sought to amend its complaint against the Rip-off Report to add a claim for "misappropriation of name or likeness." Rip-off Report defended that the new claim was futile due to 47 USC 230. The court allowed the amendment, saying that the complaint had alleged enough facts that Rip-off Report was involved in the requisite activity to overcome 47 USC 230. Based on the plaintiff's allegations in its complaint, this was the correct ruling on a 12(b)(6) motion to dismiss, yet some commentators seemed to think this was a crack in Rip-off Report's litigation armor. I didn't see that ruling as a big deal. Instead, I wrote "This is not the first time that plaintiffs' allegations against Rip-off Report have survived the equivalent of a motion to dismiss, but getting further into the litigation process has proven difficult for plaintiffs."
Indeed, after allowing the claim, the court immediately granted Rip-off Report's 12(b)(6) motion to dismiss, saying that:
While the alleged conduct may or may not be immune from defamation liability, the necessary use of Plaintiffs’ names to identify them fails to state a claim upon which relief can be granted for misappropriation. No one could possibly think that Plaintiffs are somehow endorsing Defendants, and the count adds nothing to Plaintiffs’ defamation claims.
I'd like to think that this may provide a significant new defense against publicity rights claims when websites are making "commercial referential uses" of an individual's name, but a laconic ruling like this isn't likely to have much precedential weight.
Posted by Eric at 02:59 PM | Derivative Liability , Publicity/Privacy Rights | TrackBack
April 20, 2009
eBay Resales Constitute Trademark Infringement Despite First Sale Doctrine--Beltronics v. Midwest
By Eric Goldman
Beltronics USA Inc. v. Midwest Inventory Distribution, No. 07-3340 (10th Cir. April 9, 2009)
This is yet another online channel leakage case (for my last visit to this topic, see the Mary Kay v. Weber case). Beltronics makes radar detectors. Some unnamed distributors bought radar detectors from Beltronics at wholesale prices but subject to a minimum resale price promise. The distributors removed Beltronics' unique identifiers from each detector and resold them to Midwest. Midwest then resold the detectors on eBay.
Removing the unique identifier made it difficult for Beltronics to identify the rogue distributors who were supplying Midwest. Without Beltronics' unique identifier, Beltronics also refused to provide warranty coverage (and some other minor post-sale services) to buyers. However, Midwest claimed that it offered buyers its own 1 year warranty and disclosed in the eBay auction listings that Beltronics would not provide any warranty coverage. Nevertheless, Midwest's claim didn't get much credit because Beltronics claimed that it received inquiries from Midwest buyers seeking warranty coverage, thus leading the courts to conclude that Midwest's disclosures weren't doing a very good job.
The district court concluded that the resales of the Beltronics radar detectors as "new" detectors when they lacked the manufacturer's warranty and other post-sale services created a likelihood of consumer confusion sufficient to support a preliminary injunction blocking Midwest from reselling Beltronics detectors without unique identifiers (which in practice cuts off Midwest's supply because now any rogue distributors can be caught). Midwest attacked the PI on the basis that its resales were protected by the trademark first sale doctrine. The 10th Circuit, heavily citing its atrocious Australian Gold v. Hatfield decision, held that the first sale doctrine didn't apply because Midwest sold a materially different good without the manufacturer's warranty and without adequate disclosures to buyers about the differences.
The net result then is that eBay buyers willing to pay a discount for an identical radar detector but with only Midwest's warranty instead of Beltronics' won't get that choice. Instead, they get the pleasure of buying at the minimum resale price set by Beltronics. However, the 10th Circuit implies, without saying, that it could have reached a different result if Midwest had done a better job with its disclosures. But, after anti-competition rulings like this and the Australian Gold case, I'm guessing Midwest isn't too excited about experimenting in the 10th Circuit.
Posted by Eric at 08:26 PM | E-Commerce , Trademark | TrackBack
April 17, 2009
230 Doesn't Preempt State IP Claims--Atlantic Records v. Project Playlist
By Eric Goldman
Atlantic Recording Corp. v. Project Playlist, Inc., 2009 WL 766224 (S.D.N.Y. March 25, 2009). The Justia page.
This ruling addresses one of the known "circuit splits" in 47 USC 230 jurisprudence: does 230 preempt state IP claims based on third party content/conduct? The statute (230(e)(2)) says that "Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property." In the surprising 2007 ccBill opinion, the 9th Circuit read this language to mean that 230 does not preempt FEDERAL IP claims, but all state IP claims were preempted. Then, in the 2008 Friendfinder case, a New Hampshire district court expressly declined to follow the ccBill opinion, concluding that state publicity rights claims weren't preempted by 230.
As I've said before, I think the Ninth Circuit's statutory analysis in ccBill was daft, so I am not surprised to find another court expressly rejecting it. (In fact, I doubt any court outside the Ninth Circuit will follow the ccBill case).
In this case, a consortium of music copyright owners sued Project Playlist, a website where users could create song "playlists" that linked to playable versions of the songs. I have serious reservations about the legitimacy of the plaintiff's efforts here, both doctrinally and normatively. However, this ruling focuses on Project Playlist's efforts to dismiss any claims based on state copyright laws.
[Note: as you probably know, federal copyright law expressly preempts most state copyright laws. However, sound recordings made before 1972 were protected only under state copyright law, not federal copyright law. The plaintiffs are suing to enforce those rights (among others).]
The court conducts a very sensible textual analysis of 47 USC 230 to conclude that it preempts neither state nor federal IP. Thus, the net result is that this court, like the NH Friendfinder court, votes against the Ninth Circuit's ccBill ruling. Personally, I think the Ninth Circuit's reading is untenable, in which case either the Ninth Circuit will have to revise its reading (which would require an en banc opinion) or the circuit split may potentially bubble up to the Supreme Court. Congress could also amend the statute, but the chance of 230 being amended to endorse the Ninth Circuit's rule is near-zero.
While the court says that Project Playlist can't avail itself of the 230 immunity based on the IP subject matter of the claims, it does address other elements of a 230 defense. Most interestingly, it addresses whether Project Playlist loses immunization due to the Roommates.com opinion. In what is effectively dicta, it concludes the answer is no. The court says:
In this case, unlike Roommates.com, Playlist does not itself supply the content to which plaintiffs object-the songs. Playlist merely provides the interface for accessing that content-by permitting users to listen to the songs on Playlist's Website-and provides links so users can download the songs on third-party websites. It is, in these respects, no different than Lycos, which provides chat rooms in which third-parties can voice their opinions, and Google, which provides users with lists of links responsive to user searches. At best, Playlist is guilty of "passive acquiescence in the misconduct of its users," and, even under Roommates.com, Playlist is entitled to immunity under Section 230(c)(1).
Yet more evidence that courts aren't embracing a broad reading of Roommates.com.
More on this ruling from Law Wire and MS&K.
Posted by Eric at 08:45 AM | Copyright , Derivative Liability | TrackBack
April 15, 2009
Graeme Dinwoodie on Rescuecom v. Google
By Eric Goldman
[Eric's note: As I mentioned, I'm getting a lot of private emails about Rescuecom v. Google, including the email from Margreth Barrett that I blogged last week. Today, I got the following email from Graeme Dinwoodie, a law professor currently at Chicago-Kent Law and soon to be at Oxford. Like Margreth, Graeme has written on the trademark use in commerce doctrine and search engine liability. I've blogged on a few of Graeme's papers before as well; see his SSRN page. Graeme has graciously permitted me to share his email on the blog:]
I think that your bottom-line take on Rescuecom is largely right, though it will not surprise you that I do not regard the decision as “disappointing.” I think the Second Circuit largely accepted the arguments that Mark Janis and I have made in our articles, and so I am pleased with the outcome. I agree that there are some oddities in the reasoning, though these are in large part a product of (1) having to distinguish the very badly reasoned decision in 1-800 Contacts, and (2) the fact that the trademark use requirement does not map well to the concerns that should drive the scope of trademark protection. In fact, looking at where the court appears to want to go, I have to think that – if the 1-800-Contacts decision was not out there -- they would have concluded that there was no such thing as a trademark use requirement.
I think that the court largely accepts the critique that some of us have offered of the trademark use requirement: the court recognizes that there is no inevitable symmetry between use sufficient to create rights and use that causes likelihood of confusion; the court recognizes that uses by defendants that fall outside the strict scope of the section 45 definition could be “pernicious”; and the court thinks it important to adopt a rule that allows courts to hold defendants liable when confusion is created (footnote 4 clearly reflects the concern that courts should be able to police this activity).
Of course, because of 1-800-Contacts they could not simply say that Section 45’s definition did not apply to defendants’ uses, which would have been much cleaner. If one accepts, as they do, that the definitions only apply “unless the contrary is plainly apparent from the context,” one could simply have said that almost none of the section 45 definition is intended to constrain what type of activities by a defendant might be actionable. Instead, the appendix proffers a reading of the two sentences in the definition that is truly weird. (Indeed, under one reading, you might even say that they were endorsing -- in the last couple of pages -- a trademark use requirement linked to the affixation language in what the court called the second sentence of the definition.) But their having to do all this is simply a function of the fact that the Second Circuit had previously applied the second sentence to sections of the act of defining infringement in 1-800 contacts: see fn 12.
Likewise, some of the factual distinctions seem a bit odd (even though they were to some extent predictable given the dicta in 1-800-Contacts). The URL/mark distinction is inconsistent with typical infringement analysis that permits use of a term similar to the mark to be infringing and is functionally ridiculous given the prevalence of Mark.com URLs. I suppose the distinction between an ad triggered by a “product category” in 1-800 Contacts and one triggered by a mark as in Rescuecom (also a predictable distinction given the dicta in the earlier case) might reflect some vague notion of directness or frequency of harm, but the alleged harm that is experienced when the ad appears is surely pretty similar. (It reminds me of the link-counting analysis to determine commercial use?). See Dinwoodie and Janis, Confusion Over Use at 1635.
What I take from the decision is that they really would like to go back and rethink 1-800 Contacts. I agree though they have effectively undermined 1-800-Contacts. The bad news is that the messy way in which they have done it -- if they take seriously the details of their analysis rather than the message that they are sending -- might generate some silly litigation in the meantime. The good news is that, if courts focus on the message, we might now get greater judicial consideration of the central issues of what types of confusion -- if any -- are created by this type of advertising, and what types of confusion should be actionable (and I hope that those are separate inquiries). That this is the court’s preferred focus is evident from their alternative explanation for the outcome in I-800-Contacts (see p. 17), their analysis of the product placement analogy, and some of the factual distinctions that they draw between 1-800 Contacts and Rescuecom (at least at the 12(b)(6) stage). It does not seem inevitable to me that search engines or advertisers will lose on the confusion analysis in the cases to come (including this one). And at least I hope we will now have some judicial exploration of whether there is any confusion and whether that should be actionable. To be sure, there are some litigation and compliance costs associated with this, but even those may dissipate over time through accretion of case law. And I hope and expect that defendants will begin to explore the types of uses of marks in ads that might be immunized through defenses such as nominative fair use (we've had a couple of lower court cases beginning to move in that direction). The combination of all of this analysis will, I hope, be more helpful to search engines in formulating appropriate policies and responses to trademark owner requests -- something they have already given a tremendous amount of thought to – than debate about “trademark use”
In short, although there are some problems with the opinion, the outcome should at least start us talking about types of issues that I believe we should be talking about in this area. To put it (I hope not too) tendentiously, the Second Circuit has decided to opt for analysis of “confusion” over “use”, and has decided that we should litigate the scope of trademark law, with due regard for “context.” See Graeme B. Dinwoodie and Mark D. Janis, Confusion Over Use: Contextualism in Trademark Law, 92 Iowa L. Rev. 1597 (2007). Alternatively stated, I think the law that will be developed in the next few years in the wake of this decision will be heavily driven by factual particular rather than broad legal rules (though rules of sorts may accrue over time).
Posted by Eric at 07:28 AM | Derivative Liability , Search Engines , Trademark | TrackBack
April 14, 2009
Robert Steinbuch Loses Another Round--Steinbuch v. Hachette
By Eric Goldman
Steinbuch v. Hachette Book Group, 2009 WL 963588 (E.D. Ark. April 8, 2009). The Justia page.
Law professor Robert Steinbuch, a male "protagonist" from the notorious and risque Washingtonienne blog by Jessica Cutler, suffered another courtroom loss. As far as I can tell, he is fighting the battle against Cutler now on three fronts: (1) the 4 year old lawsuit against Jessica Cutler directly, (2) a lawsuit against Hyperion, the publisher of Jessica's novel (after the district court dismissal, the lawsuit was partially revived by the 8th Circuit), and (3) this lawsuit against Hachette, the distributor for the Hyperion-published book.
In this ruling, the court grants Hachette's 12(b)(6) motion to dismiss with leave to amend. Overall, the court criticizes Steinbuch (who is now acting pro se) for a sloppy complaint:
Despite the enumeration of six claims for relief, the real nature of Steinbuch's claim, as alleged in the complaint, appears to be a claim for public disclosure of private facts. Little effort appears to have been made to plead more than labels and conclusions with respect to the other five claims for relief. On each of those claims, Steinbuch appears to rely on a formulaic recitation of the elements of the cause of action, which the Supreme Court has held will not do.
It's not exactly clear how rulings like this improve Steinbuch's reputation.
Because of the conclusory allegations, the court breezily dismisses the claims other that public disclosure of private facts. That claim fails because Steinbuch did not allege the heightened scienter required to hold book distributors liable for the books they distribute. The court also notes, without resolving, potential concerns about Steinbuch's core argument that Cutler violates Steinbuch's privacy by disclosing their mutual sexual affair:
it should be noted that the parties have not briefed, and the Court has not considered, the issue of whether, if A and B conjoin [Eric's note: conjoin???] in a private place, and A later decides to publish an account of her experience in that encounter, B can bring an action for invasion of privacy. To put it another way, in that circumstance, does A need B's consent to publish an account of her experience with him?
As I've said before, 3 separate lawsuits spanning 4 years qualifies in my book as a really bad breakup.
Posted by Eric at 01:58 PM | Content Regulation | TrackBack
GoDaddy Sued for Cybersquatting for Parked Domain Names--uBid v. GoDaddy
By Eric Goldman
uBid, Inc. v. GoDaddy Group, Inc., 1:09-cv-02123 (N.D. Ill. complaint filed April 6, 2009)
Domain name parking programs have generated some lawsuits, including the Vulcan Golf v. Google lawsuit (plus several "me-too" lawsuits following in its footsteps) and the recent Philbrick v. eNom decision. Here, uBid (the online auction site) goes after GoDaddy for its parked domain name program when the domain names include a uBid trademark. In a mild surprise, uBid only claims an Anti-Cybersquatting Consumer Protection Act violation; it does not claim trademark infringement or the various junky unfair competition claims that often accompany a trademark claim. Maybe those claims are coming in an amended complaint. I'm also interested in the fact that uBid only sued GoDaddy and not the other providers of domain name parking services (of which I believe there are many)--what did GoDaddy do (or not do) to deserve special attention?
Tom O'Toole handicaps uBid's ACPA claim and raises some questions about the lawsuit.
From my perspective, I remain baffled by lawsuits over domain name parking programs and other programs to associate domain names with ads. First, although I understand that it's mostly a fight over cash, these lawsuits have always struck me as a manifestation of domain name exceptionalism in that the law treats domain names as having magical search powers compared to other keywords. If displaying ads triggered by the uBid marks in the domain name is so bothersome to uBid, shouldn't it also be chasing advertisers who buy its trademark for ad triggered at the search engines?
Second, as I explain my Deregulating Relevancy article, there has been a longstanding battle between domain name registries, domain name registrars, toolbar providers, computer manufacturers and others to control the ad inventory of inactive domain names. Even if GoDaddy "turns off" its parking program, others may try to fill the void and monetize the exact same domain names. As a result, I'm still not clear exactly what uBid hopes to accomplish with this lawsuit (other than to take some cash out of GoDaddy's pocket if it wins).
Posted by Eric at 07:25 AM | Domain Names , Marketing , Search Engines , Trademark | TrackBack
April 13, 2009
Blogspot Sued for Dead Blogger's Content--Davis v. Google
By Eric Goldman
Davis v. Google, 09 CH 15753 (Cook County Ct. complaint filed April 9, 2009)
Venkat sent a very interesting lawsuit this morning that raises some complex policy issues. The complaint alleges that Sean Healy created a blog at unknowncolumn.blogspot.com and posted defamatory content about speedskater Shani Davis' mom, Cherie Davis. [I believe the post in question is at http://unknowncolumn.blogspot.com/2006/02/memo-to-cherie-davis.html -- I'm not going to link to it, but it did show up as my first search result for "Cherie Davis"]. The complaint further alleges that Healy is now deceased, so he can no longer remove the content on Cherie's demand, and he did not have a "probate estate" to take over his blog. As a result, Cherie feels like she has nowhere to turn to clean up the alleged defamation, so she is suing Google's Blogspot for a takedown injunction.
On the face of it, the lawsuit is clearly preempted by 47 USC 230, and Google ought to get a quick and unambiguous win. However, there are some lurking policy issues about dealing with online content posted by now-deceased individuals:
* Presumably the content and the account passed through Healy's estate. Even if there was no "probate estate," whatever that means, there is still a legal protocol for succession of Healy's assets--including the copyrights in his blog. So someone now owns Healy's blog, and it should be possible to determine who that is.
* Even if the legal rights have been allocated, taking control over a deceased accountholder's account is not always easy. The last time I recall this issue being discussed, it was in the context of taking control over deceased military personnel's email accounts. Online providers have different policies about how to deal with this--and for good reason, as too loose a policy could enable account hijacking, plus there may be concerns about the deceased accountholder's privacy. I wonder what Blogspot's policy is. This issue won't come up often, but it will definitely come up again.
* If Cherie can't sue Healy's estate, instead of suing Blogspot, I wonder if Cherie could seek a declaratory judgment that the content is defamatory. I would be shocked if Blogspot wouldn't honor a declaratory judgment in Cherie's favor, and it's not exactly like Healy would contest it.
* If Blogspot won't voluntarily remove the content, I wonder if Cherie could have more cost-effectively achieved the same net result through a reputation management service. A good reputation management service should be able to obscure several year old content that hasn't been recently refreshed.
Posted by Eric at 08:52 AM | Content Regulation , Derivative Liability | TrackBack
April 12, 2009
Q1 2009 Quick Links, Part 4
By Eric Goldman
Security
* Massachusetts Data Security regulations were amended.
* In Facebook v. Power.com, Facebook brought another lawsuit to block extraction of user data from the site (similar to the Facebook v. ConnectU lawsuit). Venkat, Masnick, News.com, NYT, Justia. In this case, I wonder if Facebook has adequately distinguished between Power.com's behavior and the operation of its own "Find a Friend" service that taps into third party email servers to extract email addresses. Power.com’s response.
* Andritz, Inc. v. Southern Maintenance Contractor, LLC, 2009 WL 48187 (M.D. Ga. Jan. 7, 2009). IP infringement isn't a cognizable harm under the Computer Fraud & Abuse Act.
Adware/Spyware
* Who says Valentine's Day is just a Hallmark holiday? Sales of spyware and other tools to track cheating SOs also increase around Valentine's Day.
* Susan Brenner on the Cybercrimes Treaty and the US's decision not to criminalize possession of malware as required by the treaty.
Venture Capital
* BusinessWeek: Silicon Valley innovation is being stifled by VCs who only want to make small bets, not big bets. But VC investing is faddish, so the wind might change tomorrow.
* $600M of VC investments in virtual worlds.
Contracts
* Burcham v. Expedia, Inc., 2009 U.S. Dist. LEXIS 17104 (E.D. Mo. Mar. 6, 2009). Buyer was bound to user agreement even though he argued (without any evidence) that someone else established the account he used. This dovetails nicely with the broad reading of who is bound by an online user agreement; see my discussion in the Lori Drew case. Jeff Neuburger's writeup. Aside: I wonder if Expedia will be insulated by 47 USC 230 for the allegedly wrong description of amenities if they got the description of the hotel from third parties. For an analogous result involving the binding of users who didn't agree to the initial contract, see CoStar Realty Information, Inc. v. Field, 2009 WL 841132 (D. Md. March 31, 2009).
* Fractional Villas Inc. v. Tahoe Clubhouse, No. 08cv1396 (S.D. Cal. Feb. 25, 2009). Citing the RMG case, the court says that merely visiting a site may be sufficient to bind visitors to a browsewrap. However, in this case, there was insufficient evidence that the defendant had ever visited the site.
* Cherny v. Emigrant Bank, 2009 U.S. Dist. Lexis 2486 (March 12, 2009). Latest case that breach of privacy policy isn’t actionable unless there are actual damages. Venkat’s writeup.
* A stat I fully believe: "studies have shown that more than half of all companies cannot even locate signed copies of 10% or more of their contracts." The Zen Master asks: if both parties think they have entered a contract but neither can find a copy, do they have a contract? (this has really happened to me before).
Taxes
* Amazon v. New York and Overstock v. New York (N.Y. Sup. Ct. Jan. 12, 2009). Kudos to New York for finally figuring out a way to break the Internet and defeat the Internet Tax Freedom Act by treating Amazon Associates as traveling salespeople for sales tax collection purposes. I imagine every state in the country will jump on this bandwagon, at which point some e-tailers will kill their affiliate program and others will end up imposing sales tax collection nationwide.
* Pitt County v. Hotels.com, L.P. (4th Cir. Jan. 14, 2009), Online travel aggregators aren't "retailers" (as referenced in the statute) for purposes of collecting local hotel occupancy taxes.
General
* Some interesting cyberspace exceptionalism developments involving cases where paper presentation may be different from electronic presentation of the exact same content. In Smith v. Under Armour, Inc., 2008 WL 5486764, web payment confirmations displayed on-screen are not "printed" within the meaning of the Fair and Accurate Credit Transactions Act. Accord Smith v. Zazzle.com, Inc., 2008 U.S. Dist. LEXIS 101050. See generally this Proskauer recap. In Saulic v. Symantec Corp., a California law prohibiting data collection with credit card sales was held inapplicable online.
* Sudduth v. Donnelly, 2009 WL 918090 (N.D. Ill. April 1, 2009). Plaintiff got stiffed on his eBay transaction and sued eBay for 1983 equal protection and conspiracy claims as well as a Title VI civil rights claim. Because eBay isn't a state actor, however, the court dismissed eBay.
* My colleague Steve Diamond is blogging every detail of the battle for SAG's soul over at his new blog, King Harvest. For example, he summarizes the travails of the Screen Actor's Guild.
* Oddee: 10 Geekiest T-Shirts. I own a t-shirt that says "I'm Blogging This" (a gift from a former student) and a mug that says "Vegetarian Blogger" (gift from a colleague).
* Oddee: 15 Most Unfortunate Town Names. I think Licking County should have been a contender.
* Is there any better sign of Cyberlaw's maturity than the publication of Internet Law in a Nutshell
* Oddee: 12 Most Ridiculous Lawsuits. I welcome your nominations for the most ridiculous Internet lawsuits of all time. I hope to write that up some day.
* Happy birthday, Gmail! Best email software I've ever used. The battles over Gmail privacy seem so...2004!
Free Stuff
* The Ninth Circuit recently updated its website...with RSS feeds!
* Nolo Press' "NDAs for Free." Potentially useful site.
* I have one extra copy of my Fall 2008 Cyberspace Law course reader. First person to send an email with their mailing address gets it. [CLAIMED]
Posted by Eric at 12:03 PM | Adware/Spyware , E-Commerce , Licensing/Contracts , Privacy/Security , Trade Secrets , Virtual Worlds | TrackBack
April 11, 2009
Q1 2009 Quick Links, Part 3
By Eric Goldman
Blogging and Social Networking Sites
* A new version of the EFF Legal Guide to Blogging. While you're there, consider joining EFF as a member. The EFF does first-rate work, and they can use all the support they can get in this economic downturn.
* Red Tape Chronicles: "Blogger: Cash4Gold tried to 'bribe' me."
* Klein v. City of Laguna Beach, 594 F. Supp. 2d 1142 (C.D. Cal. Jan. 23, 2009): "many of the cases striking down ordinances that restrict sound-amplification equipment are artifacts of a bygone age that offered activists few media of mass communication. Twenty, thirty, or fifty years ago, a sound truck was an important means of spreading a message to a large group of people. Now, one must only have a computer and a printer to publish a newsletter or handbill. The Internet, e-mail, text messaging, and widespread mobile communications devices have made it easier than ever to reach a large audience on a small budget. Indeed, it might be easier for Mr. Klein to reach the youth he wishes to target by using Facebook or MySpace."
* Maybe everyone already knew this, but I learned something interesting about Blogger. Apparently in some cases they will place an interstitial warning in front of certain user-posted content.
* Doninger v. Niehoff, 2009 WL 103322 (D. Conn. Jan. 15, 2009). On remand from the Second Circuit, the district court denies damages for a student whose off-campus blog entry led to school discipline. At the same time, Wendy Davis reports on how a Conn. Bill Would Protect Students' Free Speech Online:
* Funny article on Facebook's efforts to police against people who create funny account names, which sometimes ensnares people who actually have funny names like Batman, Six, Super, Pancake and Kisser.
* Facebook Sex-Extortion Plot: a boy pretends to be a girl, gets boys to send naked photos to him, and then threatens to go public with the photos unless they consent to sex with him.
* Dynamic Sports Nutrition, Inc. v. Roberts, 2009 WL 136023 (S.D. Tex. Jan. 16, 2009). A former employee republishing confidential information via his blog is enjoined.
* We now know that Facebook settled with ConnectU for $65M. However, ConnectU might get a little more cash after this information was inadvertently disclosed by its former counsel, Quinn Emanuel, in a marketing brochure.
* Facebook gets TRO against Wallace.
* Some people gave up Facebook for Lent.
* Reuters writes up a shocking study: many teens on MySpace post things they might regret.
* State v. Hause, 2009 WL 295404 (Ohio App. Ct. Feb. 9, 2009). Facebook photos help convict a woman for allowing minors to drink alcohol in her house.
* U.S. v. Villanueva, 2009 WL 455127 (11th Cir. Feb. 25, 2009). MySpace photo and YouTube video showing defendant holding firearms contribute to sentence enhancements for firearms charges.
* John Palfrey & Adam Thierer discuss Palfrey's arguments to "improve" 47 USC 230 by reversing Doe v. MySpace.
Defamation/Cyberbullying
* JuicyCampus has shut down. LA Times, Chronicle of Higher Education, CMLP.
* Lengthy article on the AutoAdmit lawsuits. And a mixed ruling in Ciolli v. Iravani.
* Noonan v. Staples (1st Cir. Feb. 13, 2009). Truth is NOT an absolute defense to defamation in Massachusetts, which apparently also has seceded from the Union because the First Amendment no longer seems to apply.
* Neuwirth v. Silverstein, 2009 WL 294737 (Cal. App. Ct. Feb. 9, 2009). Reiterating that a website can be a public forum for purposes of anti-SLAPP laws. The CMLP writeup.
* Douchebags Lawsuit dismissed. Marc Randazza mocks the lawsuit.
* Rios v. Fergusan, 2008 WL 5511215 (Conn. Super. Ct. Dec. 3, 2008). Connecticut court has jurisdiction to issue restraining order against North Carolina man who posted YouTube video threatening Connecticut woman.
* Fahmy v. Hogge, 2009 WL 33418 (C.D.Cal. Jan. 2, 2009). Court denies Fahme's motion to set aside the dismissal based on lack of jurisdiction because Fahme made the error that caused the dismissal.
* 24Grille v. TripAdvisor (complaint filed April 2, 2009). Restaurant sues TripAdvisor for anonymous TripAdvisor review. Hello 230!
* Censorious laws brewing in WV and NJ.
Yelp
I have been meaning to post about my experiences with Yelp as a reader and a writer, but that has been repeatedly deferred. So, instead, how about a quick recap of Yelp’s woes? Yelp has been under the microscope quite a bit in the last few months.
* Wendy Davis recaps all the Yelp-related litigation she and I could find--at least 5 known cases. CMLP recaps a couple of the lawsuits.
* This East Bay Express article about Yelp caused quite a stir. It was followed up with more attributed sources. A number of other media outlets covered Yelp, including News.com and the NYT. For a full rundown of Yelp haters, check out the Eater coverage.
Wikipedia
* 25 Biggest Blunders in Wikipedia History.
* Two books about Wikipedia I’ve been checking out.
- Wikipedia, the Missing Manual.
- How Wikipedia Works.
Pornography
* Mukasey v. A.C.L.U., No. 08-565. The Supreme Court declined the cert petition regarding the challenge to the 1998 Child Online Protection Act, officially killing the law after a decade of litigation. Putting aside the merits of the law, it would have been a huge shock to the Internet community to have a circa-1998 criminal act resurrected! I'd like to think Congress will be wiser than to try to criminalize Internet porn a third time, but the regulation of Internet porn is like a siren song to Congressmembers.
* State v. Hurst, 2009 WL 580453 (Ohio App. Ct. March 6, 2009). From the unfortunately-named Licking County courts, the defendant downloaded 14,000 pornographic photos into his work computer's local cache in a five day period (he acknowledged he spent 70% of his workday downloading porn). An expert said that about 50 of the photos were child pornographic. The defendant was convicted of possessing child pornography even though he argued that he didn't intentionally download the photos, getting a 39 month sentence and classified as a sex offender.
* Excellent article by Colette Vogele on suing over a sex tape.
Gambling
* The credit card payment systems blocked the New Hampshire Lottery due to the Unlawful Internet Gambling Enforcement Act of 2006.
* Peer-to-peer gambling OKed in Washington.
Posted by Eric at 12:53 PM | Content Regulation , Derivative Liability , Internet History , Privacy/Security | TrackBack
April 10, 2009
Q1 2009 Quick Links, Part 2
By Eric Goldman
Trademarks/Domain Names
* The ridiculous Jones Day v. BlockShopper case settled. The settlement agreement. The ABA Journal and Legal Blog Watch stories. Commentary from CMLP, Paul Levy, Tom O'Toole.
* The trial court denouement of the S&L Vitamins v. Australian Gold did not turn well for the defense--$6M jury award. The S&L Vitamins v. Australian Gold and Designer Skins v. S&L Vitamins cases subsequently settled. According to Ronald Coleman: "This settles, for our clients S&L Vitamins, Inc., the Australian Gold case and the related appeal in the Designer Skin case. All money judgments are vacated and parties bear their own fees. Our client agrees to move on to another line of work, however."
* Twelve Inches Around Corp. v. Cisco Systems, Inc., 2009 WL 928077 (S.D.N.Y. March 12, 2009). 17 USC 512(f) does not cover trademark takedown notices.
* Suarez Corp. v. Earthwise, 2008 U.S. Dist. LEXIS 92931 (W.D. Wash. Nov. 14, 2008). Including a competitor's name in a web page disclaimer creates initial interest confusion when the competitor's name is indexed by the search engines. Compare Promatek v. Equitrac, the 2002 7th Circuit case ordering the defendant to include the plaintiff's name on its web page as a cure for initial interest confusion.
* CRS Recovery v. Laxton, 2008 WL 4408001 (N.D. Cal. Sept. 26, 2008). Another California-based court says that domain names are property that can be converted. I'm amazed that these cases are still being brought.
* North American Bushman, Inc. v. Saari, 2009 WL 211932 (M.D. Pa. Jan. 27, 2009) The parties entered into a settlement agreement that "Plaintiffs further agree not to use, and in addition, to offer up or destroy, any material that includes, but is not limited to, the names, photos, images, embroideries, of likeness of [Defendant] James Saari and any of the a above named trade names and trademarks of Defendants." The court holds that this provision wasn't breached when third party users posted comments referencing the defendants in UGC areas of websites operated by the other party.
* Advice Co. v. Novak, 2009 WL 210503 (N.D. Cal. Jan. 23, 2009). Justia page. Stupid lawsuit alert! Attorneypages.com believes Attorneyyellowpages.com infringes its trademark. Case dismissed for lack of personal jurisdiction. Participating in Google AdSense doesn't automatically create jurisdiction in CA.
* DSW v. Zappos, which involved allegations of trademark infringement based on Zappo's affiliates, settled.
* An update on Google's AdWords woes in France.
* Kiva Kitchen & Bath Inc. v. Capital Distributing Inc., 2009 WL 890591 (5th Cir. April 2, 2009). The Fifth Circuit upholds enhanced damages under ACPA. Good discussion of the purpose of damages in the ACPA.
* Toys R Us buys the domain toys.com for over $5M. Is any domain name worth $5M any more?
* A 2007 interview with "Pokey" of Pokey.org fame. This is one of my favorite domain name disputes from the 1990s. A very smart cyberlawyer (Ian Ballon), on behalf of the trademark owners of Pokey & Gumby, unexpectedly got into a public tangle with a 12 year old kid nicknamed "Pokey" over the domain name pokey.org. Debating 12 year old kids in the press never turns out well.
Advertising/Marketing
* Some new material on behavioral advertising: an FTC report and a CRS report.
* Latest NYT article on human billboards. See my prior blog post.
* Privacy advocates are freaking out about Google Android and its ability to deliver location-based information and ads. But location-based information and ad targeting is inevitable...and a good thing.
* Action over mobile marketing: Mobile Messenger settled a false advertising suit with Florida for $1M, and another settlement. Google's response.
* The class in the "Vista Capable" lawsuit was decertified.
* Tsan's post on the latest FTC efforts to rein in testimonials on social networking sites and blogs. Unfortunately for the FTC, some of its efforts may be preempted by 47 USC 230.
* eBay v. Digital Point Solutions, 2009 WL 481269 (N.D. Cal. Feb. 24, 2009). eBay loses an intermediate round in its cookie stuffing lawsuit against Digital Point Solutions.
* e360, a serial defendant in spam cases, sued Choicepoint for selling it email addresses that led to the suits. Apparently neither e360 nor Choicepoint got the memo that the days of email list brokering are dead.
Search Engines
* Study: Google's search lead not matched by loyalty. A critical response.
* Is Google giving big brands extra credit in its organic search results rankings? Compare: media giants complaining they don't get enough weighting in organic results.
* Sign of improving consumer search skills: search queries are getting longer.
* Yahoo reserves the right to "auto-optimize" advertiser accounts by changing ads and advertiser bids automatically. This is not a popular move.
* Wired: The Plot to Kill Google.
Posted by Eric at 10:20 AM | Domain Names , Internet History , Marketing , Search Engines , Spam , Trademark | TrackBack
April 09, 2009
Margreth Barrett on Rescuecom v. Google
By Eric Goldman
[Eric's note: my email in-box is bulging with emails trying to sort out last Friday's Second Circuit decision in Rescuecom v. Google. I got the email below from Margreth Barrett, a law professor at UC Hastings who has written a number of papers on online trademark issues (several of which I've blogged about before). See her SSRN page for a couple of those papers. With Margreth's permission, I'm reposting her email to me:]
It strikes me as weird to differentiate Google from the 1-800 case on the ground that the WhenU software didn't use the plaintiff's mark to trigger the pop-up--since when does a defendant have to use an exact mark before it can be deemed to have made an actionable use of the mark? Last time I checked, a defendant could infringe with a word or symbol that was confusingly similar to the plaintiff's mark, like, for example, 1-800 Contacts and 1800contacts.com (or whatever it was). I know that the 1-800 contacts court noted that the web address was not the mark, but I can't see why that should matter. At most the distinction says something about the defendant's intent, but the defendant's intent has not been a basis for declining to find infringement (unless it is considered in the context of a fair use defense, to excuse infringement). Does this decision mean that Google could use the mark owner's Mark.com web address to key a competitor's ad every time a search result listed the mark owner in the top two or three search results? If so, what has been accomplished?
And the court's technical application of the language of the section 45 definition of "use in commerce" is painful. It's basically saying that Google's display of the plaintiff's mark to competitors using the keyword suggestion tool brings Google within the definition. But shouldn't the display be to the people who are likely to be confused? Judge Leval is entirely disassociating the definition of use in commerce from the concept of trademark use. The folks who see Google's "display" of the mark are not going to rely on it for information about product or service source. And the folks who might rely on it for information about source never see it.
The opinion strikes me as moving toward the notion in Panavision [Panavision Int'l, LP v. Toeppen, 141 F.3d 1316 (9th Cir. 1998)] that "selling" a mark constitutes trademark use. Boston Professional Hockey strikes again! [Boston Pro. Hockey Assoc., Inc. v. Dallas Cap & Emblem Mfg., Inc., 510 F.2d 1004 (1975)]
1-800 Contacts was a reasonably good decision, and Judge Leval has completely dismantled it. So what constitutes trademark use after this? The real underlying problem that I see here is that the court is trying to use an internal software application of a mark to prohibit an allegedly confusing screen display, which is only tangentially related to the software application, at best. It would be far better to address the screen display issue as a non-trademark-related issue of passing off or "fraudulent marketing," as that term was defined in the Restatement of Torts. Tying to make liability for the screen display rest on the keying use of the mark just further distorts and extends mark owners' control over their words and symbols in digital contexts.
And finally, what was the Appendix on the section 45 definition of use in commerce all about? The court's account of the legislative history is sloppy and shockingly incomplete in a number of ways (for example, the court seems to be unaware that "affixation" and similar "trademark use" limitations were expressly built into the definition of technical trademark infringement both at common law and in all the prior federal trademark acts--language that looked a lot like the sec. 45 definition. And the court totally ignores the sequence in which things happened in the drafting process, which is extremely telling. See my full account of the legislative history of the sec. 45 "use in commerce" definition in my recent article at 43 Wake Forest L. Rev. 893) But aside from all that, what's the point? Is the Appendix simply a performance for the benefit of Congress?
I think it is ironic that Judge Leval wrote an earlier law journal article [Leval, Trademark: Champion of Free Speech, 27 Colum. J.L. & Arts 187 (2004)] in which he touted the trademark use limitation on infringement actions as an important tool in protecting First Amendment interests.
Posted by Eric at 03:36 PM | Search Engines , Trademark | TrackBack
Boring v. Google Reconsideration Motion Denied
By Eric Goldman
Boring v. Google Inc., 2009 WL 931181 (W.D. Pa. April 6, 2009)
[I'm not quite sure why so many people are interested in this lawsuit. Maybe it's because of the oddly (and aptly?) named plaintiffs; or because Google is a defendant; or because Google Street View raises some interesting privacy issues. Whatever the case, this reconsideration ruling isn't all that interesting or significant, but I recap it here for completeness.]
You recall the Borings, a Pennsylvania couple that sued Google because Google's Street View captured and published their private driveway. In an opinion that showed zero sympathy for the plaintiffs, the district court judge dismissed the lawsuit back in February. Undeterred by the adverse ruling, the plaintiff asked the judge for reconsideration. Not surprisingly given the tenor of the initial opinion, the judge said no.
The plaintiffs appear to have abandoned their privacy and negligence claims. They asked the judge to reconsider their trespass to real property claim, arguing that a trespass claim does not require damages. The judge agrees with that proposition but rejects the reconsideration on a technicality (the Borings did not plead nominal damages in their complaint). The plaintiffs also asked for reconsideration of their unjust enrichment claim, but the judge rejected that as well because apparently they didn't point to any errors.
As a result, the case remains dismissed. Nevertheless, I suspect we haven't heard the last of this lawsuit.
Posted by Eric at 09:18 AM | Publicity/Privacy Rights , Search Engines | TrackBack
April 08, 2009
Q1 2009 Quick Links, Part 1 (Copyright Edition)
By Eric Goldman
[Note: for a couple of years, I have grouped items that didn't warrant a full blog post into a monthly "quick links" post. As you can infer, one month has now stretched to three months, which severely undercuts the currency of the information. This isn't tenable for me or all that useful for you. In the future, I still expect to do occasional quick links posts, but I am also going to exclusively post some of these current small items to my Twitter account instead. So if you want to see "everything" I'm tracking on Internet and IP law, sign up for my Twitter account or get the RSS feed. That said, I have a series of backlogged quick links posts that will be coming very soon for Q1 2009. I'll start with the copyright edition:]
* The US Supreme Court has asked the Solicitor General to provide a brief in the Cablevision case before it takes or denies cert. Somehow I don't see this as good news for the Second Circuit opinion.
* Jacobsen v. Katzer, No. C 06-01905 (N.D. Cal. Jan. 5, 2009). On remand from the Federal Circuit, the lower court dismissed the breach of contract claim for lack of alleged damages and on copyright preemption grounds. The court also denied a preliminary injunction for the copyright claims because of a lack of showing of future harm.
* Reed Elsevier v. Muchnick. The Supreme Court granted certiorari in the Tasini case again, this time to decide the issue "Does 17 U. S. C. Sec. 411(a) restrict the subject matter jurisdiction of the federal courts over copyright infringement actions?" In other words, can a settlement of a copyright class action lawsuit include unregistered copyrights? As a matter of statutory construction, I think the answer is no; as a matter of policy, I expect the Supreme Court will say yes.
* MDY Industries, LLC v. Blizzard Entertainment, Inc., 2009 WL 223631 (D.Ariz. Jan. 28, 2009). The latest ruling: "Plaintiff MDY is liable under the DMCA, that Donnelly is personally liable for MDY's tortious interference, copyright infringement, and DMCA violations, and that Blizzard is entitled to a permanent injunction against the continued sale and distribution of Glider." With all of the adverse rulings, it's hard to believe that WOW Glider is still fighting this case.
* US v. Dove. A judge finally understands demand curves and that demand when P = 0 is greater than when P > 0. I discuss this issue more in my warez trading article.
* Speaking of warez trading, a large-scale warez trading prosecution ends with no jail time for any of the defendants. To compare how favorable this is for the defendants, see my 2004 analysis of warez trading sentences.
* Apple v. Psystar, No. C 08-03251 WHA (N.D. Cal. Feb. 6, 2009). Psystar can allege copyright misuse as an affirmative counterclaim in a declaratory judgment (but presumably only for the "limited" remedy of declaring Apple's copyrights unenforceable).
* Capitol Records, Inc. v. MP3tunes, LLC, 2009 WL 637102 (S.D.N.Y. March 4, 2009). No 512(f) claim for any takedown notices that the service provider ignores. From a policy standpoint, this is completely screwed up--takedown notices ignored by the service provider pose the greatest legal risks to the provider and cause the most sleepless nights.
* In UMG v. Veoh, the judge limited UMG's claims against Veoh's investors and board members. Strike a blow against tertiary copyright infringement!
* Dahn World Co. Ltd. v. Eun Hee Chung (D. Md. Feb. 5, 2009). The court awarded the defendant attorneys fees in an unmeritorious 1201 anti-circumvention case.
* The GateHouse v. New York Times lawsuit settled. The press release and the settlement agreement. The NYT largely appeared to fold, but given that the NYT is de-integrating the links and turning off the traffic, can we really say that GateHouse won? BTW, check out UCLA law professor Doug Lichtman's lengthy (and very expensive) expert report in favor of the plaintiffs, arguing why fair use should not apply here (through an expert report...???).
* Arista Records LLC v. Usenet.com, Inc., 2009 WL 185992 (S.D.N.Y. Jan. 26, 2009). While in litigation, Usenet.com accelerated the expiration date of certain newsgroups, which prevented the plaintiff from getting data it had requested. The court held that this reconfiguration was a sanctionable spoliation of evidence, leading to adverse evidentiary inferences against Usenet.com and an obligation to pay the plaintiff's fees and costs.
* Viacom Intern., Inc. v. YouTube, Inc., 2009 WL 102808 (N.D. Cal. Jan. 14, 2009). Viacom's contractor Bay TSP is ordered to produce documents to YouTube.
* Mike Masnick on optimism and denial in the music industry.
* At the AALS Annual Meeting in January, there was a truly first-rate presentation on open source software (Heather Meeker's talk in particular was amazing). Rebecca's recap, or check out the podcast.
* Reminder about the 1909 Copyright Act celebration at SCU on April 30. Demand has been surprisingly strong, and we are getting close to the room's capacity. If this continues, we may need to establish a waiting list. If you want to make sure you can attend, register now.
Posted by Eric at 12:43 PM | Copyright | TrackBack
Q1 2009 CAN-SPAM Quick Recaps
by Ethan Ackerman
While it seems most CAN-SPAM watchers (and even traditional media, apparently) await the results of key 9th Circuit and California Supreme Court cases, CAN-SPAM rulings in lower courts and in other Circuits continue to trickle in. Two of these new cases raise issues this blog has covered in the past, but they're still worth a quick note.
Ferron v. Subscriberbase Holdings, Inc
(excellent coverage, and a link to the decision, at spamnotes.com)
This case manages to come out just right in its results, even though the opinion relies rather extensively on the 4th Circuit's rather poorly-reasoned Mummagraphics precedent.
If ever there were a cut-and-dried 'actual statutory conflict' preemption case that largely didn't have to resort to parsing the CAN-SPAM Act's preemption language, it is this case. The 6th Circuit Court should have just done a straight forward preemption analysis and said: "The OH statute imposes labeling and physical address requirements in a manner inconsistent with CAN-SPAM's labeling and physical address requirements. Actual conflict preemption - the end. We need not dally in the hypothetical of whether CAN-SPAM's preemption savings clause for 'falsity or deception' applies..." While the Court came to the correct conclusions about CAN-SPAM's preemption clause not applying to this particular statute, because this statute wasn't a "falsity and deception" law, the court muddied the waters by using Mummagraphics to get there.
On the other hand, the court correctly pointed out that the general OH consumer protection act claims were not preempted, because the state act is one of general applicability and has "false or deceptive" elements, just like CAN SPAM's exception requires. [Author's comment: Wow, you'd think CAN SPAM had been specifically drafted to pointedly protect state consumer protection acts from preemption or something...]
Hypertouch v. Azoogle.com, 2009 WL 734674 (N.D.Cal.)
While this order granting motions to dismiss and granting leave to amend the complaint is a new and separate case, you could be excused in confusing it with another of federal District Judge Chesney's spam cases - the previously-blogged Hoang v. Reunion.com.
Like in Reunion.com, the opinion confuses the tort of fraud, with its special elements and pleading requirements, with the statutory provisions of the CAN-SPAM Act. To be fair, Judge Chesney does a precise and accurate job with the preemption analysis under CAN-SPAM. Everything in the opinion is an appropriate statement of the law regarding preemption, including the review of plaintiff's less-common trespass to chattels claim.
It's at the erroneous rulings over fraud pleading standards where this opinion looses its steam. As I bemoaned in a post over the same error in Reunion.com, falsity is still not the same thing as fraud, especially when Congress distinguishes between them in a statute. Unfortunately, this opinion also repeats this earlier mistake, and explicitly imposes the heightened pleading standards of FRCP Rule 9 because the pleadings "sound in fraud." It's dismaying to see this mistake again, especially after the judge even concedes that the plaintiffs in their complaint explicitly noted that they were not asserting a general claim for the tort of fraud.
Posted by Ethan Ackerman at 09:38 AM | Spam | TrackBack
April 07, 2009
47 USC 230 Talk at Fordham
By Eric Goldman
A couple weeks ago, I gave a 12 minute talk at Fordham Law School as part of a day-long conference on intermediaries. My talk notes:
___
230(c)(1) means websites and other actors aren’t liable for third party content…PERIOD. The “period” makes lawyers think surely they can devise a way around the statute. However, 230 is an incredibly robust immunity. There have been 100+ cases interpreting it in the past 13 years, and only a very small handful have led to defense losses. Plaintiffs lawyers who think they can “outsmart” 230 are probably wrong; many clever arguments have already been tried and failed.
Nevertheless, there are two bona fide limits on the “period.”
First, the statutory exclusions:
* ECPA = null set
* Federal crimes. Examples: gambling, obscenity, child porn. But state crimes are preempted
* “Intellectual property claims.” Federal IP claims (copyright and trademark) are not preempted, but there is a split of authority on state IP claims (state copyright, state trademark, trade secret, publicity rights, hot news). In the 9th circuit: they are preempted. But in other jurisdictions, they are not preempted.
Second, a website’s marketing representations. The theory of the case is to hold a website liable for its first-party statements, not third party content. But what if the marketing representations are rendered untrue by user content/behavior? Ex: this social networking site is “safe” for kids. In Mazur v. eBay, eBay represented that a third party service was “safe.” The court says 230 doesn’t apply. A bigger problem is when plaintiffs try to turn EULA negative covenants into affirmative marketing representations
From a policy standpoint, 230’s “problem” is that it “breaks” tort law the way we learned it in law school. It's black letter common law that a participant in tortious conduct is liable for the tort. As applied in the publishing context, exercising editorial control over content creates liability for that content. To avoid such liability, one must be a “passive conduit” of third party content.
230 breaks apart those principles: active participation/control do not create liability:
...even if they receive a C&D/takedown notice
...even if they prescreen or manage the database or edit specific entries
...even if they profit from, or take ownership of, the content
This helps explain why bright judges impressed with their analytical abilities resist 230—it doesn’t comport with standard legal reasoning.
From my perspective, 230’s breaking of traditional tort law is a feature, not a bug. 230 prevents lopsided databases, i.e., databases filled only with positive comments because all of the negative comments have been taken down. I explain more about the lopsided database problem here. Further, as I will explore in my Economics of Reputational Information project, 230 has contributed to the most robust reputation ecosystem we’ve ever seen--so many existing reputational systems are broken, but online reputational mechanisms (such as product reviews) are among the healthiest and deepest reputational systems ever. This isn't to say that 230 is cost-free--it's not--but every system has its costs, including a system that creates greater liability.
___
Blog posts about the talk:
* Fordham's live-blogger
* Rebecca Tushnet
Posted by Eric at 04:36 PM | Derivative Liability | TrackBack
April 06, 2009
Ochoa on Golan v. Holder and Copyright Restoration
By Tyler Ochoa
[Eric's note: my colleague Tyler Ochoa is an expert on copyright law (among other things), and I've occasionally posted contributions from him before. This time, he weighs in on the Golan decision from Friday.]
The U.S. District Court for the District of Colorado has issued a decision in Golan v. Holder, No. 01-cv-01854 (D. Colo. Apr. 3, 2009), on remand from Golan v. Gonzales, 501 F.3d 1179 (10th Cir. 2007). Two years ago, the Tenth Circuit held that §514 of the Uruguay Round Agreements Act (codified at 17 U.S.C. §104A) “altered the traditional contours of copyright protection” by restoring copyrights in works of foreign origin that were previously in the public domain in the United States, and that the law was therefore subject to First Amendment scrutiny. The Tenth Circuit remanded the case to the District Court to determine whether §514 violated the First Amendment. The District Court has now held that §514 is unconstitutional.
The parties agreed that §514 was a content-neutral regulation of speech, which will be sustained “if it advances important government interests unrelated to the suppression of free speech and does not burden substantially more speech than necessary to further those interests.” The parties also agreed that compliance with Article 18 of the Berne Convention, which requires the restoration of foreign copyrights that were in the public domain for reasons other than expiration of the duration of protection, was an important governmental interest. Therefore, the question was whether §514 was “substantially broader than necessary” to serve that interest.
Although Article 18(1) of the Berne Convention requires restoration, Article 18(3) provides that “the respective countries shall determine, each in so far as it is concerned, the conditions of application of this principle.” The court read this provision as giving member nations discretion in how to implement Article 18(1). Thus, in implementing Article18, Congress had “broad latitude ... to protect reliance parties,” i.e., parties who relied on the public domain status of the works prior to restoration. The parties disputed, however, whether the provisions for “reliance parties” in 17 U.S.C. §104A were “narrowly tailored” to serve Congress’s interest in implementing Article 18.
Section 104A gives some protection to “reliance parties,” defined as “any person who ... with respect to a particular work, engages in acts, before [restoration], which would have violated section 106 if the restored work had been subject to copyright protection, and who, after [restoration], continues to engage in such acts.” (It also covers persons who owned one or more tangible copies of the work before restoration; or any successors, assignees, or licensees.) It allows reliance parties to continue infringing until the copyright owners serves a “notice of intent to enforce” a restored copyright. Once such a notice has been served, the reliance party has one year to dispose of all copies in its possession without liability. Finally, if the reliance party has created a derivative work, it may continue to exploit that derivative work for the duration of the restored copyright, provided it pays “reasonable compensation” to the copyright owner.
The government argued that any such accommodations for reliance parties had to be temporary in nature, and that any permanent accommodations for reliance parties would violate Article 18. The district court, however, disagreed. It pointed to the fact that the government’s own implementation of Article 18 had at least one accommodation for reliance parties — the provision for derivative works — that was permanent in nature, and that other countries had similar provisions. (Moreover, the plaintiffs’ brief points out that the U.K., Australia and New Zealand, all provide substantial protection for reliance parties on a permanent basis.) Therefore, in the District Court’s view, protection for reliance parties did not have to be temporary in nature. Accordingly, it concluded:
In light of the discretion afforded it by Article 18, Section 3, Congress could have complied with the Berne Convention without interfering with a substantial amount of protected speech — for example, by permanently “excepting parties, such as plaintiffs, who have relied upon works in the public domain,” see Golan, 501 F.3d at 1196.... Accordingly — to the extent Section 514 suppresses the right of reliance parties to use works they exploited while the works were in the public domain — Section 514 is “not tied to the Government’s interest” in complying with the Berne Convention.... Section 514 is therefore “substantially broader than necessary to achieve the government’s interest.”
The court considered and rejected two other proffered governmental interests. First, the government argued that if the U.S. limited the rights of reliance parties, other countries would similarly limit the rights of reliance parties (even though they were not obliged to do so under Article 18), therefore providing greater protection to U.S. authors in those countries. The court rejected this argument because the government did not provide any evidence that section 514 would have this effect, and the plaintiffs pointed to testimony in the original legislative history suggesting that such an effect was unlikely. Second, the government argued that section 514 served to correct a historic inequity by which foreign authors were deprived of U.S. copyrights. The court rejected this argument on the ground that “Section 514 extends protections to foreign authors that are not afforded United States authors, even in their own country.”
Of significant importance is the question of what type of relief will be granted. The court concluded that section 514 was overbroad, even though the court and the plaintiffs conceded that some type of retroactivity with broader protection for reliance parties would be constitutional, and that some type of retroactivity is required by the Berne Convention. Overbreadth is a facial challenge to a statute, which means that the ENTIRE statute will be held unconstitutional, unless it can be “saved” by merely striking the offending portion. That does not appear to be the case. Under the district court’s ruling, what offends the Constitution is that Congress has provided only very narrow protection for reliance parties, when it could have provided much broader protection for reliance parties while still complying with Article 18 of Berne. Thus, what is needed to “cure” the Constitutional infirmity is for Congress to enact broader protection for reliance parties. The court cannot simply excise a small portion of the statute while saving the rest. This means that Section 514 is unconstitutional on its face.
Assuming the ruling will be appealed, I can foresee two significant issues. One issue is whether the court properly interpreted the Berne Convention. The leading commentary on Berne agrees with the government’s position that Article 18 of Berne requires that provisions for reliance parties are transitional in nature and should be temporary, although it acknowledges a possible exception for cases where the reliance party has created a derivative work. 1 Ricketson & Ginsburg, International Copyright and Neighboring Rights, §6.123 (2d ed. 2005). On the other hand, if the plaintiff is correct that the U.K. and other Commonwealth countries have permanent protection for any type of prior use by reliance parties, the court may be reluctant to conclude that those countries are not in compliance with the Berne Convention.
The second significant issue will be whether the statute should be invalidated on its face as overbroad, or whether it should be invalidated only as applied. If the statute is invalidated on its face, that would allow these plaintiffs to use ANY work of foreign origin that is in the public domain, whether or not they had relied on its public domain status. Indeed, unless and until Congress acted to fix the statute, even non-reliance parties could use works of foreign origin in the public domain. If the statute is invalidated only as applied, that would allow these plaintiffs to use only those works that they were in fact using prior to the restoration, which would be a much narrower decision. In either case, because collateral estoppel does not apply to the government, a decision by the Tenth Circuit would be binding only on the parties and others within the Tenth Circuit; it would not be binding outside the Tenth Circuit. Parties in other circuits could still sued (or prosecuted) for infringing works of foreign origin that were in the public domain prior to restoration.
If the ruling is upheld by the Tenth Circuit, what would happen then? Congress would almost surely try to enact some version of copyright restoration again. Remember, the plaintiffs conceded that Article 18 of the Berne Convention requires some type of restoration. The plaintiff’s brief states: “Congress was ... plainly justified in believing that unless it enacted legislation to comply with Article 18, other nations would not adequately protect American copyrighted works.” The court’s ruling provides a path to compliance: Congress may restore copyrights in works of foreign origin, so long as it provides broader protection for reliance parties. Thus, any statute that ultimately emerges from Congress would probably allow for continued use of such restored works only by reliance parties, and not by the public generally. Accordingly, the definition of reliance party is very important. Are the plaintiffs reliance parties because they utilized particular works of foreign origin in the public domain, or because they generally utilized such works? A statute that protects only preexisting uses of specific works still provides very limited protection to reliance parties. There also would be the question of whether a new statute would apply only to parties that relied on the public domain status of a work before its INITIAL restoration (on January 1, 1996), or whether a new statute would also have to protect parties that relied on the public domain status of a work after that date, but before the effective date of the new legislation. If Congress is required to start anew, a party who is considering utilizing a work of foreign origin that is in the public domain for failure to comply with formalities might be well advised to begin using such a work right away, in order to ensure its continued right to use such a work after the next restoration.
The ruling also sets up a possible action against the U.S. under the dispute resolution mechanism of the World Trade Organization. Any country that thinks the U.S. is not complying with Article 18 of the Berne Convention could initiate proceedings against the U.S. under the TRIPS Agreement. If the WTO panel held that the U.S. was not in compliance with Article 18, we would once again be branded hypocrites on the world stage, and the WTO could authorize other countries to retaliate by imposing trade sanctions against the U.S. Such a ruling could also create a serious dilemma for the Tenth Circuit: the district court held that compliance with Article 18 still allowed the U.S. to provide substantially greater protection to reliance parties; but if the WTO holds that the U.S. is not in compliance with Article 18, would the Tenth Circuit defer to the WTO’s interpretation of Article 18, or would it interpret Article 18 de novo?
All in all, despite its limitations, this ruling is a significant victory for the plaintiffs and for the public domain. The court does not hold that Congress cannot restore copyrights in works of foreign origin; it only holds that this particular attempt to restore copyrights was unconstitutional, because it burdened substantially more speech than was necessary to comply with Article 18 of the Berne Convention. If the ruling is upheld on appeal, Congress will almost certainly try again; and any statute that results is likely to provide significant protection only to reliance parties, and not to others who might wish to begin utilizing public domain works in this category after restoration. However, on the plus side, the ruling demonstrates that Congress cannot restore copyrights willy-nilly; instead, it needs a substantial justification for doing so. That portion of the ruling is likely to survive appeal, making it less likely that Congress will attempt to revive long-dormant domestic copyrights, and more likely that Congress will limit any future restoration efforts to the minimum required by the Berne Convention.
Posted by Eric at 04:06 PM | Copyright | TrackBack
April 04, 2009
Republishing MySpace Post in Local Paper Might Be Intentional Infliction of Emotional Distress--Moreno v. Hanford Sentinel
By Eric Goldman
Moreno v. Hanford Sentinel, Inc., 2009 WL 866795 (Cal. App. Ct. April 2, 2009)
This is one of the most interesting cases I've seen in a while. Moreno was a UC Berkeley undergraduate who grew up in Coalinga, a small town in California's Central Valley whose attractions include a prison, a mental health institution and Harris Ranch, one of the most odoriferous spots on Highway 5. (Coalinga was also the site of a big quake in 1983). After revisiting her hometown, Moreno posted an essay, "An Ode to Coalinga," on her MySpace page. I have not seen the ode, but it was a 700 word essay that started "the older I get, the more I realize how much I despise Coalinga" and then made very negative comments about the town and its residents. Moreno apparently had a change in heart and took the essay down in 6 days. However, while it was posted, the Coalinga high school principal saw the post and submitted it to the Coalinga Record newspaper, which published it as a letter to the editor under Moreno's full name. The community response to the published essay was severe; according to the court, "Appellants received death threats and a shot was fired at the family home, forcing the family to move out of Coalinga. Due to severe losses, [the dad] closed the 20-year-old family business."
Moreno and some of her family members sued a variety of defendants for public disclosure of private facts and intentional infliction of emotional distress. The newspaper defendants were dismissed through an anti-SLAPP motion to strike, leaving the principal and the school district as the defendants.
The privacy invasion claim was easily rejected. Once Moreno posted the essay to an open-to-the-public MySpace page (even if only briefly), it was no longer private. As the court says, "the fact that Cynthia expected a limited audience does not change the above analysis. By posting the article on myspace.com, Cynthia opened the article to the public at large. Her potential audience was vast." It also did not matter that Moreno did not use her last name on her MySpace page; the court says that her identity was readily ascertainable from her MySpace page (which included a photo)..
However, the intentional infliction of emotional distress claim wasn't ready to dismiss. The jury will get to decide if the defendants' conduct was extreme and outrageous. Personally, I would like to know more why the principal did what he did.
Observations about this case:
1) According to this article, the Coalinga Record editor who republished the essay was fired.
2) Although the newspaper publishers fortunately escaped liability on anti-SLAPP grounds, if they had republished the essay only online, it should have been an easy 47 USC 230 win.
3) You know the cliche: never post anything online that you don't want repeated on the front page of the newspaper. Proven true once again.
4) And on that front, I think some folks assume that they can "take back" Internet-published content by taking it down. As this case reinforces, in some circumstances there is no "do-over." As I describe in my talks on blogs and social networking sites, every time I hit the "publish" button, I'm betting my house. In this case, Moreno effectively bet her parents' house and business when she hit the publish button.
5) The court notes that a copyright infringement claim isn't in front of it. I wonder what the publishers' copyright liability analysis would look like. I suspect the copyright damages wouldn't be great, but I still wonder why the claim wasn't apparently brought.
6) This case provides more evidence that community members don't like to see their community disparaged. I'm reminded of the recent James Andrews kerfuffle. Andrews, a PR executive at Ketchum, was on his way to Memphis to make a presentation at FedEx about using social media when he Twittered "True confession but i’m in one of those towns where I scratch my head and say “I would die if I had to live here!”" That didn't go over so well with the FedEx folks following his Twitter account.
7) Nevertheless, I wonder if the violent and ostracizing community response to Moreno's post didn't in fact validate some of her critiques.
More on this case from Law.com and the Central Valley Business Times.
SEPTEMBER 2010 UPDATE: The jury ruled that the principal's conduct was outrageous but did not cause any damages, so Moreno ended up getting nothing. The Fresno Bee posted a copy of Moreno's initial post.
Posted by Eric at 06:47 PM | Content Regulation , Derivative Liability , Publicity/Privacy Rights | TrackBack
April 03, 2009
Second Circuit Says Google's Keyword Ad Sales May Be Use in Commerce--Rescuecom v. Google
By Eric Goldman
Rescuecom Corp. v. Google Inc., 562 F.3d 123 (2d Cir. April 3, 2009)
The Second Circuit has issued its long-anticipated opinion in Rescuecom v. Google over Google's sale of trademarked keywords as ad triggers. In a disappointing but not surprising conclusion, the Second Circuit reversed the lower court and says that Rescuecom properly alleged that Google's keyword ad practices constituted a "use in commerce." This ruling merely reverses the 12b6 dismissal for Google, but it raises some important questions--including whether this ruling effectively eliminates any future "use in commerce" defense in keyword advertising cases and whether Google and other search engines could reform their practices so that they are no longer deemed uses in commerce.
1-800 Contacts v. WhenU Distinguished
The most interesting part of the opinion is how this panel distinguishes its 2005 1-800 Contacts v. WhenU precedent, which held that an adware vendor did not make a use in commerce through its keyword ad triggering processes. The court says that Google is different in two main respects:
"First, in contrast to 1-800, where we emphasized that the defendant made no use whatsoever of the plaintiff’s trademark, here what Google is recommending and selling to its advertisers is Rescuecom’s trademark. Second, in contrast with the facts of 1-800 where the defendant did not “use or display,” much less sell, trademarks as search terms to its advertisers, here Google displays, offers, and sells Rescuecom’s mark to Google’s advertising customers when selling its advertising services. In addition, Google encourages the purchase of Rescuecom’s mark through its Keyword Suggestion Tool."
The court appears to be making two distinctions. First, WhenU didn’t sell trademarked keywords directly but instead rolled up search queries into product categories that didn’t contain the trademark anywhere but in an internal database table, so there was an additional layer of abstraction away from trademarks built into WhenU's matching process. Second, the court clearly doesn't like Google's Keyword Suggestion Tool, which I think has also frustrated trademark owners and been repeatedly cited against Google in pleadings.
In theory, then, Google could eliminate its trademark use in commerce by adding a product category abstraction--although this may not be a good idea, as it would not work with long-tail queries--and by modifying or dropping the Keyword Suggestion Tool.
The case also discusses Google's "sponsored link" label and distinguishes it from WhenU's labeling of its pop-up ads. The court gives credence (as it must on a 12b6) to Rescuecom's allegations that Google's placement of ads above the organic results might confuse consumers into thinking those ads were organic. In contrast, in WhenU, the "pop-up ad appeared in a separate browser window from the website the user accessed, and the defendant’s brand was displayed in the window frame surrounding the ad, so that there was no confusion as to the nature of the pop-up as an advertisement, nor as to the fact that the defendant, not the trademark owner, was responsible for displaying the ad, in response to the particular term searched." Personally, I think Google’s interface is sufficiently clear to consumers, but this is a factual assertion not ready for judicial review in this case yet.
One oddity: the court repeatedly says that WhenU displayed ads "randomly" chosen in response to searcher behavior. I'm not sure what the court was trying to say, but the ads were hardly chosen at random, and this is a pretty significant factual error on the court's part.
Finally, the court discusses the analogies to shelf-space adjacency in the retail context. This is a topic of special interest because I've parsed this issue in gory detail in my Brand Spillovers paper. The court, without any citations, reaches the conclusion that
It is not by reason of absence of a use of a mark in commerce that benign product placement escapes liability; it escapes liability because it is a benign practice which does not cause a likelihood of consumer confusion. In contrast, if a retail seller were to be paid by an off-brand purveyor to arrange product display and delivery in such a way that customers seeking to purchase a famous brand would receive the off-brand, believing they had gotten the brand they were seeking, we see no reason to believe the practice would escape liability merely because it could claim the mantle of “product placement.”
Fair enough—if consumers purchase a passed-off good, that would be actionable. However, the court sidesteps all of the nuance in concluding that shelf-space adjacency is a "benign practice that does not cause...consumer confusion." Retailers are hardly “benign” in their practices; see my Brand Spillovers paper for more on that. Further, and perhaps more importantly, it's unclear how Google's ads misdirect anyone. The court had to accept Rescuecom's allegations of diversion as true, but I think those bear very close scrutiny on remand.
What Is a Use in Commerce?
The opinion also contains a scholarly appendix, expressly labeled as dicta, explaining its statutory analysis of the Lanham Act's use in commerce phrase. Not surprisingly, at the end of the appendix it says "It would be helpful for Congress to study and clear up this ambiguity." Although it is dicta, I expect many other courts will follow and embrace this appendix when discussing use in commerce. I also expect that this will put an end to the cottage industry of law review articles debating what the phrase means in the keyword context.
Implications of this Ruling
1) This opinion narrows the 1-800 Contacts v. WhenU opinion substantially to a very specific set of facts. I'm not sure how many courts will be favorably citing that precedent in the future.
2) This case jeopardizes the half-dozen or so district court cases (in Second Circuit-controlled jurisdictions) that have held that keyword advertising purchases aren't a trademark use in commerce. This case involves Google's sale of keyword advertising, not an advertiser's purchase of keyword advertising, but I think those cases are now very shaky precedent. (The court particularly says that the Merck and S&L Vitamins cases "overread" the 1-800 Contacts precedent). The Second Circuit still could find a way to distinguish ad buys from ad sales, but I would be surprised if it did so.
3) This case also jeopardizes the rulings in those cases that keyword metatags aren't a trademark use in commerce. The court says specifically "We did not imply in 1-800 that an alleged infringer’s use of a trademark in an internal software program insulates the alleged infringer from a charge of infringement, no matter how likely the use is to cause confusion in the marketplace." I'm not sure how this applies to keyword metatags, which can't cause consumer confusion under any circumstance. Nevertheless, if the keyword metatags don't have the layer of abstraction that WhenU used, I don't think the court would regard them favorably.
4) Although this is clearly a loss for Google because Google no longer has a reliable way to kick out cases on a 12b6, Google might still prevail in the case. Google had won on a 12b6, and the court merely said that Rescuecom alleged enough in its complaint to survive the 12b6. Google could still win on summary judgment or trial, or the parties might settle. Either way, Rescuecom merely lives to fight another day. (In theory, Google could also appeal this ruling to the Supreme Court; I would be surprised if they went that route or if the Supreme Court would take it).
5) Accordingly, I don't expect this ruling to do much for cases like American Airlines v. Yahoo. Indeed, perhaps anticipating this loss, Yahoo didn't try to get the case into the Second Circuit. I suspect that's because Yahoo had already decided not to expect the use in commerce defense to go in its favor.
6) I'm interested to see what this ruling will do to state efforts to attack keyword advertising, such as Utah's ill-fated forays in this area. In theory, this ruling might alleviate some of the pressure state legislators feel that they have to do something. However, I suspect state legislators are only mildly interested in legal proceedings elsewhere, so I doubt this will make state legislators second-guess their own brilliance.
7) As the court says, it would make a lot of sense for Congress to clean up the statutory drafting muddle over use in commerce in the Lanham Act. I don't think this is likely because of the political gridlock that would emerge over the topic. As I discuss in my Deregulating Relevancy paper, a more pragmatic approach would be for Congress to expressly provide a safe harbor for search engines selling keywords analogous to the safe harbor for domain name registrars selling domain names, but I doubt Google has the muscle for that either. As a result, I don't anticipate legislative intervention to overturn this ruling.
The case library:
* Commercial Referential Trademark Uses (Rescuecom v. Google Amicus Brief Outtakes)
* Rescuecom reply brief
* Law professors' brief by Stacey Dogan and me
* Electronic Frontier Foundation amicus brief by Jason Schultz, Corynne McSherry and Fred von Lohmann
* Public Citizen amicus brief by Paul Levy
* eBay/Yahoo/AOL amicus brief by Celia Goldwag Barenholtz, Janet Cullum and others of Cooley Godward Kronish [now mooted]
* Google's initial brief
* Rescuecom's initial brief
* District Court's opinion
Posted by Eric at 11:51 AM | Derivative Liability , Search Engines , Trademark | TrackBack