Technology & Marketing Law Blog: June 2012 Archives

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June 30, 2012

New Jersey Appeals Court Reverses Anti-Harassment Order Based on Emails – E.L. v. R.L.M

E.L. v. R.L.M, 2012 N.J. SUPER. UNPUB. LEXIS 1199 (N.J. Ct. App.; May 30, 2012)

E.L. and R.L.M. divorced, but they had children together. E.L. had custody of the children but R.L.M. had liberal visitation. Prior to their divorce, the parties communicated “extensively” via email—in the year prior to the divorce, R.L.M. sent E.L. 812 emails. E.L. did not complain about the content of the emails, but had qualms about the quantity. (The parties actually sought the help of a counselor to impose limits on the number of email communications that could be exchanged between them.) Things came to a head when R.L.M. planned on taking the children to Canada, and E.L. allegedly didn’t take care of getting the kids’ passports in order. This resulted in about 20 phone calls from R.L.M. and three emails.

Based on these emails E.L. obtained an anti-harassment order. E.L. also put forth some evidence of domestic violence, but without in any away minimizing the effect of domestic violence, these incidents seemed relatively tame (throwing a comforter down the stairs, throwing mail in E.L.’s car, closing a garage door on E.L.’s car when she tried to leave). Apart from one allegation that R.L.M. “grabbed E.L.’s arm,” there was nothing in the opinion that described incidents of actual violence or a threat of violence. As expected, there was bad blood all around, and R.L.M. also testified that E.L. had engaged in acts of domestic violence against him.

One subsection of New Jersey’s harassment statute says that harassment can be found if a person

Makes or causes to be made, a communication or communications anonymously or at extremely inconvenient hours, or inoffensively coarse language, or any other manner likely to cause annoyance of harm.

The statute setting forth when restraining orders are appropriate requires a predicate act, along with the evaluation by the court of various factors ranging from the risk of damage to persons or property, the interests of the victim of the child, and the parenting situation. Although it's unclear, harassment by sending communications can fulfill this predicate act requirement. The trial court found that R.L.M.’s “bombardment” of E.L. with emails was done with the purpose to cause annoyance or harm and therefore constituted harassment (i.e., this was the predicate act).

The appeals court looks at the whether the emails fit the statute and determines that the emails did not contain any “coarse language” (whatever this means). Nor were the communications anonymous. Thus in order to fall within the statute, the emails had to be sent in a manner that is likely to cause annoyance or harm. The court says that since the emails related to the parenting arrangement between the parties, they were not sent with a purpose to cause annoyance or harm. The court finds:

[E.L.’s] stated reaction . . . a subjective one, no doubt arising as a residual effect of the prior marital discord that led to the divorce in the first place.

The court also notes that the fact that although the statute references communications made at inconvenient times, this wouldn’t apply to emails (and presumably other electronic communications) given that opening an email is “optional with the receiver.”

We've blogged a bunch about threats allegedly perpetrated online. Those cases all raise the issue of whether the communication was one-to-one, or made to the general public. Email harassment is different in that it's a one-to-one form of communication (it's worth noting that the statute here isn't restricted to these types of communications). Although emails are one-to-one communications, as the opinion notes, phone calls are different from emails. Emails can be accessed at a time and place of the recipient's choosing. Obviously, the recipient can also just hit the delete button. Nevertheless, it's a somewhat open question as to whether repeatedly emailing someone can support a finding of harassment. (See this post from Eugene Volokh and the draft paper linked in the post for a discussion of the issues: "One-to-One Speech vs. One-to-Many Speech, Criminal Harassment Laws, and “Cyber-Stalking.” For the most part, restrictions on these types of (one-to-one) communications are thought to be OK at some point, but the statutes should be carefully drafted to avoid vagueness and overbreadth problems. For a case dealing with the use of offensive and annoying communications in an instant message conversation check out this post: "Court Finds Juvenile Delinquent Based on Allegedly Offensive Instant Messages -- In re Alex C.")

Assuming statutes can regulate 'email harassment,' the statute here still seems problematic, among other reasons because it covers speech that is "likely to cause annoyance," without any requirement that the sender intend to cause annoyance or the recipient reasonably perceive an annoyance. (As an overall matter, premising liability on "annoyance" also seems problematic.) The statute also seems to say that anonymous communications can somehow be harassing. I'm not sure what the legislature intended when it included language to this effect in the statute, but anonymity alone shouldn't be enough to put a communication into the harassment bucket.

The court here avoids all of these issues, simply finding that the emails in question were not intended to be annoying and would not reasonably be perceived as annoying. But the fact that the lower court issued the restraining order illustrates the possible reach of the statute and how it can be used to clamp down on otherwise inoffensive interpersonal communications.

Posted by Venkat at 02:31 PM | Content Regulation

June 29, 2012

Photographer's Suit Against Client for Republishing Photos on Facebook Proceeds – Davis v. Tampa Bay Arena

[Post by Venkat Balasubramani with comments by Eric]

Davis v. Tampa Bay Arena, Ltd., 2012 WL 2116136 (M.D. Fla.; June 11, 2012)

This seems like a run-of-the-mill dispute between a photographer and client, but I think it contains some helpful lessons. I have a feeling we will see more of these in the future. Chalk it up to more aggressive copyright enforcement, or an impulse to put out an increasing amount of content, or a combination of the two.

Davis worked from 1998 through 2011 (under various contract arrangements) for Tampa Bay Arena as the in-house photographer photographing events. (For what it's worth, here's what looks like Davis' site.) Davis (smartly) retained ownership of the photographs and licensed them to the arena for limited uses. The agreement in place between the parties allowed for use by the arena in the following ways:

newsletter, advertising, display prints, broadcast, and the venue website.

The arena terminated its relationship with Davis in 2011 but continued to use his photographs. In early 2011, the arena created a Facebook page and posted Davis’ pictures on the page. Apparently Facebook had a feature that allowed users to download photographs at the click of a button, and this feature was available on the arena’s Facebook page. Davis asked the arena to remove the photographs from its Facebook page. The arena demurred, and Davis sued, asserting claims for infringement, conversion, and breach of contract.

Breach of contract: The court declines to dismiss the infringement claim, finding that there is a factual dispute as to whether the arena’s use falls within the permitted uses of the agreement. The court does dismiss the infringement claims based on unregistered photographs (with leave to amend). However, the court declines to dismiss Davis’ claims for statutory damages finding there are factual disputes with respect to the timing of the infringements and the registrations.

Conversion and Breach of Contract: The court also declines to dismiss Davis’ conversion and breach of contract claims. The court does not mention preemption when discussing the conversion claims, but finds that the arena’s retention of the slides is sufficient to support a claim. (Some of the photographs were taken with a digital camera and others were taken in slide format.) The court mentions preemption when dealing with the breach of contract claim, but summarily says that the “extra element” required to support a breach of contract claim (when also bringing a claim for infringement) is satisfied when there is a contract in place. Nevertheless, the court says that Davis alleges breaches that are independent of infringement: (1) adding corporate sponsorships to photographs; (2) refusing to return the photographs; (3) conveying rights to Facebook; (4) failing to give appropriate credit; and (5) using photos for sponsorship purposes.

Unfortunately for the arena, the license provisions cover the "venue website" but do not expressly reference Facebook. This isn’t surprising, given that at the time the parties negotiated the 2008 agreement, Facebook was hardly as ubiquitous as it is now. The idea of creating a Facebook page was probably not even a glimmer in the arena's eye.

The key question will be whether the arena can argue that use of the photos on the Facebook site should fall under “advertising”. This will probably be a tough argument, particularly given that anything posted to Facebook grants Facebook broad license to re-use it (e.g., in sponsored stories) and, equally as important, allows end users (fans) to freely download it. (Recall the dispute--still ongoing--between Agence France Presse and a photographer who made photos of the Haiti earthquake. AFP took the position that photos posted to Twitpic were subject to a broad license. The parties filed cross-motions for summary judgment which are currently pending before the court.) Unless the arena has some blockbuster emails from Davis evincing an understanding that the arena’s use in “advertising” was intended to be broadly construed, this may be a tough one for the arena to win.

A few copyright issues that the case brought to mind:

- when is a breach of a license agreement actionable as infringement versus as a breach of contract (as the court noted in MDY v. Blizzard, when a breach of a condition implicates one of the copyright owner’s exclusive rights, which was probably satisfied here)

- can Davis make out a conversion claim based on retention of the photos? (retention of the slides may suffice for the non-digital photos)

- how about the arena’s argument that Davis can’t exploit the photos without its consent or without the consent of the artists or performers (how will this affect Davis' chances for damages in the event he is limited to actual damages?)

These questions aside, I think this is a good cautionary tale when dealing with freelance photographers. One obvious point from this case is clients/licensees should spell out in advance what their acceptable uses would be, and in the era of social media, it’s worth being expansive, or as general as possible. Something like “the arena can use the photos on its websites or in third party websites or platforms for purposes of advertising or promotion” would have gone a long way here.

The trajectory of the relationship between Davis and the arena is interesting. As recounted in this news story posted to Davis' blog, Davis had a long-standing relationship with the arena. The arena posts the photos to Facebook. Davis complains, then sends a C&D, ultimately leading to termination of the relationship. Davis seemed like he had a sweet gig as an in-house photographer at the arena. Was Davis over-reacting when he asked the arena to remove his photos from its Facebook page? Will his proceeds from the lawsuit make up for the money he loses from the arena's business?
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Eric's Comments

I've complained before about dealing with freelance photographers. During my stint at Epinions, we got sued only two times--both by freelancer photographers for photos we had obtained from third parties, and in both cases the financial demands were completely untethered from reality. As a result, when I see someone who describes themselves as a "freelance photographer," I just assume their alter ego is "pugnacious plaintiff." If you're negotiating a contract with a freelance photographer, get everything you possibly could ever want into the contract before writing a check. Once the cash moves, any activities not clearly permitted by the contract will cost a boatload more or invite a lawsuit, even if financially irrational. CAVEAT EMPTOR!!!

Personally, I won't deal with freelancer photographers who have unreasonable negotiating positions on copyright. That's a good signal that they are likely to be tendentiously unreasonable in the future too. In fact, in my capacity as HTLI director, I just kiboshed a deal with a photography vendor whose contract was muddled on copyright terms and who didn't back down when we made a reasonable counterproposal. Major red flags. The best news: we found a replacement vendor who was half the price and whose form contract was more reasonable about copyright from the start.

Speaking of financial irrationality, I want to amplify on Venkat's discussion about the relationship. The opinion says that Davis was getting $350 per event, plus $130/hr for events over 4 hours (implying an hourly rate of no less than $87.50/hr for events shorter than 4 hours), and he retained the copyright to the photos and could presumably commercialize those in a variety of ways. Getting paid a decent hourly rate to produce copyrighted material that can be further commercialized without restriction sounds like a pretty sweet gig to me (and that doesn't count the other perks, like the free entrance to cool events and the opportunity to rub shoulders with the rich and famous). Meanwhile, it's no surprise that the arena dumped him overboard when he threatened litigation, so Davis chose to grab for the litigation cash and free up his time for other gigs rather than keep the existing economic arrangement with the arena.

Was that a good economic choice? It's hard to tell, but the opinion does give another clue. David sued on 255 photos, 215 which weren't registered at the time he sued, meaning that at most 40 of the photos could possibly support statutory damages and attorneys' fees. It's not clear from the case if all 40 actually were registered on a timely basis, so we'll have to see if Davis is eligible for any enhanced statutory remedies at all.

I'm going to go on a limb and suggest that the maximum possible damages for the 215 photos will be de minimis. Although Davis might have a standard licensing fee for his photos, which would support a plausible claim for actual damages for these photos, the dollar value can't be very high for the use on a Facebook page. And even if all 40 of the other photos qualify for statutory damages, my guess is that the damages will be more on the $750 side than the $30,000 side (and certainly not the $150,000 side).

So how much could this case be worth in Davis' best-case (but still realistic) scenario? $50k? $100k? Is that maximum potential upside worth chucking a long-term relationship (13 years) with the arena? Only Davis can answer that question, and obviously he has (at least implicitly). I hope he made a wise choice.

Posted by Venkat at 09:19 PM | Copyright , E-Commerce , Licensing/Contracts

Can Korean Copyright Owners Sue Australian Defendants in California? Judges Disagree--DFSB Kollective v. Bourne

By Eric Goldman

DFSB Kollective Co. Ltd. v. Bourne, 2012 WL 2376209 (N.D. Cal. June 22, 2012).

DFSB Kollective is a Korea-based copyright owner and a leading producer of Korean music. It went on a litigation tear on March 7, 2011, filing seven similar copyright enforcement actions in the Northern District of California (against Bourne, Doe (revealed to be Yang), Jenpoo, Kuoch, Ma, Tran and Yew). Rather than assigning the seven cases to the same judge or otherwise relating/consolidating them, the cases were divvied up among district judges.

The Jenpoo, Kuoch and Ma cases appear to have settled. Bourne, Tran, Yang (nee Doe) and Yew all no-showed, leading to entries of default against all of them except Yang (which is still pending).

In September 2011, DFSB got a default judgment against Yew for $325k and an injunction from Judge Alsup. I (and most others) missed the Yew case when it came out, but the issues it raises are subsumed by the Tran opinion.

This post focuses on the Tran and Bourne cases. The cases are virtually identical. Both defendants are located in Australia and allegedly ran linking sites focused on the Korean music community (and may have uploaded infringing files themselves). Both cases raise a fairly fundamental question: why is a Korean copyright owner with no operations in California suing Australian defendants in a California court?

In December, Judge Koh issued a default judgment in the Tran case, awarding DFSB $645k in statutory damages plus an injunction. In contrast, earlier this month, Magistrate Judge Corley denied DFSB a default judgment in the Bourne case. Given how similar the cases are, the dichotomous results is noteworthy. Indeed, Magistrate Judge Corley’s opinion expresses disagrees with Judge Koh’s, creating an apparent intra-district split and setting up a potentially interesting showdown between Judges Koh and Corley.

The judges split on the personal jurisdiction question. Judge Koh found that Tran was subject to personal jurisdiction in California because he had accounts at Facebook, Twitter and YouTube and used a privacy service in California to shield his identity. Magistrate Judge Corley, sua sponte, saw it differently:

this Court disagrees that using the Internet accounts of companies based in California is sufficient to support a finding that a defendant expressly aimed his conduct at California. To adopt Plaintiffs' reasoning would render the “expressly aimed” prong of the Calder test essentially meaningless as it has become ubiquitous for businesses—large and small—to maintain Facebook or Twitter accounts for marketing purposes and would subject millions of persons around the globe to personal jurisdiction in California.

Corley also points out that the ads on Bourne’s website don’t appear to target or relate to California, and the website’s goal of providing a directory of Korean-language music had nothing to do with California either.

I think Judge Koh’s conclusion on the social media account question was anomalous. Most of the courts who’ve looked at the issue (none cited by either Koh or Corley) have agreed with Corley. [FN1] Having social media accounts with California-based companies doesn’t automatically confer personal jurisdiction in California for every cause of action. See generally the Mavrix case (cited by Corley). In fact, many social media users don’t know—or care—where their service providers are incorporated or headquartered or where they have data centers.

FN1: See, e.g., NuboNau, Inc. v. NB Labs, Ltd, 2012 WL 843503 (S.D. Cal. March 9, 2012) ("the Court doesn't find that merely engaging Twitter and Facebook to promote one's business constitutes purposeful direction at California, simply because Twitter and Facebook happen to be based there and require users to litigate all lawsuits arising out of their accounts in California."); Sweetgreen, Inc. v. Sweet Leaf, Inc., 2012 WL 975415 (D.D.C. March 23, 2012) ("defendants' passive websites alone do not provide a basis for jurisdiction. Their Facebook pages and Twitter accounts, while interactive, are more like a broad national advertising campaign than a website engaging in e-commerce.") Cf. Lyons v. Rienzi & Sons, Inc., 2012 WL 1203688 (E.D.N.Y. April 11, 2012): "the movant's mere possession of an account on Facebook is not, in the context of this case, a sufficient predicate for hauling it into a court in New York."

The judges also reached different conclusions regarding DFSB’s connections to California. Judge Koh effectively ignored the issue. (In my prior blog post, I wrote “Completely missing from this discussion is how the plaintiffs suffered any harm in California or, for that matter, had any ties themselves to California.”). Magistrate Judge Corley, however, asked the obvious question (again, sua sponte):

Plaintiffs do not explain how California residents were harmed or why that is the proper inquiry. In a copyright case, it is usually the plaintiff—who owns the copyright and thus has standing to bring the lawsuit—who is claiming harm.....Plaintiffs do not allege how they as corporations based in Korea suffered any harm in California.

DFSB may have been engaging in a little copyright litigation “tourism” (analogous to “libel tourism”), picking a US court even though neither litigant had any real ties to the United States. Post-SOPA, we’re on heightened alert for rightsowners’ enforcement actions against “rogue” websites. The DFSB litigation shows that US copyright law already appeals to foreign copyright owners. If SOPA had passed, undoubtedly we would have seen an increase in enforcement actions between two foreign litigants without real ties to the United States. Cf. the increasing number of disputes involving a foreign rightsowner v. a foreign defendant at the ITC, a venue intended to protect US manufacturers.

Among other problems, foreign defendants usually no-show in US litigation, raising real due process concerns. Extra kudos to Magistrate Judge Corley for not rubber-stamping the plaintiffs’ requests in a default action. Most judges are not as careful when the defendant no-shows; even Judges Alsup and Koh—both well-regarded and savvy judges—apparently adopted the plaintiffs’ default judgment arguments largely verbatim without challenging the core deficiency in the plaintiffs’ cases. In contrast, Magistrate Judge Corley raised those issues on her own initiative, without any defense attorney (or the defendant him/herself) encouraging her to do so. This is the way the system is supposed to work if due process means anything.

Corley’s decision isn’t final yet for two reasons. First, because she raised the issues sua sponte, she gave the plaintiffs a chance to rebut her ruling by July 3. Second, Corley’s ruling will go to Judge Hamilton for approval. Corley’s opinion is spot-on, so Judge Hamilton ought to approve the ruling; but I wonder if Judge Hamilton will be spooked by the intra-district split. If so, I could see Judge Hamilton deferring to Judge Koh and eliminating the intra-district split.

Because of these review opportunities, this case seems like an excellent candidate for amicus briefs to explain the social interests at play in no-show default IP cases. Venkat and I have blogged this topic many times before in cases where judges rubber-stamped SOPA-like injunctions because no one was around to object to them. See, e.g., Hermes v. Doe. This case presents a great chance to educate the judiciary about the importance of gatekeeping plaintiffs’ otherwise-unrebutted requests. The turnaround time is short for amicus intervention (and there’s no guarantees the judge will accept them). I can’t lead that charge but I would be happy to work with others.

Posted by Eric at 10:25 AM | Copyright , Evidence/Discovery | TrackBack

June 27, 2012

Court Refuses to Dismiss Claims Against Alleged Twitter-Bot Spammer--Twitter v. Skootle

[Post by Venkat Balasubramani]

Twitter, Inc. v. Skootle Corp., et al., 2012 WL 2375486 (N.D. Cal.; June 22, 2012)

Twitter sued several alleged spammers, including (1) those who provided software for the use of automated account creation and tweeting, and (2) other defendants who actually created automated accounts and sent large amounts of spam tweets.

One of the individual defendants who allegedly created and maintained numerous bot accounts moved to dismiss on the basis of personal jurisdiction, venue, and for failure to state a claim. The court declines to grant his motion.

Subject matter jurisdiction: Twitter has a good faith basis for alleging that the amount in controversy exceeds the jurisdictional threshold for diversity jurisdiction, and the court finds defendant is unable to establish to a legal certainty that the claims do not meet this jurisdictional amount.

Personal jurisdiction: The court easily finds that defendant is subject to personal jurisdiction because he aimed his acts at a California corporation and agreed to its terms of service. Defendant is unable to demonstrate that the exercise of personal jurisdiction is unreasonable. (The court says in a footnote that it's not commenting on the enforceability of forum clauses in "clickwrap" agreements generally, but just that there hasn't been a showing of unreasonableness in this case.)

Venue: The court similarly says that venue is proper under the forum selection clause in Twitter’s agreement and defendant fails to argue with any credible facts as to why litigating the dispute in California would be unduly burdensome.

Failure to state a claim: Defendant argued that Twitter’s sole remedy for a violation of Twitter’s terms of service is to suspend user accounts, but the court says that Twitter’s terms expressly reserve any other available remedy to Twitter. Twitter alleges that creating bot twitter accounts and sending spam tweets was a violation of its terms and it was damaged by defendant’s breach of the terms. At the pleading stage, Twitter easily satisfies its burden.
__

A fairly run of the mill ruling resolving some typical arguments raised by a pro se defendant.

It’s worth noting that Twitter did not assert claims under CAN-SPAM, and the core of its claims are based on a breach of its terms of service. (See my previous posts on CAN-SPAM and social media posts that mention why Facebook posts don’t track neatly to CAN-SPAM: "N.D. Cal.: Facebook Posts are Electronic Mail Messages, Subject to CAN-SPAM"; "Facebook Gets Decisive Win Against Pseudo-Competitor Power Ventures -- Facebook v. Power Ventures." The same would be true of tweets.) A noteworthy move by Twitter to not push the envelope on this issue.

The fight that may end up being interesting is the one between Twitter and the defendants who allegedly made available the software used by those who created bot accounts and tweeted. These defendants may have a potential Section 230 defense available, and to establish liability, Twitter will have to show something more than that the software can be used to manage tweets from multiple accounts and automate tweets (functionality shared by many tools that are perceived as “legitimate” by Twitter). (See also "Keylogger Software Company Not Liable for Eavesdropping by Ex-spouse -- Hayes v. SpectorSoft.")

[A final procedural note. The court (separately) issued a show cause order requiring Twitter to demonstrate that joinder is proper. The order notes that there doesn't seem to be a connection between several of the defendants other than the fact that they were all engaged in Twitter-spamming.]

Posted by Venkat at 06:57 PM | E-Commerce , Licensing/Contracts , Spam , Trespass to Chattels

June 26, 2012

Will the Floodgates Open Up for Americans with Disabilities Act (ADA) Claims Against Websites?--National Association of the Deaf v. Netflix

By Eric Goldman

National Association of the Deaf v. Netflix, Inc., 3:11-cv-30168-MAP (D. Mass. June 19, 2012)

This is a bad ruling. Really terrible. It's the kind of results-oriented judicial activism that undermines the public's trust in the judiciary. The judge made it clear he was going to rule for the plaintiff, no matter what. But in doing so, he has potentially ripped open a huge hole in Internet law. Hey jobless recent law school grads--if this ruling sticks, there may be buckets of money to be made in ADA litigation against Internet companies.

The case involves a Cyberlaw perennial: are websites obligated to comply with the Americans with Disabilities Act (the ADA)? In this case, the desired accommodation is close-captioning for Netflix-streamed video. If websites must comply with the ADA, all hell will break loose. Could YouTube be obligated to close-caption videos on the site? (This case seems to leave that door open.) Could every website using Flash have to redesign their sites for browsers that read the screen? I'm not creative enough to think of all the implications, but I can assure you that ADA plaintiffs' lawyers will have a long checklist of items worth suing over. Big companies may be able to afford the compliance and litigation costs, but the entry costs for new market participants could easily reach prohibitive levels.

And then there's linkages with other civil rights statutes, such as Title II of the Civil Rights Act of 1964 (an anti-discrimination law) and state laws, that use similar language as the language interpreted in this ruling. If all of those statutes are back in play too, the range of obligations imposed on websites--and the opportunities for aggressive plaintiffs' lawyers--expand exponentially. Expect lots of consumer claims that a website discriminated against them based on an impermissible criterion. It's safe to say that the legal rules at issue in this case could have billions of dollars of impact between the web coding obligations and the potential litigation frenzies.

The most crucial ruling is where the court says that a website qualifies as a "place of public accommodation." The court deviated from--and, incredibly, didn't cite to--a nearly unbroken line of precedent rejecting that conclusion. I don't have a complete roster of cases in this area, but cases that came to mind include Noah v. AOL (a Title II case), Access Now v. Southwest Airlines (an 11th Circuit case), Stern v. Sony, Young v. Facebook and Ouellette v. Viacom. The only plaintiff win in this area is the offbeat National Federation of the Blind v. Target case (which this court did cite), where the court held that Target's obligations to comply with the ADA in its offline retail stores extended to its website. Because of its fact-specific nature, the Target ruling really hasn't had much of an impact on Internet litigation over the past 6 years.

Bypassing all of this precedent, the judge instead relies almost exclusively on the heavily-criticized First Circuit Carparts decision from 1994. The NAD made a crafty venue move suing in a court bound by Carparts. Even so, I wonder how this ruling would fare on appeal to the First Circuit (if Netflix goes that route), and I wonder if judges in other circuits will be persuaded by this judge's ruling.

Netflix also argued that it lacked the copyright permissions to close-caption the copyrighted works of others. This is no joke; recall, for example, the howls over Amazon's text-to-speech feature in the Kindle. The court says it wants discovery on that issue.

Finally, Netflix argued that the Twenty-First Century Communications and Video Accessibility Act of 2010 ("CVAA") and associated FCC regulations. preempted the ADA's application to Netflix's service. I don't know anything about the CVAA, but it's clearly topical to the issue of close-captioning online video. The court says that Netflix (and presumably other sites covered by the CVAA) gets the pleasure of complying with both the ADA and the CVAA. Yay for duplicative and overlapping regulations!

It's possible that Netflix will win this case in the end (probably not in front of this judge). Until it does, however, we have a clean (if erroneous) ruling that websites are places of public accommodation that are subject to the ADA. I have to imagine plaintiffs will find that pretty exciting.

June 25, 2012

Wisconsin Appeals Court Punts on the Legality of Buying People's Names for Keyword Advertising--Habush v. Cannon

By Eric Goldman

Habush v. Cannon, 2012 WL 2345137 (Wis. App. Ct. June 21, 2012). The case record. My prior blog post on this case.

You may recall this case. Habush Habush & Rottier and Cannon & Dunphy are both leading personal injury law firms in Wisconsin. The Cannon firm bought the names "Habush" and "Rottier" as keywords for its competitive keyword ads. Habush and Rottier then sued the Cannon firm and its principals for violations of Wisconsin's publicity rights statute. To my knowledge, this is the only pending lawsuit over keyword advertising triggered by a person's name, and there's no direct precedent on point. Furthermore, the publicity rights doctrine is so under-theorized that no one really knows how to define its boundaries. Because of the doctrinal morass and the technological underpinnings, this case is giving judges fits. The lower court judge ruled for the defense but wrote an odd opinion, and basically expressed resignation knowing that he was going to be appealed no matter what he ruled.

The appeals court didn't want this case any more than the lower court judge did. This led the appeals court to do something highly unusual: instead of trying to resolve the case or even make any progress sorting through the issues, the appeals court simply punted the case to the Wisconsin Supreme Court. The procedural move is that the appeals court "certified" the issues to the Supreme Court, but let's be honest--the appeals court was so obviously flummoxed by this case that it simply kicked the case upstairs without even trying.

I've seen this procedural move before, but usually it's a federal district or appellate court certifying a question of state law to the state Supreme Court. I can't recall the last time I saw a state appellate court simply deem a case a "hot potato." On the other hand, the appellate court knew (like the lower court judge) that these litigants (being litigators, after all) were going to appeal its ruling no matter what it ruled, so this case is destined for the Wisconsin Supreme Court eventually. The appellate court's punt just speeded that denouement up.

The Supreme Court doesn't have to accept the certification; for example, the Supreme Court could tell the appeals court to try again. But assuming the Supreme Court accepts the certification, it will set up a major publicity rights showdown at the Wisconsin Supreme Court. I'd expect numerous amici would offer up some guidance to the Wisconsin Supreme Court; I probably would participate in some brief in support of the defense.

The appeals court offered four weak explanations why it thought it was better to punt the case than try to resolve it:

* "the Wisconsin Supreme Court has not yet interpreted WIS. STAT. § 995.50 in any context even generally resembling this one, much less addressed specific features of § 995.50(2)(b) in the context of now pervasive Internet search engines"
* "until recently, the following activity did not exist: keyword-triggered advertising that uses “sponsored” web page links to draw the potential attention of millions of Internet users who navigate from search-engine results to web pages"
* "“Developing” a “common law of privacy” is not the primary function of the court of appeals." [Seriously???]
* "any decision on these issues may have widespread and significant ramifications for many individuals and businesses in Wisconsin and beyond its borders"

Frankly, I thought the appellate court made good arguments why it should have ruled on the case on its docket, not punted it.

Posted by Eric at 08:44 AM | Publicity/Privacy Rights , Search Engines | TrackBack

June 24, 2012

Mortuary Student Can Be Disciplined for Facebook Posts--Tatro v. University of Minnesota

By Eric Goldman

Tatro v. University of Minnesota, 2012 WL 2328002 (Minn. June 20, 2012). My prior blog post on the appellate court ruling in this case.

This is one of the many lawsuits over a school disciplining a student for the student's social media posts. The two main twists are (1) the student was attending a university, not a K-12 school, and (2) the student was in the mortuary sciences program, where the subject matter of their studies (i.e., cadavers) means students may be held to higher professional expectations than your average college kid. Another key fact: Tatro already graduated in 2011, so the range of available remedies had shrunk by the time this case reached the Minnesota Supreme Court.

Based partly on both parties' agreement that “a university may regulate student speech on Facebook that violates established professional conduct standards,” the Minnesota Supreme Court held:

the University did not violate the free speech rights of Tatro by imposing sanctions for her Facebook posts that violated academic program rules where the academic program rules were narrowly tailored and directly related to established professional conduct standards.

Later, the court stresses:

Our decision is based on the specific circumstances of this case--a professional program that operates under established professional conduct standards, a program that gives students access to donated human cadavers and requires a high degree of sensitivity, written academic program rules requiring the respectful treatment of human cadavers, and measured discipline that was not arbitrary or a pretext for punishing the student's protected views.

As this narrow fact-specific holding demonstrates, the Supreme Court avoided any broad pronouncements about the legitimacy of schools regulating students’ social media posts. Consider the list of topics the court didn’t address:

* the applicability of the Tinker standard. The court said it didn’t apply because the school wasn't motivated by concerns about Tatro’s posts causing on-campus disruption.
* whether social networking activity is "on" or "off" campus (or if it matters)
* if free speech rules developed in K-12 cases equally apply to the college setting
* if Facebook posts are "public" or "private"? The court apparently assumes Tatro’s posts to her “open” Facebook account were public. The court says "the University is not sanctioning Tatro for a private conversation, but for Facebook posts that could be viewed by thousands of Facebook users and for sharing the Facebook posts with the news media." Compare Moreno v. Hanford Sentinel. It leaves open if the posts would have been “public” or “published” if her posts had been open only to her friends, and how many friends she could have and still treat her posts as private.

It seems the court was about as excited to address these cutting-edge issues as I am to blog such a milquetoast opinion. It might also have had something to do with the fact that FOUR of the Supreme Court judges recused themselves, presumably because they had ties to the University of Minnesota.

At most, this case tells us that students in professional degree programs--the Yoder and Byrnes cases involving nursing also come to mind--may be subject to greater speech restrictions online. This doesn't tell us much we didn’t already know. For example, of course law students exposed to client confidences cannot blog or tweet about those, and those that do should be subject to school discipline (and potentially state bar discipline) for doing so.

In this case, the court says "dignity and respect for the human cadaver constitutes an established professional conduct standard for mortuary science professionals." This reflects the unique context of mortuary studies, where cadaver donations could dry up if donors question the post-mortem respect afforded to the cadavers. Even without reference to that definition, I thought Tatro’s posts went one step too far and the university's discipline, while harsh, didn't overrespond--unlike a lot of the cases involving junior high or high school principals, who seems to regularly mete out punishment clearly disproportionate to the violation.

Other Coverage

* Pioneer Press
* FIRE

Posted by Eric at 10:11 AM | Content Regulation , Privacy/Security | TrackBack

June 23, 2012

Another Failed Effort to Remove a Ripoff Report Posting--Karnaby v. Mckenzie

By Eric Goldman

Karnaby v. Mckenzie, 2012 WL 2149457 (Conn. Super. Ct. May 10, 2012)

Fadi Sabastian Karnaby sued Mckenzie, a pseudonym, for allegedly false postings to Ripoff Report and other sites. The Ripoff Report posting in question. For reasons that aren't clear, Karnaby apparently didn't seek discovery for the identity of Mckenzie from the various review websites. Instead, Karnaby got permission to "serve" the complaint against Mckenzie by posting the case details in the Ripoff Report rebuttal box (see comment #2 in the prior URL). When Mckenzie no-showed in response to this so-called "notice" (surprise, surprise), Karnaby sought a default judgment.

Karnaby's request puts the judge in a pickle. If Karnaby hasn't definitively identified Mckenzie, then how will anyone know that the person uniquely associated with "Mckenzie" violated the injunction? To me, this highlights the weakness of "serving" Mckenzie via a Ripoff Report rebuttal; that gives us zero comfort that Mckenzie got actual notice of the suit. Contrast Fortunato v. Chase Bank. For all we know, Mckenzie did a dump-n-run at Ripoff Report and provided a bogus or never-checked email address to Ripoff Report, ensuring that no notification would ever reach him/her. Contrast that with, say, service via Facebook, where it's much more likely that users are checking in regularly, and it may even be possible to check the person's Facebook account to see if they've continued to use the account after notice was sent via Facebook.

Instead of monkeying with the injunction request, the judge really should have blown the whistle on the service issue. That leads to the next curiosity, which is why Karnaby hasn't more aggressively pursued Mckenzie's unmasking? Overall, it looks like Karnaby tried to cut some corners and pushed the system too far.

The judge also expresses concern about Karnaby's specific injunctive requests, saying that the requested injunction was too broad and overly restricts future speech. Finally, the judge refuses Karnaby's request that Mckenzie be required to take down the posted content, saying that the court can't monitor the execution of that request in addition to the other deficiencies.

Of course, even if the court issued the injunction, Karnaby's plan for removing the Ripoff Report posting isn't entirely clear given Ripoff Report's well-known no-takedown policy. Mckenzie doesn't have the legal rights to remove the report him/herself any more, and the court can't force the Ripoff Report as a non-litigant to remove the posts either. See the Blockowicz and Giordano cases. So I'm scratching my head wondering how Karnaby planned to get around Blockowicz/Giordano. Or, if there was no plan, then what was the point of seeking the injunction in the first place?

One possibility is that Karnaby hoped that the search engines would deindex the post based on the default judgment. I discuss that tactic here. Alternatively, Karnaby might have saved some time and money by taking advantage of Ripoff Report's VIP arbitration program. Even though it may be anathema to pay money to Ripoff Report to ameliorate a review in its own database, at least it would have been cheaper than running to court.

Meanwhile, I'm always a little intrigued when a plaintiff can't get its requests in a default judgment. As we've recently noted, judges seem so willing to accommodate plaintiffs in a default judgment (e.g., 1, 2) that it's shocking when a judge seriously pushes back. Sometimes that's a tipoff that, even without any adversarial proceedings, the plaintiff or his/her lawyers found a way to cheese off the judge (see, e.g., Nexon v. Kumar).

Posted by Eric at 08:51 AM | Content Regulation , Evidence/Discovery | TrackBack

June 22, 2012

Another Bad Ruling for PissedConsumer on Trademark and 47 USC 230 Claims--Amerigas v. Opinion Corp.

By Eric Goldman

Amerigas Propane, LP v. Opinion Corp., 2012 WL 2327788 (E.D. Pa. June 19, 2012)

You may recall PissedConsumer, the site that solicits user gripes, SEOs the crud out of them, and then offers the griped business pay-to-play to downgrade the visibility of those reviews. Its litigation docket is heating up, and I've recently blogged on two prior rulings (Ascentive and Vo).

In a thoughtful but perhaps overly cautious opinion by Judge Buckwalter (a celebrated name in cyberlaw for his pro-free speech 1990s opinions in the CDA and COPA lawsuits), PissedConsumer couldn't get a motion to dismiss on Amerigas' trademark claims, and it couldn't get dismissal of other claims on 47 USC 230 grounds. The judge signals that Amerigas is likely to lose its claims later, but it gives both parties the opportunity to lavish money on their lawyers before the judge reaches the obvious denouement.

Trademark Claims

PissedConsumer makes a number of references to the trademarks of the businesses it reviews, including using the trademark in as a third level domain (i.e., a subdomain), including the trademark in its metatags and showing keyword-triggered ads. In its motion to dismiss, PissedConsumer took a number of whacks at the trademark claims:

Trademark use. The court says Amerigas properly alleged trademark use because "the Complaint alleges that Defendant uses Plaintiff’s “AMERIGAS” trademark in its website’s text, subdomain name, and metadata in connection with the sale of advertisements to Plaintiff’s competitors" and "for a fee, Defendant will allow businesses to address the complaints posted about them on the website."

I think this is a correct synthesis of current precedent (especially after Rescuecom), but it misses the broader context that we're talking about a review site selling ads to support its editorial content. I hammer this point in my Online Word of Mouth paper, where I argue that a more aggressive policing of the trademark use doctrine would create necessary breathing room for online word of mouth. Sadly, post-Rescuecom, we've seen little judicial interest in tightening the trademark use doctrine, creating the risk that review websites have to work much harder to fend off trademark attacks.

Nominative Fair Use. Unlike some of my trademark scholar peers, I'm not a big fan of nominative fair use as a protection for review websites because it's so hard to win on motions to dismiss (and isn't guaranteed on summary judgment, either). This case illustrates that point nicely. The judge says that it would be "premature" to rule on nominative fair use on a motion to dismiss. The judge wants to see more about the likelihood of consumer confusion; and while it's likely a "gripe site" (in the court's words) would prove that it had to use the plaintiff's trademarks in order to refer to the plaintiff, the court wants to see more about whether PissedConsumer took only what was necessary and accurately reflected the relationship between Amerigas and PissedConsumer.

Likelihood of Consumer Confusion. PissedConsumer won the Ascentive case in part for lack of consumer confusion. However, that was in response to Ascentive's preliminary injunction motion (when the burden is higher for the TM owner), not on a motion to dismiss. As a result, the judge says that he needs to give the plaintiff the opportunity for discovery. Even so, the judge says the Ascentive opinion was "well-written and very persuasive" and the judge expresses skepticism about Amerigas' chances of success:

This Court also finds it difficult to believe that a person searching online for Plaintiff’s products would be confused into thinking that a site called “PissedConsumer”—which contains an abundance negative reviews, offers no propane products of its own, and links to the websites of Plaintiff’s competitors—was in some way affiliated with or endorsed by Plaintiff

And later the judge says "Plaintiff may face a tall task in demonstrating that Defendant’s use of its mark is confusing."

Based on the judge's statements plus the Ascentive precedent, it seems pretty clear that Amerigas isn't going to win the trademark claim. This is exactly why a defense or doctrinal limit that succeeds on a motion to dismiss is so important. The judge has basically ordered the parties to spend tens or hundreds of thousands of dollars on discovery, all with the strong possibility of reaching the conclusion that Amerigas isn't going to win--a conclusion that's pretty clear right now. I'm sorry to keep rehashing the trademark use debate, but the trademark use doctrine could have given the judge an easy way of saving everyone a lot of time, money and heartache.

Along the way, the judge makes an odd statement: "If the unhappy purchasers of Plaintiff’s products are posting complaints on http://amerigas.pissedconsumer.com, Plaintiff’s competitors may be more likely to advertise on Defendant’s website, and Plaintiff may be more inclined to pay for Defendant’s reputation management services.

This is essentially an empirical claim, and I've never seen any empirical evidence supporting it (or, for that matter, refuting it). I'd be grateful for any thoughts.

Initial Interest Confusion. I keep trying to declare the initial interest confusion doctrine dead, but judges aren't cooperating! The judge says that initial interest confusion is still a viable theory in the Third Circuit (he's correct as a matter of precedent), and thus Amerigas can keep arguing it. Unfortunately, like the likelihood of consumer confusion, the judge does hint that it's probably going to fail later; the judge says "it may ultimately be difficult to establish initial interest confusion in this case." Once again, lots of wasted time and money ahead!

Contributory Infringement. In a small piece of good news for PissedConsumer, the judge says Amerigas properly failed to allege that advertisers were actually committing trademark infringement or that PissedConsumer knew of their infringing activity. Thus, Amerigas hadn't stated a proper claim for contributory infringement.

Along the way, the judge makes the following odd but interesting statement: "Plaintiff has not cited to—and the Court is unable to locate—any authority to support the proposition that use of a trademark in a hyperlink constitutes per se infringement."

47 USC 230

PissedConsumer asserted Section 230 against claims of unfair competition, tortious interference and unjust enrichment. To some extent, those state law claims just extend the trademark claim, e.g., Amerigas argued that it was unfair competition for PissedConsumer to merchandise the trademark as part of PissedConsumer's overall scheme. However, the court rejects the Section 230 immunity based on two alleged facts: that PissedConsumer allegedly authored some of the reviews in question, and that PissedConsumer allegedly controlled the ads on its site. The latter fact should be entirely irrelevant for Section 230 purposes, and it's almost certainly not true as a factual matter if PissedConsumer is a Google AdSense publisher. The former fact is just like the uncited Vo case, where the court similarly accepted the plaintiff's unsupported claim that PissedConsumer wrote the reviews to survive the motion to dismiss. I explained why that's not a good result in my blog post on the Vo case.

The judge says that PissedConsumer may reassert the Section 230 immunity later in the case, but a Section 230 immunity post-discovery is way less valuable than a Section 230 immunity on a motion to dismiss.

Implications

Judge Buckwalter's opinion is solidly constructed in the sense that it fairly applies existing law to the alleged facts. As taxpayers, we got our money's worth from this opinion. Nevertheless, it's clear Judge Buckwalter and other judges lack inadequate doctrinal tools to kill doomed cases early. In the end, this case is really about Amerigas trying to shut down negative reviews of its business. I don't like PissedConsumer's business model any more than you do, and they are not the best "face" for free speech online, but PissedConsumer is a platform for letting consumers have their say, and opinions that expose them to legal risk jeopardize important social values. See my Regulation of Reputational Information essay. In this respect, I could imagine other judges finding more doctrinal flexibilities to address the realpolitik of this situation. I can't blame Judge Buckwalter for failing to do so, but the result is unfortunate nevertheless.

Posted by Eric at 10:03 AM | Derivative Liability , Trademark | TrackBack

June 20, 2012

CYBERsitter Sues Google for AdWords Trademark Infringement

By Eric Goldman

CYBERsitter LLC v. Google, Inc., CV12-5293 (C.D. Cal. complaint filed June 18, 2012)

CYBERsitter competes with Net Nanny and ContentWatch (apparently both owned by the same entity, ContentWatch) in the Internet filtering software niche. CYBERsitter claims ContentWatch ran keyword ads triggered on its trademark with ad copy like:

CYBERsitter | Net Nanny.com
Protect Your Children with #1 rated CYBERsitter Software. Just $29.99

The complaint version I saw didn't include any screenshots of the ads in question, so we're missing some key info. Most obviously, the complaint implies, but doesn't specify, that the ads linked to netnanny.com. The complaint does alllege that netnanny.com doesn't sell CYBERsitter's competitive product.

Without the linked URLs, we can't assess the likelihood that these ads were placed by ContentWatch's affiliates instead of ContentWatch itself. I have a hunch these are affiliate-placed ads. That would make a big difference because ContentWatch probably isn't liable for ad buys by its affiliates. See 1-800 Contacts v. Lens.com.

Either way, I suspect CYBERsitter and ContentWatch can work out their differences. As I've documented many, many times, the money at issue in these competitive keyword ad buys usually comes nowhere close to the costs of litigation (just one of many examples), so the most economically rational thing for both parties to do is strike a settlement (even if imperfect) rather than shoveling cash over to the lawyers.

Now, about CYBERsitter naming Google as a defendant. This is the first time Google has been sued for trademark infringement over its AdWords product in over a year, so it's the first such lawsuit since the Fourth Circuit's Rosetta Stone v. Google opinion. Frankly, I expected more lawsuits would be filed against Google after the Rosetta Stone opinion, just like the Rescuecom opinion opened up the floodgates in 2009. Perhaps this filing is just the leading edge of a litigation tsunami, but I'm not feeling that way. This complaint doesn't explicitly make any gestures towards the Rosetta Stone opinion, and it felt to me like an idiosyncratic one-off.

Indeed, from my vantage, the Google piece doesn't look very well-prepared. CYBERsitter doesn't allege that it filed a trademark complaint with Google, which would have automatically blocked the CYBERsitter references in the ad copy it's complaining about, nor does CYBERsitter claim that it gave Google notice of the problem in any other way (C&D, etc.). Based solely on the complaint's allegations, CYBERsitter can't show that Google knew there was a problem at all. If CYBERsitter didn't give Google a chance to fix the problem pre-litigation, I doubt a judge will be very supportive of CYBERsitter.

Furthermore, while ContentWatch might be pliable, especially if its affiliates went rogue on it, Google will fight this case with everything it has. I've never understood why plaintiffs choose to bring into their lawsuits a Big Dog that mints money when their beef is just with a competitor. The Wealthy Big Dog will fight to the death and has the resources and determination to overwhelm the little guy, or at least wound the little guy seriously (like leaving CYBERsitter with fewer trademarks than it started the litigation with--see, e.g., American Blinds). Given the sheer irrationality of bringing Google into a garden-variety competitor dispute, I'm laying odds that CYBERsitter will simply drop Google from the lawsuit without getting any concessions from Google--just like Rescuecom and American Blinds and Parts Geek and numerous other challengers have done.

Process note: while preparing the post, earlier today, I emailed both CYBERsitter's lawyer and ContentWatch's PR person for comments about this lawsuit. I haven't gotten a response from either, but I'll update the post if I do.

[Update: CYBERsitter's lawyer declined comment to me but provided some perspectives to the National Law Journal.]

Related suits: The roster of currently pending trademark lawsuits against Google regarding AdWords (I am resetting this roster to eliminate all of the post-Rescuecom cases that Google has resolved):

* Jurin v. Google. Jurin appears to be proceeding pro se again, so his odds of success keep going down.
* Rosetta Stone v. Google [latest post]
* CYBERsitter v. Google

Note #1: the FPX class action lawsuit voluntarily dismissed with prejudice shortly after Google defeated class certification.
Note #2: Google and Yahoo were dismissed from the Pathak case May 25, 2011 for Pathak's failure to serve them.
Note #3: for now, it looks like Google is out of the Groupion v. Groupon lawsuit because Groupion lost its substantive case against Groupon.

Posted by Eric at 03:06 PM | Derivative Liability , Search Engines , Trademark | TrackBack

Section 230 Doesn't Protect Employer From Negligent Supervision Claim--Lansing v. Southwest Airlines. Warning: Ugly Opinion

By Eric Goldman

Lansing v. Southwest Airlines Co., 2012 IL App (1st) 101164 (Ill. Ct. App. June 8, 2012)

Overview

This is a bad opinion. The court reaches the correct result that 47 USC 230 doesn’t immunize an employer for an employee’s activities. However, in reaching that fairly obvious result, the opinion—completely gratuitously—denigrates Section 230 in ways that seem designed to shrink Section 230's footprint in other types of cases. Making the immunity more limited as binding Illinois law will lead to plenty of unnecessary and costly mischief with no countervailing benefit. As a result, this opinion would benefit from an appeal to the Illinois Supreme Court to clean up the doctrinal sloppiness, even if the Supreme Court affirms the substantive ruling.

Background

Although the court speaks in euphemisms, this long-running case (since 2007) apparently involves a love triangle. McGrew was a Southwest Airlines flight attendant. It seems that both McGrew and Lansing had competing interests in the same person. In efforts to allegedly thwart his rival, for over 2 years starting in 2004, the plaintiff alleges that McGrew:

used his access to defendant's resources to make harassing telephone calls and send over 1,000 harassing and threatening text messages or e-mails to plaintiff. According to plaintiff, McGrew threatened that, as a supervisor, he knew when people made reservations on his flights and would prevent plaintiff and his family members from flying by placing them on terrorism "no fly" lists with defendant and its affiliated airlines. Further, McGrew emphasized his position and authority with defendant, threatened to "haunt" and "completely ruin" plaintiff, and asserted that no one would believe any complaints plaintiff might lodge against McGrew. As time progressed, McGrew's messages and e-mails became increasingly violent, mentioned plaintiff's family members by name, and were transmitted directly to plaintiff's family members and professional colleagues.

Lansing alleges that he contacted Southwest five times in 2005 and 2006 regarding McGrew's behavior, but Southwest didn't terminate McGrew until August 2006.

Section 230 and Employment Law

The trial court dismissed Lansing's lawsuit against Southwest based on Section 230. While I appreciate the sentiments behind that ruling, it's probably wrong. I’ve consistently argued that Section 230 ordinarily shouldn't apply to lawsuits against employers for employees' activities. We have only one case where that argument worked--California's 2006 Delfino v. Agilent case--and that was an awkward opinion at best. (This opinion denigrates it as unpersuasive).

After all, the legal identity of employees and employers is usually co-extensive; which means that for Section 230's purpose, each employee's materials should be treated as first-party content of the employer. Now, employees sometimes do rogue things, but Section 230 doesn't need to police that; the substantive doctrines (such as negligent supervision) should have internal limits (scienter, causation, etc.) that restrict plaintiff overclaims for rogue employee behavior.

The Appellate Opinion

The appeals court starts off on a good note, saying Southwest Airlines meets the threshold consideration for the immunity's eligibility: "an employer like defendant qualifies as a provider or user of an ICS because defendant uses an information system or service that multiple users, like defendant's employees, use to access the Internet."

Then, in rejecting Southwest's argument that Section 230 should be interpreted broadly, the court gets into serious trouble:

We agree with the analysis of the Seventh Circuit that section 230(c) "as a whole cannot be understood" as granting blanket immunity to an ICS user or provider from any civil cause of action that involves content posted on or transmitted over the Internet by a third party. Craigslist, Inc., 519 F.3d at 669, 671. Neither section 230's title ("Protection for private blocking and screening of offensive material") nor subsection (c)'s caption ("Protection for 'Good Samaritan' blocking and screening of offensive material") suggests that section 230 provides immunity for a negligence action based upon the defendant's failure to supervise its employee.

Oh no. Not this again. Are courts really going to determine the scope of a seminal statutory immunity by reference to the titles/header? Ugh.

In support of this, the court partially responds to strawmen positions. I didn’t check Southwest Airline’s briefs, but generally no one asserts that Section 230 grants “blanket immunity to an ICS user or provider from any civil cause of action that involves content posted on or transmitted over the Internet by a third party.” That would be factually wrong. For example, Section 230 has three important statutory exclusions (IP, federal criminal prosecutions, ECPA and state law equivalents). But except for the statutory exclusions, Section 230 does, in fact, immunize intermediaries for “any civil cause of action that involves content posted on or transmitted over the Internet by a third party.” The caselaw is entirely clear on this—and even the 7th Circuit Craigslist case supports that realpolitik conclusion.

The court keeps digging its hole (and, to mix metaphors, hacking down strawmen):

The CDA was not enacted to be a complete shield for ICS users or providers against any and all state law torts that involve the use of the Internet. Such an overly broad interpretation of the CDA is inconsistent with the statutory purpose to encourage the restriction of objectionable or inappropriate online material.

The first sentence is another strawman. Of course Section 230 is not a “complete shield for ICS users or providers against any and all state law torts that involve the use of the Internet.” So what?

On the second sentence, the court totally whiffed on the “statutory purpose.” The judges should reread Section 230(b), where Congress explicitly lays out its policy objectives for Section 230. Section 230 (b) doesn't once mention the goal of restricting access to objectionable/inappropriate material online. Indeed, while Section 230(c)(2) does seek to advance that goal, Section 230(c)(1) doesn't have any language of the sort.

Sadly, this court got befuddled by the cruft in Easterbrook's Seventh Circuit opinions where Easterbrook tried to collapse 230(c)(1) and 230(c)(2). This was a wild statutory reading that I believe no other court has agreed with. But here's a state appellate court locking into its binding statutory interpretation a goal that Congress never actually expressed--and that conflicts with Congress' expressed policy goals. Great…

The court tops off this mess by concluding that the negligent supervision claim doesn't treat the employer as the publisher/speaker of the rogue employee's emails and texts. For example, the court says "holding defendant liable for its failure to supervise its employee after defendant had received notice of the employee's wrongful conduct does not treat defendant as if it were the publisher or speaker of the alleged e-mails and texts."

Superficially, that's true, but it misses the key point: negligence claims synthetically impose accountability for someone else's speech, and that's exactly what Section 230 is designed to preempt. Indeed, the seminal Zeran v. AOL case was a negligence case quite similar to this one: Zeran alleged that AOL was negligent in several respects, including failing to cut off the anonymous tortfeasor who was harassing Zeran. And the Ninth Circuit's Barnes v. Yahoo ruling--a case that Yahoo partially lost--thoughtfully reiterated that Section 230 preempted a tort claim for "negligent undertaking" (in that case, the failure to promptly withdraw content). The court unpersuasively tries to distinguish Barnes:

plaintiff's theory of liability is not based on defendant allowing McGrew access to the Internet to publish inappropriate and defamatory electronic messages and then failing to either monitor his messages or prevent them from being sent or somehow remove them. Rather, plaintiff, seeks to hold defendant liable for failing to investigate plaintiff's complaint about McGrew's wrongful conduct, reprimand him, and timely suspend or terminate his employment. Specifically, plaintiff alleged that he repeatedly notified defendant that McGrew was using his position of employment with defendant and defendant's equipment and resources to harass and threaten plaintiff and his family, friends, and professional colleagues. Clearly, the duty plaintiff alleges defendant violated is not derived from any behavior by defendant that is similar to publishing or speaking.

Replace the concept of “employment” with “user relationship” and you’ll see how the court’s logic is completely inconsistent with the precedent. Every plaintiff wants to argue that it’s not suing for a user’s posts but for the website’s negligent failure to terminate the user or remove the posts—and many plaintiffs have done exactly that to attack Section 230, with no success. I can’t list all of the "I'm just arguing negligence" cases completely, but start with cases like Doe v. MySpace from the Fifth Circuit and the related Doe II v. MySpace from California to see how the courts have recognized, and then emphatically rejected, a negligence claim as an impermissible backdoor bypass to Section 230’s publisher/speaker prong. (There are so many others, I’m just citing two cases off the top of my head).

Instead of screwing up the publisher/speaker prong, the court should have said that, for Section 230 purposes, an employee’s content is first-party content to the employer and therefore Section 230 doesn’t apply. See a related example in the context of a message board moderator: Cornelius v. DeLuca (holding a website operator liable for its agents’ acts). This is counterintuitive because McGrew was allegedly a rogue employee, in which case his emails and texts had nothing to do with advancing his employer's interests. Compare Maypark v. Securitas Security Services USA; Amira Jabbar v. Travel Services. Treating Lansing's allegations as true, it's logical to ask the question why Southwest didn't do more to rein in McGrew after Lansing complained, but this isn't a Section 230 issue because of the principal's presumptive responsibility for its agents' actions. Perhaps we'd be better off if Section 230 jurisprudence said categorically that employers can't claim Section 230 for employee activities because of their common identity. On the plus side, that would keep courts from doing a gratuitous Section 230 sideswipe like this court did.

Implications

This opinion is good law on the question of Section 230’s lack of applicability to employer’s liability for their employees’ activities. So long as other courts restrict their reading of this opinion to that specific holding, no damage has been done. But the rest of the discussion—gratuitous, poorly researched, hyperbolic dicta—is not good law and should never be cited favorably by another other court.

Worse, the opinion may falsely encourage plaintiffs to think they have a chance to end-run Section 230 in Illinois state court. It exacerbates the implicit encouragement that Judge Easterbrook gave Illinois plaintiffs with his sloppy Doe v. GTE opinion and the follow-on “I was right in Doe v. GTE, dammit!” opinion in the Craigslist case. But the reality is that Illinois plaintiffs haven’t succeeded in getting around Section 230 (see, e.g., Dart v. Craigslist, a particularly spectacular plaintiff failure), and they won't succeed in the future either, so plaintiffs will be wasting their time—and defendants’ time and money—chasing this fool’s gold. For keying up those unnecessary resource allocations, fie on this appellate panel for going where they didn’t need to go and weren't prepared to go properly.

This opinion reinforces the fears that some Section 230 enthusiasts have expressed over the years that defendants are over-asserting the immunity, creating the opportunity for a judge to undercut the immunity generally while disposing of the weak Section 230 argument. That’s exactly what happened here. Southwest Airlines’ hard-to-support Section 230 argument was so easy for the court to knock down, it felt emboldened to say more than it needed to—to the detriment of all of us.

Posted by Eric at 09:46 AM | Derivative Liability | TrackBack

June 19, 2012

First Post-Viacom 512(c) Opinion Doesn't Look Much Different--Obodai v. Demand Media

By Eric Goldman

Obodai v. Demand Media, Inc., 2012 WL 2189740 (SDNY June 13, 2012)

This is the first substantive ruling I've seen interpreting the Second Circuit's Viacom v. YouTube ruling. (The Viacom ruling was also discussed in the Ouellette case, but that was tangential to its main discussion). The good news is that the opinion looks pretty much like it would have looked before Viacom v. YouTube. The bad news is that the case was a layup victory against an outgunned pro se plaintiff (who is also unsuccessfully sued YouTube), so we don't really learn much we didn't know. The ugly news is that even at a comparatively svelte 17 pages, the opinion remains an unfortunately long read compared to brief and to-the-point Section 230 opinions.

Obodai claims that a Cracked.com user, "socialway," published 32 items to his Cracked.com profile that infringed Obodai's copyrights. Apparently Obodai never sent 512(c)(3) takedown notices. Nevertheless, after Obodai filed his complaint but before he served it, Cracked.com apparently found out about the complaint, treated it as a 512(c)(3) takedown notice, and removed the 32 files. Thus, Obodai came into the court with the virtually untenable legal position that he didn't send proper takedown notices but the service provider removed the files anyway. In the modern era, plaintiffs like this never win their lawsuits.

Still, Obodai tried many of the standard arguments to disqualify Cracked.com from the online safe harbor. These arguments go nowhere, and Cracked.com easily gets summary judgments. Some of the facts Obodai asserted that had no impact with the judge:

* Cracked.com ran keyword-triggered ads next to socialway's posts
* Cracked.com used "Tynt" to measure search engine traffic to its pages
* Cracked.com has received many other takedown notices
* Cracked.com permitted "unprotected syndication or distribution and display acts." The court interprets this to mean that "Cracked permitted users to post and share content" analogous to the activities in Viacom and Wolk.

All of these assertions result in a resounding "thud."

Obodai also tried to argue that Cracked.com engaged in willful blindness. Expect to see this argument addressed in every 512(c) case for at least the next 5 years. Obodai alleged:

* "defendant designated a copyright agent as a means of ensuring its willful blindness to infringement." The court replies that the statute contemplates designated agents, so this can't evidence willful blindness.
* a Cracked.com staff member infringed a third party copyright. The court replies that even if true, infringement of a third party's copyright has no bearing on the plaintiff's copyright claim.

Putting the details aside, this case doesn't really teach us much. For the past 14 years, the rule has been that responsible plaintiffs send proper 512(c)(3) takedown notices, and responsible service providers respond expeditiously. Obodai's failure to hold up his end of the bargain doomed his case.

Posted by Eric at 09:07 AM | Copyright , Derivative Liability | TrackBack

June 18, 2012

Recap of the Fourth Trademark Scholars Roundtable at DePaul University

By Eric Goldman

In April, Graeme Dinwoodie and Mark Janis once again convened a roundtable of trademark law scholars to geek it out on trademark law. Group photo. This year’s theme was “trademark boundaries,” i.e., how trademark law abuts against other legal doctrines (such as copyright, patent or publicity rights) or no doctrines at all (a legally unregulated zone). As usual, Mark Lemley provided a helpful recap of our discussion:

* as a group, we principally interpreted “boundaries” as limits to trademark’s doctrines rather than as frontiers with other doctrines.

* we discussed how often trademark law gives way to conflicts with patent or copyright doctrine. Mark observed that not many of us questioned the supremacy of copyright/patent over trademarks in those conflicting cases. Mark spun through a series of hypotheses why we routinely view trademark law as subordinate to copyright or patent:

- the constitution. Patent and copyright have a Constitutional clause authorizing Congress to protect them. Trademark law exists only under Congress’ general commerce clause powers.

- venerability. Patents can be traced back a half-millennium; copyrights have a history of 300+ years; trademarks are a comparative newcomer, as they are principally a product of the 19th century.

- timing in product development. Copyrights and patent are often part of the thing being sold and are thus part of the discussion from the beginning of the product development cycle, while trademarks become relevant later in the product development cycle.

- public domain concerns. Copyright and patent have clearer paths to the public domain, and thus to enable free copying, than trademark law. Mark didn’t mention it explicitly, but one reason we subordinate trademarks to copyright and patent doctrine is that trademark protection is potentially perpetual, while copyrights and patents aren’t. The Qualitex case expressly referenced this consideration.

Mark noted that none of these explanations are fully satisfactory. As a result, we should reexamine why we denigrate trademarks’ status relative to copyrights and patents.

* where they conflict, we presume trademark law preempts state doctrines. This may be a subset of general federal/state supremacy issues.

* the group spent as lot of time discussing functionality, especially aesthetic functionality. Mark asked if we need two separate functionality doctrines. He thinks perhaps we could develop a unified doctrine, which may have the collateral benefit of keeping the doctrine from being treated like a stepchild. We spent substantial time wondering about the role of aesthetic functionality, which is at the border of trademark law and both copyrights and design patents. Perhaps the term “functionality” throws us off; Stacey Dogan offered the alternative terminology of “aesthetic utility,” which may be a more accurate descriptor.

* there was near-consensus that we should overcome any tendency to feel like “there must be some applicable law” to every situation. One way to counterbalance this impulse is by extolling the virtues of “freedom to copy” or the right to compete, a value that isn’t expressly in the Constitution even though it’s a linchpin of our economy and our system of governance. Previously, Mark observed that competition is what’s left over when there’s not an applicable intellectual property. When IP doctrines grow, competition recedes. Or as Mark McKenna observed, all IP is about unfair competition; competition norms inform IP boundaries. Somehow, we’ve flipped the presumptions and now make defendants prove why they are allowed to copy.

In my summary near the session’s end, I made two main points:

1) Compared to many of my peers, I hold a relatively absolutist position naturally informed by neo-classsical economics. I think trademark law should perform only one task, which is solely to correct specific types of marketplace defects in the marketplace that harm marketplace efficiency—the presentation of product source information that hinders consumers’ abilities to effectuate their preferences. That particular defect in the marketplace hurts society by interfering with the “invisible hand” mechanism.

This takes us to a point raised by Michael Grynberg about institutional competences for enforcement (i.e., the “who” of enforcement, as opposed to the “what”). Comparative institutional competency is a major topic in advertising law (I explored it a bit in my paper on privacy class action lawsuits), so it’s natural to revisit it in the trademark “corner” of advertising law. We rely on trademark owners to enforce their trademark rights, just like we only let competitors enforce Lanham Act false advertising claims. Competitor-initiated enforcement actions have their virtues; after all, no one has greater financial motivation to fix a marketplace defect than a competitor who is losing profits due to legal corner-cutting. But competitor-initiated enforcement has numerous downsides too, including the possibility that it’s motivated by anti-consumer impulses and the collusion risks (i.e., a competitor who lives in a glass house isn’t likely to throw stones at a competitor). Thus, we have a suite of other enforcement mechanisms for advertising law problems, including consumer lawsuits, government regulation, certification bodies, and non-legal recourse.

We don’t need trademark law to solve every problem because these other enforcement mechanisms can shoulder some of the load. In turn, we should resist the impulse to keep expanding trademark law to cover more border cases internally within trademark law, and instead trademark law should “outsource” any non-core problems to other doctrines enforced by other enforcement institutions. There’s a long list of para-trademark rights or other doctrines (ranging from defamation to antitrust law) that can handle legal concerns without expanding trademark law to cover them as well. (Rebecca gave the example of dilution as “defamation-lite,” a point often overlooked in the discussions about dilution's "merit").

2) In contextualizing the boundary problem, Bob Bone noted the possibility of both cumulation of doctrines and conflicts of doctrines. I am much more troubled by doctrinal cumulation/overlap than many of my peers. Bill McGeveran and I sparred with each other on this point all weekend; Bill observed that we shouldn’t care about doctrinal tidiness for its own sake, although I in fact would love a lot more doctrinal tidiness. Bill teaches civil procedure and I loath civil procedure (no disrespect intended!), so maybe we just start from different places.

My main objection to overlapping doctrines is that they produce two types of transaction costs. First, when in court, overlapping doctrines impose greater litigation/adjudication costs on all players. This is especially true when different doctrines are resolved at different stages of litigation, i.e., doctrines A-C can be resolved on motions to dismiss and doctrine D requires litigation through summary judgment or even fact adjudication. In those circumstances, when doctrine D isn’t meritorious, the litigants and the court bear additional costs for no extra social payoff.

Second, and more importantly, overlapping doctrines impose substantial extra costs on companies trying to bring products to market. Each doctrine requires its own research/clearance; indeed, my perspective from my in-house counsel days is that these costs grow logarithmically with each new doctrine, not arithmetically. In effect, cumulative doctrines are similar to “IP rights thickets” we lament elsewhere. Clearance costs can dramatically suppress innovation.

Jeremy Sheff rightly noted an internal tension in my two points. He observed that overlap in institutional enforcement scope creates transaction costs just like the transaction costs in doctrinal overlaps that I lamented. I responded that (in theory) we can design the enforcement institutions, and their substantive enforcement portfolios, such that they sit next to each other and don’t overlap. This is probably untrue in practice, especially, as Mark Lemley pointed out, given that regulators tend to regulate and thereby expand their portfolio of responsibilities.

Dastar came up frequently in our discussion, but there was widespread consensus that none of us feel like we understand it. Barton Beebe described Dastar as “so heavy,” which really does sum it up nicely.

Prior years' recaps:
* First
* Second
* Third

Rebecca's characteristic quasi-transcription of the discussion:
* Part 1
* Part 2
* Part 3

Posted by Eric at 09:33 AM | Marketing , Trademark | TrackBack

June 16, 2012

Nathenson on Teaching Internet Law

By Eric Goldman

Ira Nathenson is a law professor at St. Thomas University in Florida. He has posted to SSRN an article called "Best Practices for the Law of the Horse: Teaching Cyberlaw and Illuminating Law Through Online Simulations," which is in our very own Santa Clara Computer & High Technology Law Journal. I've known about the article for some time, but somehow it never got onto my blogging queue--an oversight I'm now correcting.

The article is a noteworthy contribution to the tiny literature on Internet Law pedagogy. In addition to his article, there's my own article, Teaching Cyberlaw, from 2008 (see my blog post announcing the article) and an article by foreign professor Patrick Quirk.

Ira's article describes the incredibly rich simulation he creates for his Internet Law course. He plays multiple roles in the simulation, including teacher, managing partner and litigation opponent. The article describes how juggling these roles and responding to his students' actions taps into his improvisational skills, something I don't think I could pull off very well. Even so, I envy the simulation he's built and the rich "learn-by-doing" pedagogical experience it provides his students.

The abstract:

In an influential 1996 article entitled "Cyberspace and the Law of the Horse," Judge Frank Easterbrook mocked cyberlaw as a subject lacking in cohesion and therefore unworthy of inclusion in the law school curriculum. Responses to Easterbrook, most notably that of Lawrence Lessig in his 1999 article "The Law of the Horse: What Cyberlaw Might Teach," have taken a theoretical approach. However, this Article — also appropriating the “Law of the Horse” moniker — concludes that Easterbrook’s challenge is primarily pedagogical, requiring a response keyed to whether cyberlaw ought to be taught in law schools. The Article concludes that despite Easterbrook’s concerns, cyberlaw presents a unique opportunity for legal educators to provide capstone learning experiences through role-playing simulations that unfold on the live Internet. In fact, cyberlaw is a subject particularly well-suited to learning through techniques that immerse students in the very technologies and networks that they are studying. In light of recommendations for educational reform contained in the recent studies Best Practices for Legal Education and the Carnegie Report, the Article examines the extent to which “Cybersimulations” are an ideal way for students to learn — in a holistic and immersive manner — legal doctrine, underlying theory, lawyering skills, and professional values. The Article further explains how the simulations were developed and provides guidance on how they can be created by others. The Article concludes with a direct response to Easterbrook, arguing that cyberlaw can indeed “illuminate” the entire law.

Posted by Eric at 08:38 AM | Internet History | TrackBack

June 15, 2012

More Evidence That the Initial Interest Confusion Doctrine is Dying--Dwyer v. Sensocon

By Eric Goldman

Dwyer Instruments, Inc. v. Sensocon, Inc., 2012 WL 2049921 (N.D. Ind. June 5, 2012)

Earlier this year, I blogged about some research I had done suggesting the declining fortunes of the initial interest confusion doctrine. I anticipated turning the research into an article declaring the death of the initial interest confusion doctrine, and I had some pseudo-empirical evidence supporting that...and then 2011 happened, and a few too many cases embraced the initial interest confusion doctrine (such as the crappy Facebook v. Teachbook case), screwed up my empirics and effectively scuttled the article. I've put the article on hiatus while I let more evidence accrue that the initial interest confusion doctrine is waning and washes away 2011's blip.

While I wait, I continue to read every case discussing the initial interest confusion doctrine. I thought this overlong opinion, resolving a mildly interesting trademark dispute in the "differential pressure gauge" industry regarding comparative advertising, provided a nice snapshot of the modern era's judicial hostility to the plaintiffs' overclaiming of initial interest confusion. The court says:

The Plaintiff submits, without any legal analysis, that the Defendants' rampant use of its Mark is for the purposes of increasing the Defendants' webpage search results for Magnehelic. This reference to Internet advertising implicates the discussion in Promatek Industries, Ltd. v. Equitrac Corp., 300 F.3d 808 (7th Cir.2002), regarding initial interest confusion. In Promatek, the defendant placed the plaintiff's trademark in its metatag, thereby diverting web consumers to the defendant's website. Id. at 812. The court held that this was a misappropriation of the plaintiff's goodwill even if the consumers were no longer misled once they reached the defendant's website. Id. (“[T]hat confusion as to the source of a product or service is eventually dispelled does not eliminate the trademark infringement which has already occurred.”) (quoting Forum Corp. of N. Am. v. Forum, Ltd., 903 F.2d 434, 442 n. 2 (7th Cir.1990)); see also Dorr–Oliver, Inc. v. Fluid–Quip, Inc., 94 F.3d 376, 382 (7th Cir.1996) (explaining that initial interest confusion is actionable under the Lanham Act and occurs when a competitor gets its foot in the door by confusing consumers with the similarity of the mark, even if the customer realizes the true source of the goods before the sale is consummated). The Promatek court explained that using another's trademark in metatags was much like posting a sign with another's trademark in front of a store. Id. at 813 (“Customers believing they are entering the first store rather than the second are still likely to mill around before they leave.”) (citing Brookfield Comm'ns, Inc. v. W. Coast Entm't Corp., 174 F.3d 1036, 1064 (9th Cir.1999)); cf. Eli Lilly & Co., 233 F.3d at 465 (noting that the defendant's references to the plaintiff's trademark (PROZAC®) in its website source codes was evidence of wrongful intent to divert Internet users searching for information on PROZAC® to the defendant's website). The court found that the danger of initial interest confusion that applied to terms used in metatags also applied to terms used on websites. 300 F.3d at 813.FN5

FN5. Additionally, as one district court noted, “modern search engines make little if any use of metatags.” Standard Process, Inc. v. Banks, 554 F.Supp.2d 866, 871 (E.D.Wis.2008) (quoting 4 McCarthy on Trademarks & Unfair Competition § 25:69 (4th ed.2003)). Instead of relying on keywords manipulated by webmasters, which became an increasingly poor indicator of relevancy, search engines now primarily use algorithms that rank a website by the number of other sites that link or point to it. 554 F.Supp.2d at 871 (citing 4 McCarthy on Trademarks § 25:69).

Initial customer confusion could thus exist if the Defendants' repeated use of the Magnehelic® Mark on websites selling Sensocon products caused consumers who were looking for the Plaintiff's product to visit the Defendants' website under the mistaken impression that it was a site where Magnehelic® gauges were offered for sale—even if these potential buyers then saw Sensocon's attempt to define its product as an alternative to the Plaintiff's Magnehelic® and realized that the Plaintiff did not sponsor or endorse the Defendants' product. However, in an infringement action, the Plaintiff bears the burden of proving likelihood of confusion, and the Plaintiff has not presented any evidence to suggest that, even if the Defendants intended to increase Sensocon's Internet traffic through search results for Magnehelic, any such purpose was successful achieved. For example, the Plaintiff has not designated any evidence that individuals who conduct website searches containing the word Magnehelic have been or will be directed to websites offering the Defendants' products instead of to the Plaintiff's website or authorized dealer websites. “A genuine issue of material fact arises only if sufficient evidence favoring the nonmoving party exists to permit a jury to return a verdict for that party.” Faas v. Sears, Roebuck & Co., 532 F.3d 633, 640–41 (7th Cir.2008) (quotation marks omitted). Here, there is no evidence from which a reasonably jury could find that the Defendants' use of the Magnehlic® Mark on the Sensocon website created customer confusion, initial or otherwise.

Notice what the court did here (overlook the stupid suggestion that comparative advertising could still create initial interest confusion). It required the plaintiff to provide some hard evidence of initial interest confusion, not just vague hypothetical assertions. Specifically, the court asks to see how any searchers actually saw any search results or other information that might have impacted their decision. The plaintiff had no such evidence, nor is any trademark owner likely to be able to generate such evidence because it's so hard to rank in organic search for a competitor's trademark.

This reinforces that initial interest confusion is a relic doctrine designed to redress really weak consumer search processes like guessing domain names or search engines rankings influenced by inaccurate metatags. I don't think we needed the initial interest confusion doctrine even back in the day, but I'm confident we don't need it in the modern search engine era. I discuss both the importance of judges requiring plaintiffs to demonstrate actual harm to support an initial interest confusion claim, and the likelihood that technological evolution would moot the problems that the initial interest confusion doctrine was designed to address, in my 2005 Deregulating Relevancy article.

Even though this opinion lays out a sensible evidentiary hurdle for trademark owners to overcome if they are going to whine about initial interest confusion, it would have been even better if the judge had taken the logical next step and just declared the initial interest confusion doctrine dead. The fact that judges can't bring themselves to do this, and instead engage in doctrinal twists and contortions to effectuate a de facto evisceration of the doctrine, provides some interesting insights into the so-called flexibility of the common law and the dangers of common law experiments. When I write my paper about the death of the initial interest confusion doctrine a decade from now, I'll amplify that point too.

Posted by Eric at 09:38 AM | Search Engines , Trademark | TrackBack

June 14, 2012

University of Alabama Can't Stop Paintings of Famous Crimson Tide Football Moments--University of Alabama v. New Life Art

By guest blogger Deborah Gerhardt

[Eric's introduction: Deborah Gerhardt is a law professor at University of North Carolina. She is part of the 3G team (including myself and Leah Chan Grinvald) working on the trademark policing article I mentioned last week. Deborah helped with an amicus brief in this case. I also signed onto that brief.]

The University of Alabama Board of Trustees v. New Life Art, Inc., No. 09-16412 (11th Cir. June 11, 2012)

Summary: On June 11, 2012, the Eleventh Circuit Court of Appeals elevated Daniel Moore to the rank of art law hero. In 2005, the University of Alabama sued him for breach of contract and trademark infringement. His offense? Daniel Moore had the audacity to include the team uniforms and colors in his paintings depicting famous moments from Alabama football games. The Eleventh Circuit concluded that Moore may continue creating his art without the University’s permission. The opinion states that Daniel Moore has a First Amendment right to include the crimson and white uniforms in his paintings of famous football moments and that this right trumps any trademark rights the team has in its colors.

Background: Since 1979, Daniel Moore has been painting photorealistic scenes of historic moments from Alabama football games. He sometimes spends months drawing, planning and painting a single canvas. Because of the amount of time invested in each work, the originals are only available to fans who can afford to spend thousands of dollars. Moore gives a much wider audience access to his works by selling prints, mugs, t-shirts, and calendars.

Moore is revered among Alabama fans. When I flew from Raleigh to Atlanta to help Moore’s team prepare for the oral argument, the woman sitting next to me on the plane saw the caption on the brief I was reading. She leaned in to share that she and her brothers bought an original Moore for their father. “It hangs behind him in his study—it is his favorite thing.” At a time when most fine art is not celebratory or even representational, Moore gives his fans a unique opportunity to display love for art, the beauty of the human form and University loyalty.

After years of encouraging Moore to paint and sell his work to appreciative Alabama fans, the University decided to claim exclusive trademark rights in the colors crimson and white, even though many other schools--including Harvard, University of Oklahoma and the University of Utah--use the same color combination. In 2002, The University of Alabama told Moore he must have their permission if he wanted to continue illustrating the team colors in his paintings. Moore believed he had a right to keep painting these historic moments accurately, and would not agree to subjugate his artistic freedom to the state university. Since then, Alabama has reportedly spent well over $1.5 million suing this artist. Not surprisingly, the case has been a public relations disaster for Alabama officials, but they continue to pursue it anyway.

Moore had multiple opportunities to settle this case, but he believes that as an artist in the United States, he should have the right to paint subjects that are meaningful to him. He persevered, and undoubtedly paid a fortune to litigate the dispute. The emotional toll should not be discounted either. Moore studied art at Alabama. His wife and children are also Alabama alumni. For years, he was welcomed onto the sidelines at football games so he could take photos that he would use as raw material for his work. The suit must have been a painful experience for his entire family. Still, Moore continued to defend himself and his principles.

For a long time, it seemed that no judge would have the courage to decide the case. The 11th Circuit noted that the case had been assigned to “seven different district court judges.” Many of them seemed intent on forcing a result through repeated rounds of alternative dispute resolution. Finally, District Judge Robert B. Propst split the baby, granting partial summary judgment allowing Moore to continue selling paintings and prints. In the findings of fact, the Court stated that “It is highly unlikely that a purchaser would not know that Moore is the moving force behind the paintings . . . [if trademarks] answer the question `who made it?’. . .the answer is clearly `Moore.’” Despite this finding, in its conclusion of law, the District Court found that “the paintings may create a likelihood of confusion with regard to plaintiff’s said mark.” The Court granted summary judgment to the University on the merchandise, prohibiting Moore from selling reproductions of his art on items typically seen in a museum gift shop, like smaller prints, calendars and mugs.

Eleventh Circuit Oral Argument: Both the University and Moore appealed. The Eleventh Circuit heard oral argument on February 2, 2012. Moore’s counsel, Stephen D. Heninger, is a veteran trial lawyer. He described Daniel Moore as “the Norman Rockwell of college football.” Then, Heninger held up a Sports Illustrated cover to demonstrate the importance of the issue before the court. If the University wins, what prevents it from requiring news organizations to get permission every time they want to take a photo or mention the name of a team?

Heninger wisely ceded five minutes of his argument to Notre Dame Law professor Mark McKenna [Eric's note: Mark has guest blogged here as well]. The Court bombarded him with questions, extending its time with him. McKenna emphasized the importance of applying the Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989) test in which First Amendment interests are balanced against trademark claims. He also explained that trademark law makes it OK to show a brand when the use is to express an idea or create art and not to designate the source for the work. The Eleventh Circuit opinion makes it clear that Mark McKenna’s law professor amicus brief (to which I contributed) and his oral argument were helpful to the Court in sorting through the issues.

Eleventh Circuit Opinion: In a thoughtful opinion written by Circuit Judge Anderson and issued on June 11, 2012, the Court of Appeals handed Daniel Moore a significant victory.

Breach of Contract Claim: Over several years, Moore had agreed to several license agreements with the University of Alabama for specially sponsored items that were sold with a University seal on the frame or packaging. Each of these agreements required Moore to get permission before using a long list of University “indicia” “upon or in connection with” any product. These University agreements read like they were created for T-shirts and caps, not art. Perhaps for this reason, the team colors were on the list of indicia, but the uniforms were not. The University claimed that by signing these agreements, Moore gave up any rights he may have had to use the University symbols in his art without its consent. The District Court had held that Moore did not breach these agreements because “uniforms” did not appear on the long list of indicia. The University appealed this finding because although the uniforms were not on the list, the colors were listed, and the colors did appear in Moore’s paintings.

The University thought it had a strong breach of contract claim. It urged the Eleventh Circuit to decide the entire case based on the language in the form contracts, asserting that the Court did not need to reach its trademark claims. Here, it made a huge tactical error. The University overreached in arguing that the contracts applied to all of Moore’s work, not just the ones subject to the license agreements. Such a reading was possible from the language of the contracts, but it made no sense in the broader context of the dispute. The Eleventh Circuit astutely suggested that the University’s reading of the contract might have made it void on public policy grounds. According to the Alabama interpretation, Moore would have “effectively indentured himself to the University, in that he would need to perpetually obtain permission to paint any historically accurate scenes from Alabama football games.” Being perpetually indentured sounds at worst like slavery—and at best like a covenant not to compete that never ends. Under either scenario, the contract would of course be void on public policy grounds.

The Eleventh Circuit rejected the University’s contract interpretation. It found the language of the license ambiguous. On one hand, the contract suggested that Moore needed permission for any use of the indicia, and other provisions seemed to suggest that that permission was required for branding on a product package but not in the content of a painting, print or calendar. Because the license agreements were ambiguous, the Court looked to how Moore and the University worked together in the days before the dispute to discern the true agreement between the parties. It found that even while the license agreements were in place, Daniel Moore continued to sell other artwork featuring Alabama subjects wearing the crimson tide uniforms. The University proudly displayed many of these unlicensed works on campus. Even though Moore’s work was widely known and admired in the Alabama community, the University never objected to these unlicensed works until 2002. The facts did not reflect the story the Alabama lawyers told the court. Based on the conduct of the parties, the Court concluded that the parties did not intend that Moore would seek permission every time he wanted to include Alabama uniforms in his art. He had painted them too many times with the University’s enthusiastic consent.

Trademark Claim: The opinion also gave Daniel Moore and all artists seeking to show brands in their work a big victory on the trademark claim. The result came as a pleasant surprise. The district court opinion was nearly incoherent, and the Eleventh Circuit could easily have remanded the case for a trial on whether Moore’s use of the marks created a likelihood of confusion among consumers.

Also, Moore’s lawyers had to confront some spectacularly bad precedent-- Boston Hockey v. Dallas Cap & Emblem, 510 F.2d 1004 (5th Cir. 1975), which was binding in the Eleventh Circuit. Instead of applying the typical likelihood of confusion standard for trademark liability, Boston Hockey states that any use of a trademark that “triggers a sale” should result in liability. In the law professor brief, we explained that this precedent means that there could be trademark liability every time a newspaper makes more sales because it uses a team name to report the results of a big game. (I analyze Boston Hockey’s potential chilling of such uses in more detail in my article, Social Media Amplify Consumer Investment in Trademarks). Trademark liability was not meant to be so broad. Still, the Boston Hockey case remains valid precedent in this Circuit, and the panel of judges knew it well. The Boston Hockey case itself (involving use of counterfeit team logos) may have been decided correctly, but the broad standard it articulated goes against the weight of trademark authority, and could have sunk Moore. The subject of the paintings is something that appealed to Moore’s audience.

The University again overreached. It asserted that Boston Hockey was dispositive. Their strategy failed to account for the artistic context. At oral argument, Judge Anderson asked the University’s counsel if his client’s trademarks trumped Daniel Moore’s First Amendment right to paint scenes from football games. The lawyer had no response. This question turned out to be of vital importance. In the opinion, Judge Anderson framed the central issue in the case as follows: “we must decide whether Moore’s First Amendment rights will give way to the University’s trademark rights.”

Even though the tempting simplicity of the Boston Hockey precedent was available, the Eleventh Circuit acknowledged that depicting a trademark in a work of art has First Amendment expressive value that must be balanced against the University’s trademark rights. Daniel Moore makes it very clear that he is the source of his art. Because Moore used the university symbols, such as the uniforms, to “memorialize and enhance a particular play or event in the university’s football history,” the Court found that such use does not violate the Lanham Act. At oral argument, Stephen Heninger and Mark McKenna clarified to the court that showing a brand inside a frame as art is expressive and should be protected by the First Amendment. These uses are very different from uses on a frame or package for art.

The Court noted that there was no evidence Moore made that kind of unauthorized use. After citing Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989) and ETW v. Jireh Publishing Inc. 332 F.3d 915 (6th Cir. 2003), the Eleventh Circuit disregarded Boston Hockey and balanced the artist’s First Amendment rights against the University’s trademark claims. The Court concluded that “the First Amendment interest in artistic expression so clearly outweighs whatever consumer confusion that might exist on these facts that we must necessarily conclude that there has been no violation of the Lanham Act.” It affirmed the District Court’s conclusion that Moore may continue to sell his paintings and prints without the University’s permission. The Eleventh Circuit reversed the trial court’s injunction on the calendars.

The Court reluctantly found that Moore had waived his first amendment and fair use claims by not clearly indicating that these arguments applied to his merchandise (for which he was the appellant) and not merely on his paintings (for which he was the appellee). It remanded this small piece of the case back to the District Court for a factual determination of whether the University acquiesced to Moore’s sales of these items. Perhaps this litigation will continue. The University could also appeal for en banc consideration.

This round elevated Daniel Moore to the status of First Amendment and Art Law hero. It is rare for a private citizen to have the perseverance, resources and courage to fight this kind of battle for a principle that will pave the way for many others. It would have been easy for him to turn away and paint other subjects. By fighting this litigation for nearly a decade, Daniel Moore has preserved his personal freedom to paint the subject that is most meaningful to him. He also prompted the Eleventh Circuit to validate that right in a way that will create a legacy of artistic freedom for others who enrich our lives through art that strengthens our sense of community with shared cultural symbols.

Posted by Eric at 09:14 AM | Licensing/Contracts , Trademark | TrackBack

June 13, 2012

Bank Can't Use Facebook for Service of Process -- Fortunato v. Chase Bank

[Post by Venkat Balasubramani]

Fortunato v. Chase Bank USA, N.A., 2012 WL 2086950 (S.D.N.Y.; June 7, 2012) [pdf]

Fortunato was an apparent victim of identify theft--her estranged daughter allegedly opened up a Chase credit card in her name and racked up $1,243.09 in charges. Chase went after Fortunato, obtained a default judgment and garnished her wages. Furtunato turned around and sued Chase, alleging abuse of process, conversion, and a violation of the Fair Credit Reporting Act. Chase impleads Fortunato's estranged daughter, but runs up against a snag. It can't find her and thus cannot effect service of process.

Chase engages the service of investigators who dig around and find four possible addresses for the daughter. After repeated efforts and dead end leads, the process server still can't serve the daughter, so Chase asks for permission to serve by (1) "private Facebook message"; (2) to the email address listed on the Facebook profile; and (3) delivery of the summons and complaint to Fortunato (the estranged mom). I'm guessing Chase's costs in conducting this investigation and attempts at service have well exceeded the amount of the initial debt, but that's neither here nor there.

The court looks to New York state rules for service of process, as constrained by Due Process restrictions. While courts have authorized service by email, the court says that in those cases, the party seeking to serve via email made a showing that the parties

conduct[ed] business extensively, if not exclusively, through their internet websites and correspond[ed] regularly with customers via email. [Additionally, the parties did] not disclose their physical address or location of incorporation.

In contrast, here, Chase did not offer any such evidence, and did not offer any evidence that the Facebook profile in question was the daughter's. The court adds:

The Court's understanding is that anyone can make a Facebook profile using real, fake, or incomplete information, and thus, there is no way for the Court to confirm whether the Nicole Fortunato [the daughter] the investigator found is in fact the third-party Defendant to be served.

The court orders Chase to effect service by publication. The court says that it's unclear which local newspaper is best suited to get the word out to the daughter, so Chase should publish notice in the four locales where the daughter was thought by the investigator to reside.

Email service is expressly authorized by the federal rules, but the rules authorize such service only on foreign defendants. This rule requires prior authorization by the court. State court rules authorize service by certain types of postal mail, so this is a possibility under the federal rules as well (Federal Rule 4(e) incorporates state authorized methods of service of process.)

Procedural quirks aside, the big question is whether there is a bit of Facebook exceptionalism going on here. If a court has some discretion to authorize service in a manner reasonably calculated to provide a party of notice of the lawsuit, does it make sense for the court to deny the request on the basis that "anyone can create a Facebook profile?" Does it make sense to rely on postal mail--that someone may or may not come across, or pick up--while discounting a tool that most of the population uses on a somewhat regular basis? The court also surprisingly orders service by publication . . . in a newspaper. As between notice in a newspaper where they are not sure of the daughter's geographic location and a private message to a Facebook account that there's some reason to believe is the daughter's, which has the greater chance of providing notice? (Who, other than retro hipsters, even reads the classifieds anymore?)

Over time, courts will warm up to service via Facebook, but as in the cases involving service via email, fax, or other means, will require some sort of showing that the account actually belongs to the party in question. Where the allegedly wrongful act is perpetrated via a Facebook account, this showing will be relatively easy to make, but in a situation like this where someone looks like they're off the grid, parties will have a tougher time convincing a court that service via Facebook is appropriate.

Other coverage:

ABA Journal: Federal Judge Refuses Request to Serve Party via Facebook

Jeff John Roberts: Judge says bank can’t use Facebook to reach defendant — try local paper instead

Posted by Venkat at 08:58 AM | E-Commerce , Evidence/Discovery , General

June 12, 2012

State Privacy Claims not Preempted by ECPA -- Leong v. Carrier IQ

[Post by Venkat Balasubramani]

Leong v. Carrier IQ et al., CV 12-01562 GAF (NRWx) (C.D. Cal.; Apr. 27, 2012)

This case addresses the issue of whether claims under state privacy statutes are preempted by ECPA, the federal statute governing the interception, access, and disclosure or electronic communications. The lawsuit is one of the many filed against Carrier IQ, which allegedly “developed and maintain[ed] a software that is installed on cell phones and surreptitiously records the user’s keystrokes, text messages and passwords” (without the user’s consent). Plaintiffs sued on behalf of a California class, asserting state law claims against Carrier IQ. Carrier IQ moved to dismiss on the basis that the state law claims were preempted by ECPA.

Courts have come out differently on the preemption issue. Carrier IQ relied heavily on Judge Ware’s ruling in the Google Wi-Fi case for the proposition that ECPA represents a Congressional intent to comprehensively regulate the field of privacy in electronic communications. (Here’s is our previous post on Judge Ware’s ruling: “Google Not Entitled to "Readily Accessible to the General Public" Defense in Street View Class Action.”) The court disagrees with Judge Ware, noting that Judge Ware’s ruling embraces the minority position and there are several cases going the other way. The court also cites to the legislative history for the proposition that Congress actually intended to set a minimum floor for privacy in electronic communications (citing to Lane v. CBS and Valentine v. NebuAd [pdf]). The ECPA also contains a provision limiting remedies for the interception of communications where the interception does not comply with the statute, but the court says that this provision means that criminal defendants whose communications are obtained in violation of ECPA are only entitled to suppression as a remedy.

End result: the lawsuit is remanded to state court where the plaintiffs can pursue their state law claims against Carrier IQ.

The ECPA preemption argument is an important one, and will come up in a variety of contexts. While this case dealt with the interception of electronic communications, other scenarios where it may come into play is where someone accesses emails and other communications (e.g, social networking posts) or records conversations without consent authorization. The ECPA admittedly has some gaps when it comes to privacy protection for electronic communications (see, for example Anderson Consulting v. UOP and Charles Jones & Associates v. The H Group), and plaintiffs can be expected to use state law claims to fill the gaps.

It’s tough to be sympathetic with the argument from service providers or third parties who are making a preemption argument in this situation. Unlike laws regulating spam or that cover online content—where complying with a patchwork of regulation across 50 states would be untenable—complying with state laws governing the privacy of electronic communications sounds pretty doable. At least, the parties arguing preemption haven’t to date presented good examples of why this is not the case. On the other hand, it's easy to see that these types of rulings will pave the way for the class action machine to unleash state law claims, and have available yet another tool for extracting settlements.

Other coverage: Wendy Davis: “Carrier IQ Loses Preliminary Round in Privacy Lawsuit”

Inside Privacy: Carrier IQ Class Action Sent Back to State Court

Posted by Venkat at 03:05 PM | Adware/Spyware , Privacy/Security

June 08, 2012

Court Orders Facebooking Juror to Disclose Additional Facebook Posts--Juror No. 1 v. Superior Court

[Post by Venkat Balasubramani]

Juror Number One v. Superior Court, C067309 (Ca Ct. App.; May 31, 2012)

A California Appeals Court ruled that although a juror’s Facebook posts were covered by the Stored Communications Act, the juror can be compelled to give his consent to their production by Facebook.

Background: Juror No. 1 sat on a criminal trial lasting approximately two months. The jury returned guilty verdicts. During the trial, Juror No. 1 posted several times to Facebook, despite the court’s instructions to stay off the internet. Another juror filed a declaration saying that Juror No. 1 posted comments about the evidence on his Facebook wall, inviting his friends to respond.

The trial court conducted a hearing and Juror No. 1 acknowledged making multiple posts, including on one occasion a comment about the evidence. The trial court said that this was clearly misconduct, but the extent of the misconduct was still unclear. In response, the defendant subpoenaed Facebook. Facebook moved to quash the subpoena based on the Stored Communications Act. The defendant turned around and issued a subpoena to Juror No. 1, who also moved to quash the subpoena. The trial court issued an order requiring Juror No. 1 to turn over his Facebook posts (made during the trial) to the court for in camera review, and to consent to their disclosure by Facebook.

Analysis: The court canvasses the history of the Stored Communications act and acknowledges that because it was enacted in the 80s, its definitions do not track neatly to modern day social networks and things like cloud services. Nevertheless, the court says that the SCA was intended to protect things like private bulletin boards which can roughly be analogized to certain types of social networks. In Crispin v. Audigier, the district court said that Facebook posts may be protected by the SCA. However in Crispin, the court said that this depended on the privacy settings in question, and like in Crispin, in this case Juror No. 1 did not provide the court with enough detail to determine whether the posts were covered or not. (The court distinguishes Moreno v. Hartford Sentinel, a case involving the privacy of MySpace posts, on the basis that in that case, there was no dispute that the posts were open to the public.)

Even assuming the posts are protected, the court says that there is no bar on forced disclosure, since “the compulsion is on Juror No. 1, not Facebook.” The court cites to Flagg v. City of Detroit, a civil discovery dispute where a party sought disclosure of text messages. In Flagg, the court held that while the text messages were practically under the control of the service provider, they were “constructively” under the control of the party and “thus subject to discovery under the federal rules.” In Flagg, the court said that the party who could be forced to disclose the messages was required to execute a consent so the messages could be obtained from the service provider. The court also dismisses Juror No. 1’s other objections, based on the Fourth and Fifth Amendments and California statutes.

A concurring judge agrees with the result, noting that there was evidence of impropriety and the trial court appropriately took the necessary steps to rule out whether Juror No. 1’s Facebook posts prejudiced the proceedings. While “fishing expeditions” are not appropriate, in this case, there was enough evidence of misconduct that it made sense for the trial court to take the necessary steps to rule out prejudice. However, the concurring judge says that the issue of whether the posts could be obtained from Juror No. 1 is different from whether it can be obtained from Facebook itself. Importantly, the opinion also notes in a footnote that Facebook provided to Juror No. 1, copies of the posts in question, including presumably those posts that Juror No. 1 had deleted.

Oy. I bet Juror No. 1 wishes that he had heeded the court’s instructions to stay away from the internet during trial.

The court’s decision here can be contrasted with two recent cases (that I meant to blog about but never got around to).

• Commonwealth v. Werner involved a larceny conviction where one of the jurors posted on Facebook while the trial was ongoing. Although the court issued a subpoena to Facebook, Facebook never responded. The court held a hearing without the benefit of any response from Facebook and found that while there was misconduct, it was not prejudicial.

• Special Markets Ins. v. Lynch was a garden variety business/employment dispute. Plaintif subpoenaed emails from Yahoo and voice and text messages from Verizon. The court says that the information sought is available from the defendants and it was improper for plaintiff to issue “dragnet” subpoenas to third parties. (See also Theofel v. Farey Jones.) Not only does the court quash the subpoenas, the court issues a show cause order signaling that it’s willing to award fees to the defendants.

We’ve blogged about a slew of cases where courts struggle with whether and how a party seeking discovery can obtain social networking posts in civil litigation. To say that least, courts are across the board, but for the most part, courts all agree that just because something is posted to a relatively private social network it is not off limits. Courts also agree that defendants shouldn’t be able to rummage around in someone’s account and this presents privacy issues. Where courts have really struggled is with the logistics. This case is no different. The concurring opinion acknowledges that Facebook had provided the posts in question to Juror No. 1, I don’t see why the court makes him sign a consent to have Facebook produce the information. Here, of course, Juror No. 1 expressly disregarded the court’s instructions on the use of social networking, and could face other consequences. I’m surprised the appeals court couldn’t say that the trial court could have used its contempt power to force disclosure (by Juror No. 1) of the posts in question.

Other coverage:

“Juror One” revisited: Court holds that SCA does not apply

Posted by Venkat at 12:30 PM | Evidence/Discovery , Privacy/Security

June 07, 2012

Trademark Registrant Isn't Required to Shut Down Competitive Keyword Advertisers--STK v. Backrack

By Eric Goldman

STK LLC v. Backrack, Inc., Cancellation No. 92049332, 2012 WL 2024459 (TTAB May 21, 2012). The TTAB designated this opinion "non-precedential," which they do with the vast majority of their opinions.

Deborah Gerhardt, Leah Chan Grinvald and I are writing two companion articles on trademark policing doctrines. Our basic thesis is that the trademark policing "duty" is grossly overstated in ways that have pernicious effects on everyone--other than trademark lawyers who extract extra cash from clients due to the ambiguities. You'll be hearing more about this project as we make more progress (i.e., when I actually write the portions I promised to write).

This opinion illustrates an unsuccessful attempt to overstate the trademark policing "duty." I believe it's also the first opinion that expressly addresses what, if any, obligations a trademark owner has to shut down competitive keyword advertising. Consistent with our belief that trademark policing obligations are overstated, the opinion tells trademark owners that they don't necessarily have to go after competitive keyword advertisers as a precondition to maintaining their trademark rights.

Before I get to the opinion, a note about the TTAB. The TTAB is an administrative adjudication system (not a "court") within the USPTO that resolves disputes about trademark registrations. TTAB proceedings can be fiercely contested and often are equivalent to judicial proceedings in both scope and cost. In this case, STK sought to cancel Backrack's trademark registration on the grounds that Backrack for "pick-up truck racks" is generic. Although Backrack is a weak mark, STK had an uphill battle proving genericide.

To support its claims, STK argued that Backrack had not adequately policed against third parties purchasing "backrack" as the trigger for keyword advertising. The TTAB panel rejects the argument for several reasons, including that trademark law's applicability to keyword advertising is legally unsettled:

In view of the evolving status of the case law in this area, respondent's failure to pursue purchasers of "backrack" as a keyword is not evidence of failure to police its mark.

Further, the panel says that advertisers may be purchasing the keyword precisely because it is a competitor's trademark, which would undercut the argument that the term has become generic. Indeed, the panel found that competitors were advertising a variety of analogous goods (not just truck racks) in the ads triggered by "backrack," and the panel says this reinforces that the term isn't generic. The panel doesn't cite Rosetta Stone on this point, but the 4th Circuit's Rosetta Stone opinion mentions nominative use several times--a doctrine that can apply only if the advertisers use the keyword trigger for its referential meaning. I provide much more support for this legal interpretation in my Deregulating Relevancy article.

While a non-precedential TTAB ruling is hardly the most authoritative source on this topic, this opinion reaches a sound result and provides some helpful insights for trademark owners wondering if they must chase off competitive keyword advertisers to satisfy their trademark policing "duty." I would argue the answer has always been "no," and this opinion gives additional legal support for that conclusion. Now, I recognize trademark owners might have other reasons to "protect" their trademarks as keyword ad triggers, but I hope they won't spend the time and money on the misperception that they have to do so. As usual, that time and money would be better spent competing on the merits than on trying to suppress information available to consumers.

UPDATE: Comments on the case from:

* John Welch/TTABlog
* Rebecca Tushnet

Posted by Eric at 01:37 PM | Marketing , Search Engines , Trademark | TrackBack

Plaintiffs Squeak Past Motion to Dismiss in Amazon P3P Case – Del Vecchio v. Amazon

[Post by Venkat Balasubramani with comments from Eric]

Del Vecchio v. Amazon.com, 2012 WL 1997697 (W.D. Wash.; June 1, 2012)

I previously posted on Del Vecchio v. Amazon, a case that challenged Amazon’s alleged failure to respect the P3P protocol. P3P allows websites to summarize their privacy policies in machine readable code so that web browsers could be configured to automatically "determine a website's privacy settings and adjust its [own] security settings, including its level of cookie-filtering protection." (In theory, it allows users to control collection and use of their information through configuring their browser settings.) The plaintiffs allege that Amazon miscoded its P3P settings and used a token Amazon knew to be invalid, thus miscommunicating its policies to web browsers. Plaintiff sued on her own behalf and on behalf of a putative class, alleging claims under the Computer Fraud and Abuse Act and Washington consumer protection statutes. In the first round, the court granted Amazon’s motion to dismiss. (My prior blog post on the case: “The Cookie Crumbles for Amazon Privacy Plaintiffs – Del Vecchio v. Amazon”; see also our post on Bose v. Interclick, a separate lawsuit challenging the use of flash cookies: “Another Lawsuit over Flash Cookies Fails -- Bose v. Interclick.”)

CFAA Claims: The court dismisses plaintiffs' CFAA claims with prejudice due to plaintiffs’ failure to credibly allege that they satisfied the $5,000 damage threshold. Plaintiffs argued that they satisfied the damage threshold in two ways: (1) the value of their personal information was in excess of $5,000 and Amazon’s exploitation resulted in a “loss” to them, and (2) they purchased anti-virus software.

The court rejects the anti-virus software purchases, noting that the anti-virus program had nothing to do with the alleged exploitation of the P3P protocol by Amazon. Plaintiffs also alleged that they purchased the software prior to accessing Amazon’s site, so by their own allegations, Amazon’s conduct did not necessitate the purchase of the software.

The argument that gets a little more attention is the loss attributable to the exploitation of personal information by Amazon. One recent case (Claridge v. RockYou) recognized that personal information can be property for standing purposes. Most courts have been lukewarm to this theory, and this court rejects it as well, saying that the alleged exploitation of personal information by Amazon can’t satisfy the jurisdictional threshold in this context:

Plaintiffs do not allege that they attempted to sell their “private information” to one of the purchasers they identify . . . and were rebuffed because [Amazon] had already sold or publicized that information. . . . It is not enough to allege only that the information has value to [Amazon]; the term “loss” requires that plaintiffs suffer a detriment—a detriment amount to more than $5,000.

Consumer Protection Act Claims: Two key points with respect to the claims under the Washington CPA. First, the court says Washington law “does not require damages to show ‘injury’” (although the damage has to be to plaintiff’s “business or property”). Second, the court says that the issue of whether Amazon’s access of plaintiffs’ computers was “authorized” can’t be resolved on the pleadings. The court directs the parties to come up with a briefing schedule and (if necessary) conduct discovery on the issue of “authorization”.

Trespass to Chattels and Unjust Enrichment The court dismisses the first claim, finding no credible allegation that there was any diminution in performance of plaintiffs’ computers. The court says it’s skeptical of the unjust enrichment claim for the same reasons that it dismisses the CFAA claim. However, because plaintiffs’ unjust enrichment claim--that Amazon took property that was valuable (personal information) without authorization--depends on the resolution of the authorization issue, the court defers ruling on this until completion of discovery and further briefing.

Plaintiffs keep pressing the “personal information as property” argument, but courts remain unconvinced (a few exceptions notwithstanding).

On the issue of “authorization,” Amazon’s terms are less than clear about the use of Flash Cookies. They reference flash cookies, but the terms contain the typical language that without cookies users may not be able to take advantage of certain features of the site. Interestingly, the terms do reference browser settings and this may cut against Amazon’s overall argument here (e.g., “you can disable or delete . . . data used by browser add-ons, such as Flash cookies, by changing the add-on’s settings or visiting the Web site of its manufacturer . . . ."). The core of plaintiffs’ argument is that Amazon failed to respect the browser settings and P3P protocol. Language in the policy saying that the user can control the level of cookie placement or activity through the use of browser settings would, if anything, seem to reinforce plaintiffs’ argument. Plaintiffs would still face damages issues, that as Eric notes below will be tough to overcome, but I'm surprised to see the court say that plaintiffs' possible agreement to the terms would definitively resolve the issue of authorization.

This ruling could conceivably prompt a settlement. For their separate reasons, the parties may not want to litigate the issues of whether plaintiffs were truly harmed and what Amazon’s business practices were. It’s still curious that the alleged P3P shenanigans received so little attention from the court. Maybe plaintiffs will try to re-inject into the mix through discovery. We’ll see.

Eric's comments

As Venkat indicates, the judge shuts the door on the CFAA and trespass to chattels claims. The WA consumer protection act and unjust enrichment claims survive, but only out of an abundance of judicial caution (as the judge notes himself). The court says it's "very likely" that Amazon's privacy disclosures negate those claims. If I were in Amazon's shoes, I'd reject any settlements and litigate the crap out of this. The judge has made it clear that this lawsuit will fail.

As usual, the litigation circles around the harm suffered by the plaintiffs. Funny, because that's an easy issue to resolve. The plaintiffs have NONE. Not a scintilla of harm. NOTHING. Without any underlying harm, lawsuits like this aren't laudable in the least. For more on why I think privacy advocates should oppose lawsuits like this one rather than applaud them, see my article The Irony of Privacy Class Action Lawsuits.

The court wisely gets to the right point. For example, the judge properly rejects the argument that non-monetary harm can be counted towards the CFAA's $5k threshold. The court also gets the plaintiffs to admit that individuals' PII has no economic value to the individuals, even if it's commercializable by websites. Thus, showing that Amazon could make money from the data in its database does nothing to get the plaintiffs closer to the CFAA's $5k threshold. The judge, wielding Iqbal, lays into the plaintiffs for rehashing their assertions about harm without any factual evidence at all. If the judge really wants to tells plaintiffs to stop wasting everyone's time and resources, a whiff of sanctions would help a lot.

Posted by Venkat at 11:57 AM | E-Commerce , Privacy/Security , Trespass to Chattels

June 06, 2012

Backpage Gets TRO Against Washington Law Attempting to Bypass Section 230--Backpage v. McKenna

By Eric Goldman

Backpage.com, LLC v. McKenna, 2:12-cv-00954-RSM (W.D. Wash. June 5, 2012). The complaint. Backpage's TRO motion.

As part of states' ongoing crusade against online prostitution ads, earlier this year Washington enacted SB 6251, captioned "Regulating advertising of commercial sexual abuse of a minor." The bill page. The actual bill.

The law has two main provisions. First, it defines a new crime of "advertising commercial sexual abuse of a minor," which occurs when a person "knowingly publishes, disseminates, or displays, or causes directly or indirectly, to be published, disseminated, or displayed, any advertisement for a commercial sex act, which is to take place in the state of Washington and that includes the depiction of a minor." Second, the defendant can't claim ignorance of the depicted individual's age as a defense, but it sets up a safe harbor when the defendant "made a reasonable bona fide attempt to ascertain the true age of the minor depicted in the advertisement by requiring, prior to publication, dissemination, or display of the advertisement, production of a driver's license, marriage license, birth certificate, or other governmental or educational identification card or paper of the minor depicted in the advertisement." Thus, the law both targets the publication of prostitution ads and imposes a de facto age verification and record-keeping requirement for publications running such ads.

Although the statutory language doesn't say so explicitly, the law was intended to attack Backpage for not doing enough to screen out prostitution ads. Thus, the law seeks to bypass Backpage's obvious Section 230 immunity for the ads submitted by its users.

In response, Backpage sued the state to prevent enforcement of the law, scheduled to take effect this coming Thursday. It appears the state didn't contest the TRO request. Yesterday, the court granted Backpage's TRO in a short and mostly non-substantive ruling. The court wrote:

Backpage.com has shown a likelihood of success on the merits of its claim, pursuant to 42 U.S.C. § 1983 and the Declaratory Judgment Act, 28 U.S.C. § 2201, as well irreparable harm, the balance of equities tipping strongly in its favor, and injury to the public interest, justifying injunctive relief.

Getting an uncontested TRO may have been Backpage's easiest step. It will be interesting to see if this criminal statute has enough existing circumscriptions (such as its scienter pseudo-requirement) to survive the constitutional and federal preemption challenges, or if the court imposes some limitations into the statute to exclude intermediaries like Backpage, or if the court will just toss the legislation altogether (as I've argued before regarding all state-level attempts to regulate the Internet). The court scheduled the next hearing for June 15. Obviously this litigation will be worth watching.

June 05, 2012

Satirical Anti-Birther Blog Post Protected by DC's Anti-SLAPP Law--Farah v. Esquire

By Eric Goldman

Farah v. Esquire Magazine, Inc., 2012 WL 1970897 (D.D.C. June 4, 2012). TPM coverage.

Joseph Farah is CEO/editor of WorldNetDaily, and Jerome Corsi is a senior staff reporter there. WorldNetDaily has published hundreds of stories on Birther issues. Corsi wrote a book, “Where's the Birth Certificate? The Case That Barack Obama Is Not Eligible To Be President,” published May 17, 2011. The book publication was accompanied by a major publicity push. (Un?)fortunately for Corsi, Pres. Obama released his long-form Hawaiian birth certificate on April 27, 2011, which was supposed to end the Birther controversy. Needless to say, it didn't have that effect. Instead, the hype machine cranked up even higher, and WorldNetDaily published dozens of articles on Birther issues and Corsi's book prior to the book's release. The Birther hype allegedly caused Corsi's book to go to the "#1" position on Amazon.

On May 18, 2011, the day after the release of Corsi's book, Mark Warren posted a blog post to Esquire.com's Politics Blog under the tag "humor." The blog post was entitled "BREAKING: Jerome Corsi's Birther Book Pulled From Shelves!," showed the cover of Corsi's book, and said:

In a stunning development one day after the release of Where’s the Birth Certificate? The Case that Barack Obama is not Eligible to be President, by Dr. Jerome Corsi, World Net Daily Editor and Chief Executive Officer Joseph Farah has announced plans to recall and pulp the entire 200,000 first printing run of the book, as well as announcing an order to refund the purchase price to anyone who has already bought either a hard copy or electronic download of the book.

In an exclusive interview, a reflective Farah, who wrote the book’s forward and also published Corsi’s earlier best-selling work, Unfit for Command: Swift Boat Veterans Speak out Against John Kerry and Capricorn One: NASA, JFK, and the Great “Moon Landing” Cover-Up, said that after much serious reflection, he could not go forward with the project. “I believe with all my heart that Barack Obama is destroying this country, and I will continue to stand against his administration at every turn, but in light of recent events, this book has become problematic, and contains what I now believe to be factual inaccuracies,” he said this morning. “I cannot in good conscience publish it and expect anyone to believe it.”

When asked if he had any plans to publish a corrected version of the book, he said cryptically, “There is no book.” Farah declined to comment on his discussions of the matter with Corsi.

A source at WND, who requested that his name be withheld, said that Farah was “rip-shit” when, on April 27, President Obama took the extraordinary step of personally releasing his “long-form” birth certificate, thus resolving the matter of Obama’s legitimacy for “anybody with a brain.”

“He called up Corsi and really tore him a new one,” says the source. “I mean, we’ll do anything to hurt Obama, and erase his memory, but we don’t want to look like f___ing idiots, you know? Look, at the end of the day, bullshit is bullshit.”

Corsi, who graduated from Harvard and is a professional journalist, could not be reached for comment.

A law professor isn't the best expert to parse humor, but I must confess that I find the humor in the post subtle at best. Reading the post cold, I didn't see anything unbelievable about the post until the fourth paragraph and the "rip-shit" reference (I've heard--and occasionally said--phrases that would make a sailor blush, but "rip-shit" was a new one for me). The reference to erasing Obama's memory also seemed a little over-the-top, and it seemed unlikely that the Birther crowd would make self-denigrating comments ("anyone with a brain" and "bullshit is bullshit") given the general lack of self-awareness I've seen from that community. Otherwise, the quotes put into the mouths of real people are plausible, and the overall journalistic style of the post is designed to enhance credibility with readers.

Even the "humor" tag is ambiguous. After all, the post could be laughing at true developments in the Birther Movement. There would be something funny about tearing up a Birther book because the President scooped the book, even if that were 100% true. Part of the problem is that the Birthers are a little self-parodic; their positions are so extreme and not credbile that it's almost impossible to take anything they do seriously. Thus, when the truth is so mockable, parodying it is really, really hard.

More generally, this blog post reminds me why I HATE April Fools Day posts by bloggers. I explain my position here. If anything, over the past 4 years, it has gotten virtually impossible to come up with factual statements that almost believable but nevertheless too outrageous to be true. If you're looking for a paper topic, you should research the April Fools Day blog posts from a few years and see how many of those purported jokes actually have been realized.

At best, then, Warren wrote a poorly executed joke blog post. In less than 90 minutes, realizing that not everyone was getting the joke, Esquire appended the following:

UPDATE, 12:25 p.m., for those who didn’t figure it out yet, and the many on Twitter for whom it took a while: We committed satire this morning to point out the problems with selling and marketing a book that has had its core premise and reason to exist gutted by the news cycle, several weeks in advance of publication. Are its author and publisher chastened? Well, no. They double down, and accuse the President of the United States of perpetrating a fraud on the world by having released a forged birth certificate. Not because this claim is in any way based on reality, but to hold their terribly gullible audience captive to their lies, and to sell books. This is despicable, and deserves only ridicule. That’s why we committed satire in the matter of the Corsi book. Hell, even the president has a sense of humor about it all. Some more serious reporting from us on this whole “birther” phenomenon here, here, and here.

Good satires don't need a post-publication correction, but nevertheless the quick correction should have ended the matter--no harm, no foul. Not so with Farah and Corsi. Off to federal court they went, seeking "more than $100 million in actual and compensatory damages and more than $20 million in punitive damages."

Just like law professors are bad at deconstructing humor, federal judges aren't much better. The court says:

The Blog Post itself bore indicia of its satiric nature. The page was tagged as “humor.” ...The Blog Post started with an exaggerated headline announcing in bold print “Breaking: Jerome Corsi’s Birther Book Pulled From Shelves!” Id. Real news does not usually contain an exclamation point and would not be reported on an opinion page. Further, the headline was accompanied by a logo of a siren, a symbol used by conservative Matt Drudge when commenting on current news to his readers. Id. The text asserted that Messrs. Corsi and Farah announced “plans to recall and pulp the entire 200,000 first printing run of the book” Id. The reference to a first run printing of “200,000 books” is an exaggerated number for a first printing. Also, the Blog Post refers to a fake book, alleged to be authored by Mr. Farah, called “Capricorn One: NASA, JFK, and the Great ‘Moon Landing’ Cover-Up.” Id. The book title alludes to “Capricorn One,” a 1978 movie starring O.J. Simpson and others about a government Mars landing hoax. Finally, the Blog Post includes absurd quotes, such as Mr. Farah’s alleged statement about his own Birther Movement views that “bullshit is bullshit.” Id. These clues reveal that the Blog Post was satire; Mr. Farah immediately recognized that it was.

Notice how weak some of these satiric elements are. I bet 90%+ of Esquire's readers had never heard of Capricorn One and had no idea that book reference was made up. I bet 99% of Esquire's readers would not have recognized the 200k advance printing as an inflated number. The exclamation in the headline isn't much of a tip-off; and the logo siren might (if anything) enhance the perceived credibility. Overall, trying to distill down the humorous elements from this post is quite unsatisfying.

Instead, the court is simply saying that the lawsuit is ridiculous. Fortunately, the DC anti-SLAPP law gives the judge a good tool to end a ridiculous speech-related case quickly. She says that the Warren post relates to an "issue of public interest" (Obama's constitutional authority to be president) and therefore qualifies for anti-SLAPP protection. The court doesn't really give the plaintiffs a chance to demonstrate their prima facie case (the burden shift created by the anti-SLAPP law), but perhaps that's because the court focused on the fact that Farah publicly admitted that he assumed the post was a parody. The court also repeatedly references the fact that the plaintiffs had themselves whipped up a media frenzy. The court sidesteps some controversy over whether federal courts can apply a state procedural law (see FN 10).

The plaintiffs tried to argue that the post fell into the anti-SLAPP law's commercial speech exception because it attacked their commercial interests in selling the book. The court rightly rejects the argument; even if the blog post had commercial effects, it was not commercial speech. The lack of commerciality also disposes of the plaintiff's Lanham Act claim. (Accord the Ron Paul case).

I'm not sure the court's anti-SLAPP analysis is as tight as it should be, but the case illustrates the power and importance of anti-SLAPP laws. Without the anti-SLAPP law, the court would have had to go through even more twisted doctrinal contortions to get rid of this obviously unmeritorious lawsuit. With anti-SLAPP protection, the case gets tossed quickly and the plaintiffs ought to write a check to the defendants. We need more judicial outcomes like this, and federal anti-SLAPP protection would both provide uniform nation-wide coverage and eliminate any questions about whether federal courts can apply state anti-SLAPP protection. Reminder/disclosure: I'm on the board of the Public Participation Project, which is advocating for a federal anti-SLAPP law. If you haven't done so recently, contact your members of Congress to remind them that you support federal anti-SLAPP protection, and you might consider donating to the PPP.

Atlhough I'm glad the court got to the right outcome so easily, I want to reiterate that I condemn blog posts like Warren's. It's our job as bloggers to earn our credibility with our audience, and we should never come anywhere close to the line where readers might miss the satire. Even if Warren's post wasn't tortious, it was deeply irresponsible.

UPDATE: A good WSJ article on just how hard it is to come up with something so outrageous that it's not conceivable.

See a prior blog post on a different Birther-related lawsuit. Other related posts:

* Logging Into Someone Else's Facebook Account and Posting Messages on Their Friends' Walls Could Be Identity Theft -- In re Rolando S.
* Third Circuit Schizophrenia Over Student Discipline for Fake MySpace Profiles
* Bloggers' April Fools Jokes
* Teenager Busted for Creating Fake "News" Story

Posted by Eric at 03:37 PM | Content Regulation | TrackBack

June 04, 2012

"Hot Topics in Internet Law" Talk Slides

By Eric Goldman

This weekend I presented on "Hot Topics in Internet Law" at the San Francisco IP Law Association's Spring Seminar in Healdsburg. My talk slides. A few photos from the trip. As I've mentioned before, I find "hot topics" talks unusually challenging to prepare--they take much more time than normal talks, they are hard to organize, and they have a high risk of preemption by prior speakers. In addition to quick coverage of a number of topics, I focused on 5 broader topics (I only addressed 3 in the time I had):

* intermediary deputization
* consumer reviews
* social media account disputes
* trolling
* new gTLDs

Posted by Eric at 02:24 PM | Copyright , Derivative Liability , Domain Names , Publicity/Privacy Rights , Trade Secrets , Trademark | TrackBack

Accessing an Employee's Facebook Posts by "Shoulder Surfing" a Coworker's Page States Privacy Claim -- Ehling v. Monmouth Ocean Hosp.

[Post by Venkat Balasubramani]

Ehling v. Monmouth Ocean Hospital Service Cop., 11-cv-3305 (WJM) (D.N.J.; May 30, 2012)

The extent to which employers demand social media credentials of their current and prospective employees is unclear, but employers do get in trouble for snooping on the social media activities of their employees on occasion. Pietrylo v. Hillstone Restaurant Group is one early example, but there are others. (Maryland was first out of the gate, but several other states have passed or are currently considering legislation that would broadly prohibit the practice of asking for employee social networking passwords; we’ll address those in a separate post.)

The facts here are relatively straightforward. Ehling is a registered nurse and a paramedic who worked for Monmouth Ocean Hospital Service Corp., a non-profit hospital corporation. Ehling was in union leadership and alleged that Monmouth engaged in a pattern of retaliatory conduct against her based on her activities and statements. Ehling apparently maintained a Facebook account and was careful not to friend Monmouth management, although she was friends with many of her coworkers.

In 2009, Ehling posted comments in response to an incident where a white supremacist opened fire at the Holocaust Museum in Washington, D.C.:

The 88 yr old was shot, He survived. I blame the DC paramedics. I want to say 2 things to the DC medics. 1. WHAT WERE YOU THINKING? and 2. This was your opportunity to really make a difference. WTF!!! And to the other guards….go to target practice.

Monmouth management did not have access to Ehling’s Facebook post but asked another Monmouth employee to pull up Ehling’s profile and posts while “in [a] supervisor’s presence.” As a result of this and other allegedly retaliatory action taken by Monmouth, Ehling brought a variety of claims against Monmouth. Monmouth moved to dismiss two counts: (1) the claim under New Jersey’s wiretapping and eavesdropping statute and (2) one for invasion of privacy.

New Jersey Wiretapping Statute: The court dismisses the claim under the New Jersey statute. New Jersey courts have construed the definition of “electronic storage” to cover only those messages that are “in the course of transmission or are backup to that course of transmission.” According to the court, case law interprets the statute to not cover communications that have been received and are in “post-transmission storage.” Since the posts were not intercepted while "in transmission," access of Ehling's post failed to state a claim under the statute.

Invasion of Privacy: The viability of the invasion of privacy claim turned on the familiar issue of whether Ehling had a “reasonable expectation of privacy” in her Facebook posts. Under New Jersey law, this required her to show that: (1) Monmouth intruded on her solitude, seclusion or private affairs and (2) the intrusion would be highly offensive to a reasonable person. The court says that privacy for social networking posts is an “emerging, but underdeveloped” area of the law. Viewing the spectrum of cases, the court says that on one end of the spectrum, there is clearly no expectation of privacy in material posted to an unprotected site that’s accessible by anyone. On the other end of the spectrum, courts have recognized an expectation of privacy for password-protected on-line communications. (Citing, among other cases, Pure Power Boot Camp v. Warrior Fitness Boot Camp). There is no consistent approach with respect to communications falling in between—i.e., where someone makes statements to a “limited group” of people, such as their Facebook friends. These cases should be resolved on a case-by-case basis and the court concludes that plaintiff states a plausible claim for invasion of privacy.

Ehling brought a claim under the Stored Communications Act but Monmouth did not move to dismiss this claim. It’s not clear whether accessing the Facebook post “over the shoulder” of Ehling’s co-worker constitutes unauthorized access under the SCA, but I would have guessed the court would have declined to resolve this issue at the motion to dismiss stage anyway.

Although it's unclear whether the Stored Communications Act covers Facebook posts, one early case in the discovery context--Crispin v. Audigier--said yes. In Crispin, the court said that Facebook posts may fall under the SCA, but this depended on the privacy settings in question. A couple of other cases have allowed SCA claims where an employer gains access to a privacy protected employee pages: (1) Pietrylo v. Hillstone Restaurant Group (MySpace page) and (2) Konop v. Hawaiian Airlines (private bulletin board). Both of these cases are somewhat distinguishable on the basis that in these cases, the employers obtained the credentials themselves and repeatedly accessed the sites or pages in question. (Accessing a communication that in storage requires the plaintiff to show that the employer "accessed a facility through which an electronic communication service is provided.") To my knowledge, there have been no rulings squarely addressing the practice of "shoulder surfing," an issue that will come up in the employment context, as well as in the context of school administration. To the extent the password laws aim to fill gaps in privacy protection, they should address this practice.

Setting the SCA statutory quagmire aside, there's also the issue of damages. Were this a run of the mill privacy lawsuit, Ehling would not necessarily stand a good chance of winning significant damages. It's not clear that the result should change just because the party who obtained access to the post happened to be Ehling's employer. (See for example Pure Power Boot Camp where the court awarded nominal damages for similar violations.) Interestingly, in Pietrylo, which was cited by the court on the privacy issue, the court allowed the Stored Communications Act, privacy claims, and claims under the New Jersey wiretapping statute to go forward. The jury returned a mixed verdict, but awarded a nominal amount of damages. (Check out the CMLP page on the case here.)

The court’s finding that access of the Facebook post may support an invasion of privacy claim is noteworthy, and adds to the small body of law dealing with invasion of privacy claims based on access to quasi-public posts. On the one hand, there is merit to the view that disclosure to a small group shouldn’t undermine privacy rights in personal communications. As the court recognized in Moreno v. Hanford Sentinel, the claim of a right of privacy is not "so much one of total secrecy as it is of the right to define one's circle of intimacy." Moreno involved a MySpace post which was made generally available on the internet, which distinguishes it from the post in this case which was ostensibly limited to Ehling's Facebook friends. On the other hand, you have to wonder how “private” users expect their communications to remain when they post to Facebook. Regardless of the privacy settings, which may restrict immediate availability of the post to a limited group of Facebook friends, a rant--such as the one at issue in this case--doesn’t seem like something that anyone would post online and necessarily expect to remain available only to a discrete or small group. (The number of Facebook friends she had will end up being relevant to the determination of whether the post should be accorded any privacy protection.)

A final point is that Ehling’s Facebook posts (it doesn’t seem like they were the one that was at issue in this case) were the subject of an NLRB memorandum [pdf]. The Office of the General Counsel recommended that the complaint should largely be dismissed. Lurking in the background of this case is whether the employer's actions chill the exercise of the employee's advocacy rights. The NLRB released yet another memorandum on employer social media policies, focusing on when policies allow insufficient breathing room for employee advocacy. See: "After NLRB’s Memo, Drafting Employment Policies Got Trickier."

A cautionary note to employers (and other administrators): while this order did not squarely address the issue of "shoulder surfing" under the Stored Communications Act, it does reaffirm that employees can bring invasion of privacy claims based on unauthorized access to non-public posts.

Other coverage:

Inside Privacy: N.J. Federal Court: Privacy Claim Based on Coerced Access to Employee's Facebook Posts May Proceed

Republishing MySpace Post in Local Paper Might Be Intentional Infliction of Emotional Distress--Moreno v. Hanford Sentinel
Ex-Employees Awarded $4,000 for Email Snooping by Employer -- Pure Power Boot Camp v. Warrior Fitness Boot Camp
Employee's Claims Against Employer for Unauthorized Use of Social Media Accounts Move Forward--Maremont v. SF Design Group
Ex-Employee Converted Social Media/Website Passwords by Keeping Them From Her Employer--Ardis Health v. Nankivell

Posted by Venkat at 09:00 AM | Privacy/Security

June 02, 2012

Java APIs Aren't Copyrightable--Oracle v. Google (Guest Blog Post)

By Tyler Ochoa (see some of Tyler's other posts) with comments from Eric

Oracle America, Inc. v. Google, Inc., 3:10-cv-03561-WHA (N.D. Cal. May 31, 2012).

On Thursday, Judge William Alsup concluded the district court phase of the Oracle v. Google Java-Android trial by holding that the structure, sequence, and organization of the 37 APIs copied by Google is not protected by copyright.

Judge Alsup is to be commended, both for taking the time to understand Java at a highly technical level, and for explaining it with extraordinary clarity. This is by far the most careful and well-written opinion on software and copyrights I've ever read. The opinion is so well-written, and so carefully reasoned, and demonstrates such a strong understanding of the technology involved, that I will be astonished if it is not upheld on appeal.

Judge Alsup's opinion relies on several well-established propositions of copyright law in holding that the structure, sequence, and organization of the APIs copied by Google is not copyrightable. First, under 17 U.S.C. § 102(b), copyright protection does not extend to “any idea, procedure, process, system, method of operation, concept, principle, or discovery.” That means that anyone is free to write a computer program that implements the same functionality as Oracle’s APIs. This is what Google did; they wrote their own source code to implement the same functions contained in Oracle’s APIs. The judge is correct that this is perfectly lawful.

Second, if there is only one way to implement a particular idea, procedure, process, system, or method of operation, then the merger doctrine says that the expression necessary to implement that idea is also not copyrightable. Judge Alsup relied on this proposition to hold that the declarations (programming syntax) for a particular method MUST be identical in order to function in the same way. The only thing that can differ is the name; everything else is specified by the requirements of the Java programming language, which all parties agreed is not copyrightable.

Third, names and short phrases are not copyrightable, even if they are original. Thus, the fact that Google used the same names for each of the methods or functions that it implemented is not itself a violation of copyright.

Fourth, and finally, what Google copied was the organization of those method names into classes and packages. The court found that this organization was original and creative. In other words, it is true that Sun/Oracle could have organized the methods into different classes and packages. Such organization schemes (taxonomies) are ordinarily copyrightable. BUT, the court found that the organization scheme ALSO functioned as a method of operation. Specifically, the Java language requires that a command MUST be in the form "java.package.Class.method()". This means that in order for a program written in Java to invoke a particular function, Google had to copy the structure, sequence, and organization of some of these packages in order for a program containing such a command to work properly.

This ruling is similar to the ruling by the First Circuit in the mid-1990s that the menu command structure of Lotus 1-2-3 was original and creative, but that it was not copyrightable because it was also a method of operation. The Supreme Court granted certiorari to review the case, but one judge was recused, and the ruling was affirmed by an equally divided Court on a 4-4 vote. Although that was something of a controversial ruling at the time, it has widely come to be accepted law, and I would be surprised if the Court of Appeals or the Supreme Court would take issue with it now.

Part of the reason is that broad copyright protection is no longer necessary. Judge Alsup says: "As software patents gain increasingly broad protection, whatever reasons there once were for broad copyright protection of computer programs disappear. Much of what has been considered the copyrightable 'structure, sequence and organization' of a computer program will become a mere incident to the patentable idea of the program or of one of its potentially patentable subroutines." If Oracle wanted to protect its APIs, and they were shown to be novel and non-obvious, it could have obtained patent protection. Indeed, Oracle DID obtain patent protection for some aspects of Java, but the jury specifically found that none of those patents were infringed by Google. Allowing copyright protection would allow Oracle to block any competing implementation of its APIs without having to demonstrate that it had done anything novel or non-obvious.

Obviously, this is a HUGE win for Google. Oracle gets nothing but nominal damages for the incidental copying of nine lines of code (out of thousands of lines in a particular class), and for copying eight computer files that were never used in Android. In order for Oracle to get anything more, it will have to convince the appellate court that Judge Alsup is wrong AND it would have to persuade a jury on retrial that the use was not a fair use (when this jury was reportedly deadlocked 9-3 in favor of fair use). Oracle can continue pouring money down this sinkhole if it wants to, but it would be well advised to concede defeat now.
___

Eric's comments

Competition in the enterprise software industry is as bare-knuckled as any I've seen. Thus, it's not surprising that Oracle, forged from decades of pitched battles, litigates to WIN. We saw some of this zeal in its TomorrowNow/SAP lawsuit, where Oracle didn't just seek a court victory, it sought complete annihilation. Oracle came close to realizing all of its dreams with one of the largest copyright damages awards of all time (even though the court subsequently scaled back the damages award).

Oracle's lawsuit against Google reflects the same fight-to-the-death spirit, exported to a new competitive setting (smartphones instead of enterprise software). I wonder if transplanting this to-the-death attitude to the new context didn't ultimately work to Oracle's disadvantage. Oracle's hubris seems to have hurt it with both the jury and the judge.

If Oracle is GOBOGH (GO Big Or Go Home), Judge Alsup has made it clear that it's time for Oracle to go home. Consider this snippet from the ruling:

Oracle has made much of nine lines of code that crept into both Android and Java. This circumstance is so innocuous and overblown by Oracle that the actual facts, as found herein by the judge, will be set forth below for the benefit of the court of appeals.

Two interesting things about this. First, it's never good when the judge calls a crucial part of your case both innocuous and overblown. Second, I can't recall the last time a judge said in an opinion "I'm only writing this part of the opinion because of the inevitable appeal." You can almost hear the resignation in the judge's voice that Oracle will bring a fruitless appeal despite his best efforts to stave off the wasted motion. I have to imagine that every appellate judge reading this paragraph will detect Judge Alsup's exasperation. That does not bode well for Oracle's chances on appeal.

___

Other reactions to the ruling:

* SCU's incoming new law professor Brian Love was quoted in the San Jose Mercury News as saying: "This is now effectively a total loss for Oracle, across the board...It's absolutely the best possible case for Google."

* EFF: No Copyrights on APIs: Judge Defends Interoperability and Innovation

Posted by Eric at 10:36 AM | Copyright | TrackBack

June 01, 2012

PissedConsumer Denied Section 230 Immunity and Can’t Shake Extortion Claim—Vo v. Opinion Corp.

By Eric Goldman

Vo Group v. Opinion Corp., 8758/11 (N.Y. Sup. Ct. May 22, 2012)

PissedConsumer is a consumer review site occupying the same market niche as Ripoff Report. It only wants negative consumer reviews of businesses (as signaled by its name), and its basic business model is to rank the negative consumer reviews highly in Google search results and then charge the businesses money to take the edge off that indexing. Vo Group claims it got snared in PissedConsumer’s scheme and allegedly chose not to pony up the requested cash ($5k) to PissedConsumer. Instead it sued PissedConsumer for a potpourri of claims. PissedConsumer moved to dismiss the lawsuit, and the resulting opinion is a mixed bag. Some highlights:

Defamation. Regarding Vo’s defamation claims, PissedConsumer defended on 47 USC 230. In one of the most important cyberlaw rulings of 2011, PissedConsumer won a 230 defense in the analogous Ascentive case, but the court doesn’t reach the same conclusion here:

at this stage of the litigation before any discovery has been conducted there are certainly allegations whether the initial defamatory content posted on the pissedconsumer website was attributed to the defendants themselves….Therefore the motion seeking to dismiss the initial statements is denied.

This adds to a long-simmering split in Section 230 jurisprudence: can a plaintiff defeat a motion to dismiss simply by alleging that the review website wrote the review in question? Some cases have said or implied yes (see, e.g., Children of America v. Magedson; Whitney v. Xcentric; HyCite v Badbusinessbureau; and I'm sure I'm forgetting others), while others have said no (see, e.g., Levitt v. Yelp). And of course, there was the Roommates.com train wreck on this very issue. If the answer is yes, the Section 230 immunity becomes substantially less effective; at minimum, it means the cases run longer, and plaintiffs can take expensive and disruptive discovery, even if the Section 230 immunity ultimately applies. In fact, given some courts’ wishy-washiness about Section 230 motions to dismiss, several experienced Section 230 litigators have told me that they sometimes skip a 230-based motion to dismiss and just push instead for a quick summary judgment.

Because it’s trivially easy for the plaintiff to allege that the review website wrote the review and therefore defeat an otherwise appropriate early Section 230 dismissal, I think courts need to screen the plaintiff’s allegations much more aggressively than this court did. See, e.g., Nemet Chevrolet v ConsumerAffairs, which didn't rely on 47 USC 230 but still rejected the unsupported assertion that the review site fabricated reviews. First, I think Twombly/Iqbal require the plaintiff to allege more than just the bare assertion that the website wrote the review. The plaintiff should have to provide concrete allegations of facts uncovered in its research supporting the claim, and it should not be enough simply to have a hunch. Compare Frontier Van Lines v. Valley Solutions, which said that the bare assertion of review website authorship didn't clear Iqbal, but the court didn't grant the motion to dismiss either. Second, courts should more aggressively police plaintiffs’ Rule 11 investigation obligation. In my opinion, if plaintiffs are just making up facts and defeating motions to dismiss based on these fictions, they should have to pay for the defendants’ resulting expenses.

We’ll find out if Vo has any juice behind its assertion later in the litigation. Perhaps the Section 230 motion will work better on summary judgment.

Bribery/Extortion. The court rejects the plaintiff’s commercial bribery claim, but it survives a RICO claim predicated on alleged extortion. The court says:

if PissedConsumer had the legal right to engage in the activities it was doing, then to request money in return for desisting from such activities cannot be considered extortion. [Eric’s note: the court doesn’t cite Coase, but this is quintessentially Coasean!] Since it has already been determined that some of PissedConsumer’s posts were possibly defamatory and hence fully unlawful, the $5,000 request cannot be viewed as merely nothing more than “hard bargaining” [Eric’s note: the court’s double negative makes that a hard sentence to parse]

In other words, just like the allegation that PissedConsumer authored the defamatory review defeated the Section 230 dismissal, it also helps the extortion-based RICO claim survive. This only reinforces how important is it/was for the court to gatekeep the plaintiff’s allegation that PissedConsumer wrote the review. Extortion charges are often leveled at Ripoff Report as well. Although I doubt Vo’s extortion claim will succeed in the end, I imagine other plaintiffs suing Ripoff Report and PissedConsumer will start sniffing around this RICO ruling for ways to keep their cases in court a little longer.

Trademark On the plus side, just like the Ascentive case, the court dismisses the trademark claims because the name PissedConsumer makes it clear to consumers what they are going to get. This extends the precedent that a trademark workaround to Section 230’s immunity for review websites may not exist.

Posted by Eric at 10:11 AM | Content Regulation , Derivative Liability , Trademark | TrackBack

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June 30, 2012

New Jersey Appeals Court Reverses Anti-Harassment Order Based on Emails – E.L. v. R.L.M

June 29, 2012

Photographer's Suit Against Client for Republishing Photos on Facebook Proceeds – Davis v. Tampa Bay Arena

Can Korean Copyright Owners Sue Australian Defendants in California? Judges Disagree--DFSB Kollective v. Bourne

June 27, 2012

Court Refuses to Dismiss Claims Against Alleged Twitter-Bot Spammer--Twitter v. Skootle

June 26, 2012

Will the Floodgates Open Up for Americans with Disabilities Act (ADA) Claims Against Websites?--National Association of the Deaf v. Netflix

June 25, 2012

Wisconsin Appeals Court Punts on the Legality of Buying People's Names for Keyword Advertising--Habush v. Cannon

June 24, 2012

Mortuary Student Can Be Disciplined for Facebook Posts--Tatro v. University of Minnesota

June 23, 2012

Another Failed Effort to Remove a Ripoff Report Posting--Karnaby v. Mckenzie

June 22, 2012

Another Bad Ruling for PissedConsumer on Trademark and 47 USC 230 Claims--Amerigas v. Opinion Corp.

June 20, 2012

CYBERsitter Sues Google for AdWords Trademark Infringement

Section 230 Doesn't Protect Employer From Negligent Supervision Claim--Lansing v. Southwest Airlines. Warning: Ugly Opinion

June 19, 2012

First Post-Viacom 512(c) Opinion Doesn't Look Much Different--Obodai v. Demand Media

June 18, 2012

Recap of the Fourth Trademark Scholars Roundtable at DePaul University

June 16, 2012

Nathenson on Teaching Internet Law

June 15, 2012

More Evidence That the Initial Interest Confusion Doctrine is Dying--Dwyer v. Sensocon

June 14, 2012

University of Alabama Can't Stop Paintings of Famous Crimson Tide Football Moments--University of Alabama v. New Life Art

June 13, 2012

Bank Can't Use Facebook for Service of Process -- Fortunato v. Chase Bank

June 12, 2012

State Privacy Claims not Preempted by ECPA -- Leong v. Carrier IQ

June 08, 2012

Court Orders Facebooking Juror to Disclose Additional Facebook Posts--Juror No. 1 v. Superior Court

June 07, 2012

Trademark Registrant Isn't Required to Shut Down Competitive Keyword Advertisers--STK v. Backrack

Plaintiffs Squeak Past Motion to Dismiss in Amazon P3P Case – Del Vecchio v. Amazon

June 06, 2012

Backpage Gets TRO Against Washington Law Attempting to Bypass Section 230--Backpage v. McKenna

June 05, 2012

Satirical Anti-Birther Blog Post Protected by DC's Anti-SLAPP Law--Farah v. Esquire

June 04, 2012

"Hot Topics in Internet Law" Talk Slides

Accessing an Employee's Facebook Posts by "Shoulder Surfing" a Coworker's Page States Privacy Claim -- Ehling v. Monmouth Ocean Hosp.

June 02, 2012

Java APIs Aren't Copyrightable--Oracle v. Google (Guest Blog Post)

June 01, 2012

PissedConsumer Denied Section 230 Immunity and Can’t Shake Extortion Claim—Vo v. Opinion Corp.