May 06, 2008
CDT Files Amicus Brief in Zango v. Kaspersky
By Eric Goldman
The Center for Democracy and Technology has authored a brief, for itself, anti-spyware vendors and other advocacy groups, in favor of Kaspersky in the Zango v. Kaspersky case. I thought this brief was a useful contribution to the discourse. The brief focuses heavily on the issue of empowering users' control over their desktops, which is the critical issue but a complicated one when users give instructions that may conflict with each other. The brief addresses this issue squarely:
Two scenarios illustrate the interplay of “consent” in the anti-spyware context. First, assume that a user did consent to the installation of Zango software, but later concluded that the software and resulting advertisements were harassing and objectionable. Kaspersky Lab (and most anti-spyware services and tools) offers the ability to disable Zango software, and for a user to choose to install Kaspersky software to block Zango’s advertisements is fully consistent with the user’s true choice (notwithstanding the assumed initial consent to install the Zango software).
Second, if the Kaspersky Lab software is installed on a computer before someone attempts to download and install the Zango software (and Kaspersky software blocks the Zango installation), that is quite possibly also fully consistent with the wishes of the user. By installing anti-spyware software, the user is asking to be protected from spyware even if the user does not immediately recognize certain downloaded software as spyware. Moreover, it may well be that the owner of the computer (such as a parent or an employer) decided to install anti-spyware software such as Kaspersky Lab’s, and then some other users (such as a child or employee) attempts to install Zango software (and that installation is blocked). In that scenario, the anti-spyware software is in fact doing precisely the job that it was asked to do.
I think both of these examples tell a story of how a user's putatively inconsistent instructions could be reconciled. But these examples are also pretty stylized, so minor changes in the facts would expose situations where the reconciliation might be tougher.
The case library:
* Kaspersky's answering brief [warning: 5MB file].
* National Business Coalition on E-Commerce and Privacy amicus brief in favor of Zango
* Zango's appeal brief [warning: 2.1MB file]
* The district court's dismissal and my commentary
* TRO Denial and my commentary
* Kaspersky's Response to TRO Motion
* Zango's TRO motion
Posted by Eric at 05:35 PM | Adware/Spyware , Derivative Liability | TrackBack
May 01, 2008
Adware is Dead. Long Live Adware!
By Eric Goldman
In late January, I attended the Anti-Spyware Coalition's Public Workshop entitled Spyware: What's Worked, What's Left, and What's Coming. I was on a panel entitled "Is Adware Dead?" with Alissa Cooper from CDT and Colin O'Malley from TRUSTe. This is a timely topic because I've been pondering this question myself for a while now. This blog post recaps some of my thoughts.
Adware Is Dead
At the workshop, everyone agreed that adware is dead, although we may have been using different definitions of adware. (Commissioner Leibowitz declared adware "mostly dead," invoking the phrase from the Princess Bride). I was a little surprised to see such broad consensus on this topic. Let's explore what happened.
Looking back, it's clear that the 2003-06 period was a wild time for the adware industry. Several new entrants sought to build "legitimate" businesses on client-side software that displayed advertising, and others were seeking technical exploits for more nefarious purposes.
Collectively, these efforts sparked the Great Adware Wars of the 2000s. This was a time of mania, with everyone scrambling for the largest network of installs. In turn, vendors attempted lots of aggressive practices, such as bundled installs with obscure notice/consent, difficult uninstalls, loosely controlled/uncontrolled third party distribution chains, and overgrazing of user attention once a desktop install was achieved.
I'm declaring that the Great Adware Wars of the 2000s are over, and the anti-adware forces won. The signs of a decline in the adware industry are everywhere. Most obviously, most of the entrants are out of the business. Of the players trying to run legit adware companies, arguably only Zango persists in its client-side software business model circa 2004.
Why Did Adware Die?
It's hard to tell exactly what ended the Great Adware Wars. Some possible contributing factors:
* enforcement actions by the FTC, state AGs and private litigants (including class action lawsuits)
* new laws, including the laws passed by Utah and Alaska
* technological responses, including enhanced filtering/labeling by anti-spyware vendors
* changes in the economics. In particular, paying third party distributors for installs spurred a lot of unprofitable behavior, so installation economics improved. At the same time, due to the enforcement actions and negative publicity, advertisers have become increasingly gun-shy about advertising via adware. There is some anecdotal evidence that advertisers are now including anti-adware policies in their agency agreements. It's not clear that such policies are actually being enforced, but collectively they send a signal that suppresses the demand for advertising inventory in adware.
* changes in user behavior, due to user education and press attention to adware. Adware has become a dirty/tainted word, and that taint suppresses demand up and down the chain.
Ultimately, I think the single biggest contributing factor to the demise of adware is that it often provides a lousy consumer experience. Even when adware doesn't carpetbomb users with ads, it is still largely based on interruption marketing (a term from Seth Godin's excellent book Permission Marketing
In the end, I believe lousy consumer experiences always fail in the marketplace. The adware being deployed during the Great Adware Wars didn't prove otherwise.
What Consequences from the Death of Adware?
The Great Adware Wars are over. Now what?
Regulatory Proliferation
Even though the war is over, regulators haven’t gotten the message. In fact, I predict that we will see continued efforts to regulate 2005-era adware. Why? If the threat has been neutralized, shouldn't regulators focus their attention elsewhere?
This is a classic public choice problem. Everyone hates pop-up ads and scary adware, so regulators can pander to their constituencies' fears. At the same time, no one is opposing these efforts--the adware companies have largely vanished (not that they were ever a potent lobbying force in the first place), and no one else will stand up in their stead. As a result, regulators seeking some publicity bounce for being “tough on Internet threats” can easily enact ineffectual laws to combat past problems. (As an example of this, see the continued unopposed efforts of the Humane Society to ban Internet hunting).
Long Live Adware!
Adware circa 2003-06 may be dead, but adware in the broad sense--client-side software that displays advertising--will never die. Instead, as I argue here, adware is an inevitable part of our future for several reasons.
First, client-side software can interact with the user whenever they are using their computer. As a result, the vendor doesn’t have to worry about Internet connectivity. Plus, each vendor wants to be able to reach the consumer 100% of the time, not just when the user is visiting its servers.
Second, client-side software has access to the very best data about a user. Server-side applications generally only see the data made available when users are communicating with it. This partially explains the Facebook Beacon offering; it's an attempt by Facebook to aggregate data about user behavior that's captured by third party servers (i.e., data that Facebook ordinarily wouldn't see). But even compared with Beacon, client-side software will see more--and better--data.
At the conference, it was pointed out that behavioral targeting doesn't necessarily improve with deeper datasets. While this is true, it also remains true that a website never knows if the user has transacted with its competitor (i.e., when I searched for flights at both American and United's websites, the losing company has no idea if I transacted with its competitor or not). Client-side applications can see all of this valuable information.
As a result, vendors will always want to get onto users' hard drives and watch the users' communication flows from there. Thus, the race for client-side installations will remain an omnipresent fixture of our technological environment.
At the same time, the residual legislative and regulatory efforts--made in a vacuum without a direct threat and without any counterbalancing lobbying--has a serious risk of inhibiting the development of beneficial client-side applications. Simply put, in the legislative grandstanding to put the "nail in the coffin" of adware, regulators might in fact distort the innovation cycles of software developers who can improve users' lives. It's this risk of collateral fallout that drives my objection to most types of anti-adware regulation, and when I see stupid and regressive state laws (like the Utah Spyware Control Act, or Alaska's anti-adware law, or the screwed up Utah Trademark Protection Act), the potential harm on innovation is palpable.
So here's my proposal. Let's take a moment to pause and celebrate the end of the Great Adware Wars of the 2000s, and congratulate the many people who worked very hard to contribute to its demise. Then, let's all collectively vow to move on and focus our energies on looking forward to the next round of bona fide and serious threats, instead of looking backwards at perceived threats already vanquished.
Posted by Eric at 08:10 AM | Adware/Spyware | TrackBack
April 29, 2008
Kaspersky Files Answering Brief in Zango v. Kaspersky
By Eric Goldman
Continuing my coverage of the Zango v. Kaspersky litigation over 230(c)(2), Kaspersky has filed its answering brief (warning: 5MB file). If you want to save time, the actual argument starts on page 32 of the PDF.
The case library:
* National Business Coalition on E-Commerce and Privacy amicus brief in favor of Zango
* Zango's appeal brief [warning: 2.1MB file]
* The district court's dismissal and my commentary
* TRO Denial and my commentary
* Kaspersky's Response to TRO Motion
* Zango's TRO motion
Posted by Eric at 05:53 PM | Adware/Spyware , Derivative Liability | TrackBack
April 09, 2008
Pro-Zango Amicus Brief in Zango v. Kaspersky
By Eric Goldman
The National Business Coalition on E-Commerce and Privacy has filed an amicus brief supporting Zango in Zango v. Kaspersky, the lawsuit over an anti-spyware vendor's classification of third party software as "spyware." I'm not familiar with this coalition and I couldn't find a website for it. If you have any information about them, please let me know. The brief itself conducts a very run-of-the-mill statutory and legislative history analysis, so it doesn't give much color about the coalition or why it cares about this case.
UPDATE: "Among its members are Experian, Fidelity Investments, the Investment Company Institute, Charles Schwab & Co., Inc., Deere & Company, Inc., JP Morgan Chase, General Motors Corp., Vanguard Group, UPS, CheckFree, Eastman Kodak, Bank of America, and The Assurant." This makes me even more curious why these companies would be interested in the issue.
UPDATE: Wendy Davis at MediaPost reports: "The coalition's members operate Web sites that place cookies on users' computers when they visit the site. The group is concerned that the trial judge's decision would immunize spyware removal companies that market software that deletes their members' cookies." Hmm...are they planning to sue CookiePal or any web browser software vendor that sets a default to reject all cookies?
The case library:
* Zango's appeal brief [warning: 2.1MB file]
* The district court's dismissal and my commentary
* TRO Denial and my commentary
* Kaspersky's Response to TRO Motion
* Zango's TRO motion
Posted by Eric at 10:17 AM | Adware/Spyware , Derivative Liability | TrackBack
March 30, 2008
Zango's Brief in Zango v. Kaspersky Ninth Circuit Appeal
By Eric Goldman
Zango has filed its initial appellate brief in Zango v. Kaspersky [warning: 2.1MB file], the case addressing the liability of anti-spyware vendors for their classification decisions. Characteristically, Zango goes on the offensive, declaring that Kaspersky's software is the real "badware" here.
Other materials in this case:
* The district court's dismissal and my commentary
* TRO Denial and my commentary
* Kaspersky's Response to TRO Motion
* Zango's TRO motion
Posted by Eric at 01:45 PM | Adware/Spyware , Derivative Liability | TrackBack
December 28, 2007
December 2007 Quick Links
By Eric Goldman
Marketing
* I've blogged about Various, which operates AdultFriendFinder.com, before. They made the news recently in two ways. First, they sold to Penthouse for half-a-billion dollars. Second, they settled with the FTC for "pelting" users with unwanted sexually graphic pop-up ads. Do you think these developments are linked in any way... ? Could it be that Various was willing to settle up with the FTC on any terms so that they could get a half-billion dollar check? In this respect, I'm reminded of the MySpace/Intermix $7.5M settlement with the NY Attorney General's office in a dubious enforcement action that was immediately followed by MySpace's sale to News Corp. for $580M. Hey government enforcement agencies--if you can spot hot dot-coms that are negotiating mergers and bring an enforcement action, you can name your price!
* Abrams v. Facebook, the lawsuit over Facebook sending text messages to old phone numbers, has settled. See Michael Erdman and the AP.
* Newsday circulation fraud case (involving inflated circulation numbers) nets $83M restitution, $15M criminal settlement, and nine criminal convictions.
* Texas AG Abbott is prosecuting two companies under COPPA. As far as I know, this is the first state-level enforcement action under COPPA.
* Florida AG Michael Palecki looks to be targeting online advertisers for ads placed by their affiliates.
* The Do-Not-Call registry has become an even less dynamic reflection of preferences.
Copyright
* The Second Circuit kicked out the settlement struck in Tasini's aftermath because it covered unregistered copyrights. Rebecca makes some good points.
* Perez Hilton drops YouTube because they took down one of his videos in response to a takedown notice. On the one hand, this shows that there can be marketplace mechanisms that give feedback to intermediaries based on the restrictiveness of their takedown policies. On the other hand, YouTube was a free service; what did you expect?
* Michael Savage, a radio personality, is suing a website for posting audio clips of his rants as part of the website's criticism of him. See the NYT and CMLP.
* A special master has been appointed in the Grokster case to determine the possible filtering options available to Streamcast. I'm actually amazed that this case is still going!
Reviews and Ratings
* WSJ: Restaurants are giving away free meals to online reviewers to try to get improved consumer ratings.
* BrokerCheck, a regulator-sponsored website for consumer gripes about securities brokers, deletes negative gripes if the complaint settles.
* Retail store signage ("shelf talkers") routinely overstate the Wine Spectator ratings assigned to wine on the shelves.
Best of Mike Masnick
Mike Masnick of Techdirt is a terrific blogger who is smart, prodigious and opinionated. This month he had some noteworthy posts (even by his standards), including:
* Some wise words about Fark's trademark application for NSFW.
* “Noncompete Agreements Are The DRM Of Human Capital.”
* "Anything Goes Wrong Online? Yell 'Net Neutrality' As Loud As Possible!"
Search Engines
* Google appears to have categorically wiped out PageRank for bloggers participating in PayPerPost.
* Danny's sensible remarks on the role of humans in Google's algorithmic search results.
* Search engines pay $31.5M to settle up for running gambling ads. A significant share of this settlement amount is actually public service ads, not cash. Note that enforcement of federal criminal gambling laws is one of the few exceptions to 47 USC 230; if this had been an enforcement of state anti-gambling criminal laws or a civil action, it should have been preempted.
General
* "Like the proverbial tree falling in a forest, the unauthorized use of a trademark that is never perceived by anyone cannot be said to create a likelihood of consumer confusion." Custom Manufacturing and Engineering Inc. v. Midway Services Inc. (11th Cir. Nov. 21, 2007). This statement was made in the context of a counterfeit component part, but it sounds like a good reason to reject liability for including trademarks in keyword metatags.
* Todd Hollis is suing DontDateHimGirl.com a second time. Last time the court sidestepped 230. This time, I hope the court will use 230 to terminate the lawsuit permanently.
* Mark Radcliffe's "2007 Top Ten Free and Open Source Software Legal Issues"
* A nice recap on "location-based mobile services," the delivery of services predicated on GPS devices in cellphones. UPDATE: It looks like mobile marketing/privacy is the topic du jour (or, at least, a topic worthy of end-of-the-year recaps). AP weighs in on the same topic.
* Kaspersky flags Windows Explorer as a virus and then reverses itself, calling this a false positive. Then again, many people consider Microsoft software "malicious code," so maybe the positive wasn't so false after all.
Posted by Eric at 09:39 AM | Adware/Spyware , Copyright , Derivative Liability , Marketing , Search Engines , Trademark | TrackBack
December 13, 2007
Oct.-Nov. 2007 Quick Links, Part 1
By Eric Goldman
I was so jammed at the beginning of November that I didn't have time to post my quick links from October. Never fear; that omission is being corrected with a double shot of quick links covering October and November:
Wikipedia
* Slashdot: Has Wikipedia peaked? If true, I'm not surprised.
* The new status symbol of the digital age? A personal Wikipedia page. FWIW, my personal Wikipedia page was crunched and rolled into a general criticism of Wikipedia page. I found this ironic given that the Wikipedians had already caucused about the merits of my page and decided not to kill it; and then a single Wikipedian swept through and ignored that decision. Sounds like the process worked really well there, guys.
* The newest fork from Wikipedia: Veropedia.
Google
* Webmasters give preference to the Googlebot over other search engine robots in robots.txt files.
* Searchers prefer Google results in a blind taste test. But...searchers also prefer search results when they are branded Google!
* For years, people have speculated that Google advertisers get extra bounce in organic search results. Search Engine Guide lays out the case.
* Carl Person isn't giving up in his (unquestionably futile) fight against Google. The latest: he's appealed his case to the Ninth Circuit. HT Links & Law.
Adware/Spyware
* FTC Commissioner Leibowitz thinks bigger civil fines would help shut down more spyware operators. Then again, it seems like the market is doing that job for them; another adware vendor, DirectRevenue, has gone under.
* Zango has appealed Zango v. Kaspersky to the Ninth Circuit. I wasn't a fan of this lawsuit from the outset, so pursuing the case sounds like a mistake to me.
Virtual Worlds
* Herman Miller (maker of the famous Aeron chairs--I had one at Epinions) is combating the makers of fake virtual Aeron chairs in Second Life.
* Bragg v. Linden Lab has settled. The case involved a claim that Linden Lab improperly impounded some virtual assets.
* Wired: "Cheaters in multiplayer online games beware: Game developers are turning to advanced financial fraud-detection software to keep you from crooking your way to online riches."
47 USC 230
* Roskowski v. Corvallis Police Officers' Ass'n, 2007 WL 2963633 (9th Cir. Oct. 10, 2007). A summary opinion upholding a dismissal based on 47 USC 230. See my blog post on the district court ruling. Michael Erhman's comments.
* The US Supreme Court denied certiorari in Perfect 10 v. ccBill.
* The AutoAdmit plaintiffs filed an amended complaint that dropped Ciolli as a defendant and reworked the substantive allegations. Coverage: Above the Law, Concurring Opinions (1, 2), WSJ Law Blog.
* A former student informed me that a judge on the show Boston Legal (the Nov. 13 episode, "Attack of the Xenophobes," episode 74) applied 47 USC 230--correctly!--to dismiss a lawsuit against YouTube for a defamatory video. See the episode recap.
Online Contracts
* Adsit Co. v. Gustin (Ind. Ct. App. Oct. 16, 2007). Daughter-in-law gives credit card number to mom-in-law to complete online transaction. Court holds that mom-in-law acted as daughter-in-law’s agent and thus bound the daughter-in-law to the vendor’s clickthrough agreement. Accord: the Hofer and Abramson cases.
* Whitnum v. Yahoo, Inc., 2007 WL 2609825 (NY Supreme Court, Sept. 5, 2007). Woman sought damages because Yahoo shut down her website the same day she got a good publicity hit. Yahoo pointed to the liability limits in its user agreement, and the court found that those limits supported a motion to dismiss. Given the ubiquity of similar provisions in web hosting contracts, this case nicely illustrates that web hosting customers really don’t have any recourse if their vendor just shuts them down. This is also why I find 17 USC 512(g) (the DMCA limit on liability if a web host honors a counter-notification) so baffling—web hosts don’t need any help from the statutory safe harbor when they have already eliminated the risk through their contracts.
Posted by Eric at 02:05 PM | Adware/Spyware , Derivative Liability , Licensing/Contracts , Search Engines , Virtual Worlds | TrackBack
November 21, 2007
Search Redirection Tool Could Be Trespass to Chattels--Burgess v. EForce
By Eric Goldman
Burgess v. EForce Media, Inc., 2007 WL 3355369 (W.D.N.C. Nov. 9, 2007)
Every now and then a consumer goes on a me-vs.-the-world bender and decides to unilaterally save society by suing everyone in sight. Burgess' anger over unwanted advertising may have sparked such a campaign. His previous appearance on the blog involved his pro se lawsuit against American Express and many other major brand names for unwanted pop-up ads. In that ruling, the court intimated that advertisers could be liable for contributory trespass to chattels.
In this companion action, Burgess sued a number of defendants for spam. The court rejects his CAN-SPAM claim for lack of standing (he doesn't qualify for the limited private causes of action).
Burgess also sued for the installation of search redirection client software, claiming it was a privacy invasion, trespass to chattels, and "illegal conduct." The defendants first tries to dismiss the claims as preempted by CAN-SPAM, but CAN-SPAM's preemption clause does not apply to generally applicable laws like privacy invasions and trespass to chattels. Nevertheless, the magistrate report (approved by the judge) dismisses the privacy invasion claim for failure to state a claim, saying:
While the undersigned shares in plaintiff's frustration with the internet and the unconscionable applications that interfere with one's use and enjoyment of technology--and at times display offensive websites--frustration of purpose is not an invasion of privacy. Further, the undersigned cannot find any North Carolina case recognizing a cause of action for invasion of privacy based on computer viruses that redirect internet searches or inquiries, or any cases that would suggest that similar such conduct in other fields would support such a claim.
The "illegal conduct" claim was also dismissed.
On the other hand, building on Burgess prior ruling in state court, this court refuses to dismiss the trespass to chattels claim. Citing to Sotelo and others, the court says that Burgess' "pro se pleadings are not a model of clarity but nevertheless suffice to state a claim for trespass to chattels. He sufficiently alleges actual possession of his computer and 'unauthorized, unlawful interference' with his use of this personal property." So the Sotelo precedent marches on, even though this court (as with the prior Burgess court) doesn't acknowledge Hamidi, Mummagraphics or the other cases that would put these expansive trespass to chattels rulings in serious doubt.
As a result, Burgess' case lives to see another day. I'm sure we haven't heard the last from him!
Posted by Eric at 02:32 PM | Adware/Spyware , Publicity/Privacy Rights , Search Engines , Spam | TrackBack
August 29, 2007
Anti-Spyware Vendor Protected by 47 USC 230(c)(2)--Zango v. Kaspersky
By Eric Goldman
Zango Inc. v. Kaspersky Lab, Inc., No. C07-0807-JCC (W.D. Wash. Aug. 28, 2007)
There has been a fair amount of hand-wringing/teeth-gnashing over the legal liability of anti-spyware vendors when they label a software program as spyware or some other synonym. On the one hand, vendors might present those labels in a way that causes consumers to overreact to the actual threat, or vendors may make factual errors, and either case can have significant adverse effects on the affected software manufacturer. On the other hand, if vendors are liable whenever software manufacturers don't like their labels, the vendors will make labeling decisions based on risk management, not editorial criteria, and that may degrade the tool's utility to consumers.
That's what makes this ruling so important. The court says, clearly and unambiguously, that anti-spyware vendors' labeling judgments are completely protected by 47 USC 230(c)(2), a statute designed to protect online filtering judgments. In support of this conclusion, the court says that:
1) Kaspersky qualifies as an interactive computer service provider (specifically, as an access software provider)
2) The labeled software does not have to be actually "objectionable;" the vendor qualifies for protection so long as it subjectively considers the software objectionable.
3) There is no "good faith" standard in the statute for the vendor's decision to consider software objectionable.
230(c)(2) has been interpreted fairly infrequently, but a few decisions have applied it to anti-spam vendors and search engine filtering. As best I can remember, this is the first time the statute has been applied to protect anti-spyware vendors. (Am I forgetting any?). As a result of this decision, we should see a decrease in software manufacturers' efforts to strongarm vendors into recharacterizing their software. There will still be private negotiations/discussions between vendors and software manufacturers (which is often a healthy process), but any software manufacturer's threat to escalate the matter to litigation should be fairly empty.
This should close the book on Zango's ill-fated legal initiative from May to change anti-spyware vendors' characterizations of its software. Some previous coverage of those cases: Zango loses TRO against PC Tools; Zango loses TRO against Kaspersky. Yesterday, Zango announced that it voluntarily dismissed the lawsuit against PC Tools; and this ruling appears to put an emphatic end to Zango's lawsuit against Kaspersky.
Posted by Eric at 02:08 PM | Adware/Spyware , Derivative Liability | TrackBack
August 13, 2007
2007 Cyberspace Law Syllabus
By Eric Goldman
I've posted my 2007 Cyberlaw syllabus. Unlike the past few years, which were a little slow cyberlaw-wise, the past 12 months saw a lot of important developments. Let me recap some of changes I made to my reader reflecting these developments:
Additions
Copyright: I added the Cablevision case (after editing out some of the mind-numbing description of cable technology), which provides an interesting exposition on how the source of bits matters in copyright law (we'll reinforce that message with the Amazon.com "server test"). I companioned the Cablevision with the Field case to show a very different philosophy about "volitional" server activity, so I'll ask the students to see if they can reconcile the two cases.
I struggled with how to handle the Ninth Circuit's troika of Perfect 10 opinions. The opinions are long, complicated and irresolute, but it's hard to discuss one without discussing the other two. I decided to include all three but I don't feel great about that decision, given that it takes 115 pages (about 1/6 of my total reader) to work through the three cases, and I'm not sure students will come away any smarter about Ninth Circuit online copyright law after reading all three.
Trademark. I substituted the FragranceNet case for the 1-800 Contacts v. WhenU case. The 1-800 Contacts case remains a very important keyword law precedent, but as a teaching case it was just so-so. The adware subject matter increased the complexity, and it punted on the most interesting question of search engine liability. However, most of the other recent keyword law cases have been even less teachable. Fortunately, the FragranceNet case does a pretty job of recapping the 1-800 Contacts case as well as other recent decisions, and it frames the policy issues nicely. I've paired it with the Playboy v. Netscape case, which will make a good compare/contrast. However, if the Second Circuit gets off its duff, I'd be thrilled to substitute in the court's opinion in the Rescuecom appeal. (I'd be even more thrilled if the court reaches the "right" result!).
I also updated my materials to reflect the Trademark Dilution Revision Act.
230. I continue to stick by the seminal Zeran case, which remains both powerful precedent and a colorful teaching case. However, this year I added the Ninth Circuit hairball Roommates.com opinion. I really didn't want to--it's such a messy opinion--but I think for now the case represents a vitally important incursion into 230 law that any good Cyberlawyer needs to know about it (even if they don't know what to do about it). If we're lucky, perhaps the Ninth Circuit will rehear the case en banc and issue a new and more lucid opinion before I have to teach the existing opinion.
In addition, I created a new module on "blogs and social networking sites" and added the Doe v. MySpace case, a great opinion for exploring the differences between online and offline "premises."
Spam. I teach spam at the semester's end, when time is running out, so we'll see what I'm actually able to cover this year. I've added two recent cases: the Mummagraphics case, which wiped out a lot of state anti-spam laws and has a nice interplay with trespass to chattels, and the MySpace v. theglobe.com case, which has an odd contrast with Mummagraphics on the state anti-spam statutory analysis; plus it shows how online contracts can substitute for legislative rights.
Other. I added some explanatory material, including my standard dog-and-pony CLE presentations on keyword law and blog law and my brief distillation of social networking site law. I also updated the CRS on Spyware.
Other Changes
* I eliminated my standalone section on "search engines" and folded the material into the rest of the reader. I think there's pedagogical value to isolating and deeply exploring search engine issues, which is why I initially segregated the material. However, search engine issues crop up throughout the foundational material, so I'm not sure that segregation worked.
* I deleted the following material:
- Corbis v. Amazon. This was an excellent case to teach 512, but I think the ccBill case superseded it in a number of respects.
- the district court opinion in Perfect 10 v. Google, which was superseded by the Perfect 10 v. Amazon Ninth Circuit opinion.
- 1-800 Contacts v. WhenU (as discussed above)
- Alaska SB 140, which I ran out of time to discuss last year.
Deliberately Excluded
* The Utah anti-keyword advertising law represents one of the most important statutory changes of the year, but I omitted it because I anticipate Utah will modify it, and there's no point teaching a moot law.
* I skipped the Unlawful Internet Gambling Enforcement Act. I've generally shied away from teaching online gambling in Cyberlaw; the topic requires a lot of time to teach, making it hard to squeeze into a semester-long survey course. Plus, the new law is an analytical mess, so I'm not sure what the students would get out of the discussion.
* We were so excited to get the California Supreme Court's Barrett v. Rosenthal ruling, but the actual opinion doesn't add much to Zeran, so I thought it wasn't worth the time.
Posted by Eric at 07:57 AM | Adware/Spyware , Copyright , Derivative Liability , Internet History , Search Engines , Spam , Trademark | TrackBack
August 01, 2007
July 2007 Quick Links, Part II
By Eric Goldman
Virtual Worlds
* After a remarkable run as media darlings, Second Life is now experiencing some of the inevitable backlash. Case in point: Wired's "How Madison Avenue Is Wasting Millions on a Deserted Second Life." In this respect, Second Life reminds me a little of Keen.com--both provide fantastic platforms for monetizing user-generated content, but that powerful economic platform is likely to take root primarily in the sin businesses (porn, gambling, etc.). (FWIW, Keen.com appears to have cleaned up the dial-a-porn and is now focused exclusively on dial-a-horoscopes). As a result, it will be interesting to see what happens to Second Life's numbers in response to their anti-gambling crackdown. Meanwhile, lawyers--the classic late adopters--are gushing about Second Life's potential as a business generator--an interesting counter-perspective to the Wired article.
* World Copyright Law Report: "Some residents have been using a rogue version of a program called CopyBot to make a copy of anything in the Second Life world, thus threatening to undermine the whole basis of the Second Life economy."
Wikipedia
* More marketers wake up to the value of inserting links into Wikipedia despite Wikipedia's nofollow tag. See my earlier explanation of this. Meanwhile, a Wikipedia administrator talks about what Wikipedians consider white hat practices for marketers.
* Willing to cite to Wikipedia in your legal briefs? Need some custom-tailored authority to support your argument? Edit Wikipedia to say what you want!
* Mike Godwin has become Wikimedia’s GC. You may recall that Mike and I bet about Wikipedia’s future; it appears he has raised the stakes on that bet substantially!
User Generated Content
* "GC's Client from Hell": Whole Food's CEO John Mackey pseudonymously posted about his company's stock and his competitor's stock on Yahoo Finance. The WSJ article has some of the juiciest postings. The NYT on CEO "sock puppetry."
* A restaurant owner used consumer reviews from Yelp as part of deciding to fire employees.
* Interesting interview with the pseudonymous founder of a pay-for-Diggs business.
Blogs
* The ABA Journal has entered the crowded field of blawg directories with one of their own.
* Blawgworld 2007: 77 blawgers chose their favorite posts, which were compiled into an e-book. The compilation turns out to be a great way to get noisy blawgers to promote their brilliant contributions to the e-book, which generates traffic and link love for the publisher, which in turn creates a nice delivery vehicle for sponsored content/advertising.
Miscellaneous
* Asch Webhosting, Inc. v. Adelphia Business Solutions Investment, LLC, 2007 U.S. Dist. LEXIS 52932 (D. N.J. July 23, 2007). IAP terminates customer based on complaints that customer was a spammer. Court holds that the consequential damages waiver applies, effectively negating customer's alleged damages. Rejecting the customer's argument that the termination was in bad faith, the court says: "Plaintiff’s arguments about the accuracy of the spamming complaints do not change the Court’s determination because regardless of the ultimate accuracy or veracity of the spamming complaints, defendant was entitled to rely on those complaints so long as it did so in good faith, and plaintiff has not demonstrated any bad faith by defendant." HT: Technology Law Update.
* Consumer Law & Policy Blog: "companies in two recently filed federal cases explicitly invoke [the recent Supreme Court decision in] Leegin as a justification for terminating the eBay auctions of competitors that charge lower prices online."
* Declan on whether anti-spyware vendors are screening for "fedware" (government keystroke loggers designed to capture data before it's encrypted).
Fun
* More proof that technology can save lives: During a power outage at a hospital, doctors were able to complete a surgery using the light of open cellphones.
* I’m a new fan of Oddee. Some recent posts (it helps to think about sexual connotations when interpreting the photos):
- "15 Unfortunately Placed Ads."
- "Most Unfortunate Logos Ever"
- "Unfortunate Business Names.”
Posted by Eric at 11:06 AM | Adware/Spyware , E-Commerce , General , Internet History , Marketing , Spam , Virtual Worlds | TrackBack
July 19, 2007
Advertiser Liability for "Contributory" Trespass to Chattels Redux--Burgess v. American Express
By Eric Goldman
Burgess v. American Express Co., 2007 NCBC 15 (N.C. Superior Ct. May 21, 2007)
David Fish points to an interesting new ruling on the subject of advertiser liability for pop-up advertising (I'm inferring that the pop-ups were delivered via adware, although the opinion doesn't use that term). As part of a procedural request by a defendant/advertiser, the court says:
Burgess’s claim is premised on the appearance of unauthorized “pop-up” messages on his computer displaying the Defendants’ advertisements. Burgess alleges specifically that Target (and other Defendants), through the services of a third-party intermediary, delivered unauthorized “pop-up” advertisements to his computer and thereby caused damage to the same....Construing these allegations in the light most favorable to Burgess, he has at least alleged a claim for trespass to chattels under North Carolina common law. [cite to Sotelo] ...The Court is also satisfied that Burgess has alleged actual harm; although, I note that actual damage is not required to pursue a claim for trespass to chattels in North Carolina, at least where the claim is based on unlawful interference.
While the plaintiff has a lot more work to do before winning this case, this ruling is still interesting because it reinforces the potential that advertisers can be directly/contributorily liable for a trespass to chattels based on how their advertising is delivered. Not only is this a stupid result legally, but I remain shocked that these opinions fail to discuss Intel v. Hamidi or the more recent Mummagraphics case, both of which should make pop-up ad-based claims for trespass to chattels tenuous at best. I hope the defense lawyers can convince the judge to look at broader precedent than just the Sotelo case.
Some previous posts on advertiser liability for adware/trespass to chattels:
* Utah Bans Keyword Advertising (April 2007)
* Advertisers Settle NY Anti-Adware Action (January 2007)
* WSJ Debate on Advertiser Liability for Adware (April 2006)
* The FTC, Adware Advertising and Badges of Shame (December 2005)
* Adware Witchhunt Gone Awry (October 2005)
* Downloading Software onto Home Computer May Be Trespass to Chattels--Sotelo v. DirectRevenue (Sept. 2005)
* Are Adware Advertisers Responsible for Adware? (August 2005) [points to my CNET editorial on this topic]
* AP Story on Advertiser Responsibility for Adware (June 2005)
* Edelman on "Intermediaries' Role in the Spyware Mess" (May 2005)
* LA Times on Adware Advertisers--Including 1800 Contacts? (May 2005)
* Utah Amends Spyware Control Act (March 2005)
Posted by Eric at 02:06 PM | Adware/Spyware , Derivative Liability , Marketing | TrackBack
July 02, 2007
June 2007 Quick Links
By Eric Goldman
* Spam cases are coming at a regular clip, and it's tricky divining the latest state of the law. Two recent cases that caught my attention:
- US v. Impulse Media Group, 2007 WL 1725560 (W.D. Wash. June 8, 2007). This case involved a porn site that used affiliate marketers who didn't comply with the porn spam labeling requirements. The government argued that the advertiser should be strictly liable for this breach, but the court fairly emphatically rejected that (same as Cyberheat). But the news isn't all good for the defense, as the court also rejected its SJ motion, showing that the question of scienter about affiliate behavior remains a tough one for courts. Venkat's writeup.
- Kleffman v. Vonage Holdings Corp., No. 07-2406 (C.D. Cal. May 22, 2007). A nice complement to the Facebook v. ConnectU case, each holding that aspects of California's anti-spam laws are preempted by CAN-SPAM. In this case, the targeted behavior was the fact that the emailer may have used multiple email addresses to bypass electronic spam filters, but there wasn't anything false/deceptive about each email itself. See the BNA write-up and Venkat's writeup. I've lost track of the preemption cases, but it seems like state anti-spam laws are really getting munched after the Mummagraphics case.
* NYT on the pros/cons of captchas.
* Goodmail has expanded its pay-to-email system to Comcast, Cox, Roadrunner and Verizon.
Intellectual Property
* In Explorologist v. Sapient, involving the posting of a video deconstructing Uri Geller's act, the defendant is arguing (per CCBill) that 47 USC 230 preempts British copyright law.
* A rushed high school yearbook editor downloads lots of Facebook photos and adds them to the yearbook to fill space. Not a good idea!
* Techdirt: Who owns the right to license the design of military weapons to toy manufacturers?
* Marty on intellectual property protection for sexual activity.
Contracts
* A California man claims he bought a Gateway computer that never displayed text properly. Is he bound to the clickthrough agreement displayed on bootup? If this is the only way Gateway presented its contract, the answer should be no.
* At a conference at Southwestern Law School, I heard Prof. Lon Sobel talk about "idea submission" law. He illustrated the phenomenon that "where there's a hit, there's a writ": he suggested that hit TV shows produce an average of 6 "you stole my idea” demand letters. The great 1980s movie Coming to America produced 12 such letters, which resulted in 7 actual lawsuits. Interestingly, Prof. Sobel made the case (implicitly, not explicitly) that there is no separate law of "idea submissions," but rather any such doctrines are subsumed within standard contract law.
eBay
* eBay has changed its stance towards fighting counterfeiters, and it now does more policing itself.
* eBay shill bidder pays $400k to settle with NY AG.
Social Networking/Blogs
* The NCAA kicked a reporter out of the stadium for live-blogging the event. Tip to NCAA: It’s neither possible nor wise to control the flow of real-time information. Get over it. HT: Techdirt.
* Just came across this article: Stacey Schesser, MySpace on the record: The admissibility of social website content under the Federal Rules of Evidence, First Monday, volume 11, number 12 (December 2006).
* Wired: 7 MySpace sex offenders busted.
Marketing/Advertising
* AMCO Ins. Co. v. Lauren-Spencer, Inc., 2007 WL 1795970 (S.D. Ohio June 20, 2007). Insured offers jewelry from a website. Third party claims that the insured's jewelry constituted copyright infringement. Insured tenders the lawsuit to her insurance company under the advertising injury policy. Insurance company seeks a DJ of no coverage. The court says that the website constitutes advertising for the products, and so the policy applies to photos of the allegedly infringing jewelry items, even if the photos themselves were created by the insured. Observation #1: The advertising injury policy is very helpful to web businesses. Observation #2: Due to cases like this, I suspect insurance companies are reducing their willingness to offer advertising injury coverage to web businesses.
* Taylor v. XRG, Inc., 2007 WL 1816142 (Ohio App. Ct. June 21, 2007). The defendant was a vendor retained by bulk fax senders that handled consumer responses, including opt-outs from future faxes. Court held that the vendor wasn't liable for any TCPA/state anti-junk fax laws allegedly broken by the fax sender.
* Newish ad format: ads running 2 seconds in duration.
Search
* It's taken me a while to digest some of Google's new efforts. First, Google released two tools (a new toolbar button and a new personalized tab) to anticipate searchers' needs based on their past searches. Second, Google expanded its search history to incorporate all aspects of a user's searching through its services (what it calls "web history"). Meanwhile, Google has reduced its storage of personalized search data from 18-24 months to 18 months before that data gets anonymized. FWIW, I've been using Google personalized search since November 2005 (presumably, some of my data will be flushed any time now). Google has now captured almost 12,000 searches (with a high so far of 255 searches in a single day). Despite this, Google still doesn’t do a good job making predictions for me.
* Another great study from Jim Jansen (see the last one I blogged about). This one presented identical search results branded from different search engines and found that consumer ratings of relevancy varied based on the brand (Yahoo and Google came out on top). The logical inference--branding does matter to perceptions of relevancy. HT: SEL.
* Matt Cutts on the various ways humans affect Google search.
Domain Names
* Denmark's .dk TLD registry has enacted rules targeted at wiping out domainers. See here (Sec. 8.3.6).
* What's hotter than iPhones? iPhone-related domain names.
Adware/Spyware
* Declan on the latest legislative rally against spyware, the Senate's Counter SPY Act.
* The FTC issued final approval for the DirectRevenue settlement of $1.5M. Commissioner Leibowitz dissented, saying the cash payment was too light.
Online Reputations
* Avvo has filed a motion to dismiss the lawsuit over its ratings of attorneys. The motion is very heavy on the 1st amendment and very light on 230. HT: WSJ Law Blog.
* The Washington Post gushes about Reputation Defender and its competitors, without really acknowledging the value of reputational accountability or the potential for takedown/pushdown abuse.
* Entrepreneurs figured out a way to game FICO scores. Fair Isaac will try to close the loophole.
* Ed Magedson of Rip-Off Report was the victim of a vicious harassment campaign demanding that he remove complaints from the site.
* Lengthy NYT article on Wikpedia. Not much new there, but it does hint at the young age of Wikipedians, and it talks about how "pride of ownership" motivates Wikipedians.
Other
* June 26 was the 10 year anniversary of the classic Reno v. ACLU Supreme Court opinion.
* The NYT has launched a new technology blog called BITS.
Posted by Eric at 02:37 PM | Adware/Spyware , Content Regulation , Copyright , Derivative Liability , Domain Names , Internet History , Licensing/Contracts , Marketing , Search Engines , Spam , Trademark | TrackBack
June 06, 2007
SPY Act Passes House...Again
By Eric Goldman
For the third year in a row, the House passed the SPY Act. I was hopeful that the House's passing of the I-SPY Act would forestall further action on this bill, but unfortunately I was wrong. The SPY Act is a terrible solution to problems that may be already self-correcting, so let's hope the Senate either takes a pass on both bills or at least takes a pass on the SPY Act a third time.
Posted by Eric at 05:29 PM | Adware/Spyware | TrackBack
Zango Also Loses Kaspersky TRO Motion
By Eric Goldman
Zango, Inc. v. Kaspersky Lab Inc., C07-0807-JCC (W.D. Wash. TRO motion denied June 6, 2007)
Yesterday, Zango's TRO request against PC Tools was denied but Zango claimed the result was nevertheless a "victory for consumer choice" because PC Tools had made important classification changes. Today, the same judge denied Zango's TRO request against Kaspersky Lab even though Kaspersky hasn't made commensurate classification changes. Is this result a loss for consumer choice?
Like yesterday's opinion, the court's opinion is short and plainly stated, and it repeatedly points readers to yesterday's opinion. The only substantive differences are (1) Kaspersky made fewer technical changes, but the court says that this fact isn't significant enough to reach a different result, and (2) the court suggests, but does not conclude, that a 230(c) defense might be meritorious.
The opinion doesn't say it, but I think implicitly the two opinions signal very clearly that Zango will need to present much stronger evidence of its problem if it hopes to ultimately prevail. Or, if it can't present stronger evidence, this judge doesn't look like he will be easily impressed. On that basis, Zango may find the better choice is to pursue out-of-court options.
UPDATE: Zango says this ruling puts "Consumer Choice on Hold."
Posted by Eric at 11:01 AM | Adware/Spyware | TrackBack
June 05, 2007
Zango Loses TRO Motion Against PC Tools But Claims Win
By Eric Goldman
Zango, Inc. v. PC Tools Pty Ltd., C07-0797-JCC (W. D. Wash. TRO denied June 5, 2007)
The judge denied Zango's TRO request against PC Tools. The actual opinion is efficient and somewhat non-committal, as befits an opinion written quickly in response to a TRO request. However, the court's opinion reflected that it was aware of Zango's historical practices and understood the public benefit from giving space for anti-spyware tools to do their thing. Venkat's take: "This Order would make me reconsider if I were Zango."
Despite the TRO loss, Zango claims this as a "victory for consumer choice" because the lawsuit caused PC Tools to substantially change its categorization of Zango, giving Zango the results it sought anyway.
Regardless of these developments, I'm failry confident this story isn't over. I suspect PC Tools and Zango will have continued categorization spats in the future. And, the lawsuit against Kaspersky is still pending, so perhaps that will give us some more useful insights into this legal area.
Posted by Eric at 07:59 PM | Adware/Spyware | TrackBack
PC Tools & Kaspersky Respond to Zango Lawsuit
By Eric Goldman
PC Tools and Kaspersky have responded to Zango's TRO requests in Zango v. PC Tools and Zango v. Kaspersky.
PC Tools' response reads like a typical anti-spyware gripefest about Zango generally, only some of which actually responds to Zango's TRO motion. (For an analogous circumstance, see Symantec's gratuitous smear of Hotbar in a similar lawsuit). Then again, Zango had to know that its dirty laundry was going to be aired when it filed this lawsuit. I thought it was particularly interesting that PC Tools didn't raise the 230(c)(2) defense--not sure why they didn't do so, because it seems like the quickest path to success.
Kaspersky's response claims (among other defenses) that Kaspersky USA is an independent entity from the true classifying organization in Moscow. I'm not sure how a court will handle the factual issues raised by this contention; TROs hearings don't normally engage in extensive fact-finding.
Both motions rely heavily on the New.net v. Lavasoft (see, e.g., the stern anti-SLAPP and dismissal opinion in that case). Also, in case you're curious, Ben Edelman is PC Tools' expert and Ray Everett-Church is Kaspersky's expert.
HT: Venkat. See Venkat's comments here.
Posted by Eric at 01:34 PM | Adware/Spyware | TrackBack
May 31, 2007
House Passes I-SPY Act
By Eric Goldman
Internet Spyware (I-SPY) Prevention Act of 2007 (HR 1525)
The House passed the I-SPY Act, sending it on to the Senate. This is the House's third time passing anti-spyware legislation. The past two years, the House passed the SPY Act, only to have the bill die in the Senate. We'll see what the Senate does this year.
As regular readers know, I've opposed just about every anti-spyware/anti-adware law proposed/enacted. So, it may surprise you that I think the House's passage of I-SPY is good news. This doesn't mean that I-SPY is necessary or even wise. From my perspective, I-SPY's main operative provisions overlap existing provisions in the Computer Fraud & Abuse Act. Thus, I don't think the law creates any new limitations, which makes the law a harmless/ineffective trifle.
However, I-SPY is good news because it's unlikely the House and Senate will pass two anti-spyware laws this session (and perhaps for a very long time). Thus, I-SPY may displace further action on the SPY Act, which is positive because the SPY Act is a terrible bill. The SPY Act tries to codify a set of bad practices and banish them; but, the practices targeted by the SPY Act aren't universally bad, and the technological specificity of the SPY Act will render it useless in the face of new technology, social practices and business practices. So I'm hoping that the Senate takes up I-SPY, passes it, and closes this chapter on Congressional efforts to regulate spyware. They have plenty of other important things to worry about.
Posted by John Ottaviani at 11:21 AM | Adware/Spyware | TrackBack
May 30, 2007
Zango's Busy Litigation Docket
By Eric Goldman
I got a tip that Zango's lawsuit against PC Tools had been removed to federal court, which prompted me to search for "Zango" in PACER for the Western District of Washington. I learned that Zango has a surprisingly busy litigation docket, with 4 lawsuits filed in its home court in the past two months:
* I previously blogged on Zango v. PC Tools. That case has been removed to federal court (W.D. Wash., case no. 2:07-cv-00797-JCC).
* Zango filed a similar but less well-publicized lawsuit against anti-virus software vendor Kaspersky, which also has been removed to federal court. Zango Inc. v. Kaspersky Lab Inc., 2:07-cv-00807-JCC (W.D. Wash.). Because the lawsuit was initially filed in state court, PACER doesn't have the complaint. However, here's Zango's motion for a TRO.
In addition to these 2 lawsuits against anti-spyware software vendors, Zango claims it's been stiffed by two advertisers to the tune of about $1M:
* Zango Inc. v. Internet Brands Inc., 2:07-cv-00506-RSL (W.D. Wash. complaint filed April 6, 2007). See the complaint.
* Zango Inc v. Mainstream Advertising, 2:07-cv-00507-MJP (W.D. Wash. complaint filed April 6, 2007). See the complaint.
Looks like it's a rough-and-tumble world out there!
Posted by Eric at 09:44 AM | Adware/Spyware , Licensing/Contracts , Marketing | TrackBack
May 29, 2007
Zango Claims Spyware Doctor SE Surreptitiously Deletes Its Software
By Eric Goldman
Zango, Inc. v. PC Tools Pty Ltd., 07-2-15844-8SEA (Wash. Superior Ct. complaint filed May 15, 2007)
We've seen a fair amount of tussling between adware vendors and anti-spyware software vendors, including a battle over the incorporation of' "good samaritan" immunizations for anti-spyware vendors in proposed anti-spyware legislation (see, e.g., here and here). However, litigation between the two camps has been relatively rare, so this case (if it doesn't settle like most of the precedents) might help shape the contours of anti-spyware software vendors' duties as well as influence the pending anti-spyware legislation in Congress.
Here, Zango claims that PC Tools' software, Spyware Doctor Starter Edition, (1) mislabels Zango's software as an "elevated risk" and (2) automatically disables Zango's software from functioning without giving users notice, which prevents new installs and prevents current users from using existing installs--including those users who have paid a premium subscription allowing them to use Zango's software pop-up-free. While these effects alone would be problematic for Zango even if Spyware Doctor were an obscure program, Spyware Doctor SE has the added profile of being bundled in the Google Pack.
While I can see why Zango would be upset enough about this situation to sue, bringing a lawsuit has numerous downsides. First, the facts may not be in its favor; SunbeltBlog has had difficulty replicating some of the results. Second, lawsuits over classifications threaten anti-spyware vendors' editorial integrity (and PC Tools is claiming that was Zango's intent), but fortunately those editorial judgments should be completely protected by 47 USC 230(c)(2). Third, Zango isn't particularly popular in the anti-spyware crowd, so their enforcement actions bring extra scrutiny.
With the respect to the claim that Spyware Doctor disables Zango, this case reminds me of the fracas (that matured into a lawsuit) between Avenue Media and DirectRevenue back in 2004, where Avenue Media claimed that competitor DirectRevenue was surreptitiously kicking its software off users' hard drives (the case reached a detente).
While it would be tempting to dismiss the Avenue Media/DirectRevenue lawsuit as a piratical battle between untouchables, there are other examples where company A deletes company B's software with minimal notice. Most prominently, I still can't fathom how Microsoft gets away with unilaterally wiping software off users' hard drives (my recollection is that AOL has done the same thing, but I can't find my documentation of it now). At some point we're going to have reach a social consensus about what level of user authorization is required for one software program to annihilate another program. Maybe this case will help us understand that issue a little better.
Posted by Eric at 01:14 PM | Adware/Spyware , Privacy/Security | TrackBack
May 09, 2007
Utah Trademark Protection Act Updates (from BNA)
By Eric Goldman
As I previously reported, Utah legislators met with industry representatives to discuss the Utah Trademark Protection Act on April 25. BNA [BNA subscription required] provides a fresh update on developments since the April 25 meeting. According to the BNA article:
the governor has directed the Division of Corporations and Commercial Code in the state Department of Commerce to hold off on implementing the law "for at least a couple of months" while changes to the legislation are considered....If an agreement is reached soon, changes could be enacted during a special session likely to occur this summer.
I like the way that Paul Rogers, a lobbyist for some of the technology companies, summarized his take-away from the April 25 meeting:
"I don't think they had thought it through, in terms of how it will affect the consumers' interests," he said. "We told them we're not going to comply--we're going to sue. They said, 'Don't sue--we get it, we've gone too far. Let us see if we can fix it or repeal it.' "
Personally, I recommend option #2.
Posted by Eric at 09:57 AM | Adware/Spyware , Domain Names , Search Engines , Trademark | TrackBack
April 27, 2007
Utah Legislators Realizing They Screwed Up By Banning Keyword Advertising
By Eric Goldman
Linda Fantin at the Salt Lake Tribune reports on the meeting between Utah legislators and various technology companies (Google, eBay, Microsoft, AOL, Yahoo, 1-800 Contacts and Overstock.com) to discuss the recently enacted Utah Trademark Protection Act banning trademark-triggered keyword advertising.
Based on the SL Trib article, it looks like the Utah legislators are beginning to realize that they got in over their heads (Sen. Eastman's defensive bravado that he "makes no apologies" notwithstanding). For example, the article says that the legislators didn't understand that Utah technology companies 1-800 Contacts and Overstock.com routinely buy other parties' trademarks to trigger ads--even though this is a well-documented fact. Rep. David Clark lamented that "I wish we had had this interaction with industry 60 days ago...We would have all been better off." Great point! The world would be a better place if legislators did their homework first before blasting their legislative guns.
Based on this meeting, it appears the law is in stasis for now. The Utah legislators haven't promised to amend or repeal the law (at least, not yet), but Rep. Clark admitted that "we understand we've got some work to do" and the AOL/1-800 Contacts lobbyist walked away from the meeting thinking litigation wasn't going to be necessary. Meanwhile, according to Sen. Eastman, no efforts will be made to create the registry until further discussions take place.
UPDATE: If you missed it, in an April 11 editorial, the Salt Lake Tribune urged the Utah legislature to unilaterally repeal the law.
Posted by Eric at 04:18 PM | Adware/Spyware , Derivative Liability , Marketing , Search Engines , Trademark | TrackBack
April 25, 2007
Academic Debate over Trademark Use in Commerce
By Eric Goldman
As regular blog readers know, a hot area in online trademark law is the "trademark use in commerce" element of the plaintiff's prima facie case. This element has been dispositive in several noteworthy defense wins, including the 1-800 Contacts v. WhenU and Rescuecom v. Google cases. Yet, some experts, such as Prof. McCarthy, believe that the prima facie case doesn't require the plaintiff to show that the defendant made a trademark use in commerce.
This debate has led to 2 companion articles by 4 top trademark scholars. First, Graeme Dinwoodie and Mark Janis wrote Confusion Over Use: Contextualism in Trademark Law. In the article, Dinwoodie/Janis agree with McCarthy that trademark use in commerce isn't a separate element of the plaintiff's prima facie case because, otherwise, the trademark fair use statutory provision makes no sense. Therefore, Dinwoodie/Janis favor a contextual analysis of infringement which effectively omits the trademark use in commerce element and instead focuses on the likelihood of confusion factor.
Mark Lemley and Stacey Dogan responded with Grounding Trademark Law Through Trademark Use. This article argues that the trademark use in commerce element historically helped distinguish between direct and contributory infringers (i.e., if the defendant hadn't made a TM use in commerce, its only liability would be contributory).
As I've said before, I think the statute is unresolvably irresolute, so statutory arguments aren't likely to help us reach a consensus any time soon. From a normative standpoint, I think Lemley and Dogan have the better argument in this debate, but for different reasons than the ones they articulate. I think the use in commerce requirement acts to keep "commercial referential uses" outside the boundaries of trademark law. I'll explain this in more detail soon.
The Dinwoodie/Janis abstract:
This paper tackles an intellectual property theory that many scholars regard as fundamental to future policy debates over the scope of trademark protection: the trademark use theory. We argue that trademark use theory is flawed and should be rejected. The adoption of trademark use theory has immediate practical implications for disputes about the use of trademarks in online advertising, merchandising, and product design, and has long-term consequences for other trademark generally. We critique the theory both descriptively and prescriptively. We argue that trademark use theory over-extends the search costs rationale for the trademark system, and that it unhelpfully elevates formalism over contextual analysis in trademark law rulemaking. The theory seeks determinate trademark rules in order to encourage a climate of certainty for innovators, but the concepts on which it is founded are likely to degenerate. We show that trademark use theorists ignores the multivalence of trademark law, and that adopting trademark use doctrines would result in less transparent trademark decisionmaking. Instead, we propose that trademark law retain its traditional preference for contextual analysis. We show in particular how a contextual analysis would offer an approach to trademark disputes involving online advertising that better captures the potential of trademark law to police new information markets. Our analysis contemplates individual