August 01, 2008
Domainer Loses Cybersquatting Lawsuit--Verizon v. Navigation Catalyst
By Eric Goldman
Verizon California, Inc. v. Navigation Catalyst Systems, Inc., 2008 WL 2651163 (C.D. Cal. June 30, 2008). The Justia page. A page with some of the early filings.
[Sorry for the delay blogging this--it just showed up on my radar screen]
This is an extremely interesting and potentially precedent-setting case regarding domaining and domain name tasting. The court condemns both practices, leading to a preliminary injunction against the domainer and its registrar based on the Anti-Cybersquatting Consumer Protection Act (ACPA). As far as I can recall, this is the first time that a domainer has lost an ACPA lawsuit in court, and it provides an important data point confirming that domaining can be cybersquatting (a previously unresolved issue). I also believe that this is the first time a domain name registrar has lost an ACPA lawsuit. Although the court wasn't asked to assess damages (it was just an injunction request), it's clear from the strongly worded opinion that Verizon will get paid if the case gets that far. As a result, this is a major loss for domainers and might very well force them to change their practices.
The defendants are Navigation Catalyst, a domainer, and Basic Fusion, its registrar. Navigation Catalyst engaged in some common domainer practices, including:
* high volume automated domain name tasting. Many of the registered domains have nothing to do with anyone's trademark, but some were typographical error versions of Verizon's trademarks (allegedly, nearly 1400 were variations of Verizon's trademarks)
* trademark "scrubbing" of domain names during the tasting period (both an automated blacklist and a manual review)
* disabling ads on any challenged domains and offering to transfer those domain names to the trademark owner
Despite the scrubbing, Navigation Catalyst registered and kept 126 domain names that Verizon alleges infringe its trademark. Navigation Catalyst also tasted nearly 1300 other challenged domains, and as the court points out, made some money from those domains during the tasting period.
Navigation Catalyst's main defense is that it merely reserved the domains during the tasting period instead of "registering" them (the ACPA statutory requirement) because they hadn't paid for the domains prior to the end of the grace period. Not surprisingly, the court is completely unimpressed with this sophistry.
Further, the court determines that domain tasting is a bad faith intent to profit under the ACPA:
It is clear that their intent was to profit from the poor typing abilities of consumers trying to reach Plaintiffs' sites: what other value could there be in a name like ve3rizon.com? Further, the sites associated with these names often contained links to products directly competitive with Plaintiffs' cellphone and internet businesses, potentially diverting consumers who would otherwise have purchased goods or services from Plaintiffs away from Plaintiffs.
Finally, the defendants tried to argue that Verizon had unclean hands because of Verizon's monetization of wildcard traffic in its FIOS service. Despite some pretty apparent duplicity on Verizon's part, this argument also fell on deaf ears.
While this is a big loss for the domainer, it's a shocking ruling against the registrar. After all, the ACPA specifically limits injunctions against domain name registrars (see 15 USC 1114(2)(d)(i)(II)), and the court did not discuss this section at all or otherwise why an injunction against the registrar was appropriate. I suspect the registrar should be able to get the court to clarify or reconsider its ruling if it asks.
It will be interesting to see how this ruling affects the domainer industry. There is absolutely no good news for them in this ruling. This court rejected the standard risk-management that domainers claim protect them from cybersquatting liability. Further, the big win will only encourage Verizon--already one of the most aggressive plaintiffs against domainers--to keep suing, and it might spur other trademark owners to join the party. Although a single ruling like this often doesn't change an industry overnight, I wouldn't be surprised if we look back in a couple of years and point to this ruling as the beginning of the end of standard domaining practices circa 2007-08.
Posted by Eric at 10:10 PM | Derivative Liability , Domain Names , Trademark | TrackBack
July 01, 2008
June 2008 Quick Links
By Eric Goldman
Trademarks/Domain Names
* Utah Lighthouse Ministry v. Foundation for Apologetic Information and Research, 2008 WL 22043807 (10th Cir. May 29, 2008). CMLP writeup. Nice 10th Circuit win for a gripe site against trademark infringement and cybersquatting. This case, plus the SKI VAIL case, indicate that the 10th circuit is making progress undoing the harm it created in the Australian Gold v. Hatfield case.
* Georgia has a new anti-phishing law (16-9-109.1) that acts as a para-trademark law. See my comments on the analogous California anti-phishing law.
* After initiating a trademark lawsuit against a consumer review site and soundly losing in court, Lifestyle Lift paid $17,500 to settle its own lawsuit and avoid claims for legal fees under Rule 11 and the Lanham Act.
* Marty reports on a German case saying that white-text-on-a-white-background is a trademark use.
* Update on the battle over the trademark registration for "SEO."
* Will TLD proliferation lead to a new open era in domain name administration, or will the resulting anarchy just reinforce that top search engine placement is the really important online real estate? It seems like the currently limited number of TLDs has some benefits from a bounded rationality standpoint, and those benefits will be lost in a cacophony of unknown TLDs.
Patents
* My colleague Colleen Chien has posted "Patently Protectionist? An Empirical Analysis of Patent Cases at the International Trade Commission" (forthcoming William & Mary Law Review). She empirically demonstrates that the ITC mostly involves disputes between two domestic litigants, making it a redundant battleground with federal district court but nevertheless an attractive venue for plaintiffs due to a number of procedural advantages. She makes a number of recommendations to eliminate the litigation gamesmanship offered by having parallel venues. Check it out.
Search Engines
* Udi Manber, chief algorithm keeper for Google, reiterates why it's silly for lawyers and judges to put too much legal emphasis on the relative placement of search engine results, saying "it's definitely the case that if you do the same search on a different cluster, you may get slightly different results at a given time. It's also the case that if you do the same search on different days you may get different results, because some of the results are things we indexed five minutes ago."
(Over)Regulation
* In response to an enforcement effort by the NY AG's office, several Internet access providers have blocked access to newsgroups that are putatively sources of child pornography. See the NYT story and the NY AG press release. In practice, this means wholesale takedowns of newsgroups that may have nothing to do with child porn. For example, Verizon is killing all USENET hierarchies except comp.*, misc.*, news.*, rec.*, sci.*, soc.*, and talk.*. Wired suggests this is the death of online intermediary freedom as conceptualized in 47 USC 230. Of course, 230 never protected intermediaries from criminal exposure for child porn, and this isn't the first time that an access provider has knuckled under to the NY AG's office. See the BuffNet enforcement action from 2001.
* Ohm, Paul. The myth of the superuser: fear, risk, and harm online. 41 UC Davis L. Rev. 1327-1402 (2008). A neat article on how regulators manufacture a fake bogeyman, the unbeatable "superuser," as a justification for expansive regulatory power.
* No evidence that data breach disclosure laws actually help reduce identity theft. Surprised?
* The FTC wants civil enforcement authority for spyware actions. Haven't they heard that the adware battle is already over...and they won?
Contracts
* Mark Radcliffe expresses concern about the ALI's proposed software licensing project on open source licenses.
* Sarah Bird on a messy contract lawsuit involving an SEO contractor.
Anonymity
* Tendler v. www.jewishsurvivors.blogspot.com, 2008 WL 2352497 (Cal. App. Ct. June 10, 2008). A subpoena request to identify a blogger doesn't support an anti-SLAPP cause of action.
* In the AutoAdmit lawsuit, Doe 21's motions to squash the subpoena and proceed anonymously were both denied. David Hoffman provides an update on the case.
Event Tickets
* Chicago has moved against eBay for reselling tickets in violation of its amusement tax law.
* The Ticketmaster v. RMG case ended with a default judgment granting a permanent injunction and $18.2M in damages.
General
* Vanity Fair: How the Web Was Won.
* Paul Levy blogs about a plaintiff's effort to bypass 230 by suing the authors of complaints about the vendor and then joining the consumer complaint site as a necessary party as a cost-increasing tactic.
* BusinessWeek on emerging technological tools to protect workers' attention against unwanted/untimely interruptions.
* Text message-savvy kids educate the North Carolina DMV about the meaning of the term "WTF," which was used on a license plate example on the DMV's website.
* I have one free pass to OMMA Behavioral in San Francisco July 21. First person to send me an email asking for the pass gets it.
Posted by Eric at 12:32 PM | Adware/Spyware , Content Regulation , Derivative Liability , Domain Names , E-Commerce , Internet History , Licensing/Contracts , Marketing , Patents , Privacy/Security , Search Engines , Trademark | TrackBack
June 02, 2008
May 2008 Quick Links, Part 1 (Trademarks/Domain Names Edition)
By Eric Goldman
* Syncsort Inc. v. Innovative Routines Intern., Inc., 2008 WL 1925304 (D.N.J. April 30, 2008). Including a third party trademark in a keyword metatag qualified as nominative use. (Along the same lines, see the Designer Skin case that I will blog about later this week).
* Punch Clock, Inc. v. Smart Software Development, 2008 WL 936889 (S.D. Fla. April 7, 2008). In a default judgment, a judge awarded the trademark owner the right to obtain 7 years of corrective advertising (a total of over $1M), calculated by what it would take for the trademark owner to buy the top spot in Google AdWords. Tom O'Toole sorts through this mess.
* A new ruling in the V Secret v. Moseley case. Rebecca puts it in context.
* Matthew Nelson, Comment, Utah's Trademark Protection Act: Over-Reaching Unconstitutional Protectionism or Decisive Clarifying Legislation?, 2007 Utah L. Rev. 1199. A couple of months after the Utah legislature repealed the Utah Trademark Protection Act, a Utah law student says the law is unconstitutional. His conclusion:
The Utah Trademark Protection Act places an undue burden on interstate commerce and the courts should find it unconstitutional under the dormant Commerce Clause using the Pike balancing test. Apart from the constitutional problems, the Act is bad policy for Utah businesses and Utah consumers. Although the unpredictability that currently exists in the courts makes it difficult for Internet advertisers and advertising sellers to mitigate risks and set efficient policy, these risks are far outweighed by costs to consumers and business. The Act sacrifices fair use, comparative advertising, and noncommercial use to gain certainty. These trademark functions are more important than the additional protections afforded mark holders under the law, protections that go too far and encourage anticonsumer policy rather than furthering the competitive environment trademark policy seeks to create.
Uses of keywords to trigger advertising that are unfair, deceptive, and contrary to trademark policy can still be pursued under the current common law. Trademark law is effectively evolving to handle these new challenges. If there should be legislation, it should be at the federal level because this issue so profoundly affects interstate commerce. The refining process that is occurring in the courts will provide Congress, should it choose to act, with valuable insight into how to handle all the competing interests in the rapidly growing area of Internet advertising.
* Tdata Inc. v. Aircraft Technical Publishers, 2008 WL 2169353 (S.D. Ohio May 21, 2008). Initial interest confusion does not substitute for actual confusion when considering if damages are appropriate under the Lanham Act. See my prior post on this case. See also the related Gibson Guitar case.
* I'm not exactly sure what's going on in France, but a French court has asked the European Court of Justice to opine on the legitimacy of keyword advertising.
* Verisign has obtained a patent for its defunct SiteFinder tool. Domain name wildcarding was taking place for years before VeriSign tried it, so I wonder about the prior art to this patent.
* NYT: Can a Dead Brand Live Again? This article discusses the development of a secondary market for well-recognized but defunct brands. Says the market maker: "We're taking consumers' memories and starting entire businesses."
* Todd Davies, A Behavioral Perspective on Technology Evolution and Domain Name Regulation, PAC. MCGEORGE GLOBAL BUS. & DEV. L.J. 21, 1-25 (2008). See my previous blog post about this paper.
Posted by Eric at 10:36 AM | Domain Names , Patents , Search Engines , Trademark | TrackBack
April 22, 2008
March 2008 Quick Links, Part II
By Eric Goldman
Copyright
* A lot of action on whether “making available” a file in a P2P share directory is copyright infringement, including Elektra v. Barker and London-Sire v. Doe. Patry summarizes the action.
* Ticketmaster L.L.C. v. RMG Technologies, Inc., 2008 WL 649788 (C.D. Cal. March 10, 2008). Copyright misuse is not an independent cause of action; it's only a defense. HT Evan Brown.
* A student asked me a good Q that I couldn't answer. Given that copyright work transfers are subject to the risk of a non-waivable termination of transfer 35-40 years after the transfer, how do companies account for that risk on their financial statements?
* A man whose Youtube video was taken down by lawyers for Van Morrison strikes back with a new video: "The Lawyers Pulled My Video Down."
Trademark
* The Utah governor signed SB 151, the repeal of the Utah Trademark Protection Act.
* Wilson v. Yahoo! UK Ltd., No. 1HC 710/07, Feb. 20, 2008. A UK court says that buying the broad-matched keyword "spicy" does not constitute an actionable use in commerce of the trademark "Mr. Spicy." In response, Google liberalized its keyword policy in the UK and Ireland to match its US and Canada policy.
* Vulcan Golf, LLC v. Google Inc., 2008 WL 818346 (N.D. Ill. March 20, 2008). This is another interesting development that I just didn't have time to blog (see my earlier post when the lawsuit was filed). In a lengthy opinion, the district court rejected most of the significant motions to dismiss, saying that she wanted to let the case develop. Ironically, she also complained about the workload in the case--perhaps this is obvious, but granting some motions to dismiss would help clear your docket queue! Unfortunately, most of the opinion isn't insightful because so many issues were reserved for further development. Perhaps the most interesting discussion relates to the "use in commerce" question, and the court rejected a motion to dismiss on that basis: "The plaintiffs have alleged that Sedo and the other Parking Defendants transacted in and improperly profited from domain names that are deceptively similar to the plaintiffs' trademarks. Such statements sufficiently allege the "use" of a domain name to allow the infringement claims against Sedo and Oversee to move forward on this issue." Some other commentary on the case: Sarah Bird and David Fish.
* American Airlines loves Google (except for the part where it's suing Google). HT Search Engine Land.
State Regulation of the Internet
* Some state legislators are becoming privacy entrepreneurs about behavioral targeting. Venkat does a recap. But Zachary Rodgers points out that some of the operative provisions track NAI's self-regulatory guidelines. More angst about deep packet inspection by IAPs.
* Ewert v. eBay, Inc., 5:07-cv-02198-RMW (N.D. Cal. March 31, 2008). eBay isn't an "auctioneer" or an "auction company" as defined by California's Auction Act.
* The Tennessee legislature is considering a goofy response to the Hannah Montana ticket furor.
* Ken Magill at Direct wrote an article entitled "Psychotic Law Clowns in Utah at it Again." A highlight: "Whenever I think of Utah's state legislature, I envision a room full of Jack-in-the-Boxes straight out of a never-made Twilight Zone episode. Every fall, when it's time for the next legislative session, their cranks begin to turn, a chorus of "Pop Goes the Weasel" begins, and on the note for "pop" the lids fly open and dozens of psychotic clown heads spring out of the boxes chanting: "New Internet Law! New Internet Law!""
Other Stuff
* The Economist: The Battle for Wikipedia's Soul. "To create a new article on Wikipedia and be sure that it will survive, you need to be able to write a "deletionist-proof" entry and ensure that you have enough online backing (such as Google matches) to convince the increasingly picky Wikipedia people of its importance. This raises the threshold for writing articles so high that very few people actually do it. Many who are excited about contributing to the site end up on the "Missing Wikipedians" page: a constantly updated list of those who have decided to stop contributing. It serves as a reminder that frustration at having work removed prompts many people to abandon the project." See a similar article in the NY Times Review of Books.
* FTC busts Goal Financial for inadequate security practices.
* The DOJ is busting people who click on a link that purportedly offered child porn, prosecuting them for attempted downloading of child porn.
* Orin Kerr, "Criminal Law in Virtual Worlds," University of Chicago Legal Forum (forthcoming). Orin sensibly argues against virtual world exceptionalism with respect to criminalizing activities in virtual worlds.
Posted by Eric at 10:09 AM | Content Regulation , Copyright , Domain Names , Marketing , Privacy/Security , Trademark , Virtual Worlds | TrackBack
March 02, 2008
Feb. 2008 Quick Links
By Eric Goldman
Advertising
* BusinessWeek: Monetizing social networking sites isn't as easy as everyone had hoped, clickthrough rates are through the floor (0.04%!), and ad proliferation on the sites is driving users away.
* Wilbur, Kenneth C. and Zhu, Yi, "Click Fraud" (January 2, 2008). This paper appears to argue that search engines can increase their profits by failing to disclose the true rate of click fraud on their network.
* In re Miva, Inc. Securities Litigation, 2008 WL 450037 (M.D. Fla. Feb. 15, 2008). This lawsuit alleges that Miva and some associated individuals understated or misreported Miva’s reliance on click fraud, spyware and third party distributors in its public statements and thus inflated the company's stock price. Last year, the court dismissed many of the allegations but let a couple survive. In this ruling, the court dismisses a few more defendants from some statements and lets the rest of the case proceed.
* Going-out-of-business sales are often just another scam. (HT ContractsProf). Note this is completely consistent with economists’ theoretical predictions of final-period behavior of trademark owners.
* Google's stock has lost $70B in market cap in 7 weeks. Oh darn. Clickz offers some theories about why Google's clicks are declining. Could lower rates of click fraud be part of it?
* Hal Varian, Google's Chief Economist, argues that Google's marketplace success is solely due to its "secret sauce" (i.e., the advantage of learning by doing) rather than any defects in the marketplace.
Spam
* Jaynes v. Virginia (Va. Sup. Ct. Feb. 29, 2008). By a 4-3 vote, the Virginia Supreme Court upheld Jeremy Jaynes' 9 year sentence for violating Virginia’s spam law.
* Silverstein v. Experienced Internet.com, 2008 U.S. App. LEXIS 3364 (9th Cir. 2008). Ninth Circuit dismissed a CAN-SPAM lawsuit for lack of jurisdiction when the defendants attest that they didn't send the message and aren't local.
Domain Names
* NSI has been sued for its practice of grabbing pre-registration domain names based on WHOIS searches. The complaint. Good luck defending those practices, NSI!
* Two more breathy articles about the economics of domaining from the New York Times and Network World.
47 USC 230
* Johnson v. Barras, 2007 CA 001600 B (DC Superior Ct Feb. 1, 2008). Court dismisses a lawsuit against a website for republishing a defamatory story per 47 USC 230.
* Yet another doomed lawsuit against MySpace for facilitating communications between an adult male and an underage female that led to sex. Sam Bayard's comments.
Pornography
* NY Lawyer (login required): "Defense Bar Sees Growing Practice in Internet Sex Crimes"
* A federal obscenity prosecution for publishing graphic short stories (without pictures) on the Internet? As Tim Wu says, "astonishing."
* The Utah legislature is considering entering the marketplace again, this time through a certification mark program for Internet access providers who are willing to combat porn. See HB407. Of course, the Utah legislature has had terrific success in the past creating successful new business opportunities that the marketplace has overlooked.
User-Generated Content
* Nick Carr: "What we've seen happen with self-regulating communities, both real and virtual, is that they go through a brief initial period during which their performance improves - a kind of honeymoon period, when people are on their best behavior and rascals are quickly exposed and put to rout - but then, at some point, their performance turns downward. They begin, naturally, to decay." Like, I think, Wikipedia.
* Slate on the top-heavy nature of contributions to Wikipedia and Digg.
* Christian Science Monitor: Teachers Strike Back at Students' Online Pranks.
* Sam Bayard on a motion to quash in the AutoAdmit case.
Reputation
* eBay no longer lets sellers leave negative/neutral feedback for buyers. This putatively stops sellers from retaliating against buyers who leave legitimate complaints, but it also skews the database towards only positive reviews, which ultimately undercuts its credibility.
* In India, where courtships remain very brief by US standards and grooms can be paid dowries by the bride's families, there is an emerging trend for brides to hire "wedding detectives" to ferret out the scoop on grooms and whether their representations are correct.
* Funny article on being a secret shopper for Consumer Reports.
* Dan Solove's book, The Future of Reputation, is now available online for free. Ethan's review of the book.
Patents
* Six years later, eBay finally buys it now: eBay v. MercExchange settles with eBay buying out some of MercExchange's patents and licensing others.
* Mike Masnick: "Psst! Patent Examiners Do Not Scale"
Copyright
* Mike Masnick: “Why We Should All Want Politicians Who Plagiarize.”
* Do Not Resuscitate...My Copyrights (funny).
Miscellaneous
* Citizen Media Law Project has a useful discussion on getting insurance for cyberlaw risks.
* People v. Fernino, 2008 WL 382348 (N.Y. City Crim. Ct. Feb. 13, 2008) (woman violated a no-contact order when sending a MySpace message to the person).
* Mike Masnick: "We Need A Broadband Competition Act, Not A Net Neutrality Act"
* A retrospective on some of the leading dot-coms from the 1990s.
Posted by Eric at 05:32 PM | Content Regulation , Copyright , Derivative Liability , Domain Names , E-Commerce , Internet History , Marketing , Patents , Privacy/Security , Search Engines , Spam , Trademark | TrackBack
February 13, 2008
Jan. 2008 Quick Links (IP Edition)
By Eric Goldman
Trademarks and Domain Names
* Adidas America, Inc. v. Payless Shoesource, Inc., 2007 WL 4482201 (D. Oregon Dec. 21, 2007). This case (1) discusses whether advice of counsel is a defense against willfulness in the trademark context, and (2) concludes that Oregon's state anti-dilution law is preempted by Bonito Boats.
* More evidence that price does affect brand perceptions: "A $90 wine tastes better than the same wine at $10."
* Visa Int'l Service Assoc. v. JSL Corp., No. 2:01-CV-00294, 2007 U.S. Dist. LEXIS 95334 (D. Nev. Dec. 27, 2007). The domain name "evisa.com" actually dilutes the Visa brand because it will disappoint people who enter the domain name looking for Visa. That's SO 1997!
* Salle v. Meadows, 6:07-cv-1089-Orl-31DAB (M.D. Fla. Dec. 17, 2007). A rare case interpreting 15 USC 1129, the law restricting the registration of domain names incorporating a person's name.
* The "Surf City" USA lawsuit between Huntington Beach and a Santa Cruz retailer has settled.
* I've seen this issue come up a few times now. Trademarks 1 and 2 are similar. A Google search for TM1 includes the question "Did you mean: TM2?" How might this prompt affect an infringement analysis?
* There has been a lot of domain name craziness in the past few weeks, and unfortunately I couldn't keep up with all of it. So a few brief remarks on two of the more interesting developments:
- First, NSI has admitted that it grabs domain names that people are researching, preventing the potential customers from using any other domain name registrar for 5 days and potentially helping swipers grab the domain name thereafter. NSI's practice is completely sleazy because of the unique retailing environment for domain names. Domain names are a single-item good that is being simultaneously and competitively sold by multiple retailers (the registrars)--but through this practice, NSI expands its inventory and simultaneously shrinks the inventory of competing retailers before NSI has actually made the sale. ICANN needs to shut down this type of inventory abuse NOW.
- Second, Google has announced that it will not provide AdSense ads (through its domain name parking program) to domain names that may be kited (i.e., repeatedly reregistered during the free 5 day trial period). That's great, Google, but why don't you simply say that you won't display ads on any domain names in the first 5 days of their registration? That policy change would kill domain name tasting, but Google's foot-dragging here makes me wonder just how much money Google is making from domain name tasting. C'mon Google, I think you can do better.
Copyright and File-Sharing
* Virgin Records v. Thompson (5th Cir. Jan. 4, 2008). Man improperly sued by the RIAA dragnet can't recover his attorneys' fees. This turns on the fact that he didn't respond to the pre-litigation contacts to turn over his adult daughter who did the file-sharing.
* Atlantic Recording Corp. v. Serrano, 2007 WL 4612921 (S.D. Cal. Dec. 28, 2007). The court rejects the trespass to chattels and CFAA claims of a P2P file sharer against the parties investigating him by checking out his share directory.
* Lots of action over takedown notices:
- The 10th Circuit says that a bogus takedown notice (in this case, an eBay NOCI under its VeRO program) supports jurisdiction in the targeted vendor's home court. Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 2008 WL 217724 (10th Cir. Jan. 28, 2008). See related litigation from the same eBay vendor.
- For a contrary ruling, see Doe v. Geller, 2008 WL 314498 (N.D. Cal. Feb. 4, 2008).
- Colon v. Innovate! is a lawsuit initiated by an eBay seller that claimed an IP owner was misusing eBay's VeRO program to shut down his auctions (which were priced below the IP owner's minimum pricing program although the seller wasn't bound to the program). Innovate made an interesting tactical move (blunder?) to implead eBay into the lawsuit; eBay then countersued Innovate for sending bogus NOCIs.
* In a bizarre press release issued almost 2 months after the applicable ruling, John Dozier of the Dozier Internet Law Firm extolled the ruling in the 43sb.com case (a case the Dozier firm wasn't involved with) where the court suggested that cease-and-desist letters were copyrightable. This sparked yet another blogswarm on this topic; see, e.g., Paul Levy, Marc Randazza, Eugene Volokh, Frank Pasquale, Joe Gratz, 43sb.com, Ron Coleman, Overlawyered. It's clear this issue needs a more definitive resolution by the courts or the legislature. Fortunately, a number of people would welcome the opportunity to help Dozier test if his legal theory will fly in court. If you've been contacted by John Dozier threatening you for infringing the copyright in his firm's cease-and-desist letters and would be interested in help arranging an appropriate defense, please contact me.
Posted by Eric at 11:29 AM | Copyright , Domain Names , Trademark | TrackBack
December 14, 2007
Oct.-Nov. 2007 Quick Links, Part 2
By Eric Goldman
Marketing/Branding
* To stimulate demand for its services, the British postal service is pointing out that snail mail is a good way to use olfactory marketing. Try to keep up with THAT, spammers! But doesn't this give new meaning to the observation that “junk mail stinks”...?
* Dunlop Tires offered a free set of tires to people who would get a tattoo of the company's logo. This tops a past promotion where they gave free tires to anyone who got tire tracks shaved into their hair. As a promotion, tattoos have an obvious advantage over hair-shaving because hair grows back. See my comprehensive post on tattoo advertising.
* As the Internet increases price competition and reduces margins in the jewelry market, diamond manufacturers are trying to prop up prices by branding their diamonds.
* Another lawsuit over the scorching-hot Hannah Montana concert tour—this time, alleging that the Hannah Montana fansite overpromised priority access to tickets.
* Anthony v. Yahoo, which involved a claim that Yahoo misled consumers of its dating service, has settled for $4M.
* I enjoyed this YouTube Video, Mr. Spam Man. Brought to mind the Spam-Free-or-Die video, which is still funny today.
Copyright
* William Patry on crazy copyright rulings against the “segOne,” a device that allows retailers showing broadcast TV to their patrons to substitute in ads sold by them instead of the ads sold by the broadcasters.
* Textile Secrets International, Inc. v. Ya-Ya Brand, Inc. (C.D. Cal. Oct. 31, 2007). 17 USC 1202 (the restriction on modification/removal of “copyright management information”) has been rarely interpreted, so this is a noteworthy case on that basis alone. This case involved the removal of CMI in offline activities. The court concludes "Court nevertheless cannot find that [1202] was intended to apply to circumstances that have no relation to the Internet, electronic commerce, automated copyright protections or management systems, public registers, or other technological measures or processes as contemplated in the DMCA as a whole."
* The Copyright Office has (finally) updated its electronic copy of Title 17.
Blogging
* David Hoffman discusses some considerations when structuring a group blogging LLC's operating agreement.
* U.S. v. Citgo Petroleum Corp., 2007 WL 4116066 (S.D. Tex. Nov. 19, 2007). An attendee at a trial blogs some of her observations about the jury. Her reward? One of the litigants can depose her as having potentially relevant information about jury impartiality. See my first-hand experience with potentially being deposed due to a blog post.
E-Commerce
* College students are ordering tires, pool tables and Winchester rifles online.
* The Canadian taxing authorities have won a victory allowing them to order eBay’s US company to disclose vast amounts of transactional data that presumably will be cross-checked against Canadian PowerSeller tax returns.
Miscellaneous
* Express Media Group, LLC, v. Express Corp., No. C 06-03504 WHA (N.D. Cal., May 10, 2007). Martin Samson's summary: "Court finds defendant, who claimed to have purchased plaintiffs' Express.com domain for $150,000 from someone who purported to be, but was not, the domain's Administrative Contact, guilty of conversion and directs defendant to return the domain to plaintiffs."
* Fallout from the Oracle v. SAP case: SAP may sell TomorrowNow, and several TN executives have been axed.
* A good use for a geolocated cellphone-mediated information service: the location of the nearest public toilet.
* Declan rallies against a federal "Do Not Track" list.
* NYT: US News & World Reports is getting into the consumer review business by aggregating third party opinions. According to the NYT, "The magazine has searched the work of dozens of automotive reviewers at newspapers and magazines, assigned a numerical value to each review (a process U.S. News describes as complex, rigorous and top secret), and then aggregated those into final scores. The Web site offers a description of each vehicle, sprinkled with snippets of quotes from those reviewers, so that it reads as much like a Zagat's restaurant blurb as something you might find in Consumer Reports."
* Don'tcensorme.com: a website for commenters who believe that their comments have been deleted by moderators on hubris overload.
* BusinessWeek: 101 Best Web Freebies.
Posted by Eric at 08:20 AM | Copyright , Domain Names , E-Commerce , Marketing , Privacy/Security , Spam | TrackBack
October 06, 2007
September 2007 Quick Links Part I
By Eric Goldman
Marketing
* From the NYT: There are 200+ auto repair shops in the "Iron Triangle" area in New York, and apparently they compete fiercely with each other, shouting out price quotes as cars needing repairs drive by. But according to one business owner, "Competition is fierce, but we got ground rules here for pulling in customers...For one, you got to stand in front of your own business. You can’t come and stand in front of my shop and steal my customers."
* Cowan v. Hotwire, LASC Case No. BC328621 (Los Angeles Superior Court complaint filed Feb. 10, 2005). I just found out about this case because apparently I'm a potential class member. The gist of the lawsuit is that Hotwire overpromised the hotel quality based on the star ratings assigned to specific hotels. Whether or not this lawsuit is meritorious, it's another reminder that companies need to precisely characterize their rating systems.
* You may recall the lawsuit over James Frey's A Million Little Pieces, a non-fiction story that was a little fictional. The case settled with a class remedy of a refund for book purchasers who went through a fairly complicated process. Care to guess how many purchasers tendered claims? Try 1,345--meaning about $20,000 of actual cash will go into the hands of "harmed" class members. Transaction costs to award this $20,000 of relief? Lawyers want almost $800,000, plus the costs to communicate with the class were about $335,000--in total, about $56 for every $1 of relief.
* In this article, I discussed how intermediaries would seek to mine a person's various methods of communication as source material for ad targeting (that is, unless the law restricts the intermediaries' ability to mine such data sources). The latest example? Pudding Media, which provides free Internet-based calls for the opportunity to deliver contextually relevant ads triggered by the contents of the phone call.
* The "perfect schwag"? One obvious option that didn't make the list...slinkies!
Intellectual Property
* We usually assume that copyright owners won't license their content to critics seeking to disparage them; hence, fair use is needed to permit such critical secondary uses. But a counterexample from the NYT: Naomi Klein licensed the Canadian "National Post" to display excerpts of her book alongside a critical review. There is some evidence Klein didn't know the hatchet job was coming, but even if she did, would it have been a bad choice on Klein's part? Not necessarily. See this study showing that even a critical New York Times book review lifts sales.
* Chang v. Virgin Mobile USA (D. Tex). See the NYT article on this case. Virgin Mobile allegedly downloaded photos from Flickr to use in an advertising campaign without getting publicity consents from the individuals depicted. This is a lawsuit by one of the depicted individuals. I'm very surprised by this apparent oversight because most ad agencies are thoroughly aware of publicity rights issues. Maybe someone mistakenly thought that Flickr's Creative Commons license extended to publicity rights?
* Freecycle Network, Inc. v. Oey (9th Cir. Sept. 26, 2007). Defendant does not make a trademark "use in commerce" when his actions were not "made to promote any competing service or reap any commercial benefit whatsoever."
* WSJ: "Web-Address Theft Is Everyday Event"
* WSJ: Some franchisors are loosening restrictions on franchisees’ ability to make independent choices.
Posted by Eric at 10:10 PM | Copyright , Domain Names , Marketing , Publicity/Privacy Rights , Trademark | TrackBack
September 06, 2007
August 2007 Quick Links, Part I
By Eric Goldman
Search Engines
* Google extended its ad serving technology to consider a user's past search phrases in addition to their current search term.
* Greg Linden: "Google is teasing too many lions."
* BusinessWeek: Some VCs are cranky that Google is competing with them by actively investing in start-up deals.
* From Answers.com's press release in August: "Answers Corporation (NASDAQ: ANSW) announced today that, due to a search engine algorithmic adjustment by Google, Answers.com has seen a drop in search engine traffic starting last week. As a result, overall traffic is currently down approximately 28% from levels immediately prior to the change...This change only demonstrates the sound business rationale behind our agreement to purchase Dictionary.com, because it underscores a primary motivation for the deal: to secure a steady source of direct traffic and mitigate our current dependence on search engine algorithms."
Intellectual Property
* Question: Any theories why the Copyright Office hasn't yet issued "final" regulations for the DMCA 512 registration of an agent for notice...9 years after the DMCA passed?
* From the EFF: RIAA v. the People: Four Years Later. A terrific overview/recap of the RIAA's campaign against online dissemination of music. I'm planning to assign this report to my Cyberlaw students when we discuss file-sharing.
* New York Mercantile Exchange v. Intercontinental Exchange, No. 05-5585-cv (2d Cir. Aug. 1, 2007). Second Circuit says that mercantile exchange settlement prices are not protectable due to the copyright merger doctrine. It would have been better if the court had said that prices aren’t copyrightable, but perhaps we should take our victories where we can find them. HT Patry.
* Bensbargains.net, LLC v. XPBargains.com, 2007 WL 2385092 (S.D. Cal. August 16, 2007). Plaintiff aggregated various "deals" into a website and claimed a copyright in the aggregation. Defendant took the deals and integrated them into its website. Copyright infringement? The judge sets an arbitrary cutoff: "there is insufficient similarity to survive summary judgment where either the percentage of Plaintiff's deals that were copied or the percentage of Defendants' deals that were derived from Plaintiff's website is less than 70%." Evan has more.
* Lennar Pacific Properties Management, Inc. v. Dauben, Inc., 2007 WL 2340487 (N.D. Tex. August 16, 2007). Trademark owner gets an ex parte TRO against a domainer. More from Evan.
* WSJ: The KSR case has noticeably improved prospects for patent defendants.
* The EFF is challenging UMG's practice of stamping a "promotional use only, not for resale" label on promotional CDs.
Marketing/Advertising
* NYT on car ad-wrapping. See my previous post where I proclaimed ad wrapping as a relic of the dot com boom. It looks like the practice still lives! Open invitation: anyone who would like to pay me $800/mo to wrap my car, please call me! For that amount of cash, I'll drive the ugliest ad imaginable.
* There was a new ruling in NetQuote v. Byrd, which I styled as the “lead fraud” case. Rebecca recaps the action.
* Apparently, in Florida, a lot of senior citizens dining out at restaurants will ask for some lemon wedges and a glass of water, then add a few Sweet-and-Low packets to create their own tableside-brewed lemonade for free instead of ordering a drink off the menu. One restaurant owner got fed up and charged a diner $1.29 for the unadvertised menu item of self-brewed lemonade. Now, the sparks are flying!
* More unfortunately placed ads.
Contracts
* Cohn v. TrueBeginnings LLC, No.B190423 (Cal. Ct. App. July 31, 2007). Another court upholds a mandatory clickthrough even when the actual terms are hyperlinked. Tom O'Toole comments and provides screenshots.
* Ken Adams demonstrates, step-by-step, how he edits a contract.
Lexicon Watch
* New word alert: "bacn" = transactional email from websites you have a relationship with. Personally, I think we need to get off the meat metaphors.
* William Gibson says the prefix "cyber" is passe.
Posted by Eric at 04:27 PM | Copyright , Domain Names , Licensing/Contracts , Marketing , Patents , Search Engines , Trademark | TrackBack
July 31, 2007
July 2007 Quick Links, Part I
By Eric Goldman
Search Engines
* According to this study, up to 40% of search queries are "re-finding queries" (i.e., the searcher is trying to re-find previously viewed information). The implication: "Because people repeat queries so frequently, search engines should assist their users by providing a means of keeping a record of individual users' search histories, perhaps via software installed on the user's own machine." As I've said before, search engines necessarily will need client-side software to see more consumer behavior if they want to improve relevancy for consumers. HT Greg Linden.
* People are spoofing the Googlebot.
* Hal Varian, a first-rate scholar at Berkeley's SIMS, is now Google's chief economist. I don't know how many other Internet companies have economists-on-staff, but I could see this as a growth area.
Intellectual Property
* Prediction: at least one person will go to jail for prereleasing the new Harry Potter book. It's just too conspicuous for the feds to ignore. Indeed, at this point, it seems unavoidable that every launch of an eagerly anticipated copyrighted work will also involve criminal prosecutions for unauthorized prereleasing (see, e.g., this post). Meanwhile, BusinessWeek is marveling at how many websites are now cooperating with copyright owners rather than fighting them.
* Capitol Federal Sav. Bank v. Eastern Bank Corp., 2007 WL 1885134 (D. Kan. June 29, 2007). Kansas TM owner lacks jurisdiction in Kansas over New England bank allegedly committing TM infringement, even though the New England bank bought keyword ads on the trademark (but, those ads were geo-targeted to Massachussetts). Along the way, the court (as usual) cites to Zippo but rejects the "website doing business" prong, instead requiring the plaintiff to show that the website was doing business in the forum jurisdiction.
* Masterson Marketing, Inc. v. KSL Recreation Corp., 2007 WL 1975425 (S.D.Cal. April 13, 2007). Oh man, what a crazy lawsuit. Freelancer takes product shot of hotel and licenses photo to hotel. Hotel then provides photo to third party websites (such as Expedia) as a way of promoting the hotel. The freelancer claims the hotel breached the license and proceeds to sue what seems like every website in the travel industry. This case is now going on 5 YEARS...over a product shot. (Disclosure note: I worked a little on the case when I was affiliated with Epinions, which is one of the defendants. Yes, it's that old). This ruling deals with the hotel's attempt to recreate the product shot with a different photographer. The court grants SJ to the defendants on the copyright infringement of a recreated shot (per ETS-Hokin). The court also makes it clear that the plaintiff isn't going to get any of the plaintiff's profits, which I assume means the plaintiff is going to get bubkus damages (plaintiff isn't eligible for statutory damages).
* From the NY Times: Mr. Skin is a website that provides subscribers with access to pictures and videos of naked actresses taken from movies. Mr. Skin doesn't normally get permission from copyright owners, seemingly making it a prime target of a business-ending copyright lawsuit. It tries to justify the wholesale republication of clips and stills under the guise of fair use because it claims to be a movie review site, but I doubt that many judges would find that argument very persuasive. However, movie studios have realized that promotion via Mr. Skin increases demand for the movies ("sex sells"), even if Mr. Skin is already showing the "money shot" on its site. As a result, instead of getting lots of C&D letters, Mr. Skin gets lots of promotional copies from movie studios.
* Microsoft is trying to patent what Ars Technica describes as the "mother of all adware." Microsoft is also trying to patent a system for tracking people to deliver relevant advertising. People may find these patents a little creepy, but I see them as both inevitable and ultimately a good thing.
* Washington Post: a new website is trying to position the purchase and resale of exclusively branded fashion items (e.g., Birkin purses) as an investment. And to stabilize the investment decisions, the website screens out the knock-offs and certifies authenticity.
* Domaining to become a $4B/year industry?
Posted by Eric at 12:40 PM | Copyright , Domain Names , Internet History , Patents , Search Engines , Trademark | 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 27, 2007
Google Sued in Domainer Lawsuit--Vulcan Golf v. Google
By Eric Goldman
Vulcan Golf, LLC v. Google, Inc., No. 07CV3371 (N.D. Ill. complaint filed June 15, 2007) [WARNING! the complaint is a 4.3MB PDF]
Domainer litigation is heating up, and this lawsuit may be the most ambitious anti-domainer lawsuit to date. First, it is a putative class action lawsuit. Second, in addition to naming four leading domainer firms, the plaintiffs provocatively go after Google for providing ads to domainer sites. I believe this is the first lawsuit against Google for its domainer relationships.
The complaint itself is a 121 page, 638 paragraph (with one paragraph enumerating 47 defined terms), 4.3MB behemoth alleging trademark infringement and dilution, ACPA violations, RICO and other claims.
Much of the lawsuit focuses on Google's "AdSense for Domains" program specifically catering to domainers and domain name parkers. Google's program is somewhat obscure and unusual. It is only available to domain names that don't have any content (other than the ads provided by Google), and Google effectively takes control of the pages itself. As the program’s FAQ says, "AdSense for domains customers redirect traffic from parked domains to the AdSense for domains service. When Google receives the request, it processes the domain name and returns formatted HTML that includes contextual ads and related searches. Customers can either display the full page HTML or include it in a frame." The plaintiffs argue that, as a result, Google is effectively the domain name licensee, which enables plaintiffs to assert an ACPA claim against Google.
Functionally, the complaint says that a "domain name is not a search query" (para. 312). However, from my perspective, Google in fact treats the domain name exactly like a search query; the domain name acts like a keyword to trigger ads, no different from the way Google treats a searcher's keywords as a trigger for ads on its website. (I explain my view of the interrelationship between domain names and keyword triggers in much more depth here).
Whether domaining is a good or bad thing policy-wise depends on your view:
Con: Trademark owners complain about the typosquatting nature of most domainer pages. Indeed, Google is uncharacteristically solicitous of trademark owners upset by parked domains--in contrast to Google's normal policy that it won't disable trademarked keywords, Google will completely disable ads on parked domain names at the trademark owner's request. This raises the lurking issue about whether search engines can impose opt-out obligations on IP owners. At the same time, it makes me wonder if the class could get its desired results simply from following the complaint procedures. (The complaint rejects this approach, calling the trademark complaint procedures "audacious" and "illusory.")
Pro: Google and the domainers could point out that consumers who access these domain names are either going to see a 404 or a page of putatively relevant paid links, and the latter is more useful to them. In fact, according to this study, ads on parked automotive-related domains convert at 2X ads on search engines. So, perhaps these ad pages are more helpful to consumers than 404 pages.
There is a lot of interesting detail in the complaint, but I’ll just point to one more tidbit. The complaint notes that Google has repeatedly gone after typosquatters on the Google mark. It says "Defendant Google...has engaged in precisely the same illegal conduct ... that Google itself complained of....In fact, Defendant Google has taken the illegal conduct to a new and more egregious level" because (among other things) it profits from hundreds of thousands of illegitimate domain names and uses a "sham" and "illusory" trademark complaint procedure.
It’s hard to tell if a complaint like this will have legs. The plaintiffs’ attorneys did extensive research and provide a lot of detail, so the complaint lacks some of the deficient elements we often see in lawsuits against search engines. At the same time, the lawsuit could be gutted if the judge rules that none of the parties engaged in a trademark use in commerce—an open legal question that has not been resolved in the domainer context. Further, the lawsuit could effectively fall apart if the judge rejects formation of a class. Trademark class action lawsuits are rare for good reason-- trademark owners must establish the validity of their marks, the famousness of their marks (for dilution) and the similarity between their marks and the defendants' usage. These are all intensely fact-specific questions; none of which seem susceptible to class adjudication.
Posted by Eric at 05:20 PM | Domain Names , Search Engines , Trademark | TrackBack
June 26, 2007
New Cyberlaw Fad--Real Estate Developers v. Griping Homebuyers
By Eric Goldman
We appear to be seeing a mini-trend of homebuilders suing griping homebuyers. Overlawyered's Walter Olson succinctly aggregated some cases, including:
* RSA Enterprises v. Bad Business Bureau and Google, a lawsuit doomed to failure (at least in Google's case) due to 47 USC 230.
* WBG Builders v. ConsumerAffairs.com and Garlic. Depending on the facts, ConsumerAffairs.com may be protected by 47 USC 230, but the news report indicates that WBG is suing the posters as well.
* While not exactly a developer v. buyer lawsuit, a home contractor (Sieber/SCS Contracting) sued a number of defendants for defamation based on postings to Angie's List. According to the DC Superior Court website, Sieber v. Mattera (Case # 2007 CA 002063 B) and Sieber v. Hammock (Case # 2007 CA 001726 B) each settled a month after filing, although Hammock's lawsuit against Sieber for contract breach is still pending (see Case # 2006 CA 006940 B). Sieber also sued Angie's List and some other defendants for malicious interference. Sieber v. Brownstone Publishing, Case # 2007 CA 002549. I think this claim is clearly barred by 47 USC 230 if it's based on user postings. The lawsuit was dismissed May 31 but revived; then all of the individual defendants (but not the named defendant) were dismissed June 11.
What's going on here? First, homebuilders are wasting their time suing sites that republish buyer complaints; those lawsuits should be preempted by 47 USC 230. Second, developers appear to be a little touchy. People always complain about their homes; as readers, we know that and can evaluate others' complaints accordingly. So a developer's lawsuit may appear to offer moral vindication, but chances are it's a bad economic decision (assuming the developer has legitimate reason to complain in the first place).
The latest developer v. buyer case is Taylor Building Corp. v. Benfield, 2007 WL 1748694 (S.D. Ohio June 15, 2007). This lawsuit relates to a gripe site set up at the domain name "www.taylorhomes-ripoff.com" in 2003 that was taken offline in 2004. The developer sued for defamation, tortious interference and trade dress infringement. The court carefully rejects most of the defamation claim (for being substantially truthful) and the tortious interference claim for lacking the requisite scienter. The court also rejects the trade dress claim on several grounds, including the website’s nature as a gripe site:
Benfield clearly hoped to drive customers away from Taylor by posting his complaints about the home builder. Thus, it is arguable that he intended to cause Taylor economic harm. However, in keeping with the logic of Taubman and Lamparello, the Court concludes that, even if Benfield's use of the website was commercial, his website was a forum for criticizing the builder. Accordingly, there is no likelihood of confusion and, thus, no Lanham Act violation.
The court also rejects the initial interest confusion claim because the site didn't sell or promote any products, and no one would be confused by a domain name containing the word "ripoff."
Despite the significant good news for the defendant, two potentially defamatory statements survived the SJ motion. A reminder to gripers: you own your words, so pick them carefully.
Tying these cases together, it appears that developers are the latest industry to realize the power and danger that online word of mouth poses to their businesses. Coping with this revelation requires some care. Historically, publicity-enhancing lawsuits may not have been the best way to respond to negative reputational information, but in the networked era, they are almost guaranteed to be a poor choice. So developers will need to adapt their practices--and perhaps their expectations--to accommodate the modern information ecosystem.
Posted by Eric at 08:37 AM | Content Regulation , Derivative Liability , Domain Names , Trademark | TrackBack
June 12, 2007
Domain Names Can't Be Trespassed--Utube.com v. YouTube
By Eric Goldman
Universal Tube & Rollform Equipment Corp. v. YouTube, Inc., 2007 WL 1655507 (N.D. Ohio June 4, 2007)
Boy, this case got a lot of attention when it was first filed (which isn't surprising; YouTube lawsuits usually do). You may remember the story: the plaintiff is a dealer of used tube mills, used pipe mills and used pollforming machines. The plaintiff operated a website at utube.com. As you might expect, like most other industrial B2B vendors' websites, utube.com had a small but targeted audience.
With the phenomenal and quick rise in popularity of YouTube, a lot of web users mistyped youtube.com and entered utube.com instead, causing utube.com to suddenly experience disproportionate popularity. Unfortunately for the plaintiff, few of these visitors were interested in pollforming machines--as the opinion starts out, "This is a case about two very different types of “tubes.”" As a result, the plaintiff was paying big bandwidth charges for customers who weren't buying. In some cases, the plaintiff claimed that the traffic overwhelmed the servers, causing utube.com to be offline and preventing the plaintiff's real customers from conducting business with the plaintiff.
The plaintiff sued YouTube for trademark infringement, trespass to chattels and related claims. Last week, the court addressed YouTube's motion to dismiss. The net result is that the court allowed some of the plaintiff's trademark and related claims to survive, but the court dismissed several other claims (with leave to amend).
Trespass to Chattels
Most interesting to me is the court's dismissal of the plaintiff's claims that YouTube "trespassed" utube.com. The court correctly says that trespass to chattels (TTC) claims require physical contact, so it is not possible to trespass intangible property like a domain name. While this is the right result, I can't help but note the Ninth Circuit's holding that domain names can be converted like personal property (in the Sex.com case), and the recent Thyroff case, which also said that digital files could be converted. But here we're talking about a smaller possessory interest than conversion, and the court rightly understands that TTC could become a bypass to trademark infringement. As a result, this decision channels unhappy domain name owners towards trademark claims instead of some TTC bypass.
Even if the domain name itself can't be trespassed, the plaintiff can still claim that the computer servers attached to the domain name were trespassed. The court dismisses the claim for two independent reasons:
1) The plaintiff uses a third party web host, and the court says that the plaintiff didn't allege an adequate possessory interest in its host's equipment.
This may just be a pleading issue that gets corrected in an amended complaint, but it raises an interesting question about TTC standing that I don't recall seeing discussed before. Assuming that TTC is occurring to a site hosted by a third party vendor, does the TTC claim rest with the website operator, the vendor, or no one? I had always assumed that the website operator and the vendor EACH had standing for TTC because each has shared possessory interest in the computers, but I can see outer limits to this. For example, a person using a free web host vendor who is one of a zillion customers shouldn't have standing if there's a TTC to the vendor's computers. OTOH, if a customer is paying a vendor to operate a dedicated computer, and the customer will bear all economic charges associated with that computer's usage, I think the customer has standing. In that circumstance, perhaps the vendor does as well.
In my case, I pay a nominal amount to my web host for shared computer usage, but I pay bandwidth charges associated with my domain name. I think that if a third party were trespassing my website, and I bore the economic consequences from bandwidth usage, I should be able to claim TTC even though I only "lease" the computer space and I share that computer with other sites. Perhaps this warrants more thought.
2) Independently, the court correctly says that YouTube's customers, not YouTube itself, are "contacting" utube.com, and therefore YouTube isn't committing the actus reus. This result also appeared to be designed to channel this complaint into trademark law.
Nuisance
Some pundits have theorized about the existence of a nuisance claim that would parallel (or supplant) online TTC claims. These nuisance claims are occasionally pleaded (for example, a nuisance claim was made initially in the Intel v. Hamidi case, though Intel voluntarily dropped it), but this argument has not gotten any traction in court. This court's terse rejection of the claim is typical:
Universal has provided virtually no legal support for its contention that a private nuisance can exist when no land is involved. Nor has Universal shown any support for the proposition that a domain name, a website, or a computer that hosts a website somehow constitutes real property. There being no such support or other basis for its nuisance claim, that claim will be dismissed.
Other Claims
The court also dismissed the plaintiff's attempt to cancel (in district court) YouTube's trademarks and claims for negligence and violation of state RICO laws. The court rejected YouTube's motion to dismiss for unfair competition, state dilution, and deceptive trade practices, so those claims are still active (plus any causes of action revived with an amended complaint).
Posted by Eric at 09:59 AM | Domain Names , Privacy/Security , Trademark | TrackBack
June 03, 2007
May 2007 Quick Links
By Eric Goldman
Spam
* MySpace Inc. v. The Globe.com Inc., No. CV 06-3391 RGK (C.D. Cal. Feb. 27, 2007). This case has some personal interest because theglobe.com was one of my flagship clients before I left the law firm in 2000. This ruling held theglobe.com liable under CAN-SPAM, California's anti-spam law and the user agreement for spamming within the MySpace network. See the BNA writeup. Among other remarkable angles of this ruling, the court upholds the liquidated damages clause based on the anti-spam restrictions in the contract. Based on this adverse judgment, in April the parties settled for over $2.5M —basically, all of theglobe.com’s remaining cash, leaving its survival in serious jeopardy.
Domain Names
* Domainers are hot. Business 2.0 article on Kevin Ham, a major domainer who has wildcarded Cameroon's .cm TLD. NYT article on NameMedia, which owns 725,000 domains.
* From the AP: Entrepreneurs loaded up on Virginia Tech- and victim-related domain names following the massacre.
Marketing
* Broadway producer Scott Rudin was annoyed that the New York Times' website published user-submitted reviews of his play. To tweak them for doing so, the play cherry-picked some comments from the users' submissions and ran them in ads for the play with the attribution "The New York Times Online." An NYT editor objected to that attribution because it connoted an editorial judgment of the paper, rather than the paper's readers. Read the fun back-and-forth between Rudin and the editor.
* From the Washington Post: Billboards are the second-fastest growing ad category (after the Internet) due to increased traffic congestion and new digital billboard technology. And a technologist has developed eye-tracking technology that may let billboard advertisers accurately count eyeballs.
* Optima Funding, Inc. v. Strang, 2007 WL 1430699 (Cal. Ct. App. May 16, 2007). A mortgage company said it never sent unsolicited faxes or authorized anyone to do so on its behalf, but it did use lead generation companies. Strang sued Optima repeatedly in small claims court for TCPA violations. Optima struck back with a 17200 claim, basically saying that Strang was falsifying evidence to connect Optima to the faxes. In this ruling, the California Appellate Court upholds Strang's anti-SLAPP motion to strike.
* NYT: Custom postage stamps haven't really caught on. (Note: I just tested on them in my