May 07, 2008
April 2008 Quick Links
By Eric Goldman
Anti-Gaming
* Even though Ticketmaster won its lawsuit, Minnesota overreacted to the Hannah Montana ticket crush by banning software to circumvent an online ticket allocation process. See Sec. 609.806. Check out the hyperbole in this press release! What's next? Are legislators going to make SEO a crime?
* Google modified its relevancy algorithm 450 times in 2007. And yet courts still cite to Brookfield for how search engines operate!
* The UK cracks down on shill marketing online. ClickZ: "Under the new [UK] Consumer Protection from Unfair Trading regulations, it will be illegal to "Falsely claim or create the impression that the trader is not acting for purposes relating to his/her trade, business, craft or profession," or to "falsely represent oneself as a consumer."" See also AdAge.
IP
* Speaking of SEO....the latest pathetic attempt to grab a generic term and trademark it? "SEO." Sarah Bird is on the job.
* Do student notes of a professor's lecture constitute copyright infringement? We may find out.
* Atlantic v. Howell. More on the "making available" theory of copyright infringement.
* Sarah Bird on registering copyrights in websites and blogs.
* A for-profit T-shirt listing the names of deceased Iraq soldiers sparks a publicity rights lawsuit.
General
* Bowen v. YouTube, Inc., 2008 WL 1757578 (W.D. Wash. April 15, 2008). The court upheld the forum selection clause in YouTube's user agreement.
* eBay is ending its promotion of third party live auctions. Maybe because of this loss?
* Rebecca blogs on SuccessFactors, Inc. v. Softscape, Inc., 2008 WL 906420 (N.D. Cal.), an odd case involving the Computer Fraud & Abuse Act and an "attack PowerPoint" allegedly sent by a competitor to its prospective customers.
* Kate Kaye writes about the new Internet industry lobby group, the "State Privacy and Security Coalition," designed to fight laws like the Utah Trademark Protection Act.
* Kevin Werbach, The Centripetal Network: How the Internet Holds Itself Together, and the Forces Tearing it Apart, UC Davis Law Review, Forthcoming. An interesting paper applying "network formation" theory to show how the Internet came together as a unified network and how those unifying forces are under constant stress.
Posted by Eric at 08:52 PM | Content Regulation , Copyright , Internet History , Licensing/Contracts , Marketing , Publicity/Privacy Rights , Search Engines , Trademark | TrackBack
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 21, 2008
Eric Menhart Backs Off CyberLaw Trademark Claim
By Eric Goldman
You may recall that last month we all had a good laugh over self-proclaimed Cyberlawyer Eric Menhart's trademark application for the term "CyberLaw" to describe his Cyberlaw practice. (In case it wasn't clear, we weren't laughing WITH him...). Despite his initial blustery defense of the application (which, as a reader noted to me, violated the First Rule of Holes), Menhart has now backed off his claim to own the term "CyberLaw." Instead, he has amended his application to seek a trademark registration only in his stylized CyberLaw logo. (Thanks to Tricia Bishop at the Baltimore Sun for calling my attention to the amendment and sending the copy). Unfortunately, I won't dare display the logo here because it would likely make me his next enforcement target; but you can see the design in the amended application.
With this amendment, I'm inferring that all of us--even Michael Grossman, the victim of Menhart's efforts to enforce his purported trademark rights in the term "CyberLaw"--are now free to use the term "Cyberlaw" for its dictionary meaning without fear of getting sued by Menhart. However, Menhart doesn't appear to have changed his tune about the merits of his initial application. Instead, the Baltimore Sun quotes him as saying that he amended his application because:
It was very clear that this was not going to be an academic argument, it was going to be more of a shouting match, and I didn't think it was worth my time to get involved in a shouting match with people that were going to shout louder and had more ammunition in their holsters than I had
Funny--I would have thought it wasn't worth his time because the application was completely unmeritorious.
What Eric Menhart might characterize as a "shouting match" is actually online word of mouth in action. (Note: the Baltimore Sun article incorrectly quoted me as saying that the blogosphere "gang-heckled" him. Actually, I said that we "gang-tackled" him, but the imagery of gang-heckling is perhaps nevertheless appropriate). Historically, it has been fairly rare to see bona fide public evaluations of a lawyer by his or her peers; that kind of reputational information was often well known among lawyers practicing in the geographic/doctrinal area and effectively unavailable to everyone else. Now, through the Internet, everyone--including Menhart's prospective clients--can easily find out what his peers think of Eric Menhart's choices, enabling this reputational information to have a much greater effect at rewarding or punishing marketplace participants as appropriate.
UPDATE: More coverage of this topic:
* Brett Trout
* Ron Coleman
* Sam Bayard
* Techdirt
Posted by Eric at 11:32 AM | Internet History , Trademark | TrackBack
February 14, 2008
Classic Article on "Cybermediaries"
By Eric Goldman
Mitra B. Sarkar et al., Intermediaries and Cybermediaries: A Continuing Role for Mediating Players in the Electronic Marketplace, J. COMPUTER MEDIATED COMMUNICATIONS, 1995
I've been working on my Brand Spillovers paper, which in part addresses the trademark legal principles that govern intermediaries including retailers and search engines. The Sarkar article is one of the most prescient and clear-sighted articles assessing the role of online intermediaries. In particular, it provides a terrific checklist of ways that intermediaries can provide valuable services to consumers and producers, thus continuing to add value to the distribution chain even as transaction costs generally decrease due to electronic mediation. This article is even more remarkable because it was written in the mid-1990s, at the height of cyberspace exceptionalism and at the time when conventional wisdom was that the Internet was going to create widespread disintermediation. A refreshing read, even today.
Posted by Eric at 11:09 AM | Derivative Liability , E-Commerce , Internet History | TrackBack
January 18, 2008
Who Owns "CyberLaw"(TM)? Eric Menhart, a DC IP Attorney, Thinks He Does
By Eric Goldman
Every now and then, we see comical efforts to claim trademark rights in common Internet-related terms. You might recall that the word "Internet" itself was once a trademark (see a list of registrants dated 1994); the term "listserv" is also a trademark that the owner is trying to preserve (bonne chance!), and Hormel has protested the use of its "Spam" trademark in connection with email. Typically, the trademark owner is trying to prevent the genericism of its trademark. Those battles are almost always futile, but I can see why they are fought.
The latest would-be-funny-if-it-wasn't-so-sad attempt to assert trademark rights in a common Internet term involves the term "Cyberlaw." But unlike the anti-genericism efforts, Eric Menhart--a self-described "recognized leader" in intellectual property--is seeking to fence in the generic term "Cyberlaw" to convert it into his own property. He has filed a federal trademark application (application 77341910) in the term "CyberLaw" for the following services:
Legal document preparation and research services for attorneys; Legal research; Legal services; Legal services, namely, preparation of applications for trademark registration; Consulting and legal services in the field of privacy and security laws, regulations, and requirements; Expert witness services in legal matters in the field of intellectual property and information technology; Providing a website that features information on the development of international law, regulations, legal policies, and legal practices in a manner that promotes global governance by all types of organizations; Reviewing standards and practices to assure compliance with intellectual property and information technology laws and regulations; Attorney services; Litigation services; Legal services, namely, trademark maintenance services; Copyright management; Copyright management consultation; Registration of domain names for identification of users on a global computer network; Arbitration; Arbitration services; Consultation in the field of data theft and identity theft; Intellectual property consultation; Intellectual property watch services; Licensing of advertising slogans and cartoon characters; Licensing of computer software; Licensing of intellectual property; Litigation consultancy; Mediation; Patent licensing; Preparing and filing incorporation papers; Providing information relating to legal affairs
He claims a priority date of Feb. 22, 2007. Mysteriously, his website displays the circle-R next to the term "CyberLaw" even though it's only a pending application (the application was just filed Dec. 1, 2007).
Fortunately, I'm 100% confident that the TM Office will reject this application because the term "Cyberlaw" has become a generic description for the law of the Internet and related fields--see the Wikipedia entry on the topic. In fact, the term "Cyberlaw" has been around over 15 years. I did a search in Westlaw's News Database and the earliest reference I found was a Macweek article discussing Jonathan Rosenoer's AOL "Cyberlaw" column--from 1992. I'm reasonably confident we could find earlier references. For example, I found a 1993 National Law Journal article ("A Shingle in Cyberspace: Lawyers Online Find Clients--and Some Risks" by Rosalind Resnick) that discusses the "burgeoning field of cyberlaw, those legal issues confronting the online world."
Unfortunately, the improbability of this trademark hasn't stopped Menhart from asserting his perceived rights against third parties. The EFF writes about one such demand against Michael Grossman, a Chicago attorney who runs a blog entitled "CyberBlawg." I'm wondering how many other people have been the unlucky recipient of a demand letter from Menhart asserting similar claims over "CyberLaw." Perhaps those demands will stop once the TM application gets bounced by the TM Office, but the harm done in the interim could be substantial.
One final observation (and I apologize in advance for any snarkiness here, but I know I'm saying what most of us are thinking). It's impossible to ignore that the trademark applicant is a lawyer claiming expertise in Cyberlaw. What kind of Cyberlawyer doesn't know that the term "Cyberlaw" isn't trademarkable for Cyberlaw services, *especially* not by one who claims a priority date of 2007?
Coverage from around the web:
* Boing Boing
* Slashdot
* Techdirt
* Dvorak
* Las Vegas Trademark Attorney (with a careful analysis of precedent trademark applications)
* Groklaw
* Freedom to Differ
* Lex Ferenda (finding a Cyberlaw reference as early as 1987)
* Likelihood of Confusion
* Your Name is My Business
* NameWire
* Life on the Wicked Stage
* Joho
UPDATE: The Baltimore Sun ran an interesting feature on Eric Menhart in 2004. The article notes some critics said that Menhart's "enterprising nature has led him into another pursuit that some people describe in harsh terms -- like 'extortion' or 'blackmail.'"
UPDATE 2: Mr. Menhart has blogged a response to EFF that reinforces that he really doesn't get it. Two unavoidable facts of life for him:
1) The PTO will bounce his TM application
2) If he ever attempts to enforce his purported trademark rights in "CyberLaw" again, he will be met by a buzzsaw of opposition from some very determined folks.
In light of these facts, most savvy lawyers would realize that the absolutely wrong approach is to dig in his/her heels.
Posted by Eric at 03:59 PM | Internet History , Trademark | TrackBack
November 16, 2007
The Victorian Internet
By Eric Goldman
Tom Standage, The Victorian Internet (1998). Find it at Half.com and Amazon
As you might infer, I'm not at the cutting-edge of reading books. I don't read that many books in general; and I tend to read books well after everyone is done talking about them. But I enjoyed this book so much, and it has aged so well over the past decade, that I thought it was worth a shoutout. One side bonus: given that the book is no longer a hot release, you should be able to get this book used for well less than $10.
The book discusses the history of the telegraph. The book explains the technologies preceding the telegraph, the battles between the inventors of the telegraph, the telegraph's role in spawning new technological innovations (and creating enormous wealth for some of those folks) and the ways that the telegraph did--and did not--change society.
Its thesis is that many phenomena we associate with a global electronic network first occurred in the 19th century, not the 20th, which has made our celebration of the Internet's novelty (a topic at its zenith in 1998 when the book was published) ahistorical. The book thoroughly delivers on this thesis. One particular anecdote really hammered this point home. The book talks about a telegraph-mediated "online wedding" that first occurred...before 1848. (Indeed, the book "Wired Love" was published in 1879 and an article "The Dangers of Wired Love" ran in 1886). Yet, numerous newspaper articles from the mid-1990s marveled at Internet-mediated weddings as if they were completely unprecedented.
More generally, the book broadly makes the case that some things never change. For example, the book describes the arms race between telegraph companies establishing pricing schemes to curb attempts to send more information at a lower cost, just to have telegraph senders coming up with new gaming strategies. The book discussed the paranoia of major institutions in response to telegraphy, including governments that sought to control the use of cryptography in telegraphy and newspapers that assumed that the telegraph would destroy their business. (In the latter case, the newspapers adapted and thrived in response to telegraphy). The book also described how the telegraph contributed to feelings of information overload.
The book ends on a bittersweet note. It observes that people thought that the borderless telegraph communication network would contribute to world peace by breaking down barriers to communication. It didn't. If anything, the telegraph played an important role in 19th century imperialism and contributed to some of the bloodiest wars in history. Similarly, 150 years later, many similarly romanticize how the Internet can make the world a better place. Perhaps the Internet is truly different from the telegraph in this respect, or perhaps, we are just ahistorically proclaiming the latest technology innovation as our savior. As the book says, "That the telegraph was so widely seen as a panacea is perhaps understandable. The fact that we are still making the same mistake today is less so."
From my perspective, the only thing "missing" from this pithy and efficient book was a more thorough discussion of how lawmakers reacted to the rise of the telegraph. I would like to know more about how 19th century regulators coped with--or, more likely, freaked out about--the technological assumptions changed by the telegraph.
It seems safe to assume that some legislators misunderstood the technological underpinnings of telegraphy. The book gives numerous examples of how people didn't understand that the telegraph sent only electronic signals and wasn't a teleportation technology, such as the story of a woman in 1870 who sought to "telegraph" sauerkraut to her son. Again, some things never change; in 2003, a member of the House of Lords had a similar misunderstanding about spam. [the exact quote: "Will the Minister explain how it is that an inedible tinned food can become an unsolicited email, bearing in mind that some of us wish to be protected from having an email?"]
In this vein, the book offered one possible explanation for Sen. Stevens' explanation that the Internet is a "series of tubes." [the exact quote from Wired: "the internet is not something you just dump something on. It's not a truck. It's a series of tubes. And if you don't understand those tubes can be filled and if they are filled, when you put your message in, it gets in line and its going to be delayed by anyone that puts into that tube enormous amounts of material, enormous amounts of material."] Many telegraph operators built out a network of pneumatic tubes to move messages over short distances because this was quicker and more accurate for those messages. So perhaps Sen. Stevens was thinking of the telegraph when he referred to the "series of tubes."
The book was published before Western Union sent its last telegram. At the time I knew this represented the end of an important era, but after reading this book I better understand the significance of that event. Some day, someone will send the very last TCP/IP enabled http message...an event that will also probably pass with a whimper, not a bang.
Posted by Eric at 05:54 PM | Internet History | TrackBack
November 13, 2007
Geolocation and A Bordered Cyberspace
By Eric Goldman
I recently gave a talk on the general theme of the future of e-commerce, and I was allowed to take the topic in any direction. I decided to talk a little about the propagation of geolocation technology and its consequences for a borderless Internet. My notes from the talk:
______
A constant problem in Cyberlaw: the difficulties of authenticating users for age and geography. With respect to geography, in the mid-1990s, there was a strong belief that cyberspace was borderless. Examples:
* John Perry Barlow's 1996 Declaration of the Independence of Cyberspace
* 1997: ALA v. Pataki, where a state anti-Internet porn law (a baby CDA) was struck down as violating the dormant commerce clause. In that case, Judge Preska said: "Geography is a virtually meaningless construct on the Internet."
But there are ways to restore geographic borders to the purportedly borderless Internet:
1) Ask users to self-report. Users may want to self-report geography, especially in the e-commerce context where they want physical goods delivered or need to report their address to authorize a credit card purchase. But the law could force online actors to compel users to self-report geography and then act on the reported information. Examples:
* LICRA v. Yahoo. The French court envisioned that Yahoo could do 90% effective geographic authentication through a combination of IP address analysis and user self-reporting if Yahoo popped up windows asking users to self-report before being allowed to access the website.
* Alaska SB 140, an anti-adware law. To combat pop-up ads, the statute requires software vendors to display pop-up windows asking users to self-report geography.
A world with compelled requests for user self-reporting of geography would be a pop-up filled world constantly asking "where are you now? where are you now?" [see the analogous Verizon ad campaign] This makes user self-reporting undesirable, in addition to being unreliable.
2) IP address analysis. IP addresses are allocated on an International scheme. Yahoo used this scheme to display local ads, a fact noted in the LICRA court. IP address analysis can be more regional; for example, Google does geo-targeting on a more granular basis. Ex: if I search for "mercedes" in Google, I get local Mercedes dealers in the Bay Area. But IP address analysis is incomplete/imperfect.
So if the only geographic authentication tools were IP address analysis or user self-reporting, the Internet would remain more borderless than bordered. However...
3) Geolocation technology. In the future, Internet access devices will be coupled with GPS technology that will automatically report user geography. For example, many mobile phones already have GPS technology in them, and consumers use other mobile devices (e.g., Blackberries) that have geolocation technology. Inevitably, the boundaries between computers and these geolocated mobile access devices will dissolve, meaning that Internet access devices will be geolocated and will automatically self-report user geography as part of interacting with other online actors.
A geolocated Internet will have some benefits. Most obviously, ads can be geographically targeted in ways that can help consumers (i.e., a driver searching for gas can get ads from nearby gas stations). It will also enable other localized content where that matters (weather, directions, location of friends).
But a geolocated Internet will also enable governments to force online actors to "honor" the geographic information. Thus, states could legitimately enact state-specific laws and require online actors to customize their offerings for state residents. Governments could also use the geolocation information to created walled environments, including more highly filtered/screened content. We've already seen this in China and some other countries. In these situations, Internet users will have very different Internet experiences based on their geography. Thus, a geolocated Internet should contribute to the demise the Internet utopianism. Instead of bringing people together over a borderless network, a geolocated world reenables borders that will keep us further apart.
Posted by Eric at 05:44 PM | Content Regulation , E-Commerce , Internet History | TrackBack
October 21, 2007
Ticketmaster Wins Big Injunction in Hannah Montana Case, But Did the Public Interest Get Screwed?--Ticketmaster v. RMG
By Eric Goldman
Ticketmaster L.L.C. v. RMG Technologies, Inc., 2007 WL 2988403 (C.D. Cal. Oct. 16, 2007)
You may remember Ticketmaster's multi-year battle against Tickets.com over data aggregation and deep linking. Ticketmaster never got a solid win in that case, but here Ticketmaster successfully advances the same legal theories against someone gaming its allocation of tickets. Hannah Montana fans might cheer this ruling, but some of the court’s analysis makes this a troubling Cyberlaw development.
Introduction
This case involves what I'll call "ticket sniping"--the practice of quickly snapping up highly-sought-after tickets when they first go on sale and then reselling them at higher prices. When it comes to hot concerts--such as the upcoming Hannah Montana tour--Ticketmaster's price may be well below the prices people are willing to pay in the secondary market. Why don't event promoters use auctions or other dynamic pricing scheme to capture this upside on the first sale? I'm reminded of the odd pricing systems for IPOs--just like that market, perhaps Ticketmaster (as an intermediary) deliberately underprices below the market-clearing price to increase its profits.
In any case, initial ticket buyers from Ticketmaster can get an economic windfall, which naturally motivates people to game the initial first-come, first-served ticket allocation system. RMS was one such gamer. They developed software that helped its customers beat other buyers in the rush to get hot tickets. Ticketmaster sued RMS to stop their gaming activities; the court issues a preliminary injunction:
Copyright
The court says that RMS directly infringed Ticketmaster's copyright in its web pages by browsing them to test the operation of its software tool. Effectively, then, the court says that web browsing is copyright infringement. This isn't the first time a court intimated as much, but it's troubling every time we see it.
The court overlooks any implied license to browse because Ticketmaster's "browsewrap" on its home page (which says "Use of this website is subject to express Terms of Use which prohibit commercial use of this site. By continuing past this page, you agree to abide by these terms") acts as an express restriction on browsing, so any access in contravention of those terms constitutes copyright infringement.
One of the key Qs is how RMS's software differs from other search engine robots. The court skirts this Q, simply pointing to Perfect 10 v. Amazon as excusing the cache copies made by web users who follow search engine links. Of course, search engine robots make lots of other copies, and we think these copies are excused because the final presentation (the display of search results snippets) doesn’t infringe. The court doesn't address this at all.
The court also says that RMS is indirectly infringing based on a Grokster inducement theory because RMS's marketing said it's offering "stealth technology [that] lets you hide your IP address, so you never get blocked by Ticketmaster." This is a pretty expansive interpretation of copyright inducement because the marketing references IP address blocks, not copyright infringement, but it's very consistent with the court's moral condemnation of RMS's behavior.
Anti-Circumvention
The court says that website pages are protected by copyright, and the website used a CAPTCHA to restrict access to these copyrighted works. Thus, distributing the software tool designed to circumvent the CAPTCHA to access the copyrighted website violates 1201(a)(2) and 1201(b)(1). Not only does this give unexpected copyright protection for CAPTCHAs, this ruling seems inconsistent with several precedents holding that bypassing a password protection system doesn't violate 1201.
Breach of Contract
As indicated above, the court upholds Ticketmaster's browsewrap. Admittedly, Ticketmaster has improved its contract formation processes since it litigated against Tickets.com, but I'm not sure this was as easy as the court treated it.
Computer Fraud & Abuse Act
Surprisingly, the court denies relief for this claim because Ticketmaster couldn't allege $5,000 of loss. I tell my students that if they can't construct $5,000 of loss under the CFAA, then they aren't thinking creatively enough.
Conclusion
It's easy to point at RMS and its customers as the bad guys. After all, they are trying to get an unfair advantage in the first-come, first-served allocation of scarce tickets for their economic benefit, with the result that later comers have to pay more to get the same tickets.
But what about Ticketmaster's role in this situation? They haven't designed a technologically gaming-resistant allocation of tickets, so they need legal help to solve that deficiency. I also remain suspicious about Ticketmaster's incentives here, both in setting prices and in policing against ticket allocation gaming. Their motives may not be nearly so consumer-friendly as they try to portray.
And this opinion is hardly pro-consumer either. This ruling won't be a problem if future courts limit this ruling solely to a company's efforts to legally protect a competently designed anti-gaming strategy. But some of the more dramatic rulings are anything but consumer-friendly, such as the implicit holding that browsing is copyright infringement and the upholding of Ticketmaster's browsewrap. If other courts apply these principles more broadly, Hannah Montana concertgoers may have gotten a benefit at the expense of us all.
Posted by Eric at 03:45 PM | Copyright , Derivative Liability , E-Commerce , Internet History , Licensing/Contracts , Privacy/Security | TrackBack
October 10, 2007
Pandora Founder Westergren Speaks at SCU
By Eric Goldman
I *love* Internet radio. I typically listen to it all day long while I'm pounding out emails, articles and blog posts (like this one). I've tried a number of services, including Accuradio, Sky.fm and Last.fm. However, now I listen exclusively to Pandora, which in my opinion is the best of the bunch. Pandora really does get better based on the feedback I give it, which gives me enough incentive to customize it to my tastes. (I won't embarrass myself by exposing my idiosyncratic music preferences here, other than to say that I don't think I've seeded Pandora with any band that started after 1990. Hey, I'm a product of my time.)
In any case, when the High Tech Law Institute was contacted by the Santa Clara University's Center for Innovation and Entrepreneurship to co-sponsor a talk by Tim Westergren, one of Pandora's founders, we jumped on the opportunity. Tim gave an outstanding talk last night to an enthusiastic audience of at least 200 people.
Pandora was founded in 1999 and raised $1.5M in early 2000. That money ran out in 2001 when no more VC money was available. For the next 2 1/2 years, the company went on 300+ VC pitches with no luck, but was able to run on fumes in large part by mostly deferring employee salaries (a total of $1.4M deferred). This is an amazing feat for a number of reasons, including the fact that most employees need to put food on their table, plus I don't think the labor laws really tolerate employee salary deferrals. In any case, in 2004, the company raised new money and revamped the business model. In October 2005, the company launched a consumer-oriented Internet radio, and the rocket ship took off.
This roller-coaster ride was partially tied to the company's search for a viable business model. Pandora first thought it would be an online music retailer (typical thinking circa 1999). Then, it focused on B2B licensing of its services to other online retailers (typical thinking circa 2001). By 2004, there had been enough external changes to contemplate a consumer radio service--broadband had become more widespread, and the webcasting license fees were set at a more palatable level. In their October 2005 relaunch, they first started with a consumer subscription model but quickly realized the futility of getting people to pay for Internet radio. Now, they are effectively ad-supported, and Tim thinks that they can reach profitability at the end of next year assuming the webcasting royalty rate will be reset. (After the tribunal issued the new webcasting rate, the company held a board meeting to decide if they should just fold up their tents and give the remaining money back to investors--instead, they pushed for a listener grass-roots campaign, which was wildly successful).
Pandora's main competitive differentiator is its "Music Genome Project." 50 trained musicians with at least a college degree in music (called "music analysts") listen to songs all day long and rate each song on 400 different musical attributes. See the 2005 WSJ article discussing them. By profiling songs this way, the system can predict that a person who likes an artist's song might like other songs with similar musical attributes. From listening to Pandora for many, many hours, IMO the system isn't perfect, but it does a pretty good job, and it has definitely hooked me on music that I wouldn't have listened to otherwise.
However, the human capital required to build this database is significant and expensive. Sure, the supply of people with a music degree willing to be paid to listen to music all day long should be favorable, but still, a low salary multiplied by 50 people is still a big number. As Tim acknowledged, this is the opposite of scalability--a song can take up to 1/2 hour to catalog--which reduces Pandora's ability to comprehensively catalog the "long tail." On the other hand, they already have a database of 500,000 profiled songs, and they are adding 15,000 songs a month. Plus, having found a way to survive while building such a large database, the database is now a big barrier to entry, because any competitor seeking to take a similar approach (patents permitting) would have to incur serious upfront costs to replicate a competitive system.
Pandora does a little search engine marketing, but principally they rely on viral marketing--build a better product and let the customers evangelize it to their friends. They claim 8.5M registered listeners, growing at the rate of 500k new registrants per month. Listeners interact with Pandora on average 7-8 times per hour to give feedback or configure things (that sounds about right from my personal experience), which is remarkable as a stickiness measure. The result of this interaction is a database of 1B thumbs up/down opinions, a gargantuan database of user preferences. Tim said that Pandora uses this database for some collaborative filtering, but it sounds like this database is could be a globally important resource if made available more widely. (I'm sure the privacy folks are running through all the ways this data could be misused.)
A couple of other interesting factoids:
* at peak hours, Pandora's traffic represents 1.5% of global Internet data
* they block International users because of the lack of Internet webcasting statutory licenses parallel to the rights enacted in the DMCA
* 94% of their database of 500,000 cataloged songs are played every day--powerful evidence of the long tail effect that consumers will enjoy otherwise obscure content if the transaction costs are low enough
* Tim said Pandora's biggest competitor is ClearChannel. Clearly, they want to own the entire radio industry, not just the Internet radio market.
Check out Pandora and see what you think. If you want a jump start and you promise not to laugh at my tastes, I can email you my heavily customized stations.
Posted by Eric at 06:00 PM | Copyright , Internet History | TrackBack
October 07, 2007
September 2007 Quick Links Part II
By Eric Goldman
Contracts
* Manasher v. NECC Telecom, No. 06-cv-10749 (E.D. Mich. Sept. 18, 2007). NECC included the following language on its invoices: "NECC's Agreement 'Disclosure and Liabilities' can be found online at www.necc.us or you could request a copy by calling us at (800) 766 2642." Not surprisingly, an arbitration clause in the referenced document wasn't incorporated into the contract because (among other deficiencies) there was no "call to action" that communicated that the referenced document was part of the agreement. HT: Tom O'Toole.
* Hofer v. The Gap Inc., No. 05-40170 (D. Mass. Sept. 28, 2007). 2 friends decide to vacation together in Jamaica. Friend 1 books the travel arrangements for both of them through Expedia. Friend 2 suffers a personal injury at the resort and wants to hold Expedia liable. Expedia invokes the liability protections in its user agreement, but Friend 2 never consented to or even saw that user agreement. No problem, says the court--Friend 1 was Friend 2's agent and therefore automatically bound Friend 2 to Expedia's agreement. For an analogous case involving software installed on a home computer, see here. HT: Tom O'Toole.
Web 2.0
* Video Professor, Inc. v. Doe (D. Colo.). Video Professor believes a bunch of individuals are committing false advertising, disparagement and other torts by bashing Video Professor's products. Video Professor knows it can't sue the intermediaries per 47 USC 230, so instead it's seeking subpoenas to unmask the gripers. This lawsuit seems misarchitected from a legal standpoint (at least, the Lanham Act portions), but it's also a really bad idea from a business standpoint--the chance of this lawsuit rehabilitating their online reputation is near-zero, and the chance of raising the profile of the gripers' comments in the search engines is near-one. Fortunately, Paul Levy is fighting back. HT: Consumer Law & Policy Blog.
* Michael Erdman reports that the Chicago Lawyers Committee v. Craigslist appeal is moving again. For a while, the case was deliberately sitting idle at the Seventh Circuit, presumably to facilitate settlement, but the Seventh Circuit has now issued a briefing schedule.
* Gary Price reports on the move in Wikipedia Germany to have all page edits reviewed by "trusted editors." More on this from the New Scientist. Yet more evidence that Wikipedia is looking increasingly like other editorially controlled content databases.
* Want to see a user community in the midst of turmoil? Check out the troubles at RateItAll. The consequence: 4 power users are gone, taking 20,000 items of content with them.
* News.com: 9 Fun Ways Web 2.0 Startups Can Commit Legal Suicide
Search Engines
* Jayne v. Google Internet Search Engine Founders, 2007 WL 2852383 (M.D. Pa. Sept. 27, 2007). This was a ridiculous pro se lawsuit that the court easily dismisses on its face. The interesting aspect is that the court says that Google isn't a state actor. This isn't the first court to say so, but it reinforces that Google and other search engines aren't subject to Constitutional restrictions.
* Google filed a motion to dismiss the American Airlines lawsuit. HT Gary Price.
* MediaPost: Personalized search results expand the number of search results that users look at and strongly improve clickthrough rate.
Content Regulation
* I missed this when it was first filed: Interactive Media Entertainment & Gaming Association v. Gonzales (D.N.J. complaint filed June 5, 2007), a First Amendment challenge to the Unlawful Internet Gambling Enforcement Act of 2006.
* American Booksellers Foundation for Free Expression v. Strickland, 2007 WL 2783678 (S.D. Ohio Sept. 24, 2007). Another state level anti-Internet porn law was struck down (this time in Ohio), but only on First Amendment grounds. Influenced by the upholding of state anti-spam laws, the court rejects a challenge to the law on dormant commerce clause grounds. This is a rare opinion saying that a baby CDA state law didn’t violate the DCC.
For Fun
Posted by Eric at 08:33 AM | Content Regulation , Derivative Liability , Internet History , Licensing/Contracts , Search Engines , Trademark | TrackBack
September 07, 2007
August 2007 Quick Links, Part II
By Eric Goldman
* e360 Insight v. Spamhaus Project, 2007 U.S. App. LEXIS 20725 (7th Cir. Aug. 30, 2007). An email marketing company was listed on Spamhaus' ROSKO and sued for defamation and other torts in Illinois. Spamhaus took the position that US courts have no authority to render a judgment on a UK-based operation. The district court ultimately awarded $11.7M in damages and various equitable relief. The Seventh Circuit affirmed the default judgment but vacated the damages and equitable relief, sending those back to the district court to reevaluate the appropriate remedies. I understand that Spamhaus wanted to make a philosophical point by not fighting the lawsuit in the US, but had they overlooked their philosophical objections, they should have won a quick victory per 47 USC 230(c)(2).
* Perfect 10 has appealed its Ninth Circuit 230 loss in ccBill to the US Supreme Court.
* Search Engine Land had a good overview/recap article on geolocation technology. It provides a clear and easy-to-read explanation why the folks who think online businesses can just stay out of a state that enacts dumb regulations are full of crud.
* Pisciotta v. Old National Bancorp, No. 06-3817 (7th Cir. Aug. 23, 2007). Another court (this time, the Seventh Circuit) says that consumer fretting about possible future identity theft isn't enough harm to support a lawsuit. See the analogous JetBlue, Acxiom and Key cases.
* Wikipedia Scanner--an automated tool to determine who is editing Wikipedia pages. Katie Hafner's NYT article on the matter. David Hoffman does a little sleuthing on law firm edits.
* NYT: In the 1990s, a lot of people sought to build an infrastructure for micropayments. Consumers resisted them, but today those efforts seem a little silly--AdSense advertising can generate the same financial benefits for a web publisher without the overhead. Meanwhile, the credit card systems are being stretched to cover micro-transactions because merchants are aggregating a consumer's orders and processing them in bulk (rather than processing each one individually) as a way to reduce the transaction costs.
* NYT: "As video games have surged in popularity in recent years, politicians around the country have tried to outlaw the sale of some violent games to children. So far all such efforts have failed."
* AP: Chinese animated cops will be patrolling the Information Superhighway beat.
* Tired of negative reviews on Yelp, a San Francisco restaurant put up a sign saying "no Yelpers." I wonder if a sign like that lessens or exacerbates negative publicity.
* NYT: Book authors obsessively check Amazon sales rankings and try to game them.
* Facebook accidentally posted some of its source code to a public website. Surely an interesting development for ConnectU's discovery team!
* Another Internet company hires its own in-house economist--this time, virtual world Eve Online.
* A nice retrospective on the Cleveland Free-net, which at one point was a prominent component of the Cyberspace community.
* I have one free guest pass to the CLE International New Media Law conference in SF on Oct. 1-2. Free to the first person who sends me an email request. [SORRY--TAKEN!]
Posted by Eric at 09:48 AM | Content Regulation , Derivative Liability , E-Commerce , General , Internet History , Privacy/Security , Virtual Worlds | 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 04, 2007
Taking Intangible Electronic Files is Criminal Fraud--NM v. Kirby
By Eric Goldman
New Mexico v. Kirby, 2007-NMSC-034 (N.M. June 13, 2007)
This is a very confusing case, so maybe you can help me figure out what it means. At minimum, this case highlights the problems that can be arise when a web design/development relationship goes sour. More broadly, it also contributes to the already confused case law about when intangible electronic records can be "stolen," but this lesson comes at a high cost--in this case, 18 months of jailtime for the defendant.
Facts
According to the Supreme Court's statement of facts, Kirby retained Collett, a website designer, to "develop[] and/or improv[e] a World Wide Website to be installed on the client's web space on a web hosting service's computer." I believe the site at issue is environmentalbenefits.com. The agreement specified that Collett retained the copyright "to the finished assembled work of web pages" and Kirby would be "assigned rights to use as a website the design, graphics, and text contained in the finished assembled website" after Kirby paid the contract price of $1,890 plus tax.
But Kirby never paid Collett--although, according to this site, Kirby paid with an allegedly bum check. Kirby also changed the password for the designed website, which effectively cut off Collett's ability to access those files--the files that, per the contract, Collett still owned.
If Kirby stiffed Collett, it seems like Collett had several legal options, including breach of contract and copyright infringement. Instead, this case went to state prosecutors, who prosecuted Kirby for criminal fraud based on Kirby having taken "a Website Design belonging to Loren Collett, by means of fraudulent conduct, practices, or representations." The jury convicted Kirby, and the Supreme Court affirmed. According to this site, Kirby was sentenced to 18 months in jail.
Questions
This case raises some tough issues, including:
* Why did NM prosecutors pursue this case? On its face, this looks like a garden-variety $2000 commercial dispute. Heck, it could have been handled in small claims court. Instead, Kirby get a felony conviction and jailtime. Huh?
* Did Collett retain a duplicate copy of his files in his possession? If so, how did Kirby "take" non-rivalrous electronic files?
* In that vein, why isn't this crime preempted by copyright law? Copyright preemption is inherently confusing, so I don't feel too bad about being confused here. Indeed, on its face, a commercial fraud crime should be sufficiently removed from copyright law to avoid preemption easily. But in this case, Kirby was prosecuted for converting Collett's intangible files. This sounds a lot like copyright infringement to me. Of course, this ruling isn't completely unprecedented: cases like Kremen v. Cohen and Thyroff have held that intangible electronic records can be converted, though I think the copyright preemption analysis in these cases is hardly satisfying (plus, the recent Utube case held that an intangible asset could not result in trespass to chattels). Though the case talks about copyright a lot, there's no reference at all to preemption--perhaps it wasn't raised by the public defender?
Lessons
1) This case reminds us of the importance of drafting a website development agreement properly. For example, the contract's provision that Kirby would be "assigned rights to use" the website is fatally ambiguous. I wrote a lot on the issues associated with web development agreements in the 1990s; see, e.g.,
* A Fresh Look at Web Development and Hosting Agreements (1998) with sample web development agreement
* Top 10 legal issues for clients of Web developers (1996)
* Pitfalls in Outsourcing Your Website (1996)
In particular, the excerpted contract language indicates that the parties were struggling with defining their respective ownership interests. This is a typical area of confusion; I racked up a fair amount of billable hours in the late 1990s on this very point with people (including opposing lawyers) who didn't get it. Even when the deal value is low, a savvy lawyer can add significant value, at relatively low cost, helping the parties understand this topic.
2) This case reminds us that, unless the contract specifies otherwise, the web designer owns his/her web development work product even if the retaining party pays for the work. This isn't new either (web development lawsuits from the 1990s addressed this point), and here the parties actually expressed addressed ownership in their contract. Nevertheless, caveat emptor!
3) This case extends the meme that intangible electronic records are just as tangible as chattel for conversion purposes. I remain concerned in general about this trend. We may benefit from a careful rethinking about the implications of rivalrousness on conversion doctrines.
4) I'm trying to figure out how broadly this case could apply. For example, would it apply in other circumstances where a party cuts off another party's access to electronic files by changing a password? With little effort, I can think of two: (1) divorcing spouse cuts off spouse's access to shared account containing copyrighted works, and (2) website terminates customer by changing the password, cutting off access to copyrighted material stored in the account (I'm assuming the contract doesn't expressly grant this right). Each fact pattern appears indistinguishable from the elements at issue in this case, although there may not be the requisite scienter to find fraud. if there were (for whatever reason), this case could expand the realm of criminality much further than we might have anticipated.
5) No matter what, the Supreme Court opinion and some of the source materials at this site strongly indicate that the New Mexico judicial system still doesn't understand Internet technology very well. If this were a typical civil case, that would be a shame; if this technological confusion directly led to jailtime for the defendant, it may have produced a travesty.
Posted by Eric at 04:05 PM | Copyright , Internet History , Licensing/Contracts | 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 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.
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