internetcases – Attorney Evan Brown – Page 73 – The law and emerging technologies

January 8, 2009 Cybersquatting, Trademarks

Verizon obtains damages, injunction against regsitrar under ACPA

[This is a guest post by contributor Brian Beckham]

Plaintiff Verizon California, Inc. (Verizon) recently obtained a default judgment in the U.S. District Court for the Northern District of California, San Jose Division, in its favor against Defendant, the registrar OnlineNIC, Inc. (press release).

Despite repeated attempts, Verizon was not able to serve notice on OnlineNIC; the court ultimately approved Verizon’s application to serve process with the California Secretary of State. OnlineNIC was alleged to have engaged in the bad faith registration of 663 identical or confusingly similar domain names incorporating one of Verizon’s family of marks (e.g., <bestverizon.net>, <myprepaidverizon.com>, <verizonflios.com>, <vzwactivate.com>, etc.) inter alia, in violation of the ACPA. Verizon’s unchallenged, well-pleaded allegations were accepted by the court as true; OnlineNIC’s liability was thus established.

In addition to OnlineNIC’s default, significantly, the court noted that OnlineNIC had refused to alter its behavior (presumably after a cease & desist letter) and had purposefully attempted to avoid detection (e.g., by providing false contact information). However, given the default, the court was reluctant to impose the full statutory damages provided for under the ACPA ($100,000 per infringement), but imposed damages of $50,000 per violation (totaling $33.15 million). It remains to be seen whether Verizon will successfully collect, nonetheless, Verizon obtained a transfer order in its favor for all of the 663 infringing domain names. OnlineNIC (including any related entity) was further enjoined from directly or indirectly (i) registering, trafficking in or using any domain name that is identical or confusingly similar to the Verizon marks and (ii) assisting, aiding or abetting any other person or business entity in engaging in or performing and of the said activities.

This injunction seems to leaves open the question of whether the seemingly common registrar practice of actively suggesting alternate domain names available for registration (e.g., those that add alphanumerical strings, e.g., <new____4u.com>, <buy____.net>, <your____.org>, <my____pro.com>, <best____.com>, etc.) would be covered by the “assisting, aiding or abetting” language in the injunction.

Case is: 2008 U.S. Dist. LEXIS 104516

December 22, 2008 Copyright, DMCA

Should ISPs get paid to respond to DMCA takedown notices?

CNET News is running a story about how Jerry Scroggin, the owner of Louisiana’s Bayou Internet and Communications, expects big media to pay him for complying with DMCA takedown notices. No doubt Scroggin gets a little PR boost for his maverick attitude, and CNET keeps its traffic up by covering a provocative topic. After all, people love to see the little guy stick it to the man.

Here is something from the article that caught my attention:

Small companies like [Bayou] are innocent bystanders in the music industry’s war on copyright infringement. Nonetheless, they are asked to help enforce copyright law free of charge.

A couple of assumptions in this statement need addressing. I submit that:

ISPs are not innocent bystanders.

As much as one may disdain the RIAA, the organization is enforcing legitimate copyright rights. Though an ISP may have no bad intent to help people infringe (i.e., the “innocent” part), infringing content does pass through their systems. And few would disagree that the owner of a system is in the best position to control what happens in that system. So unless we’re going to turn the entire network over to a government, we must rely on the ISPs at the lower parts of the web to comply with the DMCA. They owe a duty. It’s in this way that the ISPs are anything by innocent bystanders in the copyright wars. In fact, they’re soldiers (albeit perhaps drafted).

Though the administrative burdens of DMCA compliance fall on the ISPs, the work is not undertaken for free.

The safe harbor that ISPs enjoy in return for compliance is a huge compensation. An entity in the safe harbor has more certainty that a suit for infringement would be unsuccessful. Were there more doubt about the outcome, there would be more litigation. More litigation equals more cost. And I guarantee you that those litigation costs would dwarf the administrative costs associated with taking down content identified in a notice. So substract the administrative costs from the hypothetical litigation costs, and there you have the compensation paid to ISPs for compliance.

What do you think?

Pirate Christmas photo courtesy Flickr user Ross_Angus under this Creative Commons license.

December 19, 2008 Copyright, Litigation

What could the RIAA’s switch in strategy mean?

The Wall Street Journal and others are reporting that the Recording Industry Association of America is adjusting its strategy for combating the massive infringement occasioned by the sharing of music files over the internet. Since 2003, that strategy has been to pursue copyright infringement cases against individual file sharers. The RIAA now says it will focus less on pursuing infringement litigation and more on working with internet service providers to shut down the accounts of individuals suspected of illegally trading files.

This is the third wave in the recording industry’s attack on digital piracy:

First wave: The labels went after the purveyors of the software used in file sharing. There are reported decisions involving Napster, Aimster and Kazaa, not to mention the U.S. Supreme Court decision in MGM v. Grokster.
Second wave: The thousands of lawsuits against individual file sharers. Though it’s said that the RIAA sued some 35,000 people, only one of those cases went through to verdict (the Jammie Thomas case). Most settled for a few thousand dollars.
Third wave: Rejection of the massive litigation model (announced today) and collaboration with ISPs to combat file sharing.

So what does this change in strategy tell us? Does it mean that the RIAA has given up and the file sharers have won? It’s hard to tell. But there may be some insight to be had into the broader picture of digital copyright enforcement. Here are some observations:

The ability to easily make innumerable perfect copies creates a problem for copyright holders that must be addressed at a systemic level (like at the ISP level). The suits against individuals are too much like whack-a-mole to have practical effect.
The question of whether merely making a copy available can be infringement is problematic. So it was probably a good time for the litigation to end so that that question doesn’t have many more opportunities to be answered unfavorably for the RIAA.
It makes less sense to think of copyright in terms of the right to “copy” as it did in the analog-only world. What’s more important now, it seems, is a distribution or access right. Another reason to focus on the ISPs and not the individuals. For more on this, see the work of Ernest Miller and Joan Feigenbaum, Taking the Copy Out of Copyright [Warning – PDF file].
Shifting to a model of “punishing” file sharers before claims of infringement can be litigated presents some issues that implicate due process. See Cindy Cohn’s comments in this article.
Regardless of the legal merits of one’s claim (i.e., the RIAA certainly has legitimate rights to enforce), there is a public relations downside to standing up for those rights.

No matter what the shift of strategy really means, the fact that there is a shift at all demonstrates the changing dymanic of the music industry. And it points to a shift, both practical and normative, in the manner copyright law applies to the digital content.

Photo courtesy Flickr user [nati] under this Creative Commons license.

December 18, 2008 Trademarks

Disclaimer in trademark registration sinks UDRP action

Ideation Unlimited, Inc. v. Dan Myers, Case No. D2008-1441 (WIPO November 12, 2008).

A trademark owner who notices that someone else has registered a domain name incorporating the owner’s mark can file an arbitration action under the Uniform Domain Name Dispute Resolution Policy (UDRP for short). This often serves as a quicker and less expensive alternative to pursuing the cybersquatter in court.

To be successful under the UDRP, the “Complainant” has to show all of the following three elements:

(a) the registered domain name is identical or confusingly similar to a trade mark or service mark in which the Complainant has rights; and

(b) the “Respondent” has no rights or legitimate interests in respect of the disputed domain name; and

Ideation Unlimited, Inc. uses a logo with the word PRESCRIPTION COSMETICS. It has a United States and United Kingdom registrations for this logo. But in the U.S. registration the term “prescription cosmetics” is disclaimed. (Trademark applicants are required to “disclaim” any exclusive rights to use terms within their marks that are generic or merely describe the products.”) In the U.K. registration the word “prescription” is disclaimed.

The panel concluded that “[i]f the Complainant has willingly disclaimed any trade mark rights in the entire term ‘Prescription Cosmetics’, it cannot and should not claim to have trade mark rights in that term by virtue of its . . . registration.”

But what about common law rights, you ask? After all, one can support a UDRP action even without a trademark registration. The panel noted as follows:

Of course, it is not necessary for the Complainant to establish registered trade mark rights – it would be sufficient for the purposes of these proceedings under the Policy for the Complainant to demonstrate common law trade mark rights in the term PRESCRIPTION COSMETICS. However in the Complaint, the Complainant relies heavily on the three device marks, and provides little evidence of common law rights or reputation.

The decision underscores the importance of keeping trademark registrations up to date. Presumably, the mark in question here could have acquired distinctiveness by now (it’s been in use since the mid-70’s) so the disclaimer probably isn’t necessary anymore. And the decision also shows the importance of submitting evidence (at least a declaration) showing what common law or unregistered rights the complainant has.

December 16, 2008 Anonymity, First Amendment

Site operator successfully challenges subpoena which sought to unmask anonymous commenters

Enterline v. Pocono Medical Center, 2008 WL 5192386 (M.D. Pa. December 11, 2008)

A federal court in Pennsylvania has denied a motion demanding that a website operator turn over the identity of persons who commented anonymously in response to an article posted on the website. The court held that the website had standing to assert the free speech rights of the anonymous speakers, and that the First Amendment barred the unmasking where the information sought was available from other sources.

Plaintiff Enterline sued defendant Pocono Medical Center for sexual harassment and retaliation. On October 9, 2008, the local newspaper, The Pocono Record, published an article about the lawsuit. Several people left comments to the article, some of them claiming personal knowledge of facts possibly relevant to the case.

Enterline sent a subpoena to the newspaper seeking the identity of the anonymous commenters. When the newspaper wouldn’t respond, Enterline filed a motion to compel response to the subpoena. The newspaper responded by asserting a number of arguments. Among those arguments was that disclosure of the anonymous commenters’ identities would violate those persons’ First Amendment right to speak anonymously.

Siding with the newspaper, the court denied the motion.

The court first evaluated whether the newspaper website operator even had standing (i.e., the legal right) to assert the anonymous commenters’ First Amendment right. To answer this question in the affirmative, the court found that:

Practical obstacles prevented the anonymous commenters from asserting rights on their own behalf. The anonymity was the very right at stake. To defend that right, the commenters would have to be identified (setting aside for a moment the question of whether the commenters could appear as Doe defendants). The evaporation of that anonymity would lead to practical difficulties, as they had indicated they worked at the hospital or otherwise had personal connections with the litigants.
The anonymous commenters had sufficient injury-in-fact to satisfy the constitutional “case or controversy” requirement. Looking to such cases as RIAA v. Verizon, 257 F.Supp.2d 244 (D.D.C. 2003), the court agreed with the website operator, concluding that the relationship between the website and its readers was the type of relationship allowing it to assert the First Amendment rights of the anonymous commentators.
The website operator could reasonably be expected to properly frame the issues and present them with the necessary adversarial zeal. There was little discussion on this point, as the plaintiff did not contest that the website operator would be an adequate advocate to assert the First Amendment rights of the anonymous visitors.

Finding that the website operator had standing to assert the rights of its anonymous commenters, the court next considered whether the identification of the anonymous speakers would violate the First Amendment. To evaluate this question, the court applied the factors set out in Doe v. 2TheMart.com, 140 F.Supp.2d 1088 (W.D. Wash. 2001).

The court found that:

The subpoena was not brought in bad faith or for an improper purpose,
The information sought related to a core claim of the plaintiff,
The information was directly and materially relevant to the claim,

but that

Information required to prove the plaintiff’s claims was available from other sources. Several of the anonymous commenters stated that they were, for example, co-workers of the plaintiff or of the doctor against whom the plaintiff complained. The information these anonymous posters had could be uncovered through other discovery

This case is significant inasmuch as it could be applied to a case where a blogger or any other social media website operator is asked to turn over information that would identify its anonymous users. The decision outlines the framework that a blogger would have to use to show it has the right to argue on behalf of its anonymous visitors. The case then lays out (with the help of the 2TheMart.com decision) what must be shown after that initial threshold is crossed.

Photo of the Poconos courtesy Flickr user Nicholas T under this Creative Commons license.

December 11, 2008 Copyright

Cisco accused of violating open source licenses

Free Software Foundation, Inc. v. Cisco Systems, Inc., No. 08-10764 (S.D.N.Y., filed December 11, 2008). [Download the Complaint]

The Free Software Foundation (“FSF”) has filed a copyright infringement suit against Cisco claiming that Cisco has violated the GPL v.2 and Lesser GPL versions 2.0 and 2.1 open source licenses by distributing software without the source code. More specifically, FSF says that Cisco’s Linksys division has distributed firmware covered under these open source licenses in object code or executable form only, depriving users of the ability to modify and further distribute the source code for the programs.

No doubt FSF feels more confident in the success of its copyright infringement claims after this past summer’s decision from the Federal Circuit in Jacobsen v. Katzer. That case confirmed that the failure to abide by certain terms of an open source license can be treated as a use of the software beyond the scope of the license and therefore an infringement. The ability to seek remedies for copyright infringement and not merely breach of contract gives greater economic importance to open source licenses. Let’s hope this case gets to be litigated so that we can have some more resolution as to the contours of open source license enforceability.

More early coverage:

December 10, 2008 Uncategorized

What are the top 10 internet cases of 2008?

I’m working on gathering a list of the most important internet- and technology-related cases from the past year. There are many cases to choose from, and I’m trying to crowdsource the nomination process. I invite you to nominate the case or cases you think have been most significant by leaving a comment to this post. Think in terms of (1) the decision’s practical implications, (2) the novelty of the judge’s thinking, and (3) the “interestingness” of the facts.

For inspiration, browse the Internet Cases archives, or go visit Professor Goldman who doesn’t let much in the way of interesting cases slip by.

Thanks in advance for your help!

Is Twitter a big fat copyright infringing turkey?

Here’s a topic you can mull over if conversation gets slow during tomorrow’s Thanksgiving dinner: Does Twitter infringe your copyright every time you post to it (i.e., put up a “tweet”)?

Consider this:

One of the exclusive rights of a copyright owner (under 17 U.S.C. 106) is the right to display the work. A website displays content when it serves up pages to the end user. Posts to Twitter — though they’re only 140 characters maximum — are arguably copyright protected works. (Set aside the question of retweeting.)

Twitter’s Terms of Service, in an earnest effort to be generous and progressive, assure users that when it comes to copyright, “what’s yours is yours.” Elaborating on this point, the Terms of Service go on to say that “[Twitter] claim[s] no intellectual property rights over the material you provide to the Twitter service.” In so many words, Twitter is saying “thanks but no thanks” to any copyright rights it might otherwise have over user-submitted content.

But by displaying tweets, Twitter is exercising one of the exclusive rights of the copyright owner. To do this lawfully, it has to have permission. And this permission is an intellectual property right. But didn’t Twitter just tell us that it doesn’t want any such right? Yes. So it has no permission. Exercise of an exclusive copyright right without permission (fair use aside) is infringement.

So should we all go out and sue Twitter for infringement? Of course not. Twitter would have a number of good defenses, which I expect may get articulated in the comments to this post. Are you really going to pay the filing fee to the Copyright Office and register the copyright in each of your tweets? You’ll have to do that before you can even show up in court. And what about injunctive relief? A court order making Twitter take down your stuff would seem to defeat the whole purpose, at least a little bit.

Similar analysis from Venkat here.

Turkey photo courtesy Flickr user stevevoght via this Creative Commons license.

November 24, 2008 Contracts, Litigation

Court enforces forum selection clause in web hosting agreement

Bennett v. Hosting.com, Inc., 2008 WL 4951020 (N.D. Cal. November 18, 2008)

Bennett filed an astounding 30-count complaint against defendant Hosting.com. Though the Managed Hosting Agreement designated Jefferson County, Kentucky to be the sole and exclusive venue for actions brought in connection with the agreement, Bennet brought the action in federal court in Northern California. Hosting.com moved to dismiss for improper venue. The court granted the motion.

Kentucky on a map

The court held that Bennett failed to prove that the forum selection clause in the hosting agreement was unreasonable. The fact that Hosting.com may have had superior bargaining power and the agreement appeared to be non-negotiable was not enough to render the agreement unconscionable. Moreover, Bennett failed to demonstrate how the forum selection clause was against any public policy of California. And the court rejected her argument that the case belonged in California because Kentucky does not recognize certain of the causes of actions in the complaint. After all, a Kentucky court could apply California law.

The court also rejected Bennett’s argument that the forum selection clause shouldn’t apply because a number of the claims arose from tort law and did not involve the agreement. This argument was rejected because many of the tort claims would require the same findings of fact as the contract-related claims. Moreover, and perhaps more importantly, the forum selection clause was broad. All the claims appeared to be “in connection with” the agreement. That was enough in this case to bring them in.

(Missing Kentucky image courtesy Flickr user dog_manor under this Creative Commons license.)

November 17, 2008 Trademarks, Unfair Competition

Results of Internet searches helpful in earthworm trademark case

Cascade Mfg. Sales, Inc. v. Providnet Co. Trust, 2008 WL 4889716 (W.D. Wash. November 12, 2008)

Cascade Manufacturing makes and sells composting bins in which earthworms “enhance and accelerate the composting process.” Cascade owns a federal trademark registration for WORM FACTORY. It sued its competitor Providnet Co. for trademark infringement over Providnet’s use of the mark GUSANITO WORM FACTORY. Cascade moved for a preliminary injunction against Providnet’s use of its “worm factory” mark. The court granted the motion.

One of Providnet’s arguments against the injunction was that “worm factory” is a generic term for the types of products being sold under the respective marks. To refute this contention, Cascade introduced evidence of Internet searches supporting its claim that the products at issue are referred to as “worm bins,” and that “worm factory” refers to Cascade’s particular product. The court found this evidence to be instructive.

Earthworm picture courtesy Flickr user Rick Harris under this Creative Commons license. Redistributed here under the same license.