August 2007

Technology Law Update August 2007

In this issue:

1. Court Rules Novell Owns UNIX Copyrights
2. Service Provider May Not Change Service Contract Terms Merely By Posting Revised Contract On Web Site
3. Forum Selection Clause Accessible Via Hyperlink Is Enforceable Against User Agreeing To Online Web Site Membership
4. Forum Selection Clause In Software Maintenance Agreement Does Not Govern In Dispute Brought Under Separate Subcontract Agreement
5. Under New York Law, Unsigned Contract May Be Authenticated Via E-mail Communications If Sender Exhibited A 'Present Intention To Authenticate A Writing'
6. Use Of Archived Web Pages By Law Firm To Investigate Infringement Allegations Is Permissible Fair Use
7. Search Engine Caching Of USENET Newsgroup Postings Does Not Constitute Direct Copyright Infringement
8. Ex Parte DMCA Subpoena May Not Issue To ISP That Does Not Provide Hosting Services Or Information Storage
9. Under Georgia Law, Contract To Advertise Product That Violates DMCA Not Void For Illegal Purpose
10. 'Access' To Copyrighted Works On Plaintiff's Web Site Not Established, Absent Wide Dissemination Or Reasonable Possibility Of Viewing By Defendant
11. Software Licensing Lawsuit Filed In State Court Is Not Preempted By Copyright Act
12. Domain Name Registrant Ordered To Transfer Domain Name In UDRP Proceeding Has Standing To File ACPA Action In Federal Court
13. Disclosure Of Password To Government By Third Party Negates Web Site Owner's Reasonable Expectation Of Privacy In Password-Protected Site
14. Washington State Telemarketing Statute Allows For Vicarious Liability Claims
15. Single Publication Rule Applies To Posting Of Identical Material By A Third-Party Website
16. Authorized Computer Access By Employee Not CFAA Violation, Despite Intent To Misuse Information
17. CFAA Conviction May Be Based On Circumstantial Evidence Of Motive, Access And Expertise
18. Installation Of File Scrubbing Program On Employer's Laptop Without Evidence Of File Deletion Is Not 'Damage" Under The CFAA
19. Fourth Amendment Warrant Not Required For Government Surveillance Of Internet Activity To Acquire Internet Users' E-Mail Addresses And IP Addresses Of Visited Web Sites
20. Unsolicited E-mails To Company Employees Advocating Unionization Deemed 'Commercial' Under the CAN-SPAM Act
21. 'Assisting' In The Transmission Of Spam May Constitute 'Initiating' The Transmission Of Unlawful Messages Under The CAN-SPAM Act
22. ISP Entitled To Rely Upon Spamming Complaints In Terminating Contract
23. Broad Dispute Resolution Clause In Software License Agreement Enforceable Despite Use Of Permissive Language
24. Opinions and Developments of Note

1. Court Rules Novell Owns UNIX Copyrights

   Copyrights in the UNIX System V operating system are owned by Novell, Inc., entitling the company to dismissal of slander of title and related claims brought by The SCO Group, Inc. with respect to statements made by Novell asserting its ownership of the copyrights.  The SCO Group, Inc. v. Novell, Inc., No. 2:04CV139, 2007 U.S. Dist. LEXIS 58854 (D. Utah Oct. 10, 2007). The court ruled that under the terms of the 1995 transaction between Novell and SCO's successor in interest, the UNIX copyrights were excluded from the list of transferred assets. The court concluded that the exclusion of the copyrights was supported not only by the plain language of the transaction documents, but by extrinsic evidence, including the underlying purpose of the deal and the history of the negotiations between the parties, among other things.

   Opinion http://www.thelen.com/tlu/SCOvNovell.pdf

    

   Editor's Note: The SCO Group asserts ownership of the disputed copyrights in its lawsuit against IBM alleging the contribution of copyrighted code to the LINUX operating system open source project. See further discussion of the opinion on the Technology Law Update blog.

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2. Service Provider May Not Change Service Contract Terms Merely By Posting Revised Contract On Web Site

   Notwithstanding that the contract purported to give the provider the right to change terms without notice, a long-distance telephone service provider may not change the terms of a service contract merely by posting the revised contract on its Web site.  Douglas v. U.S. District Court for the Central District of California, No. 06-75424, 2007 U.S. App. LEXIS 17061 (9th Cir. July 18, 2007). The appeals court ruled that the customer was not bound by the terms of the revised contract containing the arbitration clause, because he was not notified of the changes in the contract via e-mail or otherwise. The court also ruled that the new terms of the contract would probably not be enforceable under California law, because it conflicted with California's fundamental policy as to unconscionable contracts, both procedurally and substantively.

   Opinion http://www.thelen.com/tlu/DouglasVDistrict.pdf

    

   Editor's Note: The appellate court distinguished the customer's situation from that in other cases in which terms of service were enforced, noting that because the customer had paid for the service by credit card for a lengthy period, he had no reason to visit the service provider's Web site, nor did he have reason to check the terms of the contract for changes even if he had visited the service provider's Web site. The court commented: "Parties to a contract have no obligation to check the terms on a periodic basis to learn whether they have been changed by the other side."

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3. Forum Selection Clause Accessible Via Hyperlink Is Enforceable Against User Agreeing To Online Web Site Membership

   A California user who clicked on a “Continue” button signifying assent to Terms of Use as part of a Web site membership registration process, during which a conspicuous hyperlink for viewing the entire Terms of Use was displayed, is bound by the forum selection clause included in the Terms of Use.  Cohn v. Truebeginnings, LLC, No. B190423, 2007 Cal. App. Unpub. LEXIS 6232 (Cal. Ct. App. July 31, 2007) (unpublished opinion). The appeals court ruled that the lower court did not abuse its discretion in concluding that the user had assented to the Terms of Use. The court noted that despite the user’s assertion that he had not been presented with the Terms of Use as part of the registration process, the Web site operator had submitted declarations supporting the conclusion that the user could not have completed the registration process without clicking on the “Continue” button. The court also commented that there is “nothing inherently unfair in requiring him to access contractual terms via hyperlink.”

   Opinion http://www.thelen.com/tlu/CohnVTruebeginnings.pdf

    

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4. Forum Selection Clause In Software Maintenance Agreement Does Not Govern In Dispute Brought Under Separate Subcontract Agreement

   An exclusive forum selection clause of a software maintenance agreement designating Puerto Rico as the chosen forum does not govern a claim asserted under a separate software agreement between the parties.  DataCard Corp. v. Softek, Inc., No. 07-321, 2007 U.S. Dist. LEXIS 55075 (D. Minn. July 27, 2007). The court denied the defendant’s motion to dismiss, finding that the plaintiff’s claim under the Subcontractor Agreement is governed by a separate non-exclusive, permissive forum selection clause that would confer jurisdiction over the parties in Puerto Rico, but does not prohibit suit in any other proper forum (i.e. Minnesota district court).  The court also denied the defendant’s motion to transfer venue to Puerto Rico, concluding that although some witnesses resided in Puerto Rico and some operative events of the lawsuit occurred there, the court did not find that such facts overrode the Minnesota plaintiff’s choice of forum.

   Opinion http://www.thelen.com/tlu/DataCardVSoftek.pdf

    

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5. Under New York Law, Unsigned Contract May Be Authenticated Via E-mail Communications If Sender Exhibited A 'Present Intention To Authenticate A Writing'

   Whether a party to an unsigned contract authenticated the agreement via e-mail communications is a question of fact concerning whether the party manifested a "present intent to authenticate a writing" within the meaning of N.Y. Gen. Oblig. L. 5-701.  SD Protection, Inc. v. Del Rio, No.06-cv-5571, 2007 U.S. Dist. LEXIS 52801 (E.D. N.Y .July 20, 2007). The court declined to grant the defendant's motion to dismiss based on the ground that the unsigned contract did not satisfy the New York Statute of Frauds, finding the existence of factual disputes. Noting that the e-mails produced to the court were undated, the court requested more discovery on the issue of whether the defendant "authenticated" the unsigned contract by sending e-mails that stated "Your offer is accepted" and "Forever at your service."  The court commented that while the contract's blank signature lines suggested a lack of intention of authenticate, further extrinsic evidence, such as other e-mails or evidence regarding the parties' relationship before the contract was written, could indicate the requisite intent.

   Opinion http://www.thelen.com/tlu/SDProtectionVDelRio.pdf

    

   Editor's Note:The court also concluded that there was a factual issue concerning the nature of the plaintiff's business and its status under New York licensing statutes. The court declined to make a factual finding on that issue based upon information provided by the defendant from the plaintiff's Web site, commenting that in ruling on a motion to dismiss it should not rely upon information outside the complaint "particularly information derived from a website, which is often unreliable and is frequently changed at the whim of the operator."

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6. Use Of Archived Web Pages By Law Firm To Investigate Infringement Allegations Is Permissible Fair Use

   A law firm's access to archived versions of a Web site and the copying of pages from the Web site for distribution within the law firm is permissible fair use, where the purpose of the copying was to investigate the Web site owner's allegations of copyright and trademark infringement against a client of the law firm.  Healthcare Advocates, Inc. v. Harding Earley Follmer & Frailey, No. 05-3524, 2007 U.S. Dist. LEXIS 52544 (E.D. Pa. July 20, 2007). The court analyzed the factors applicable to a claim of fair use, concluding that analysis of all four of the factors weighed in favor of a finding favorable to the law firm. In analyzing the law firm's purpose in printing the archived images, the court commented: "It would be an absurd result if an attorney defending a client against charges of trademark and copyright infringement was not allowed to view and copy publicly available material, especially material that his client was alleged to have infringed."

   Opinion http://www.thelen.com/tlu/HealthcareVHarding.pdf

    

   Editor's Note: The plaintiff also alleged that the law firm had gained access to its archived pages by bypassing the technological protection afforded by the deployment of a "robots.txt" file to block access to the Internet Archive's "Wayback Machine." This aspect of the opinion is discussed further on the Technology Law Update blog.

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7. Search Engine Caching Of USENET Newsgroup Postings Does Not Constitute Direct Copyright Infringement

   A search engine's automatic archiving of USENET postings containing unauthorized copies of copyrighted works does not constitute direct infringement because the search engine does not engage in any "volitional conduct."  Parker v. Google, Inc., No.06-3074, 2007 U.S.App. LEXIS 16370 (3rd Cir. July 10, 2007). The appeals court affirmed the district court's dismissal of the plaintiff's claims of direct infringement, concluding that the provider of an electronic facility that responds automatically to user input is not liable for a user's direct infringement without some "intervening conduct." The court also affirmed the dismissal of the secondary infringement claims because the plaintiff failed to show any requisite knowledge of the infringement or supervisory activity by the search engine. The court also affirmed the dismissal of related state tort claims based upon the defendant's immunity under Section 230 the Communications Decency Act for providing search results and links for Web sites that portrayed the plaintiff negatively.

   Opinion http://www.thelen.com/tlu/ParkerVGoogle.pdf

    

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8. Ex Parte DMCA Subpoena May Not Issue To ISP That Does Not Provide Hosting Services Or Information Storage

   Section 512(h) of the Digital Millennium Copyright Act (DMCA) does not authorize a copyright owner to request the issuance of an ex parte subpoena to a service provider that performs only "conduit" functions and does not provide hosting services or information storage.  Interscope Records v. Does 1-7, No.4:07cv52, 2007 U.S. Dist. LEXIS 50552 (E.D. Va. July 12, 2007). In denying the plaintiffs' motion for permission to serve an ex parte subpoena to identify unknown P2P file-sharers, the court classified a college that provided ISP services to its students as a §512(a) service provider since it did not cache, host or locate the plaintiffs' copyrighted materials. The district court ruled that DMCA §512(h) does not authorize the issuance of subpoenas against §512(a) providers, because the clerk must first receive a copy of previously-served "DMCA takedown notice" before issuing a subpoena, something which cannot practically be served on §512(a) providers.

   Opinion http://www.thelen.com/tlu/ParkerVGoogle.pdf

    

   Editor's Note: This is the second recent decision denying record company plaintiffs permission for the issuance of an ex parte subpoena to a university to compel the release of the identity of alleged student file-sharers. See Capitol Records, Inc.v.Does 1-16, No.07-485 (D. N.M. May 24, 2007), in which the issuance of the subpoena was denied due to the plaintiff's failure to show immediate irreparable harm. In that case, the parties were directed to confer on a procedure that includes prior notification to student subscribers and a reasonable period of time to intervene or object.

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9. Under Georgia Law, Contract To Advertise Product That Violates DMCA Not Void For Illegal Purpose

   A contract to advertise a software program that enabled the unlawful copying of motion picture DVDs is not void for illegality under Georgia law.  Smith v. Saulsbury, 2007 Ga. App. LEXIS 759 (Ga. Ct. App. July 5, 2007). The appellate court upheld a jury verdict in favor of an advertiser that sold copies of the DVD copying program under an agreement that entitled him to a commission from the software developer for every copy of the program that he sold. The appellate court ruled that the trial court had properly denied the software developer's motion for summary judgment and properly excluded evidence concerning the illegality of the DVD copying software under the anticircumvention provisions of the Digital Millennium Copyright Act. The court concluded that the developer had failed to show that the purpose of the agreement with the advertiser was illegal, and that any illegality related to the use of the program to copy DVDs was incidental to contract performance.

   Opinion http://www.thelen.com/tlu/SmithVSaulsbury.pdf

    

   Editor's Note: The court's analysis of the anticircumvention provisions of the DMCA is discussed further in the Technology Law Update blog.

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10. 'Access' To Copyrighted Works On Plaintiff's Web Site Not Established, Absent Wide Dissemination Or Reasonable Possibility Of Viewing By Defendant

    Access to the plaintiff's copyrighted works on the part of the defendant in a copyright infringement case cannot be established merely by the presence of the works on a Web site.  Art Attacks Ink, LLCv. MGA Entertainment, Inc., No.04-CV-1035-B, 2007 U.S. Dist. LEXIS 48254 (S.D. Cal. July 2, 2007). Following trial, the court dismissed the plaintiff's copyright claims as a matter of law, finding the plaintiff had shown no evidence of wide dissemination of the Web site or an inference that the defendant's employees had a "reasonable possibility" of "viewing or even stumbling across" the site. The court noted that the plaintiff had provided no evidence of "hits" to the site, no evidence that the defendant's associates ever viewed the site, and no searchable metatags related to the copyrighted works that would draw a user to the site.

    Opinion http://www.thelen.com/tlu/ArtAttacksVMGA.pdf

     

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11. Software Licensing Lawsuit Filed In State Court Is Not Preempted By Copyright Act

    A state court action brought by a software licensee seeking a declaration that it does not owe additional fees under a software license agreement presents a state law breach of contract issue and not a federal question under the Copyright Act.  U.S.South Communications, Inc. v. Northern Telecom, Inc., No.3:07cv186, 2007 U.S. Dist. LEXIS 49523 (W.D. N.C. July 9, 2007). In remanding the case back to state court, the district court rejected the defendant's argument that even if the action presented no federal question, the plaintiff's complaint was preempted by the Copyright Act. The court concluded that the question of whether the plaintiff owes the defendant additional right-to-use fees under the software license agreement is an "extra element" to the claim (namely, the parties' rights under the license) that is not equivalent to the rights granted under copyright law.

    Opinion http://www.thelen.com/tlu/WarshakVUS.pdf

     

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12. Domain Name Registrant Ordered To Transfer Domain Name In UDRP Proceeding Has Standing To File ACPA Action In Federal Court

    A domain name registrant who is ordered to transfer a domain name in a proceeding under the ICANN Uniform Domain Name Dispute Resolution Policy (UDRP) has standing to file a declaratory judgment action under the Anticybersquatting Consumer Protection Act (ACPA) before the domain name is actually transferred.  Mannv. AFN Investments, LTD, No.07cv0083, 2007 U.S. Dist. LEXIS 54582 (S.D. Cal. July 27, 2007). The district court denied the defendant trademark owner's motion to dismiss the action for lack of subject matter jurisdiction. The court interpreted the declaratory judgment provision in the ACPA to allow jurisdiction where a domain name has been ordered to be transferred but the actual transfer has not yet occurred because of the automatic stay provisions of the UDRP. The court concluded that even though the domain name had not yet been "suspended, disabled, or transferred" as provided in 15 U.S.C.§1114(2)(D)(v), it would be a waste of judicial resources to require the registrant to dismiss the action and re-file it once the domain name had actually been transferred pursuant to the UDRP.

    Opinion http://www.thelen.com/tlu/MannVAFN.pdf

     

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13. Disclosure Of Password To Government By Third Party Negates Web Site Owner's Reasonable Expectation Of Privacy In Password-Protected Site

    A computer user who stores proscribed images in a password-protected Web site has a reasonable expectation of privacy in the Web site's contents, but if the user shares the password with a third party, the user assumes the risk that the third party will share the password with Government authorities.  United Statesv. D'Andrea, No.06-10082, 2007 U.S. Dist. LEXIS 52558 (D. Mass. July 20, 2007). In denying the defendant's motion to suppress the physical evidence found on the private Web site, the court relied on the "assumption of risk" exception to the Fourth Amendment. The court concluded where the expectation of privacy in Web site contents has been vitiated by a private search by a third party, police may examine the same item provided they do not "significantly expand" the nature of the underlying private search. In dicta, the court commented that the Government's "emergency intervention" argument, based upon the risk to a child victim depicted in the proscribed images, was an alternative basis for the search.

    Opinion http://www.thelen.com/tlu/USVD'Andrea.pdf

     

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14. Washington State Telemarketing Statute Allows For Vicarious Liability Claims

    Vicarious liability claims are permitted under the Washington State telemarketing statute, RCW §80.36.200, which prohibits the use of automatic dialing and announcing device for purposes of commercial solicitation.  Spaffordv. Echostar Communications Corp., No.C06-479JLR, 2007 U.S. Dist. LEXIS 51251 (W.D. Wash. July 16, 2007). In denying the defendant's motion for summary judgment, the court allowed the plaintiff to pursue an agency theory of liability under the state telemarketing statute, referencing precedent which permitted vicarious liability claims under the federal Telephone Consumer Protection Act for unsolicited fax solicitations.

    Opinion http://www.thelen.com/tlu/SpaffordVEchostar.pdf

     

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15. Single Publication Rule Applies To Posting Of Identical Material By A Third-Party Website

    The District of Columbia single publication rule bars an individual's defamation claims based upon the republication by a third-party Web site of an allegedly defamatory report authored by the defendant, absent evidence that the original publisher took steps beyond its initial publication to expand the audience for its material.  Jankovicv. Int'l Crisis Group, No.06-7095, 2007 U.S.App. LEXIS 17511 (D.C. Cir. July 24, 2007). The appeals court upheld the district court's ruling that the one-year statute of limitations on one of the plaintiff's claims began to run with the initial publication of the allegedly defamatory report. The court rejected the plaintiff's argument that the "foreseeable republication of a libelous document" by a third-party Web site "resets the limitations clock."  The court commented that, like the print media world, the copying of an article by a reader, even for wide distribution, does not constitute a new publication.

    Opinion http://www.thelen.com/tlu/jankovicVICG.pdf

     

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16. Authorized Computer Access By Employee Not CFAA Violation, Despite Intent To Misuse Information

    A departing employee, who copied client files while still having full access to his employer's computers, did not "exceed authorized access" under the Computer Fraud and Abuse Act (CFAA), despite the defendant's improper use of the files and alleged breach of company policy.  Brett Senior & Assoc. v. Fitzgerald, No.06-1412, 2007 U.S. Dist. LEXIS 50833 (E.D. Pa. July 13, 2007). The court granted summary judgment to the defendant on the CFAA and related state claims, but let stand the breach of fiduciary duty claim for the plaintiff's telephone solicitation of clients while he was still in the plaintiff's employ. The court found that the defendant could not be liable under the CFAA because there was no allegation that the defendant lacked authority or "exceeded authorized access" to view any information in the plaintiff's computer system. The court rejected the plaintiff's argument, based upon the Seventh Circuit opinion in International Airport Centers, L.L.C. v. Citrin, 440 F.3d 418 (7th Cir 2006), that an employee exceeds his authorized access when he obtains company information for an allegedly improper purpose.

    Opinion http://www.thelen.com/tlu/BrettSeniorVFitzgerald.pdf

     

    Editor's Note: See further discussion of this and a similar case rejecting the Seventh Circuit approach to the "authorized access" issue on the Technology Law Update blog.

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17. CFAA Conviction May Be Based On Circumstantial Evidence Of Motive, Access And Expertise

    A conviction under the criminal provisions of the Computer Fraud and Abuse Act (CFAA) for an employee's introduction of a "time bomb" virus into a computer database may be based upon circumstantial evidence of the defendant's motive, access to the computer network, timing of the intrusions, and technical expertise.  United Statesv. Shea, No.06-10450, 2007 U.S.App. LEXIS 16388 (9th Cir. July 11, 2007). The appeals court affirmed the jury's verdict, finding "overwhelming" evidence to support the defendant's conviction, namely, his high-level access to the database; his unique ability to program in the computer system; his antagonistic relationship with his employer; and the timing of certain edits to the "time bomb" virus that corresponded to meetings regarding his termination.

    Opinion http://www.thelen.com/tlu/USVShea.pdf

     

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18. Installation Of File Scrubbing Program On Employer's Laptop Without Evidence Of File Deletion Is Not 'Damage" Under The CFAA

    A departing employee's installation of a file scrubbing program onto a company's laptop computer with no clear evidence that any files were deleted does not constitute "damage" under the Computer Fraud and Abuse Act (CFAA).  Hasan v. Foley & Lardner, LLP, No. 04-5690, 2007 U.S. Dist. LEXIS 54930 (N.D. Ill. July 26, 2007). The court granted the employee's motion for summary judgment dismissing the employer's CFAA counterclaim.  The court ruled that despite the installation of the file scrubbing program, the employer submitted no evidence of "damage," that is, that the integrity of its data was impaired or that data was deleted.  The court also found that the employer failed to plead a cognizable loss under the CFAA of at least $5,000 because it relied on bare allegations and failed to offer an hourly cost accounting breakdown for the time spent by partners and technical staff in investigating the incident.

    Opinion http://www.thelen.com/tlu/HasanVFoley&Lardner.pdf

     

    Editor's Note: The court cited the Seventh Circuit opinion in International Airport Centers, L.L.C. v. Citrin, 440 F.3d 418 (7th Cir. 2006), which found CFAA liability under similar circumstances. However, the court distinguished the instant case because the employer in Citrin produced actual evidence of file deletion.

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19. Fourth Amendment Warrant Not Required For Government Surveillance Of Internet Activity To Acquire Internet Users' E-Mail Addresses And IP Addresses Of Visited Web Sites

    The Government is not required to obtain a warrant to engage in surveillance of Internet users in order to obtain the to/from addresses of their e-mail messages, the IP addresses of visited Web sites or the total amount of data transmitted to or from a user account because Internet users do not have a legitimate expectation of privacy in such information.  United States v. Forrester, No.05-50410, 2007 U.S.App. LEXIS 17626 (9th Cir. July 25, 2007) (amended opinion). The court affirmed the lower court's holding that the Government's monitoring of the defendant's e-mail and Internet activity was not a search under the Fourth Amendment, likening it to a permissible search of dialed telephone numbers and the exterior of sealed postal mail. The court commented that Internet and e-mail users should know that e-mail messages are sent and IP addresses are accessed through the equipment of ISPs, requiring people to "voluntarily turn over information to third parties."  The court also concluded that e-mail to/from addresses and IP addresses constitute "addressing information" and do not reveal the contents of e-mails or the particular pages of Web sites viewed.

    Opinion http://www.thelen.com/tlu/ParkerVGoogle.pdf

     

    Editor's Note: In a footnote to the opinion, the court suggested that surveillance techniques that enable the Government to determine not only the IP address that a user accessed but also the URL of the Web pages visited "might be more constitutionally problematic."  As the appeals court noted, a URL, unlike an IP address, identifies the particular document and articles within a Web site that a user views, whereas an IP address shows only that a user visited a particular Web site.

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20. Unsolicited E-mails To Company Employees Advocating Unionization Deemed 'Commercial' Under the CAN-SPAM Act

    E-mails sent by union organizers, purporting to be from managers of the a company targeted by the organizers and promoting membership in the union, are "commercial electronic mail messages" within the meaning of the federal CAN-SPAM Act.  Aitkenv. Communications Workers of America, No.1:06cv1161, 2007 U.S. Dist. LEXIS 51434 (E.D. Va. July 12, 2007). The court denied the union's motion to dismiss the CAN-SPAM claims, concluding that the e-mails provided information about the characteristics of a service and promoted that service, i.e., union representation, and were therefore "commercial" under the Act. The court rejected the argument that the e-mails were per se non-commercial because they related to union speech, and noted that the First Amendment does not preclude the regulation of misleading speech by labor unions. The court went on to hold that because the e-mails purported to be from individuals other than the organizers, they were misleading under the CAN-SPAM Act.

    Opinion http://www.thelen.com/tlu/AitkenVCWA.pdf

     

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21. 'Assisting' In The Transmission Of Spam May Constitute 'Initiating' The Transmission Of Unlawful Messages Under The CAN-SPAM Act

    A corporate officer that "assists" in the transmission of allegedly misleading and deceptive commercial e-mail messages may be deemed to have "initiated" the transmission of spam under the federal CAN-SPAM Act.  Omni Innovations, LLC v. Impulse Marketing Group, Inc., No. C06-1469, 2007 U.S. Dist. LEXIS 51867 (W.D. Wash. July 18, 2007). In denying the motion to dismiss CAN-SPAM Act claims against the corporate officer, the court found that more than one person may be considered to have initiated an e-mail message under the Act.  The court found that the defendant corporate officer who allegedly "assisted" with the spam may be considered to have "initiated" the unlawful messages, that is, to "originate or transmit the message oneself or to procure such action by inducing another person to transmit the message."

    Opinion http://www.thelen.com/tlu/OmniInnovationsVImpulseMarketing.pdf

     

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22. ISP Entitled To Rely Upon Spamming Complaints In Terminating Contract

    An Internet Service Provider (ISP) acted in good faith in terminating a customer agreement for violation of the ISP's Acceptable Use Policy, where the ISP relied upon complaints by other customers that the plaintiff had engaged in spamming activities.  Asch Webhosting, Inc. v. Adelphia Business Solutions Investment, No. 04-2593, 2007 U.S. Dist. LEXIS 52932 (D. N.J. July 23, 2007) (unpublished). The court granted the ISP's motion to preclude the recovery of consequential damages pursuant to the exculpatory clause in the contract, rejecting the plaintiff's argument that the spamming complaints were false, demonstrating bad faith on the part of the ISP and thereby voiding the exculpatory clause. The court concluded that the ISP's good faith in terminating the agreement was demonstrated on the record, and that the ultimate accuracy or veracity of the spamming complaints was immaterial so long as the ISP relied upon them in good faith.

    Opinion http://www.thelen.com/tlu/AschVAdelphia.pdf

     

    Editor's Note: This case is discussed further on the Technology Law Update blog.

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23. Broad Dispute Resolution Clause In Software License Agreement Enforceable Despite Use Of Permissive Language

    A broadly-worded dispute resolution clause in a software license agreement that contained seemingly non-mandatory language regarding dispute resolution and failed to include the word "arbitration" is nevertheless enforceable.  Health Care Logistics, Inc. v. Adonix Transcomm, Inc., No. 2:06-cv-815, 2007 U.S. Dist. LEXIS 48294 (S.D. Ohio July 3, 2007). The court granted the defendant's motion to compel arbitration, finding that the provision's broad language covering "any dispute" applied to "any dispute about breach of the contract," regardless of one party's unilateral termination of the contract.  The court also rejected the plaintiff's argument that the phrase "there should be a dispute resolution procedure" indicated that arbitration was merely permissive, concluding the clause's broadly-worded language and exhaustive detail about mandatory resolution procedures expressed the parties' desire for arbitration.  The court also found that the failure to include the word "arbitration" in the dispute resolution clause was of no consequence, given the parties' overall intent to arbitrate.

    Opinion http://www.thelen.com/tlu/HealthCareLogisticsVAdonix.pdf

     

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24. Opinions and Developments of Note

Injunction Denied On Remand In Mercexchange v. eBay Patent Dispute Mercexchange, L.L.C. v. eBay, Inc. (E.D. Va. July 27, 2007) http://www.thelen.com/tlu/mercexchangeVeBayRemand.pdf Court Dismisses Competitor's Antitrust Suit Against MySpace Anti-Linking Policy LiveUniverse v. MySpace (C.D. Cal. June 4, 2007) http://www.thelen.com/tlu/LiveUniverseVMySpace.pdf MySpace Obtains CAN-SPAM Injunction Against Phishing E-Mails MySpace, Inc. v. Wallace (C.D. Cal. July 20, 2007) http://www.thelen.com/tlu/MySpaceVWallace.pdf Court Orders RIAA To Pay $70,000 In Attorney Fees In Unsuccessful P2P File-Sharing Lawsuit Capitol Records, Inc. v. Foster (D. Okla. July 16, 2007) http://www.thelen.com/tlu/CapitolVFoster.pdf 'Advertising Injury' Insurance Policy Provides Coverage For TCPA Violations Under New Jersey Law Terra Nova Insurance Co.v.Fray-Witzer (Mass. July 10, 2007) http://www.thelen.com/tlu/TerraNovaInsuranceVFrayWitzer.pdf Court Delays Ruling On Miller Community Standards In Prosecution For Video Downloads U.S. v. Extreme Associates (W.D. Pa. July 31, 2007) http://www.thelen.com/tlu/USvExtreme.pdf Court Rules AT&T Video Programming Service Is Cable Service Regulated Under Cable Act Office of Consumer Counsel v. Southern New England Telephone Co. (D. Conn. July 26, 2007) http://www.thelen.com/tlu/OfficeVSouthern.pdf District Court Preliminarily Enjoins Real Estate Broker Gripe Site Lennar v. Morgan (S.D. Fla. July 20, 2007) http://www.thelen.com/tlu/LennarVMorgan.pdf Perfect 10 Files Copyright Infringement Suit Against Microsoft Search Engine Blog: http://brownraysman.typepad.com/technology_law_update/2007/08/perfect-10-trie.html Student's IM Icon Suggesting Threat To Teacher Supports Student Suspension Wisniewski v. Board of Education (2d Cir. July 5, 2007) http://www.thelen.com/tlu/WisniewskiVBoard.pdf Federal Court Strikes Down Most Amended New York Attorney Advertising Rules Alexander v. Cahill (N.D. N.Y. July 23, 2007) http://www.thelen.com/tlu/AlexanderVCahill.pdf Music Publishers File Suit Against Sirius Radio Over Music Storage Devices Nota Music Publishing, Inc. v. Sirius Satellite Radio, Inc. (S.D. N.Y. July 13, 2007) http://www.thelen.com/tlu/NotaVSirius.pdf Federal Press Shield Bill Broadly Worded To Include Bloggers Free Flow of Information Act of 2007, H.R. 2102 (110th Cong. 1st Sess. 2007) http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.02102: back to table of contents

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