ISP Immune Under CDA Section 230 For Alleged "Knowing Hosting" Of Newsgroup On Which Illegal Images Were Distributed
An Internet Service Provider (ISP) is immune under Section 230 of the Communications Decency Act (CDA) from a civil action alleging that it "knowingly hosted" an e-mail newsgroup on which illegal images of children were disseminated. Doe v. Bates, No. 5:05-CV-91, 2006 U.S. Dist. LEXIS 93348 (E.D. Tex. Dec. 18, 2006). Acknowledging that the issue was one of first impression, the district court upheld the recommendation of a magistrate judge to dismiss claims of negligence, intentional infliction of emotional harm, invasion of privacy and conspiracy against Yahoo! based on Yahoo!'s alleged "knowing hosting" an e-mail group on which illegal images of children were disseminated. The court recognized that the government has the authority to prosecute ISPs for alleged violations of the federal statute proscribing the images at issue, but concluded that private civil suits for the same conduct are prohibited by Section 230 of the CDA. The court commented that while the facts of a case involving such images "may be highly offensive, Congress has decided that the parties to be punished and deterred are not the internet service providers but rather are those who created and posted the illegal material."
The opinion is available at
http://www.thelen.com/tlu/DoeVBates12_27_07.pdf
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Employer Immune Under CDA Section 230 For Threatening Messages Sent Over Its Computer Network By Employee
An employer whose computer network was used by an employee to send threatening e-mails and post similar messages on an Internet bulletin board is immune under Section 230 of the Communications Decency Act from liability for plaintiff’s claims of emotional distress.
Delfino v. Agilent Technologies, Inc., No. H028993, 2006 Cal. App. LEXIS 1937 (Cal. Ct. App. Dec. 14, 2006). The court dismissed the tort claims brought against the defendant employer by the private individuals who were the subject of the anonymous threatening messages. The court deemed that the employer, with its networked computer system, was a “provider of an interactive computer service” and the messages in question were produced by another “information content provider” (i.e. the employee) and thus, the court reasoned that the employer was entitled to CDA immunity from liability for plaintiff’s claims that treated the employer as a publisher or speaker of the allegedly wrongful e-mails.
The opinion is available at
http://www.courtinfo.ca.gov/opinions/documents/H028993.PDF
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Site That Provided Webcasts Of Motorcycle Racing Events Infringed Motocross Race Promoter’s Copyright
A Web site owner's unauthorized inline linking to live audio webcasts of motorcycle racing events made available by the plaintiff race promoter on its own Web site violated the race promoter’s rights of public display and public performance. Live Nation Motor Sports, Inc. v. Davis, No. 3:06-CV-276-L, 2006 U.S. Dist. LEXIS 89552 (N.D. Tex. Dec. 11, 2006). In issuing a preliminary injunction barring the defendant from providing links to plaintiff’s audio webcasts or otherwise displaying them, the court ruled that the unauthorized links "would likely qualify as a copied display or performance" of the plaintiff's copyrighted webcasts. Noting that the case was one of first impression, the court analogized the unauthorized linking to the unauthorized satellite transmissions of live football television broadcasts that were enjoined in National Football League v. PrimeTime 24 Joint Venture, 211 F.3d 10 (2d Cir. 2000).
The opinion is available at
http://www.thelen.com/tlu/LiveNationVDavis.pdf
Editor's Note: This opinion is interesting because it does not discuss the District Court opinion in Perfect 10 v. Google, 416 F.Supp 2d 828 (D. Cal. 2006), in which the court adopted the "server test" for determining liability for linking to copyrighted material. Under the server test, copies are deemed to be made by the server from which the copyrighted material is made available, not by the party that supplies a link to the copyrighted material. An appeal in Perfect 10 v. Google currently is pending in the Court of Appeals for the Ninth Circuit.
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Expert Source Code Analysis Necessary To Establish Software Copyright Infringement
Expert analysis of computer source code is required to support a claim of copyright infringement with respect to a software program. Auto Inspection Services, Inc. v. Flint Auto Auction, Inc., No. 06-15100, 2006 U.S. Dist. LEXIS 87366 (E.D. Mich. Dec. 4, 2006). The court ruled that the plaintiff had failed to establish a probability of success on the merits of its claim that the defendant's competing program was substantially similar to its copyrighted computer software program, because the plaintiff had failed to offer an expert analysis of the software code of the two programs. The court ruled that testimony concerning similarities in the screen displays and general capabilities of the competing programs was insufficient to establish "legal similarity" between the programs. The court noted that the programmer who created the allegedly infringing program testified that he did not have access to the source code of the plaintiff's program, that the two programs were written in different languages, and that much of the code was written to conform to the inherent functionality requirements of the automobile inspection process for which the program was written.
The opinion is available at
http://www.thelen.com/tlu/AutoInspectionVFlint.pdf
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File-Sharing Defendant Seeks Class Action Status In Suit Against P2P Network
An individual who settled copyright infringement claims brought by record companies has filed suit against the distributor of the P2P file-sharing software through which she traded copyrighted music files. Lewan v. Sharman Networks, Ltd, No. 06-6736 (N.D. Ill. complaint filed Dec. 6, 2006). The complaint alleges that the distributor of the software, along with other entities, engaged in fraudulent misrepresentation, deceptive trade practices and consumer fraud in marketing the software as allowing "free" downloads of copyrighted music files. The complaint also alleges that the software was "nearly impossible" to uninstall, and caused the persistent sharing of files on users' computers on the P2P network even after the software had been removed. The complaint also includes claims that the file-sharing software was bundled with surreptitiously installed spyware programs that adversely affected users' computers.
The complaint is available at
http://www.thelen.com/tlu/LewanVSharman.pdf
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“e” Trademark For Electronic Commerce Company Deemed Weak And Non-Distinctive
The use of the prefix "e" in a mark for an Internet business yields a suggestive or descriptive mark. ePrize L.L.C. v. Net Prize, Inc., No. 06-14114, 2006 U.S. Dist. LEXIS 89536 (E.D. Mich. Dec. 12, 2006). In denying a preliminary injunction barring the defendant, a competing e-commerce company, from using its 'Net Prize' trademark, a district court ruled that the plaintiff’s 'ePrize' mark was “relatively non-distinctive” and “weak.” The court concluded that the use of the designation “e,” denoting an Internet business, coupled with a common word like “prize,” which suggests a weaker mark, makes a finding of confusion less likely. The court also found that Net Prize did not likely infringe the plaintiff’s ePrize trademark since the visual and linguistic similarities were outnumbered by the differences and failed to create a likelihood of confusion under the Lanham Act.
The opinion is available at
http://www.thelen.com/tlu/ePrizeVNetPrize.pdf
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Thirty Percent Of Gross Profits Awarded For Violation Of Preliminary Injunction Against Software Copyright Infringement
An award of thirty percent of a company's gross profits is an appropriate monetary sanction for the company's violation of a preliminary injunction against the use of the plaintiff's software and related materials in the after-market servicing of plaintiff's power supply equipment. MGE UPS Systems, Inc. v. Titan Specialized Services, Inc., No. 3:04-0231, 2006 U.S. Dist. LEXIS 88398 (N.D. Tenn. Dec. 6, 2006). The court found as a matter of fact that that approximately one-third of the defendant company's business involved after-market servicing of the plaintiff's equipment, that certain service functions could not be accomplished without using the plaintiff's software, that the defendant had obtained the plaintiff's proprietary materials by improper means, and that the defendant had continued to use the materials after the date upon which the court had entered the preliminary injunction and impoundment order. The court concluded that the sanction was appropriate in order to ensure future compliance with the court's order, as well as to compensate the plaintiff.
The opinion is available at
http://www.thelen.com/tlu/MGEvTitan.pdf
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Suit Alleging Multiple Claims Against Google AdSense Program Dismissed For Failure To State A Claim
A complaint alleging violations of the Lanham Act and the federal Electronic Communications Privacy Act, as well as multiple state law claims including fraud, in connection with her participation in the Google AdSense program, has been dismissed with limited leave to amend. Bradley v. Google, Inc., No. C 06-05289, 2006 U.S. Dist. LEXIS 94455 (N.D. Cal. Dec. 22, 2006). The court dismissed the plaintiff's entire complaint in which she alleged, among other things, that she was deceived by the manner in which Google advertised the AdSense program, in particular by her inability to preview the ads which the program placed on her Web site. She also alleged that she was damaged by the nature of the ads that were placed on her Web site and by Google's failure to remove ads to which she objected.
The opinion is available at
http://www.thelen.com/tlu/BradleyVGoogle.pdf
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Right to Privacy Not Violated By Municipality's Web Site Posting Of Traffic Ticket Information
A municipality’s Web site posting of a speeding ticket which displayed plaintiff’s name, social security number and other personally identifiable information did not violate her right of privacy under the Fourteenth Amendment to the U.S. Constitution or support a civil rights claim under Section 1983. Lambert v. Hartmann, No. 1:04cv837, 2006 U.S. Dist. LEXIS 93926 (S.D. Ohio Dec. 29, 2006). Under Sixth Circuit precedent, the court commented, the right of privacy is triggered when the interest at stake concerns those personal rights that can be “fundamental” or “implicit” in the concept of ordered liberty and that “not all disclosures of private information will trigger constitutional protection.” In dismissing the plaintiff’s federal claims and declining to exercise jurisdiction over related state claims, the court found that plaintiff’s allegations that the municipality’s web posting of her speeding ticket led directly to an incident of identity theft did not implicate a fundamental right of privacy but only identified a risk of financial harm.
The opinion is available at
http://www.thelen.com/tlu/LambertVHartman.pdf
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Federal Telephone Pretexting Bill Signed Into Law
The Telephone Records and Privacy Protection Act of 2006 passed both houses of Congress on December 8, 2006 and was signed into law on January 12, 2007. H.R. 4709 (109th Cong., 2d Sess.) . The legislation defines new federal criminal offenses covering the fraudulent acquisition or unauthorized disclosure of telephone customer records, including customers of both traditional telephone service and IP-enabled voice service, i.e., Voice Over Internet Protocol (VoIP). Among other things, the legislation proscribes unauthorized access to telephone customer accounts via the Internet, by means of conduct that violates the Computer Fraud and Abuse Act.
Bill information is available at
http://thomas.loc.gov/cgi-bin/bdquery/z?d109:h.r.04709:
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FTC Mails Reimbursement Claim Forms To ChoicePoint ID Theft Victims
The Federal Trade Commission (FTC) mailed reimbursement forms to more than 1,400 individuals identified as victims of the security lapses at the ChoicePoint data broker. FTC File No. 052-3069. The FTC alleged in an enforcement action that the data broker sold information about consumers to individuals who turned out to be identity thieves. Under the FTC reimbursement program, which is funded by the proceeds of the agency's $5 million settlement with the data broker, victims may submit claims for out of pocket expenses for identity theft resulting from the incident.
The FTC press release is available at
http://www.ftc.gov/opa/2006/12/choicepoint.htm
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Web Use Of Photo Does Not Restart Limitations Period For Right Of Publicity Claim
The reuse of the plaintiff's photograph on a Web site does not restart the limitations period on the plaintiff's right of publicity claim, where the photo had previously been used in several different media over a period of time, for a single purpose and for a single audience. Blair v. Nevada Landing Partnership, No. 04--L--459, 2006 Ill. App. LEXIS 1136 (Ill. App. Ct. 2d Dist. Dec. 8, 2006). The appeals court affirmed the trial court's ruling that the plaintiff's claims under common law and under the Illinois Right of Publicity Act were barred by the one-year limitations period applicable to both types of claim. The court rejected the argument that the multiple uses of the photograph in print media, on billboards and on a Web site constituted a "continuing violation," concluding that the multiple uses constituted a "single overt act." The court noted that the single image of the plaintiff, a former employee of the defendant, was used to promote a single product and was not altered, and the purpose of its use on the Web site "was the same as the purpose of its use in the other mediums" in which it was used.
The opinion is available at
http://www.state.il.us/court/Opinions/AppellateCourt/2006/2ndDistrict/December/2060328.pdf
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General CAN-SPAM Claims Do Not Constitute Averments of Fraud Requiring Pleading With Particularity
The plaintiff’s CAN-SPAM Act causes of action, which included claims of misleading subject lines, failure to provide an unsubscribe option, failure to disclose the promotional nature of the e-mail and failure to provide a postal address, did not amount to an allegation of fraud, requiring a more particularized pleading. Gordon v. Virtumundo, No. 06-0204-JCC, 2006 U.S. Dist. LEXIS 89494 (W.D. Wash., Dec. 8, 2006). In denying the defendant’s motion to dismiss the plaintiff’s CAN-SPAM claims, the court reasoned that when a complaint contains allegations of both fraudulent and non-fraudulent conduct, only the specific averments of fraud must be pled with particularity, and that the plaintiff’s CAN-SPAM claims, which contained generalized language and referred to annexed copies of the allegedly wrongful e-mails, satisfied the federal pleading requirements.
The opinion is available at
http://www.thelen.com/tlu/GordonVVirtumundo.pdf
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New Federal E-Discovery Rules Come Into Effect
Amendments to the Federal Rules of Civil Procedure that deal comprehensively with issues pertaining to electronic discovery have come into effect. Fed. R. Civ. P. (Dec. 1, 2006). Among other things, the amended rules mandate early attention in the litigation process to issues raised by the discovery of electronically stored information, address issues of work-product protection and inadvertent privilege waiver, and clarify discovery obligations with respect to electronically stored information that is not readily accessible. Of particular importance are rule amendments that deal with the obligation of parties to preserve electronically stored information that is or may become relevant to the litigation.
The Rules and Committee Notes are available at
http://www.uscourts.gov/rules/EDiscovery_w_Notes.pdf
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Undisclosed "Buzz Marketing" Relationship May Violate FTC Act
Buzz marketing, or "amplified word of mouth marketing" may be deceptive within the meaning of the FTC Act under certain circumstances if the relationship between the "sponsored consumer" and the marketer is not disclosed to consumers. FTC opinion letter, Dec. 7, 2006. The FTC letter describes buzz marketing as occurring when a marketer compensates a consumer for disseminating a message to other consumers without disclosing the consumer’s relationship with the marketer. In the letter responding to a Request for Investigation, FTC staff referenced prior agency determinations on endorsements, in which the FTC concluded that the relationship between a seller and an endorser must be disclosed where the relationship between them is likely to have an effect on the weight or credibility of the endorsement. The letter concluded that the relationship between a marketer and a "sponsored consumer" might need to be revealed under similar circumstances, unless the relationship "were otherwise clear from the context."
The FTC opinion letter is available at
http://www.ftc.gov/os/closings/staff/061211staffopiniontocommercialalert.pdf
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Spoliation Sanction Not Warranted For Good Faith Deletion And Transfer Of Proprietary Computer Files
A defendant's transfer of computer files to a portable medium and the concurrent deletion of them from the defendant's computer does not warrant a spoliation sanction, where the defendant sought to comply with a court order requiring the return of misappropriated confidential and proprietary information. Anadarko Petroleum Corp. v. Davis, No. H-06-2849, 2006 U.S. Dist. LEXIS 93594 (S.D.Tex. Dec. 28, 2006). The court concluded that the defendant had acted in a good faith effort to comply with the order directing him to disable access to the files and to return the plaintiff's misappropriated information, as evidenced by his delivery of the files on the portable medium to the plaintiff and his subsequent agreement to allow a forensic audit of his computer. The court noted, however, that the defendant should have conferred with the plaintiff and sought assistance from the court before acting unilaterally to transfer and delete the files, because these actions potentially impaired the ability of the plaintiff to verify that all of the information alleged to have been misappropriated by the defendant had been returned.
The opinion is available at
http://www.thelen.com/tlu/AnadarkoVDavis.pdf
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E-Mail Modification Of Settlement Agreement Unenforceable Because Not "Subscribed" As Required By Michigan Court Rules
An e-mail message sent by a plaintiff's attorney requesting a modification of a settlement agreement was not a "subscribed" writing as required by the Michigan Court Rules applicable to agreements between parties to litigation, because the attorney's name was not typed or appended to the end of the message and appeared only in the heading of the message. Kloian v. Domino's Pizza, L.L.C., No. 263882, 2006 Mich. App. LEXIS 3796 (Mich. Ct. App. Dec. 28, 2006). The court ruled that the modification to the settlement agreement was unenforceable even though the defendant's attorney agreed to the modification on behalf of his client. The court pointed out that the term "signed" is different from the narrower term "subscribed," which means to append a signature "at the bottom of a document." The court concluded that the Uniform Electronic Transactions Act was irrelevant because the Act validates electronic signatures but does not address the subscription requirement imposed by the Michigan court rule.
The opinion is available at
http://courtofappeals.mijud.net/documents/OPINIONS/FINAL/COA/20061228_C263882_38_263882.OPN.PDF
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"Mailbox Rule" Extension Under Federal Rules Applies To Electronically Served Papers, Under Local District Rules
The three-day extension of filing deadlines under the "mailbox rule," applicable to responses to papers served via first class mail under Federal R. Civ. P. 6(e), also applies to responses to papers served electronically. Nowak v. Ford Motor Co., No. 06-11718, 2006 U.S. Dist. LEXIS 92780 (E.D. Mich. Dec. 22, 2006). Rejecting a party's assertion that an adversary's responsive papers were late-filed, the court ruled that under the district court's local rules, which implement the federal court Electronic Court Filing (ECF) system for the service of pleadings, service of papers made through the court's electronic filing system constitutes service "as if by first class mail." Accordingly, the court found that the Fed. R. Civ.P. Rule 6(e) mailbox rule applied to a court order served electronically through the ECF system, and extended by three days the time in which the party was required to respond to the order.
The opinion is available at
http://www.thelen.com/tlu/NowakVFord.pdf
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Mirror Imaging Of Party's Hard Drives Justified Where Close Relationship Is Shown Between Claims And Computer Equipment Is Shown
A plaintiff is entitled to obtain mirror images of a defendant's computer hard drives, where the plaintiff has shown a close relationship between its claims and the defendant's computer equipment. Ameriwood Industries, Inc. v. Liberman, No. 4:06CV524, 2006 U.S. Dist. LEXIS (E.D. Mo. Dec. 27, 2006). The court granted the plaintiff's request for the mirror images, where the plaintiff claimed that the defendants, its former employees and their recently formed company, had used its computers to misappropriate confidential files and information and forward it to their personal e-mail accounts, presumably for further transfer to other computers. The court directed that the mirror imaging and examination be conducted by a forensics expert pursuant to a three-step imaging, recovery and disclosure process defined by the court in detail.
The opinion is available at
http://www.thelen.com/tlu/AmeriwoodVLiberman.pdf
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Bar On Class Action Arbitration In Cable Service Contract Unconscionable Under Pennsylvania Law
An arbitration clause that requires individual arbitration of disputes and prohibits class action arbitration is unconscionable and unenforceable under Pennsylvania law. Thibodeau v. Comcast Corp., Nos. 2176, 2177 EDA 2005, 2006 Pa. Super. LEXIS 4168 (Dec. 1, 2006). The appeals court upheld the trial court's refusal to compel arbitration, rejecting the argument that the Federal Arbitration Act (FAA) bars the application of state law to arbitration provisions. The court concluded that the FAA does not bar the application of general principles of state contract law, such as unconscionability, to arbitration clauses. The court ruled that cable service contract was a contract of adhesion and that the arbitration provision was unconscionable and against public policy because the requirement of individual arbitration disadvantaged consumers and effectively immunized corporations from redress of grievances.
The opinion is available at
http://www.courts.state.pa.us/OpPosting/Superior/out/A23008_06.pdf
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Circuit Court Upholds FCC Order Imposing E911 Requirements On VoIP Providers
An FCC order requiring VoIP carriers to implement E911 emergency call capabilities and notify customers of any limitations the VoIP carrier’s E911 service within 120 days is not arbitrary or capricious. Nuvio Corp. v. FCC, No. 05-1248, 2006 U.S. App. LEXIS 30820 (D.C. Cir., December 15, 2006). In upholding FCC order, the court found that the Commission weighed public safety against the technological hurdles and economic cost of compliance and found in favor of public safety. The court also rejected the petitioner’s argument that the FCC Order was against established precedent when the FCC had previously given more time for wireless and satellite phone providers to implement 911 capabilities. In deferring to the FCC, the court commented that different technologies may bear different regulatory burdens, particularly given that the agency had previously refused to classify VoIP providers as “telecommunications carriers.”
The opinion is available at
http://pacer.cadc.uscourts.gov/docs/common/opinions/200612/05-1248a.pdf
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Developments of Note
