March 2007

Technology Law Update March 2007

In this issue:

1. Child Online Protection Act Held Unconstitutional
2. Viacom Files Copyright Infringement Suit Against YouTube, Google Over Uploads
3. Unauthorized And Dissemination Use Of Online Publication By Subscriber Supports Copyright Infringement Claim
4. Archiving of Web Site’s Contents May Breach Posted Terms of Use
5. Search Engines’ First Amendment Rights Preclude Injunction Over Refusal To Run Web Site Owner’s Advertisements
6. Claim Under District of Columbia Consumer Protection Statute May Proceed For Alleged Misrepresentations On Hotel’s Web Site
7. Expert’s Report In Trademark Litigation May In Part Rely On Wikipedia Online Encyclopedia
8. Amended Trademark Dilution Act Applies Where Prospective Injunctive Relief Is Sought
9. Criminal Provisions Of CAN-SPAM Act Not Unconstitutionally Vague
10. Social Networking Site Immune Under CDA Section 230 From Tort Liability Over Sexual Assault
11. Message Board Operator Immune Under CDA Section 230 For Erroneous Securities Information Provided By Third Party
12. Web Site Parody About Private Business Owner Not Defamatory
13. Web Site Owner Who Previously Posted Personal Information Lacks Standing To Challenge “.us” Domain Name Disclosure Rules 
14. Plaintiff Likely To Succeed On ECPA Claim Against User Of Keystroke Surveillance Software In Domestic Relations Dispute, But Injunctive Relief Denied
15. Victim Of Telephone Pretexting Has Cause Of Action Against Pretexters Under Federal Electronic Communications Statute And State Law
16. Mirror Imaging Of Party's Hard Drive Justified To Determine Whether Party Granted Permission For Receipt Of Text Messages
17. Representative Association Lacks Standing To Bring Assigned Claims For Unsolicited Faxes Under TCPA
18. "Advertising Injury" Insurance Policy Provides Coverage For TCPA Violations
19. Consequential Damage Exclusion In Software License Agreement Bars Copyright Infringement Claims
20. Web Sites Not Barred From Disseminating Leaked Documents From Well-Known Multidistrict Litigation
21. Online Bankruptcy Software Provider A "Bankruptcy Petition Preparer" Subject To Regulations
22. Developments of Note

1. Child Online Protection Act Held Unconstitutional

   The Child Online Protection Act (COPA), which imposes federal civil and criminal penalties for exposing minors to material that is "harmful to minors," facially violates the First and Fifth Amendment rights of providers of content on the World Wide Web.  American Civil Liberties Union v. Gonzales, No. 98-5591 (E.D. Pa. Mar. 22, 2007). The district court granted a permanent injunction against the enforcement of the Act, ruling that COPA is not narrowly tailored to the compelling interest of Congress in protecting childen from sexually explicit material on the Web, and because the Act is not the least restrictive, most effective alternative of achieving that compelling interest. The court also held that the Act is impermissibly vague and overbroad.

   Opinion: http://www.paed.uscourts.gov/documents/opinions/07D0346P.pdf

    

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2. Viacom Files Copyright Infringement Suit Against YouTube, Google Over Uploads

   Viacom International, Inc., along with a group of its affiliates, filed a lawsuit against YouTube, Inc. and Google, Inc. for direct and secondary copyright infringement in connection with the YouTube online video site.  Viacom International, Inc. v. YouTube, Inc., No. 1:2007cv02103 (S.D.N.Y. Mar. 13, 2007). The complaint alleges that the video service is responsible for copyright infringement "on a massive scale" and that its "brazen disregard of the intellectual property laws fundamentally threatens not just Plaintiffs, but the economic underpinnings of one of the most important sectors of the United States economy." The complaint seeks declaratory and injunctive relief, including a permanent injunction requiring the service to employ "reasonable methodologies" to prevent or limit infringement, and damages "of at least one billion dollars."

   Complaint: http://www.thelen.com/tlu/ViacomYouTubeComplaint3-12-07.pdf

    

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3. Unauthorized And Dissemination Use Of Online Publication By Subscriber Supports Copyright Infringement Claim

   A subscriber to an online publication who purchased a single-user license and then shared the confidential username and password with fellow employees may be liable for copyright infringement.    Therapeutic Research Faculty v. NBTY, Inc., No. 2:05-cv-2322, 2007 U.S. Dist. LEXIS 8147 (E.D. Cal. Jan. 25, 2007). In denying the defendants’ motion to dismiss, the court found that the plaintiff’s claims of unauthorized copying of the plaintiff’s Web publications,  including allegations regarding the pasting of copyrighted text into emails sent to unauthorized users, were sufficient to plead a violation of the plaintiff’s rights of display, reproduction and distribution under the Copyright Act.  The court also refused to dismiss the plaintiff’s CFAA claims, concluding that the defendants’ unauthorized access to the Web publication was actionable under the statute and that the plaintiff’s allegations that the defendants’ avoided paying approximately $40,000 for a full corporate user license satisfied the CFAA’s minimum loss requirements. 

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

    

   Editor’s Note:  This case is the latest to address the still-common corporate practice of sharing of single-user passwords to subscription sites amongst various people, as well as the copying and pasting of subscription content to e-mail for dissemination. 

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4. Archiving of Web Site’s Contents May Breach Posted Terms of Use

   A company that uses an automated Web crawler to archive the contents of a Web site multiple times may have formed a contract with the Web site owner via the site’s terms of use and then breached the contract when it then failed to pay the prescribed copying fees as outlined under the terms of that contract.     Internet Archive v. Shell, No. 1:06-cv-1726, 2007 U.S. Dist. LEXIS 10239 (D. Colo. Feb. 13, 2007). The court dismissed the defendant’s conversion and racketeering counterclaims, but allowed the defendant Web site owner to proceed with her breach of contract counterclaim. While the court commented that the “absence of human consent to this contract” may  ultimately doom the defendant’s breach of contract claim, the court  ruled  that the  defendant had raised factual issues that could not be resolved on a motion to dismiss for failure to state a claim, particularly concerning the exact nature of the Web crawler’s archiving activities and the Web site owner’s placement and accessibility of the relevant terms of use. 

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

    

   Editor’s Note:  This case may be of particular interest because it involves the Internet Archive's "Wayback Machine" archive of Web sites. This case highlights the ever-lurking issues of the enforceability of certain Web site terms of use, as outlined in two notable Second Circuit decisions, namely Specht v. Netscape (2nd Cir. 2002) (terms of use unenforceable where a user had unimpeded access to the Web site contents and could only become aware of the terms of use by clicking on a separate icon located elsewhere on the site) and Register.com v. Verio (2d Cir. 2002) (terms of use were displayed to a Web crawler only after each use, but the Web crawler was assumed to have become aware of the terms of use after accessing the Web site multiple times). The dispute raises the issue touched on by Verio as to whether one can avoid Web site contractual restrictions by using automated access technologies.    

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5. Search Engines’ First Amendment Rights Preclude Injunction Over Refusal To Run Web Site Owner’s Advertisements

   A claim based upon a search engine’s refusal to accept and place a Web site owner’s proposed ads in prominent places among search engine results and its removal of the owner’s Web sites from its search result rankings is precluded by the search engine’s First Amendment rights and Section 230 of the Communications Decency Act (CDA).   Langdon v. Google, Inc., No. 1:06-cv-319, 2007 U.S. Dist. LEXIS 11902 (D. Del. Feb. 20, 2007).   In dismissing the pro se plaintiff’s constitutional and fraud-based claims against various search engines, the court found that compelling the defendants to accept the plaintiff’s ads and “honestly” rank his Web site in search rankings is precluded by the search engine’s First Amendment rights and by the CDA, which provides immunity from suit for claims grounded upon a search engine’s exercise of editorial discretion over screening Internet content.  However, the court did let stand the plaintiff’s breach of contract claim against Google, declining to dismiss the claim at such an early stage of the litigation.

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

    

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6. Claim Under District of Columbia Consumer Protection Statute May Proceed For Alleged Misrepresentations On Hotel’s Web Site

   A guest whose final foreign hotel bill was higher than the price quoted on the U.S. based hotel company’s Web site due to certain procedures concerning currency exchange rates may proceed in federal district court with misappropriation claims under the District of Columbia Consumer Protection statute.   Shaw v. Marriott International, Inc., No. 1:05-cv-1138, 2007 U.S. Dist. LEXIS (D. D.C. Feb. 22, 2007).   In denying the defendant’s motion to dismiss, the court found that even though the events alleged took place in Russia, the witnesses and information relating to the defendant’s Internet reservation practices are likely contained in the defendant’s District of Columbia area headquarters, making the District of Columbia district court a convenient forum.  The court also found that District of Columbia law would govern this case, and that the District of Columbia consumer protection statute could have extraterritorial effect and apply to cases involving non District of Columbia consumers and transactions.

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

    

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7. Expert’s Report In Trademark Litigation May In Part Rely On Wikipedia Online Encyclopedia

   An export’s report in a trademark litigation concerning the transliteration of Russian names into English may, in part, rely on the Wikipedia online encyclopedia, despite reasonable concerns about the ability of anonymous users to alter Wikipedia entries.  Alfa Corp. v. Oao Alfa Bank, No. 04-cv-8968, 2007 U.S. Dist. LEXIS 12771 (S.D.N.Y. Feb. 21, 2007).   In denying the defendant’s motion to preclude the proposed testimony of plaintiff’s experts, the court concluded that the Wikipedia entry partially relied on by the plaintiff’s expert is not so inherently unreliable as to render inadmissible any opinion that references it.  The court commented upon the number of judicial opinions that cite Internet sources like Wikipedia and its apparent dependability as compared to traditional sources. The court further commented that, despite the citations to Wikipedia, the expert relied more heavily on written sources, and in any event defense counsel would be given the opportunity to cross-examine the plaintiff’s expert at trial concerning his reliance on the disputed sources.

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

    

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8. Amended Trademark Dilution Act Applies Where Prospective Injunctive Relief Is Sought

   The amended Federal Trademark Dilution Act (FTDA) applies to trademark infringement claims brought prior to the amendment of the Act, to the extent that the trademark owner is seeking prospective injunctive relief.    Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., No. 06-0435-cv, 2007 U.S. App. LEXIS 3372 (2d Cir. Feb. 15, 2007). The appeals court vacated a lower court judgment finding that the trademark owner had failed to show dilution under the “actual dilution” standard of the original Act, and remanded the case back to the lower court to apply the likelihood of dilution standard of the amended Act. The court also concluded that even though the lower court applied the “likely to cause dilution” standard in evaluating the plaintiff’s state dilution claims, such analysis was not necessarily “coextensive” with the amended federal statute.

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

    

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9. Criminal Provisions Of CAN-SPAM Act Not Unconstitutionally Vague

   The provisions of the CAN-SPAM Act that criminalize the transmission of e-mails with false header information are not unconstitutionally vague.  United States v. Twombly, No. 06-cr-1715, 2007 U.S. Dist. LEXIS 12664 (S.D. Cal. Feb. 22, 2007).   The court denied the defendant’s motion to dismiss the indictment alleging the transmission of millions of e-mails containing materially false header information that impaired the ability of recipients and ISPs to identify the sender. The court rejected the defendant’s argument that the Act is unconstitutionally vague because an e-mail header does not necessarily personally identify the sender nor does a recipient who is a lay person have the ability to “identify” the sender based on the header information. The court concluded that the statute does not assume that e-mail senders are personally identifiable but merely forbids fraudulent interference with the ability to locate senders of e-mails, and is expressly designed to protect the ability of ISPs and law enforcement to investigate spam, entities that are more adept at taking the steps to identify the sender of an e-mail.

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

    

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10. Social Networking Site Immune Under CDA Section 230 From Tort Liability Over Sexual Assault

    A social networking site is entitled to immunity under Section 230(c) of the Communications Decency Act for allegedly failing to institute adequate safety measures to prevent sexual assaults of minors and for the failure to institute policies relating to age verification.  Doe v. MySpace, No. 1:06-cv-00983-SS (W.D. Tex. Feb. 13, 2007). In dismissing the complaint, the court rejected the argument that the claims were not barred by Section 230 because the plaintiffs were not seeking to hold the defendant liable as a publisher of defamatory content, but rather were asserting a negligence claim for failure to take reasonable safety measures to prevent sexual predators from communicating with minors on the defendant’s site.  The court noted that the defendant had no duty to protect the plaintiff, nor to institute safety measures on its Web site. The court concluded that the plaintiffs’ claims were directed toward MySpace for alleged harms relating to its publishing and screening capacities as a social networking site, and that judicial interpretations of Section 230 have generally barred such suits for non-defamation claims based in negligence.

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

     

    Editor’s Note:  It is interesting to note that MySpace apparently did not try to invoke the protections afforded by its terms of use—presumably because the plaintiff is a 13-year old minor, and therefore incapable of contracting.  Also interesting is the court’s discussion of “premises liability,” where the court noted that it was declining to extend such liability to the  Internet context, “particularly where, as here, the defendant provides its services to users for free.”  This raises the question as to whether a different outcome would result if a fee were imposed for the usage of the site. 

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11. Message Board Operator Immune Under CDA Section 230 For Erroneous Securities Information Provided By Third Party

    An operator of a financial-oriented Internet message board and Web site is immune under Section 230 of the Communications Decency Act (CDA) for a series of allegedly false and defamatory postings made by third-parties that disparaged the financial condition of the plaintiff, a publicly traded company.  Universal Communications Systems, Inc. v. Lycos, Inc., No. 06-1826, 2007 U.S. App. LEXIS 3946 (1st Cir. Feb. 26, 2007) .  The appeals court upheld the dismissal of plaintiff’s complaint, which included claims of cyberstalking, state securities fraud and trademark dilution. The court rejected the plaintiffs' argument that the CDA was inapplicable because defendant was “manifestly aware of the illegal nature of the subscriber postings.” The court followed established precedent in construing Section 230 immunity broadly and found that such immunity applies even after notice of the potentially unlawful nature of the third-party content, particularly when there was no evidence that the defendant was responsible for the creation of the third-party posting.  The court also rejected the plaintiff’s novel argument that the defendant’s conduct was a form of "culpable assistance" to parties wishing to disseminate misinformation, analogous to the "active inducement of infringement" that the U.S. Supreme Court found actionable in MGM Studios v. Grokster, 125 S.Ct. 2764 (2005). 

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

     

    Editor’s Note:  In drafting its claims, and in particular in raising the “culpable assistance” argument, the plaintiff seemingly attempted to take advantage of the apparent invitation by Seventh Circuit judge Easterbrook in Doe v. GTE Corp., 347 F.3d 655 (7th Cir. 2003)  to frame tort claims in a manner that would avoid Section 230 immunity.    The court did not rule on whether a claim premised on active inducement could ever be exempt from the reach of CDA immunity, but concluded that even if an active inducement claim could fall outside CDA immunity, there were no acts by the defendant that constituted active inducement, i.e., a “clear expression or other affirmative steps taken to foster unlawful activity.”

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12. Web Site Parody About Private Business Owner Not Defamatory

    Website content that humorously commented upon the personal and professional character of a private business owner was not defamatory because, according to the court, no reasonable person could believe that the comments were true.    Hamilton v. Prewett, No. 12A01-0601-cv-32, 2007 Ind. App. LEXIS 228 (Ind. Ct. App. Feb. 6, 2007). In affirming the lower court’s dismissal of the plaintiff’s defamation claims, the appellate court ruled that, taken as a whole, the website was clearly a parody and “not subject to a defamatory interpretation” due to its obvious tongue-in-cheek customer testimonials as well its numerous outrageous statements about the amazing effects of the plaintiff’s water products, including claims that “Amish Aliens” from another solar system were placing minerals in the water supply.

    Opinion: http://www.ai.org/judiciary/opinions/pdf/02060702jgb.pdf

     

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13. Web Site Owner Who Previously Posted Personal Information Lacks Standing To Challenge “.us” Domain Name Disclosure Rules 

    A Web site owner who previously volunteered personal information on his site lacks the standing to challenge the National Telecommunications and Information Administration (NTIA) from enforcing a rule that requires public disclosure of personal information of any individual who registers an Internet domain on the “.us” top-level domain.   Peterson v. National Telecommunications and Information Administration, No. 06-1216, 2007 U.S. App. LEXIS 4260 (4th Cir. Feb. 27, 2007). In affirming the lower court’s denial of the plaintiff’s motion for a preliminary injunction, the appeals court commented that the First Amendment protects anonymity “where it servers as a catalyst for speech,” but concluded that the plaintiff’s prior posting of personal information was wholly inconsistent with his invocation of such a right.  Ultimately, the court found that the plaintiff lacked standing because he voluntarily revealed his identity and therefore suffered no harm from any compelled identification under the NTIA disclosure requirement.

    Opinion: http://pacer.ca4.uscourts.gov/opinion.pdf/061216.P.pdf

     

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14. Plaintiff Likely To Succeed On ECPA Claim Against User Of Keystroke Surveillance Software In Domestic Relations Dispute, But Injunctive Relief Denied

    A party whose communications were tracked by the installation of a keystroke logger and other surveillance software on a home computer is likely to succeed on the merits in her claim that the surveillance constituted an unlawful interception under the Electronic Communications Privacy Act (ECPA), 18 U.S.C. §2510 et. seq., but she is not entitled to an injunction against the use of the intercepted communications in a domestic relations case.   Potter v. Havlicek, No. 3:06-cv-211, 2007 U.S. Dist. LEXIS 10677 (S.D. Ohio Feb. 14, 2007). The court rejected the defendant’s argument that the use of the keystroke logger and screenshot recording software did not record communications contemporaneously with the transmission of the communications as required under the ECPA. However, the court declined to grant the party’s request for injunctive relief barring the use of the communications, ruling among other things, that it did not have the authority to bar the use of the communications in a state court domestic relations proceeding.

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

     

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15. Victim Of Telephone Pretexting Has Cause Of Action Against Pretexters Under Federal Electronic Communications Statute And State Law

    A victim of telephone pretexting may not bring a claim under the 1996 Telecommunications Act, 47 U.S.C. §222 et seq., against parties that obtained the victim’s telephone records without authorization.   McEwen v. Sourceresources, No. 4:06-cv-2530, 2007 U.S. Dist. LEXIS 10156 (S.D. Tex. Feb. 13, 2007). In dismissing the plaintiffs’ claims under the provisions of 1996 Telecommunications Act that pertain to protecting customers’ confidential information, the court found that while the Act provides a private right of action against telecommunications carriers, the statute does not give a private right of action against third parties who are alleged to have obtained customer information from carriers by theft or deceit.  However, the court let stand the plaintiff’s state privacy law claims, as well as claims under the Stored Wire and Electronic Communications and Transactional Records Access Act, 18 U.S.C. § 2701 et seq., which prohibits unauthorized access to a carrier’s “wire or electronic communications,” rejecting the defendant’s arguments that the data obtained through pretexting (i.e. the list of outgoing telephone numbers dialed by the plaintiffs) were not “communications” under the Act.

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

     

    Editor’s Note:  This case was brought prior to the passage of the Telephone Records and Privacy Protection Act of 2006, the new federal anti-pretexting law signed into law this past January.  The dismissal of one of the plaintiffs’ federal causes of action in this case highlights the apparent difficulty encountered by plaintiffs in finding the appropriate federal statute that directly prohibited the practice of pretexting before the passage of the new law. 

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16. Mirror Imaging Of Party's Hard Drive Justified To Determine Whether Party Granted Permission For Receipt Of Text Messages

    In a case in which the plaintiff alleges that unsolicited text messages were sent to his mobile phone in violation of the Telephone Consumer Protection Act (TCPA), the defendant is entitled to obtain mirror images of the plaintiff’s computer hard drive to determine whether the plaintiff initiated prior contact.   Thielen v. Buongiorno USA, Inc., No. 1:06-cv-16, 2007 U.S. Dist. LEXIS 8998 (W.D. Mich. Feb. 8, 2007). The court granted the defendant’s request for the mirror images, finding the benefit of the discovery request outweighed the burden to the plaintiff.  The court concluded that the issue of whether plaintiff accessed the defendant’s Web site or an affiliated Web site was relevant to the litigation, along with any possible information concerning any past Internet transactions with the defendant that were subsequently deleted.  The court directed that the forensics expert follow a specified protocol and the final report first be given to the plaintiff to allow for a review and a limited period for the plaintiff to seek a protective order for any non-relevant personal information. 

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

     

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17. Representative Association Lacks Standing To Bring Assigned Claims For Unsolicited Faxes Under TCPA

    A representative association that accepts assignments of “junk fax” claims under the Telephone Consumer Protection Act  (TCPA), lacks standing to assert the assignor’s claims.    US Fax Law Center v. iHire, Inc., No. 05-1323, 2007 U.S. App. LEXIS 2622 (10th Cir. Feb 7, 2007). In dismissing the plaintiff’s consolidated suits for lack of standing, the court found that Congress expressly provided that federal courts apply substantive state law in determining which parties may bring TCPA claims in federal court.  The court concluded that under Colorado state law, TCPA claims are unassignable because they are in the nature of “personal-injury privacy claims,” as opposed to claims for economic harm.   

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

     

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18. "Advertising Injury" Insurance Policy Provides Coverage For TCPA Violations

    An insurance policy that covers "advertising injury," defined as the "written…publication …of material that violates a person’s right of privacy” provides coverage for alleged violations of the Telephone Consumer Protection Act (TCPA) resulting from the sending of unsolicited faxed advertisements.   American Home Assurance Co. v. McLeod USA, Inc., No. 1:05-cv-5173, 2007 U.S. Dist. LEXIS 8706 (N.D. Ill. Feb. 2, 2007). The court found that the plaintiffs, two insurance companies, have a duty to defend the insured party in lawsuits alleging violations of the TCPA by sending junk faxes. The court, applying Iowa law, and looking to the recent decisions of the Illinois Supreme Court and other jurisdictions as instructive, declined to follow contrary Seventh Circuit precedent, and concluded that the claims associated with unsolicited fax advertisements fell within the ordinary definition of “advertising injury.” 

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

     

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19. Consequential Damage Exclusion In Software License Agreement Bars Copyright Infringement Claims

    A consequential damage exclusion clause in a software license agreement limits a software company’s copyright infringement claims stemming from the customer’s alleged unlicensed use of the software following termination of the agreement.    Piper Jaffray & Co. v. SunGard Systems International, Inc., No. 04-2922, 2007 U.S. Dist. LEXIS 11399 (D. Minn. Feb. 16, 2007). In granting the customer’s motion for partial summary judgment, the court rejected the software company’s argument that the copyright infringement claims arose outside of the agreement and were therefore not limited by the consequential damage exclusion clause that prohibited recovery of indirect or punitive damages.  The court held that since the software company was seeking indirect damages based upon the customer’s unlicensed use of the software to sell its own products, such damage claims were barred by the agreement’s prohibition on extra-contractual damages.   

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

     

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20. Web Sites Not Barred From Disseminating Leaked Documents From Well-Known Multidistrict Litigation

    The continuance of an injunction against Web sites that published leaked documents stemming from a multidistrict litigation involving thousands of personal injury suits against a pharmaceutical company is not warranted where other Web sites may have subsequently published the same documents, and the contents of the documents have been widely discussed in the press.   Zyprexa Litigation, No. 07-cv-0504, 2007 U.S. Dist. LEXIS 10329 (E.D.N.Y. Feb. 13, 2007). While the court compelled certain individuals to return the leaked documents, the court lifted the injunction barring Web sites from posting or linking to the information.  The court commented that to enjoin five of the Internet’s millions of Web sites “would be a fruitless exercise of the court’s equitable power” and “would constitute a dubious manifestation of public policy.” 

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

     

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21. Online Bankruptcy Software Provider A "Bankruptcy Petition Preparer" Subject To Regulations

    A seller of Web-based software that prepares bankruptcy petitions based upon solicited information from customers acted as a “bankruptcy petition preparer” under 11 U.S.C. §110(a)(1) subject to statutory requirements and regulations.   In re Reynoso (Frankfort Digital Services, Ltd v. Kistler), No. 04-17190, 2007 U.S. App. LEXIS 4256 (9th Cir. Feb. 27, 2007).  In an issue of first impression in the Ninth Circuit, the appeals court upheld the lower court ruling, finding that software that translated inputted customer information into specific responses to questions on the official bankruptcy forms constituted a bankruptcy petition preparer, regardless of the lack of in-person interactions.  The court also concluded that the provider engaged in the unauthorized practice of law since the software went beyond providing mere clerical services, with the Web site advertising personalized guidance, extensive advice on bankruptcy code loopholes, and an “expert system” that the court deemed more than a “customized word processor.”

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

     

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22. Developments of Note

RIAA Must Pay Attorney Fees In P2P Filesharing Dismissal Press Release: http://www.eff.org/deeplinks/archives/005114.php New York Legislator Proposes Ban On Handheld Devices In Crosswalks News Coverage: http://news.com.com/2100-1047_3-6157109.html Belgian Court Rules Against Google In Newspaper Lawsuit Blog: http://googleblog.blogspot.com/2007/02/about-copiepresse-decision.html Microsoft Settles Iowa Class Action Pricing Lawsuit News Coverage: http://www.usatoday.com/tech/products/cnet/2007-02-14-microsoft-iowa-case_x.htm?POE=TECISVA UK Financial Regulator Fines UK Company Over Laptop Left News Coverage: http://news.com.com/2100-1029_3-6159349.html Spyware Distributor Settles FTC Charges With Restitution Agreement Press Release: http://www.ftc.gov/opa/2007/02/enternet.htm FTC Issues Report On Five Years Of COPPA Press Release: http://www.ftc.gov/opa/2007/02/copparpt.htm DirectRevenue Settles FTC Deceptive Adware Charges With $1.5 Million Restitution Agreement Press Release: http://www.ftc.gov/opa/2007/02/directrevenue.htm Telemarketer Settles FTC Automatic Dialing Charges With $1 Million Penalty Press Release: http://www.ftc.gov/opa/2007/02/broadcastteam.htm Wireless Audio Inventor Sues Slingbox Alleging Patent Violation News Coverage: http://news.com.com/2100-1030_3-6159815.html Eight Year Sentence For Axicom Data Theft Upheld News Coverage: http://www.siliconvalley.com/mld/siliconvalley/news/editorial/16750676.htm Apple And Cisco Settle iPhone Name Dispute News Coverage: http://www.infoworld.com/article/07/02/21/HNappleciscoiphone_1.html Politician Unmasked As Anonymous Poster Sues Online Site For Wrongful Release Of His Identity Complaint: http://www.citizen.org/documents/galluccicomplaint.pdf Amazon.com Sued By Humane Society Over Sale Of Animal Fighting Magazines And Videos Press Release: http://www.hsus.org/hsus_field/animal_fighting_the_final_round/recent_activities/amazon_cockfighting_magazines.html National Arbitration Forum Reports 21% Increase In Domain Name Disputes Press Release: http://domains.adrforum.com/newsroom.aspx?itemID=1176 U.S. Supreme Court Hears Oral Argument In Microsoft/AT&T Patent Jurisdiction Dispute Transcript: http://www.supremecourtus.gov/oral_arguments/argument_transcripts/05-1056.pdf Jury Awards Alcatel-Lucent $1.5 billion In Patent Dispute With Microsoft News Coverage: http://www.siliconvalley.com/mld/siliconvalley/news/editorial/16760324.htm Egyptian Court Upholds Blogger's Four Year Sentence For Insults News Coverage: http://www.post-gazette.com/pg/07072/768851-96.stm Golf Pro Files Defamation Lawsuit Over Wikipedia Entry Complaint: http://www.thesmokinggun.com/archive/years/2007/0222071fuzzy1.html Veritas To Pay $30 Million Penalty To Settle SEC Accounting Fraud Charges Press Release: http://www.sec.gov/litigation/litreleases/2007/lr20008.htm SEC Files Action In Hacking And Trading Case Press Release: http://www.sec.gov/litigation/litreleases/2007/lr20037.htm Verizon Wireless Gets Injunction, Damages In Wireless Spam Case News Coverage: http://www.forbes.com/technology/security/2007/02/26/spam-text-messaging-tech-security-cx_ll_0226spam.html Rep. Boucher Introduces Digital Fair Use Bill Bill Summary & Status File: http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.01201: RIAA Pushes Settlement Offers For Alleged Campus Piracy News Coverage: http://www.siliconvalley.com/mld/siliconvalley/news/editorial/16802845.htm Justice Department Pushes ISP Data Retention Proposal News Coverage: http://news.com.com/2100-1028_3-6163679.html Sony Settles Game Controller Patent Dispute With Immersion News Coverage: http://www.informationweek.com/shared/printableArticle.jhtml?articleID=197700814 back to table of contents

The monthly Technology Law Update is prepared in the New York office of
Thelen Reid Brown Raysman & Steiner LLP
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New York, New York 10022