e-Commerce Docket Sheet

An employee's posting of a subscription e-mail report to a company-wide intranet and dissemination via e-mail in the company is copyright infringement, and subjects the company to vicarious copyright infringement liability. Lowry's Reports, Inc. v. Legg Mason, Inc., Civ. No. WDQ-01-3898 (D. Md. July 10, 2003). The defendant paid for and received by e-mail one subscription to plaintiff's financial report, which was expressly limited to the use of the individual who received it. Despite such limitation, the report was first posted daily on the company's intranet, and later routinely forwarded as e-mail to six coworkers. The district court granted plaintiff's motion for summary judgment on the issue of liability arising from this conduct. The defendant company argued it should not be found be vicariously liable, because the employee's actions were in violation of an express company policy prohibiting such activity. The court rejected this defense, holding that copyright infringement is a strict liability violation, and presence of a policy is relevant only for the purpose of evaluating damages.

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Workplace E-mail Creates 'Limited Expectation of Privacy'

A county government's policy on e-mail use that declared that all employee e-mail messages are the county's property and not private nonetheless gave county employees “at least a limited expectation of privacy” in the e-mails they exchanged. Board of County Comm'rs of the County of Arapahoe, Colorado v. Baker, No. 03 CA 0074 (Colo. Ct. App. July 17, 2003). The appeals court cited several aspects of the policy supporting limited expectation of privacy for users of the system. These included an automatic purge function, an allowance for occasional personal use and a requirement that e-mails be treated as confidential by other employees and accessed only by the intended recipient. The court vacated the trial court's order issued pursuant to the Colorado Open Records Act (CORA) to make public several hundred sexually explicit e-mails, and remanded for reconsideration of whether CORA warranted such disclosure.

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Ninth Circuit Revises Opinion on Inline Linking of Copyrighted Images

The Ninth Circuit withdrew portions of an opinion originally issued in February 2002 that held a visual search engine's display of a photographer's copyrighted images by inline linking violated the photographer's exclusive right of public display. Kelly v. Arriba Soft Corp., No. 00-55521 (9th Cir. refiled July 7, 2003). In its re-filed opinion, the Ninth Circuit held that the trial court improperly broadened the issues it adjudicated on the copyright owner's motion for summary judgment and, consequently, the issue of public display of the full-sized images was not properly before the court on appeal. The re-filed opinion leaves intact those portions of the circuit court's prior opinion, in which it held that the display of thumbnail-sized versions of the copyrighted images by the search engine constituted fair use.

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File-Sharing Network Lacks Antitrust Standing Against Copyright Owners

The operator of the Kazaa file-sharing network cannot assert counterclaims against movie and music copyright owners because it is neither a competitor nor customer in the allegedly restrained market for digital distribution of copyrighted works. Metro-Goldwyn-Mayer Studios Inc., v. Grokster, Ltd., No. CV 01-08541-SVW (C.D. Cal. July 2, 2003). The court concluded that the operator of the network has represented itself as a distributor of content-neutral, peer-to-peer file-sharing software – not as a distributor of copyrighted works themselves. Consequently, the court ruled, any injury the network operator suffered from the copyright owners' allegedly anticompetitive conduct is derivative only, based on the company's contractual relationship with a content-distribution company.

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Registrar May Be Liable for Mishandled Domain Name Transfer

A domain name is a form of intangible property protected by the law of conversion, and a domain name registrar may be liable under such a theory for its mishandling of a domain name. Kremen v. Cohen, No. 01-15899 (9th Cir. July 25, 2003). The decision involved Network Solutions' 1994 transfer of the domain “sex.com” from the plaintiff to an individual who submitted a forged authorization letter to the registrar. The Ninth Circuit reversed the district court's grant of summary judgment dismissing all of the plaintiff's claims against the registrar, holding that the evidence supported a claim for conversion. The court noted that California conversion law protected the domain name, and that exposing the registrar to liability under these circumstances was no different from holding a corporation liable for giving away someone's shares.

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Author Seeking Domain Name Fails to Prove Common Law Trademark Rights in Name

In order to obtain transfer of a disputed domain name, a complainant seeking to establish common law trademark rights in a famous name must demonstrate that the name is associated with goods or services in commerce. Edwards v. Miller, No. D2003-0339 (WIPO July 14, 2003). The World Intellectual Property Organization (WIPO) panelist refused to transfer the domain name “geneedwards.org” to the evangelist and author Gene Edwards. The panelist noted that while many famous people, particularly authors, have proved common law trademark rights in domain names bearing their names, the complainant in this case failed to submit proof that he used his name for commercial, as opposed to religious, undertakings.

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“Typosquatter” Use of Domain Name Found to Be Bad Faith

A defendant's registration and use of misspellings of a competitor's trademark to promote its own products and attract potential customers constitutes bad faith and may justify injunctive relief under the Anticybersquatting Consumer Protection Act. Ballistic Products, Inc. v. Precision Reloading, Inc., Civ. No. 03-2950 (D. Minn. July 28, 2003). The district court preliminarily enjoined the defendants from using the domain names “balisticproducts.com” and “ballisticproduct.com,” and ordered the domains transferred to the plaintiff, who did business under the trademark Ballistic Products. The court noted that consumer confusion was likely due to the similar domain names, and there was a continuing risk that consumers would be misdirected to Web pages controlled by the defendants.

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Generic Domain Name Registrant Cannot Obtain Transfer from Typosquatter

Under the Uniform Domain Name Dispute Resolution Policy, a party cannot obtain transfer of the domain-name equivalent of a generic term, according to the World Intellectual Property Organization (WIPO). Giftcertificates.com Corp. v. Zuccarini, No. D2003-0267 (WIPO July 24, 2003). The panel denied transfer of the misspelled “giftcetificates.com” to the owner of the “giftcertificates.com” domain name, finding that the domain name was based on a generic term in which complainant lacked trademark or service mark rights. The panel noted that complainant's rights in the domain name derived not from a trademark or service mark, but from “its good fortune in having secured a valuable address on the Internet.”

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Costs of Tracking Hacker Not Recoverable Under CFAA

Under the Computer Fraud and Abuse Act (CFAA), 18 U.S.C. ?1030, a hacking-attack victim is not entitled to recover costs associated with tracking down the hacker. Tyco Int'l (US) Inc. v. Does 1-3, No. 01 Civ. 3856 (S.D.N.Y. July 11, 2003). The Magistrate Judge preliminarily concluded that the plaintiff was not entitled to the $136,026.94 in investigator's fees it claimed were the “natural and foreseeable result” of the defendant's “denial of service” attack on its e-mail servers, because the case law did not support such an entitlement. But the court allowed the plaintiff to supplement its submissions to demonstrate other allowable compensatory damages under the CFAA, such as costs associated with assessing damage to and restoring its system, and damages resulting from its loss of server capacity during the attack.

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Textual Web Material Denied Trade Secret Protection

Textual material made available on a Web site will not ordinarily be granted trade secret protection. MorrisWIN, LLC v. Lutes, Civ. No. 02-2195-KHV (D. Kan. July 8, 2003). The plaintiffs sought, inter alia, a declaration that they were the sole owners of trade secret information that they provided to the defendants to develop their Web site, and that the defendants could not communicate that information to third parties. The district court denied plaintiffs' motion for summary judgment, finding no evidence that the textual material and content satisfied the definition of a trade secret under Kansas law. The court noted that “textual material on an Internet Web site confronts an uphill battle in qualifying as a trade secret,” and rejected plaintiffs' unsupported assertion that their trade secrets were not made available to the public because they carefully screened those privy to this information on the site.

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Allegedly Infringing Trademark Display Warrants Jurisdiction

It is appropriate for a court to exercise long-arm personal jurisdiction over a nonresident defendant who displayed an allegedly infringing trademark in an advertisement on its interactive Web site. Alpha Int'l, Inc. v. T-Reproductions, Inc., No. 02 Civ. 9586 (S.D.N.Y. July 1, 2003). The district court held that the defendant “transacted business” within the meaning of New York's long-arm statute by displaying the allegedly infringing trademark in an advertisement to sell the merchandise at issue to forum residents. The Web site allowed users to purchase the accused products directly, and at least one sale was actually made to a forum resident via the Web site.

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Posting Defamatory Material on Passive Web Siteis Outside Personal Jurisdiction

Under New York's long-arm statute and the Due Process Clause, a court may not exercise personal jurisdiction over a nonresident defendant who simply places allegedly defamatory material on a passive Web site. Realuyo v. Villa Abrille, No. 01 Civ. 10158 (S.D.N.Y. July 8, 2003). The allegedly libelous article was published on a foreign news Web site that was written and maintained abroad. The court dismissed the plaintiff's defamation suit, finding that it lacked general and specific jurisdiction over the defendants. Although the article was accessible in the forum state and several hundred forum residents were registered (nonpaying) users of the site, the court found no evidence that the article was directed toward this “potential” forum audience so as to defame the plaintiff in the forum state.

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Forum State Hosting Contract Insufficient for Jurisdiction

A defendant's contract with a company in the forum state under which the company provided only domain-name purchase and Web-hosting services for the defendant's Web site is an insufficient contact on which to base specific jurisdiction in a trademark-infringement action concerning defendant's Web site content. Carefirst of Maryland, Inc. v. Carefirst Pregnancy Centers, Inc., No. 02-1137 (4th Cir. July 2, 2003). The Court of Appeals distinguished an earlier opinion in which it upheld the exercise of specific jurisdiction on the basis of a forum state entity's active role in the administration and maintenance of a Web site. The court found that it would be unreasonable to expect an out-of-state company to foresee it would be subject to jurisdiction in a foreign forum merely because its Web site

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Julian S. Millstein Edward A. Pisacreta Jeffrey D. Neuburger

Company Liable for Worker Posting, Sending Paid E-mail to Coworkers

An employee's posting of a subscription e-mail report to a company-wide intranet and dissemination via e-mail in the company is copyright infringement, and subjects the company to vicarious copyright infringement liability. Lowry's Reports, Inc. v. Legg Mason, Inc., Civ. No. WDQ-01-3898 (D. Md. July 10, 2003). The defendant paid for and received by e-mail one subscription to plaintiff's financial report, which was expressly limited to the use of the individual who received it. Despite such limitation, the report was first posted daily on the company's intranet, and later routinely forwarded as e-mail to six coworkers. The district court granted plaintiff's motion for summary judgment on the issue of liability arising from this conduct. The defendant company argued it should not be found be vicariously liable, because the employee's actions were in violation of an express company policy prohibiting such activity. The court rejected this defense, holding that copyright infringement is a strict liability violation, and presence of a policy is relevant only for the purpose of evaluating damages.

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Workplace E-mail Creates 'Limited Expectation of Privacy'

A county government's policy on e-mail use that declared that all employee e-mail messages are the county's property and not private nonetheless gave county employees “at least a limited expectation of privacy” in the e-mails they exchanged. Board of County Comm'rs of the County of Arapahoe, Colorado v. Baker , No. 03 CA 0074 (Colo. Ct. App. July 17, 2003). The appeals court cited several aspects of the policy supporting limited expectation of privacy for users of the system. These included an automatic purge function, an allowance for occasional personal use and a requirement that e-mails be treated as confidential by other employees and accessed only by the intended recipient. The court vacated the trial court's order issued pursuant to the Colorado Open Records Act (CORA) to make public several hundred sexually explicit e-mails, and remanded for reconsideration of whether CORA warranted such disclosure.

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Ninth Circuit Revises Opinion on Inline Linking of Copyrighted Images

The Ninth Circuit withdrew portions of an opinion originally issued in February 2002 that held a visual search engine's display of a photographer's copyrighted images by inline linking violated the photographer's exclusive right of public display. Kelly v. Arriba Soft Corp., No. 00-55521 (9th Cir. refiled July 7, 2003). In its re-filed opinion, the Ninth Circuit held that the trial court improperly broadened the issues it adjudicated on the copyright owner's motion for summary judgment and, consequently, the issue of public display of the full-sized images was not properly before the court on appeal. The re-filed opinion leaves intact those portions of the circuit court's prior opinion, in which it held that the display of thumbnail-sized versions of the copyrighted images by the search engine constituted fair use.

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File-Sharing Network Lacks Antitrust Standing Against Copyright Owners

The operator of the Kazaa file-sharing network cannot assert counterclaims against movie and music copyright owners because it is neither a competitor nor customer in the allegedly restrained market for digital distribution of copyrighted works. Metro-Goldwyn-Mayer Studios Inc., v. Grokster, Ltd., No. CV 01-08541-SVW (C.D. Cal. July 2, 2003). The court concluded that the operator of the network has represented itself as a distributor of content-neutral, peer-to-peer file-sharing software – not as a distributor of copyrighted works themselves. Consequently, the court ruled, any injury the network operator suffered from the copyright owners' allegedly anticompetitive conduct is derivative only, based on the company's contractual relationship with a content-distribution company.

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Registrar May Be Liable for Mishandled Domain Name Transfer

A domain name is a form of intangible property protected by the law of conversion, and a domain name registrar may be liable under such a theory for its mishandling of a domain name. Kremen v. Cohen, No. 01-15899 (9th Cir. July 25, 2003). The decision involved Network Solutions' 1994 transfer of the domain “sex.com” from the plaintiff to an individual who submitted a forged authorization letter to the registrar. The Ninth Circuit reversed the district court's grant of summary judgment dismissing all of the plaintiff's claims against the registrar, holding that the evidence supported a claim for conversion. The court noted that California conversion law protected the domain name, and that exposing the registrar to liability under these circumstances was no different from holding a corporation liable for giving away someone's shares.

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Author Seeking Domain Name Fails to Prove Common Law Trademark Rights in Name

In order to obtain transfer of a disputed domain name, a complainant seeking to establish common law trademark rights in a famous name must demonstrate that the name is associated with goods or services in commerce. Edwards v. Miller, No. D2003-0339 (WIPO July 14, 2003). The World Intellectual Property Organization (WIPO) panelist refused to transfer the domain name “geneedwards.org” to the evangelist and author Gene Edwards. The panelist noted that while many famous people, particularly authors, have proved common law trademark rights in domain names bearing their names, the complainant in this case failed to submit proof that he used his name for commercial, as opposed to religious, undertakings.

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“Typosquatter” Use of Domain Name Found to Be Bad Faith

A defendant's registration and use of misspellings of a competitor's trademark to promote its own products and attract potential customers constitutes bad faith and may justify injunctive relief under the Anticybersquatting Consumer Protection Act. Ballistic Products, Inc. v. Precision Reloading, Inc., Civ. No. 03-2950 (D. Minn. July 28, 2003). The district court preliminarily enjoined the defendants from using the domain names “balisticproducts.com” and “ballisticproduct.com,” and ordered the domains transferred to the plaintiff, who did business under the trademark Ballistic Products. The court noted that consumer confusion was likely due to the similar domain names, and there was a continuing risk that consumers would be misdirected to Web pages controlled by the defendants.

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Generic Domain Name Registrant Cannot Obtain Transfer from Typosquatter

Under the Uniform Domain Name Dispute Resolution Policy, a party cannot obtain transfer of the domain-name equivalent of a generic term, according to the World Intellectual Property Organization (WIPO). Giftcertificates.com Corp. v. Zuccarini, No. D2003-0267 (WIPO July 24, 2003). The panel denied transfer of the misspelled “giftcetificates.com” to the owner of the “giftcertificates.com” domain name, finding that the domain name was based on a generic term in which complainant lacked trademark or service mark rights. The panel noted that complainant's rights in the domain name derived not from a trademark or service mark, but from “its good fortune in having secured a valuable address on the Internet.”

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Costs of Tracking Hacker Not Recoverable Under CFAA

Under the Computer Fraud and Abuse Act (CFAA), 18 U.S.C. ?1030, a hacking-attack victim is not entitled to recover costs associated with tracking down the hacker. Tyco Int'l (US) Inc. v. Does 1-3, No. 01 Civ. 3856 (S.D.N.Y. July 11, 2003). The Magistrate Judge preliminarily concluded that the plaintiff was not entitled to the $136,026.94 in investigator's fees it claimed were the “natural and foreseeable result” of the defendant's “denial of service” attack on its e-mail servers, because the case law did not support such an entitlement. But the court allowed the plaintiff to supplement its submissions to demonstrate other allowable compensatory damages under the CFAA, such as costs associated with assessing damage to and restoring its system, and damages resulting from its loss of server capacity during the attack.

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Textual Web Material Denied Trade Secret Protection

Textual material made available on a Web site will not ordinarily be granted trade secret protection. MorrisWIN, LLC v. Lutes, Civ. No. 02-2195-KHV (D. Kan. July 8, 2003). The plaintiffs sought, inter alia, a declaration that they were the sole owners of trade secret information that they provided to the defendants to develop their Web site, and that the defendants could not communicate that information to third parties. The district court denied plaintiffs' motion for summary judgment, finding no evidence that the textual material and content satisfied the definition of a trade secret under Kansas law. The court noted that “textual material on an Internet Web site confronts an uphill battle in qualifying as a trade secret,” and rejected plaintiffs' unsupported assertion that their trade secrets were not made available to the public because they carefully screened those privy to this information on the site.

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Allegedly Infringing Trademark Display Warrants Jurisdiction

It is appropriate for a court to exercise long-arm personal jurisdiction over a nonresident defendant who displayed an allegedly infringing trademark in an advertisement on its interactive Web site. Alpha Int'l, Inc. v. T-Reproductions, Inc., No. 02 Civ. 9586 (S.D.N.Y. July 1, 2003). The district court held that the defendant “transacted business” within the meaning of New York's long-arm statute by displaying the allegedly infringing trademark in an advertisement to sell the merchandise at issue to forum residents. The Web site allowed users to purchase the accused products directly, and at least one sale was actually made to a forum resident via the Web site.

---

Posting Defamatory Material on Passive Web Siteis Outside Personal Jurisdiction

Under New York's long-arm statute and the Due Process Clause, a court may not exercise personal jurisdiction over a nonresident defendant who simply places allegedly defamatory material on a passive Web site. Realuyo v. Villa Abrille, No. 01 Civ. 10158 (S.D.N.Y. July 8, 2003). The allegedly libelous article was published on a foreign news Web site that was written and maintained abroad. The court dismissed the plaintiff's defamation suit, finding that it lacked general and specific jurisdiction over the defendants. Although the article was accessible in the forum state and several hundred forum residents were registered (nonpaying) users of the site, the court found no evidence that the article was directed toward this “potential” forum audience so as to defame the plaintiff in the forum state.

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Forum State Hosting Contract Insufficient for Jurisdiction

A defendant's contract with a company in the forum state under which the company provided only domain-name purchase and Web-hosting services for the defendant's Web site is an insufficient contact on which to base specific jurisdiction in a trademark-infringement action concerning defendant's Web site content. Carefirst of Maryland, Inc. v. Carefirst Pregnancy Centers, Inc., No. 02-1137 (4th Cir. July 2, 2003). The Court of Appeals distinguished an earlier opinion in which it upheld the exercise of specific jurisdiction on the basis of a forum state entity's active role in the administration and maintenance of a Web site. The court found that it would be unreasonable to expect an out-of-state company to foresee it would be subject to jurisdiction in a foreign forum merely because its Web site

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Julian S. Millstein Edward A. Pisacreta Jeffrey D. Neuburger New York Brown Raysman Millstein Felder & Steiner LLP