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e-Commerce Docket Sheet
First Suit is Filed Under Federal CAN-SPAM Act
An interactive service provider (ISP) in California filed the first civil action under the federal CAN-SPAM Act of 2003, 15 U.S.C. Section 7701 et seq. Hypertouch, Inc. v. BVWebTies, LLC, No. (N.D. Cal. complaint filed March 4, 2004). The complaint alleges that the owner of the Bobvila.com domain name and a codefendant violated the act in connection with sending e-mail advertisements for the Bob Vila Home Again Newsletter. The alleged violations include the sending of e-mail containing materially false or materially misleading header information, failing to include a valid sender postal address in e-mail, and sending e-mail to opted-out addresses and to addresses generated using automated means.
No Effective Copyright Infringement Notification Procedure May Cost DMCA Safe Harbor Protection
An online-service provider's failure to maintain an “effective notification procedure” for occurrences of copyright infringement on its system creates issues of material fact concerning the availability of Digital Millennium Copyright Act (DMCA) safe harbor from copyright liability. Ellison v. Robertson, No. 02-55797 (9th Cir. Feb. 10, 2004). The circuit court pointed out that the conditions of eligibility for safe-harbor protection in DMCA Section 512(i) require a service provider to adopt and implement a policy for termination of repeat copyright infringers, to implement that policy in a reasonable manner and to inform subscribers of the policy. The court noted that the service provider's filing in the U.S. Copyright Office contained an incorrect e-mail address for receipt of copyright-infringement notifications, and held that, in light of this evidence, it could not conclude as a matter of law that the service provider had “reasonably implemented” its policy against repeat infringers.
National Do-Not-Call Registry Survives Constitutional Challenge
The registry, aimed at stopping telephone solicitations to consumers and which is operated pursuant to Federal Trade Commission (FTC) regulations, is a valid regulation of commercial speech and does not violate the First Amendment. Mainstream Marketing Services, Inc. v. Federal Trade Commission, No. 03-1429 (10th Cir. Feb. 17, 2004). The circuit court relied on four aspects of the registry in finding that registry regulations were constitutional: 1) the registry restricts commercial speech, 2) the registry targets speech that invades the privacy of the home, 3) the registry is an opt-in mechanism controlled by consumer choice and 4) the registry advances government interests in combating abusive telemarketing and preventing consumer-privacy invasion. The court concluded that the registry “directly advances the government's important interests in safeguarding personal privacy and reducing the danger of telemarketing abuse without burdening an excessive amount of speech.”
DVD Access Control Technology Covered by DMCA Anticircumvention Provisions
The technology that blocks access to copyrighted content distributed on DVDs falls within the protection of the anticircumvention provisions of the Digital Millennium Copyright Act (DMCA) even though the technology does not itself prevent copying of the content. 321 Studios v. Metro Goldwyn Mayer Studios, Inc., No. C 02-1955 SI (N.D. Cal. Feb. 19, 2004). The court concluded that because the purpose of the access-control technology is to prevent copying, it is a “copy control system” that protects “a right of the copyright owner” within the meaning of the DMCA. The court rejected additional statutory and constitutional arguments advanced by the producer and distributor of software that bypasses the access-control technology, concluding that the software “is both primarily designed and produced to circumvent” the DVD-protection technology, and was “marketed to the public for use in circumventing” it. The court ordered the software company to cease manufacturing and distributing the software.
Unauthorized Use of Database Password is Not Circumvention Under DMCA
The use of a valid password issued to an authorized user of a database by an unauthorized user does not constitute circumvention of a technological measure under the anticircumvention provisions of the Digital Millennium Copyright Act (DMCA). I.M.S. Inquiry Management Systems, Ltd v. Berkshire Information Systems, Inc., No. 03 Civ. 2183 (NRB) (S.D.N.Y. Feb. 23, 2004). The court ruled that “circumvention” within the meaning of the DMCA's anticircumvention provisions means “descrambling, decrypting, avoiding, bypassing, removing, deactivating or impairing a technological qua technological measure.” The court consequently dismissed the database owner's DMCA claims, but ruled that the plaintiff's allegations of unauthorized access stated a claim under the Computer Fraud and Abuse Act and the state law of tortuous interference with contractual relations. See 2004 U.S. Dist. LEXIS 2673 (S.D.N.Y. Feb. 20, 2004).
Injunction Against Posting DVD-Cracking Software Violates First Amendment
An injunction against the Web site posting of DVD-cracking software violated the poster's First Amendment rights because there was no evidence that the DVD-protection technology revealed by the software was “not generally known” at the time the software was posted or the injunction was issued. DVD Copy Control Assn v. Bunner, No. H021153 (Cal. Ct. App. 6th Cir. Feb. 27, 2004). The court noted that the claimed trade secret had been widely disseminated on the Internet by numerous individuals at the time that the injunction was issued, and an injunction against further disclosure “would have done nothing to protect the secret because the secret would have ceased to exist.” See 2004 Cal. App. LEXIS 234 (Ct. App. 6th Dist. Feb. 27, 2004).
Web Site Operated by Foreign Nonprofit Satisfies Use in Commerce Requirement
The “use in commerce” requirement under Section 1127 of the Lanham Act is met when a party's service mark is included in the domain name on a Web site offering information about the party's services to people throughout the world. Argos v. Orthotec LLC, Civ. No. 03-0757-SLR (D. Del. Jan. 8, 2004). The court concluded that the plaintiff, a nonprofit entity organized under the laws of France that does no business in the United States, had standing to bring a claim under the Anticybersquatting Consumer Protection Act (ACPA) because it met the use in commerce requirement with respect to its common-law mark. The court held that using a domain name to operate a Web site is a “use in commerce” because “it affects a party's ability to offer services.”
LAWOFFICES Mark for Online Database of Attorneys Held Descriptive
The mark is descriptive as applied to an online database of attorneys because the database provided services similar to those provided by attorneys in a physical law office. DeGidio v. West Group Corp., No. 02-3739 (6th Cir. Jan. 14, 2004). The Circuit Court noted that the database, like attorneys in traditional offices, provided referrals to specialists, advice on attorneys in other jurisdictions and other legally related advice. The court also upheld the trial court's conclusion that the mark had not acquired secondary meaning because, among other things, the plaintiff provided no consumer surveys, and the consumer testimony provided did not contain testimony that consumers identified the plaintiff's Web site with a particular source of services.
FCC Fines Fax.com $5.4 Million for Unsolicited Faxes
The Federal Trade Commission (FTC) has imposed a fine of almost $5.4 million on Fax.com for violations of the federal Telephone User Protection Act (TCPA) and the Commission's TCPA rules. In re Fax.com, Inc., FCC No. 04-2 (FCC Dec. 31, 2003). The Commission concluded that Fax.com violated its TCPA rules on 489 separate occasions, and imposed an $11,000 fine for each one.
Arranging for Transmission of Unwanted E-mail May be Common Law Trespass
Allegations that a plaintiff's former employee arranged for large volumes of unwanted, sexually explicit e-mail to be sent to a former colleague as part of a campaign of harassment state a claim for common law trespass to chattels under New York law. School of Visual Arts v. Kuprewicz, No. 115172-03 (N.Y. Sup. Ct., N.Y. Cty Dec. 22, 2003). The court found that the content of the sexually explicit e-mails was irrelevant to the viability of the plaintiff's claim. It ruled that the allegations that the e-mails depleted the plaintiff's hard disk space, drained processing power and adversely affected other computer system resources were sufficient to survive a motion to dismiss for failure to state a cause of action.
Government, Law Enforcement Officials May be Liable Under ECPA for Improper Subscriber Information Access
A municipal government and its law-enforcement officers may be liable in a civil suit brought under the Electronic Communications Privacy Act (ECPA) for obtaining a subscriber's information from an Internet service provider (ISP) with an invalid search warrant. Freedman v. America Online, Inc., No. 3:03cv1048 (D. Conn. Jan. 4, 2004). The court held that in the absence of consent from a subscriber, applications for such information must be obtained by means of a valid warrant, court order or subpoena, not an unsigned warrant application that was “a legal nullity.” The court noted that precedent suggesting improper access might not subject governmental entities to such liability had been superseded by amendments to the ECPA in 2001.
In Defamation Suit, Canadian Court Rules Anonymous Net Posts
More Likely to be Believed
Defamatory postings about a company CEO on an Internet bulletin board were aggravated by the fact that the postings were anonymous, and therefore more likely to be believed by readers. Vaquero Energy v. Weir, 2004 ABQB 68 (Queen's Bench Alberta Jan. 29, 2004). In assessing damages, the court considered that when statements are anonymous, “readers cannot know who the author is and that person's motives” in posting the statements, and therefore are less able to discount them. The court also considered that the publication of the defamation on the Internet “is world-wide and instantaneous.” The court awarded the CEO $40,000 in general damages and $25,000 in punitive damages.
Canadian Court May Exercise Jurisdiction Over U.S. Paper
In Online Defamation Case
A Canadian resident can sue a U.S.-based newspaper in a Canadian court for allegedly defamatory articles posted on the newspaper's Web site that are accessible in Canada. Bangoura v. Washington Post, Docket: 03-CV-247461CM1 (Ontario Superior Court of Justice Jan. 27, 2004). The court concluded that there was a “real and substantial connection” between the jurisdiction and the tort for which damages were sought, as required under Canadian constitutional law. The court rejected the argument that it should decline to exercise jurisdiction because subjecting the newspaper to Canadian law would be repugnant to U.S. courts, which would refuse to enforce the judgment. The court commented that the refusal of an American court to enforce a Canadian libel judgment would be “an unfortunate expression of lack of comity,” and “should not be allowed to have an impact on Canadian values.”
Electronically Searchable CD-ROMs May Satisfy Document Index Requirement
A party's obligation to provide an index to voluminous documents provided to an adversary on CD-ROMs may be satisfied if the documents are electronically searchable. In re Lorazepam, MDL No. 1290 (D. D.C. Jan 16, 2004). In the absence of an agreement between the parties, the Magistrate Judge ordered the CD-ROMs containing the documents to be made available to a computer forensics firm to determine whether they could either be read and searched by “commercial available” software, or converted into a readable and searchable format. The court commented that it is “the glory of electronic information” that it not only saves space but permits virtually instantaneous searches for relevant documents through searches for text strings.
California Cybercafe Local Ordinance Held Enforceable in Part
A California municipal ordinance requiring cybercafes to obtain a conditional use permit may not be enforced because it vests excessive discretion in municipal officials to regulate First Amendment-related activity. Vo v. City of Garden Grove, No. G032058 (Cal. Ct. App. 4th Dist. Jan. 29, 2004). The appeals court held that the lower court appropriately exercised its discretion in granting an injunction against the enforcement of the conditional use requirement. The appeals court reversed the injunction as to the operational portions of the ordinance, however, concluding that the city could enforce portions of the ordinance that require cybercafes to closely surveil the activities of customers. With respect to the requirement that cybercafes surveil their customers with video cameras, the court concluded that video surveillance was no more intrusive of First Amendment activity than an adult employee or security guard.
Reposter of Defamatory Internet Messages not Absolutely Immune from Suit
Section 230 of the Communications Decency Act (CDA) does not provide absolute immunity from a defamation action where an Internet poster reposts defamatory statements of another party in a Usenet newsgroup, after being notified that the statements were false. Barrett v. Rosenthal, No. A096451 (Cal. Ct. App. 1St. Dist. Jan. 21, 2004).
Julian S. Millstein Edward A. Pisacreta Jeffrey D. Neuburger
First Suit is Filed Under Federal CAN-SPAM Act
An interactive service provider (ISP) in California filed the first civil action under the federal CAN-SPAM Act of 2003, 15 U.S.C. Section 7701 et seq. Hypertouch, Inc. v. BVWebTies, LLC, No. (N.D. Cal. complaint filed March 4, 2004). The complaint alleges that the owner of the Bobvila.com domain name and a codefendant violated the act in connection with sending e-mail advertisements for the Bob Vila Home Again Newsletter. The alleged violations include the sending of e-mail containing materially false or materially misleading header information, failing to include a valid sender postal address in e-mail, and sending e-mail to opted-out addresses and to addresses generated using automated means.
No Effective Copyright Infringement Notification Procedure May Cost DMCA Safe Harbor Protection
An online-service provider's failure to maintain an “effective notification procedure” for occurrences of copyright infringement on its system creates issues of material fact concerning the availability of Digital Millennium Copyright Act (DMCA) safe harbor from copyright liability. Ellison v. Robertson, No. 02-55797 (9th Cir. Feb. 10, 2004). The circuit court pointed out that the conditions of eligibility for safe-harbor protection in DMCA Section 512(i) require a service provider to adopt and implement a policy for termination of repeat copyright infringers, to implement that policy in a reasonable manner and to inform subscribers of the policy. The court noted that the service provider's filing in the U.S. Copyright Office contained an incorrect e-mail address for receipt of copyright-infringement notifications, and held that, in light of this evidence, it could not conclude as a matter of law that the service provider had “reasonably implemented” its policy against repeat infringers.
National Do-Not-Call Registry Survives Constitutional Challenge
The registry, aimed at stopping telephone solicitations to consumers and which is operated pursuant to Federal Trade Commission (FTC) regulations, is a valid regulation of commercial speech and does not violate the First Amendment. Mainstream Marketing Services, Inc. v. Federal Trade Commission, No. 03-1429 (10th Cir. Feb. 17, 2004). The circuit court relied on four aspects of the registry in finding that registry regulations were constitutional: 1) the registry restricts commercial speech, 2) the registry targets speech that invades the privacy of the home, 3) the registry is an opt-in mechanism controlled by consumer choice and 4) the registry advances government interests in combating abusive telemarketing and preventing consumer-privacy invasion. The court concluded that the registry “directly advances the government's important interests in safeguarding personal privacy and reducing the danger of telemarketing abuse without burdening an excessive amount of speech.”
DVD Access Control Technology Covered by DMCA Anticircumvention Provisions
The technology that blocks access to copyrighted content distributed on DVDs falls within the protection of the anticircumvention provisions of the Digital Millennium Copyright Act (DMCA) even though the technology does not itself prevent copying of the content. 321 Studios v. Metro Goldwyn Mayer Studios, Inc., No. C 02-1955 SI (N.D. Cal. Feb. 19, 2004). The court concluded that because the purpose of the access-control technology is to prevent copying, it is a “copy control system” that protects “a right of the copyright owner” within the meaning of the DMCA. The court rejected additional statutory and constitutional arguments advanced by the producer and distributor of software that bypasses the access-control technology, concluding that the software “is both primarily designed and produced to circumvent” the DVD-protection technology, and was “marketed to the public for use in circumventing” it. The court ordered the software company to cease manufacturing and distributing the software.
Unauthorized Use of Database Password is Not Circumvention Under DMCA
The use of a valid password issued to an authorized user of a database by an unauthorized user does not constitute circumvention of a technological measure under the anticircumvention provisions of the Digital Millennium Copyright Act (DMCA). I.M.S. Inquiry Management Systems, Ltd v. Berkshire Information Systems, Inc., No. 03 Civ. 2183 (NRB) (S.D.N.Y. Feb. 23, 2004). The court ruled that “circumvention” within the meaning of the DMCA's anticircumvention provisions means “descrambling, decrypting, avoiding, bypassing, removing, deactivating or impairing a technological qua technological measure.” The court consequently dismissed the database owner's DMCA claims, but ruled that the plaintiff's allegations of unauthorized access stated a claim under the Computer Fraud and Abuse Act and the state law of tortuous interference with contractual relations. See 2004 U.S. Dist. LEXIS 2673 (S.D.N.Y. Feb. 20, 2004).
Injunction Against Posting DVD-Cracking Software Violates First Amendment
An injunction against the Web site posting of DVD-cracking software violated the poster's First Amendment rights because there was no evidence that the DVD-protection technology revealed by the software was “not generally known” at the time the software was posted or the injunction was issued. DVD Copy Control Assn v. Bunner, No. H021153 (Cal. Ct. App. 6th Cir. Feb. 27, 2004). The court noted that the claimed trade secret had been widely disseminated on the Internet by numerous individuals at the time that the injunction was issued, and an injunction against further disclosure “would have done nothing to protect the secret because the secret would have ceased to exist.” See 2004 Cal. App. LEXIS 234 (Ct. App. 6th Dist. Feb. 27, 2004).
Web Site Operated by Foreign Nonprofit Satisfies Use in Commerce Requirement
The “use in commerce” requirement under Section 1127 of the Lanham Act is met when a party's service mark is included in the domain name on a Web site offering information about the party's services to people throughout the world. Argos v. Orthotec LLC, Civ. No. 03-0757-SLR (D. Del. Jan. 8, 2004). The court concluded that the plaintiff, a nonprofit entity organized under the laws of France that does no business in the United States, had standing to bring a claim under the Anticybersquatting Consumer Protection Act (ACPA) because it met the use in commerce requirement with respect to its common-law mark. The court held that using a domain name to operate a Web site is a “use in commerce” because “it affects a party's ability to offer services.”
LAWOFFICES Mark for Online Database of Attorneys Held Descriptive
The mark is descriptive as applied to an online database of attorneys because the database provided services similar to those provided by attorneys in a physical law office. DeGidio v. West Group Corp., No. 02-3739 (6th Cir. Jan. 14, 2004). The Circuit Court noted that the database, like attorneys in traditional offices, provided referrals to specialists, advice on attorneys in other jurisdictions and other legally related advice. The court also upheld the trial court's conclusion that the mark had not acquired secondary meaning because, among other things, the plaintiff provided no consumer surveys, and the consumer testimony provided did not contain testimony that consumers identified the plaintiff's Web site with a particular source of services.
FCC Fines Fax.com $5.4 Million for Unsolicited Faxes
The Federal Trade Commission (FTC) has imposed a fine of almost $5.4 million on Fax.com for violations of the federal Telephone User Protection Act (TCPA) and the Commission's TCPA rules. In re Fax.com, Inc., FCC No. 04-2 (FCC Dec. 31, 2003). The Commission concluded that Fax.com violated its TCPA rules on 489 separate occasions, and imposed an $11,000 fine for each one.
Arranging for Transmission of Unwanted E-mail May be Common Law Trespass
Allegations that a plaintiff's former employee arranged for large volumes of unwanted, sexually explicit e-mail to be sent to a former colleague as part of a campaign of harassment state a claim for common law trespass to chattels under
Government, Law Enforcement Officials May be Liable Under ECPA for Improper Subscriber Information Access
A municipal government and its law-enforcement officers may be liable in a civil suit brought under the Electronic Communications Privacy Act (ECPA) for obtaining a subscriber's information from an Internet service provider (ISP) with an invalid search warrant. Freedman v. America Online, Inc., No. 3:03cv1048 (D. Conn. Jan. 4, 2004). The court held that in the absence of consent from a subscriber, applications for such information must be obtained by means of a valid warrant, court order or subpoena, not an unsigned warrant application that was “a legal nullity.” The court noted that precedent suggesting improper access might not subject governmental entities to such liability had been superseded by amendments to the ECPA in 2001.
In Defamation Suit, Canadian Court Rules Anonymous Net Posts
More Likely to be Believed
Defamatory postings about a company CEO on an Internet bulletin board were aggravated by the fact that the postings were anonymous, and therefore more likely to be believed by readers.
Canadian Court May Exercise Jurisdiction Over U.S. Paper
In Online Defamation Case
A Canadian resident can sue a U.S.-based newspaper in a Canadian court for allegedly defamatory articles posted on the newspaper's Web site that are accessible in Canada. Bangoura v.
Electronically Searchable CD-ROMs May Satisfy Document Index Requirement
A party's obligation to provide an index to voluminous documents provided to an adversary on CD-ROMs may be satisfied if the documents are electronically searchable. In re Lorazepam, MDL No. 1290 (D. D.C. Jan 16, 2004). In the absence of an agreement between the parties, the Magistrate Judge ordered the CD-ROMs containing the documents to be made available to a computer forensics firm to determine whether they could either be read and searched by “commercial available” software, or converted into a readable and searchable format. The court commented that it is “the glory of electronic information” that it not only saves space but permits virtually instantaneous searches for relevant documents through searches for text strings.
California Cybercafe Local Ordinance Held Enforceable in Part
A California municipal ordinance requiring cybercafes to obtain a conditional use permit may not be enforced because it vests excessive discretion in municipal officials to regulate First Amendment-related activity. Vo v. City of Garden Grove, No. G032058 (Cal. Ct. App. 4th Dist. Jan. 29, 2004). The appeals court held that the lower court appropriately exercised its discretion in granting an injunction against the enforcement of the conditional use requirement. The appeals court reversed the injunction as to the operational portions of the ordinance, however, concluding that the city could enforce portions of the ordinance that require cybercafes to closely surveil the activities of customers. With respect to the requirement that cybercafes surveil their customers with video cameras, the court concluded that video surveillance was no more intrusive of First Amendment activity than an adult employee or security guard.
Reposter of Defamatory Internet Messages not Absolutely Immune from Suit
Section 230 of the Communications Decency Act (CDA) does not provide absolute immunity from a defamation action where an Internet poster reposts defamatory statements of another party in a Usenet newsgroup, after being notified that the statements were false. Barrett v. Rosenthal, No. A096451 (Cal. Ct. App. 1St. Dist. Jan. 21, 2004).
Julian S. Millstein Edward A. Pisacreta Jeffrey D. Neuburger
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
'Huguenot LLC v. Megalith Capital Group Fund I, L.P.': A Tutorial On Contract Liability for Real Estate Purchasers
In June 2024, the First Department decided Huguenot LLC v. Megalith Capital Group Fund I, L.P., which resolved a question of liability for a group of condominium apartment buyers and in so doing, touched on a wide range of issues about how contracts can obligate purchasers of real property.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.