e-Commerce Docket Sheet

An Internet critic's use of extensive quotations from copyrighted materials obtained at a training seminar was protected by the fair use doctrine, even if the materials were obtained in violation of a nondisclosure agreement. NXIVM Corporation v. The Ross Institute, 364 F.3d 471 (2d. Cir. 2004). The circuit court upheld the lower court's refusal to issue a preliminary injunction against the posting of the quotations, finding that there was no likelihood that the copyright owner could overcome the critic's fair use defense. The court concluded that the fair use defense was not completely precluded by the critic's bad-faith conduct in obtaining the materials, and that the critic's bad faith was mitigated by the transformative use of the materials for the purpose of criticism. In a concurring opinion, Judge Jacobs agreed that the critic's use fell under the fair use doctrine, but stated his view that the critic's bad faith was irrelevant to the fair-use analysis, commenting that publication of critical works should not be “inhibited by a publisher's anxiety or uncertainty about an author's ethics if his secondary work is transformative.”

A rival yacht broker's copying and momentary retention of HTML-coded Web pages maintained by a competitor to extract sales listings embodied in the pages is protected by the fair use doctrine. Nautical Solutions Marketing, Inc. v. Boat.com, N0. 8:02-cv-760-T-23TGW, 2004 U.S. Dist. LEXIS 6304 (M.D. Fla. April 1, 2004). The court granted the rival yacht broker's request for a declaratory judgment of noninfringement, also concluding that the copying and posting of the sales listings themselves on the rival broker's Web site did not constitute copyright infringement, because the listings consisted of photographs and descriptions that the yacht sellers ' and not the competitor ' owned. The court also rejected the argument that the competitor had a protectible interest in the headings used in the listings and in the listing compilation.

An Internet service provider (ISP) lacks standing to maintain an action seeking a declaratory judgment that the takedown provisions of the Digital Millennium Copyright Act (DMCA) are unconstitutional. Fatwallet, Inc. v. Best Buy Enterprise Services, Inc., No. 03 50508, 2004 U.S. Dist. LEXIS 6153 (N.D. Ill. April 12, 2004). The court concluded that the ISP lacked standing because it would suffer no harm by refusing to comply with a takedown notice that would be additional to any harm it might already suffer, irrespective of the DMCA. The court suggested that posters of information subject to the takedown notices had the proper standing to challenge the law.

A jury's finding that a software developer did not violate anticircumvention provisions of the Digital Millennium Copyright Act (DMCA) when he installed an unauthorized server on a customer's network does not preclude an award of damages under another theory of liability. Pearl Investments, LLC v. Standard I/O, Inc., No. 02-50-P-H, 2004 U.S. Dist. LEXIS 6815 (D. Me. April 20, 2004). In denying the developer's motion to vacate the damage award, the court noted that the jury also found in the customer's favor on its claim that the developer installed the unauthorized server to run a program he developed by misappropriating the customer's trade secrets. The jury could reasonably conclude, the court held, that the customer's damages, ie, its expenditures for the correction of system bugs and slowdowns, resulted from the misappropriation of its trade secrets.

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