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e-Commerce Docket Sheet, Part 2
CA Supreme Court
To Hear CDA Section 230
Case On Distributor Liability
The court will review the controversial court of appeals decision in Barrett v. Rosenthal, 114 Cal. App. 4th 1379 (1st Dist. Jan. 21, 2004), judgment vacated and review granted, 87 P.3d 797; 12 Cal. Rptr. 3d 48 (April 14, 2004). The court of appeals ruled that the immunity provided to a 'provider or user of an interactive service' by Section 230(c)(1) of the Communications Decency Act (CDA) does not abrogate the common-law principle of distributor or knowledge-based liability. On appeal of an order striking a libel complaint pursuant to California's anti-SLAPP statute, the appeals court held that the trial court erred in finding that CDA Section 230 shielded a newsgroup poster from defamation liability. The poster allegedly distributed to various Internet newsgroups a defamatory e-mail message that she received from another defendant, and then refused to remove and, in fact, repeatedly posted the message after being informed of its defamatory nature. Contrary to the trial court (and the leading case of Zeran v. America Online, Inc., 129 F.3d 327 (4th Cir. 1997)), the appeals court held that Section 230 does not restrict distributor liability under the common law, and that the statute did not bar the plaintiff's defamation claim.
CDA Section 230 Immunity
Unavailable To Operator
Of Consumer Complaint Site
The operator of a consumer-complaint Web site became an 'information content provider' when it added allegedly defamatory report titles and headings to material consumers provided for posting on the Web site. MCW, Inc. v. Badbusinessbureau.com, No. 3:02-CV-2727-G, 2004 U.S. Dist. LEXIS 6678 (N.D. Tex April 19, 2004). The court also noted that there was evidence that the operator personally wrote various messages containing defamatory content, and in some cases actively encouraged and instructed consumer users of the Web site in the creation of defamatory content. The court concluded that the operator's activities went beyond the publisher's role protected under Section 230 of the Communications Decency Act when it participated in the creation and development of information posted on the site.
Availability Of Individual's
Likeness Constitutes Commercial Use
With respect to a cause of action under the Ohio right-of-publicity statute, making a 'wet-T-shirt' video containing the plaintiff's image available in the subscription-only portion of an adult Web site constitutes a use of the plaintiff's image for commercial purposes. Bosley v. Wildwett.com, 310 F. Supp. 2d 914 (N.D. Ohio 2004). The plaintiff, a television newscaster, claimed that she did not give consent to the making of the videotape or to the subsequent use of her image in commercial videotapes, on Web sites and in advertising photographs. The court concluded that the image was used 'to directly promote the sale of videos and memberships' in the adult Web site, and was not protected under the public-affairs exception to the right-of-publicity statute, or by the First Amendment.
UT Anti-Spyware Act
Stayed In WhenU Suit;
Act May Be Amended
Internet advertiser WhenU has obtained a temporary stay of the effective date of the controversial Utah Spyware Control Act. WhenU.com v. Utah, No. 040907578 (Utah Dist. Ct. 3d Dist. April 23, 2004). The Act prohibits the installation of spyware on another person's computer and prohibits use of 'a context based triggering mechanism' to display ads that obscure Web-site content or paid advertising from a user's view. The stay of the May 3 effective date was entered pending a hearing that was scheduled for May 21 on the company's allegations that the act violates the company's commercial-speech rights. In a related development, the sponsor of the Utah legislation stated on April 21 that amendments to the Act are under consideration and may receive legislative attention this summer.
Tower Records Settles
FTC Privacy Policy
Misrepresentation Charges
The Federal Trade Commission (FTC) has entered into a settlement with Tower Records concerning the commission's allegations that the company's customer personal information was exposed online in violation of the company's privacy policy. In re MTS Inc., FTC File No. 032-3209 (April 21, 2004). The FTC alleged that the company claimed in its privacy policy that it protected personal information with 'state-of-the-art technology,' but that a redesign of the Web site introduced a security vulnerability that made customer personal information vulnerable to unauthorized access. The settlement agreement prohibits the company from misrepresenting the extent to which it maintains and protects the privacy, confidentiality or security of customer personal information, and requires it to establish and maintain a comprehensive information-security program. The settlement includes independent review and record-keeping requirements.
German Court Requires
Software Developer
To Comply With
Open Source License
A German software developer has been ordered to comply with the requirements of the GNU General Public License by providing source code and a copy of the GNU license terms to distributees of its software. Welte v. Site-com Germany GmbH, No. 21 O 6123/04 (Landgericht Meunchen, April 2, 2004). The developer's wireless-access router product was based on code developed by the open source Netfilter Project to enable packet filtering, network address and port translation, and other packet-routing functions.
Invoice Reference
Sufficient For Purchaser
Notice Of Software License
A reference in an invoice for software directing a purchaser to 'read the software license agreement ('license') carefully' is sufficient basis for a jury to find that the purchaser was aware of and accepted the terms of the license. I-Systems, Inc. v. Softwares, Inc., No. 02-1951, 2004 U.S. Dist. LEXIS 6001 (D. Minn. March 29, 2004). The court rejected the purchaser's argument that it was unaware of the license, which was installed along with the software in a file containing a statement that use of the software constituted acceptance of the license terms. The court also noted that a series of transactions between the same parties included a prior negotiated software-development agreement that made it clear that the purchaser did not own the software, and a subsequent click-wrap license accompanying a software update required acceptance on installation of the software.
Ninth Circuit Orders
Rehearing En Banc
In Internet Jurisdiction Case
The Ninth Circuit Court of Appeals ordered the rehearing of the panel opinion in Gator.com Corp. v. L.L. Bean, Inc., 341 F.3d 1072 (9th Cir. 2003), opinion vacated and rehearing en banc granted, 2004 U.S. App. LEXIS 8471 (9th Cir. Apr. 29, 2004). The panel ruled that L.L. Bean's substantial mail-order and Internet-based commerce in California were sufficient to support the assertion of general jurisdiction over it in Gator.com's action seeking a declaratory ruling that its pop-up advertising techniques do not infringe L.L. Bean trademarks. In applying Ninth Circuit precedents, the panel concluded that although L.L. Bean met very few of the traditional factors for general jurisdiction that are associated with physical presence, the company engaged in extensive marketing and sales in California, had extensive contacts with California vendors and maintained a Web site that 'is clearly and deliberately structured to operate as a sophisticated virtual store in California.'
Julian S. Millstein Edward A. Pisacreta Jeffrey D. Neuburger
CA Supreme Court
To Hear CDA Section 230
Case On Distributor Liability
The court will review the controversial court of appeals decision in
CDA Section 230 Immunity
Unavailable To Operator
Of Consumer Complaint Site
The operator of a consumer-complaint Web site became an 'information content provider' when it added allegedly defamatory report titles and headings to material consumers provided for posting on the Web site. MCW, Inc. v. Badbusinessbureau.com, No. 3:02-CV-2727-G, 2004 U.S. Dist. LEXIS 6678 (N.D. Tex April 19, 2004). The court also noted that there was evidence that the operator personally wrote various messages containing defamatory content, and in some cases actively encouraged and instructed consumer users of the Web site in the creation of defamatory content. The court concluded that the operator's activities went beyond the publisher's role protected under Section 230 of the Communications Decency Act when it participated in the creation and development of information posted on the site.
Availability Of Individual's
Likeness Constitutes Commercial Use
With respect to a cause of action under the Ohio right-of-publicity statute, making a 'wet-T-shirt' video containing the plaintiff's image available in the subscription-only portion of an adult Web site constitutes a use of the plaintiff's image for commercial purposes.
UT Anti-Spyware Act
Stayed In WhenU Suit;
Act May Be Amended
Internet advertiser WhenU has obtained a temporary stay of the effective date of the controversial Utah Spyware Control Act. WhenU.com v. Utah, No. 040907578 (Utah Dist. Ct. 3d Dist. April 23, 2004). The Act prohibits the installation of spyware on another person's computer and prohibits use of 'a context based triggering mechanism' to display ads that obscure Web-site content or paid advertising from a user's view. The stay of the May 3 effective date was entered pending a hearing that was scheduled for May 21 on the company's allegations that the act violates the company's commercial-speech rights. In a related development, the sponsor of the Utah legislation stated on April 21 that amendments to the Act are under consideration and may receive legislative attention this summer.
Tower Records Settles
FTC Privacy Policy
Misrepresentation Charges
The Federal Trade Commission (FTC) has entered into a settlement with Tower Records concerning the commission's allegations that the company's customer personal information was exposed online in violation of the company's privacy policy. In re MTS Inc., FTC File No. 032-3209 (April 21, 2004). The FTC alleged that the company claimed in its privacy policy that it protected personal information with 'state-of-the-art technology,' but that a redesign of the Web site introduced a security vulnerability that made customer personal information vulnerable to unauthorized access. The settlement agreement prohibits the company from misrepresenting the extent to which it maintains and protects the privacy, confidentiality or security of customer personal information, and requires it to establish and maintain a comprehensive information-security program. The settlement includes independent review and record-keeping requirements.
German Court Requires
Software Developer
To Comply With
Open Source License
A German software developer has been ordered to comply with the requirements of the GNU General Public License by providing source code and a copy of the GNU license terms to distributees of its software.
Invoice Reference
Sufficient For Purchaser
Notice Of Software License
A reference in an invoice for software directing a purchaser to 'read the software license agreement ('license') carefully' is sufficient basis for a jury to find that the purchaser was aware of and accepted the terms of the license. I-Systems, Inc. v. Softwares, Inc., No. 02-1951, 2004 U.S. Dist. LEXIS 6001 (D. Minn. March 29, 2004). The court rejected the purchaser's argument that it was unaware of the license, which was installed along with the software in a file containing a statement that use of the software constituted acceptance of the license terms. The court also noted that a series of transactions between the same parties included a prior negotiated software-development agreement that made it clear that the purchaser did not own the software, and a subsequent click-wrap license accompanying a software update required acceptance on installation of the software.
Ninth Circuit Orders
Rehearing En Banc
In Internet Jurisdiction Case
The Ninth Circuit Court of Appeals ordered the rehearing of the panel opinion in
Julian S. Millstein Edward A. Pisacreta Jeffrey D. Neuburger
Strategy vs. Tactics: Two Sides of a Difficult Coin
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