e-Commerce Docket Sheet

WA Direct Wine And Beer Sales Law
Against Commerce Clause

The Washington state law that allows only in-state wineries and breweries to engage in direct sales to retailers is invalid because it discriminates against out-of-state producers in violation of the Commerce Clause of the U.S. Constitution. Costco Wholesale Corp. v. Hoen, No. 04-360P (W.D. Wash. Dec. 21, 2005). The court ruled that the Washington law prevented out-of-state producers from competing on equal terms with in-state producers, and that the state had not demonstrated any need to discriminate in that fashion. The court concluded that the ruling striking down the Washington law was dictated by the U.S. Supreme Court decision in Granholm v. Heald, 125 S.Ct. 1885 (2005), which struck down state laws prohibiting out-of-state producers from selling directly to consumers.

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TN Public Records Act
Doesn't Require e-Format

The Tennessee Public Records Act does not require a custodian of public records to provide such records to a citizen in the manner that the citizen requests. Wells v. Wharton, No. W2005-00695-COA-R3-CV, 2005 Tenn. App. LEXIS 762 (Tenn. Ct. App. Dec. 7, 2005). The plaintiff sought relief when the county government limited the citizen's Web-site access to public documents in bulk format because the plaintiff's access overloaded its computer system. The court ruled that a citizen requesting such records is not entitled to receive them in electronic format, and noted further that the statutory provisions concerning maintenance of public records “appear to prohibit providing records in electronic form to the public.”

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EU Parliament Adopts Data-Retention Directive

The EU Parliament adopted on December 14 a directive on data-retention covering traffic and location data generated by telephony, SMS and the Internet. According to the EU Parliament press release, the directive will provide for data to be retained by telecommunications companies, including Internet service providers, for a minimum of 6 months and a maximum of 24 months.

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Restoring e-Mail Backup Tape
Needs Relevance Showing

Due to the extraordinary expense of restoration and review of e-mail backup tapes, a party seeking restoration and review must make a showing that the files contained in a particular backup tape may contain relevant information. In re Priceline.com Inc., Securities Litigation, No. 00-1884, 2005 U.S. Dist. LEXIS 33636 (D. Conn. Dec. 8, 2005). The court ruled in a case in which more than 200 e-mail backup tapes had been identified, and the cost of restoring each backup tape was estimated at $200 to $800. The court indicated that it would not compel the restoration of any backup tape, regardless of which party was to pay the cost of restoration, “unless the effort is justified.”

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Copyright Office OK In
Denying Web Site Registration

The Copyright Office acted within its discretion in denying copyright registration to a Web site on procedural and substantive grounds. Darden v. Peters, No. 04-30, 2005 U.S. Dist. LEXIS 32610 (E.D. N.C. Dec. 6, 2005). The court concluded that the Register of Copyrights did not abuse her discretion in rejecting the plaintiff's claim for registration where neither the arrangement of the uncopyrightable elements on the Web site nor the formatting of the Web pages themselves was copyrightable. The court also upheld the Register's rejection of the plaintiff's claim as procedurally defective, as the plaintiff failed to submit material that was representative of the Web pages as of the claimed publication date.

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Copyright Precedents Guide
DMCA Damages Calculation

In determining an award of statutory damages within the range provided in the anti-circumvention provisions of the Digital Millennium Copyright Act (DMCA), a court may look to precedents awarding damages under the Copyright Act. Sony Computer Entertainment America, Inc. v. Filipiak, No. C-04-2318 (N.D. Cal. Dec. 27, 2005). The court noted that there are no decisions construing the language in the DMCA that permit a court to award such statutory damages “as the court considers just,” and concluded that it was reasonable to consider Copyright Act damages precedents as “highly persuasive if not determinative.” The court awarded damages of over $6 million for the sale of more than 7,000 video-game console mod chips, based on consideration of several factors, including “the expense saved by the defendant in avoiding a license agreement; profits reaped by the defendant in connection with the infringement; revenues lost to the plaintiff; and the willfulness of the infringement,” as well as “the goal of discouraging wrongful conduct.”

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First Amendment Bars Injunction
Of Allegedly Defamatory Blog Posts

The First Amendment precludes the issuance of a preliminary injunction against the posting of allegedly defamatory statements by a former employee on her Web site and related Web log. Bynog v. SL Green Realty Corp., No. 05-0305, 2005 U.S. Dist. LEXIS 34617 (S.D.N.Y. Dec. 22, 2005). The employer and union sought injunctive relief in connection with their counterclaims for trade libel and other torts, filed in the discrimination litigation brought by the former employee. The court noted established precedent in the Second Circuit that, absent extraordinary circumstances, no injunction should be issued in a defamation case. The court concluded that neither the employer nor the labor union had shown extraordinary circumstances.

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Spoliation Sanction For Wiping Hard Drive
Not Available On SJ Motion

A defendant is subject to a spoliation inference for wiping his computer hard drive clean after receiving notice of a file-sharing suit, but the inference cannot be used to justify a finding of copyright-infringement liability on the plaintiff's motion for summary judgment. Paramount Pictures Corp. v. Davis, No. 05-0316 (E.D. Pa. Dec. 2, 2005). The court concluded that the spoliation inference was appropriate because data on the defendant's hard drive was relevant to the plaintiff's claim that the defendant was a “first propagator” of an unauthorized copy of the plaintiff's copyrighted motion picture, and the defendant knew or should have known that the data would be necessary to confirm or refute the plaintiff's copyright-infringement claim. The court ruled that the spoliation inference should not be applied at the summary judgment stage, however, because it would be “tantamount to granting summary judgment ' a far more severe sanction” and because a spoliation inference is an adverse inference that a fact-finder may draw from the evidence presented at trial, not a mandated legal conclusion.

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Bill To Close “Analog Hole” Introduced In House

The Digital Transition Content Security Act of 2005, H.R. 4569, “to require certain analog conversion devices to preserve digital content security measures,” is sponsored by Rep. F. James Sensenbrenner (R-WI) and co-sponsored by Rep. John Conyers (D-MI). Rep. Sensenbrenner is chairman of the House Committee on the Judiciary. According to the sponsor's press release accompanying the introduction of the bill, H.R. 4569 mandates the use of two technologies to limit and frustrate redistribution of video content, the Content Generation Management System ' Analog (CGMS-A), and Video Encoded Invisible Light (VEIL). The legislation would require that devices that convert analog content pass through the CGMS-A and VEIL content-protection signals contained in the original version. To ensure that the technology used does not become outdated, the Patent and Trademark Office is authorized to conduct ongoing rulemakings to update the technology.

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Citizen Not Entitled To Access
Municipal Web Site As A Public Forum

Citizen proponents of a municipal ballot initiative are not entitled to unfettered access to the municipality's Web site to express their views on the merits of the initiative. Vargas v. City of Salinas, No. H027693, 2005 Cal. App. LEXIS 1984 (Cal. Ct. App., 6th Dist. Dec. 29, 2005). The court concluded that the municipal Web site was not a traditional “public forum” to which equal access must be provided, because the municipal Web site operated as a repository of information provided to the public by the municipality, and was not offered as a forum for airing views either by proponents or opponents of the ballot measure.

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NJ Court: Employer Has Duty To Investigate
Worker Child Porn Access At Work

An employer that is on notice of an employee's use of a workplace computer to access Web sites that may contain child pornography has a duty to investigate and take “prompt and effective action” to cease such activity that may harm innocent third parties. Doe v. XYC Corp., No. A-2909-04T2 (N.J. Super. Ct. App. Div. Dec. 27, 2005). The appellate court reinstated the negligence claim brought by the wife of the employee against the employer, for its failure to adequately investigate and respond to the employee's workplace access to inappropriate Web sites. The wife alleged that such an investigation would have revealed the employee's use of the employer's computer system to distribute pornographic images of the employee's minor stepdaughter. The court ruled that the plaintiff had established that the employer had the capability to monitor the employee's activities on his work computer; that under the employer's e-mail and Internet usage policy, the employee had no legitimate expectation of privacy concerning his workplace computer that would preclude such monitoring; that the employer was on notice that the employee was viewing pornography, including child pornography, on his workplace computer; and that the employer had a duty to report the employee's activities to the proper authorities and to take “effective internal action to stop those activities, whether by termination or some less drastic remedy.” The court remanded the case for consideration of whether the plaintiff could establish that the employer's breach of its duty was the proximate result of any injury to the minor child.

WA Direct Wine And Beer Sales Law
Against Commerce Clause

The Washington state law that allows only in-state wineries and breweries to engage in direct sales to retailers is invalid because it discriminates against out-of-state producers in violation of the Commerce Clause of the U.S. Constitution. Costco Wholesale Corp. v. Hoen, No. 04-360P (W.D. Wash. Dec. 21, 2005). The court ruled that the Washington law prevented out-of-state producers from competing on equal terms with in-state producers, and that the state had not demonstrated any need to discriminate in that fashion. The court concluded that the ruling striking down the Washington law was dictated by the U.S. Supreme Court decision in Granholm v. Heald , 125 S.Ct. 1885 (2005), which struck down state laws prohibiting out-of-state producers from selling directly to consumers.

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TN Public Records Act
Doesn't Require e-Format

The Tennessee Public Records Act does not require a custodian of public records to provide such records to a citizen in the manner that the citizen requests. Wells v. Wharton, No. W2005-00695-COA-R3-CV, 2005 Tenn. App. LEXIS 762 (Tenn. Ct. App. Dec. 7, 2005). The plaintiff sought relief when the county government limited the citizen's Web-site access to public documents in bulk format because the plaintiff's access overloaded its computer system. The court ruled that a citizen requesting such records is not entitled to receive them in electronic format, and noted further that the statutory provisions concerning maintenance of public records “appear to prohibit providing records in electronic form to the public.”

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EU Parliament Adopts Data-Retention Directive

The EU Parliament adopted on December 14 a directive on data-retention covering traffic and location data generated by telephony, SMS and the Internet. According to the EU Parliament press release, the directive will provide for data to be retained by telecommunications companies, including Internet service providers, for a minimum of 6 months and a maximum of 24 months.

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Restoring e-Mail Backup Tape
Needs Relevance Showing

Due to the extraordinary expense of restoration and review of e-mail backup tapes, a party seeking restoration and review must make a showing that the files contained in a particular backup tape may contain relevant information. In re Priceline.com Inc., Securities Litigation, No. 00-1884, 2005 U.S. Dist. LEXIS 33636 (D. Conn. Dec. 8, 2005). The court ruled in a case in which more than 200 e-mail backup tapes had been identified, and the cost of restoring each backup tape was estimated at $200 to $800. The court indicated that it would not compel the restoration of any backup tape, regardless of which party was to pay the cost of restoration, “unless the effort is justified.”

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Copyright Office OK In
Denying Web Site Registration

The Copyright Office acted within its discretion in denying copyright registration to a Web site on procedural and substantive grounds. Darden v. Peters, No. 04-30, 2005 U.S. Dist. LEXIS 32610 (E.D. N.C. Dec. 6, 2005). The court concluded that the Register of Copyrights did not abuse her discretion in rejecting the plaintiff's claim for registration where neither the arrangement of the uncopyrightable elements on the Web site nor the formatting of the Web pages themselves was copyrightable. The court also upheld the Register's rejection of the plaintiff's claim as procedurally defective, as the plaintiff failed to submit material that was representative of the Web pages as of the claimed publication date.

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Copyright Precedents Guide
DMCA Damages Calculation

In determining an award of statutory damages within the range provided in the anti-circumvention provisions of the Digital Millennium Copyright Act (DMCA), a court may look to precedents awarding damages under the Copyright Act. Sony Computer Entertainment America, Inc. v. Filipiak, No. C-04-2318 (N.D. Cal. Dec. 27, 2005). The court noted that there are no decisions construing the language in the DMCA that permit a court to award such statutory damages “as the court considers just,” and concluded that it was reasonable to consider Copyright Act damages precedents as “highly persuasive if not determinative.” The court awarded damages of over $6 million for the sale of more than 7,000 video-game console mod chips, based on consideration of several factors, including “the expense saved by the defendant in avoiding a license agreement; profits reaped by the defendant in connection with the infringement; revenues lost to the plaintiff; and the willfulness of the infringement,” as well as “the goal of discouraging wrongful conduct.”

---

First Amendment Bars Injunction
Of Allegedly Defamatory Blog Posts

The First Amendment precludes the issuance of a preliminary injunction against the posting of allegedly defamatory statements by a former employee on her Web site and related Web log. Bynog v. SL Green Realty Corp., No. 05-0305, 2005 U.S. Dist. LEXIS 34617 (S.D.N.Y. Dec. 22, 2005). The employer and union sought injunctive relief in connection with their counterclaims for trade libel and other torts, filed in the discrimination litigation brought by the former employee. The court noted established precedent in the Second Circuit that, absent extraordinary circumstances, no injunction should be issued in a defamation case. The court concluded that neither the employer nor the labor union had shown extraordinary circumstances.

---

Spoliation Sanction For Wiping Hard Drive
Not Available On SJ Motion

A defendant is subject to a spoliation inference for wiping his computer hard drive clean after receiving notice of a file-sharing suit, but the inference cannot be used to justify a finding of copyright-infringement liability on the plaintiff's motion for summary judgment. Paramount Pictures Corp. v. Davis, No. 05-0316 (E.D. Pa. Dec. 2, 2005). The court concluded that the spoliation inference was appropriate because data on the defendant's hard drive was relevant to the plaintiff's claim that the defendant was a “first propagator” of an unauthorized copy of the plaintiff's copyrighted motion picture, and the defendant knew or should have known that the data would be necessary to confirm or refute the plaintiff's copyright-infringement claim. The court ruled that the spoliation inference should not be applied at the summary judgment stage, however, because it would be “tantamount to granting summary judgment ' a far more severe sanction” and because a spoliation inference is an adverse inference that a fact-finder may draw from the evidence presented at trial, not a mandated legal conclusion.

---

Bill To Close “Analog Hole” Introduced In House

The Digital Transition Content Security Act of 2005, H.R. 4569, “to require certain analog conversion devices to preserve digital content security measures,” is sponsored by Rep. F. James Sensenbrenner (R-WI) and co-sponsored by Rep. John Conyers (D-MI). Rep. Sensenbrenner is chairman of the House Committee on the Judiciary. According to the sponsor's press release accompanying the introduction of the bill, H.R. 4569 mandates the use of two technologies to limit and frustrate redistribution of video content, the Content Generation Management System ' Analog (CGMS-A), and Video Encoded Invisible Light (VEIL). The legislation would require that devices that convert analog content pass through the CGMS-A and VEIL content-protection signals contained in the original version. To ensure that the technology used does not become outdated, the Patent and Trademark Office is authorized to conduct ongoing rulemakings to update the technology.

---

Citizen Not Entitled To Access
Municipal Web Site As A Public Forum

Citizen proponents of a municipal ballot initiative are not entitled to unfettered access to the municipality's Web site to express their views on the merits of the initiative. Vargas v. City of Salinas, No. H027693, 2005 Cal. App. LEXIS 1984 (Cal. Ct. App., 6th Dist. Dec. 29, 2005). The court concluded that the municipal Web site was not a traditional “public forum” to which equal access must be provided, because the municipal Web site operated as a repository of information provided to the public by the municipality, and was not offered as a forum for airing views either by proponents or opponents of the ballot measure.

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NJ Court: Employer Has Duty To Investigate
Worker Child Porn Access At Work

An employer that is on notice of an employee's use of a workplace computer to access Web sites that may contain child pornography has a duty to investigate and take “prompt and effective action” to cease such activity that may harm innocent third parties. Doe v. XYC Corp., No. A-2909-04T2 (N.J. Super. Ct. App. Div. Dec. 27, 2005). The appellate court reinstated the negligence claim brought by the wife of the employee against the employer, for its failure to adequately investigate and respond to the employee's workplace access to inappropriate Web sites. The wife alleged that such an investigation would have revealed the employee's use of the employer's computer system to distribute pornographic images of the employee's minor stepdaughter. The court ruled that the plaintiff had established that the employer had the capability to monitor the employee's activities on his work computer; that under the employer's e-mail and Internet usage policy, the employee had no legitimate expectation of privacy concerning his workplace computer that would preclude such monitoring; that the employer was on notice that the employee was viewing pornography, including child pornography, on his workplace computer; and that the employer had a duty to report the employee's activities to the proper authorities and to take “effective internal action to stop those activities, whether by termination or some less drastic remedy.” The court remanded the case for consideration of whether the plaintiff could establish that the employer's breach of its duty was the proximate result of any injury to the minor child.