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e-Commerce Docket Sheet
Hard Disk Imaging of Licensed Software to
Enable 'Broadest Authorized Use' Is Not Fair Use
The use of hard-disk imaging to install licensed software on computers in excess of the number of paid-for licenses is not protected by fair use, even where the licensee alleged that it limited simultaneous user access to the software's functionality to the number of paid-for licenses. Wall Data, Inc. v. Los Angeles County Sheriff's Department, No. 03-56559, 2006 U.S. App. LEXIS 12100 (9th Cir. May 17, 2006).
The appeals court upheld the trial court's grant of summary judgment, rejecting the licensee's fair-use defense, finding that each of the four fair-use factors weighed against a fair-use finding. In particular, the appeals court noted that the use of hard-drive imaging saved the licensee the time and effort that would have been required to install each copy of the software individually, rendering the licensee's use commercial, because the unauthorized copies were made to save the expense of purchasing authorized copies.
Trademark Use Prohibition Agreement
Requires Explanatory Link
Under a settlement agreement in which a defendant agreed not to use the plaintiff's trademark in Oklahoma, the defendant's obligation to avoid consumer confusion requires it to place an 'Oklahoma' link on the first page of the Web site. Communitycare HMO, Inc. v. Memberhealth, Inc., No. 06-CV-187, 2006 U.S. Dist. LEXIS 28121 (N.D. Okla. May 8, 2006).
The court granted a limited temporary restraining order enforcing an agreement in which two health-care companies settled prior litigation over the right to use a trademark term on products and services related to Medicare coverage. The court ruled that the defendant, which was entitled to use the trademark term in all states other than Oklahoma, had not violated either trademark law or the settlement agreement by using the trademark term on its Web site used for marketing to the entire company. The court concluded, however, that to satisfy its obligation under the settlement agreement to take steps to avoid confusion among Oklahoma consumers, the defendant should include a specific link for Oklahoma residents on the opening page of its Web site, leading to a general explanation of the differences between the plaintiff and defendant companies.
Credit Agency May Be Liable under FCRA For
Failing to Provide Database Access Safeguards
A credit agency may be held liable for failing to implement adequate safeguards to ensure that customers who are given direct Internet access to databases containing consumers' personal information are not violating the Fair Credit Reporting Act. Centuori v. Experian Information Solutions, Inc., No. CIV 04-013, 2006 U.S. Dist. LEXIS 30390 (D. Ariz. May 12, 2006).
The court refused to dismiss the plaintiff's complaint that the agency acted willfully or negligently, or both, in allowing a public defender's office access to his credit history for purposes that the FCRA doesn't authorize. The court concluded that a jury could reasonably find, among other breaches of the high standard set by the FCRA, that the agency acted negligently or recklessly when it implemented a system allowing customers to have direct Internet access to its database, without simultaneously bolstering its review of customer applications to screen out applicants who presented a high risk of potential FCRA violations.
Injunction Transferring Domain Name Not Warranted
Where Plaintiff Can Operate From Alternate Site
Although the plaintiff in a domain-name dispute made a sufficient showing of trademark infringement to justify the issuance of a preliminary injunction, the removal of the disputed Web site, rather than the transfer of the disputed domain name, would maintain the status quo, pending the resolution of the dispute on the merits. C.V. Starr & Co., Inc. v. C.V. Starr & Co., Inc., No. 06-2157, 2006 U.S. Dist. LEXIS 27277 (S.D. N.Y. May 9, 2006).
The dispute involved the rights to a domain name between closely affiliated business entities engaged in a dissolution of their relationship. The court noted that the plaintiff had shown that customer confusion would result from the continued operation of the 'cvstarr.com' Web site by the defendant. The court also noted, however, that the plaintiff had operated, and could continue to operate, at the 'cvstarrco.com' Web site, pending a resolution of the dispute on the merits. The court concluded that the removal of the Web site at the disputed domain name would maintain the status quo and avoid irreparable harm to the plaintiff.
Online Auction Sale Not Complete
When 'Final Hammer Falls'
An online auction sale is not complete when the auction closes when the online-auction terms required the high bidder to execute a purchase agreement subsequent to the auction to finalize the purchase. Gossett v. HBL, LLC, No. 2:06-123, 2006 U.S. Dist. LEXIS 30435 (D. S.C. May 11, 2006).
The court rejected the high bidder's argument that the arbitration provision included in the purchase agreement that he signed subsequent to the close of the auction was not binding, because the auction sales transaction was complete 'upon the fall of the electronic hammer.' The court ruled that the auction sale was not complete, because the online-auction terms imposed several conditions precedent to the completion of the transaction, ie, that the high bidder contact the seller within 24 hours, make a down payment, and sign and return sale-related paperwork, including the purchase agreement, within 24 hours of the auction closing.
FTC Sues Companies Alleged to Use Pretexting
The Federal Trade Commission (FTC) has filed federal-court complaints charging five Web-based operations that have obtained and sold consumers' confidential telephone records to third parties with violating federal law. Federal Trade Commission v. Information Search, Inc., Accusearch, Inc., CEO Group, Inc., 77 Investigations, Inc. and Integrity Security & Investigation Services, Inc.
According to the FTC, the defendant companies advertised on the Internet that they would obtain and sell confidential telephone records. The FTC asserts that the companies' methods of obtaining the records included 'pretexting,' ie, posing as a customer of a telecommunications carrier to induce the carrier to disclose the confidential records.
Instant Messages Set Long-Arm
Jurisdiction Under NY Statute
A sophisticated institutional investor entered New York to do business within the meaning of the New York long-arm statute by initiating, negotiating and concluding a $15 million bond transaction with a New York-based securities firm via an instant-messaging system. Deutsche Bank Securities, Inc. v. Montana Board of Investments, No. 71, 2006 NY Slip Op. 04338 (N.Y. June 6, 2006). The court noted that under New York CPLR 302(a)(1), personal jurisdiction may be exercised over any non-domiciliary who transacts any business within the state, even if the defendant never physically enters the state, so long as the activities of the defendant 'were purposeful and there is a substantial relationship between the transaction and the claim asserted.' The court found that the defendant had engaged in approximately eight substantial transactions with the same securities firm over the previous 13 months, and consequently had availed itself of the benefits of conducting business in New York and had sufficient contacts with New York to justify the exercise of jurisdiction.
California Appeals Court Shields Online Publisher
In Apple Trade Secret Case
A panel of the California Court of Appeal has ruled that online publishers accused of publishing Apple Computer's protected trade secrets are entitled to the protections of the California reporter's shield law. O'Grady v. The Superior Court of Santa Clara County, No. H0228579 (Cal. Ct. App. 6th Dist. May 26, 2006). The appeals court ruled that two online news sites devoted to information about Apple Computer products and related subjects constitute 'periodical publications' within the meaning of the shield law. The court concluded that the California Legislature intended the term to encompass Web-based publications 'which differ from traditional periodicals only in their tendency, which flows directly from the advanced technology they employ, to continuously update their content.' The court also ruled that subpoenas directed to the e-mail providers of the news sites were unenforceable under the Federal Stored Communications Act, 18 U.S.C. ”2701-2712, concluding that there is no implied civil discovery exception to the Act's prohibitions against service-provider disclosure of the contents of e-mail communications.
Docket Sheet is written by Julian S. Millstein, Edward A. Pisacreta and Jeffrey D. Neuburger, partners in the New York office of Brown Raysman Millstein Felder & Steiner LLP (www.brownraysman.com).
Hard Disk Imaging of Licensed Software to
Enable 'Broadest Authorized Use' Is Not Fair Use
The use of hard-disk imaging to install licensed software on computers in excess of the number of paid-for licenses is not protected by fair use, even where the licensee alleged that it limited simultaneous user access to the software's functionality to the number of paid-for licenses. Wall Data, Inc. v. Los Angeles County Sheriff's Department, No. 03-56559, 2006 U.S. App. LEXIS 12100 (9th Cir. May 17, 2006).
The appeals court upheld the trial court's grant of summary judgment, rejecting the licensee's fair-use defense, finding that each of the four fair-use factors weighed against a fair-use finding. In particular, the appeals court noted that the use of hard-drive imaging saved the licensee the time and effort that would have been required to install each copy of the software individually, rendering the licensee's use commercial, because the unauthorized copies were made to save the expense of purchasing authorized copies.
Trademark Use Prohibition Agreement
Requires Explanatory Link
Under a settlement agreement in which a defendant agreed not to use the plaintiff's trademark in Oklahoma, the defendant's obligation to avoid consumer confusion requires it to place an 'Oklahoma' link on the first page of the Web site. Communitycare HMO, Inc. v. Memberhealth, Inc., No. 06-CV-187, 2006 U.S. Dist. LEXIS 28121 (N.D. Okla. May 8, 2006).
The court granted a limited temporary restraining order enforcing an agreement in which two health-care companies settled prior litigation over the right to use a trademark term on products and services related to Medicare coverage. The court ruled that the defendant, which was entitled to use the trademark term in all states other than Oklahoma, had not violated either trademark law or the settlement agreement by using the trademark term on its Web site used for marketing to the entire company. The court concluded, however, that to satisfy its obligation under the settlement agreement to take steps to avoid confusion among Oklahoma consumers, the defendant should include a specific link for Oklahoma residents on the opening page of its Web site, leading to a general explanation of the differences between the plaintiff and defendant companies.
Credit Agency May Be Liable under FCRA For
Failing to Provide Database Access Safeguards
A credit agency may be held liable for failing to implement adequate safeguards to ensure that customers who are given direct Internet access to databases containing consumers' personal information are not violating the Fair Credit Reporting Act. Centuori v.
The court refused to dismiss the plaintiff's complaint that the agency acted willfully or negligently, or both, in allowing a public defender's office access to his credit history for purposes that the FCRA doesn't authorize. The court concluded that a jury could reasonably find, among other breaches of the high standard set by the FCRA, that the agency acted negligently or recklessly when it implemented a system allowing customers to have direct Internet access to its database, without simultaneously bolstering its review of customer applications to screen out applicants who presented a high risk of potential FCRA violations.
Injunction Transferring Domain Name Not Warranted
Where Plaintiff Can Operate From Alternate Site
Although the plaintiff in a domain-name dispute made a sufficient showing of trademark infringement to justify the issuance of a preliminary injunction, the removal of the disputed Web site, rather than the transfer of the disputed domain name, would maintain the status quo, pending the resolution of the dispute on the merits. C.V. Starr & Co., Inc. v. C.V. Starr & Co., Inc., No. 06-2157, 2006 U.S. Dist. LEXIS 27277 (S.D. N.Y. May 9, 2006).
The dispute involved the rights to a domain name between closely affiliated business entities engaged in a dissolution of their relationship. The court noted that the plaintiff had shown that customer confusion would result from the continued operation of the 'cvstarr.com' Web site by the defendant. The court also noted, however, that the plaintiff had operated, and could continue to operate, at the 'cvstarrco.com' Web site, pending a resolution of the dispute on the merits. The court concluded that the removal of the Web site at the disputed domain name would maintain the status quo and avoid irreparable harm to the plaintiff.
Online Auction Sale Not Complete
When 'Final Hammer Falls'
An online auction sale is not complete when the auction closes when the online-auction terms required the high bidder to execute a purchase agreement subsequent to the auction to finalize the purchase. Gossett v. HBL, LLC, No. 2:06-123, 2006 U.S. Dist. LEXIS 30435 (D. S.C. May 11, 2006).
The court rejected the high bidder's argument that the arbitration provision included in the purchase agreement that he signed subsequent to the close of the auction was not binding, because the auction sales transaction was complete 'upon the fall of the electronic hammer.' The court ruled that the auction sale was not complete, because the online-auction terms imposed several conditions precedent to the completion of the transaction, ie, that the high bidder contact the seller within 24 hours, make a down payment, and sign and return sale-related paperwork, including the purchase agreement, within 24 hours of the auction closing.
FTC Sues Companies Alleged to Use Pretexting
The Federal Trade Commission (FTC) has filed federal-court complaints charging five Web-based operations that have obtained and sold consumers' confidential telephone records to third parties with violating federal law. Federal Trade Commission v. Information Search, Inc., Accusearch, Inc., CEO Group, Inc., 77 Investigations, Inc. and Integrity Security & Investigation Services, Inc.
According to the FTC, the defendant companies advertised on the Internet that they would obtain and sell confidential telephone records. The FTC asserts that the companies' methods of obtaining the records included 'pretexting,' ie, posing as a customer of a telecommunications carrier to induce the carrier to disclose the confidential records.
Instant Messages Set Long-Arm
Jurisdiction Under NY Statute
A sophisticated institutional investor entered
California Appeals Court Shields Online Publisher
In
A panel of the California Court of Appeal has ruled that online publishers accused of publishing
Docket Sheet is written by Julian S. Millstein, Edward A. Pisacreta and Jeffrey D. Neuburger, partners in the
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