e-Commerce Docket Sheet

By ALM Staff | Law Journal Newsletters |
October 30, 2006

Pattern of Use, Expressed Preference
for e-Mail Constitute Agreement

A lessee's repeated communications with a landlord by e-mail and her complaint of delay when the landlord communicated by certified letter manifested an intent to do business by e-mail under the Uniform Electronic Transactions Act (UETA). Crestwood Shops, L.L.C. v. Hilkene, WD65694, 2006 Mo. App. LEXIS 1188 (Ct. App. W.D. Aug. 8, 2006). The appeals court upheld the trial court ruling that the lessee's e-mail offer to terminate her lease satisfied the Statute of Frauds requirement of a signed writing. The court rejected the argument that the lessee had agreed to communicate by e-mail but did not agree to transact by e-mail, noting that the lessee had stated her offer to terminate the lease in an e-mail to the landlord in which she stated that she would be available 'by e-mail only.'

Employee Bound By Consent to Arbitration In Online Application

A clickwrap arbitration agreement that was presented to an employee during an online employment-application process is valid and binding. Bell v. Hollywood Entertainment Corp., No. 87210, 2006 Ohio 3974 (Ct. App. 8th Dist. Aug. 3, 2006). The court noted that the presentation of the arbitration agreement was preceded by the presentation of information regarding arbitration, and that the employee was given sufficient time to read and understand the information presented before she clicked 'yes' to signify her assent to the provision. The court rejected the argument that the agreement was unconscionable, and while conceding that the employee 'may have been young and inexperienced' when she assented to the arbitration agreement, the court concluded that she had the legal capacity to enter into a contract, and that she was free to find other employment rather than agree to be bound by the terms presented in the online-application process.

Exchange of Casual Favors Does Not Give Rise to Agreement

In a dispute over the ownership of a domain name and related Web site for a youth baseball tournament, an 'exchange of casual favors' between the Web site developer and the operator of the tournament did not give rise to a legally binding agreement concerning ownership of the domain name and the site. Southeastern Sports Management v. Baker, No. 2:05CV61, 2006 U.S. Dist. LEXIS 53893 (N.D. Miss. Aug. 1, 2006). The court noted that it was uncontested that the Web site developer registered and paid for the domain name with his own funds and in his own name, and that he created the Web site as a favor to the tournament operator. The court concluded that the fact that the tournament operator at some point no longer charged the developer for his son's baseball lessons and for certain other services did not give rise to a legally binding agreement under which the operator became the owner of the Web site and the domain name.

Confidential Customer List Is a
Protectable Trade Secret Under NY Law

A bankruptcy court was correct in ruling that an e-mail marketing company's confidential customer list was a protectable trade secret under New York law. In re: Cross Media Marketing Corp. (Cross Media Marketing Corp. v. Nixon), No. 06-Civ. 4228, 2006 U.S. Dist. LEXIS 56112 (S.D. N.Y. Aug. 11, 2006). In affirming the bankruptcy court's award of $286,000 in damages against a party who sought to auction the customer list on the Internet, the district court concluded that the marketing company's list was a protectable trade secret because it was 'developed through a substantial effort spanning many years,' was kept in confidence and was not readily ascertainable to the company's competitors. The court also noted that the customer list contained confidential customer information, such as the identities and preferences of client contacts.

Web Display of Photo For Sale
Does Not Diminish Copyright

The fact that a photograph was published on an Internet site does not diminish the protection available to the owner under copyright law simply because the image was expressly offered for sale. Gregerson v. Vilana Financial, Inc., No. 06-1164, 2006 U.S. Dist. LEXIS 57487 (D. Minn. Aug. 16, 2006). The court declined to dismiss the owner's copyright action against an advertising company that used the image in an advertisement for its services and claimed for various reasons that it was entitled to the defense of fair use. The court noted that a thorough analysis of the fair-use factors was unnecessary on the defendants' motion to dismiss for failure to state a claim, but a preliminary examination of the fair-use factors suggested that the defendants' use was not fair, because it was commercial, because the photograph was not offered for free but was available for sale, and because nearly the entire photograph was used.

Party Seeking Software Rental Amendments Act Protection
Must Prove Copyright Registration

A party that seeks to invoke the protection of the Software Rental Amendments Act (SRAA), which prohibits unauthorized rental of computer programs, must show copyright registrations for the allegedly infringed works as computer-software programs. Action Tapes, Inc. v. Mattson, No. 05-3309, 2006 U.S. App. LEXIS 22224 (8th Cir. Aug. 30, 2006). The appeals court affirmed the lower court dismissal of a copyright infringement action brought by a manufacturer of memory cards that enable computer-run sewing machines to stitch embedded designs on fabric. The appeals court ruled that the manufacturer was not entitled to the 'extra protection' that the SRAA provides to a 'limited category of copyrights,' ie, computer software, because the manufacturer had not complied with the specific requirements imposed by the U.S. Copyright Office on registration of computer programs, including deposit of certain portions of the program source code. Accordingly, the appeals court concluded, the manufacturer could not show that it had obtained proper copyright registrations prior to the commencement of the infringement action.

Injunction Against Keyword Advertising Not Warranted

A district court did not abuse its discretion in denying a trademark owner a preliminary injunction against a competitor that allegedly purchased keyword advertising, where there was no proof that the competitor in fact purchased keyword advertising on the owner's trademarked phrase. Picture It Sold!, Inc. v. iSold It, LLC, No. 06-15112, 2006 U.S. App. LEXIS 22163 (9th Cir. Aug. 28, 2006) (unpublished). In an unpublished opinion, the appellate court pointed out that the search-engine results proffered by the trademark owner were insufficient to prove that the competitor purchased advertising on the trademarked phrase 'Picture It Sold' because the searches were not conducted using quotation marks to delimit the phrase. Accordingly, the court pointed out, the search returns would include results containing the constituent words in the term in any order, including results reflecting the competitor's legitimate purchases of keyword advertising on its own trade name, 'I Sold It.'

Commercial Disparagement Not Stretched
By Continuing Torts Doctrine

Under Colorado law, publication of allegedly defamatory statements on a Web site is subject to the single-publication rule applicable to traditional print media. Bloom v. The Goodyear Tire & Rubber Co., No. 05-cv-01317, 2006 U.S. Dist. LEXIS 56133 (D. Colo. Aug. 10, 2006). The court ruled that in an action for commercial disparagement, the continuing tort doctrine does not salvage claims for defamation based on a Web site posting that occurred more than 3 years prior to the filing of the action. In the absence of a Colorado case addressing the issue, the court relied on decisions under the law of several other jurisdictions and noted that the preponderance of courts addressing the issue have applied the single-publication rule to Internet publications.

Irreparable Harm Needed For Injunction
Against Bad Faith Takedown

Plaintiffs, in a dispute over copyright rights in posted videos, were not entitled to an injunction against the defendant's alleged bad-faith takedown notices under the Digital Millennium Copyright Act (DMCA) where they failed to show that they would suffer irreparable harm in the absence of an injunction. Novotny v. Chapman, No. 3:05cv370, 2006 U.S. Dist. LEXIS 55471 (W.D. N.C. Aug. 9, 2006). The court noted that the plaintiffs who sought injunctive relief had removed the disputed videos from their Web site and had shown no interest in reposting them pending the resolution of the underlying dispute. The court found that under the circumstances, the plaintiffs had not demonstrated a 'likelihood' of further injury from bad-faith takedown notices, because such harm was precluded by the absence of the videos from their Web site.

Political Action Demand Shows Bad Faith

A defendant who offered to stop repeated registrations of infringing domain names in return for a trademark owner's pledge to fund organizations that support the defendant's political cause acted in bad faith within the meaning of the Anticybersquatting Consumer Protection Act (ACPA). Faegre & Benson, LLP v. Purdy, No. 03-6472, 2006 U.S. Dist. LEXIS 60227 (D. Minn. Aug. 24, 2006). In granting partial summary judgment on the plaintiff's ACPA claim and issuing a permanent injunction, the court also referenced the long history of the defendant's registration of numerous domain names containing the plaintiff's trademarks, and his citations for contempt of the court's previous orders requiring him to transfer previously registered domain names and to cease registering new ones. The court also granted summary judgment on the plaintiff's trademark-infringement claims, and awarded contempt sanctions and attorney fees exceeding $100,000.

Unrebutted Allegations Avoids Dismissal under FL Law

In an action brought by a business that alleged it had been defamed on a consumer reporting Web site, unrebutted claims that the Web site operator was involved in creating or developing some of the defamatory Web site posts sufficiently alleged the commission of a tort in Florida under the state's long-arm statute. Whitney Information Network, Inc. v. Xcentric Ventures, LLC, No. 06-11888, 2006 U.S. App. LEXIS 19518 (11th Cir. Aug. 1, 2006) (unpublished). The appeals court concluded that the trial court erred in dismissing for lack of jurisdiction on the grounds that the plaintiff had failed to adequately show that the defendant Web site operators had committed a tortious act within the state. The court ruled that although the defendants submitted declarations denying the allegations of the complaint, those declarations did not adequately rebut the plaintiff's contention that they were involved in the creation or development of some of the offending content and thus they could be liable for defamation notwithstanding the immunity provisions of Section 230 of the Communications Decency Act.

Julian S. Millstein Edward A. Pisacreta Jeffrey D. Neuburger http://www.brownraysman.com/

Pattern of Use, Expressed Preference
for e-Mail Constitute Agreement

A lessee's repeated communications with a landlord by e-mail and her complaint of delay when the landlord communicated by certified letter manifested an intent to do business by e-mail under the Uniform Electronic Transactions Act (UETA). Crestwood Shops, L.L.C. v. Hilkene, WD65694, 2006 Mo. App. LEXIS 1188 (Ct. App. W.D. Aug. 8, 2006). The appeals court upheld the trial court ruling that the lessee's e-mail offer to terminate her lease satisfied the Statute of Frauds requirement of a signed writing. The court rejected the argument that the lessee had agreed to communicate by e-mail but did not agree to transact by e-mail, noting that the lessee had stated her offer to terminate the lease in an e-mail to the landlord in which she stated that she would be available 'by e-mail only.'

Employee Bound By Consent to Arbitration In Online Application

A clickwrap arbitration agreement that was presented to an employee during an online employment-application process is valid and binding. Bell v. Hollywood Entertainment Corp. , No. 87210, 2006 Ohio 3974 (Ct. App. 8th Dist. Aug. 3, 2006). The court noted that the presentation of the arbitration agreement was preceded by the presentation of information regarding arbitration, and that the employee was given sufficient time to read and understand the information presented before she clicked 'yes' to signify her assent to the provision. The court rejected the argument that the agreement was unconscionable, and while conceding that the employee 'may have been young and inexperienced' when she assented to the arbitration agreement, the court concluded that she had the legal capacity to enter into a contract, and that she was free to find other employment rather than agree to be bound by the terms presented in the online-application process.