e-Commerce Docket Sheet

An Internet retailer is not directly or contributorily liable for copyright infringement for the resale of copies of books that were previously sold or given away to consumers by the copyright holder. Clark v. Amazon, 2007 U.S. Dist. LEXIS 34314 (E.D. Cal. May 10, 2007). In granting the defendant's motion for summary judgment, the magistrate found that the resale of books lawfully sold or given away by the copyright holder did not constitute infringement under the 'first sale' doctrine of the Copyright Act, and so then, neither the Internet retailer nor the third-party merchants that offered the plaintiff's book for sale on the Internet retailer's site were liable for copyright infringement.

An online advertiser did not violate a permanent injunction barring it from purchasing or using in commerce the trademark 'Sport Court' when it purchased and 'broad matched' the search-engine keyword court to generate sponsored links. Rhino Sports, Inc. v. Sport Court, Inc., 2007 U.S. Dist. LEXIS 32970 (D. Ariz. May 3, 2007). The court denied the trademark owner's motion to hold the advertiser in contempt of the prior injunction, because the trademark owner had failed to show that the advertiser had used the owner's trademark in a manner that violated the terms of the injunction. The court reviewed the functioning of the search engine 'broad matching' feature, noting that the purchase of the 'court' keyword would cause the defendant's sponsored ads to appear when the term 'sport court' was searched, even though the defendant did not purchase the 'sport court' keyword. The court ruled that with regard to keyword purchasing, the permanent injunction's prohibitions against using or purchasing the owner's trademarked terms was not a bar to the defendant's use of any generic term such as 'court' in search-engine advertising.

An Internet retailer has standing to file a declaratory-judgment action against a patent holder that sent a demand letter clearly enunciating its willingness to litigate against potential infringers. Crutchfield New Media, LLC v. Hill & Assoc., Inc., 2007 U.S. Dist. LEXIS 33264 (S.D. Ind. May 4, 2007). The court denied the patent holder's motion to dismiss for lack of a justiciable controversy. The court found that the contents of the patentee's letter clearly indicated that a 'substantial controversy, between parties having adverse legal interests, of sufficient immediacy' existed to warrant the retailer's declaratory judgment, citing the recent Supreme Court precedent of Medimmune, Inc. v. Genentech, Inc., 127 S.Ct. 764 (2007).

A competitor's purchase of a company's trademark term as a search-engine advertising keyword does not constitute an actionable trademark use under the Lanham Act, where the trademark owner did not allege that the competitor displayed the owner's trademark in any of its sponsored search advertisements. Site Pro-1, Inc. v. Better Metal, LLC, 2007 U.S. Dist. LEXIS 34107 (E.D. N.Y. May 9, 2007). The magistrate judge dismissed the trademark owner's infringement action for failure to state a claim, noting that under Second Circuit precedent, actionable trademark use is not shown unless there is an allegation that defendant 'placed plaintiff's trademark on any goods, displays, containers, or advertisements, or used plaintiff's trademark in any way that indicates source or origin.' The court also found that defendant's placement of the plaintiff's trademark in the meta tags of its Web site, which is not displayed to consumers, is not a use in commerce under the Lanham Act.

An online Internet radio service that allows customers to create artist-specific music streams is a 'non-interactive service' entitled to a compulsory license under the provisions of the Digital Millennium Copyright Act, a jury found. Arista Records, Inc. v. Launch Media, Inc., No. 01 Civ. 4450 (S.D.N.Y. April 27, 2007). The issue was submitted to the jury following the district court's ruling in November 2005 that summary judgment on the issue of interactivity of an online music service was inappropriate due to factual and semantic issues concerning the meaning of the statutory definition of an 'interactive service.' In its prior ruling on the motion for summary judgment, the court noted that the term has yet to be definitively construed by the courts, and concluded that determination 'of where the as yet unwritten line should be drawn' regarding whether a particular level of interactivity met the statutory definition raised genuine issues of material fact that precluded the grant of summary judgment.

A non-commercial parody Web site that used the plaintiff's trademark and founders' names as domain names to direct traffic to the Web site did not violate the Lanham Act because the links on the site were insufficient to satisfy the 'commercial use' requirement of the statute. Utah Lighthouse Ministry, Inc. v. Discovery Computing Inc., No. 2:05-CV-00038, 2007 U.S. Dist. LEXIS 21798 (D. Utah Mar. 26, 2007). In granting the defendants' motion for summary judgment, the court acknowledged that a non-commercial Web site meets the 'commercial use' requirement if it contains a hyperlink to another Web site that is operated for commercial purposes. The court found that the non-commercial parody site had no 'direct' links to any commercial sites, but contained only a hyperlink to another non-commercial Web site, which in turn linked to an online bookstore. The court also rejected the plaintiff's arguments that the international nature of the Internet rendered the use of the domain names commercial, and that the definition in this instance of commercial use was established by hindrance of the plaintiff's ability to offer its services in commerce.

The input of a trademarked term into a Web site's internal search engine, resulting in the search phrase atop listings of a company's products for sale, does not constitute trademark infringement, because it is not a 'use in commerce' under the meaning of the Lanham Act. Hamzik v. Zale Corporation/Delaware, No. 3:06-CV-1300, 2007 U.S. Dist. LEXIS 28981 (N.D. N.Y. Apr. 19, 2007). The court granted the defendant's motion to dismiss the plaintiff's trademark claims based on the defendant's internal Web site search-ad display functionality, but declined to dismiss the plaintiff's claims based on the defendant's purchase of the plaintiff's trademark as keyword terms from various search engines. While the district court expressed its agreement with the rationale of the circuit's prior keyword-advertising decisions that found no 'use' under the Lanham Act, it concluded that there were sufficient allegations at this early stage of the litigation to survive a motion to dismiss.

A late-night cable news program called 'Redeye with Greg Gutfeld' does not likely infringe the trademark of a free daily newspaper called 'the REDEYE,' given the absence of a likelihood of consumer confusion between the two media products. Chicago Tribune Co. v. Fox News Network, LLC, No. 07-0865, 2007 U.S. Dist. LEXIS 25058 (N.D. Ill. Apr. 4, 2007). In denying the plaintiff's request for a preliminary injunction, the court found, among other things, that despite a similarity between the marks, there is no apparent likelihood of confusion because the defendant's logo is continually displayed on its news program, there is little overlap in the content of the parties' media products, and there is no evidence that the newspaper and television program are in direct competition.

A faux movie trailer marketed to theaters for use in encouraging patrons to shut off their cell phones does not infringe the plaintiff's similar copyrighted faux movie trailer, where both trailers share the concept of teaching cell-phone etiquette among audience members, but express that concept by using varying themes and plot elements. Identity Arts v. Best Buy Enterprise Services, No. 3:05-CV-04656 (N.D. Cal. Apr. 18, 2007). In granting the defendant's motion for summary judgment on the copyright claims, the court examined the two competing movie trailers, finding no substantial similarly between the two works, because they told different story plots with different characters, and because the few similar sequences of events (e.g., a ringing cell phone and stock phrases) were too generic and not sufficiently concrete to warrant copyright protection.

A parent who defended against allegations that she was secondarily liable for copyright infringement based on the actions of a daughter who engaged in improper P2P file-sharing is entitled to an award of attorney's fees following a voluntary dismissal of the plaintiffs' claims. Capitol Records, Inc. v. Foster, No. 04-1569, 2007 U.S. Dist. LEXIS 29131 (W.D. Okla. Apr. 23, 2007). In denying the plaintiffs' motion for reconsideration of its prior award of attorney's fees, the court rejected the plaintiffs' argument that such an award was not dictated by the factors delineated in Fogerty v. Fantasy, 510 U.S. 517 (1994), which suggest that attorney's fees be awarded based on 'frivolousness, motivation, [and] objective unreasonableness.' The court stated that the Fogerty factors are not the exclusive test for awarding attorney's fees, and that while the court did not find the plaintiffs' pursuit of secondary copyright claims to be frivolous, it did find that such claims were 'marginal and indisputably untested,' particularly because the plaintiffs could not point to a single case finding secondary liability for copyright infringement under similar circumstances.

The proposed mark 'lawyers.com' is generic and unregisterable as a trademark for a legal-service information-exchange Web site because there is an 'inextricable' link between the services that the trademark applicant sought to identify with the mark (i.e., legal news and legal services) and the nature of the public's understanding of the services that the proposed mark would evoke (i.e., a Web site providing information about lawyers). In Re Reed Elsevier Properties, Inc., No. 2006-1309, 2007 U.S. App. LEXIS 8376 (Fed. Cir. Apr. 12, 2007). The Federal Circuit upheld the Trademark Trial and Appeal Board ruling refusing to register the mark and rejected the applicant's argument that an information exchange about lawyers is discrete from an information exchange about the law and legal news.

A federal district court has specific jurisdiction over a software company located outside the forum, based on representations made as part of a national advertising campaign to induce people to buy virtual land on the videogame Second Life. Bragg v. Linden Research, Inc., 2007 U.S. Dist. LEXIS 39516 (E.D. Pa. May 30, 2007). The court found that while advertising in the national media does not generally subject a defendant to jurisdiction in every state, defendant's representations urging players to buy virtual land constitute part of the alleged deceptive conduct at the heart of the plaintiff's claims. The court also denied the gamemaker's motion to compel arbitration, finding that, under California law, the defendant's arbitration provision was procedurally and substantively unconscionable, because the court considered it a 'contract of adhesion' replete with a variety of one-sided remedies.

(For more on this case, see 'Federal Court Cancels Arbitration Clause in 'Virtual World' Test Case' in this issue.)

Internet Retailer's Resale Does Not
Violate Author's Distribution Right