Posting Entire News Article on Nonprofit
Organization's Blog Constitutes Fair Use The re-posting of an entire news article on the blog of a
nonprofit organization is fair use as a matter of law where the
purpose was to educate the public, a district court ruled. The
court concluded that the nonprofit's use was transformative
from the use of the current copyright holder, a copyright
enforcement firm, a use which the court characterized as
"nothing more than litigation-driven." Thus, the
court said, the defendant's use "does not constitute a
substitution for plaintiff's use." The court also found
that the purpose of the news article was informational and thus the
work entitled to less copyright protection than a "creative
work of entertainment"; that the use of the entire article was
reasonable because the purpose was to educate the public and
because the factual nature of the information made it
"impracticable" to cut the article or edit it down; and
that no market harm was demonstrated by the plaintiff. Righthaven LLC v. Jama and Center for Intercultural Organizing,
Docket No. No. 10-cv-01322 (D. Nev. Apr. 22, 2011) Opinion Editor's Note: Righthaven is a
copyright enforcement firm that has brought hundreds of lawsuits
challenging the online posting of news articles of which it is the
copyright assignee, primarily in the District of Nevada on behalf
of the Las Vegas Review-Journal, and more recently in the District
of Colorado on behalf of the Denver Post. Earlier fair use rulings
in Righthaven litigations are discussed on the Proskauer New Media
and Technology Law
blog. Further information on the Righthaven lawsuits in general
is available at RighthavenLawsuits.com. Notice of Past Infringements on Online Photo Site Does
Not Obligate Operator to Proactively Screen Site An online photo-sharing site does not have a duty to search its
site for material that infringes an artist's works, even if it
has received past notices of infringement of the same works from
the artist, a district court ruled. The court rejected the
artist's argument that her previous takedown notices gave the
site actual or apparent knowledge of other infringements of her
works on the site. The court concluded that imposing such a duty on
the site would impermissibly shift the burden of policying
copyright infringement from rightsholders to the site. In declining
to impose a duty to screen on the site, the court relied on Viacom
International Inc. v. YouTube Inc., 718 F. Supp. 2d 514 (S.D.N.Y.
2010), and UMG Recordings Inc. v. Veoh Networks Inc., 665 F. Supp.
2d 1099 (C.D. Cal. 2009) Wolk v. Kodak Imaging Network Inc. (S.D.N.Y. Mar. 17, 2011) Opinion Mobile Carriers Not Secondarily Liable for Copyright
Infringement on Multimedia Messaging System Mobile carriers are not liable for inducing infringement of
copyright on their multimedia messaging system because they did not
design the system with the object of promoting infringement, nor
did they take any specific, affirmative steps to actively encourage
or induce infringement by users of the system, a district court
ruled in a copyright infringement action brought by a producer of
multimedia messaging content. The court noted that it was
undisputed that the system was capable of substantial lawful and
unlawful uses. The court also found that the mobile carriers were
not vicariously liable for infringement occurring via the system.
The content owner did not allege that the carriers were capable of
monitoring or controlling content transmitted by third parties on
their system, the court found, nor was there any authority for
requiring the to retrofit their system in order to do so. Luvdarts LLC v. AT&T Mobility, LLC, No. 10-05442 (C.D. Cal.
Mar. 17, 2011) Opinion OTHER COPYRIGHT DEVELOPMENTS Cable Operator Ordered to Disclose Subscriber
Information for 1,200 Accounts Providing information on over 1,200 subscribers who are alleged
to have downloaded and distributed unauthorized copies of a motion
picture on a P2P file-sharing network is not an undue burden on an
ISP, a district court ruled, also rejecting arguments that the
order infringed the subscribers' right to anonymous
communication. Call of the Wild Movie v. Does 1-1, No. 10-455; Maverick
Entertainment Group Inc. v. Does 1-4, No. 10-569; Donkeyball Movie
LLC v. Does 1-171, No. 10-1520 (D.D.C. Mar. 22, 2011) Opinion Under New York Long-Arm Statute, Copyright Owner's
Location is Situs of Copyright Harm from Online
Infringement Under N.Y.C.P.L.R. 302(a)(3)(ii), which provides for long-arm
jurisdiction in cases involving out-of-state tortious acts that
cause harm within the State, where unauthorized copies of
copyrighted works are posted on Web sites outside New York, the
situs of the resulting injury is the location of the copyright
owner. Penguin Group (USA) Inc. v. American Buddha, No. 7 (N.Y. Mar.
24, 2011) (responding to a question certified by the U.S. Court of
Appeals for the Second Circuit) Opinion In Four Cases, French Appellate Court Finds Google
Liable for Copyright Infringement of Films Located on Video
Search The rulings were issued on March 21, 2011, by the Paris Court of
Appeal, in Google Inc. v. Bac Films, The Factory; Google Inc. v.
Compagnie des phares et balises; Google Inc. v. Bac Films, The
Factory, Canal+; and Google Inc. v. Les Films de la Croisade,
Goatworks Films. Blog Google Books Settlement Would Usurp Congressional Role
in Revising Copyright Law Judge Chin found that the settlement was not "fair,
adequate and reasonable," as required by the federal rules,
and suggested that it might be able to be approved if it was
changed to an opt-in, rather than an opt-out, settlement. The Authors Guild v. Google, Inc., No. 05-civ-8136 (S.D.N.Y.
Mar. 22, 2011) Opinion U.S. Supreme Court Grants Review of Statute Restoring
Copyright in Public Domain Works The questions presented are whether the Progress Clause of the
United States Constitution prohibits Congress from taking works out
of the public domain, and whether Section 514 of the Uruguay Round
Agreements Act of 1994 violates the First Amendment of the United
States Constitution. Golan v. Holder, No. 10-545 (U.S. cert. granted Mar. 24, 2011)
Questions Presented Infringement and Circumvention of Massively Multiplayer
Online Video Game Yield $300,000 Damages Award The court entered a default judgment for statutory damages for
trademark and copyright infringement and circumvention of
technological measures resulting from the distribution of
unauthorized copies of the plaintiff's videogame. Evony v. Holland, 2011 U.S. Dist. LEXIS 34700 (W.D. Pa. Mar. 31,
2011) Opinion CONTRACTS Under Arkansas Law, Insurance Law Writing Requirement
Satisfied by Online Transaction A requirement in the Arkansas law that a rejection of medical
benefits in an automobile insurance policy be in writing is
satisfied by an electronic form completed online, the Arkansas
Supreme Court ruled. The court noted that the Arkansas enactment of
the Uniform Electronic Transaction Act, Ark. Code Ann. §§
25-32-101 to -120, provides that where "a law requires a
record to be in writing, an electronic record satisfies the
law." This provision, the court found, "could not be more
straightforward," and could be "read harmoniously"
with the requirement in the insurance law that a rejection of
certain benefits must be in writing. Barwick v. Government Employees Insurance Co., 2011 Ark. 128;
2011 Ark. LEXIS 111 (Ark., Mar. 31, 2011) Opinion DEFAMATION AND ONLINE SPEECH CDA Section 230 Protects Online Business Review Site
from Liability for Refusing to Remove Negative Reviews Section 230 of the Communications Decency Act protects the
provider of an online business review site from liability for
refusing to remove negative reviews, a district court ruled. The
court stated that if the provider has taken no part in the creation
of the reviews, "it is irrelevant for purposes of Section
230(c)(1) how incendiary or blatantly harassing that content may
be, whether the provider has knowledge of the complained-of
content, or whether it has a 'general monitoring policy'
for such content." The court also ruled, however, that Section
230 does not extend to liability for the provider's own acts,
including allegations that the provider removed positive reviews in
order to coerce businesses to purchase advertising. While Section
230 shields service providers from liability for the removal of
offensive materials, that liability is conditioned on the
provider's "good faith." The court rejected the
claims based upon alleged coercion, however, finding the business
plaintiffs' allegations factually insufficient. Levitt v. Yelp! Inc., No. 3:10-cv-01321-MHP (N.D. Cal. Mar. 22,
2011) Opinion No CDA 230 Protection for Online Booksellers for
Internet Sale of Book While online booksellers are immune under Section 230 of the
Communications Decency Act for defamation claims arising out of
promotional material supplied by third parties and posted on the
booksellers' sites, Section 230 does not extend to defamation
claims arising out of the books themselves, a district court ruled.
The court rejected the online booksellers' argument that
Section 230 immunity applies to the online sale of books because
the transaction takes place on the Internet. The court reasoned
that a claim for liability for the sale of a book does not treat
the bookseller "as the publisher or speaker" of
third-party information within the meaning of Section 230.
Nevertheless, the court concluded that the booksellers were not
liable in the instant case, because the plaintiff failed to show
that the booksellers had the necessary actual knowledge and
reckless disregard for the truth that is constitutionally required
to impose defamation liability on a distributor with respect to a
"public figure." Parisi v. Sinclair, 2011 U.S. Dist. LEXIS 34710 (D.D.C. Mar. 31,
2011) Opinion OTHER DEVELOPMENTS IN DEFAMATION AND ONLINE
SPEECH CDA 230 Protects Blog Owner from Liability for
Third-Party Comment The court ruled the owner of a blog is not liable for an alleged
defamatory comment even if the owner viewed and approved the
comment prior to publication on the blog. Kruska v. Perverted Justice Found., 2011 U.S. Dist. LEXIS 36832
(D. Ariz. Apr. 4, 2011) Opinion Italian Court Says Google Can Be Held Liable for Failing
to Filter Libelous Search Suggestions The attorney for a plaintiff in a defamation action brought
against Google in Italy reported on his blog that a court in Milan
ruled on March 31 that the search engine provider has an obligation
to filter out libelous "search suggestions" that appeared
when the plaintiff's name was entered as a search term. COMPUTER FRAUD AND ABUSE ACT Cost of Credit Monitoring for Victims of Data Security
Breach Constitutes Loss under CFAA The cost of providing credit monitoring for employees whose
personal information was accessed as a result of unauthorized
access by an inmate to a prison computer network constitutes a
"loss" under the Computer Fraud and Abuse Act, the United
States Court of Appeals for the First Circuit ruled. The court held
that the district court properly included the cost of the credit
monitoring in an order of restitution entered following the
inmate's plea of guilty to 18 U.S.C. § 1030(a)(5)(B)(i),
causing "loss" as a result of unauthorized computer
network access. The court noted that "loss" is defined in
the statute as "'any reasonable cost to any victim,
including the cost of responding to an offense in addition to the
cost of damage assessment, restoration of the damaged system and
consequential damage like lost revenue." The court concluded
that the cost of a credit check for affected employees was a
reasonable cost of responding to the security breach. United States v. Janosko, No. 10-1046 (1st Cir. Apr. 12, 2011)
(Opinion by Associate Justice David Souter, sitting by
designation) Opinion Employee Violation of Employer Computer Use Policy Can
Support CFAA Criminal Charge An employee's violation of an employer's computer use
policy can support a criminal charge of exceeding authorized access
under the Computer Fraud and Abuse Act, a district court ruled. The
appeals court reinstated charges under 18 U.S.C. §
1030(a)(4) that a former employee and his co-conspirators
"knowingly and with intent to
defraud," exceeded their authorized access to the
employer's computer network when they copied the
employer's proprietary information for the benefit of another
enterprise. The court noted that the employees were subject to a
computer use policy that imposed "clear and conspicuous
restrictions" on both the employees' access to the
computer network, that they had "fair warning that they
were subjecting themselves to criminal liability." The court
further commented that "as long as the employee has knowledge
of the employer's limitations on that authorization, the
employee "exceeds authorized access" when the employee
violates those limitations. It is as simple as that." United States v. Nosal, No. 10-10038 (9th Cir. Apr. 29,
2011) Opinion Editor's Note: The ruling is
discussed further on the Proskauer New Media and Technology Law blog. PRIVACY AND DATA SECURITY Bills to Regulate Consumer Privacy Introduced in U.S.
House and Senate Several bills aimed at regulating the collection and use of
consumer personal information was introduced in Congress in
April. Senators John Kerry and John McCain are co-sponsors of the
Commercial Privacy Bill of Rights Act of 2011. Among other things,
the Act would require collectors of information on individuals to
provide clear notice of their collection practices and the purpose
for such collection. Individuals would be provided the right to opt
out of certain information collection, and affirmative opt-in would
be required for information defined as "sensitive." The
bill would require notice to an individual of his or her ability to
opt out of the collection of information for the purpose of
transferring it to third parties for behavioral advertising. It
also would require collectors to provide individuals either the
ability to access and correct their information, or to request
cessation of its use and distribution. S. 799 (112th Cong. 1st Sess. Apr. 12, 2011) Bill Summary and Status File Representative Cliff Stearns introduced the Consumer Privacy
Protection Act. The Act contains provisions, among others,
requiring covered entities to establish and make easily available a
privacy policy with respect to collection, sale and disclosure of
consumer information, and to notify consumers of any material
change in such policy. It also would require notification to
consumers that their information may be shared by third parties for
a purpose unrelated to a transaction, and permit them to opt out of
certain sharing of that information. The bill provides no private
right of action and preempts certain state laws. H.R. 1528 (112th Cong., 1st Sess. Apr. 13, 2011) Bill Summary and Status File Broker and Compliance Officer Personally Fined by SEC
for Customer Privacy Violations The Securities and Exchange Commission imposed fines of $20,000
each against the former president of a broker-dealer and a former
broker for their actions in transferring customer information to a
new firm as the defunct firm wound down. The SEC also fined the
brokerage firm's former chief compliance officer $15,000 for
compliance failures and security breaches that took place at the
defunct firm, some dating back to 2005. The SEC charged that the
president of the firm authorized a departing broker to copy
information from more than 16,000 accounts to a portable drive for
transfer to the new firm, without providing prior notice to the
customers and an opportunity to opt out. The SEC also noted
numerous lapses in security at the defunct firm, including the
theft of laptop computers and unlawful access to its e-mail system
by a former employee using stolen passwords. The SEC charged that
the compliance officer took no action to revise or supplement the
firm's policies and procedures following these breaches. In re Mark A. Ellis, In re Frederick O. Kraus, In re David C.
Levine (SEC Apr. 7, 2011) Press Release Editor's Note: Further discussion
of the SEC enforcement action is available in this Proskauer Client Alert. FTC Says 10-Day Limit on Online Ad Company's Cookie
Opt-Out is Deceptive, Requires Five-Year Effectiveness for
Opt-Out The Federal Trade Commission settled charges of deceptive
practices with an online advertising company that gave consumers
the opportunity to opt out of its tracking cookies, but limited the
opt-out period to ten days. According to the FTC, the ad company
stated in its privacy policy that it allowed consumers to opt out
of its consumer tracking activities on the Internet, but did not
stated that the opt-out was effective for only ten days. After the
ten-day period, the company began to drop cookies on the computers
of consumers who visited the Web sites of its advertising partners.
The settlement with the ad company requires it to provide consumers
with the ability to opt out of its targeted advertising for a
period of at least five years. The company also must destroy all
identifiable user information collected as a result of the
deceptive opt-out, and alert consumers who previously opted out to
opt out again. In the Matter of Chitika, Inc., FTC File No. 1023087 (Mar. 14,
2011) Press Release FTC Consumer Privacy Settlement over Google Buzz
Includes EU Safe Harbor Violations The Federal Trade Commission settled deceptive practices charges
against Google relating to the rollout of the Google Buzz social
network in 2010, including charges that Google violated the
substantive requirements of the EU -U.S. Safe Harbor agreement. The
FTC charged that the procedures for allowing users of the Google
Gmail service to opt out of Buzz were confusing, difficult to find,
and ineffective. Additionally, the FTC charged that requiring users
to opt out of the network rather than opt in violated statements in
its previously posted privacy policy. The consent agreement bars
Google from misrepresenting the privacy or confidentiality of
users' personal information or misrepresenting compliance with
the EU-U.S. Safe Harbor requirements or other privacy or security
programs. Google also must obtain user consent prior to sharing
information with third parties in a way contrary to previously
posted privacy promises. Finally, the settlement further requires
Google to establish and maintain a comprehensive privacy program,
and it requires that for the next 20 years the company have
biannual audits conducted by independent third parties to assess
its privacy and data protection practices. In re Google, Inc., FTC File No. 102 3136 (Mar. 30, 2011) Press Release Editor's Note: Further discussion
of the FTC settlement with Google is available on the Proskauer Privacy Law blog. Decreased Value of Consumer Personal Information
Resulting from Security Breach Confers Standing in Personal Injury
Suit A plaintiff whose personal data was contained in a social
network service online database copied by a hacker sufficiently
alleged an injury-in-fact to support Article III standing, on the
theory that the value of his personal information was diminished as
a result of the breach, a district court ruled. The plaintiff
alleged that the security breach was enabled by the defendant's
storage of user passwords in unencrypted, "plain text"
form, and its failure to secure the database where the passwords
were stored against well-known security vulnerabilities. The court
acknowledged that the plaintiff's claim was novel, and
questioned his ability to prove his damages theory, but declined to
dismiss the action, citing "a paucity of controlling authority
regarding the legal sufficiency of plaintiff's damages
theory," and the unsettled state of the law generally
regarding the unauthorized disclosure of personal information via
the Internet. Despite having held that the plaintiff alleged
sufficient facts to establish Article III standing, the court
dismissed several of the plaintiff's substantive claims for
failure to plead the particularized elements of injury, including
those under the California unfair competition law and the
California Penal Code. Claridge v. Rockyou Inc. (N.D. Cal. Apr. 11, 2011) Opinion Other Privacy Developments FTC Finalizes Settlement with Twitter for Failure to
Safeguard Consumer Personal Information The charges arose out of lapses in the security of the social
networking site's administrative accounts, which enabled
hackers to gain access to both administrative and customer
accounts. In re Twitter, Inc., FTC File No. 092 3093 (Mar. 11, 2011) Press Release No Implied Consent under SCA to Discovery of E-Mails
Arises from E-Mail Account Holder's Fugitive
Status A parent who is alleged to have unlawfully taken her children to
a foreign county did not thereby consent, within the meaning of the
Stored Communications Act, to the disclosure of her e-mails
pursuant to a civil discovery subpoena directed to her ISP, the
district court ruled. Bower v. Bower, No. 10-405 (D. Mass. Apr. 5, 2011) Opinion No Fourth Amendment Violation in Transfer of Laptop
Seized at Border for Forensic Examination The transfer of a laptop seized at a border crossing to a
facility 170 miles away for forensic examination was justified
under the border search doctrine, the U.S. Court of Appeals for the
Ninth Circuit ruled. United States v. Cotterman, No. 09-10139 (9th Cir. Mar. 30,
2011) Opinion Wiretapping in Child Custody Dispute Results in Civil
Damage Award under Federal Wiretap Act A spouse involved in a child custody dispute and her parents
were assessed civil damages under the federal Wiretap Act in
connection with the recording of conversations via a device hidden
in a child's toy. Lewton v. Divingnzzo (D. Neb. Feb. 18, 2011) Opinion ELECTRONIC MARKETING Federal CAN-SPAM Act Preempts Claim under Illinois
Anti-Spam Law That E-Mail Utilizing Tracking Technology Was
Misleading A claim under the Illinois anti-spam law that the heading on a
promotional e-mail was misleading because it failed to warn the
recipient that the e-mail sender utilized tracking technology is
preempted by the federal CAN-SPAM Act, a district court ruled. The
plaintiff alleged that the heading was misleading because, if he
had been warned that opening the e-mail would "provide private
information" to the e-mail sender, he would not have opened
it. The court noted that the CAN-SPAM Act preempts state anti-spam
laws, except those that prohibit "falsity or deception"
in any portion of a commercial e-mail. The court found that the
plaintiff's claim was essentially one for
"incomplete" or "less than comprehensive
information" in the subject line, a claim that other courts
have ruled is not based in "traditional tort theories"
and thus is not one for "falsity or deception" within the
meaning of the CAN-SPAM Act. Martin v. CCH Inc., No. 10-3494 (N.D. Ill. Mar. 24, 2011) Opinion CAN-SPAM Act May Be Applicable to Facebook
Messages The CAN-SPAM Act may apply to communications intended to drive
users of the Facebook social network to "pages" that
redirect the users to an advertiser's external Web site and
also encourage them to send additional messages to other users, a
district court ruled. The court refused to grant a motion to
dismiss brought by an advertising and marketing company whose
affiliates were alleged to have been responsible for unsolicited
marketing communications directed to a user's wall, news feed,
home page or inbox on the in-network message system. The court
rejected the argument that the Act's definition of an
"electronic mail message" includes only e-mail, finding
that the plaintiffs had sufficiently pleaded that social network
communications fall within the Act's definition because they
are "sent to a unique electronic mail address," and
because they required "some routing activity" on the part
of the Facebook communications system. Facebook Inc. v. MaxBounty Inc., No. 10-4712 (N.D. Cal. Mar. 28,
2011) Opinion Advertiser Settles Deceptive Advertising Charges
Stemming from Undisclosed Payments for Online Reviews An advertiser that paid affiliates to post favorable reviews of
its product in online articles, blog posts and other online
editorial material without disclosing the arrangement agreed to pay
a $250,000 fine to settle deceptive advertising charges brought by
the Federal Trade Commission. The advertiser also agreed to monitor
its affiliate marketers and make sure that they are not
misrepresenting themselves as ordinary consumers or independent
reviewers. The FTC complaint alleged that the failure to disclose
the arrangement violated the agency's revised Guides Concerning
the Use of Endorsements and Testimonials in Advertising. In re Legacy Learning Systems, Inc., FTC File No. 102 3055 (Mar.
15, 2011) Press Release TRADEMARKS AND DOMAIN NAMES Employer May Have Violated Lanham Act, State Right of
Publicity, in Impersonation of Employee on Social
Media An employer that is alleged to have posted messages
impersonating an employee on her personal Facebook and Twitter
pages while she was recuperating from an accident may be liable
under the Lanham Act for false endorsement and under the Illinois
right of publicity, a district court ruled. The employee alleged
that while she was absent due to an injury, the employer authored
posts and tweets promoting the employer's business that
contained the employee's name and likeness and posted them to
her personal accounts. The court ruled that the employee had
sufficiently alleged, for purposes of a motion to dismiss the
Lanham Act claim of false endorsement, that she had sustained a
commercial injury based upon the employer's use of her name and
likeness. The court also ruled that she had pleaded a continuing
violation of her state right of publicity, on which the statute of
limitations had not run when she filed her complaint. Maremont v. Susan Fredman Design Group , N.D. Ill., No. 10-7811
(Mar. 15, 2011) Opinion In Keyword Advertising Dispute, Ninth Circuit Says
Trademark Infringement Requires More Than Initial Interest
Confusion Courts must be flexible in applying the law in the Internet
context, the U.S. Court of Appeals for the Ninth Circuit emphasized
in a dispute involving the use of trademark terms in keyword
advertising. The appeals court extensively examined its prior
rulings concerning trademark infringement in the Internet context,
and concluded that the district court had incorrectly applied those
rulings in issuing a preliminary injunction barring the
defendant's use of the plaintiff's trademark terms in
keyword advertising. In particular, the appeals court found that
the district court had incorrectly applied the ruling in Brookfield
Communications, Inc. v. West Coast Entertainment Corp. (9th Cir.
1999), in which the appeals court found that the use of a trademark
term in a domain name resulted in actionable "initial interest
confusion." The court remanded the case for reconsideration,
finding that the most relevant factors for determining consumer
confusion, given the nature of the alleged infringement in the
case, are "(1) the strength of the mark; (2) the evidence of
actual confusion; (3) the type of goods and degree of care likely
to be exercised by the purchaser; and (4) the labeling and
appearance of the advertisements and the surrounding context on the
screen displaying the results page." Network Automation, Inc. v. Advanced System Concepts, Inc.,
10-55840 (9th Cir. March 8, 2011) Opinion Other Trademark and Domain Name
Developments ICANN Approves .XXX Domain for Adult Content, Signs
Agreement with Registrar Domain names in the newly approved gTLD are expected to go on
sale in November.ICANN Press Release The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.