No Infringement for Cussler Bros., Adventure Novelists

Ka-Pow! The District Court in Hawaii ruled recently that the adventure novel Treasure of Khan by Clive Cussler and Dirk Cussler (the nineteenth Cussler yarn to feature the character Dirk Pitt) did not infringe plaintiff’s novel, Gold of Khan, about Marco Polo's lost treasure. (Doody v. Penguin Group (USA) Inc., D. Haw., No. 08-cv-00285-JMS-BMK, 11/23/09.)

Specifically, the court found that there was no substantial similarity between the protectable elements plaintiff’s work those the Cussler novels. From a plaintiff’s perspective, this amounts to a superhero body slam.

As an aside, you will recall that copyright protection does not extend to ideas or facts. 17 U.S.C. Section 102(b). It does, however, protect the original expression of ideas or facts. Also, mere themes and bare plots are not protected. Midas Productions, Inc. v. Baer, 437 F. Supp. 1388, 1390 (C.D. Cal. 1977). There is also agreement among the circuit courts of appeal that a stereotyped characters are not protected by copyright; a character must be sufficiently fleshed out to constitute more than an idea, or more than a stock character. Walt Disney Productions v. Air Pirates, 581 F.2d 751 (9th Cir. 1978); Miller v. Universal City Studios, 650 F. 2d 1365 (5th Cir. 1981); but see the widely criticized, Ninth Circuit “fleshing out” and “story being told” tests in e.g. Metro-Goldwyn-Meyer, Inc. v. American Honda Motor Co., Inc., 900 F. Supp., 1287, 1296 (C.D. Cal 1995 (James Bond character protected because a James Bond story without 007 is not a Bond story).

Ok, back to our regularly scheduled programming: The Court in Doody also rejected the plaintiff’s argument that the Court’s similarity analysis should be based on a comparison of the plaintiff's work with the defendants’ books as a whole. The Court said that “[t]o accept Plaintiff's proposition would mean that ‘hardly any drama since the Garden of Eden could survive the charge of plagiarism.” (Quoting Rose v. Connelly, 38 F. Supp. 54 (S.D.N.Y. 1941).


Jonathan Pink practices in the areas of intellectual property and commercial litigation at Bryan Cave, LLP. He is resident in the firm's Los Angeles and Irvine offices, and is Co-Chair of the firm's Internet and New Media Team. He can be reached at 949-223-7173.

Google et Les Françaises -- Hardly a French Kiss

Google et Les Françaises . . . So let’s see, the Can-Can began-gan in Paris. But now, Google has come to find that Can’t-Can’t has originated there as well.

A Paris court has ordered Google to cease its scanning and subsequent distributing of French books online. The court awarded the plaintiffs roughly $400,000 (US) in damages, and ordered Google to pay about $14K per day that the material remains on the web. The plaintiffs had sought about $26 million in damages.

You will recall that Google has made a global push to digitize books – becoming, in a sense, the Digital Alexandria – and has received quite a bit of flack/resistance and legal bills for its efforts. In the U.S., Google reached a proposed settlement with class plaintiffs over a similar issue, and the Court just recently approved of that proposal. Notably, it excludes foreign works published after January 5, 2009, provided such works had been registered with the U.S. Copyright Office by that date, or had been published in Canada, the United Kingdom or Australia by then.



Jonathan Pink is a commercial litigator with a specialty in high-stakes trademark, trade dress, copyright, patent and trade secret disputes. He also has extensive experience litigating claims for breach of contract, fraud, unfair practices, trade libel and a broad spectrum of intellectual property matters in state and federal courts across the nation. He is resident in Bryan Cave's Irvine (Orange County) and Los Angeles offices, and is Co-Chair of the firm’s Internet and New Media Team. He can be reached at jonathan.pink@bryancave.com.

Storm Troopers, Copyright Infringement and a Bit of Clever Luck

Some months ago I wrote about a case I was handling involving an Italian company accused of infringing a U.S. copyright. The infringement alleged against my client occurred in Italy. According, my defense was that the U.S. courts had no jurisdiction over the claim because -- well, see earlier post ("An Italian Fling") for that analysis. The bottom line is they don't, and as a result, the plaintiff's million dollar claim became the parties' several thousand dollar, nuisance-value settlement.

This post deals with the flip side of that issue. Here, Lucasfilm Ltd. prevailed in a U.S. court against British national, Andrew Ainsworth, ruling that Mr. Ainsworth (one of the costume makers who made the storm trooper helmets used in its Star Wars films -- can you say "cool!"), replicated those helmets and sold them over the Internet to customers in the U.S. Mr. Ainsworth is nothing if not industrious -- and creative, and apparently rather clever.

Lucasfilm sued for the U.S. Based copyright infringement, and Mr. Ainsworth largely ignored them. The court entered a default judgment entered against him, and Mr. Ainsworth (ok, I'm imagining here) yawned. After all, Mr. Ainsworth lives in England and the judgment against him was way over here on the other side of the pond.

So back to my "flip side" comment. If a U.S. court does not have jurisdiction over foreign infringement (and again, remember the court here tagged Ainsworth for U.S. based infringement), does its domestic rulings have an international reach? As Lucasfilm discovered, apparently not.

Lucasfilm tried to enforce its U.S. judgment against Ainsworth in England, and the court there said "I should say not!" (or upper crust words to that effect). Now, a second British court has sided with the first, ruling that Mr. Ainsworth is safe from a U.S. default judgment entered against him. (Lucasfilm Ltd. & Ors v. Ainsworth & Anor, case number [2009] EWCA Civ 1328, in London's High Court of Justice, Court of Appeal (Civil Division).)

Hence my comment that Mr. Ainsworth is industrious, creative, and cleaver. Now, if this result was based on dumb luck rather than a calculated risk, I suppose we could substitute the adjective lucky.

In fairness, while Ainsworth's sales ran afoul of U.S. copyright law, they are legal under British laws. Under U.K. law, the storm trooper helmets are not entitled to the protections afforded works of art, because their purpose was primarily utilitarian. Moreover, the British court ruled that Ainsworth's online sales to U.S. customers do not place him under U.S. jurisdiction.

So for now, the Force is with Mr. Ainsworth. Lucasfilm may appeal to the U.K. Supreme Court, but doing so may carry as much probability of success as trying to destroy the the Deathstar with a bunch of X-Wing Fighters.



Jonathan Pink is a business litigation attorney with a specialty in intellectual property. He handles high stakes copyright, trademark and patent litigation for clients world wide. He is resident in Bryan Cave's Irvine (Orange County) and Los Angeles offices. He can be reached at 949-223-7173 or at jonathan.pink@bryancave.com.

And People Wonder Why Most Patents Don't Make Any Money

As we close out the year, it’s fun to take a look back. In the work of intellectual property, that always makes for some quality amusement. Let’s look, for example, at just a few of the patents that issued this year:

Pat. No. 7,533,832 -- Leg-mounted scent dispenser
Pat. No. D589070 -- Bacon comb
Pat. No. 7,537,453 -- Life-sized furniture kit
Pat. No. 7,497,606 -- Functional shoe
Pat. No. D585,182 -- Removable underwear
Pat. No. D596,839 Striped socks
Pat. No. 7,594,814 -- Prayer-reminder device
Pat. No. 7,510,225 -- Combined manure fork and fan-type shavings blower
Pat. No. D593,731 -- Visor with hair
Pat. No. D589,252 -- Combined towel and handbag
Pat. No. 7,607,664 -- Marriage and divorce game
Pat. No. D596,237 -- Human-shaped toilet stationery organizer
Pat. No. 7,594,878 -- Whole-body vibrator
Pat. No. 7,591,811 -- Diaper with legs
Pat. No. 7,494,681 -- Food products comprising fat and salt
And last (but certainly not least) Pat. No. 7,597,727 -- Method for starting a fire.

Now for 2010? Let the infringement suits begin!

Jonathan Pink is a commercial litigator specializing in high stakes copyright, trademark, patent and business-related disputes. He is Co-Chair of the Internet and New Media Team at Bryan Cave, LLP, where he is resident in the Irvine (Orange County) and Los Angeles offices. He can be reached at 949-223-7173 or at jonathan.pink@bryancave.com.

SixthSense Technology -- The Future is Now

Many of you heard Nambi Seshadri, VP&CTO of the Mobile and Wireless Group at Broadcom Corporation, discuss the future of wireless technology at our last BC Edge.

Now you can see that future, and much more by following this link to Pranav Mistry's presentation about SixthSense technology: http://www.ted.com/talks/pranav_mistry_the_thrilling_potential_of_sixthsense_technology.html.

For those who haven’t yet heard of SixthSense technology, here’s the low down:

Pranav Mistry (a PhD candidate at the MIT Media Lab and perhaps one of the greatest inventor of our day), has developed a wearable, interactive computing system that is completely detached from what we currently think of as a wireless device.

Forget making a phone call on your IPhone or Blackberry, the time is near where we will dial instead on the palm of our hands. Sound amazing? That’s only the beginning. Imagine taking a photo with no visible camera, by simply holding up your hands as a director might frame a shot for a film, or holding up your airline boarding pass and having it tell you whether your plane is delayed. Again, follow the link to see what I’m talking about.

Pranav Mistry’s device creates a digitial bridge between the real world and the virtual world using little more than a webcam, a battery-powered projector, an internet-enabled mobile phone and some amazing software that only big brains can develop (and the beta version of which is said to have cost less than $350).

And the final kicker? Mistry says he intends to make the software necessary to run this SixthSense technology open source. Follow the link. The future is waiting.



Jonathan Pink is Co-Chair of the Internet and New Media Team at Bryan Cave, LLP. He is resident in the firm's Irvine, California and Los Angeles offices, and can be reached at 949-223-7173. His practice includes commercial litigation with a specialty in intellectual property issues.

Who Owns Works Created by University Professors?

An issue came up recently that is worth discussing. The question posed is: Does a university professor own the copyright in the materials he or she creates in the scope of his or her professorial employment?

I would answer the question as “yes,” at least under the Copyright Act. Interestingly, many educators with whom I’ve spoken seem to think that the answer is categorically “No!.”

Now I haven’t spoken to scores of professors about this, but I have spoken to a few. Here is an example of one who gave me permission to share our conversation on this blog.

Howard Suber is a professor in the School of Film and Television (at least that’s what it was called when I attended) at UCLA. He is one of UCLA’s finest educators, and like many of his colleagues, he writes extensively both in connection with classroom activities and otherwise. His take on this issue was:

“I thought it was settled law, established decades ago in cases, that the intellectual property a professor produces is his/her own and does not belong to the university, absent signed documentation to the contrary. [¶] The patent and I.P. department at UCLA and elsewhere routinely try to get researchers in the sciences, engineering, etc. to sign such stipulations. But I’m not aware of any in the arts and humanities, have never been asked to sign such a document in my 45 years at UCLA.”

I’ll come back to UCLA’s policy – and Professor Suber’s belief in a moment. First, let me lay the foundation for my view of the world.

Let’s start with the work for hire doctrine. Under that doctrine (17 U.S.C. Section 201(b)) a "work for hire" is the property of the employer of the creator of the work, not of the creator provided the work was "prepared by an employee within the scope of his or her employment." (See also 17 U.S.C. Section 100.) There is no express statutory (or binding case law) exception for educators. Rather, you have to conduct a factual analysis to determine whether the work was created with the scope of employment. See principally Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989) (the seminal “work for hire” case that set forth a muti-factor test to determine if the work-for-hire doctrine applied); Restatement (Second) of Agency (setting forth the following factors, all of which must be shown to establish that the employee was acting within the scope of her employment: (1) whether the work is of the type that the employee is employed to perform; (2) whether the work occurs substantially within authorized work hours; and (3) whether its purpose, at least in part, is to serve the employer).

Under the multi-factor test in Reid, the court will look to, among other things, whether the "hired party" is an employee of the "hiring party"; whether the hiring party has the right to control the manner and means by which the hired party creates the product at issue (here it would seem to be the teaching materials); whether the hired party uses his or her own equipment, tools, etc. and where he or she creates the work. The court will also look at the hired party’s discretion over when and how long to work; whether the work is part of the regular business of the hiring party; and the provision of employee benefits to (and the tax treatment of) the hired party. Notably, the Court in Reid said that no one factor was determinative.

Under the holding in Reid, it would seem to me that where one is employed expressly for teaching purposes, a professor’s teaching activities would fall under the work for hire doctrine. While professors certainly have a good deal of autonomy, they still receive a pay check for teaching (from which the university will withhold taxes), and likely receive employee benefits such as insurance, retirement plans, etc. I don’t know whether universities assign the classes to be taught in all instances, I assume not, but it may impose some requirements with respect to this that would arguably fall under the scope of Reid. When you look at all those factors, and consider as well the rules regarding Agency that I set forth above, it is hard for me to believe that a court would find that faculty-created teaching materials are not prepared within the scope of the professor’s employment.

By the way, I also think that there is also a good argument that outside scholarly works could be likewise considered a work for hire, but I think the argument there is not as robust.

Now, turning back to the seemingly-prevailing view of this issue in world of academia. You’ll recall that I mentioned UCLA’s policy on the matter. According to one administrator there, “The answers are quite clear at UCLA . . . .” And those answers are set forth in the following links: http://www.universityofcalifornia.edu/copyright/systemwide/pcoiv.html; http://www.ucop.edu/ucophome/coordrev/policy/8-19-92att.html; and http://www.ucop.edu/ott/faculty/crworks.html.

Reading these through, you will notice that the UCs give ownership much as does the Copyright Act (and as does the ruling in Reid). That is, the professor is given ownership of his or her “scholarly/aesthetic work,” defined as work that is originated by the professor “resulting from independent academic effort” unless such works are “sponsored works or contracted facilities works [meaning works that originated with the use of University controlled buildings, equipment, computer centers, certain laboratories and other facilities, but excluding University libraries]. . . .” Professors are also given the copyright in their “personal works” which are defined as “work that is prepared outside the course and scope of University employment (except for permissible non-University consulting activities) without the use of University Resources.” In other words, if the work is “independent” or outside the course and scope of the professor’s employment, the copyright in the work usually will belong to the professor. To the extent this is more generous than the Act itself provides, keep in mind that it contractually given to the professor and not given as a matter of law.

Now according to Professor Suber:

“I’m sure you’d find that virtually every major university in the country makes similar statements [to that which is on the American Association of University Professors’ website: http://www.aaup.org/AAUP/protect/legal/topics/copy.htm . I don’t know of any university that has tried to claim copyright in a professor’s lectures or scholarly writing unless, as the UCLA statement says, the work was specifically commissioned for a narrow purpose and the professor signed an employee-for-hire contract. . . . [i]f your hypothetical were ever translated into practice, the professoriate of every university in the country would be in arms. It hasn’t happened because, as far as I’m aware, no university of any repute would dare assert ownership.”

I’ll just note that the AAUP site does include several references to case law on this topic, but most of them go against the professor and I do not believe that those which don’t are binding copyright precedent.

So, all this to say: check with the school’s technology transfer policy before assuming who owns – or doesn’t own – the copyright in work created by a professor. Absent a generous grant to the professor in that document, the “work for hire” doctrine should apply.


Jonathan Pink is a commercial litigator specializing in high stakes copyright, trademark, patent and business-related disputes. He is resident in the Irvine (Orange County) and Los Angeles offices of Bryan Cave, LLP. He can be reached at 949-223-7173.

Twitter Jitters

Here is some information to pass on to clients or incorporate into your drafting of iron-clad agreements.

Turns out that an ever-increasing number of entertainment deals now include contract language that is expressly intended to curb the use of social media by the other contracting party. According to an article in today's Hollywood Reporter, the goal of this language is to plug "leaks of disparaging or confidential information about productions via the likes of Twitter, Facebook and YouTube."

According to the article, Disney has used such a clause to forbid confidentiality breaches on Facebook, Twitter, and "any other interactive social network or personal blog," and DreamWorks has one that prohibits the making of any statement via "a social networking site, blog or other Internet-type site" prior to the studio's own public release of the information. Another studio agreement is broadly drafted to prohibit commentary on "all platforms, including voicemails, blogs, Internet sites, chat or news rooms, podcasts or any online forum," and at least one talent deal referenced in the article contains a nondisparagement provision prohibiting the actor from "bashing any element of a production with social media."

This once again highlights the potential for both positive and damaging information (truthful or otherwise) being disseminated via social media. It also points out the potential hazard this new avenue of expression poses for our clients, and suggests some steps we may take to protect them. In short, while the Internet has given a voice to millions, it has also given them an audience.

Eliminating the traditional "gate keepers" to the public dissemination of information can be great or it can be problematic. As lawyers working in the Internet space, we need to be aware of this, and find ways to shield our clients from the potential dangers. Because of this, we should consider following the lead of the networks and studios by drafting Internet/social media-specific confidentiality clauses in all appropriate agreements. (NDAs, employment agreements, IP licenses and settlement agreements come immediately to mind). If you're thinking, "doesn't the confidentiality clause I currently use already cover this?", the answer is "maybe." But as those who litigate contracts know, sometimes having the additional, highly specific provision is better. California has a statute that says the specific controls over the general, and I suspect other states have something similar. So if we want to expressly prohibit or limit specific conduct -- such as the on line bad-mouthing of our clients -- it is better to take the lawyerly "belt and suspenders" approach.

Which reminds me: I once saw a man who was actually wearing a belt and suspenders. I don't think he was a lawyer, but maybe he should have been.


Jonathan Pink is a commercial litigator with a specialty in high-stakes trademark, trade dress, copyright, patent and trade secret disputes. His clients include companies in industries ranging from media to manufacturing, software to soft drinks. He has successfully represented many of the biggest names in the automotive and motorcycle aftermarket parts industries (including B&M Racing & Performance Products, Hurst Shifters, McLeod Clutches, and Baron Custom Accessories), and has extensive experience litigating claims for breach of contract, fraud, unfair practices, trade libel and a broad spectrum of intellectual property matters in state and federal courts, and before the United States Trademark Trial and Appeal Board. He is resident in Bryan Cave's Irvine (Orange County) and Los Angeles offices.

Still More on Punternet

A bit of a further update on this:

Many of you know Eric Goldman, and if you don't, you should. He is an Associate Professor at Santa Clara University School and Director of the High Tech Law Institute there -- he is also, for my money, one of the foremost U.S. authorities on issues involving Cyberlaw. (His blog can be found at http://blog.ericgoldman.org/ and is well worth following.)

In any event, with respect to my comments regarding Punternet's response to recent calls (from the British government) for its demise, Eric wrote: "I looked at the Punternet site this weekend. On it, the operator makes clear that he is a Brit residing in CA."

Interesting, but what I really wanted to know was, so what's the site like (I'm not visiting it, thanks; even if I could under the guise of work related activity -- hey, I co-lead the Internet and New Media team here at Bryan Cave -- but who wants to explain those red flags to my esteemed colleagues?). To which Eric responded:

"I was surprised at how internally credible it looked. The reviews were surprisingly thoughtful and detailed. It was a well run product review site for a class of services that normally don't elicit intelligent commentary."

This from the man who used to be GC of Epinions (and who knows a decent review site when he sees it). So, yes, I'm tempted to look. Maybe from home. If I can explain it to my wife.

JP

jonthan.pink@bryancave.com. Mr. Pink is a member of the Intellectual Property Group and a resident in the Irvine office of Bryan Cave.

Puternet Update: The Response.

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Britain asks Schwarzenegger to Close Prostitute Web Site -- But Can he Do That?

A. Funny What You Come Across When Reading the News

In a recent article entitled “Britain Asks Schwarzenegger to Close Prostitute Web Site,” Reuters reported that Harriet Harman, the British government minister for women and equality (no caps in the original article, so I’m assuming that’s how they write it) has asked California governor Arnold Schwarzenegger (my fair state) to shut down a U.S. website entitled "Punternet" that allows men (and I’m assuming women too) to rate prostitutes, including those working in London.

Ms. Harman (who one assumes is not reviewed on that particular site, but I have not personally checked to verify this) stated at a recent Labor Party conference that "Punternet" fuels the demand for prostitution, degrades women and puts them at risk. I am certain that it degrades women; as to fueling the demand for prostitution, I find that a little specious. I mean, that’s like saying that a match thrown into a raging inferno fuels fire. As to putting women at risk, they’re not in a great situation anyway, and maybe this would allow someone to track/find rescue them, but maybe this is just Westside naiveté on my part.

In any event, the Minister for Women and Equality (to hell with it, I’m capitalizing her title) has apparently asked Governor Schwarzenegger to close down Punternet, believing that he has the power to do so given that it is located here in California. "Surely it can't be too difficult for 'The Terminator' to terminate Punternet and that's what I am demanding that he does."

Not so fast there Ms. Minister. In United States, we have the Communications Decency Act of 1996, Section 230 of which protects operators of websites and other interactive computer services from liability for publishing the statements of third parties. 47 U.S.C. § 230. And in Britain? They have the Queen. Of course, another difference between the two countries (and I’m not counting the food here folks) is that Britain permits – as in it’s legal – prostitution, while here it – umm – is not.

So back to Section 230, and how it might impact Punternet. Section 230 provides clearly that “[n]o provider or user of an interactive computer service shall be treated as a publisher or speaker of any information provided by another information content provider,” and that “n]o cause of action may be brought and liability may be imposed under any State or local law that is inconsistent with this section.” 47 U.S.C. §§ 230(c)(1), 230(e)(3); see also Blumenthal v. Drudge, 992 F. Supp. 44, 51 (D.D.C. 1998) (in enacting the Section 230, "Congress made a policy choice . . . not to deter harmful online speech through the separate route of imposing tort liability on companies that serve as intermediaries for other parties' potentially ages. ").
Section 230's protection is not limited to civil liability. That is, while it does not apply to federal criminal law, see 47 U.S.C. § 230(e)(1), the most plausible reading of the statute's language is that it preempts state criminal actions that are inconsistent with it. 47 U.S.C. § 230; see also Gibson v. Craigslist, Inc., 2009WL 1704355 (SDNY June 15, 2009). (applying the service provider immunity of § 230, the court held that Craigslist was not liable for an advertisement displayed on Punternet, even if the ad itself was tortuous) . When determining the availability of immunity under Section 230, courts engage in a three part inquiry that is discussed in greater detail below. See e.g. Green v. Am. Online (AOL), 318 F.3d 465, 470-71 (3d Cir. 2003), cert. denied, 540 U.S. 877 (2003); Kruska v. Perverted Justice Found. Inc., No. 08 Civ. 54, 2008 WL 2705377, at *2-3 & n.1 (D. Ariz. July 9, 2008).

B. An Application of Section 230 to Punternet

Here, as indicated above, Punternet (just to digress – I don’t really know what this means, “Punter,” and I’m pretty sure that I don’t want to; still, every time I write it, I get the feeling that maybe I’m saying something I shouldn’t – like that Monty Python skit about the German guy and the English dictionary. . . ) provides a forum where users can review prostitutes. (Again, according to Minister Harman, Punternet allows users to compare and rate services in the same way as they would a restaurant, a hotel or a holiday – apparently as in “tasty,” “nicely redone” and “a party from start to finish.”) Clearly a site of that nature may be abused by third-parties in connection with various crimes despite efforts Punternet itself might take to prevent this. But can Punternet be shut down, or is it protected by Section 230? And moreover, what steps might it take to help insure that it is entitled to immunity pursuant to Section 230 should this ever become necessary?

Here are a few thoughts from the trenches:

1. Terms of Use –

I would strongly recommend that Punternet create and implement an appropriate and detailed “Terms of Use,” and that henceforth all usage of Punternet be subject to those terms. The “Terms of Use” should be readily available to all users through prominently displayed links throughout the website. Further, I would advise that, in order for users to post any review, he or she first affirmatively declare his or her acceptance of the “Terms of Use” by clicking an "ACCEPT" button located below a full-text display of those terms themselves.

Among other things, I would recommend that the “Terms of Use” explicitly prohibit the posting or making available of any content that is "unlawful" or that "advertises any illegal service," including in particular "any offer or solicitation of illegal prostitution." To promote compliance with these “Terms of Use,” Punternet should employ some self-regulatory measures, including an automated filter that blocks reviews that contain words or phrases that are associated with problematic content and perhaps a community flagging system that encourages users to "flag" inappropriate ads for removal. I realize that this might limit what they are trying to do on the site, but I’m paying the “conservative lawyer” here: I’m just talking about staying within the confines of Section 230, not keeping Punternet’s users happy (which they apparently are taking care of themselves).

2. Strict Compliance with Section 230 –

As indicated above, the key provision of Section 230 states that "[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider." 47 U.S.C. § 230(c)(1). As the Ninth Circuit has noted, there is a "consensus developing across other courts of appeal that § 230(c) provides broad immunity for publishing content provided primarily by third parties." Carafano v. Metrosplash.com, Inc., 339 F.3d 1119, 1123 (9th Cir. 2003); see also Doe v. MySpace, Inc., 528 F.3d 413, 418 (5th Cir. 2008) ("Courts have construed the immunity provisions in § 230 broadly in all cases arising from the publication of user-generated content"); Zeran v. America Online, Inc., 129 F.3d 327, 328 (4th Cir. 1997) ("Section 230 . . . plainly immunizes computer service providers like AOL from liability for information that originates with third parties"); Green v. America Online, Inc., 318 F.3d 465, 471 (3d Cir. 2003) ("By its terms, § 230 provides immunity to AOL as a publisher or speaker of information originating from another information content provider"); Ben Ezra, Weinstein, & Co., v. America Online, Inc., 206 F.3d 980, 984-85 (10th Cir. 2000) (§ 230 "creates a federal immunity to any state law cause of action that would hold computer service providers liable for information originating with a third-party"); Universal Communication Systems, Inc. v. Lycos, Inc., 478 F.3d 413, 419 (1st Cir. 2007); ("[W]e too find that Section 230 immunity should be broadly construed"). Chicago Lawyers Committee for Civil Rights Under Law, Inc. v. Craigslist, Inc., 519 F. 3d 666 (7th Cir. 2008) (under Section 230, Craigslist itself could not be held liable for its users' allegedly unlawful postings).

The last case listed above, Chicago Lawyers Committee for Civil Rights Under Law, Inc. v. Craigslist, Inc. (“CLC”,) is instructive as there is little material distinction between the facts in that case and my fellow citizen’s operation of Punternet. In CLC, the plaintiff sued Craigslist for allegedly discriminatory housing ads posted by Craigslist-users. In affirming the lower court’s dismissal of the case, the Court of Appeal noted that services like Craigslist are, in many respects, “like common carriers such as telephone services,” meaning that they do not read the messages they transmit on their systems. 519 F.3d at 668. Based on this, the Court recognized that requiring Craigslist to review each ad is neither practical nor effective. Id. at 669. It therefore concluded that Craigslist was not obligated to review the ads at issue because Section 230 immunized it from liability for them. In short, the plaintiff in the CLC case was seeking to hold Craigslist – a provider or user of an interactive computer services – liable for publishing the ads at issue in that case, and the Court (applying the clear immunity set forth in Section 230),said “no.” Id. at 671.

As with CLC case, any criminal or civil action against Punternet based on users who may be involved in prostitution should be barred by Section 230 so long as Punternet does not induce anyone to advertise any illegal service, or solicit prostitution. See 519 F.3d at 671-72 ("given § 230(c)(1) [the CLC] cannot sue the messenger just because the message reveals a third party's plan to engage in unlawful [conduct]"). 519 F.3d at 672. See also Fair Housing Council v. Roommates.com, 521 F.3d. 1157, 1174 (9th Cir. 2008) (en bane) (holding that a website operator may not be liable for unlawful ads posted by its users, except in circumstances where the website operator structures its site so as to directly and necessarily cause its users to include unlawful statements in their postings).

In Roommates.com, a portion of the defendant’s website required users to answer multiple choice questions which, the court found, necessarily led to the generation of statements of unlawful preferences in housing ads. 521 F.3d. at 1165. The Roomates.com website also included an open-ended "Additional Comments" section which allowed users to insert content, some of which also was allegedly unlawful. Still while the Court held that Section 230 did not immunize Roommates.com with respect to the allegedly unlawful content dictated by the multiple choice questions, the court expressly held that everything users included in the "Additional Comments" section was created entirely by the users themselves, and thus the site operator was entitled to immunity from liability for any unlawful content contained there pursuant to Section 230(c)(1). Id. at 1174-75.

To this end, and in keeping with the Roommates.com holding, I would advise that Punternet avoid any “check the box” sort of questionnaire (analogous to the multiple choice questions discussed in Roomates.com) that may cause its users to include unlawful statements or otherwise promote (engage in) unlawful conduct. Rather, I would advisethat Punternet simply provide a blank text box in which users may review the service their received, advertise their service, or post their comments. In short, Punternet should have no content dictates or constraints (other than compliance with the “Terms of Use”) which induce users to advertise, solicit or promote any illegal activity. By limiting its function similarly to providing something analogous to the open-ended "Additional Comments" feature of the Roommate.com website, Punternet will help insure its Section 230 immunity from liability for content published by its users.

3. Diligence in Assuring Punternet Meets the Section 230 Immunity Test –

While similar to recommendation No. 2 above, it is important to remember that immunity under Section 230 must be determined, if at all, by a formal legal ruling (e.g. only after the website at issue has been sued based on its content), and that any court before whom this issue arises will apply the three-part “Section 230 immunity test.”

Specifically, the Court will first determine whether the defendant is a provider of interactive computer services. From what we have seen of Punternet, it seems that it is indeed a provider of an interactive computer services. See Chicago Lawyers' Comm. For Civil Rights, supra, 519 F.3d 666; see also Carafano v. Metrospash.com Inc., 207 F. Supp. 2d 1055, 1065-66 (C.D. Cal. 2002), affd, 339 F.3d 1119 (9th Cir. 2003).

Second, the Court will look at whether the content was placed on the website by independent third parties or by an agent of the website itself. If the content was posted by an independent third party, the website should be entitled to protection under Section 230. In this instance, the reviews and on Punternet appear to have been placed there not by Punternet, but from “another information content provider,” namely the users of Punternet. 47 U.S.C. § 230(f)(3).

Finally, the Court will look at whether the would-be legal action is merely a cloaked attempt to hold the website itself liable for third party content, e.g. based on an alleged failure to block, screen, or otherwise prevent the dissemination of such third-party content. Here, it is difficult to imagine any would-be claims other than those that seek to hold Punternet itself liable for the reviews and/or advertisements posted there by third parties. Because those claims would, by necessity, be directed toward Punternet as a "publisher" of third party content, they would be subject to protection under Section 230. Green v. Am. Online, supra 318 F.3d at 470-471 (affirming dismissal of claim that AOL "negligent[ly] fail[ed] to properly police its network for content transmitted by its users" because Sects m 230 bars "attempts to hold AOL liable for decisions relating to the monitoring, screening, and deletion of content from its network — actions quintessentially related to a publisher's role”; internal quotations and citation omitted).

Along this same line, see also Myspace, supra, 474 F. Supp. 2d at 849 ("Plaintiffs argue this suit is based on MySpace's negligent failure to take reasonable safety measures to keep young children off of its site and not based on Myspace’s editorial acts . . . . No matter how artfully Plaintiffs seek to plead their claims, the Curt views Plaintiffs' claims as directed toward MySpace in its publishing, editorial, and/or screening capacities."); Green, supra, 318 F.3d at 470-71 (affirming dismissal of claim that AOL "negligent[ly] fail[ed] to properly police its network for content transmitted by its users" because Sects m 230 bars "attempts to hold AOL liable for decisions relating to the monitoring, screening, and deletion of content from its network — actions quintessentially related to a publisher's role”); see also Stoner v. eBay, Inc., No. 305666, 2000 WL 1705637, at *3 (Cal. Super. Nov. 1 2000) (rejecting plaintiffs "contention . . . that eBay should be held responsible for failing to monitor the products auctioned over its service" because "Congress intended to remove [through Section 230] any legal obligation of interactive computer service providers to attempt to identify or monitor the sale of such products").

Now again, I have not reviewed or visited Punternet; I’m basing my comments strictly on Ms. Harman’s comments, as she seems to be pretty familiar with the site. Nonetheless, given what I’ve read, it appears that the three elements for Section 230immunity would be met if the recommendations set forth were followed. The mere fact that Punternet provides a forum for erotic content – or even crimes that may flow from that content – is not sufficient to treat the website as the publisher of any posted illegal content. See Gentry v. eBay, Inc., 99 Cal.App.4th 816, 832 (2002) (holding that eBay's provision of product categories did not render it responsible for ads created by users).

4. Section 230's Specific Exceptions –

One final note is that Section 230 contains several exceptions of which Punternet should be aware. Specifically, Section 230 is inapplicable in cases involving enforcement of federal criminal statutes, 47 U.S.C. § 230(e)(1), intellectual property law, 47 U.S.C. § 230(e)(2), and communications privacy law, 47 U.S.C. § 230(e)(4). Section 230 does not contain any exception for State prostitution laws. This would seem to show that Congress did not intend to exempt such laws from the statute's reach. See Andrus v. Glover Constr. Co., 446 U.S. 608, 616-17 (1980) ("Where Congress explicitly enumerates certain exceptions to a general prohibition, additional exceptions are not to be implied, in the absence of a contrary legislative intent.")

C. Conclusion

Section 230 was enacted, for among other reasons, to encourage self-regulation of the Internet by eliminating disincentives to such self-regulation that existed prior to the passage of that statute. Congress sought to achieve this goal by “encourag[ing] interactive computer services and users of such services to self-police the Internet for obscenity and other offensive material.” Batzel v. Smith, 333 F.3d 1018, 1028 (9th Cir. 2003); see also Zeran v. America Online, Inc., supra, 129 F.3d at 331 (Section 230 was intended "to encourage service providers to self-regulate the dissemination of offensive material over their services"). I note this because, for Section 230 to be an effective immunity, a certain amount of self-regulation is expected of service providers. Punternet can comply with these expectations by, among other things, taking the steps set forth above including (but not limited to) : (1) the creation and implementation of a detailed “Terms of Use”; (2) avoiding any structure that directly and necessarily causes its users to include unlawful statements in their postings; and (3) deleting – if and when discovered – any reviews or advertisements that contain unlawful statements or solicit illegal activities.

So to wrap this up, let's all keep this straight: Britain allows prostitution, but does not have an equivalent to 47 U.S.C. § 230; the U.S. has that statute which creates a broad immunity for websites that publish this kind of third party content, but doesn't allow prostitution. Oh, and Britain has the Queen as the faux ruler of their country, and we Californians have a faux Terminator as the ruler of our state. It's a bit like Through the Looking Glass around here.

Ok, so that you’ve read this, which web site are you going to next?


Jonathan Pink heads the Internet and New Media Team at Bryan Cave, LLP. He is resident in the firm’s Irvine, California (Orange County) office, and is a member of the firm’s Intellectual Property Group. He can be reached at jonathan.pink@bryancave.com or by dialing 949-223-7173.

Two New Copyright Rulings Worth Noting – (A “Precious” Pooh-Pooh)

Two new rulings from the last few days are worth mentioning:

A Copyright Transfer Requires a “Precious” Written Document -- The first involves the right to distribute the new movie “Precious,” which had led to a legal squabble between producer Harvey Weinstein (and his company, the Weinstein Co.) and Lionsgate Films. In a nutshell, following the film’s screening at the Sundance Film Festival in January, both Weinstein and Lionsgate came away believing that they had purchased the right to distribute the movie from director Lee Daniels. According to Weinstein, an independent film sales agent sold "Precious" to the Weinstein Co. before agreeing to selling that right to Lionsgate when Lionsgate offered a better deal. Not surprisingly, the two production companies sued one another over this issue. In fact, four separate lawsuits have been filed over this issue.

On Friday, U.S. District Judge Naomi Reice Buchwald whittled this down a bit by dismissing one of the four lawsuits. Specifically, in action brought by Weinstein against the film's producers, Smokewood Entertainment Group, the Court ruled that Weinstein had never acquired a copyright interest in the film (including that portion of the copyright “bundle of rights” that the distribution company would need to obtain in order to distribute the film) because it never obtained a written contract for distribution purposes. That is, because a writing is a required when a copyright is transferred to another party, the absence of a written contract equated to the absence of a written copyright assignment. "A signed writing is required to effectuate a transfer of copyright ownership," the Court said. "To the extent that [Weinstein Co.] alleges a purely oral agreement for the exclusive licensing and distribution rights to 'Push,' that claim clearly fails as a matter of law."

Pooh-poohing Your Claim to Copyright Ownership – After nearly two decades of legal battles, U.S. District Judge Florence-Marie Cooper granted the Walt Disney Co.’s motion to dismiss a copyright and trademark infringement claim brought by the family of Stephen Slesinger, which claims to hold the merchandising rights to Winnie the Pooh.

Mr. Slesinger acquired these rights from A.A. Milne in 1930, but after he died, his widow assigned those rights to Disney. Disney took the intelligently written children’s stories and turned them into what most children now think of as Winnie the Pooh. In her ruling last week, Judge Cooper determined that Disney -- not the Slesinger family -- controlled those IP rights. "Stephen Slesinger Inc. transferred all of its rights in the Pooh works to Disney, and may not now claim infringement of any retained rights," Cooper wrote in her ruling. That ruling effectively concludes the two existing lawsuits between Disney and the Slesinger family, clearing the way for Disney to merchandise Pooh as it seems fit. The Court, however, ruled that Disney must continue to pay royalties to the Slesinger family when any of the Pooh characters are used in movies and merchandise.

jonathan.pink@bryancave.com

Full Text of Interview from Portfolio.com

I was interviewed recently by Romy Ribitzky from Portfolio.com. I posted a link on this blog several days ago. Given that the interview was considerably longer than the quotes used (understandably, charitably and without complaint), I thought I'd include the full scope of my thoughts -- yes, for what they're worth -- here.


Romy Ribitzky: Do companies have the right to dictate what an employee can and can’t do with their own, personal, online presence?

Jonathan Pink: Companies have no absolute legal right to dictate what an employee can or can’t do, and in fact some states have statutes that affirmatively prohibit an employer from taking action against employees for lawful off-duty activity. Some courts have held that these statutes do little more than reaffirm existing rights, but an argument exists that posting to blogs or social network sites would fall into the category of lawful activities protected by such statutes. Companies may try to circumvent such statutes by having employees enter into a nondisparagement agreement, a confidentiality agreement, or the like. If consideration is given for these contracts, and the parties knowingly and affirmatively assume the obligations set forth in them, companies can acquire rights not otherwise theirs to assert. That said, without such agreements, and without suggesting that employees ever have the right to engage in illegal activity, companies do not have the right to dictate what an employee can or can’t to with their own, personal online presence. Also, of course, where the employer/employee are in a at-will employment state, such as California, an employer may terminate an employment for no reason at all. This means that while an employer may not regulate otherwise legal, off work conduct absent a contractual agreement to the contrary, an employer can look at the employee’s on-line persona and decide “we really don’t want someone like that here.”

Romy Ribitzky: What legal murkiness do you enter when you encourage your employees to blog, tweet, etc. about your organization, their projects?

Jonathan Pink: Asking employees to blog, tweet, etc. about their employer can be a double-edged sword both legally and otherwise. You may recall that Comcast was the subject of some highly unfavorable bulletin-board posts, and the negative commentary posed a real PR danger to the company. One rogue employee took it upon himself to set the record straight by posting positive comments and addressing the inaccuracies that were multiplying on the web. When word reached upper-management, the immediate reaction was to reel in this employee. But the company’s CEO saw it differently, he saw the benefit of this fellow addressing the inaccuracies and posting the good word about the company. The result was, the employee was given not just the right to continue.

From a legal standpoint, having an employee in this position can also present problems. Is the employee then speaking on behalf of the company as an authorized agent? Probably, and if so, his or her statements may be attributed to the company itself. This can have unexpected and unintended ramifications. Another issue is copyright infringement. If the employee decides to lift text from another source for use on the company-sponsored blog, not only will the employee be liable for infringement, but the company too may find itself facing an infringement claim, or at the very least a Digital Millennium Copyright Act takedown notice. A tougher call would be if the employee disparaged a third party on the company sponsored blog. The Telecommunications Act of 1996 (47 USC 230(c)) may provide protection to the company, depending on whether it had control over the employee’s content, while the employee individually would have no protection.


Romy Ribitzky: What are the privacy risks with searching a candidate’s social media sites as a factor in the employment decision?

Jonathan Pink: If a prospective employee places his or her content on the web, he/she should fully expect that will be discovered by a prospective employer. If the candidate placed the content onto the web, there are few - - if any - - privacy rights he or she could claim. An interesting footnote on that point, I have a client that is a large media company head quartered in New York. The client recently mentioned that it now requires perspective employees to “friend” it on Facebook so that the HR department can have a look at would-be employees beyond what is reflected in their resumes. As long as the perspective employee agrees to this, there is nothing illegal about it. Moreover, while it may appear somewhat invasive, it also may prove very helpful in making employment decisions that save the company money down the line.

Romy Ribitzky: What privacy risks are associated with monitoring your employees on social media platforms while they’re at work?

Jonathan Pink: The general rule of thumb is that an employee has no right to privacy over anything he or she writes, posts, or retrieves from the web while using an employer’s computer. This includes emails, and Facebook posts. The employer has the right to monitor employees’ computers - - and many companies make frequent use of this right. So, in a nutshell, employees should assume that they have no privacy rights with respect to any social media platforms they interact with while at work.

Romy Ribitzky: What should you consider when developing internal social networking sites for employees?

Jonathan Pink: When developing internal social networking sites for employees, common sense and discretion should dictate the rules of the road. Obviously rules need to put into place, and followed rigorously, to protect fellow employees and company property. This means staying clear of disparaging, taunting and threatening co-workers, and using discretion before publishing non-public, company information. So, employees need to remember that what they post is public, or semi-public, and they need to “play nice.” What one employee regards as funny may be viewed by others as derogatory, insulting, threatening, inappropriate and/or offensive, any one of which could cost the posting employee his or her job. Employees should allow their conduct to be governed by the maxim “discretion is the better part of valor.” And if an employee doesn’t think he or she can live within such guidelines, they should opt-out of any participation in such a venue.

Romy Ribitzky: What are the protections companies enjoy when a third-party posts comments on their social media sites or in response to a blog, tweet, etc.

Jonathan Pink: The Internet has opened new channels of communication and self-expression. An individual’s ability to have a voice in the world has never been greater. While this is good, it also presents risks to those who write first and think later. With this in mind, when a third-party posts comments on a company’s social media sites, or in response to a blog, the most common danger is that the poster will defame another party. As with traditional print media, laws related to defamation apply in cyberspace as well.

Companies, however, may have protection for allegedly defamatory statements made by others on their site. This is because providers of interactive computer services are immune from liability for content created by third parties when sued "as the publisher or speaker of any information provided by" someone else under the Telecommunications Act of 1996 (47 U.S.C. § 230(c)).

Courts have applied Section 230(c) to a broad mix of "computer service providers." For example, courts have found that this Section shielded the publisher where third party content was posted a blog entitled “ripoffreport.com” that warned consumers about unscrupulous practices and bad service, and it has also been used as a defense to claims of negligent misrepresentation, interference with prospective advantage, unfair business practices.

Romy Ribitzky: When are companies liable for that post and how can they limit or prevent liability?

Jonathan Pink: Section 230(c), however, will not provide protection to a company where the company itself is the deemed the speaker/poster of the content. Thus, where the content was posted by an employee working in his or her capacity as a company representative, the company itself will likely be deemed the speaker, and will be held liable for comments posted.

We see something similar in the area of copyright infringement, where a company can, in some instances, be held liable for another person’s infringing post either as a direct infringer or as a party with secondary liability. Secondary liability cam be either contributory infringement and vicarious infringement. The good news is, however, that – as with claims for defamation – some additional protections exist on line that do not exist in traditional print media. In the cyber world, the safe harbor provision of the Digital Millennium Copyright Act may apply to protect a company from liability, provided it complies with all of the Act’s requirements. This means designating an agent for notification with the Copyright Office, and establishing – and posting -- a policy against repeat infringement by its readers. So, while companies may not have a duty to police their blogs for copyright infringement, they must act to remove infringing content when they are put on notice or face liability.

Romy Ribitzky: Can companies moderate user product reviews and discussions and keep its legal protections against wrongful posts from users?

Jonathan Pink: There is no easy answer to whether companies that moderate user product reviews and discussions can continue to maintain their legal protections against wrongful (e.g. defamatory) posts made by users. Courts have consistently held that 47 USC section 230(c) protects one from exercising traditional editorial controls over user-generated content. Thus, for example, deciding whether to publish, delete, or edit material should all be covered by Section 230. However, the further away a company moves from these traditional editorial functions, the more it risks losing its Section 230 immunity. If a company does nothing more than host third-party content, without providing any editorial oversight, it will likely be protected under Section 230. If it exercises traditional editorial functions over user-generated content, it should be protected as well. But once the company goes beyond that, it starts getting into potentially choppy legal waters.

Romy Ribitzky: What issues arise from your company’s blogging about a competitor’s product both on the clock and off, in case an employee does it from a personal account at home?

Jonathan Pink: When blogging about a competitor’s product, be it on or off the clock, the same general rules regarding trade liable, interference with economic advantage and false advertising apply. In short, making statements that are false or disparaging is never a good idea, and it’s not made any better when done on line. As to whether the company – as opposed to the individual -- could be held liable for this conduct, that would turn on the facts specific to the controversy. In other words, was the off-duty employee engaging in conduct on behalf of the company? I know how most companies would answer that question if this came to litigation.

Romy Ribitzky: How should you handle legal and governmental requests for information about your members?

Jonathan Pink: Handling legal and governmental requests for information will depend on the scope of the information requested. These types of requests should always be directed to the company’s legal department or outside legal counsel. There are times, in certain circumstances, where such requests for information will be overly broad or may improperly impinge the target’s right to privacy – thus subjecting the responding company to liability. Certainly, we’ve seen many cases where the subpoenaing party has been unable to attain the information they requested and, on the flip side, we have been successful in obtaining such information from those who would have liked to shield it. So it is a fact specific situation, and the answer will vary based on those facts.

jonathan.pink@bryancave.com 949-223-7173

Jailbirds and the DMCA

Jailbirds and the DMCA

Breaking news: SoCal man busted on charges of "jail breaking" videogame consoles in violation of the Digital Millennium Copyright Act (“DMCA”). Not sure this really rises to the level of such extensive law enforcement, but according to Wired News, Homeland Security authorities arrested 27 year old Matthew Crippen this week on charges of having circumvented the copyright encryption technology on a number of videogame consoles including Wii, PlayStation and the Xbox. Crippen, an Anaheim, California resident and Cal State Fullerton liberal arts student, charged customers $30 a pop for this -- uh -- service.

I could make a comment here about Anaheim being the home of Disneyland, and Crippen's age being a little advanced for an undergrad, or the fact that he was doing all this for $30 a pop when a job at Starbucks probably would have paid just as well (and would not have led to his arrest), but I won't. I'll refrain. So, enough of that, and on to the next paragraph, please.

Really, this story makes me feel very, very secure. I mean, what with the Bush administration (and Chenney in particular), I really thought that terrorists were practically at our front door. Turns out, this must not be the case given that Homeland Security has time to bust a guy who's gaming videogame consoles. Wow, what must the strategy sessions that led to that bust have been like? "Guys, we've got a big one." (Tense silence as the team, clad in black, waits . . . .) "Hacker." (Team's thinking: code for Bin Laden, no . . . for . . . who?! They all nod knowingly as their leader continues.) "Bastard's breaking into Xboxes, the Wii and . . . the PlayStation." (Whoa. Sweat starts to form on foreheads . . . .) Cut to the five black vans with blackened windows pulling up outside Crippen's house, firepower in abundance, men taking positions – BAM! the door comes down and the fugitive comes out -- dressed in boxes and holding a screw driver? At least that's how I imagine it.

Anyway, why all the fuss? Because under the DMCA, jailbreaking a video game is a copyright no-no. The DMCA provides, in relevant part, that, “no person shall circumvent a technological measure that affectively controls access to a work protected under this title.” Stated another way, no jailbreaking decrypted copies of videogame unless you're ready to do some hard time . . . and have Homeland Security come knocking at your door. Now don't get me wrong: the DMCA is a great statute and I've used it in some of my own cases, but this really seems like killing a gnat with a sledgehammer when a rolled up newspaper would suffice.

So now the big question now is: where did Crippen get his training? Afghanistan? Pakistan? From the The Big Man? No, according to Wired, Crippen learned his skill on “Google, man.” He was released on Monday on $5,000 bond.

Pirate Update

Pirate update: No, not the Somalis, the Dutch.

According to a report in IP360 (and the Associated Press), a Dutch court has given Pirate Bay 10 days to walk the plank – errr, to shut down operations in the Netherlands. And if they don’t? There are sharks waiting for them in the churning sea below, to the tune of up to $42,000 per day. Ouch! It is not clear from either report how the Court proposes to enforce its order or to block Netherlands-based traffic (one envisions a little Dutch boy, with his finger in the Internet dyke), but that’s what the Court has said and they seem to mean business.

The ruling, by the way, follows the copyright infringement suit filed just over a week ago by a number of studios (a baker’s dozen, all of whom have the dough to do so). Pirate Bay has continued to operate notwithstanding a ruling last April from a Swedish court which sent the site's founders to jail (for one year each), and hit them with a hefty $3.6 million fine based on similar charges.

How is it that Pirate Bay gets him with infringement suits (and, ahem, jail time) when YouTube hosts plenty of material that may well be covered by third party copyrights? Because unlike YouTube, Pirate Bay distributes torrent files, linking users to the copyrighted material. It is the users who host the torrents and who are in possession of any infringing material.

Thus, by seeking to circumvent claims of domestic and international copyright infringement, the Pirate walks the plank, while YouTube . . . . walks to the bank.


Jonathan Pink litigates copyright actions around the globe. He is Co-Leader of the Internet and New Media Team at Bryan Cave, LLP. Bryan Cave is an international law firm with more than 1200 attorneys world wide.

Facebook, High School Renunions, Patent Infringement and Cable TV

My high school reunion is coming up. Thirty years. No, I won’t make it. I’ll be on vacation with my family. Not that I’d intentionally avoid it; it just worked out that way.

I actually enjoyed the last reunion. It was our 25th, and held at a classmate’s home. This wasn’t like a backyard pool party or a front yard Bar-B-Q. This classmate had purchased the former George C. Scott Estate in Bel Air. He’d done quite well for himself (starting a gay television network; I don’t have a TV, but I’m assuming we’re talking cable here). The fact that he had done quite well is particularly interesting to me because he was not one of the popular kids in high school. (Nor was I.) He was always a bit of an outsider (as – I am somewhat chagrinned to admit – was I).

Which brings me to my point (sort of): I always wonder what happened to the popular kids. Most of the successful ones I can think of were not the popular ones. Most of the popular ones are not now terribly successful. At the last reunion, I remember talking to one of them. He didn’t remember me, but was still more than happy to chat. He was living in a trailer; didn’t drive, but did ride a bike. He spent about 15 minutes recounting for me that time in high school when he saw a UFO. It was a little metallic ball, he told me, looking in at him through a window while he watched TV and his laundry tumbled dry in the next room.

Side note: Now you’ve got to remember the first Star Wars movie which – huh! – came out when this guy and I were in high school. Remember the scene where Luke learns to use the light saber? Remember the little metal ball flying around? I can’t say for certain, but I’m guessing there is a connection here which, I’m sorry to say, I didn’t point out to my old friend. Instead, I said “Huh, you know, I’m going to get another drink,” then hurried away. (I then met up with one of my closest friends – a psychologist -- and encouraged him to go talk to Mr. UFO.)

Back to my point: So, it seems to be that, if you’re popular in high school, you’re likely to be perceived as an underachiever at your high school reunions, at least when compared with the losers in high school who now own estates, or at least practice intellectual property law in Irvine.

Ahem. The point of all this lead up? To compare and contrast what happens when you’re a successful business. What happens? That’s easy: you get sued. Case in point: Facebook. Hugely popular (hey, if you’re reading this, feel free to send me a “friend” request on Facebook), Facebook has had its share of lawsuits of late. A couple of click fraud cases, and at least one patent infringement suit brought against it by Leader Technologies Inc.

The patent infringement case was the subject of an interesting recent ruling, whereby Facebook was ordered to provide the plaintiff with a complete copy of Facebook’s entire computer source code. What does this have to do with the suit itself? Leader Technologies sued alleging Facebook had deliberately infringed Leader’s U.S. Patent Number 7,139,761, titled “Dynamic association of electronically stored information with iterative workflow changes.” As if the title were not clear enough, the patent has to do with the management and storage of electronic information (something most websites – including this one – does). In that case, however, Leader claims that Facebook infringed its patent by marketing services “including but not limited to those related to the Facebook Web site.”

Like any good patent plaintiff, Leader is seeking preliminary and permanent injunctions, treble damages, attorneys' fees and costs. Uh-huh. We’ve all seen this drill before. In fact, I’m in a battle like this one now, except it involves mattresses and memory foam rather than “electronically stored information with interactive workflow changes.” Almost the same, but not quite.

In any event, in the Facebook case, Magistrate Judge Leonard P. Stark (DC Del) ruled that Facebook must provide Leader with a hierarchical map of its source code by the end of this week, and the entire source code by Friday, August 21st. Facebook is not happy. It claims Leader has no need for the entire source code, or at least has failed to articulate such a need.

The Court disagreed. Judge Stark ruled that a protective order would adequately address any of Facebook’s concerns, and founded his decision on the declaration of plaintiff’s expert witness, and a limited review of a portion of the code itself. Maybe so, but the ruling really seems over reaching to me. I’d bet anything that the Judge is not Facebook.

Leader, by the way, bills itself as a “pioneer in Web-based collaboration platforms.” I point this out only because of the further parallel to my case, which involves a bedding platform. And also because, just like a high school reunion – where the once popular are now not so (and those who weren’t now own gay television networks) – it’s all about creating “dynamic associations.”


Jonathan Pink litigates copyright, trademark and patent cases at Bryan Cave, LLP. He is resident in the Irvine office and can be reached at jonathan.pink@bryancave.com.

No Vacancy at Hotels.com

Such a pity. Hotels.com tried, tried, tried to obtain a trademark in its name "Hotels.com," but alas the Court of Appeals for the Fed Circuit ruled the mark was a too generic. Too generic? Really? So, my hopes of getting a trademark in "milkdelivery.com" for my new business delivering milk might run into problems as well? Generic. Humph.

The Court said that the USPTO's Trial and Appeal Board's refusal of the registration was appropriate, and affirmed the TTAB's rejection of Hotels.com's argument that the “dot-com” suffix showed converted the generic term “hotels” into a brand name.
Really going out on a limb there, TTAB; bold, controversial assertion of the law.

Of course, in some deference to Hotels.com ("some," meaning not a lot, meaning the subtextual "what the hell were you thinking?" still applies), it appears that the website had originally sought to register its mark for the services of “providing information for others about temporary lodging; travel agency services, namely, making reservations and bookings for temporary lodging for others by means of telephone and the global computer network.” So it wasn't, e.g., just giving people access to hotels? Oh, you see that's where I was mistaken.

Seems the TM examiner had the same thought I did, that “Hotels.com” was “merely descriptive” of hotel reservation services. (No, it's for "providing information . . . .") In any event: denied. Possibly without even visiting the site (which looks a lot like a site where you make hotel reservations, folks), the TTAB affirmed the rejection, finding that “hotels” identified “the central focus of the information and reservation services” provided on the site, and concluding that “hotels.com" was therefore simply a term that identified the focus of the service, and was thus "generic for the services themselves.”

Hotels.com appealed, arguing that the mark was not generic because the Web site Hotels.com does not provide lodging and meals for its users and isn't synonymous with the word “hotel.” It further argued that its name had effectively acquired secondary meaning (or acquired distinctiveness), saying that the mark was widely associated with the company itself, and is not viewed as a generic term or common name for hotel services.

The Fed Circuit ruled that "the generic-descriptive-suggestive-arbitrary-fanciful continuum of words and their usage as marks of trade, there is no fixed boundary separating the categories; each word must be considered according to its circumstances.” In other words, while generic terms cannot themselves be registered as trademarks, descriptives may acquire distinctiveness and serve as a trademark.

But, the Court did not side with Hotels.com that that had happened in this instance. It agreed with the TTAB that "hotels" identified the core component of the services at issue, and that “hotels.com” was the functional equivalent of granting a service mark to the unadorned word, “hotels,” which it was not about to do. In short, the Court found that the combination of “hotels” and “.com” did not produce a new meaning when used in combination with one another. It held that “registrability does not depend on the .com combination.”

So, Hotels.com is left without registered mark in the brand it has worked so hard to develop. What does this tell us? Talk to a trademark attorney before selecting a a mark in which you intend to invest mucho money? Now there's an idea!

Twitter: Password Security Breach

Was interviewed by the L.A. Times on this topic. The article is very interesting (my quoted comment just makes for a pithy conclusion). Here is the link http://latimesblogs.latimes.com/technology/2009/07/leaked-twitter-documents-security.html

TechCrunch Publishes Confidential, Internal Twitter Documents

Techno/news website TechCrunch today published confidential, internal documents from Twitter, including Twitter’s financial projections (o.k., while it may be unseemly to repeat: Twitter projected it would bring in $400,000 in revenue this quarter and $4 million during the fourth quarter), and a document showing an internal discussion about a proposed reality television show (do we really need another? How about one in which we watch an over-worked lawyer typing out his blog in between sips of coffee and hoping to finish before his wife calls and says “If you’re not billing, come home!”).

Why would TechCrunch do this? Well, it’s fabulous publicity. It’s snarky, it’s quasi-newsworthy, it’s provoking. It will drive up traffic to their site, and thus increase (dramatically) their relevance and their value. Bingo! But, when the dust settles and the news moves to something more relevant (FLASH: Michael Jackson NOT Really Dead; Spotted at Disneyland’s Toontown), I suspect there will be some legal bills to pay.

As I’ve said before, stuffing your site with high quality, original content is an excellent way to increase readership and web traffic. Stuffing it with content poached from another site will only lead to trouble (or, as the case may be, increased readership and web traffic). Copyright protects a wide range of works being reproduced without the permission of the copyright owner. 17 U.S.C. § 102. This would include many of the internal documents TechCrunch decided to republish. Perhaps they’ve forgotten that the owner of the copyright has the sole right to authorize a reproduction of the work, distribute copies, or display it publicly. 17 U.S.C. § 106.

Or maybe they’ve decided to test the limit of a fair use defense. Remember the fair use doctrine? As the U.S. Supreme Court observed in Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, “some opportunity for fair use of copyrighted materials [is] necessary to fulfill copyright’s very purpose, ‘[t]o promote the Progress of Science and useful Arts. . .’.” I’ll bet my bonus that TechCrunch will argue that the fair use doctrine permits its republication because it was intended to spur discussion and debate (under that doctrine, as codified in 17 U.S.C. § 107, short quotations used “for purposes such as criticism, comment, news reporting, teaching … scholarship or research [are] not an infringement of copyright”).

Uh-huh.

But the analysis doesn’t stop there. Courts evaluate fair use by considering four factors: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of copying, and (4) the market effect. The most significant is the last one. If the copy lessens the demand for the original work, it’s difficult to claim fair use. On the other hand, if the copy is used strictly for purposes of parody, criticism, or news reporting, it’s more likely to be deemed “fair.” So if you happen to receive confidential, internal Twitter documents, and truly believe that they are news worthy, wouldn’t it be best to discuss them generally, quote selectively, and adhere to the principal that “less is more,” rather than “more and more and more”? Well, maybe. I suppose TechCrunch could still argue that what it took had no effect on the market, so taking more (ok, all) of the material didn’t reduce it’s value, but the better approach might have been to exercise some restraint from the get go.

Moreover, even if TechCrunch avoids liability on copyright grounds, it could still face a claim for misappropriation of trade secrets or unfair competition under California Business and Professions Code §17200 (which broadly applies protect against unfair and “unethical” conduct).

And notably, it does not appear that TechCruch would have much of a defense these claims under the Telecommunications Act of 1996, 47 USC § 230(c). As we’ve seen recently, that is a fairly robust Section that makes providers of interactive computer services immune from liability for content created by third parties. That is, the service providers are immune when sued “as the publisher or speaker of any information provided by” someone else. 47 U.S.C. § 230(c). For example, courts have found that this Section shielded the publisher where third party content was posted on a roommate matching site (See Fair Housing Council v. Roommate.Com, 489 F.3d 921 (9th Cir. 2007)); an on line newsletter (Batzel v. Smith, 333 F.3d 1018, 1031 (9th Cir. 2003)); and a blog entitled “ripoffreport.com” that warned consumers about unscrupulous practices and bad service. Certainly, Section 230(c) has also been used as a defense to claims of negligent misrepresentation, interference with prospective advantage, unfair business practices. But Section 230(c) loses its shielding strength where the service provider itself is deemed the speaker/poster of the content.

By the way, this is what Twitter posted on its blog about this: “We are in touch with our legal counsel about what this theft means for Twitter, the hacker, and anyone who accepts and subsequently shares or publishes these stolen documents. We’re not sure yet exactly what the implications are for folks who choose to get involved at this point but when we learn more and are able to share more, we will.”

Oh, I’m sure of it.

On the horizon (or so I predict): Twitter sends TechCrunch a “take down notice” pursuant to the Digital Millennium Copyright Act (17 U.S.C. §§ 512(c)), and then possibly sues; TechCrunch sees a big up tic in hits, and enjoys its time in the spotlight.

You're Invited! BC Edge, July 29, 2009, Noon Pacific Time

If you're reading this, you're invited to our next “BC Edge” roundtable on July 29 at noon PST.

This quarter's topic: "The Copyright Alchemists: From 'Happy Birthday' to 'This Land is Your Land,' Making Millions from Songs in the Public Domain."

The purpose of this roundtable is to bring together Bryan Cave attorneys from all practice areas (not just IP), guests and clients who share an interest in cutting edge intellectual property issues.

This quarter's topic will focus on instances where licensors have made money licensing of songs which they may -- on closer inspection -- not actually own.
Our special guests will include the Electronic Frontier Foundation's Fred von Lohmann, George Washington University's Robert Braunies, and music law attorney Michael Perlstein.

As with every BC Edge, the topic I've outlined is just the beginning: where the conversation goes from there is up to all who participate.

I hope that will include you.

Toll Free Dial In Number: 800-300-1596
Passcode: 949-223-7173

REGISTER YOUR MARKS WITH FACEBOOK BEFORE POTENTIAL CYBERSQUATTERS DO

REGISTER YOUR MARKS WITH FACEBOOK BEFORE POTENTIAL CYBERSQUATTERS DO



Facebook, the social networking web site, just announced that commencing Saturday, June 13 at 12:01 AM EDT, it will allow its members to create personalized URLs for their Facebook pages. For example, .

To protect trademark rights holders by blocking potential cybersquatters from registering your brands as URLs, Facebook provides a means of reserving rights in marks via their trademark protection contact form available at the following web page: http://www.facebook.com/help/contact.php?show_form=username_rights.

Thus, to protect your Intellectual Property rights in your brands, I strongly recommend registering your marks with Facebook to prevent cybersquatters from adopting your brands for personalized URLs.

Please contact me if you require any assistance in reserving and registering your brands with Facebook as soon as possible, keeping in mind that the deadline is this Saturday.

jonathan.pink@bryancave.com

Pirates! And Even More Frightening, Polititians!

An interesting confluence of events brings us back to my new favorite question: can the rights of copyright owners survive in the era of BitTorrent? Stated even less elegantly, if “content yearns to be free” (which is some silly phrase I must’ve heard somewhere that, nonetheless, succinctly sums up this whole dichotomy between copyright owners and on-line content thieves), what is to become of that precious right held by the content creator to actually make money from his or her creations?

Slight digression: as some of you know, I am a cartoonist. I like to say “I was syndicated before I went to law school.” I like to say it because it’s true, and well it also sounds pretty cool when delivered in an off-hand way. Try it, you’ll see. It certainly beats “I worked at the Dairy Queen.” Try that one too and you’ll see what I mean. Suave, cool and artsy vs. solid, clear-cut loser. So where was I going with this? Only that, as a content creator, I understand the desire to make some dough off of your art. Don’t get me wrong, I’d give my stuff away – and have (and still kick myself for not giving it to the National Lampoon when they said, “We love it, but we’re out of money thanks to Sam Gross over paying for everything”) – but when it comes down to it, I’d much rather get paid. It’s like getting paid to eat ice cream. So the point that I’m taking way to long to make is that wrong, uncool and just plain wicked to deprive a creator of the right to profit from his or her creation by downing-loading, copying, “sharing” or stealing it off of, over or through the Web. If you disagree, just let me know when you wouldn’t mind my stopping by to take anything of your that I might like for free.

Ok, back to our program. . . . So the interesting confluence of events are: (1) the illegal copying by a California Congressional candidate of a Don Henley song (and his vehement assertion that he had a right to copy based on the First Amendment); (2) a ruling in the Pirate Bay case (involving a P2P site not entirely dissimilar to Napster) and the political fall out from that ruling; and (3) the technology on the horizon that will make all this copying even easier.

The Wacky Politician – I am generally distrustful of politicians. I suppose that I’m of the opinion that they are self-serving, disingenuous and a-moral until proven otherwise. That said, I am nonetheless constantly surprised by what scumbags some of these people are (although generally so very, very nice when you meet them in person). Enter Republican (it figures) candidate for the U.S. Senate, Charles DeVore. According to the former Eagles rock star, Don Henley (free association: I once saw them in concert), the Republican (it figures) used Henley's songs "The Boys of Summer" and "All She Wants to Do Is Dance" in two campaign videos without Henley’s authorization. Note to would-be Republican (it figures) Senator: that’s copyright infringement, bucko.

DeVore (Republican; it figures) responded by claiming he had a First Amendment right to use the work. Huh? What, does he think no one’s listening to him? Maybe that’s how the Republicans do it. (Another digression: is it just me, or does it seem like a lot of Republicans went to USC? And why do those people from USC think it’s something to be proud of? And why do they buy those flags and hang them from their house and act as if they’re – well, Republicans all the time?) Anyway, so Henley sues, and DeVore plans to counter-claim and – even better – now apparently intends to use Henley’s music as part of a parody song, which you will recall may then entitle him to a fair use defense. Maybe it’s just me, but I bet that was his lawyer’s idea and not DeVore’s (the Republican; it figures).

For those of you who don’t remember much about the fair use doctrine, it permits short quotations used “for purposes such as criticism, comment, news reporting, teaching … scholarship or research [are] not an infringement of copyright.” 17 U.S.C. § 107. Courts evaluate fair use by considering four factors: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of copying, and (4) the market effect. The most significant is the last one. If the copy lessens the demand for the original work, it’s difficult to claim fair use. On the other hand, if the copy is used strictly for purposes of parody, criticism, or news reporting, it’s more likely to be deemed “fair.”
The Pirate Bay Ruling -- The Pirate Bay is a Swedish website that indexes and tracks bittorrent (.torrent) files. Since its humble beginnings in 2003 (it was created by the Swedish anti-copyright organization Piratbyrån – translated “The Piracy Bureau”), it has been involved in a number of lawsuits as both plaintiff and defendant (although not at the same time). The L.A. Times described the site as "one of the world's largest facilitators of illegal downloading", and "the most visible member of a burgeoning international anti-copyright—or pro-piracy—movement". By the end of 2008, it claimed to have over 25 million unique peers, meaning users who upload torrent files which link to the copyrighted material. With success like that, it will come as no surprise that several days ago, it’s principals were found guilty of criminal copyright infringement and sentenced to one year in a Swedish prison. (Which I imagine is filled with furnishings from Ikea, and serves those spicy ginger cookies to the prisoners.)

Surprisingly, this ruling has caused mass demonstrations against the jailing of these “pirates,” and moreover, the has apparently caused many young Swedes to affiliate with ‘The Pirate Party', a new political party that supports free file sharing for non-commercial use. According to press reports I have read, support for the Pirate Party had now surpassed that of the Swedish Green Party. (Huh, here we are, back on politics.) I find this fascinating because it strongly suggests that those who so firmly believe that “content is yearning to be free” (even if – surprisingly -- the contents of their own homes does not), will seek such homeostasis through political change. And why not? If people so strongly believe that the content created by others should belong to all – and not to those who created it alone – let’s put this thing to a vote. We know how Charles DeVore would vote.

Technology On the Horizon – And now for the coup de grace: Bittorrent tracking sites such as the Pirate Bay are on the verge of obsolescence. The technology poised to overtake them includes applications such as the Tribler, which – unlike those bittorrent file sharing applications that need to be pointed at torrent tracking sites such as the Pirate Bay, conducts its searches over a network of fellow bittorent users, thereby avoiding the centralized tracking sites entirely. Moreover, with applications such as iPredator, downloading can happen anonymously, meaning that copyright owners and prosecutors will have an even more difficult time locating the infringement and the infringers. Chuck DeVore, party of one? Your table is ready.

One last note: We’ll be discussing the inconvenient mismatch between the real world of P2P file sharing and copyright jurisprudence at the next meeting of BC Edge, April 29, 2009 at 12 noon Pacific Time. If you’d like to opine on whether copyright owners can survive in an era of fast evolving, dynamic, disruptive innovation, and whether the fair use doctrine should apply to file sharing, just send me an email and I’ll respond with the call-in number and pass code. My email is jonathan.pink@bryancave.com.

Second Circuit Revisits Key Word Debate

Breaking News (if you consider it still “breaking” when in fact it occurred a couple of days ago).

The Second Circuit – the only court to firmly hold that key word advertising does not constitute trademark infringement – has overturned a lower court’s decision to dismiss Rescuecom Corp.’s trademark infringement claim against Google based on precisely such facts (e.g. selling the term Rescuecom as a keyword to Rescue’s competitors), and remanded the case for further proceedings. (Rescuecom Corp. v. Google Inc., case number 06-4881).

In making this ruling, the Second Circuit stated that, by selling the Rescuecom’s mark as a keyword to advertisers, Google’s conduct was likely to cause confusion, at least with respect to search-engine users who searched for Rescuecom’s trademark on Google. This, the Court found that Rescuecom had adequately alleged a Lanham Act claim. The Court however did not express any opinion as to whether Rescuecom could prevail on that claim.

You will recall, the Second Circuit previously ruled in 1-800 Contacts Inc. v. WhenU.com Inc. that WhenU’s triggered pop-up adds touting 1-800s competitors did not constitute trademark infringement because it was not a “use in commerce” as required under the Lanham Act. To a large degree, that case turned on the fact that WhenU did not use, display, or sell the 1-800 trademark to competitors. Here, however, Google is alleged to do all this and more.

We’ll see where this goes. It will be particularly interesting given the fact that the Second Circuit has been in the minority with respect to key word cases.

Another Opinion Copyright Ownership In the Era of BitTorrent

I recently wrote about an artist who tried to gather support for a national day of “dining and dashing” to promote what he considered to be the injustice copyright owners face in the era of BitTorrent. There is no doubt that there currently exists an inconvenient mismatch between the real word of P2P file sharing and copyright jurisprudence, and that this inevitably leads to the question: can copyright ownership survive in an era of fast evolving, dynamic, disruptive innovation and should it?

Now a new book tackles this very question. Entitled Against Monopoly, and written by two econ professors at Washington University, David K. Levine and Michele Boldrin argue that intellectual property rights may stifle – rather than encourage – innovation, claiming that competition requires some degree of imitation.

Maybe.

As I argued in my last post on this issue, Professors Levine and Boldrin would seem to agree that even with P2P file sharing, musicians for example have an ancillary ability to make money off of their work, for example by using their increased popularity (that comes from easy access – read no coast – to their music) to sell more concert tickets, tee-shirts, etc.

While I wouldn’t go as far as they by suggesting we abandon the Copyright Act (far from it), I do think it needs some revision in order to allow for the reality of easy access to material in the Digital Age. Maybe the solution is to levy significant taxes on file-sharing companies such as BitTorrent, and use those proceeds to the artists whose works fuel these P2P sites. OK, that sounds pretty unworkable, even as I write it. But then again, what’s your bright idea?

Blog Bites -- A Few More Words on Micro-Blogging

Not long ago I wrote a long, detailed piece on the potential pitfalls involved in blogging. What is not mentioned in that article in any detail is mico-blogging.

Micro-blogging is defined by Wikipedia as a form of blogging “that allows users to send brief text updates or micromedia . . . to be viewed by anyone or by a restricted group. . . .” Think Twitter or Facebook, MySpace, LinkedIn or Xing: Micro-blogging typically consists of short pieces, almost like “sound bites” or “blog bites,” if you will. They provide short, immediate commentary, and often related to such important, breaking news as “What I’m doing now is . . . .”

Because one often uses micro-blogging only with respect to one’s close friends (or expanded circle of friends), one’s micro-blogged persona may differ from one’s professional persona. Ask yourself this: would I “friend” my boss on Facebook and let him or her see everything that’s going on in my personal life? If the answer is “no,” you’ll understand why a number of companies no insist that job applicants “friend” them so they can check out the what isn’t on the resume.

Is this legally acceptable? Seems that it. I put the question to one of my colleagues who practices in the firm’s Labor & Employment Group, and her response was that it would seem to pass legal muster. (I’m omitting a slew of caveats, but that was the general idea.)

What’s more, a colleague in our Atlanta office chimed in with an anecdote about having found the “smoking gun,” which allowed his team to prevail on a lawsuit, on the plaintiff’s Facebook page. Hey, an admission is an admission no matter where you find it. But with the advent of the Internet, and the proliferation of micro-blogging sites, there are more opportunities to make potentially case-killing statements, and a greater chance that, once made, they won’t simply disappear into the ether.

Add into this mix, the Federal (and California, etc.) rules on electronic discovery, and you can see a storm brewing. In a nutshell, the Federal Rules explicitly incorporate e-discovery as subject to disclosure requirements. While certain “safe harbors” exist, for example where the e-information sought is automatically deleted as part of good-faith, routine system operations (and not as part of a plan to destroy evidence), the fact is that most of what we create in cyberspace (micro-blogs included) would be subject to such discovery, and we – and our clients – would have a duty to preserve such data, search for it and (gulp!) disclose it (provided it is relevant, not privileged and "reasonably accessible" of course).

So, what happens when Web 2.0 (social networking, Twitter, Facebook, etc.) meet e-discovery? The answer may depend on how – and if – such data can be archived. In other words, is it there when the opposing counsel asks for it? Certainly one could ask for a print out of everything available as of the date of the request.

Moreover, if the data resides on the Twitter, Facebook or LinkedIn server, it may be obtainable by subpoena, and if it has been stored on the responding party’s internal computer RAM, there seems to be no question that it is subject to discovery.

While this area of law is sure to evolve in the coming months, it is something to remember when seeking discovery, or representing a company in their hiring issues. After all, you don’t a blog bite to come back and bite you in the . . . .


Jonathan Pink is a member of the Intellectual Property Service Group at Bryan Cave, LLP. He can be reached at jonathan.pink@bryancave.com

An Italian Fling

So I’m sitting in my office the other day, generally depressed about the depression, when my phone rings and (trumpets sound) a new case lands on my desk.

Now, I love the thrill of a new case. It’s like a new love (as best I can remember from way back when). Everything is new, and bright and interesting. And get this: this one was Italian. Actually, an Italian copyright case, to be exact.

Seems that my client – located in Italy -- had been accused by an American company of hacking into the Yank’s computer (located in the U.S.), and then copying software code (from Italy) that is covered by a valid, U.S. Copyright registration. And, of course, the U.S. company was threatening a parade of nasties all covered by the U.S. Copyright Act.

But that really begs the question, doesn’t it: if this was infringement, is it governed by the U.S. Copyright Act? Or is this a dispute that would have to be litigated in Italy?

In general, “United States copyright laws do not have extraterritorial effect, and therefore, infringing actions that take place entirely outside the United States are not actionable.” Subafilms, Ltd. v. MGM-Pathe Comm’ns Co., 24 F.3d 1088, 1091 (9th Cir. 1994) (en banc); Peter Starr Prod. Co. v. Twin Continental Films, Inc., 783 F.2d 1440, 1442-1443 (9th Cir. 1986). In other words, even if the plaintiff is a U.S. based company, and the method of copyright violation occurs by internet connection (as would have been the case if my clients had infringed as alleged), “[a]t least one alleged infringement must be completed entirely within the United States.” Allarcom Pay Television, Ltd. v. Gen. Instrument Corp., 69 F.3d 381, 387 (9th Cir. 1995); see also Danjac, LLC v. Sony Corp., 1998 U.S. Dist. LEXIS 22231, at *22 (C.D. Cal. 1998) (scope of injunction limited to domestic activities).

In Allarcom, the plaintiff was the authorized Canadian distributor of certain television and movie rights, while defendant, Showtime, had U.S. rights to some of the same material. 69 F.3d at 383-384. Co-defendant, General Instrument, manufactured a descrambling device that allowed unauthorized users to receive protected television signals from companies such as Showtime (e.g. they received the content for free by stealing it with the use of the descrambling device). The plaintiff sued for copyright infringement, filing its claim in a U.S. district court. The court held that the Copyright Act did not apply to infringement at issue, as it had occurred in Canada. Id. at 387. Specifically, the court held that although the signal was from the United States, it had been received and decoded in Canada, and thus “the potential infringement was only completed in Canada once the signal was received and viewed.” Id.

So bringing this back to my case, these facts will weigh heavily when negotiating a settlement. That is, while the plaintiff has asked for a boatload of money, I’ve pointed out that if she wants to litigate this case, she’d better brush up on her Italian (where, by the way, the penalties for alleged infringement are not as steep as they are in the U.S.). I’ll let you know haw this goes.

Jonathan.pink@bryancave.com

Trade Secret Cloak and Dagger: the Economic Espionage Act of 1996

As if getting hit with a claim for misappropriation of trade secrets were not enough, many people do not realize (OK, it came as a surprise to me) that there is a criminal component to misappropriation. That is, at least where the theft is done for purposes of passing off the secrets to a foreign government.

Cloak and dagger: the Economic Espionage Act of 1996 (18 U.S.C. § 1831–1839) criminalizes the theft or misappropriation of a trade secret. Moreover, the offense applies even where the information taken is not top secret. (Although it makes the story so much more interesting if it is highly classified). The EEA involves any commercial information that is neither classified nor related to national defense (in which case it is falls under the run-of-the-mill espionage act).

This EEA in a nutshell: The Act is broken into two parts. The first, 18 U.S.C. § 1831(a), criminalizes the misappropriation of trade secrets (including conspiracy to misappropriate trade secrets and the subsequent acquisition of such misappropriated trade secrets) with the knowledge or intent that the theft will benefit a foreign power. The second, 18 U.S.C. § 1832, criminalizes the misappropriation of trade secrets related to or included in a product that is produced for or placed in interstate (including international) commerce, with the knowledge or intent that the misappropriation will injure the owner of the trade secret.

So far as I can tell, the EEA isn’t used all that often, and when it is, the cases seem to look to the Uniform Trade Secret Act for guidance as to what is -- or isn’t – a trade secret. There was one fairly high profile case decided in August, 2007 in the Northern District of California (before District Court Judge Jeremy Fogel). In that case, Judge Fogel sentenced a Canadian citizen, Xiaodong Sheldon Meng, to 24 months in federal prison "for stealing military software from a Silicon Valley defense contractor and trying to sell it to the Chinese military."

According to my sources, another case is poised to go to trial this May in the Central District of California. That case also involves efforts to sell (or at least deliver) to the Chinese government material that was gleaned by an employee of a military contractor.

Like most criminal conduct, the penalties for violation of the EEA are steep. Penalties for violation of Section 1813(a) include fines of up to $500,000 and imprisonment of up to 15 years. (Organizations can also be guilty of this Act, and while they won’t do any prison time, they will pay a fine of up to $10 million.) Penalties for violation of section 1832 are imprisonment for up to 10 years for individuals (no fines) and fines of up to $5 million for organizations.


jonathan.pink@bryancave.com
949-223-7173