Monthly Archives: September 2008

Federal District Court Mandates the Disclosure of the Identity of Online Posters in Yale Law Student Case

Internet Law: Federal Case Law: Anonymous Speech: Two female Yale law students recently brought suit in the United States District Court in Connecticut, in Doe I and Doe II v. Individuals, whose true names are unknown, 2008 WL 2428206 (D. Conn. 2008). Through the lawsuit the students alleged that they had been defamed, threatened and harassed on the Autoadmit.com website. The problematic statements were posted on the website forum utilizing monikers, and therefore the identity of the speakers was unknown. The plaintiffs issued a subpoena duces tecum to AT&T as the Internet Service Provider for the website in order to identify the individuals utilizing those monikers.

In evaluating the motion to quash the subpoenas, the District Court noted that the “First Amendment generally protects anonymous speech,” and that such protections extend to Internet speech. The Court acknowledged that many other courts have quashed subpoenas seeking the identifying subscriber information based on First Amendment concerns and protection of anonymous speech. However, the Court specifically noted that the First Amendment right to anonymous Internet speech “is not absolute and must be weighed against [Plaintiff’s] need for discovery to redress alleged wrongs.

The Court outlined several factors to be examined in making this determination: (1) whether the plaintiff undertook efforts to notify the anonymous posters that they are the subject of the subpoena; (2) whether the exact “problematic” statements would constitute actionable speech; (3) the specificity of the discovery request and “whether there is an alternative means of obtaining the information called for in the subpoena;” (4) whether there is a “central need for the subpoenaed information to advance the plaintiffs’ claims;” (5) whether the subpoenaed party had an expectation of privacy when the online material was posted; and (6) whether the plaintiffs have made an “adequate showing” as to their claims. Notably, the Court held that the notice requirement had been met because notice of the subpoena was placed on the Autoadmit.com website itself. Moreover, the Court outright rejected other courts’ interpretations as to what constitutes an “adequate showing.” Instead, the Court adopted the threshold requirement that the plaintiffs “make a concrete showing as to each element of a prima facie case against the defendant.” Specifically, the Court noted that “[u]nder such a standard, ‘[w]hen there is a factual and legal basis for believing [actionable speech] has occurred, the writer’s message will not be protected by the First Amendment.”

Examining the statements at issue, the Court determined that the plaintiff had made such a showing and that her interests in pursing discovery outweighed the defendant’s First Amendment right to anonymous speech. Finally, the Court also denied the defendant’s request to proceed in the litigation as an anonymous party. In so ruling, the Court noted that the defendant had not made a “showing of any substantial privacy right or of any potential physical or mental harm as a result of being a named party in the litigation.”

Comments/Questions: ljm@gdnlaw.com

© 2008 Nissenbaum Law Group, LLC

Contracting to Address Joint Copyright Issues

Intellectual Property Law: Joint Copyright Ownership: As I previously discussed on this Blog, in A Work for Hire Agreement: A Critical Tool for Production Companies, work for hire agreements are a necessary aspect of the relationship between film production companies and their freelancers. As I alluded, the risk is that the freelance contributor could be deemed a joint copyright holder.

The law generally provides that all contributors to a work may be able to claim rights as a joint copyright holder. Importantly, this is based on creation of the work alone, and is separate and apart from copyright registration. Essentially, all contributors, including not only freelance contractors, but also a production company’s producers, sound technicians, photographers, etc., could arguably claim that they are joint copyright holders to the final product. The problem? The law generally provides that a joint copyright holder can act independently. This means that one joint copyright holder can contract, license, distribute or otherwise conduct business relating to the work separate and apart, and without permission from the other copyright holders to the work. This greatly impacts the other owner’s ability to control the work. For instance, a production company may devise a project that it wants to market as an art-driven, independent film. However, its joint copyright holder decides to instead exploit the film through “pop culture” in a manner that is contrary to the production company’s ideologies. As a joint copyright holder, that individual or entity can exploit their work in any way they deem suitable, and without the other’s permission. The fact that it is contrary to the production company’s original plan for the project or otherwise goes against its beliefs is irrelevant. From a common law perspective, either owner may act independently. One of the only limitations is a mandated sharing of profits. Though, notably the law provides that this is generally to be an even split.

The good news is there is an easy way to avoid this: utilize proper contracts. First, the fallback position should generally be that all contributors to a work enter into an agreement whereby they are assigning all of their rights to the production company, and acknowledge that all of their contributions are as a “work-for-hire.” In those rare situations where the company nevertheless wants to provide someone with rights as a joint copyright holder, it should contract to explicitly define what each of their respective rights are. By contract the parties can limit the rights that the law otherwise provides. For instance, the production company may want to limit the contributor’s ability to sell or otherwise contract or conduct business relating to the work without the company’s permission. Moreover, the company may want to establish a different split of profits rather than the default 50/50. It is critical that companies consult an attorney to draft an enforceable agreement to protect its rights and suit its particular goals.

Comments/Questions: ljm@gdnlaw.com

© 2008 Nissenbaum Law Group, LLC

New York Imposes Education Requirement Relating to Internet Safety

Internet Law: New York Legislation: Internet Safety: New York legislators have taken a solid stance in moving to protect children from online predators. They have done so by imposing curriculum requirements relating to Internet safety within the New York Education Law.

Specifically, the new law provides that the Commissioner of Education needs to “develop age-appropriate resources and technical assistance for schools to provide to students in grades three through twelve and their parents or legal guardians concerning the safe and responsible use of the internet. The resources shall include, but not be limited to, information regarding how child predators may use the internet to lure and exploit children, protecting personal information, internet scams and cyber-bullying.”

The new law was imposed with the specific and stated intention of raising “awareness of the need for vigilance and to ensure that students and parents have comprehensive, age appropriate internet safety resources throughout their school tenure that will enable students to maximize the internet’s potential while protecting them from sexual predators and others with malicious intentions.

The law is effective as of September 4, 2008. However, the New York legislature provided the Commissioner with 180 days to develop the resources referenced in the statutory requirement.

Comments/Questions: ljm@gdnlaw.com

© 2008 Nissenbaum Law Group, LLC

New York Federal Court Rejects Contributory Trademark Infringement Suit Brought by Tiffany Against eBay for the Sale of Counterfeit Goods

Internet Law: New York Caselaw: Trademark Infringement: On July 14, 2008, the U.S. District Court for the Southern District of New York issued a decision siding with eBay in a landmark trademark infringement lawsuit brought against the online auction site by Tiffany, Inc. and Tiffany and Company (collectively, “Tiffany”). Tiffany, Inc. v. eBay, Inc., Case No. 04-Civ-4607 (S.D.N.Y. July 14, 2008). In its suit, Tiffany sought to hold eBay liable for the sale of counterfeit Tiffany jewelry by eBay sellers under the doctrine of contributory trademark infringement. The Court rejected Tiffany’s claim, declining to accept a theory of liability which would have drastically expanded the reach of contributory trademark infringement.

Prior to bringing suit, Tiffany had informed eBay that a substantial amount of counterfeit Tiffany jewelry was being sold on the auction site. Tiffany demanded that eBay immediately suspend access to the site to any sellers that Tiffany identified as selling counterfeit goods. It also insisted that eBay remove any listings that offered five or more of the same Tiffany item for sale, contending that where a listing offered a large number of the same Tiffany item, the item was likely counterfeit. In response, eBay refused to comply with Tiffany’s requests.

In bringing its claim, Tiffany argued that eBay should be held liable for contributory trademark infringement because it had been put on notice (by Tiffany) that its sellers were engaging in counterfeit sales and thus it should have “reasonably anticipated” the wrongful sales of counterfeit (and infringing) merchandise occurring on its site. Accordingly, Tiffany argued, eBay had a legal obligation to proactively investigate and remove any listings that raised a suspicion of wrongdoing.

The Court disagreed with Tiffany, holding that eBay should be absolved of liability as long as it takes appropriate steps to suspend access to the site and remove listings when it receives specific knowledge that a particular listing is infringing. The Court noted that a trademark owner has the burden of policing its own mark. It found that eBay cannot be held liable for contributory infringement simply because of its generalized knowledge that some of its sellers might be engaging in infringing behavior.

In support of its decision, the Court cited Coca-Cola Co. v. Snow Crest Beverages, an earlier contributory infringement case having a similar fact pattern. 64 F.Supp. 980 (D. Mass. 1946), aff’d, 162 F.2d 280 (1st Cir. 1947). In that case, Coca-Cola claimed that Snow Crest had contributorily infringed its mark by selling an item called “Polar Cola” to bartenders who mixed it into “rum and Coke” drinks. Coca-Cola argued that Snow Crest should have reasonably anticipated the infringement because Coca-Cola’s lawyers had informed Snow Crest that the practice was occurring in a number of bars. Coca-Cola did not, however, provide names of specific bars where the alleged infringing behavior was occurring. The Coca-Cola Court refused to impute knowledge of the infringing behavior to Snow Crest based on a “blanket demand” by Coca-Cola.

Just as the Coca-Cola Court had held that Snow Crest should be liable based on generalized notice of what some of its buyers might be doing, the Court in Tiffany v. eBay held that generalized notice that some of its users might be selling counterfeit goods on its site was insufficient to impute knowledge to eBay of any specific acts of actual infringement. The Court reasoned that “the doctrine of contributory trademark infringement should not be used to require defendants to refuse to provide a product or service to those who merely might infringe the mark.” The Court took particular note of the fact that eBay had devoted a substantial amount of resources to establishing and implementing procedures to combat the sales of counterfeit goods.

The decision is a favorable one for entities offering services similar to eBay. Its holding sends the message that such intermediaries will not be responsible for investigating and policing all of the potentially infringing activity on their sites. It also highlights an additional potential defense for websites that are sued for its “members” acts, emphasizing the importance of detailed notice. On the other hand, the decision should also serve as a warning to trademark owners that they bear the burden of policing others’ use of their marks. Moreover, it accentuates the importance of a trademark owner providing very specific and detailed notice in the event of an infringement.

Notably, in a separate case brought against eBay in the Tribunal de Commerce in Paris, the court’s holding went in the opposite direction. There, the court found that eBay was not taking adequate measures to prevent the auction of unauthorized and counterfeit goods. It is interesting to note that different jurisdictions are interpreting website responsibility differently, thus creating different legal standards for the operation of a website in different areas.

Comments/Questions: ljm@gdnlaw.com

© 2008 Nissenbaum Law Group, LLC

Internet Websites May Be Vulnerable to Regulation by Foreign Countries

Commentary: International Websites: The Internet has been amazing tool; enabling even the smallest voice to reach people throughout the world. It has, in fact, breathed new life into many small businesses who now can reach millions of potential customers in mere keystrokes. Many companies elect not to, or do not think to, limit the reach of their website. As a result, it may be accessible to the international public, and the Company could be deemed to be offering its goods or services to customers throughout the world. Again, this may be beneficial from a business standpoint, but it presents some legal vulnerabilities. Quite simply, different countries have different rules and standards by which a website must operate.

By offering its goods or services to other countries’ residents, a foreign court could claim that it has jurisdiction over a US-based company. So, even if the company has lawfully established the website in the United States, and is complying with the Federal and State laws here but the website is accessible to residents in another country, that company could still be vulnerable to legal attack for failure to adhere to that country’s (or their state or provincial) laws.

The difference in international website standards was recently highlighted in the Beijing Olympics. A lot of press came out of the Olympic Games for China’s censorship of certain Internet content. There, the government merely banned access to certain websites. However, other countries may not be so proactive, and may instead allow access to the website but hold the website operator liable for illegalities on the site or in connection with the sale. The vulnerability regarding the international scope of websites also takes a prominent role in regard to the different definitions of “obscenity.” Other countries have different standards as to what is “obscene” as compared to the United States. Therefore, what might be acceptable here, and what might even be considered to be artwork here, may be banned as pornography elsewhere. Another example is that the European Union tends to generally have stricter rules when it comes to privacy regulations.

Unfortunately, this vulnerability is complicated in that there may be different standards in each locality in addition to those differing national standards. This is a challenge even within the United States. For instance, the Internet is not generally regulated at the Federal level. Rather, each state can have its own rules and regulations relating to the operation of an e-commerce company. For instance, California has an entire regime of laws relating to privacy protections and disclaimers that need to be on a website. Regardless from where a website is based, if it is marketing to California residents, it will arguably need to comply with those laws.

Accordingly, if a website is simply launched and offers services to everyone, there are numerous legal vulnerabilities given all of the levels of legal regulation to which it may be exposed. One of the best ways to manage this risk is to limit in some way the people to whom the company is offering its goods or services. This can be included in the website terms and conditions or other legal disclaimers, where a company can specifically require the user to indicate that they are a resident of a certain country or state. Moreover, a company could establish protocols to be sure that orders are not accepted from residents of certain states and territories. Therefore, a company can limit the reach of its offerings to those states and countries that it has evaluated with legal counsel to ensure that the website and its goods and services will not run afoul of the laws of those areas.

Comments/Questions: ljm@gdnlaw.com

© 2008 Nissenbaum Law Group, LLC

U.S. Supreme Court Upholds Third Legislative Effort by Congress to Stamp Out Child Pornography on the Internet

Internet Law: Supreme Court Caselaw: In a recent decision, the United States Supreme Court upheld a law aimed at regulating child pornography in the age of the Internet. U.S. v. Williams examined a facial attack against the PROTECT Act of 2003, which prohibits not only the possession or transmission of a pornographic image depicting a minor, but also any advertisement, distribution or solicitation which reflects the belief, or which is intended to cause another to believe that, such an image is being distributed. In other words, the Act reaches beyond actual child pornography to also apply to the distribution or solicitation of material that an individual mistakenly believes to be child pornography. The Court rejected the plaintiff’s argument that the statute was vague and overbroad in scope and thus contradictory to deep rooted First Amendment principles.

This holding follows cases invalidating, or otherwise holding as unconstitutional, Internet laws aimed at preventing child pornography. In upholding the statute, the Court essentially held that the doctrine of mistake trumps the First Amendment. The mistake doctrine is a criminal law principle under which a mistake about the facts is no defense. In the context of the Williams decision, the doctrine is relevant in that the PROTECT Act applies not only when actual child pornography is actually being distributed, but also when a party is either distributing material with the mistaken belief that it is child pornography or attempting to persuade another party to purchase material by fraudulently advertising it as child pornography. The Williams Court reasoned that offers to engage in illegal transactions, when those transactions would not technically be deemed unlawful, are outside the protection of the First Amendment. As such, First Amendment protection will turn on whether an individual traffics in material that he believes to be unprotected, and not on whether that material is actually protected.

Notably, the PROTECT Act is the third legislative effort to regulate child pornography at the federal level. The first two efforts by Congress were the Communications Decency Act of 1996, which was partially overturned by the Supreme Court in 1997, and the Child Online Protection Act (COPA), which was struck down by the U.S. Circuit Court of Appeals for the Third Circuit in 2008. In both instances, the Court upheld legal challenges to the statutes on the ground that they were unconstitutionally overbroad. Similar to the PROTECT Act, the reach of COPA went beyond actual child pornography, prohibiting material that merely appeared to be or conveyed the impression that it was child pornography.

With the Williams decision, the Supreme Court has taken a harder line. The PROTECT Act seeks to punish not only those individuals who deal in actual child pornography, but also the individuals who support the production, distribution and possession of such material. The effect of the decision will depend on how stringently trial courts enforce the Act, which will turn on the evidentiary standard that prosecutors must overcome in proving that a defendant intended to distribute material that he believed to be, or that he wanted others to believe was, actual child pornography. For example, if a defendant distributes pornography depicting an individual who appears to be 14 years old, but is really 20 years old, a court may nonetheless deem the defendant to have violated the Act. Again, such determinations will depend on the approach that the trial courts take in enforcing the Act.

Comments/Questions: ljm@gdnlaw.com

© 2008 Nissenbaum Law Group, LLC