Digital Media Lawyer Blog

On July 2, 2009, the FTC issued a press release announcing that a federal court had ordered "key players in an international spam ring to give up $3.7 million that they made by sending out illegal email messages pitching bogus hoodia weight-loss products and a 'human growth hormone' pill." The FTC claimed that this was the first case in which the FTC used the US SAFE WEB Act.

The US SAFE WEB Act was a Sen. John McCain-sponsored bill that was enacted in December 2006 and codified as portions of 15 U.S.C. §§ 44, 45, 46, 56 and 57-57c. With some exceptions, the US SAFE WEB Act does not create new areas of prohibited conduct for which a person could be subject to criminal or civil liability. Rather, it primarily provides the FTC with new powers to cooperate with foreign law enforcement agencies and new protections for persons who voluntarily provide information to aid FTC investigations.

For example, the Act permits the FTC to provide investigative assistance to foreign law enforcement agencies, including conducting investigations to collect information and evidence for these foreign agencies. 15 U.S.C. § 46(j). It also authorizes the FTC to spend funds for the costs of multilateral cooperative law enforcement groups. 15 U.S.C. § 46(l). This would seem to permit the FTC and foreign governments to create super-police agencies which could cooperate to gather information around the globe. However, the original Act limited these funds to $100,000 and specified that they had to be spent for the costs of five specific international groups. So while the concept of international policing agencies seems exciting, at least as of December 2006, Congress intended these to be quite modest efforts.

The Act permits the FTC to share investigative materials, such as documents, written reports or answers to questions and transcripts of oral testimony with foreign law enforcement agencies. 15 U.S.C. § 57b-2(6). However, the foreign government has to show that the materials are to be used to investigate or enforce foreign laws prohibiting fraudulent or deceptive commercial practices that are "substantially similar" to the practices prohibited by U.S. law.

The Act also contains secrecy provisions, so that the FTC does not have to disclose information provided by foreign sources under FOIA or other provisions of U.S. law. 15 U.S.C.§ 57b-2(f). The bill provides that the FTC was subject to the Right To Financial Privacy Act. However, it also specifies procedures under which disclosures mandated under the Right To Financial Privacy Act can be delayed or prohibited if it would jeopardize an FTC investigation. 15 U.S.C. § 57(b)-2a.

Continue reading "What is the US SAFE WEB Act and what does it mean for you?" »

A June 30, 2009 decision by the California Court of Appeal addressed the issue of whether the provision of neutral on-screen prompts for information, such as drop-down menus, by an interactive website makes the site a co-developer of the information included in a profile. Under the Communications Decency Act, a website operator can gain immunity from publishing offensive or harmful material provided by another "information content provider." Over the past decade, the courts have broadly interpreted the Act to provide immunity to interactive website operators who permit users to create false profiles that are then used to injure other users. See Carafano v. Mertrosplash.com Inc., 339 F.3d 1119 (9th Cir. 2003).

However, the courts have also long recognized that this immunity can be breached if the website operator itself is determined to also be a developer of offensive material. For example, in the recent case Fair Housing Council, San Fernando v. Roommates.com, 521 F.3d 1157 (9th Cir. 1157), the Ninth Circuit ruled that a website operator was a developer of profile information entered by third parties because it used on-screen prompts which required users to input information that violated state and federal fair housing laws.

In the Doe v. MySpace cases, several teenage girls created MySpace profiles through which they met adult men who later sexually assaulted them. Doe v. MySpace,--Cal.Rptr.3d--, 2009 WL 1862779 (2009). The girls sued MySpace on negligence and other grounds, arguing that MySpace had failed to implement readily-available precautions, such as age-verification software, that could have prevented these attacks. MySpace defended, claiming that the Communications Decency Act provided it immunity for publishing material from the girls or their attackers because such material came from "another information content provider".

The plaintiffs argued that as in Roommates, MySpace should be considered a provider of the information on the profiles because it collaborated with the Does and their attackers to create and flesh out their MySpace profiles and allowed the attackers to channel information in profiles, and search and browse profiles for particular characteristics. The Court of Appeal rejected this argument.

The Court of Appeal found that the Ninth Circuit had deemed Roommates.com to be an information content provider because it "created . . . discriminatory questions, presented a limited choice of answers and designed its search and email systems to limit listings based on sex, sexual orientation, and presence of children." In other words, Roommates.com created and forced used to participate in a discriminatory process.

Continue reading "The Doe v. MySpace Cases: Neutral On-screen Prompts Don't Make an Interactive Website a Developer of User Information for Communications Decency Act Purposes" »

On June 29, 2009, the 10th Circuit handed down another in a recent series of rulings that have found no Communications Decency Act immunity where a website operator encourages a third party to provide illegal or offensive information that is then posted on its site. The case was Federal Trade Commission v. Accusearch, Inc., -- F.3d.--, 2009 WL 1846344 (2009), which concerned Accusearch's website www.Abika.com, a site which bills itself as a source of personal information, including criminal, tax and mortgage records, IP and email addresses, background checks and personality profiles.

According to the Court, from February 2003 to January 2006, Abika.com also advertised access to personal telephone records. The website stated that its customers could acquire "details of incoming or outgoing phone calls from any phone number, prepaid calling care or Internet Phone." The Court stated that "acquisition of this information would almost inevitably require someone to violate the Telecommunications Act or to circumvent it by fraud or theft," because the act generally forbids telephone companies from disclosing such records without customer consent.

Accusearch argued if such criminal activity had occurred, it was immune under the Communications Decency Act (47 U.S.C. § 230), because the phone records were supplied by third-party researchers. A user of Abika.com would place a search order and pay an "administrative search fee." Abika.com would forward the request to a researcher. After completing the search, the researcher would send the results to Accusearch and bill Accusearch directly. Accusearch would then email the result to the customer and post it on the customer's Abika.com account. The customer had no contact with the researcher throughout the process. In any event, all the allegedly illegal information came from third party providers.

In response, the FTC argued that Abika.com was not an interactive computer service, because it did not allow for interaction between users and third parties. However, the 10th Circuit skirted this argument, noting that other cases had found that websites necessarily provide interactive computer services. (This might be fertile ground for future cases -- especially if other forms of communication are combined with the use of a website in providing the content at issue).

Instead, the 10th Circuit focused on the question of whether Accusearch was itself a provider of the illegal phone records or whether the material could be deemed to have come from a third party provider. The Court noted that the CDA defines the term "information content provider" as "any person or entity the is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service." As such, there can be several information content providers for a single internet post.

Continue reading "FTC v. Accusearch, Inc: No Communications Decency Act Immunity Where Website Operator Qualified As Developer of Material Posted on Website" »

Search engine operators and their advertisers have been locked in a decade-long battle over whether the use of trademarks as keywords to trigger links to competitor ads is actionable as confusion or deceit under federal trademark laws. This practice has often been attacked as a form of "initial interest confusion." Initial interest confusion occurs when a competitor uses a trademark in a manner calculated to capture initial consumer attention, even though no actual sale is finally completed as a result of the confusion. (Fn 1) The concept of initial interest confusion is recognized in the 9th Circuit, although it has been questioned by some courts.

Search engine operators have long used trademarks as keywords to trigger competitor advertising, by either requiring advertisers to link their ads to the trademarks, or by selling the trademarks as keywords to the advertisers. In either case, when a user enters the trademark as a keyword in the search engine, the search engine will return advertisements from competitors to the trademark owner. In some cases, these have appeared as banner ads. In several recent cases involving Google, the competitor ads have appeared in a list identified by Google as "Sponsored Links." (Fn 2)

Earlier 9th Circuit cases had suggested that clearly identifying competitor ads as such might eliminate initial interest confusion. For example, a banner advertisement from a competitor might eliminate confusion by identifying the source of the advertisement. Or the search engine could eliminate confusion by including a statement saying "If you are interested in Brand X, you might also be interested in a message from Brand Y."

Google recently performed a test of this defense to a claim of initial interest confusion in the 2007 case Google, Inc. v. American Blind & Wallpaper. In that case, it filed a motion for declaratory relief against American Blind & Wallpaper, seeking a judgment that its use of American Blinds' trademarks as keywords in its AdWords program did not constitute trademark infringement. Google argued that it identified "Sponsored Links" as such and that such links were "conspicuous and differentiated from its genuine search results."

On Google's motion for summary judgment, American Blind introduced expert testimony that Google's practices still created initial interest confusion. According to American Blind's expert, 29% of respondents in a survey "falsely believed, after being shown a Google search engine results page from the entry 'American Blinds,' that "Sponsored Links" appearing on that page were affiliated with [America Blinds]." Over numerous objections by Google, Judge Jeremy Fogel admitted this survey as providing evidence of possible confusion.

We don't know what a jury would have done with this evidence, because the parties apparently settled the case shortly after Judge Fogel's order was entered.

Continue reading "Does Identifying a Search Result as an Advertisement Eliminate Confusion with a Trademarked Search Term?" »

The point of the spear in digital media law may be turning from copyright to trademark. As website operators take advantage of recent court decisions, such as Perfect 10, to provide access to third party content with less fear of a copyright suit, content providers as looking to other intellectual property laws to protect their work. The Rescuecom v Google (Fn1) case is an example of such an attack regarding Google's use of third party trademarks as keywords in internet searches.

Rescuecom filed suit over Google's use of Rescuecom's trademark in Google's search engine. At the time of suit was filed (Fn2), when a Google user entered an entity's name or trademark, Google provided two types of results. First, it provided a list of links to websites, listed in the order Google's algorithm's deemed to be of descending relevance to the user's search term. (The search results were generally found in a column on the left side of a user's screen). Search results would typically begin by providing a link to a site owned by the trademark holder, followed by a list of other links that Google's algorithm's also deemed relevant to the search term. Second, Google would also provide content-based advertising. These are the "Sponsored Links", which in my experience show up in a narrower column on the right side of a user's screen.

Google used a couple of programs to offer these "context-based" links to advertisers: AdWords and Keyword Suggestion Tool. AdWords permitted an advertiser to purchase keywords. The advertiser's ad would appear in the "Sponsored Links" section on a user screen whenever the purchased keyword was entered as a search term. The advertisers would then pay Google based on the number of times its ad was clicked by users.

Google's Keyword Suggestion Tool would provide hints to advertisers wishing to purchase keywords as to other useful words that they could purchase. If an advertiser X, a furnace repair company, purchased the keyword "furnace repair", the tool might also suggest that it purchase the term "Y" -- the brand name and trademark of a competing furnace repair company. This would permit advertiser's X's ad to appear on Google's website whenever a user searched for company's Y's brand name and trademark.

Rescuecom claimed that through the use of these tools, its competitors' ads would appear when users were searching for "Rescuecom" on Google. It alleged that as a result, users were deceived and diverted from Rescuecom to these other competing firms. Rescuecom sued, claiming that this practice violated the Lanham Act (federal trademark law).

Based on older 2nd Circuit precedent, the District Court dismissed the suit on Google's 12(b)(6) motion. (Fn3) However, on April 3, 2009, over a year after it heard the case, the 2nd Circuit reversed.

Continue reading "Inside Rescuecom Corp. v. Google, Inc.: Does Google's Use of Trademarks to Trigger Advertisements from Competitors Violate Federal Trademark Laws?" »

The complaint in Vanderhye v. IParadigms, LLC represented an interesting attempt to attack an on-line, computerized plagiarism detection service by accusing the service of copyright infringement. See Vanderhye v. IParadigms, LLC, 562 F.3d 630 (4th Cir. 2009).

IParadigm operates an on-line plagiarism detection service called Turnitin. Schools require students to submit writing assignments to Turnitin, which are compared to other writings in Turnitin's database. The database contains other student papers, as well as commercial and academic journal articles. Turnitin supposedly creates a "fingerprint" of the student's papers by applying various mathematical algorithms. Turnitin then compares this digital fingerprint to the fingerprints of the other works in its database and generates an "Originality Report" which indicates the percentage of the student's work that appears not to be original.

With permission from participating schools, Turnitin will place the submitted writing assignments into its database, so that they become part of the database used to evaluate the originality of subsequent student papers. The plaintiffs included three students who had submitted their papers to Turnitin for testing and whose papers were then archived in the database. The plaintiffs alleged that Turnitin's inclusion of their papers in the database constituted copyright infringement.

The Fourth Circuit's analysis focused on the "fair use" doctrine, which it characterized as "a privilege in others than the owner of the copyright to use the copyrighted material in a reasonable manner without the [copyright holder's] consent." 17 U.S.C. § 107 provides that fair use includes "criticism, comment, news reporting, teaching . . . scholarship or research." The statute provides a four factor test to determine whether the use is fair.

The Court rejected the argument that because IParadigm's use of the student papers was commercial that this required a finding that its use was unfair. Looking at the four factor test in the statute, the Court instead found that Turnitin's use of the student papers was transformative, since the papers were being used for a different purpose in the Turnitin database than that for which they were originally prepared. It further found that Turnitin's use of the papers did not discourage, but rather encouraged creative expression. While Turnitin used the whole of the plaintiff's works, its use was so transformative that this factor was not decisive. Finally, it found no substantial evidence that Turnitin's use of the papers in its database would affect the market for the papers.

It is not surprising that the 4th Circuit took the side of the schoolmasters in this case. Of course, any time a Court rules that it is OK for a third party to copy and then use an entire copyrighted work, it will raise eyebrows in some quarters.

David D. Johnson is a business lawyer whose practice focuses on litigation and other issues relating to digital media and consumer electronics companies. David can be contacted at (310) 785-5371 or DJohnson@jmbm.com.

I have recently had a number of discussions with website operators that bring audio, video and other content to their websites via "in-line" linking, about whether this practice violates copyright laws. In-line linking is a form of hyperlinking that permits a host website to incorporate images and other materials from other websites into the host website. The HTML in the "in-line" link directs the user's browser to retrieve a linked-to image from a source website and display it on the user's screen -- all without leaving the host website.

Typically, the linked material appears on the user's screen in a "frame" -- surrounding material from the host website. In many cases, a shot of the opening frame (in the case of video clips) or a diluted version object itself (in the case of photographs) will be used as a "thumbnail," which the user will click to activate the hyperlink. This technology has been used in Google's image search function and in social networking and affinity sites, among others.

"In-line" linking and "framing" have often been criticized by the owners of the source objects. For example, in many cases, the "frames" on the host website will cover over advertising and trademarks of the source website. This reduces the ad revenue stream that the source website may have counted on to pay for the content. It is also often claimed that the creation of thumbnails reduces the demand for cell-phone downloads of images.

So do in-line linking, framing and the use of thumbnails violate copyright laws? In many cases -- as the legacy of series of decisions in the Perfect 10 case -- the answer will be "No."

Perfect 10 is a media company that distributes photographs of female models through its magazine, website and via cell-phone downloads. Because it exists on the internet, it was covered by Google's search text and image engines. Google image searches would recover Perfect 10 photographs, which would be displayed as thumbnails on Google's site. When a user clicked on the thumbnail, "his computer would pull up a page comprised of two distinct frames, one hosted by Google and a second hosted by the underlying website that originally hosted the full-size image." Perfect 10 v. Google, Inc., 416 F.Supp.2d 828 (C.D. Cal. 2006).

The Google frame, at the top of the screen, stated that the thumbnail "may be scaled down" and that the Google frame was not the context in which the picture was originally found. The Google frame also gave the URL of the source of the picture, although often in truncated form. The thumbnail was created by Google from the original photograph and existed on Google's servers. While the essence of the image could be viewed, thumbnails typically eliminated over 97% of the pixels in the original image. Id. at p. 847, n. 13.

Continue reading "The Legacy of Perfect 10: Websites that Use In-line Linking and Thumbnails to Bring Third Party Content to Users Can Avoid Suits for Direct Copyright Infringement" »

The Ninth Circuit's recent ruling in Zango, Inc. v. Kaspersky Lab, Inc. is one of the few that directly deal with the provisions in the Communications Decency Act that provide immunity from suit for the screening activities of internet service providers. The relevant section, 47 U.S.C. § 230(c)(2), provides as follows:

"No provider or user of an interactive computer service shall be held liable on account of --

(A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected; or

(B) any action taken to make available to information content providers or others the technical means to restrict access to material described in paragraph [A]."

The plaintiff in the case, Zango, Inc., is a now-defunct Internet entertainment company that provided access to a catalog of online videos, games and music to users who agreed to view advertisements while surfing the internet. The defendant, Kaspersky Lab, Inc., is still live and kicking, and is a Moscow-based firm which bills itself as "a leading anti-virus software and Internet Security software solution for your home computer or business."

According to the court, Kaspersky's software classified Zango as "adware," a type of malware. Once installed on a user's computer, adware monitors a user's browsing habits and causes "pop-up" ads to appear throughout the browsing session. Adware can open up links with websites that themselves contain malware that can infect a personal computer. Kaspersky's software disabled key features of Zango's software and through a series of routines, ultimately blocked the use of Zango.

Zango sued Kaspersky, seeking an injunction against its blocking activities. In defense, Kaspersky invoked the protection of §230(c)(2)(B), cited above.

The Ninth Circuit concluded that Kaspersky was "plainly immunized" by the Communications Decency Act. This conclusion was based on its analysis of §230(c)(2)(B) and two related definition sections: § 230(f)(2) which defines the term "interactive computer service" to mean any "information service, system, or access software provider that provides or enables computer access by multiple users to a computer server . . . "; and § 230(f)(4) which defines the term "access software provider" to include providers of software that filter content.

Combining these three sections, the Court concluded that a provider of filtering software or services may not be held liable for any action taken to make its filtering software available "so long as the provider enables access by multiple users to a computer service." The Court then noted that Kaspersky "provides or enables computer access by multiple users to a "computer server" by providing its customers with online access to its update servers."

Continue reading "Zango, Inc. v. Kaspersky Lab, Inc.: The Ninth Circuit Gets to the Right Destination But By the Wrong Route" »