Attorney Evan Brown

April 8, 2024 Cybersquatting, Trademarks

Sprint puts an end to entrepreneurs’ efforts to revive NEXTEL brand

abandonment — This house is abandoned but the NEXTEL mark is not.

Plaintiff Sprint (owner of the NEXTEL brand) sued defendant business owners, asserting claims for trademark infringement, cybersquatting and counterfeiting. Beginning in 2016, defendants – apparently believing that Sprint had abandoned the NEXTEL mark – began selling cheap cell phones branded as Nextel devices, and operating websites lauding the brand’s “revival”.

The question of defendants’ liability for infringement of the NEXTEL word mark went to a jury, which found in favor of plaintiff. The jury rejected defendants’ argument that Sprint had abandoned the NEXTEL mark.

Defendants sought review of the jury’s finding of no abandonment with the Eleventh Circuit Court of Appeals. On appeal, the court affirmed the lower court’s judgment.

The court examined how abandonment is a defense in trademark infringement cases, requiring discontinuation of a mark’s use with no intent to resume. Trademarks must be used genuinely, and the Lanham Act provides that three years of nonuse is prima facie evidence of abandonment.

The court concluded that the evidence showed Sprint’s continuous use of the NEXTEL word mark. For the three year period that defendants claimed Sprint had not used the mark, Sprint had provided evidence that the mark was used on at least two products. This continuous use also undermined defendants’ arguments against the cybersquatting claim.

Sprint Communications, Inc. v. Calabrese, 2024 WL 1463416 (11th Cir., April 4, 2024)

April 3, 2024 Section 230

Section 230 and … Environmental Law?

section 230 environmental law

Here is a recent case that is interesting because the court applied Section 230 to a situation (as far as this author knows) in which Section 230 has not been applied before – the Clean Air Act.

The Clean Air Act makes it illegal for a person, including a company, “to manufacture or sell” a “part or component intended for use with … any motor vehicle” if “a principal effect” of the part or component is to “defeat” emissions controls “and where the person knows or should know” that it is “put to such use.” 42 U.S.C. § 7522(a)(3)(B).

And we know that our old friend Section 230 – a part of the Communications Decency Act (47 U.S.C. § 230(c)(1)) – commands 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.” This works to establish broad federal immunity to any cause of action that would make service providers liable for information originating with a third-party user of the service.

Defendants’ product was used to defeat emissions testing

In the case of United States v. EzLynk Sezc, 2024 WL 1349224 (S.D.N.Y., March 28, 2024), the federal government filed suit over the sale of the “EZ Lynk System.” The system was comprised of three parts – hardware that would connect to a car to reprogram its software used in emissions testing, a cloud based service where users could upload “delete tunes” – software that was used to defeat the emissions control software, and a mobile app to coordinate the hardware and the cloud based software.

Defendants moved to dismiss, arguing that it was immune under Section 230. The court granted the motion.

Section 230 immunity

The court noted that to satisfy the test for immunity: (1) the defendant must be a provider or user of an interactive computer service; (2) the claim must be based on information provided by another information content provider; and (3) “the claim would treat the defendant as the publisher or speaker of that information. It found that all three of these elements were met.

The system was an interactive computer service

On the question of whether defendants provided an interactive computer service, the court rejected the government’s suggestion that Section 230’s immunity was limited to social media platforms. “Software is information, albeit presented in code. The Complaint alleges the EZ Lynk Cloud is a platform on which people exchange information in the form of software. . . . Thus, according to the government’s own account of the nature of an interactive computer service, the Complaint alleges that the EZ Lynk Defendants provide an interactive computer service.”

Claim based on information provided by third parties, of which defendants were not the speaker

Seeking to avoid Section 230 immunity, the government sought to hold defendants liable for their own conduct. It claimed defendants were themselves information content providers who bore responsibility for the creation and installation of the delete tunes. But the court looked to the language of the complaint itself that expressly alleged that the delete tunes were created by third party companies and individuals. And the court found it could not infer from the allegations in the complaint that defendants collaborated with the third party software providers who uploaded the delete tunes. The court likewise rejected the government’s assertions that defendants’ technical support online communications and social media activity contributed to any misconduct on the part of defendants.

United States v. EzLynk Sezc, 2024 WL 1349224 (S.D.N.Y., March 28, 2024)

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April 2, 2024 Cybersquatting, Trademarks, Unfair Competition

Redirecting URL was unlawful but did not cause damages

url redirect trademark

In the months leading up to the FDA shutting down plaintiff’s business, one of the co-owners of the business left and set up a competing enterprise. For a few weeks, the former co-owner set plaintiff’s domain name to forward to the new company’s website.

Plaintiff sued and the court held that redirecting the URL was a violation of the Lanham Act (the federal law relating to trademarks and unfair competition). But plaintiff was not entitled to any damages because it failed to show that the redirection caused any lost sales. During that time, 133 users who tried to access plaintiff’s website were redirected to the new company’s website, and of those 133 visitors, only two submitted inquiries and neither customer who submitted an inquiry placed an order.

ABH Nature’s Products, Inc. v. Supplement Manufacturing Partner, Inc., 2024 WL 13452228 (E.D.N.Y., March 29, 2024)

Can the owner of a company be personally liable for what the company does?

personally liable

One of the major benefits of forming a corporation or limited liability company is the shield from personal liability the business entity provides to its owners. But that shield does not protect against all of the company’s officers’ conduct.

In a recent trademark infringement case in federal court in California, a court evaluated whether a company’s officer could face liability for trademark infringement and cybersquatting. Plaintiff sued the company and the owner individually, asserting that that the owner should be personally liable because he controlled and was involved in all significant corporate decisions regarding the alleged infringement.

Citing to Facebook, Inc. v. Power Ventures, Inc., 844 F.3d 1058 (9th Cir. 2016), the court observed that a corporate officer can be personally liable when he or she is the “guiding spirit” behind the wrongful conduct, or the “central figure” in the challenged corporate activity.

In this case, the court declined to dismiss the individual defendant from the lawsuit. With respect to the alleged trademark infringement and cybersquatting, the court focused on the fact that the individual defendant:

was the founder and central figure of the company,
personally participated in all major business strategy, branding and marketing decisions and actions,
ran the company from his home,
was the only officer of the company and was simultaneously the CEO, CFO and Secretary,
promoted the company’s brand from his personal social media account, and
directly negotiated with the plaintiff’s founder to see whether the parties could “find a more peaceful resolution.”

Simply stated, the individual defendant was not merely a board member that “final say,” but was substantially involved in every aspect of the conduct of the business giving rise to the alleged intellectual property infringement.

Playground AI LLC v. Mighty Computing, Inc. et al., 2024 WL 1123214 (N.D. Cal., March 14, 2024)

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March 28, 2024 Privacy, Section 230

CCPA claim against Apple thrown out on Section 230 grounds

Plaintiffs sued Apple after downloading a malicious app from the App Store. The claims included violation of the Computer Fraud and Abuse Act (“CFAA”), the Electronic Communications Privacy Act (“ECPA”), and the California Consumer Privacy Act (“CCPA). (Alphabet soup, anyone?)

The lower court granted Apple’s motion to dismiss these claims. Plaintiffs sought review with the Ninth Circuit Court of Appeals. On appeal, the court held that the lower court properly applied Section 230 immunity to dismiss these claims.

What Section 230 does

Section 230 (47 U.S.C. § 230) instructs 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.” A defendant is not liable if it can show that (1) it is a provider of “interactive computer services” as defined by the statute, (2) the claim relates to “information provided by another content provider,” and (3) the claim seeks to hold defendant liable as the “publisher or speaker” of that information.

Why the CFAA and ECPA claims were dismissed

In this case, concerning the CFAA and ECPA claims, the court looked to Barnes v. Yahoo!, Inc., 570 F.3d 1096 (9th Cir. 2009) and concluded that the lower court properly found Section 230 immunity to apply. The duty that plaintiffs alleged Apple violated derived from Apple’s status or conduct as a “publisher or speaker.” It found that the claims referred, as the basis for culpability, to Apple’s authorization, monitoring, or failure to remove the offending app from the App Store. “Because these are quintessential “publication decisions” under Barnes, 570 F.3d at 1105, liability is barred by section 230(c)(1).”

Section 230 knocked out CCPA claim too

The data privacy count included allegations that Apple violated duties to “implement reasonable security procedures and practices” to protect the personal information of App Store users, in violation of Cal. Civ. Code § 1798.100(e). The court said that it need not decide whether violations of such duties can be boiled down to publication activities in every instance or whether implementation of reasonable security policies and practices would always necessarily require an internet company to monitor third-party content. Citing to Lemmon v. Snap, Inc., 995 F.3d 1085 (9th Cir. 2021) the court found that in this case, at least, plaintiffs failed to plead adequately a theory of injury under CCPA that was “fully independent of [Apple’s] role in monitoring or publishing third-party content.”

Diep v. Apple, Inc., 2024 WL 1299995 (9th Cir. March 27, 2024)

March 27, 2024 Social Media

Negligence claim against Roblox for minors’ gambling moves forward

Plaintiffs sued defendant Roblox asserting various claims, including under RICO and California unfair competition law. Plaintiffs also claimed that Roblox was negligent by providing a system whereby minors were lured into online gambling.

Roblox moved to dismiss the negligence claim for failure to state a claim upon which relief may be granted. The court denied the motion to dismiss, allowing the negligence claim to move forward.

Roblox’s alleged involvement with online casinos

The gaming platform uses a virtual currency called “Robux” for transactions within its ecosystem. Users can purchase Robux for in-game enhancements and experiences created by developers, who can then convert their earned Robux into real money through Roblox. However, plaintiffs allege that online casinos accept Robux for gambling, thereby targeting minors. These casinos allegedly conduct sham transactions on Roblox to access a minor’s Robux, allowing the minors to gamble. When minors lose Robux in these casinos, the lost currency is converted back into cash, with Roblox allegedly facilitating these transactions and profiting from them. Plaintiffs claim Roblox is fully aware that its services are being exploited to enable illegal gambling activities involving minors in this way.

Why the negligence claim survived

The court observed that under California law, there is a fundamental obligation for entities to act with reasonable care to prevent foreseeable harm. Roblox argued that it was exempt from this duty. But the court rejected this argument, holding that that Roblox did indeed owe a duty to manage its platform responsibly to avoid harm, including by alerting parents about gambling risks.

Colvin v. Roblox Corporation, — F.Supp.3d —, 2024 WL 1268420 (N.D. Cal. March 26, 2024)

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March 26, 2024 Artificial Intelligence

VIDEO: AI and Voice Clones – Tennessee enacts the ELVIS Act

Generative AI enables people to clone other peoples’ voices. And that can lead to fraud, identity theft, or intellectual property infringement.

On March 21, 2024, Tennessee enacted new law called the ELVIS Act that seeks to tackle this problem. What does the law say?

The law adds a person’s voice to the list of things over which that person has a property interest. And what is a “voice” under the law? It is any sound that is readily identifiable and attributable to a particular individual. It can be an actual voice or a simulation of the voice. A person can be liable for making available another person’s voice without consent. And one could also be liable for making available any technology having the “primary purpose or function” of producing another’s voice without permission.

March 26, 2024 Section 230

Section 230 immunity protected provider of ringless voicemail services to telemarketers

Defendant telecommunication services provider provided ringless voicemail services and VoIP services to telemarketers. These services enabled telemarketers to mass deliver prerecorded messages directly to recipients’ voicemail inboxes without causing the recipients’ phones to ring or giving recipients the opportunity to answer or block the call.

The federal government sued a couple of telemarketers and defendant alleging violation of the FTC Act, which prohibits unfair or deceptive acts or practices in commerce. Defendant moved to dismiss the action, arguing that Section 230 provided it immunity from liability. The court granted the motion.

Section 230 immunity

Section 230(c) (at 47 U.S.C. 230(c)) provides 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.”

Defendant asserted it met the criteria for Section 230 immunity because of (1) its role as an interactive computer service, (2) the way the government’s claims sought to treat it as a publisher or speaker of the allegedly unlawful calls, and (3) the potential liability was based on third party content (the calls being placed by the other telemarketing defendants).

Ringless voicemail services were an “interactive computer service”

The government argued defendant was not an “interactive computer service” because recipients accessed their voicemails through their telephones rather than a computer. The court rejected this argument, finding that defendant had shown that it transmitted content and provided access to multiple users to a computer server, thereby meeting the statutory definition of an interactive computer service.

Lawsuit sought to treat defendant as a publisher or speaker

The government next argued that its claims against defendant did not seek to treat defendant as the publisher or speaker of content, because defendant’s liability did not depend on the content of the transmitted messages. The court likewise rejected this argument as well because it was indeed the content that gave rise to liability – had the voicemails at issue not been for commercial purposes, they would not have been unlawful, and the matter would not have been brought in the first place.

Allegations related to the content of unlawful voicemails

Finally, as for the third element of Section 230 immunity – the offending content being provided by a third party – the court also sided with defendant. “While [defendant] developed the ringless voicemail technology at issue, that development goes to how the third-party content is distributed rather than the content itself.”

United States v. Stratics Networks Inc., 2024 WL 966380 (S.D. Cal., March 6, 2024)

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March 25, 2024 Artificial Intelligence, Litigation

New Jersey judiciary taking steps to better understand Generative AI in the practice of law

We are seeing the state of New Jersey take strides to make “safe and effective use of Generative AI” in the practice of law. The state’s judiciary’s Acting Administrative Director recently sent an email to New Jersey attorneys acknowledging the growth of Generative AI in the practice of law, recognizing its positive and negative uses.

The correspondence included a link to a 23-question online survey designed to gauge New Jersey attorneys’ knowledge about and attitudes toward Generative AI, with the aim of designing seminars and other training.

The questions seek to gather information on topics including the age and experience of the attorneys responding, attitudes toward Generative AI both in the and out of the practice of law, the levels of experience in using Generative AI, and whether Generative AI should be a part of the future of the practice of law.

This initiative signals the state may be taking a proactive approach toward attorneys’ adoption of these newly-available technologies.

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March 25, 2024 Artificial Intelligence, Litigation

Lawyer gets called out a second time for using ChatGPT in court brief

You may recall the case of Park v. Kim, wherein the Second Circuit excoriated an attorney for using ChatGPT to generate a brief that contained a bunch of fake cases. Well, the same lawyer responsible for that debacle has been found out again, this time in a case where she is the pro se litigant.

Plaintiff sued Delta Airlines for racial discrimination. She filed a motion for leave to amend her complaint, which the court denied. In discussing the denial, the court observed the following:

[T]he Court maintains serious concern that at least one of Plaintiff’s cited cases is non-existent and may have been a hallucinated product of generative artificial intelligence, particularly given Plaintiff’s recent history of similar conduct before the Second Circuit. See Park v. Kim, 91 F.4th 610, 612 (2d Cir. 2024) (“We separately address the conduct of Park’s counsel, Attorney Jae S. Lee. Lee’s reply brief in this case includes a citation to a non-existent case, which she admits she generated using the artificial intelligence tool ChatGPT.”).

In Park v. Kim, the court referred plaintiff for potential disciplinary action. The court in this case was more lenient, by just denying her motion for leave to amend, and eventually dismissing the case on summary judgment.

Jae Lee v. Delta Air Lines, Inc., 2024 WL 1230263 (E.D.N.Y. March 22, 2024)

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