In a trademark dispute between two companies in the real estate space, the court was called upon – at the summary judgment stage – to determine if there was a triable issue as to whether plaintiff’s STOCKDALE mark was not merely descriptive but instead had acquired distinctiveness.
Defendants had argued that plaintiff’s case failed because plaintiff did not have a protectable mark. Plaintiff countered that its STOCKDALE mark, which it had used for 30 years and which the court found was primarily merely a surname, had acquired distinctiveness. Guided by the principles in the case of Viacom Int’l v. IJR Capital Investments, LLC, 891 F.3d 178 (5th Cir. 2018) (the Krusty Krab case), the court examined, concerning plaintiff’s mark:
length and manner of use of the mark or trade dress,
volume of sales,
amount and manner of advertising,
nature of use of the mark or trade dress in newspapers and magazines,
consumer-survey evidence,
direct consumer testimony, and
the defendant’s intent in copying the [mark].
It determined that there was a genuine issue of material fact as to whether the mark was protectable as one that had acquired distinctiveness. Interestingly, the plaintiff had not kept track of its advertising expenditures, but did introduce evidence that it had paid more than $50,000 to acquire the domain name stockdale(.)com. The court found that information relevant to inquiry.
Stockdale Investment Group, Inc. v. Stockdale Capital Partners, LLC, No. 18-2949, 2019 WL 5191526 (S.D. Tex., October 15, 2019)
About the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.
Plaintiff was bound by forum selection clause found in online terms and conditions.
Plaintiff sued TripAdvisor and some related defendants (including Viator, a company that TripAdvisor acquired) for a number of torts arising from an ATV accident that plaintiff had while on a tour in Mexico that she had booked online through defendants’ website. Defendants moved to dismiss, or in the alternative, to transfer the matter to federal court in Massachusetts based on the forum selection clause found in the Terms and Conditions that plaintiff agreed to when she booked the tour. The court granted the motion to transfer.
To purchase the tour, plaintiff was required to click on a “Book Now” icon, directly under which the following message was located: “[b]y clicking Book Now and making a reservation, I acknowledge that I have read and agree to be bound by Viator’s Terms and Conditions and Privacy Statement.” The phrase “Viator’s Terms and Conditions” appeared in blue underlined text, in the form of a hyperlink, which directed the consumer to the website’s Terms and Conditions.
Viator’s Terms and Conditions included a forum selection clause, which, in relevant part, provided:
[T]his agreement is governed by the laws of the Commonwealth of Massachusetts, USA. You hereby consent to the exclusive jurisdiction and venue of courts in Boston, Massachusetts, USA and stipulate to the fairness and convenience of proceedings in such courts for all disputes arising out of or relating to the use of this Website. You agree that all claims you may have against Viator, Inc. arising from or relating to this Website must be heard and resolved in a court of competent subject matter jurisdiction located in Boston, Massachusetts.
The court found that plaintiff had agreed to the forum selection clause, and that the clause was enforceable. In determining whether plaintiff was bound by the clause, the court was guided by “fundamental precepts of contract law.” More specifically, under New Jersey law, “[a] contract term is generally binding if the contract has been mutually agreed upon by the parties, is supported by valid consideration, and does not violate codified standards or offend public policy.” W. Caldwell v. Caldwell, 26 N.J. 9, 24-26 (1958).
Plaintiff had argued that the Terms and Conditions amounted to an invalid browsewrap agreement, because she neither received reasonable notice of their existence, nor provided an unambiguous manifestation of assent. Primarily relying upon Specht v. Netscape, plaintiff argued that she was not bound by the Terms and Conditions, because Viator’s website was designed so that a user can use its services without affirmatively assenting to the web page’s terms of use. According to plaintiff, she was ultimately permitted to purchase the ATV tour without ever being asked to check a box or click an “I Agree” button, or even acknowledge that the Terms existed. Without proper notice, plaintiff maintained that enforcing the forum selection was not appropriate.
The court disagreed. It found that the hyperlinked terms on defendant’s website adhered to the requirements of reasonable notice. Regardless of whether plaintiff was required to scroll through the Check Out page, the hyperlinked Terms and Conditions were conspicuously placed directly underneath the “Book Now” icon. Based on its location, therefore, the court found that the hyperlink was not hidden in an area of the screen that plaintiff was unlikely to notice, but, instead, was clearly displayed in a section of the webpage that she needed to review in order to effectuate her purchase of the ATV tour. Stated differently, the hyperlink was placed within the immediate proximity of an icon that plaintiff was required to click, for the purpose of confirming her purchase on defendant’s website.
About the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.
Plaintiff, the owner of a college student housing facility, filed suit for unfair competition under Section 43(a) of the Lanham Act against a number of entities and individuals that operated a competing student housing facility. Defendants registered eight domain names that incorporated plaintiff’s trademarks. At first defendants used some of the domain names to redirect traffic to the website for defendants’ competing student housing facility. But after plaintiff demanded defendants cease and desist, defendants simply parked the domain names with GoDaddy and permitted pay-per-click ads to appear on the pages.
The case went to trial and the court found in plaintiff’s favor on the unfair competition claim. The court determined that the domain names were confusingly similar to plaintiff’s marks that had acquired secondary meaning. And the use of the domain names in the manner defendants had set them up constituted use in commerce. Each of the web pages displayed the domain name associated with it – and each such domain contained plaintiff’s mark. And each of the pages showed pay-per-click ads comprised of links to various vendors’ goods and services. This use met the Lanham Act’s definition of “use in commerce”.
ZP No. 314, LLC v. ILM Capital, LLC, No. 16-521, 2019 WL 4924029 (S.D. Alabama, September 30, 2019)
About the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.
Plaintiff sued Google for false advertising and violations of New Jersey’s Consumer Fraud Act over Google’s provision of Adwords services for other defendants’ website, which plaintiff claimed sold counterfeit versions of plaintiff’s products. Google moved to dismiss these two claims and the court granted the motion.
On the false advertising issue, the court held that plaintiff had failed to allege the critical element that Google was the party that made the alleged misrepresentations concerning the counterfeit products.
As for the Consumer Fraud Act claim, the court held that Google enjoyed immunity from such a claim in accordance with the Communications Decency Act at 47 U.S.C. 230(c).
Specifically, the court found: (1) Google’s services made Google the provider of an interactive computer service, (2) the claim sought to hold Google liable for the publishing of the offending ads, and (3) the offending ads were published by a party other than Google, namely, the purveyor of the allegedly counterfeit goods. CDA immunity applied because all three of these elements were met.
The court rejected plaintiff’s argument that the New Jersey Consumer Fraud Act was an intellectual property statute and that therefore under Section 230(e)(2), CDA immunity did not apply. With immunity present, the court dismissed the consumer fraud claim.
InvenTel Products, LLC v. Li, No. 19-9190, 2019 WL 5078807 (D.N.J. October 10, 2019)
About the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown@internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.
App terms of service said that arbitrator – not court – should determine whether arbitration is proper.
The family of a man killed on a Lime scooter sued Lime over the man’s death. Lime looked to its user agreement – which provided that disputes are subject to arbitration – and asked the court to compel such arbitration. The court granted the motion.
The court found that the agreement structure was not a clickwrap or browsewrap, but instead a “sign-in wrap”. Underneath the Facebook button one can use to sign up within the Lime app was a notice that stated, “[b]y singing up, I confirm that I am at least 18 years old, and that I have read and agreed to Lime’s User Agreement & Terms of Service.” The words “User Agreement” and “Terms of Service” were in darker boldface than the rest of the sentence, and they provided a hyperlink to Lime’s user agreement.
If found that a the hyperlink to the user agreement on Lime’s sign-up screen was reasonably conspicuous and placed the deceased on notice of the user agreement. The sign-up screen was visible on one page, and the hyperlink was in close proximity to the two sign-up buttons. Moreover, the notice was legible, and the hyperlinked words “User Agreement & Terms of Service” were in dark, bold font, making them stand out from both the white screen and the surrounding gray text. Based on these circumstances, the court found, a “reasonably prudent smartphone user” would understand that by signing up for Lime, he or she was assenting to the user agreement.
Further, the court found that compelling arbitration – even for purposes of determining the question of whether arbitration was what the parties had agreed to – was appropriate. By stating that the arbitration provider’s rules would govern the arbitration proceedings, the parties “clearly and unmistakably” reserved the determination of arbitrability for the arbitrator.
Phillips v. Neutron Holdings, Inc., No. 18-3382, 2019 WL 4861435 (N.D. Texas, October 2, 2019)
Oath, Inc., the successor to Yahoo! Inc., filed an action under the Uniform Domain Name Dispute Resolution Policy (UDRP) against a domainer that acquired ymobile.com earlier in 2019. The split 3-member FORUM panel denied the complaint, finding that Oath failed to demonstrate that the respondent lacked rights or legitimate interests in the disputed domain name, and failed to show it registered and used the disputed domain name in bad faith.
On the question of rights or legitimate interests, the panel found that the respondent’s purchase and sale of the domain name comprised of the generic term “mobile” prefixed by “y” was legitimate, so long as the respondent did not intend to capitalize on Oath’s YMOBILE mark, which is registered in Japan. The panel accepted the respondent’s assertion that it had no notice of the YMOBILE mark prior to acquiring the disputed domain name.
Regarding bad faith registration and use, the panel similarly found that the respondent was not targeting the Y! or YMOBILE mark, and that it had no knowledge of the YMOBILE mark’s existence prior to acquiring the disputed domain name.
One of the panelists dissented, arguing that the disputed domain name should have been transferred. He emphasized how the respondent was using the disputed domain name – which the panel found was identical to a mark the complainant owns – to display pay-per-click ads for goods and services competitive with the complainant’s. Some of the ads, for example, were for online games and downloadable software. And on the issue of bad faith, this panel member observed that although the respondent claimed to not know of the complainant’s YMOBILE mark, a simple web search would have revealed it.
Federal agents served a search warrant on plaintiff’s doctor’s office and thereby obtained access to plaintiff’s medical records, which were shared with a number of other parties involved in the criminal investigation of plaintiff’s doctor. Plaintiff sued under the Computer Fraud and Abuse Act (CFAA). Defendants moved to dismiss that claim. The court granted the motion. The CFAA prohibits unauthorized access to a “protected computer”. In dismissing the case, the court found, among other things, that there were no specific allegations that defendants accessed plaintiff’s computer.
Micks-Harm v. Nichols, No. 18-12634, 2019 WL 4781342 (E.D. Michigan, September 30, 2019)
About the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.
Court held this was an “exceptional case” and that trial court judge should have awarded plaintiff its attorneys’ fees under the Lanham Act.
While it is fairly common for successful litigants in copyright cases to be awarded the attorneys’ fees they incur in bringing or defending the case, that fee-shifting is not as common in trademark cases. There is a higher standard that must be met in trademark cases – the prevailing party must show that it has won an “exceptional case”. That recently occurred in the Seventh Circuit Court of Appeals.
Plaintiff home remodeling company and defendants – a manufacturer of storm shelters and one of its owners individually – found themselves in a trademark dispute over rights to use a mark plaintiff had developed to use as a distributor of defendants’ storm shelters.
Defendants disregarded on oral license agreement it had with plaintiff and used the mark for years outside the territorial scope of the license. The evidence showed that defendants intended to just buy the mark in the event plaintiff noticed defendants’ out-of-scope use.
Plaintiff indeed noticed and sued. The trademark infringement case went to trial. The trial court – though it found in plaintiff’s favor on the liability question and awarded more than $17 million in damages to plaintiff – declined to order defendants to pay plaintiff’s attorneys fees. Plaintiff sought review of the denial of attorney’s fees with the Seventh Circuit.
On appeal, the court reversed and remanded. It found that the trial court’s findings made this an “exceptional case” and thus appropriate for an award of attorneys’ fees.
Specifically, the court found that defendants’ conduct was willful, egregious and intentional. Likewise, defendants had acted in bad faith and maliciously, and refused to cease infringing activity, causing plaintiff unnecessary trouble and expense.
About the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.
Plaintiff – one of the millions of people who have played Fortnite – sued Fortnite developer Epic Games based on a data vulnerability in the Fortnite platform and an apparent hacking incident that took place in 2018. After the case was moved from state court in Illinois to federal court there, and then to federal court in North Carolina, defendant moved to dismiss for failure to state a claim.
This young man is feeling anxiety and anguish. He probably would not have standing in a data breach case.
The court dismissed the case, finding that the court lacked subject matter jurisdiction, since plaintiff had not sufficiently alleged that he had suffered an “injury-in-fact”.
It held that the mere existence of a data vulnerability does not constitute injury-in-fact. Instead, a complaint must allege a sufficient factual basis from which to conclude either that plaintiff’s compromised data has been misused, or that it will be misused, such that concrete harms are actual or imminent.
In this case, plaintiff’s complaint contained no facts showing, or even suggesting, that his personal data had been used as a result of the cyber vulnerability. Plaintiff’s complaint did not even state that his data was taken, only that Fortnite had a cyber vulnerability that could have allowed hackers to access his data.
Plaintiff’s only alleged harms were “time and effort to mitigate the risk of identity theft” and “anxiety and anguish”. The court held that anxiety and anguish resulting from data breaches do not confer standing. And without a single fact alleged to show that future harms were certainly impending, the money, time, and effort spent by plaintiff were merely self-imposed harms in response to a speculative threat. In the court’s view, the threat of future injury was wholly speculative and insufficient for standing.
Krohm v. Epic Games, Inc., No. 19-173, 2019 WL 4861101 (E.D. N. Carolina, October 1, 2019)
About the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.
Plaintiff sued defendant for violation of the Computer Fraud and Abuse Act (“CFAA”). For almost 20 years, defendant had worked for a company that developed plaintiff’s proprietary software system. In this capacity, defendant had access to plaintiff’s customer database, accounting system and other confidential information. After leaving the work he was performing for plaintiff, defendant founded his own competing venture.
Defendant moved to dismiss the CFAA claim. The court granted the motion to dismiss. The court held that defendant did not exceed the scope of his authorized access by accessing certain of plaintiff’s documents, files or drives for the benefit of his own venture. Citing to United States v. Nosal, 676 F.3d 854, (9th Cir. 2012), the court observed that the Ninth Circuit has defined “exceeds authorized access” narrowly to include only someone who is authorized to access only certain data or files but accesses unauthorized data or files – or to put it simply: hacking.
In this case, defendant was authorized to access plaintiff’s systems by virtue of the work he was hired to do in connection with plaintiff’s proprietary software systems. Plaintiff had attempted to draw a distinction between the work he was doing for his former employer and the actions he was undertaking to benefit his new venture (even though those actions were one and the same conduct). The court rejected this reasoning: “[E]ven if defendant accessed [plaintiff’s] information for the eventual benefit of [defendant’s new venture], that does not mean he could not have also accessed it for [his former employer’s] authorized purpose of building software.”
It is worth noting that the contours of “exceeding authorized access” under the CFAA give rise to a circuit split. It is fruitful to consider whether the outcome of this case may have been different, for example, in the Seventh Circuit, under the doctrines set out in Int’l Airport Ctr., L.L.C. v. Citrin, 440 F.3d 418 (7th Cir.2006).
Regal West Corporation v. Nguyen, No. 19-5374, 2019 WL 4748393 (W.D.Washington, September 30, 2019)
