Attorney Evan Brown

August 20, 2007 Trademarks

“I’M” not like “i’m” in the trademark sense

Finding Internet video player and instant messaging software “extraordinarily different,” court denies preliminary injunction in trademark case.

Instant Media, Inc. v. Microsoft Corp., No. 07-2639, 2007 WL 2318948 (N.D.Cal. August 13, 2007)

Plaintiff Instant Media sued Microsoft for trademark infringement, and later moved for a preliminary injunction. Instant Media had a registration for the word mark I’M for use in connection with its downloadable media player called I’M. Microsoft used the mark “i’m” in connection with philanthropic services closely tied to its Windows Live Messenger service.

The court denied the motion for preliminary injunction, finding that Instant Media would not likely succeed on its infringement claim. It applied a subset of the Ninth Circuit’s Sleekcraft factors known as the “Internet trinity,” comparing (1) the similarity of the marks, (2) the relatedness of the products, and (3) the parties’ simultaneous use of the Internet as a marketing channel.

Similarity of the Marks

As for the first factor of the Internet trinity, the court considered the sight, sound and meaning of the two marks. It held that in terms of sight, Microsoft’s mark, consisting of lowercase letters “i’m” appearing in a stylized format with a speech balloon and rendered in pale green and blue, was sufficiently different from Instant Media’s registered “I’M” word mark. The court determined that the sound of the two marks was ambiguous, so Instant Media had not established that the marks sound the same. The court also sided with Microsoft on the third subpart of this analysis — meaning — holding that, given “I’M” could mean Instant Media, instant messenger or the contraction “I am,” Instant Media had not demonstrated that the two marks shared the same meaning.

Relatedness of the Products

The court then turned to the second factor of the Internet trinity, the relatedness of the services. Citing to Jupiter Hosting Inc. v. Jupitermedia Corp., 76 U.S.P.Q.2d 1042 (N.D. Cal. 2004), Instant Media had essentially argued that the two products were necessarily related under this factor, because they were both “free downloadable Internet applications intended for computer users at large.”

The Jupiter Hosting case had relied on GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199 (9th Cir. 2000) in which the Ninth Circuit observed that in the Internet context, “even services that are not identical are capable of confusing the public.” The GoTo.com case recognized, however, that “[o]ur ever-growing dependence on the Web may force us eventually to evolve into increasingly sophisticated users of the medium.”

The court declared that such an age of increasing sophistication had arrived:

GoTo.com was decided seven years ago-aeons in Internet terms-and the moment of our evolution into “increasingly sophisticated users of the medium” is upon us. While it may have been plausible in 2000 to suggest that consumers could not easily discriminate between content-delivery programs such as the I’M player or iTunes on the one hand and instant messaging programs such as WLM or AIM on the other, in 2007, where iPods and instant messaging are household concepts, this Court cannot say that, as a matter of law, “it is irrelevant whether the parties’ Internet related services are different.”

Applying this standard, the court held that Microsoft’s instant messaging software and Insight Media’s video player were “extraordinarily different within the context of the Internet.”

Simultaneous Use of the Internet as Marketing Channel

This third factor of the “Internet trinity” was the only one that weighed in Instant Media’s favor. Although Microsoft argued that the marketing channels were different, in that it did not advertise on television (and Instant Media did), the court held there was no real dispute that both parties used the Internet to market their products.

August 17, 2007 Contracts

California court invalidates Alienware arbitration provision in online terms and conditions

Oestreicher v. Alienware Corp., —F.Supp.2d—-, 2007 WL 2302490 (N.D. Cal. Aug. 10, 2007)

Plaintiff Oestreicher bought a laptop on the Alienware website. Six months later the computer overheated and was irretrievably broken. Oestreicher filed a class action suit against Alienware in California state court, and Alienware removed the case to the U.S. District Court for the Northern District of California. Alienware then moved to compel arbitration, citing to the terms and conditions of purchase, which had been presented to Oestreicher in the form of a “click-wrap” agreement during check-out.

The court denied the motion to compel arbitration. The first two-thirds of the opinion addressed the question of whether California or Florida law should govern the enforceability of the arbitration provision. Disregarding the express provisions of the agreement providing for application of Florida law “without regard to conflicts of laws principles,” the court decided that California law should apply. It held that enforcement of the provision requiring arbitration (and the attendant waiver of the right to pursue a class action) violated a fundamental policy of the state of California. Furthermore, California had a materially greater interest in the litigation, based on the fact that California residents were invoking consumer protection laws to seek recovery for allegedly defective products shipped into California.

Applying California law, the court determined that the class action waiver was unconscionable and unenforceable. It was procedurally unconscionable because it was a take-it-or-leave-it contract of adhesion. It was substantively unconscionable because the dispute implicated by the class action waiver involved a small amount of damages and Oestreicher had alleged Alienware carried out a scheme to deliberately cheat large numbers of customers out of individually small sums of money.

View the opinion below, or click through if it’s not showing up in the RSS feed:

August 17, 2007 Trademarks

A look at the American Airlines v. Google suit

Eric Goldman takes an in-depth look at the newly-filed American Airlines v. Google sponsored listings suit. From the professor’s post:

This complaint pleads the usual claims for this type of action, including direct, contributory and vicarious trademark infringement…; a false advertising claim that the “sponsored link” language communicates a false impression of actual sponsorship; dilution; various “soft” state claims (unfair competition; misappropriation and others); and tortious interference with contract because Google allegedly knew that American’s distributors weren’t supposed to buy American’s trademarks as keywords.

August 15, 2007 Miscellaneous

First sale doctrine not a defense to tortious interference and civil conspiracy claims

Merle Norman Cosmetics, Inc. v. Labarbera, No. 07-60811, 2007 WL 2254932 (S.D.Fla. August 03, 2007)

Cosmetics purveyor Merle Norman sued defendant Labarbera in a Florida federal court, alleging state law claims for tortious interference with contract, civil conspiracy, and deceptive and unfair trade practices. Merle Norman alleged that Labarbera worked in conjunction with an authorized Merle Norman studio owner to obtain cosmetics which she later resold on eBay.

Labarbera moved to dismiss under FRCP 12(b)(6), arguing that the “first sale doctrine” protected her right to resell products she had lawfully acquired in the stream of commerce. Merle Norman responded that the first sale doctrine should not apply, as the doctrine only protects defendants for claims of intellectual property infringement. In this case, Merle Norman argued, the defendant was not merely reselling the products, but was engaged in tortious conduct with the authorized studio owner.

The court agreed with Merle Norman and denied the motion to dismiss. Quoting Bulova Corp. v. Bulova Do Brasil Com. Rep. Imp. & Exp. Ltd., 144 F.Supp.2d 1329, 1331-1332 (S.D.Fla.2001), it observed that “[c]ourts have limited this doctrine to cases where there is no other conduct of infringement or where the defendant is not culpable for anything more than mere reselling of a product.” The court went on to observe that “the point at this early stage of this litigation is that the First Sale Doctrine has not been accepted as a complete defense to tortious interference and civil conspiracy claims.”

View the opinion below (or click through if it’s not showing up in the RSS feed):

August 15, 2007 Spam

MySpace messages treated like e-mail under CAN-SPAM

Over at Spamnotes,Venkat put up a post about a recent decision from a federal court in California that considered the defendant’s argument that MySpace “messages” do not fall under CAN-SPAM because “the addresses to which those messages are sent lack a ‘domain name’ and have no route, instead remaining within the MySpace.com.”

Venkat has described the case far beyond my poor power to add or detract, but here’s the skinny: the court looked to the plain language of the statute to can that argument. The definition of “‘electronic mail address’ entails nothing more specific than ‘a destination . . . to which an electronic mail message can be sent,’ and the references to ‘local part’ and ‘domain part’ and all other descriptors set off in the statute by commas represent only one possible way in which a ‘destination’ can be expressed.”

MySpace v. Wallace, No. 07-1929 (C.D. Cal. July 2, 2007)
Download the opinion or view below (click through if it’s not showing up in the RSS feed):

August 14, 2007 Litigation

Looking for a suit coat that coordinates with pajama pants

Below is an excerpt from a recent decision in the case of Ideal Instruments, Inc. v. Rivard Instruments, Inc., a patent case from the Northern District of Iowa. [— F.Supp.2d —-, 2007 WL 2296407 (N.D. Iowa, August 10, 2007)] In the future we’ll think it quaint that this deserved special mention in the court’s written opinion. But I’m sure clients will appreciate the cost savings. And imagine trying a federal case while telecommuting!

The court held the Markman hearing in this case on August 3, 2007. The Markman hearing in this case was the first instance in which this court has conducted a hearing using teleconferencing and “webcasts” of the parties’ presentations over the internet. The court and the parties found that this procedure was also extremely effective in both presenting the parties’ arguments and saving the parties substantial sums in attorney fees and travel costs.

***

Owing to the last minute notice by the plaintiff of a desire to present materials using PowerPoint via a webcast and some technical difficulties with working out the procedure to surrender “moderator” rights from one party to the other, the parties actually presented separate, simultaneous webcasts, one for the plaintiff’s presentation and one for the defendants’ presentation, instead of a single webcast. In fact, the parties used different webcast hosts in this case: one used Netspoke and the other used Webex. The court and the parties each logged in to both webcasts at the beginning of the conference call, then switched between them as the parties made their arguments. Although not as elegant a procedure as a single webcast would likely have been, the simultaneous webcasts procedure was very effective, eliminated the technical difficulties in the short time available, and proved quite workable. One “glitch” that occurred when the plaintiff “timed out” of the defendants’ webcast was quickly remedied by the plaintiff logging back in. The parties had also taken the precaution of providing the court and each other with copies of their presentation slides by e-mail prior to the hearing, so that even when the plaintiff temporarily lost the defendant’s webcast, the plaintiff was able to follow the defendant’s presentation by using the copy that the plaintiff had received. The court heartily recommends requiring such a backup procedure when using technology, whether new or tested and true, even though “Murphy’s Law” has not yet been codified into the United States Code.

August 8, 2007 Right of Publicity

Court sides with the late James Brown in right of publicity case against Corbis

Brown v. ACMI Pop Div., — N.E.2d —-, No. 06-0870, 2007 WL 2214544 (Ill. App. Aug. 2, 2007) [Download the opinion]

The Appellate Court of Illinois recently addressed some questions arising at the sometimes murky border between copyright and the right of publicity. At issue was whether Corbis, the online stock photography company, violated the late singer James Brown’s right of publicity by offering to license the copyright in photos of him, even though he had not consented to the use by Corbis of his name or image.

Corbis moved to dismiss under 735 ILCS 5/2-619 (which is much like a motion for summary judgment), arguing that the offering of copyright licenses through the website was not an unauthorized commercial use, and therefore not a violation of Brown’s right of publicity under the Act and at common law. The court denied the motion, and Corbis sought interlocutory review with the Appellate Court. On appeal, the court affirmed the trial court’s denial of the motion to dismiss.

Corbis argued that Brown’s allegations were “premised on an unprecedented legal theory that a copyright for a photograph of an individual cannot be licensed unless the publicity rights are obtained by the licensor, not the end user, without regard to the ultimate use of the photograph.” Citing to earlier Illinois cases in which the name and image of certain well-known figures had been used in novels and in news coverage, Corbis claimed that the use of the image was a “vehicle of information,” much like a news report.

Brown argued that Corbis’s use of the photos was not as a mere “vehicle of information,” but were being sold for commercial purposes, as merchandise or a good. But Corbis sought to distinguish its activity as a “service,” namely, licensing the “incorporeal image,” which is “purely intangible.” Corbis also asserted that permitting Brown to charge a fee for permission to use his image for news reporting (many of Corbis’s customers were news media outlets) would violate the First Amendment. Moreover, the Right of Publicity Act specifically exempts use of images for noncommercial purposes, such as news reporting.

In affirming the denial of the motion to dismiss, the court observed the “vast difference of opinion regarding the interpretation of the definition of what Corbis sells and the legal effect of such sales.” Accordingly, the court determined, a material and genuine disputed question of fact remained, so the trial court’s refusal to dismiss the matter was appropriate.

August 6, 2007 Contracts

Court upholds limitation of liability clause in Internet services agreement

Asch Webhosting, Inc. v. Adelphia Business Solutions Inv., LLC, No. 04-2593, 2007 WL 2122044 (D.N.J. July 23, 2007).

Plaintiff Asch Webhosting entered into a three year contract with Adelphia Business Solutions for “internet services.” About two months after the agreement was finalized, Adelphia sent Asch a letter informing it that the services would be terminated because of alleged violations by Asch of the service’s acceptable use policy. The parties worked out an agreement whereby Asch had thirty days to find another provider. After those thirty days were over, Adelphia pulled the plug.

Asch filed suit alleging breach of contract, claiming $1.4 million in consequential damages due to the loss of business stemming from the termination of the agreement. Adelphia moved for summary judgment, citing to an “exculpatory clause” in the agreement which limited the amount of recovery for consequential damages to the amount paid by Asch for the services.

The court granted Adelphia’s motion for summary judgment. It held that the exculpatory clause was reasonable and that Asch demonstrated no conduct by Adelphia sufficient to overcome the expressed limitations on liability. The transaction at issue was made at arms length and was between two private commercial entities. Moreover, there were no public policy concerns implicated by the agreement. Given this scenario, the court refused to “engage in judicial revision of the parties’ [a]greement.”

Adelphia’s conduct in terminating the agreement, according to the court, did not render the exculpatory clause void. Adelphia had received complaints that Asch was using the service to spam other customers. Regardless of the “ultimate accuracy or veracity” of those complaints, the court found that Adelphia was entitled to rely on them so long as it did so in good faith.

Internet Archive malfunction leads to interesting DMCA and infringement case

Healthcare Advocates, Inc. v. Harding, Earley, Follmer & Frailey, — F.Supp.2d —-, 2007 WL 2085358 (E.D. Pa., July 20, 2007). [Download the opinion]

(This case has been pretty well covered already in the legal blogosphere, including here and here, but this is my $0.02 anyway.)

Plaintiff Healthcare Advocates sued defendant law firm Harding, Earley Follmer & Frailey, as well as a number of attorneys and staff at the firm for copyright infringement and violation of the anticircumvention provisions of the Digital Millennium Copyright Act (“DMCA”). The defendants moved for summary judgment, asserting that the alleged infringement was excused under the doctrine of fair use, and that the alleged conduct under the DMCA did not constitute a “circumvention” as contemplated under the statute. The court granted the defendants’ motion for summary judgment.

The dispute between the parties arose from a novel factual scenario. The defendants used the Internet Archive’s Wayback Machine to access cached versions of the plaintiff’s website. A few days earlier, the plaintiffs had configured a robots.txt file to be used in connection with their site, which should have – in the normal course of operations – prevented the web pages from showing up in the Internet Archive. [More on robots.txt files] But as it turns out, the Internet Archive’s servers were malfunctioning when the defendants conducted their searches, so the pages that should have been excluded under the instructions in the robots.txt file showed up anyway.

The plaintiff claimed that by viewing the archived pages on their office computers without authorization (such lack of permission stemming from the exclusion instructions in the robots.txt file), the defendants violated the plaintiff’s exclusive right under 17 U.S.C. §106 to publicly display their copyrighted works, thereby committing infringement. And by accessing the cached versions in spite of the robots.txt file, the plaintiff argued, the defendants circumvented a technological measure used to prevent access to a copyrighted work, in violation of 17 U.S.C. §1201.

The court agreed that the plaintiffs established the two necessary elements of copyright infringement, namely, (1) ownership of valid copyrights in the web pages, and (2) that the defendants, by viewing the web pages on their office computers, violated the exclusive display right under §106. But the court went on to determine that there was no infringement, because the use made by the defendants was a protected fair use.

On the fair use question, the most significant factor in the court’s analysis was the “purpose and character” of the subsequent use that the defendants had made. The defendants had viewed the archived web pages in connection with their work in defending their client against allegations of infringement in another case brought by Healthcare Advocates. In holding that this investigation of the plaintiff’s online materials was a permissible fair use, the court stated that “[i]t would be an absurd result if an attorney defending a client against charges of trademark and copyright infringement was not allowed to view and copy publicly available material, especially mater that his client was alleged to have infringed.”

As for the DMCA anticircumvention claims, the court held that because the malfunctioning of the Internet Archive servers made it such that the exclusion instructions in the robots.txt file were not present, there was no protective measure in place to be circumvented. Plaintiffs had argued that even though the protective measure was not in place, defendants should have known that they did not have permission to view the cached pages, as some of the requests were met with messages that the page was blocked by the website owner. The court rejected this argument, and, nodding to the case of I.M.S. Inquiry Mgmt. Sys., Ltd. v. Bershire Info. Sys., Inc., 307 F.Supp.2d 521 (S.D.N.Y. 2004), held that a lack of permission is not circumvention under the DMCA.

August 2, 2007 Personal Jurisdiction

Postings to newsgroup support exercise of personal jurisdiction

Goldhaber v. Kohlenberg, — A.2d —-, 2007 WL 2198181 (N.J.Super.A.D. Aug. 2, 2007).

A pair of New Jersey plaintiffs sued a California defendant over “vile” messages that the defendant allegedly posted about the plaintiffs on a newsgroup devoted to cruises and cruise ships. The defendant didn’t answer the complaint, and the trial court entered a default judgment against him in excess of $1 million. That got the defendant’s attention, so he hired local counsel to move to set aside the default judgment, claiming the court lacked personal jurisdiction over him. The trial court denied the motion, and the defendant sought review with the appellate court. On appeal, the court affirmed the denial, holding that the exercise of personal jurisdiction was proper.

The case is particularly interesting in the Internet law context, because the allegations of personal jurisdiction stem exclusively from the defendant’s alleged web-based activity. Looking to an earlier Internet jurisdiction case decided by the New Jersey Supreme Court, Blakey v. Continental Airlines, 164 N.J. 38 (2000), the court observed the implicit application therein of the well-known Calder v. Jones “effects test” [465 U.S. 783, 104 S.Ct. 1482, 79 L. Ed.2d 804 (1984)].

In Calder, the defendants “edited an article that they knew would have a potentially devastating impact upon [the plaintiff],” knowing that “the brunt of that injury would be felt by [the plaintiff] in the State in which she live[d] and work[ed].” The New Jersey court found similarities in this case, even though, in reciting the facts, it stated that the defendant had “no contacts of any type with New Jersey.”

The court concluded that the author of the message board postings did, indeed, target them to New Jersey, not only knowing that plaintiffs resided there, but also knowing the municipality in which they resided. He made specific disparaging references to that municipality in many of his postings, some of which were made in response to plaintiffs’ replies to offending comments. This intentional and directed conduct, and its connection to New Jersey, according to the court, was such that the defendant should reasonably have anticipated being haled into court there.