Litigation – Page 3 – Attorney Evan Brown

October 1, 2019 Contracts, Litigation

Court will not aid company that was banned from accessing Facebook API

Facebook’s ability to decisively police the integrity of its platforms was without question a pressing public interest.

Plaintiffs provided software-as-a-service to help their clients locate social media content, gain approval to use that content, and then re-purpose it in the clients’ own advertising and marketing activities.

Previously, plaintiffs had operated in partnership with Facebook, whereby plaintiffs had access to the Facebook Open Graph API. In late August 2019 (a few weeks after a Business Insider article identified plaintiffs as misusing the Instagram platform) Facebook terminated the marketing partnership and access to the API.

After efforts to informally resolve the situation failed, plaintiffs, perhaps emboldened by the Ninth Circuit’s recent decision in hiQ v. LinkedIn, sued Facebook and Instagram asserting a number of claims, including breach of contract and tortious interference, and also sought a declaratory judgment that plaintiffs did not violate the Computer Fraud and Abuse Act. Plaintiffs sought a temporary restraining order that would have restored access to the platforms pending the case’s determination on the merits. But the court denied the motion.

No irreparable harm likely

The court rejected plaintiffs’ argument that they would suffer irreparable harm if access was not restored. It found that plaintiffs’ allegations of imminent harms shared a common fatal flaw in that they merely alleged speculative harm – they did not sufficiently demonstrate that irreparable harm was likely to occur.

Plaintiffs did establish for purposes of this motion that much (though not all) of the work they conducted for clients before losing API access involved Facebook. But the court found that plaintiffs had not sufficiently shown that they would actually lose current customers, or fail to acquire new prospective customers, if access were not restored.

Further, the court found that plaintiffs’ CEO’s statement that “this will soon reach a tipping point where [plaintiffs] can no longer operate” was not specific enough to demonstrate there was irreparable harm. “The extraordinary relief of a pre-adjudicatory injunction demands more precision with respect to when irreparable harm will occur than ‘soon.’ Such vague statements are insufficient evidence to show a threat of extinction.”

Not in the public’s interest

The court also found that the “public’s interest caution[ed] against issuing injunctive relief at this time.”

Plaintiffs argued that the public interest favored an injunction because one would prevent the imminent destruction of plaintiffs’ business, preserve employee jobs, and generally allow plaintiffs to continue operating. Additionally, they argued that the public interest would be served by enjoining defendants’ wrongful conduct.

Defendants argued that the public had an interest in allowing Facebook to exclude those who act impermissibly on its platform and jeopardize user privacy by, in this instance, automating data collection and scraping content en masse. Defendants argued that the public has an interest in allowing them latitude to enforce rules preventing abuse of their platforms.

The court decided that awarding injunctive relief at this stage would compel Facebook to permit a suspected abuser of its platform and its users’ privacy to continue to access its platform and users’ data for weeks longer, until a preliminary injunction motion could be resolved. Moreover, as precedent within Facebook’s policy-setting organization and potentially with other courts, issuing an injunction at this stage could handicap Facebook’s ability to decisively police its social-media platforms in the first instance. Facebook’s enforcement activities would be compromised if judicial review were expected to precede rather than follow its enforcement actions.

And although the public certainly has some interest in avoiding the dissolution of companies and the accompanying loss of employment, the court found that Facebook’s ability to decisively police the integrity of its platforms was without question a pressing public interest. In particular, the court noted, the public has a strong interest in the integrity of Facebook’s platforms, policing of those platforms for abuses, and protection of users’ privacy.

Stackla, Inc. v. Facebook Inc., No. 19-5849, 2019 WL 4738288 (N.D. Cal., September 27, 2019)

September 30, 2019 Anonymity, Electronic Discovery, Litigation

Plaintiff failed to make key arguments in bid to unmask anonymous online defendants

Plaintiff sued some unknown defendants for breach of contract and violations of the Computer Fraud and Abuse Act, based on the defendants’ deceptive conduct that tricked some internet users into signing up for plaintiff’s paid services. The unknown defendants would receive affiliate commissions from operating this scheme. This caused reputation problems for plaintiff.

Plaintiff sought early discovery to ascertain the identities of the unknown defendants. The court denied the motion.

The Federal Rules of Civil Procedure do not permit a party to seek discovery from the adverse parties in the case until all parties have conducted an initial conference under Rule 26(f). But when the defendants are unknown, that conference cannot take place. So the plaintiff needs to conduct discovery to find out who they are. In situations like these, for the required early discovery to occur and the unknown defendants to be identified (so that the conference can take place), the court must enter an order permitting early discovery.

A court can authorize early discovery to identify unknown defendants if there is good cause. In determining whether there is good cause, courts consider whether the plaintiff:

can identify the missing party with sufficient specificity such that the court can determine that defendant is a real person or entity who could be sued in federal court;
has identified all previous steps taken to locate the elusive defendant;
has articulated claims against defendant that would withstand a motion to dismiss; and
has demonstrated that there is a reasonable likelihood of being able to identify the defendant through discovery such that service of process would be possible.

In this case, the court found that plaintiff failed to identify the defendants with sufficient specificity, and did not demonstrate that each defendant was a real person or entity who would be subject to jurisdiction in the Northern District of California. Plaintiff had not explained why defendants would be subject to the jurisdiction of the court, as defendants’ activities seemed directed at Argentina, and plaintiff’s harm was felt in Argentina and other parts of Latin America. The only apparent connection defendants had with the Northern District of California was that they used domain name services from California companies. Plaintiff provided no authority to suggest this was sufficient to create jurisdiction.

Plaintiff also failed to explain what steps it had taken to locate defendants. Citing to Columbia Ins. Co. v. seescandy.com, 185 F.R.D. 573 (N.D. Cal. 1999), the court noted that “[t]his element is aimed at ensuring that plaintiffs make a good faith effort to comply with the requirements of service of process and specifically identifying defendants.”

In its motion, plaintiff only stated that there were no more practical measures that would permit it to identify the unknown defendants, but did not identify what measures – if any – were taken. For example, plaintiff was apparently able to identify defendants as affiliates, and that a contract existed, giving rise to legal liability. It was therefore not clear why plaintiff was unable to identify defendants based on the contract.

Binbit Argentina, S.A. v. Does 1-25, No. 19-5384, 2019 WL 4645159 (N.D. Cal., September 24, 2019)

Should revenge porn victims be allowed to proceed anonymously in court?

Plaintiff and her twin sister sued her ex-boyfriend and an unknown John Doe accusing them of copyright infringement and other torts such as invasion of privacy. They claimed the defendants posted intimate and nude photos of plaintiffs online without their consent. And defendants had posted one of the plaintiff’s name and other information on social media in connection with the photos.

Arguing that they had a substantial privacy right that outweighed the customary and constitutionally-embedded presumption of openness in judicial proceedings, plaintiffs asked the court for permission to proceed anonymously. But the court denied the motion.

Plaintiffs’ privacy arguments

Plaintiffs had primarily argued that proceeding under their real names would require them to disclose information of the utmost intimacy and that if they were required to attach their names to the litigation, there would be a public record connecting their names to the harm and exploitation they had suffered which could result in even more people viewing the very images that were stolen and disseminated without their consent.

Court: the harm had already been done

The court rejected these arguments. It observed that the photographs had been published on the internet for approximately seven years and had been sent to people they know. Plaintiffs admitted that one of them could be identified in some of the photographs because her face and a distinctive tattoo were visible. And John Doe had already published that plaintiff’s contact information which resulted in her being inundated with phone calls, text messages, emails, and Instagram, Facebook, and Twitter messages.

So in the court’s mind it appeared that that plaintiff’s identity was already known or discoverable. In addition, that plaintiff had obtained copyright registrations for many of the photographs and the copyright registration was a public document that clearly identified her by name.

As for the twin sister, although her identity had not been similarly made public, the court found that “no great stretch [was] required to identify her through public records as [the other plaintiff’s] twin sister.”

Consequently, the court was not persuaded that plaintiffs’ privacy interests outweighed the public’s right of access in judicial proceedings.

M.C. v. Geiger, 2018 WL 6503582 (M.D.Fla. Dec. 11, 2018)

December 7, 2018 Litigation, Uncategorized

Attorney-client privilege protected defendants’ lawyers’ communications with PR firm hired to combat negative online treatment

In defending intellectual property claims over video games, defendants’ law firm hired a public relations firm to assist it with “input on legal strategy, including regarding initial pleadings and communications about the case to counteract [plaintiff’s] false and negative statement.” Defendants were allegedly being targeted by negative online attacks by the plaintiff.

During discovery, plaintiff served a subpoena on the hired PR firm, seeking, among other things, all documents relating to the communciations between the PR firm and defendants’ counsel.

Defendants sought to quash the subpoena, arguing the information was protected from disclosure under the attorney-client privilege. The court quashed the subpoena.

It found that because defendants’ counsel (and not defendants themselves) hired the PR firm to provide PR counseling specifically for the purposes of litigation strategy, the attorney-client privilege extended to the communications between the PR firm and defendants’ counsel pertaining to “giving and receiving legal advice about the appropriate response to the lawsuit and making related public statements.”

Specifically, these communications were

confidential communications made
between lawyers and public relation consultants
hired by the lawyers to assist them in dealing with the media in cases or litigation
that were made for the purpose of giving or receiving advice
directed at handling the client’s legal problems that were undeniably protected by the attorney client privilege.

The court similarly found that the attorney work product doctrine extended to the communications exchanged between the PR firm and defendants’ counsel. As could be seen by the privilege log, documents such as a “draft Answer and Counterclaim” and a “draft press release” would contain “the mental impressions, conclusions, opinions, or legal theories of a party’s attorney or other representative concerning the litigation.” Moreover, documents such as a “draft Answer and Counterclaim” and a “draft press release” were “prepared in anticipation of litigation or for trial.” Defendants’ counsel also did not waive their work-product protection when they shared otherwise valid work product (e.g. draft Answers or Counterclaims) with the PR firm for assistance because the communications were intended to be confidential.

Stardock Systems, Inc. v. Reiche, 2018 WL 6259536 (N.D.Cal. Nov. 30, 2018)

November 26, 2018 Anonymity, Litigation, Trademarks

Anonymous online trademark infringer can be identified through subpoena to domain registrar

Plaintiff trademark owner noticed that an unknown party was using plaintiff’s mark to sell email templates online without plaintiff’s authorization. After the unknown infringer’s domain name registrar (the case does not say whether it was also the web host) refused to take down the allegedly infringing content, plaintiff filed suit against the “John Doe” defendant. Since it needed to learn the identity of the defendant to move the case forward, plaintiff asked the court for early discovery that would permit plaintiff to send a subpoena to the registrar that would compel the registrar to identify its customer.

The court granted the motion for leave to take early discovery. It applied the standard set out in OpenMind Solutions, Inc. v. Does 1-39, 2011 WL 4715200 (N.D. Cal. Oct. 7, 2011) (citing Columbia Ins. Co. v. seescandy.com, 185 F.R.D. 578-80 (N.D. Cal. 1999)), which requires that prior to early discovery being permitted, a plaintiff must show:

Plaintiff can identify the missing party with sufficient specificity such that the court can determine that defendant is a real person or entity who could be sued in federal court;
Plaintiff has identified all previous steps taken to locate the elusive defendant;
Plaintiff’s suit against defendant could withstand a motion to dismiss; and
Plaintiff has demonstrated that there is a reasonable likelihood of being able to identify defendant through discovery such that service of process would be possible.

On the first factor, plaintiff had alleged that the Doe defendant owned or was using the specified domain name associated with the offending website to sell email templates using plaintiff’s trademark.

As for the second factor, plaintiff had contacted the domain name registrar, and asked that the information be taken down, but the registrar refused to do so. The domain name alone was not sufficient for plaintiff to identify the Doe defendant, and plaintiff had no other means to identify the Doe defendant besides the registrar’s record which it refused to provide without a subpoena.

Regarding the third factor, plaintiff made the required showing by alleging that it holds a valid trademark for its mark that the Doe defendant used to sell products on the offending website.

And concerning the fourth factor, the plaintiff had alleged that the registrar was the registrar for the domain name associated with the offending website and that it had stated it would pass the complaint information on to the website owner. The court found that plaintiff had thus demonstrated that a subpoena to the registrar should reveal the identity of the Doe defendant.

One should note this court’s willingness to permit early discovery as being in contrast to another court’s recent apparent disdain for a copyright troll plaintiff seeking the identity of an anonymous online infringer.

Marketo, Inc. v. Doe, 2018 WL 6046464 (N.D.Cal. Nov. 19, 2018)

November 20, 2018 Anonymity, Copyright, Electronic Discovery, Litigation, Privacy

Court labels copyright plaintiff as a troll and shuts down efforts to ID anonymous infringer

When a copyright plaintiff does not know who a particular alleged infringer is, it must first send a subpoena to the ISP assigned the IP address used to commit the alleged infringement. But the rules of procedure do not allow the sending of subpoenas until after the 26(f) conference – a meeting between the plaintiff and defendant (or their lawyers) to discuss the case. A plaintiff cannot have a 26(f) conference if the defendant has not been served with the complaint, and the complaint cannot be served unless the defendant’s identity is known.

So you can see the conundrum. To break out of this not-knowing, plaintiffs in situations like this will ask the court’s help through a motion for leave to take early discovery. That way the plaintiff can learn who the defendant is, serve the complaint, and move the case forward.

In the recent case of Strike 3 Holdings v. Doe, Judge Royce Lamberth of the U.S. District Court for the District of Columbia put a stop to the efforts of a plaintiff that it called a copyright troll right to its face (or at least right in the text of the opinion). The court denied Strike 3’s motion for leave to take early discovery to learn the identity of an unknown BitTorrent user accused of downloading pornography.

The court held that the plaintiff’s request was not specific enough, and the privacy interests of the unknown defendant, together with the social harm of being wrongfully accused of obtaining “particularly prurient pornography” were not outweighed by the trollish plaintiff’s need for the information.

Key to the court’s ruling was the idea that a subpoena in circumstances like this must be able to actually identify a defendant who could be sued. The court noted, however, that

Strike 3 could not withstand a 12(b)(6) motion in this case without resorting to far more intensive discovery machinations sufficiently establishing defendant did the infringing—examining physical evidence (at least the computers, smartphones, and tablets of anyone in the owner’s house, as well as any neighbor or houseguest who shared the Internet), and perhaps even interrogatories, document requests, or depositions. Strike 3’s requested subpoena thus will not—and may never—identify a defendant who could be sued.

The opinion is an entertaining read and conveys the judge’s clear frustration with copyright troll plaintiffs. Below are some of the more memorable quips.

Regarding the flaws of using IP addresses to identify people:

[Plaintiff’s] method [of identifying infringers] is famously flawed: virtual private networks and onion routing spoof IP addresses (for good and ill); routers and other devices are unsecured; malware cracks passwords and opens backdoors; multiple people (family, roommates, guests, neighbors, etc.) share the same IP address; a geolocation service might randomly assign addresses to some general location if it cannot more specifically identify another.

Regarding the public shame of being accused of infringing porn:

… But in many cases, the method is enough to force the Internet service provider (ISP) to unmask the IP address’s subscriber. And once the ISP outs the subscriber, permitting them to be served as the defendant, any future Google search of their name will turn-up associations with the websites Vixen, Blacked, Tushy, and Blacked Raw. The first two are awkward enough, but the latter two cater to even more singular tastes.

How trolls are quick to flee:

Indeed, the copyright troll’s success rate comes not from the Copyright Act, but from the law of large numbers. … These serial litigants drop cases at the first sign of resistance, preying on low-hanging fruit and staying one step ahead of any coordinated defense. They don’t seem to care about whether defendant actually did the infringing, or about developing the law. If a Billy Goat Gruff moves to confront a copyright troll in court, the troll cuts and runs back under its bridge. Perhaps the trolls fear a court disrupting their rinse-wash-and-repeat approach: file a deluge of complaints; ask the court to compel disclosure of the account holders; settle as many claims as possible; abandon the rest.

It’s pretty much extortion:

Armed with hundreds of cut-and-pasted complaints and boilerplate discovery motions, Strike 3 floods this courthouse (and others around the country) with lawsuits smacking of extortion. It treats this Court not as a citadel of justice, but as an ATM. Its feigned desire for legal process masks what it really seeks: for the Court to oversee a high-tech shakedown. This Court declines.

The court’s decision to deny discovery is anything but the rubber stamp approach so many judges in these kinds of cases over the past several years have been accused of employing.

Strike 3 Holdings v. Doe, 2018 WL 6027046 (D.D.C. November 16, 2018)

May 22, 2018 Copyright, Electronic Discovery, Litigation, Privacy

Court takes into consideration defendant’s privacy in BitTorrent copyright infringement case

Frequent copyright plaintiff Strike 3 Holdings filed a motion with the U.S. District Court for the District of Minnesota seeking an order allowing Strike 3 to send a subpoena to Comcast, to learn who owns the account used to allegedly infringe copyright. The Federal Rules of Civil Procedure created a bootstrapping problem or, as the court called it, a Catch-22, for Strike 3 – it was not able to confer with the unknown Doe defendant as required by Rule 26(f) because it could not identify the defendant, but it could not identify defendant without discovery from Comcast.

The court granted Strike 3’s motion for leave to take early discovery, finding that good cause existed for granting the request, and noting:

Strike 3 had stated an actionable claim for copyright infringement,
The discovery request was specific,
There were no alternative means to ascertain defendant’s name and address,
Strike 3 had to know defendant’s name and address in order to serve the summons and complaint, and
Defendant’s expectation of privacy in his or her name and address was outweighed by Strike 3’s right to use the judicial process to pursue a plausible claim of copyright infringement.

On the last point, the court observed that the privacy interest was outweighed especially given that the court could craft a limited protective order under Federal Rule of Civil Procedure 26(c) to protect an innocent ISP subscriber and to account for the sensitive and personal nature of the subject matter of the lawsuit.

Strike 3 Holdings, LLC v. Doe, 2018 WL 2278110 (D.Minn. May 18, 2018)

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.

May 21, 2018 Litigation, Trade Secrets

Online marketer’s misappropriation claims against publicly traded former suitor move forward

Plaintiff – a small online marketing company – sued a large, publicly-traded competitor for copyright infringement, misappropriation of trade secrets, deceptive and unfair practices, and breach of contract. The parties had previously signed a nondisclosure agreement and an agreement whereby plaintiff would provide defendant with access to plaintiff’s technology used to monitor the scope of companies’ online presence and the accuracy of information appearing in search engines. The parties had also engaged in discussions about defendant acquiring plaintiff. But after the negotiations broke off, plaintiff discovered that it appeared defendant had appropriated plaintiff’s technology (including copyright-protected materials) into defendant’s own product offerings.

The lower court entered a preliminary injunction against defendant, barring it from offering the allegedly infringing and misappropriating technology. Defendant sought review of the entry of preliminary injunction with the U.S. Court of Appeals for the Eleventh Circuit. The appellate court affirmed the order.

The appellate court rejected defendant’s argument that the lower court had not described specifically enough those trade secrets of plaintiff that defendant had allegedly misappropriated. It also rejected defendant’s arguments that plaintiff’s delay in bringing suit undermined its argument of irreparable harm, that plaintiff failed to show that it was likely to succeed on the merits of its underlying claims, and that the district court erred in weighing the balance of harm and in considering the impact on the public interest.

Advice Interactive Group, LLC v. Web.com Group, Inc., 2018 WL 2246603 (11th Cir., May 16, 2018)

November 3, 2017 Litigation, Section 230

Google can, at least for now, disregard Canadian court order requiring deindexing worldwide

U.S. federal court issues preliminary injunction, holding that enforcement of Canadian order requiring Google to remove search results would run afoul of the Communications Decency Act (at 47 U.S.C. 230)

canada-us
Canadian company Equustek prevailed in litigation in Canada against rival Datalink on claims relating to trade secret misappropriation and unfair competition. After the litigation, Equustek asked Google to remove Datalink search results worldwide. Google initially refused altogether, but after a Canadian court entered an injunction against Datalink, Google removed Datalink results from google.ca. Then a Canadian court ordered Google to delist worldwide, and Google complied. Google objected to the order requiring worldwide delisting, and took the case all the way up to the Canadian Supreme Court, which affirmed the lower courts’ orders requiring worldwide delisting.

So Google filed suit in federal court in the United States, seeking a declaratory judgment that being required to abide by the Canadian order would, among other things, be contrary to the protections afforded to interactive computer service providers under the Communications Decency Act, at 47 U.S.C. 230.

The court entered the preliminary injunction (i.e., it found in favor of Google pending a final trial on the merits), holding that (1) Google would likely succeed on its claim under the Communications Decency Act, (2) it would suffer irreparable harm in the absence of preliminary relief, (3) the balance of equities weighed in its favor, and (4) an injunction was in the public interest.

Section 230 of the Communications Decency Act immunizes providers of interactive computer services against liability arising from content created by third parties. It states 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.” [More info about Section 230]

The court found that there was no question Google is a “provider” of an “interactive computer service.” Also, it found that Datalink—not Google—“provided” the information at issue. And finally, it found that the Canadian order would hold Google liable as the “publisher or speaker” of the information on Datalink’s websites. So the Canadian order treated Google as a publisher, and would impose liability for failing to remove third-party content from its search results. For these reasons, Section 230 applied.

Summarizing the holding, the court observed that:

The Canadian order would eliminate Section 230 immunity for service providers that link to third-party websites. By forcing intermediaries to remove links to third-party material, the Canadian order undermines the policy goals of Section 230 and threatens free speech on the global internet.

The case provides key insight into the evolving legal issues around global enforcement and governance.

Google, Inc. v. Equustek Solutions, Inc., 2017 WL 5000834 (N.D. Cal. November 2, 2017)

Court allows Microsoft to unmask unknown Comcast users accused of infringement

A federal court in Washington state has given the green light for Microsoft to subpoena records from Comcast to discover the identity of the person or persons associated with an IP address used to activate thousands of unauthorized copies of Microsoft software.

Statue_of_Anonymus_(Budapest,_2013)

Generally, in federal court litigation, a party cannot serve discovery requests or subpoenas until after the plaintiff and defendant have conferred (in a Rule 26(f) conference). But when the plaintiff does not know the identity of the defendant, there is a bootstrapping problem – discovery needs to be taken to find out the defendant with whom to conduct the conference. In situations like this, the plaintiff seeking to unmask an unknown defendant will file its complaint against one or more “John Does,” then ask the court for leave to serve discovery prior to the Rule 26(f) conference.

That is what happened in this case. It is a common tactic used by parties legitimately seeking to enforce intellectual property, as well as parties that may be considered copyright trolls. See, e.g., this early bittorrent case from 2011.

Microsoft filed its complaint and also filed a motion for leave to take discovery prior to the Rule 26(f) conference. Finding that good cause existed for the early discovery, the court granted the motion.

It held that

(1) Microsoft had associated the John Doe Defendants with specific acts of activating unauthorized software using product keys that were known to have been stolen from Microsoft, and had been used more times than were authorized for the particular software,

(2) Microsoft had adequately described the steps it took in an effort to locate and identify the John Doe defendants, specifically by utilizing its “cyberforensics” technology to analyze product key activation data, identifying patterns and characteristics which indicate software piracy,

(3) Microsoft had pleaded the essential elements to state a claim for copyright and trademark infringement, and

(4) the information proposed to be sought through a subpoena appeared likely to lead to identifying information that would allow Microsoft to serve the defendants with the lawsuit.

Microsoft Corp. v. John Does 1-10, 2017 WL 4958047 (W.D. Wash., November 1, 2017)

Image courtesy Dmitrij Rodionov under Creative Commons Attribution-Share Alike 3.0 Unported license. Licensed granted hereby under same terms.