Category: Uncategorized

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.

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.

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Plaintiff (the luxury brand Chanel) sued defendant under the Anti-Cybersquatting Consumer Protection Act (15 U.S.C. 1125(d)) (“ACPA”) over defendant’s registration and use of the disputed domain name <chanelgraffiti.com>. Plaintiff moved for summary judgment on its ACPA claim. The court granted the motion.

Distinctiveness of plaintiff’s mark

Defendant did not contest that plaintiff’s CHANEL mark was distinctive at the time the disputed domain name was registered. Plaintiff had put forth evidence that it owned registered trademarks for the mark CHANEL, and the court noted that registered trademarks are presumed to be distinctive.

Confusing similarity

The court found that the disputed domain name was confusingly similar to plaintiff’s mark. Citing 5 McCarthy on Trademarks § 25:78 (4th ed. 2002), the court held that “[i]n the cybersquatting context, ‘confusingly similar’ must simply mean that the plaintiff’s mark and the defendant’s domain name are so similar in sight, sound, or meaning that they could be confused.” The court found that defendant offered no admissible evidence to suggest that chanelgraffiti.com was not confusingly similar to the mark CHANEL.

Even with the additional word “graffiti” appearing within the disputed domain name, the court found that the similarities between the CHANEL mark and the disputed domain name were “instantly apparent because of the inclusion of the word” CHANEL in the disputed domain name. Moreover, defendant did not claim that the term “chanel” was meant to reference anything other than the luxury brand. Similarly, the court found that the including of the term “graffiti” did not self-evidently connote a type of criticism or disregard for the brand that rises to a meaningful level of distinction.

Bad faith intent

The court also found that there was no reasonable dispute that defendant had a bad faith intent to profit from the CHANEL mark. It found that bad faith could be inferred from defendant’s intent to divert consumers from plaintiff’s online location to a site accessible under the disputed domain name that could harm the goodwill represented by plaintiff’s mark, either for commercial gain or with the intent to tarnish or disparage plaintiff’s mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site.

The court found that the disputed domain name unquestionably advertised products containing plaintiff’s mark and had product descriptions that read “CHANEL inspired graffiti bags.” Defendant disputed that he had any control over the content of the site, stating that he did not operate the website and had no connection to the disputed domain name outside of registering it.

Whether and to what extent the site was used or operated by defendant, however, was beside the point under ACPA. Defendant did not dispute that his registration of the disputed domain name, regardless of the content of the site, would divert customers from plaintiff’s website by creating a likelihood of confusion as to the affiliation of defendant’s site, which was a “quintessential example of bad faith within the meaning of ACPA.”

Chanel, Inc. v. Richardson, 2018 WL 6097865 (S.D.N.Y. November 20, 2018)

Plaintiff airline ticket buyer sued Expedia in court for, among other things, fraud, claiming that he was entitled to a refund of the price of his ticket because he had to cancel for medical reasons. Expedia moved to compel arbitration. The court granted the motion.

It found that plaintiff manifested his clear agreement to the arbitration clause in Expedia’s online terms and conditions when he selected the “complete booking” button on the “Review and book your trip” screen during his ticket purchase process.

It also found that each of plaintiff’s claims were encompassed by the arbitration agreement found in the online terms. The arbitration agreement entered into by the parties stated that “[a]ny and all Claims will be resolved by binding arbitration.” There was no apparent exception for fraud or contract claims, and plaintiff did not argue that any exception existed.

Van Den Heuvel v. Expedia Travel, 2017 WL 5133270 (E.D. Cal., November 6, 2017

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.

In all copyright infringement cases, a plaintiff must prove, among other things, that the defendant copied elements of plaintiff’s work that are protected by copyright. This is key because not all copying is infringement – some of what is copied may be merely ideas, processes, facts, in the public domain, or scenes a faire material. It’s not illegal to copy those things. So a successful plaintiff has to show more than “copying in fact”. It must show “illegal copying”.

Software infringement cases present some nuance for this analysis. A computer program has different levels of abstraction (i.e. from main purpose down to object code), and when the only similarities are at higher levels of abstraction, there is less chance that infringement has occurred. Some courts employ the “abstraction-filtration-comparison test” to evaluate whether a defendant accused of infringing the copyright in software has indeed illegally copied protected elements of the plaintiff’s work:

At the abstraction step, we separate the ideas (and basic utilitarian functions), which are not protectable, from the particular expression of the work. Then, we filter out the nonprotectable components of the product from the original expression. Finally, we compare the remaining protected elements to the allegedly copied work to determine if the two works are substantially similar.

Plaintiff sued one of its founders for copyright infringement after that founder had moved to another company and had developed software allegedly similar to software he had created while at plaintiff-company. The parties agreed to have a special master evaluate the parties’ software to opine on whether defendant had infringed. The special master found there to be infringement, and the district court agreed, ordering that copies of defendant’s software be destroyed.

Defendant sought review in the Tenth Circuit. On appeal, the court vacated and remanded. It held that the special master failed to properly document the steps involved in conducting the abstraction-filtration-comparison test.

The court found there was little evidence the special master performed the abstraction step. Although “[a]pplication of the abstractions test will necessarily vary from case-to-case and program-to-program,” a “computer program can often be parsed into at least six levels of generally declining abstraction: (i) the main purpose, (ii) the program structure or architecture, (iii) modules, (iv) algorithms and data structures, (v) source code, and (vi) object code.” In the court’s mind, “[a]bstraction is important, and it cannot be neglected here.”

The failure to “conscientiously and systematically” perform the abstraction step tainted the remainder of the three-part test. The court criticized the special master’s application of the filtration and comparison steps, observing that the special master apparently proceeded from the false premise that an infringement analysis begins and ends with “copying in fact.” The special master went to great lengths to show that defendant took steps to conceal his copying of source code (e.g., by omitting comments). But having not first properly separated out (by filtering) the unprotected elements after abstraction, the special master’s report was not sturdy enough to support a finding in the district court that infringement had occurred.

Paycom Payroll, LLC v. Richison, — F.3d —, 2014 WL 3377679 (10th Cir. July 11, 2014)

Palleschi v. Cassano, — N.Y.S.2d —, 2013 WL 322573 (N.Y.A.D. 1 Dept. January 29, 2013)

Petitioner — an emergency medical services supervisor and lieutenant in the New York Fire Department — admitted that he posted a picture to Facebook of a computer screen containing confidential and privileged information about a 911 caller’s complaint of a gynecological emergency. The pic also showed the caller’s name, address and telephone number.

He added the caption, “[c]an’t make this up,” apparently for his 460 friends’ enjoyment.

Petitioner sought review of the Commissioner’s decision to fire him. The court affirmed the decision. If found that in light of the serious nature of the conduct, the penalty did not shock any sense of fairness.