Attorney Evan Brown

January 24, 2014 Computer Crime

Hunter Moore arrest reveals a certain inconsistency about the Computer Fraud and Abuse Act

The feds arrested Hunter Moore and an alleged co-conspirator on Thursday for hacking into email accounts to get nude photos Moore published on isanyoneup.com. At the heart of the prosecution is the Computer Fraud and Abuse Act, the federal statute that makes it a crime (and in some circumstances, gives rise to civil liability) for accessing a computer without authorization.

Few will come to these guys’ defense in this situation. Moore’s conduct in publishing and promoting isanyoneup.com was reprobate, and if the allegations in this criminal action prove true, that backend nefariousness will simply multiply the reasons why Moore was known as the most hated man on the internet. And because of this disdain for Moore’s conduct, most of us are happy to see the CFAA used aggressively against him.

But that’s the same statute many blame for crushing Aaron Swartz. To the extent a reasonable person may feel ill-will against Hunter Moore, he or she may feel sympathy, indeed compassion, for Aaron Swartz having had the CFAA book thrown at him. Against Moore there’s a sense of justice, against Swartz, a palpable injustice.

Isn’t it a bit mysterious how the same conduct — granted, for way different purposes and under different circumstances — can elicit such contrasting emotions?

January 23, 2014 Contracts

“Right to audit” provisions in technology services agreements can benefit both parties

About the Author: Evan Brown is a Chicago technology and intellectual property attorney. Need help? Call Evan at (630) 362-7237, send email to ebrown@internetcases.com, or follow him on Twitter @internetcases.

“Right to audit” provisions in technology services agreements are common. You’ve seen them. A typical section will read something like this:

Vendor will keep accurate and complete records and accounts pertaining to the performance of the Services. Upon no less than seven (7) days’ written notice, and no more than once per calendar year, Customer may audit, or nominate a reputable accounting firm to audit, Vendor’s records relating to its performance under this Agreement, including amounts claimed, during the term of the Agreement and for a period of three months thereafter.

These provisions often benefit the customer, to give it some transparency and assurance that the vendor is performing the services according to the agreement and that vendor is charging customer for the services appropriately.

But a right to audit provision can benefit the vendor (and go against the customer) as well. As a recent court decision shows (Carlson, Inc. v. IBM, 2013 WL 6007508 (D. Minn. November 13, 2013)), a customer’s comprehensive audit rights can preclude it from claiming that vendor owes it a fiduciary duty.

In the case, the customer sued its software vendor alleging, among other things, that the vendor breached its fiduciary duty. The customer argued that it had to essentially “hand over the keys” of its operations to the vendor. But the court ruled that vendor did not owe customer a fiduciary duty because the customer had several important rights to know about and control the vendor’s performance.

The master services agreement between the parties reserved for the customer the right to audit the vendor’s performance and challenge its pricing and delivery of services. Under the agreement, customer had:

regular and recurring access to vendor personnel;
access to complete records and supporting documentation underlying vendor’s services;
the right to conduct operational audits to examine vendor’s performance of the services;
the right to audit performance for comparison to standards in the service level agreement;
the right to financial audits to verify the accuracy and completeness of invoiced charges.

The court found that “[t]hese audit and oversight provisions [were] meaningless if [customer] was as helpless as it [claimed].”

So while vendors may find right to audit clauses to be a nuisance, they should remember that the presence of such a clause could provide an important defense in litigation over the technology agreement.

Evan Brown is a Chicago attorney helping businesses negotiate and draft technology services and development contracts. He also handles many other issues involving the internet, copyright and trademarks, and new media. Call him at (630) 362-7237 or email ebrown@internetcases.com.

January 22, 2014 First Amendment

Hulk Hogan sex tape redux: Another court holds Gawker had First Amendment right to publish video excerpts

Evan Brown is a Chicago attorney helping businesses and individuals identify and manage issues dealing with technology development, copyright, trademarks, software licensing and many other matters involving the internet and new media. Call him at (630) 362-7237 or email ebrown@internetcases.com.

As we discussed here on internetcases back in November 2012, someone surreptitiously filmed Hulk Hogan engaged in sex acts with someone other than his wife. When Gawker posted an article and video excerpts about that, Hulk sued in federal court for invasion of privacy. The federal court denied the preliminary injunction, holding that to bar Gawker from publishing the information would be an unconstitutional prior restraint on speech.

A few weeks after the federal court denied his motion for preliminary injunction, Hulk voluntarily dismissed the federal case and filed a new case in state court. Unlike the federal court, the state court granted a preliminary injunction against Gawker publishing the information and the video excerpts. Gawker sought review with the Court of Appeal of Florida. On appeal, the court reversed the lower court’s order granting the preliminary injunction.

The state appellate court’s decision closely tracked the federal court’s reasoning from 2012. The court observed that where matters of purely private significance are at issue, First Amendment protections are often less rigorous. But speech on matters of public concern is “at the heart of the First Amendment’s protection.”

The court found that the sex tape excerpts and information that Gawker published were matters of public concern. Much of this was from Hulk’s own doing — he injected himself into the public spotlight not only as a professional wrestler, but also through books detailing his sexual indiscretions, radio interviews, and other public pronouncements about his “conquests.”

In arguing that Gawker’s speech was not of public concern, Hulk looked to Michaels v. Internet Entertainment Group, Inc., 5 F.Supp.2d 823 (C.D.Cal.1998), a case that dealt with the infamous sex tape that Bret Michaels and Pamela Anderson made. In that case, the court found defendant’s redistribution of the video was not protected by the First Amendment, in part because the distribution was purely commercial. The court didn’t buy it.

But wasn’t Gawker’s use commercial as well? The court drew a distinction:

We are aware that Gawker Media is likely to profit indirectly from publishing the report with video excerpts to the extent that it increases traffic to Gawker Media’s website. However, this is distinguishable from selling the [Hulk] Sex Tape purely for commercial purposes.

So the court found that despite his brawn, Hulk failed to carry his “heavy burden” of overcoming the presumption that a preliminary injunction would violate the First Amendment in this situation.

Gawker Media, LLC v. Bollea, 2014 WL 185217 (Fla.App. 2 Dist., January 17, 2014)

January 20, 2014 Electronic Discovery

Bullied student did not have to hand over all of his social media content in lawsuit against school district

A student sued the school district in which he attended high school for failing to protect him against bullying. The school district served discovery requests on the student seeking electronic copies of everything he did on social media during the time period of the alleged bullying. When the student refused to produce all of his social media content, the school district moved to compel.

The court held that the student did not have to produce all of his social media content, but had to produce any materials that revealed, referred, or related to any “emotion, feeling, or mental state.” The court looked to the case of E.E.O.C. v. Simply Storage Management, LLC, 270 F.R.D. 430 (S.D.Ind.2010) to find that the mere fact that the student had social communications was not probative of any mental or emotional state. Rather, the school district would be entitled to discover whatever communications were relevant to the claims or defenses in the matter.

In the social media discovery context, this meant something less than the student’s entire social media history:

To be sure, anything that a person says or does might in some theoretical sense be reflective of her emotional state. But that is hardly a justification for requiring the production of every thought she may have reduced to writing or, indeed, the deposition of everyone she may have talked to.

Despite this attempt by the court at limitation, one is left to wonder whether the scope of the court’s order — requiring production of materials that revealed, referred, or related to any “emotion, feeling, or mental state” — is so vague as to be of no real help. Scarcely anyone’s casual social media content (let alone the content of the typical teenager) contains material that is void of emotion, feeling or mental state. Tweets, comments, status updates and wall postings drip with pride, humor, loneliness, angst, and the rest of the spectrum of human sentiment.

D.O.H. ex rel. Haddad v. Lake Central School Corp., 2014 WL 174675 (N.D.Ind. January 15, 2014)

January 7, 2014 Cryptocurrency, Right of Publicity, Trademarks

The trademark and right of publicity woes of having a cryptocurrency named after you

Not too surprisingly, Kanye West’s lawyers have demanded the developers of the Coinye West cryptocurrency not use his name. The somewhat obnoxious letter shows that Kanye’s lawyers are asserting, among other things, trademark infringement and right of publicity misappropriation.

Russell Brandom at the Verge observes that “[o]nce the code is public, the original coders will be unable to prevent its use, forcing West’s legal team to prosecute every instance of Coinye individually.”

That observation raises a couple of interesting points. The first one is more of a clarification — once the code is in the wild, we should assume Kanye would only care to stop the use of his name, and would not seek (nor have any basis upon which) to stop anyone from using the code.

Stopping users of a cryptocurrency from using the name of that cryptocurrency could be a bit tough. Kanye’s lawyer threatens to “purse all legal remedies against any business that accepts the purported COINYE WEST currency.”

Infringement and misappropriation both depend on a use of the offending term in a commercial way. But users of the decentralized system, and the vendors who accept that currency, are not providers of any goods or services onto which Kanye’s identity will be attached. If one is merely using the currency as a tool, it’s hard to see how that’s any different from implicating the rights of the historical figures who appear on paper currency. So might it all be about the Benjamins? Maybe not at all.

December 31, 2013 Privacy

Is the future a trade between convenience and privacy?

This TechCrunch piece talks about how (predictably) Google wants to build the “ultimate personal assistant.” With Google’s collecting user preferences cross-platform and applying algorithms to ascertain intentions, getting around in the world, purchasing things, and interacting with others could get a lot easier.

But at what cost? The success of any platform that becomes a personal assistant in the cloud would depend entirely on the collection of vast amounts of information about the individual. And since Google makes its fortunes on advertising, there is no reason to be confident that the information gathered will not be put to uses other than adding conveniences to the user’s life. Simply stated, the platform is privacy-destroying.

What if one wants to opt-out of this utopically convenient future? Might such a person be unfairly disadvantaged by, for example, choosing to undertake tasks the “old fashioned” way, unassisted by the privacy eviscerating tools? This points to larger questions about augmented reality. As a society, will we implement regulations to level the playing field among those who are not augmented versus those who are? Questions of social justice in the future may take a different tone.

November 22, 2013 Copyright

Copyright and the JFK Assassination

Fifty years ago today, which was of course long before smartphones with cameras, Abraham Zapruder filmed the assassination of President John F. Kennedy using his 8 millimeter color home movie camera. Not only did the Zapruder film become iconic, its subsequent treatment formed the basis for a later copyright case that presented some interesting issues.

A few days after the assassination, in exchange for $150,000, Zapruder assigned the copyright in the film to Life Magazine (actually its parent company Time Inc.). In 1967, Josiah Thompson wrote a book about the assassination that contained charcoal sketches copied from frames of the Zapruder film.

Time sued for copyright infringement. Defendants moved for summary judgment. The court granted the motion.

Among other things, defendants argued that the frames from the Zapruder film were not entitled to copyright protection in the first place because they lacked originality. The court rejected this argument, noting that:

The Zapruder pictures in fact have many elements of creativity. Among other things, Zapruder selected the kind of camera (movies, not snapshots), the kind of film (color), the kind of lens (telephoto), the area in which the pictures were to be taken, the time they were to be taken, and (after testing several sites) the spot on which the camera would be operated.

The case also had a fair use component. As is still the reality 50 years later, the court observed that “the [fair use] doctrine is entirely equitable and is so flexible as virtually to defy definition.” It cited an earlier decision that called the issue “the most troublesome in the whole law of copyright.”

The fair use analysis is particularly interesting in that it took place, obviously, before the 1976 Copyright Act, which codified the now well-known fair use factors. But it looked to the same language that is now in Section 107 of the Act, which then was merely a passed Hose Bill (H.R. 2512) but still under consideration by the Senate. It wasn’t until more than 10 years later that the factors actually became codified.

The court held that the fair use factors went in defendants’ favor. It noted the substantial public interest in having the fullest information available. And it concluded that people bought the book not for the Zapruder pictures, but because of the theory and explanation set forth in it, supported by the Zapruder pictures. Moreover, there was little, if any, injury to the copyright owner. There was no competition between plaintiff and defendants. And here is a theme that persists to this day, even as recently as the Google Book Search decision: “It seems more reasonable to speculate that the Book would, if anything, enhance the value of the copyrighted work; it is difficult to see any decrease in its value.”

Time Inc. v. Bernard Geis Associates, 293 F.Supp. 130 (D.C.N.Y 1968)

November 15, 2013 Copyright

What the Google Book Search fair use decision means for innovators

(This is a slightly modified cross-post from my firm’s blog.)

Yesterday the U.S. District Court for the Southern District of New York granted Google’s motion for summary judgment in the 8-year-running Google Book Search case. The court held that Google’s copying and display of in-copyright books is a noninfringing fair use. The decision is a signal that modern copyright law, despite its many flaws that become apparent in the digital age, will make at least some room for technological innovation.

About the Case

In 2004, Google announced plans to scan the full text of millions of books, both in the public domain and in-copyright, and to make those scanned works searchable on the web. For in-copyright works, Google would make “snippets,” each comprised of 1/8 of a page, available as search results for keywords contained within them.

Plaintiffs (some individual authors and the Authors Guild) sued Google in 2005 for copyright infringement. The parties reached a settlement agreement in 2008, but the court later rejected that agreement. Earlier this year, plaintiffs suffered a setback when the Second Circuit held that a class action was not appropriate because of the fact-specific fair use questions.

Back at the trial court level, the parties cross-moved for summary judgment. Google argued, as it had from the outset, that the scanning and display is a noninfringing fair use. The court granted Google’s summary judgment motion.

The Court’s Decision

Fair use is an affirmative defense to copyright infringement. Section 107 of the Copyright Act guides a court on how to determine whether a defendant’s use is fair. That provision instructs that it is not copyright infringement if one uses another’s work “for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research.” It goes on to provide that a court should apply four non-exhaustive factors in the fair use analysis:

the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
the nature of the copyrighted work;
the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
the effect of the use upon the potential market for or value of the copyrighted work.

In this case, the court began its fair use analysis by emphasizing how “[c]opyright law seeks to [provide] sufficient protection to authors and inventors to stimulate creative activity, while at the same time permitting others to utilize protected works to advance the progress of the arts and sciences.”

In applying the fair use factors, the court focused extensively on the first factor (purpose and character of the use). In this analysis, the court looked to the key question of whether the use was “transformative.” Borrowing from the Supreme Court, the court looked to whether Google’s scanning and display of the works “superseded” or “supplanted” the original creation, or whether the conduct:

instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is “transformative.”

The court found the use to be transformative, comparing the “snippets” to thumbnail images, which were found to be protected by fair use in a 2003 case (Kelly v. Arriba Soft) involving an image search engine. Moreover, the court’s opinion noted the extensive benefits occasioned by Google’s efforts, including:

The creation of new and efficient ways for readers and researchers to find books.
The increased ability to conduct “data mining” or “text mining” research. For example, using the tool, researchers can examine word frequencies, syntactic patterns, and thematic markers to consider how literary style has changed over time.
The expansion of access to books. In particular, the court noted how traditionally underserved populations will benefit as they gain knowledge of and access to far more books. Digitization facilitates the conversion of books to audio and tactile formats, increasing access for individuals with disabilities.
The preservation and “new life” of old and out of print books.

The court acknowledged the idea that Google was engaged in commercial activity through the scanning project. But such fact was not dispositive to the fair use finding. Given the nature of the benefits, the court was satisfied that the purpose and character of the use supported a fair use finding.

On the second fair use factor, the court found that because the works were already published and were non-fiction, the balance tilted in favor of fair use.

The third factor came out “slightly” in Google’s favor. While a copying of all of a work will generally weigh against the defendant in considering the “amount and substantiality of the portion used,” the fact that the search feature would not function properly had the entire work not been scanned, put this factor on Google’s side.

Finally, on the fourth fair use factor — effect on the market — the court rejected plaintiff’s arguments that the scanning and display will negatively affect the sale of plaintiff’s works. Google does not sell the scanned copies, nor would it be feasible or practicable for a user to obtain an entire copy of the work through an assemblage of snippets. In fact, the court noted how the platform will help readers and researchers identify books, thus benefiting authors and publishers. From this, the court found, Google Books will generate new audiences and create new sources of income.

What This Says About Innovation and the Law

Google’s use of technology in this situation was disruptive. It challenged the expectation of copyright holders, who used copyright law to challenge that disruption. It bears noting that in the court’s analysis, it assumed that copyright infringement had taken place. But since fair use is an affirmative defense, it considered whether Google had carried its burden of showing that the circumstances warranted a finding that the use was fair. In this sense, fair use serves as a backstop against copyright ownership extremism. Under these particular circumstances — where Google demonstrated incredible innovation — that backstop provided room for the innovation to take root and grow. Technological innovators should be encouraged.

November 12, 2013 Privacy, Right of Publicity

Guy faces lawsuit for using another man’s Facebook pics to send sexually explicit communications to undercover cops

Defendant emailed three pictures, thinking he was communicating with two 14-year-old girls. But he was actually communicating with a police detective. And the pictures were not of defendant, but of plaintiff — a cop in a neighboring community. The pictures were not sexually explicit, but the accompanying communications were. Defendant had copied them from plaintiff’s Facebook page.

Plaintiff and his wife sued defendant under a number of tort theories. Defendant moved to dismiss plaintiffs’ claims for false light publicity and intentional infliction of emotional distress. The court denied the motion.

It found that the false light in which defendant placed plaintiff through his conduct would be highly offensive to a reasonable person, and that defendant had knowledge of or acted in reckless disregard as to the falsity of the identity of the person in the photo, and the false light into which the plaintiff would be placed.

As for the intentional infliction of emotional distress claim, the court found that: (1) defendant intended to inflict emotional distress or that he knew or should have known that emotional distress was the likely result of his conduct; (2) that the conduct was extreme and outrageous; (3) that the conduct was the cause of plaintiff’s distress; and (4) that the emotional distress sustained by the plaintiff was severe.

Defendant argued that his conduct was not extreme and outrageous. The court addressed that argument by noting that:

[Defendant] cannot do that with a straight face. The test is whether “the recitation of the facts to an average member of the community would arouse his resentment against the actor and lead him to exclaim, Outrageous!” . . . This is such a case.

Plaintiff’s wife’s intentional infliction of emotional distress claim survived as well. This was not, as defendant argued, an allegation of bystander emotional distress, such as that of a witness to an automobile accident. Defendant’s conduct implied that plaintiff was a sexual predator. This would naturally reflect on his spouse and cause her great personal embarrassment and natural concern for her own personal health quite apart from the distress she may have experienced from observing her husband’s own travail.

Dzamko v. Dossantos, 2013 WL 5969531 (Conn.Super. October 23, 2013)

Court refuses to help author who was victim of alleged bogus DMCA takedown notices

Author and her publisher disagreed on the content of two of the author’s new books. (As an aside, this author is very prolific — she alleges that she publishes a new book every two weeks!) So rather than deal with publisher, author self-published the works on Amazon. Publisher sent DMCA takedown notices to Amazon, with which Amazon complied. Author sued publisher under Section 512(f) of the DMCA, which provides penalties against senders of DMCA takedown notices that knowingly materially misrepresent claims of infringement. She sought a temporary restraining order (TRO), asking the court to instruct publisher to tell Amazon to make the works available.

The court denied the TRO motion. It found that author had failed to show she would suffer irreparable harm if the works were not put back on the market. In the court’s view, author failed to show how a temporary delay in sales would affect her reputation or goodwill.

The case presents an interesting issue concerning a party’s right to send a DMCA takedown notice. Author alleges that her agreement with publisher provided she owns the copyright in her works, and that publisher merely has a right of first refusal to publish any “sequels” to her previous works. So if what author is saying is true, that publisher does not have a copyright interest in the books but merely a contract interest, she stands a good chance, ultimately, on her 512(f) claim.

Flynn v. Siren-BookStrand, Inc., 2013 WL 5315959 (September 20, 2013)