Attorney Evan Brown

September 2, 2008 Evidence, Litigation, Miscellaneous

Slamming Wikipedia’s reliability not enough in immigration case

Badasa v. Mukasey, — F.3d —, 2008 WL 3981817 (8th Cir. Aug. 29, 2008)

Illegal alien Badasa sought asylum in the United States. To establish her identity, she submitted to the Immigration Judge a “laissez-passer” issued by the Ethiopian government. Opposing the application for asylum, the Department of Homeland Security submitted a number of items, including a Wikipedia article, to show that a laissez-passer is merely a document issued for a one-time purpose based on information provided by the applicant. The Immigration Judge was not convinced that the laissez-passer established Badasa’s identity, and denied the application for asylum.

Badasa appealed to the Board of Immigration Appeals, which agreed that asylum should be denied. It soundly criticized Wikipedia’s reliability to establish the meaning of the document at issue, but found there was enough other evidence to support the Immigration Judge’s conclusion that Badasa had failed to establish her identity. But the Board of Immigration Appeals failed to discuss this other evidence, therefore running afoul of the administrative law textbook case of SEC v. Chenery, 318 U.S. 80 (1943).

So the Eighth Circuit sent the case back to the Board of Immigration Appeals to make additional findings. The court observed that the Board of Immigration Appeals found that “Badasa was not prejudiced by the [Immigration Judge’s] reliance on Wikipedia, but [the Board of Immigration Appeals] made no independent determination that Badasa failed to establish her identity.” In short, the Board of Immigration Appeals had focused only on why the use of Wikipedia made the case less “solid,” and did not address the lack of solidity found in any of the other evidence connected with the laissez-passer used to establish identity.

August 22, 2008 Personal Jurisdiction

Ninth Circuit: No personal jurisdiction over out of state eBay seller

Boschetto v. Hansing, — F.3d —, 2008 WL 3852676 (9th Cir. August 20, 2008)

Hansing, a resident of Wisconsin, offered a 1964 Ford Galaxie for sale on eBay. Boschetto, a California resident, was the winning bidder, and sent Hansing $34,106. He also arranged to have the car shipped from Wisconsin to California. After Boschetto found that the car didn’t meet the description in the eBay listing, he sued Hansing in California federal court, based on diversity subject matter jurisdiction. (Never mind how far below $75,000 the amount that was in controversy appears.)

Hansing moved to dismiss for lack of personal jurisdiction, and the court granted the motion. Boschetto sought review with the Ninth Circuit. On appeal, the court affirmed.

Single eBay transaction not enough

The question was whether this single transaction – enabled by eBay – constituted minimum contacts between Hansing and California to satisfy constitutional due process. A threshold question in that analysis was whether Hansing had purposely availed himself of the privileges of conducting activities in California, thereby invoking the benefits and protections of its laws.

The court answered the purposeful availment question in the negative. The single transaction did not create any ongoing obligations in California, nor did it result in substantial business being conducted by Hansing there. On this point, the court nodded to the oft-cited Burger King v. Rudzewicz case for its holding that a contract alone does not automatically establish minimum contacts in the plaintiff’s home forum. 471 U.S. at 478.

eBay as facilitator a “distraction” to the jurisdictional analysis

What makes this case worth noting (in light of the fact that personal jurisdiction cases can be pretty dull) is the court’s rejection of Boschetto’s argument that the eBay component of the deal defined the analysis. Boschetto had argued that the eBay listing would have been viewed by anyone in California, thus that functionality supported an exercise of personal jurisdiction.

But “the issue [was] not whether the court [had] personal jurisdiction over the intermediary eBay but whether it [had] personal jurisdiction over an individual who conducted business over eBay.” The court noted that in other Internet-related personal jurisdiction cases, like Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414 (9th Cir. 1997) and the famous case of Zippo Mfg. Co. v. Zippo Dot Com, 952 F.Supp. 1119 (W.D.Pa. 1997), the interactive nature of the websites had jurisdictional significance because they permitted the defendants to maintain ongoing contact with the forum.

An isolated sale on eBay, however, is different in nature. In this case, the court found that the eBay aspect was “a distraction from the core issue.” The use of eBay was to facilitate a one time contract that created no substantial connection with or ongoing obligations in the forum state.

This is not to say that the use of eBay could never give rise to personal jurisdiction outside a defendant’s home forum. A number of cases have so held. See, e.g., Dedvukaj v. Maloney. The court noted that where eBay is used as a means for establishing regular business with a remote forum, the traditional notions of fair play and substantial justice might provide for the exercise of personal jurisdiction. But this was not one of those cases.

(Photo of 1964 Galaxie courtesy of Flickr user Brain Toad Photography under a Creative Commons license.)

August 20, 2008 Copyright, DMCA, Fraud/Misrepresentation

Sender of DMCA takedown notice should consider fair use

Lenz v. Universal Music Corp., No. 07-3783 (N.D. Cal. August 20, 2008). [Download the opinion]

Hat tip to Joe Gratz for breaking this story.

One of the things that a person sending a takedown notice under the Digital Millennium Copyright Act (DMCA) has to swear to is that he or she “has a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law.” 17 U.S.C. §512(c)(3)(A) (emphasis added). If the sender of the takedown notice makes a knowingly material misrepresentation as to whether the law authorizes the use of the material, the party whose content is taken down can sue under 17 U.S.C. §512(f). This serves as a backstop against DMCA takedown abuses.

Suppose that the complained-of work may be protected by fair use. If the sender is deliberately ignorant of that possibility, can that result in a misrepresentation that runs afoul of 512(f)? That question had not been answered before today, when the U.S. District Court for the Northern District of California said “yes.”

The case is Lenz v. Universal Music Corp., No. 07-3783. You may have heard of this case before, as it’s the one where the mom filmed her daughter dancing to Prince’s “Let’s Go Crazy” and uploaded that to YouTube, only to have it removed after a Universal DMCA takedown notice. Lenz sued under §512(f) and Universal moved to dismiss.

In its motion to dismiss, Universal contended that copyright owners cannot be required to evaluate the question of fair use prior to sending a takedown notice because fair use is merely an excused infringement of a copyright rather than a use authorized by the copyright owner or by law.

But the court disagreed. “[T]he fact remains that fair use is a lawful use of a copyright. Accordingly, in order for a copyright owner to proceed under the DMCA with ‘a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law,’ the owner must evaluate whether the material makes fair use of the copyright.” The court went on to say that “[a]n allegation that a copyright owner acted in bad faith by issuing a takedown notice without proper consideration of the fair use doctrine thus is sufficient to state a misrepresentation claim pursuant to Section 512(f) of the DMCA.”

Because Lenz’s complaint contained allegations of this nature, it was detailed enough to pass Twombly muster [Bell Atlantic Corp. v. Twombly, — U.S. —-, 127 S. Ct. 1955, 1964-65 (2007)], and the case moves forward.

The practical effect of this decision is that one sending a DMCA takedown notice without considering whether the person who posted the content is making a fair use, does so at his or her peril. Let’s be clear — the decision does not mean that sending a takedown notice in a situation where it turns out to be a fair use will automatically result in a finding of §512(f) misrepresentation. But it does add another implicit item on the checklist of the takedown notice sender.

August 20, 2008 Section 230

Google doesn’t have to pay $50 billion to defamation plaintiff

Steele v. Mengelkoch, 2008 WL 2966529 (Minn.App. August 5, 2008).

Pro se plaintiff Steele sued Google in Minnesota state court for $50 billion because Google indexed an article which Steele though defamed him. Google moved to dismiss the complaint for failure to state a claim and the lower court granted the motion. Steele sought review with the Court of Appeals of Minnesota. On appeal, the court affirmed.

The court held that 47 U.S.C. §230, by its plain language, creates a federal immunity to any cause of action that would make Google – as the provider of an interactive computer service – liable for information originating with a third party user of the service.

In the court’s language, §230(c)(1) “precludes courts from entertaining claims that would place a computer service provider in a publisher’s role.” So a lawsuit seeking to place responsibility on Google to exercise traditional roles of the publisher – e.g., deciding to publish, withdraw, postpone or alter content – was not legally sufficient to survive.

Other coverage:
Techdirt
Professor Goldman

August 19, 2008 Unfair Competition

Pop-ups don’t amount to unfair competition in Utah case

Nor do they give rise to tortious interference.

Overstock.com, Inc. v. SmartBargains, Inc., — P.3d —-, 2008 WL 3835094 (Utah August 19, 2008)

In 2004, Overstock.com sued its competitor SmartBargains in Utah state court for violations of the state’s anti-spyware statute [Utah Code sections 13-40-101 et seq.], unfair competition and tortious interference with prospective business relations. Overstock accused SmartBargains’ of using a technology to cause SmartBargains pop-up ads to appear when one visited Overstock.com. The lower court granted summary judgment in favor of SmartBargains, holding the anti-spyware statute unconstitutional, and finding that Overstock had not presented a genuine issue of material fact on its unfair competition and tortious interference claims.

Overstock sought review of the lower court’s decision on the unfair competition and tortious interference claims with the Utah Supreme Court. On appeal, the court affirmed the grant of summary judgment.

The lower court had looked to the various WhenU cases, which deal with pop-up advertising to determine there was no triable issue as to unfair competition. (1-800 Contacts, Inc. v. WhenU.com, Inc., 414 F.3d 400 (2d Cir.2005), Wells Fargo v. WhenU.com, Inc., 293 F.Supp.2d 734 (E.D.Mich.2003), and U-Haul Int’l, Inc. v. WhenU.com, Inc., 279 F.Supp.2d 723 (E.D.Va.2003)) But the Supreme Court found the cases to be of limited value, given that they interpreted federal statutory laws, not state common law.

The court declined to adopt a “per se rule holding that all pop-ups do not violate Utah unfair competition law.” Nonetheless, the court found that Overstock did not demonstrate specific facts beyond the pleadings showing that the pop-ups were deceptive, infringed a trademark or passed off SmartBargains’ goods as those of Overstock. After all, the pop-ups were labeled with SmartBargains’ logo and appeared in a separate window. Without something compelling like survey evidence, the court concluded there was no genuine issue for trial.

As for the tortious interference claim, the court similarly held that Overstock had not shown any evidence of improper purpose (competition was fully legitimate end) or improper means on the part of SmartBargains in causing the pop-ups to appear. Although the case doesn’t expressly say so, the dismissal of this claim was probably collateral damage to the unconstitutionality of the anti-spyware statute. Among the things included as “improper means” under Utah tortious interference law is violation of a statute. With no statue left to violate, no so-called improper means could subsist.

July 17, 2008 Computer Crime

CFAA requires intent to cause harm, not merely intent to transmit

Kalow & Springnut, LLP v. Commence Corporation, 2008 WL 2557506 (D.N.J. June 23, 2008)

The federal Computer Fraud and Abuse Act (CFAA), 18 U.S.C. §1030 et seq. creates civil liability for anyone who “knowingly causes the transmissions of a program, information, code, or command, and as a result of such conduct intentionally causes damage without authorization, to a protected computer.” Does this mean that the defendant has to intend to cause harm, or does it simply mean that the defendant merely intended to cause the transmission? The U.S. District Court for the District of New Jersey chose the former in the recent case of Kalow & Springnut, LLP v. Commence Corporation, 2008 WL 2557506 (D.N.J. June 23, 2008).

Plaintiff Kalow got hooked on the defendant’s software, which converted and stored plaintiff’s data in a proprietary format. In March 2006 the software stopped working because of a purported “time bomb” that defendant included in the application. To get the program working again, Kalow had to upgrade at a cost of over $15,000.

Kalow sued, and claimed, among other things, violation of the Computer Fraud and Abuse Act. The defendant moved to dismiss, and the court granted the motion with leave to amend.

In its complaint, Kalow had alleged that the defendant “intentionally transmitted a software code” to Kalow’s computer system and that the “software code [that defendant] intentionally transmitted to these computer systems caused damage to them.” The court found that these allegations were insufficient, as Kalow had not actually averred that defendant intended to cause harm.

The court rejected Kalow’s reliance on the case of Shaw v. Toshiba America Information Systems, Inc., 91 F.Supp.2d 926 (E.D.Tex.1999), concluding that the plaintiffs therein not only pled that the defendants knowingly had transmitted code, but that the defendants “knew [it] would cause the loss and corruption of data….” The court similarly rejected Kalow’s reliance on North Texas Preventive Imaging, LLC v. Eisenberg, No. 96-0071, 1996 U.S. Dist. LEXIS 19990, observing that the 1994 amendments to the CFAA embodied Congress’s aim to emphasize harmful intent and resultant harm rather than just unauthorized access.

July 16, 2008 Trademarks

He was a trademark owner, she was a competitor, he would take her to court over keyword advertising.

In a lawsuit filed recently, Plaintiff Rosetta Stone Ltd. claimed that Defendants Rocket Languages Ltd. et al. infringed Rosetta Stone’s trademarks and engaged in unfair competition. The Plaintiff provides foreign language educational software under the registered mark: Rosetta Stone, and is probably most famous for their clever “farmboy supermodel” ads.

Rosetta Stone claims that the Defendants and their affiliates (competitors of Rosetta Stone) use the Rosetta Stone mark as a keyword in Google and Yahoo! targeted / keyword advertising. Thus, Rosetta Stone contends that “when a consumer [searches for a variation of] ‘ROSETTA STONE’, he is confronted with a list of advertisements from Defendants that either directly offer Rocket Languages products or purport to offer information and reviews of various foreign language software products [, and that the Rosetta Stone mark appears] in the header and text of the resulting sponsored links”. Rosetta Stone also alleges that the Defendants have tarnished the Rosetta Stone mark by running advertisements which state, inter alia, “Rosetta Spanish A Scam?” or “Read These Reviews Before Buying Rosetta Spanish!” Rosetta Stone also alleges that “comparison reviews” of the Defendants are biased and fail to disclose their true source. Finally, Rosetta Stone contends that several hyperlinks on affiliate sites appear to link users with Rosetta Stone, but in fact, link users to Defendants products.

Rosetta Stone alleges that if these actions are permitted to continue, significant monetary and trademark goodwill damages will occur. Rosetta Stone is asking the Court to enjoin the Defendants, inter alia, from using the Rosetta Stone mark in its advertising. Additionally, Rosetta Stone seeks a Court Order that the Defendants remove the Rosetta Stone mark from their keyword advertising.

Given several recent rulings, blogged here, the Court may enter an injunction in favor of Rosetta Stone, though this case may present some interesting comparative advertising questions.

July 2, 2008 Contracts

Software distributor agreement violated New York’s Rule Against Perpetuities

McAllister Software Systems, Inc. v. Henry Schein, Inc., No. 06-0093, 2008 WL 922328 (E.D. Mo. April 2, 2008)

This case came out about three months ago, and I should have blogged about it then but it slipped by. It’s a quirky holding, what with the Rule Against Perpetuities, so it’s worth going back to pick it up. As it turns out, the Rule comes into play in real life, not just on the bar exam or in first year of law school Property class.

In 1990, McAllister and Schein entered into an Exclusive Distributor Agreement (EDA) whereby Schein would have the exclusive right to promote and sell veterinary management software. In 2006, McAllister sued, asking the court to declare the EDA void ab initio (from its creation), claiming that terms of the EDA violated New York’s Rule Against Perpetuities. (The EDA provided that New York law would apply).

McAllister moved for summary judgment on its claim, and the court granted the motion. And now for the legalese, because I know that’s the real reason you’re here.

The New York Estate Powers and Trust Law at Article 9, Section 1.1 prohibits the suspension of the absolute power of alienation of any present or future estate for a period beyond lives in being at the creation of the estate plus twenty-one years. Although usually thought of as a real property question, under New York law, the Rule applies to personal property as well. Yawn.

The court found that two provisions of the EDA violated the Rule because they permanently restrained McAllister from freely selling the software and developing and marketing new software in the same market space.

One provision provided that

Schein shall have the right to be the exclusive distributor of any other software designed for the Market that [McAllister Software] produces, develops, or acquires the rights to, hereafter.

Another provision stated that

McAllister Software will keep and maintain a current version of the Software’s source code and supporting documentation (“Escrow Materials”) in escrow with its attorney or a professional computer software escrow agent (“Escrowee”) …If [McAllister Software] fails to support the Software to the reasonable satisfaction of Schein and Schein’s customers or if [McAllister Software] ceases to do business, Schein shall have the right to immediately obtain the source code from the Escrowee, and [McAllister Software], by its execution hereof, hereby authorizes Escrowee to release the source code to Schein only under said circumstances.

Both the parties were corporations so there were no “measuring lives” to use for purposes of the Rule Against Perpetuities calculation. So the court simply considered whether the power of alienation was suspended for at least 21 years. This situation fit the bill, so the EDA was void.

July 1, 2008 Computer Crime, Miscellaneous

Accused blogger did not cause substantial emotional distress

Ramsey v. Harman, — S.E.2d —-, 2008 WL 2415127 (N.C.App. June 17, 2008)

Defendant Harman maintained a blog on which she put up some posts accusing plaintiff Ramsey’s daughter of being a bully. Harman also posted this:

With all the bulling [sic] and harassing that goes on in our school system. Then the trouble that went on Friday at Madison Middle. The first student in that age group that came to mind was [plaintiff]’s daughter. Wasn’t this the student that harassed the Cantrell child? And we wonder why some kids hate to go to school…..

Ramsey apparently took great offense, filing suit against Harman for “stalking” under North Carolina law, and sought a “civil no-contact order” (like a restraining order) against Harman. The trial court granted the no-contact order and Harman sought review with the state appellate court. On appeal, the court reversed.

Harman argued that the lower court erred in finding that she had violated the state’s anti-stalking law (N.C. Gen. Stat. §50C-1(6)). She also argued the order violated her First Amendment rights. Because the court found there was insufficient evidence to support a violation of the statute, it did not need to rule on the constitutional issue.

The main question before the court was whether Harman’s blog posts were intended to cause, and indeed did cause, “substantial emotional distress” to Ramsey and her daughter. The court found there was no such showing. There were no threats of physical harm, and the only evidence as to the effect on the plaintiff’s daughter was that she was “embarrassed” when teachers at school were reading the blog posts. But there was evidence that the school had blocked access to the website, making the claim implausible to begin with. There were no communications directly between the defendant and the plaintiff, and the plaintiff’s daughter’s name was never mentioned. Moreover, there was evidence that the posts were made in retaliation over a disagreement between the Harman and Ramsey which had taken place on a political website, and over an alleged threatening phone call Harman had gotten from some of Ramsey’s family members.

Statutory damages for copying competitor’s catalog on website

Silver Ring Splint Co. v. Digisplint, Inc., 2008 WL 2478390 (W.D.Va. June 18, 2008)

Silver Ring and Digisplint are competitors in a niche industry, each producing and selling fine jewelry quality finger splints made of gold and sterling silver. Silver Ring sued Digisplint for copyright infringement alleging that Digisplint copied text from Silver Ring’s 1994 catalog, and posted that text on Digisplint’s website.

Before trial, the court awarded summary judgment to Silver Ring on the question of liability for copyright infringement. The question of damages proceeded to trial. Finding that “nearly identical and very similar text comprise[d] substantial portions of both [works],” and that the similarities were “obvious and persuasive,” the court awarded Silver Ring $30,000 in statutory damages pursuant to 17 U.S.C. §504(c)(1). It found that Digisplint’s copying was willful, and although Digisplint reaped no profits from the infringement, the award was to serve as a deterrent to future conduct of the sort.

Digisplint had filed a counterclaim pursuant to the Anticybersquatting Consumer Protection Act (ACPA) over Silver Ring’s registration of digisplint.com. The court found in favor of Digisplint on this claim, and entered an injunction against any further registration of a confusingly similar domain name. But because Silver Ring registered the domain name in 1998, prior to the enactment of the ACPA, Digisplint was entitled to no money damages, only an injunction.