August 23, 2007 Copyright

Open source license bars claim for copyright infringement

Jacobsen v. Katzer, No. 06-1905, 2007 WL 2358628 (N.D. Cal. August 17, 2007).

Plaintiff Jacobsen wrote some decoder definition files and made them available under an open source license used by the Java Model Railroad Interface Project. This open source license granted broad rights to members of the general public to do certain things with the software, including

— the right to distribute and create derivative works from the software, provided that the licensee give proper credit to the JMRI Project original creators.

— the right to make or give away verbatim copies of the source form without restriction provided that the licensee duplicate all of the original copyright notices and associated disclaimers.

— the right to distribute the copyrighted work “in a more-or-less customary fashion, plus [have] the right to make reasonable modifications.”

— the right to “distribute [the material] in aggregate with other (possibly commercial) programs as part of a larger (possibly commercial) software distribution provided that [the licensee] not advertise [the material] as a product of [the licensee’s] own.”

Jacobsen sued defendant Katzer for copyright infringement, claiming that without permission or consent, Jacobson made copies of the software, distributed copies to the public, or created derivative works. He also moved for a preliminary injunction. The court denied the motion.

The opinion explains the distinction between causes of action for infringement on one hand, and and breach of contract on the other, when a licensee violates some term of the agreement. In general, the court observed, a non-exclusive license, like the one in this case, is a waiver of the right to sue for infringement. So long as the licensee’s use of the work is within the scope of the license (say, only to distribute and not make copies), any other violation of a condition of the agreement, (like providing attribution), would allow only for a breach of contract action.

In this case, the court looked to the open source license at issue and found that

[T]he scope of the nonexclusive license is, therefore, intentionally broad. The condition that the user insert a prominent notice of attribution does not limit the scope of the license. Rather, Defendants’ alleged violation of the conditions of the license may have constituted a breach of the nonexclusive license, but does not create liability for copyright infringement where it would not otherwise exist.

Accordingly, the Court found that Jacobsen’s claim properly sounded in contract and therefore had not met his burden of demonstrating likelihood of success on the merit of his copyright claim.

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

August 22, 2007 Miscellaneous

Damages available under Computer Fraud and Abuse Act, even though no “interruption of service”

Frees, Inc. v. McMillian, No. 05-1979, 2007 WL 2264457 (W.D. La. August 6, 2007)

Plaintiff Frees, Inc. filed suit against two of its former employees, McMillan and Pierceall for, among other things, violation of the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. 1030. Frees alleged that McMillian and Pierceall loaded Frees proprietary data onto their new employer’s computers, which they then used to develop and market products in competition with Frees. Frees also alleged that McMillian deleted data from the Frees computers before he left its employment. This alleged conduct resulted in Frees expending more than $16,000 to various consultants and forensics investigators. Frees did not suffer any interruption of service.

McMillan and Pierceall moved for partial summary judgment. They argued that Frees had not alleged “loss” as defined under the CFAA, and in the alternative, that Frees could not recover lost profits absent an interruption of service. The court denied the motion.

“Loss” under the CFAA

Frees had argued that the “loss” it suffered was the fees it paid the consultants and forensics investigators it had to hire because of the deletion of data from its computer systems. The defendants argued that these expenditures were not cognizable as “loss” under the statute. The court rejected that argument, citing to a number of cases from around the country holding that the costs associated with investigating possible damage to a computer system are considered “loss.” Citing to E.F. Cultural Travel BV v. Explorica, Inc., 274 F.3d 577, 585 (1st Cir.2001) the court observed that a finding of “loss” is not lessened simply because no damage occurred.

No interruption of service

The defendants contended that lost revenues were not compensable damages in the case because there was not an interruption of computer service. They argued that the phrase “any revenue lost, cost incurred, or other consequential damages incurred because of interruption of service” was not only a jurisdictional threshold, but also a limitation on the types of recoverable damages. 18 U.S.C. § 1030(e)(11). Frees rejected that contention, arguing that a plaintiff is entitled to recover ordinary “compensatory damages” once the jurisdictional threshold has been met.

Recognizing that the federal circuits are split on this issue, the court sided with Frees. The court found that the terms “damage” and “loss,” appearing in the CFAA, are terms of art used to define a jurisdictional threshold. They do not control or limit what damages are available in a civil action if the substantive and threshold standards are not met. Rather, the court found, Congress used the terms “compensatory damages” and “economic damages” in the CFAA to define the scope of recovery.

August 21, 2007 Cybersquatting

TRO issued against domainer’s use of “mylennar.com”

Lennar Pacific Properties Management, Inc. v. Dauben, Inc., No. 07-1411, 2007 WL 2340487 (N.D.Tex. August 16, 2007)

Companies sometimes find that opportunistic purchasers of domain names (often referred to as “domainers”), will purchase a domain name quite similar to that of the company, and establish a site at the URL loaded with revenue-generating sponsored ads. To accomplish these purposes, domainers seem to prefer the services of companies like HitFarm and Domain Sponsor. A web user types in the confusingly similar URL and is bombarded with pop-up ads and sponsored links to goods and services, often competitive to the company whose name or trademark is being appropriated in the URL.

The Lennar Corporation, an established home builder, noticed that a company called Dauben, Inc., d/b/a “Texas International Property Associates,” set up a HitFarm site at mylennar.com. Dauben’s page purported to feature “resources and information on Floor plans and Building construction.” It also contained a link titled “Home building,” which when clicked on, took the user to another page of sponsored links to homebuilders competitive to Lennar.


Lennar filed suit for trademark infringement in Texas federal court, and sought injunctive relief. The court granted the motion for temporary restraining order, prohibiting the defendant from using, canceling or transferring the domain name to any person or entity other than Lennar, and from using any domain name that incorporated or was confusingly similar to the Lennar mark.

The court held (1) there was a substantial likelihood of Lennar’s success on the merits of the trademark claim; (2) there was a substantial threat that Lennar would suffer irreparable injury if the injunction was denied; (3) the threatened injury outweighed any damage that the injunction might cause Dauben; and (4) granting the injunction would not disserve the public interest.

It looks like this Texas International Property Associates has targeted other companies in the past, and has come up empty handed. See, e.g., this WIPO opinion, in which Fry’s Electronics wrestled to get the typo-squatted domain name “fyrselectronics.com”.

Decision appears below (click through if it’s not showing up in the RSS feed):

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.

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