August 3, 2006 Employment

Employee fired for claiming copyright in website can get unemployment benefits

Update: This decision was reversed by the North Carolina Supreme Court at Binney v. Banner Therapy Products, Inc., — S.E.2d —-, 2008 WL 2370887 (N.C., June 12, 2008).

Christina Binney was one of the founders of Banner Therapy Products, and worked as the company’s treasurer. She was also responsible for Banner’s computers, and designed its catalog and website. In April 2003, she was fired for taking her computer’s hard drive home over the weekend, and because she had named herself in copyright notices appearing in the company’s catalogs and on its website.

She sought unemployment benefits, and the North Carolina Employment Security Commission (“ESC”), denied her claim. The ESC determined that the denial of benefits was proper because Binney had been terminated for employment-related misconduct.

Binney appealed the ESC’s determination to a North Carolina trial court, but that court affirmed the denial of benefits. She tried again with the state’s appellate court, which reversed the denial of benefits. The appellate court held that given Binney’s position and responsibilities in the company, and the reasonableness of her conclusions as to ownership of copyright, her actions did not rise to the level of misconduct that warranted a denial of benefits.

In determining that it was okay for Binney to have taken her hard drive home for the weekend, the court emphasized the she was the one primarily responsible for the company’s computer equipment. There was no formal policy to prohibit her from removing the hard drive, and there was no evidence that her use of the drive over the weekend to prepare for a meeting on Monday morning was improper. Moreover, there was no evidence that the removal of the hard drive inconvenienced Banner in any way.

As for whether it was misconduct for Binney to have claimed ownership in the company’s catalog and website which she created, the court observed that there was no evidence that Binney acted in bad faith. She had created the original version of the catalog before the company was incorporated, and, relying on legal research she had conducted herself, she believed she owned rights in subsequent versions as derivative works. Without any evidence that Binney’s belief about her copyright ownership was not genuine, and without any evidence that Banner incurred any detriment, the court held that Banner failed to meet its burden of demonstrating misconduct sufficient to warrant a denial of benefits.

Binney v. Banner Therapy Products, — S.E.2d —, 2006 WL 2022223 (N.C.App., July 18, 2006).

August 2, 2006 Antitrust, First Amendment

Suit over drop in search engine placement dismissed

(This case came out a couple of weeks ago and has been written about quite a bit, but here’s my take on it anyway.)

Plaintiff Kinderstart.com LLC, the operator of an online directory and search engine for information about the care of young children, filed suit against Google after a “cataclysmic fall” in the number of visitors that the Kinderstart site received. It claimed that Google wrongfully blocked search results for Kinderstart, and intentionally lowered the site’s number in Google’s PageRank system. In an unpublished and noncitable opinion, the United States District Court for the Northern District of California dismissed Kinderstart’s complaint, and granted leave to amend.

Kinderstart alleged a number of causes of action, including violation of the First Amendment right to free speech and unlawful monopolistic behavior in violation of the Sherman Act. The court held that Kinderstart failed to allege facts sufficient to entitle it to relief.

In dismissing the First Amendment claim, the court held that Google is not a state actor. Although the Ninth Circuit employs a number of tests to determine whether state action exists, Google did not meet any of those tests. Kinderstart did not show that Google performed a public function, nor did it show that Google was involved in any joint action with the government. The complaint did not sufficiently allege that Google was in any way compelled or coerced by the government, or that there was any nexus or entwinement between Google’s actions and the government’s actions. No facts in the complaint pointed to any “symbiotic relationship” – a necessary element in a special Ninth Circuit test for state action – between Google’s conduct and the financial success of any governmental entity.

The court also rejected Kinderstart’s First Amendment argument that by making the search engine “freely available to anyone with an Internet connection,” Google had created a private space dedicated to public use in which the alleged restrictions violated free speech. On this point, Kinderstart’s own allegations of Google’s vast monetization – to the tune of $3.1 billion in 2005 – contradicted assertions that the sole function of Google is to promote open and free communication.

Another of Kinderstart’s claims was that by blocking links to the Kinderstart site in its search results, Google had engaged in anticompetitive behavior that is prohibited under Section 2 of the Sherman Act (15 U.S.C. §2). To succeed on this claim, Kinderstart would have had to allege a specific intent on Google’s part to destroy competition, conduct directed toward accomplishing that purpose, a dangerous possibility of succeeding at destroying competition, and resulting antitrust injury.

The court held that Kinderstart failed to allege enough facts to support this claim. There was no sufficient allegation that Google had denied access to an essential facility or refused to deal. Kinderstart did not explain how Google’s alleged conduct demonstrated the required intent for a Sherman Act violation. Moreover, noting that there generally is “no duty to aid competitors,” the court concluded that Google’s alleged removal of a competing search engine from its results was merely legitimate competitive action.

Kinderstart.com, LLC v. Google, Inc., No. 06-2057, (N.D. Cal., July 17, 2006) (Not selected for official publication).

July 26, 2006 Computer Crime

New law to criminalize trickery by adult website owners

According to this News.com article, President Bush is expected to sign the Child Protection Safety Act (also known as the Walsh Act), touted as “the most extensive rewriting of federal laws relating to child pornography, sex offender registration and child exploitation in a decade.”

The comprehensive legisltation will establish, among other things, a national sex offender registry, and will provide funding for pilot programs to implement GPS technology in tracking convicted sex offenders.

Of particular importance to website owners is a provision in the act that would make it a crime to “knowingly embed[] words or digital images into the source code of a website with the intent to deceive a person into viewing material constituting obscenity.” Moreover, the act would prohibit adding content to a site with “the intent to deceive a minor into viewing material harmful to minors on the Internet.”

July 25, 2006 Privacy

Eleventh Circuit almost lets Section 230 preempt right of publicity claim

In the recent case of Almeida v. Amazon.com, Inc., the Eleventh Circuit Court of Appeals came close to issuing an interesting ruling in a case involving immunity under the Communications Decency Act, at 47 U.S.C. §230. At issue was whether Section 230 provided immunity to Amazon.com in a suit brought against it alleging violation of the plaintiff’s right to publicity.

A photograph of plaintiff Almeida appeared on the cover of a book that Amazon.com offered for sale online. Almeida filed suit claiming, among other things, that she had not authorized the use of the photograph in the way it appeared on the cover of the book. Accordingly, Almeida argued, Amazon.com had violated Florida’s right of publicity statute, Fla. Stat. §540.08.

The district court granted summary judgment in favor of Amazon.com, holding that Section 230 preempted the state right of publicity claim. On review, the appellate court affirmed summary judgment, but disagreed that Section 230 applied.

The lower court had decided on its own (without Amazon.com making the argument) that Section 230 preempted the right of publicity claim. As any loyal reader of this weblog knows, Section 230 provides, in relevant part, that

No 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.

Because Almeida was pursuing a claim against Amazon.com for information (the photo) provided by a third party, the district court held that Amazon.com could not be the “publisher or speaker” of that information, and therefore not liable.

The district court did not consider, however, 47 U.S.C. §230(e)(2), which states that “[n]othing in this section shall be construed to limit or expand any law pertaining to intellectual property.” Almeida argued on appeal that her right of publicity claim was one sounding in intellectual property, and thus should have been unaffected by Section 230 immunity.

And the appellate court came oh-so-close to agreeing with Almeida on this point. But it found a way around having to answer the question of whether Section 230 provides immunity for right of publicity claims: Almeida’s claim would have failed anyway. Because it was clear from the complaint that Amazon did not use Almeida’s image for “trade, commercial, or advertising purposes,” there was no violation of the right of publicity as defined by the Florida statute.

Almeida v. Amazon.com, Inc., (Slip Op.) — F.3d —-, 2006 WL 1984448 (11th Cir., July 18, 2006).

This content originally posted by Evan Brown to InternetCases.com.

July 24, 2006 Cybersquatting

Sometimes “may” means “must”

Virginia federal court reads publication requirement for in rem jurisdiction under ACPA.

Investools, Inc. recently filed an in rem domain name proceeding against a Canadian entity that registered the domain names investtools.com and investtool.com. In rem domain name proceedings are provided for under the Anticybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. 1125(d), and are a handy way for a trademark owner to acquire a domain name from a cybersquatter when the cybersquatter can’t be found e.g., is located outside the U.S. [More on in rem proceedings.]

The ACPA requires that a plaintiff demonstrate four things to establish in rem jurisdiction over a domain name.

— First, the plaintiff must show that subject matter jurisdiction is proper in the district where the action is brought. Since the ACPA provides for jurisdiction in the judicial district in which the domain name registry is located, actions involving .com domain names will be proper in the Eastern District of Virginia for at least as long as Verisign is located there.

— Second, a plaintiff must establish that it is unable to obtain in personam jurisdiction over the defendant where the suit is brought. This is usually pretty easy to do where the registrant is a foreign entity with no ties to the U.S.

— Third, the plaintiff must show that it has perfected service of process as described by the ACPA. Under 15 U.S.C. §1125(d)(2)(A)(ii)(II), this involves:

(aa) sending a notice of the alleged violation and intent to proceed under this paragraph to the registrant of the domain name at the postal and e-mail address provided by the registrant to the registrar; and

(bb) publishing notice of the action as the court may direct promptly after filing the action.

(It is on this third point that the court made the important ruling in this case. We’ll come back to take a closer look at that after laying out the fourth element.)

— Fourth, a plaintiff must establish the elements of trademark infringement or trademark dilution.

In this case, the court held that Investools had satisfied the first, second and fourth elements for establishing in rem jurisdiction. It would not award summary judgment, however, because of a failure to meet the two-step third element.

Although Investools had sent notice by mailing and emailing the complaint to the listed registrant, it had not published notice of the action as provided for in (bb).

And why should it have? Nothing in the case indicates the court had directed that any publication occur. Apparently, the plaintiff was supposed to have interpreted the case of Cable News Network L.P., L.L.L.P., v. CNNews.com, 177 F.Supp.2d 506 (E.D.Va. 2001) to stand for some permanent order that publication is required in every in rem case.

One could reasonably disagree with the court’s determination that (bb) requires filing in every case. A perfectly sensible interpretation would be that it is required only in those particular actions where the court specifically directs it. But that is not the way the Eastern District of Virginia reads it, and it looks like an in rem plaintiff must publish notice of the action regardless of whether it’s specifically ordered to do so.

Investools, Inc. v. investtools.com, (Slip Op.) 2006 WL 2037577 (July 17, 2006).

July 19, 2006 Miscellaneous

Chicago event: Internet/IP seminar with speech by Commissioner of Patents

There is an exciting intellectual property law event coming up Chicago on the afternoon of July 27, 2006, and the registration deadline (July 21) is quickly approaching.

The Intellectual Property Law Association of Chicago (“IPLAC”) will be hosting an afternoon seminar with three panels addressing copyright, trademark and patent law. The program will end with a keynote address by Commissioner for Patents John Doll.

I will be moderating a panel discussion on copyright. The panel will consist of University of Chicago Professor Doug Lichtman, Northwestern professor Clint Francis, and Sachnoff & Weaver attorney John Hines.

Registration fee is $25 if you’re not an IPLAC member. Here is a link to a registration form. I encourage you to attend.

July 12, 2006 Miscellaneous

Two must reads: one on net neutrality, the other on Section 230 and Wikipedia

There have been a couple of very interesting articles to appear online in the past few days that I recommend.

Ed Felten has put together a very accessible primer on the technological aspects underlying network neutrality (perhaps more aptly described as network discrimination.) After reading the article, one can see that policymaking concerning the issue is much subtler than it appears at first blush.

Eric Goldman pointed me to a terrific article by Ken Myers called Wikimmunity which is slated to be published in this fall’s Harvard Journal of Law and Technology. Myers provides a detailed roadmap to the conclusion that 47 U.S.C. 230 should permit Wikipedia to escape liability for defamatory content posted by the volunteers who add content to it. It’s a brilliant analysis of Wikipedia’s history, the legislative impulse behind Section 230’s enactment, and the important cases that have applied the law.

July 7, 2006 Trademarks

“Google” as trademark takes a step toward “genericide”

Calvin (as in this Calvin, not this one) said “verbing weirds language.”

Yesterday the publishers of the Merriam-Webster dictionary announced that the word “google” has been added to the English lexicon as a verb, meaning “to use the Google search engine to obtain information . . . on the World Wide Web.” [Covered here on SiliconValley.com.]

Surprisingly, a Google spokesman said that the listing is “appropriate.” Is it? Perhaps Google should be concerned that widespread acceptance of the word “google” as a verb could mean that the word is becoming generic — i.e., is becoming the very name of the service the company provides. Generic terms are not subject to trademark protection.

In the case of America Online, Inc. v. AT & T Corp., 243 F.3d 812 (4th Cir. 2001), the court held that the term “IM” was not subject to trademark protection because, among other things, AOL had used the term as a verb. The court also pointed to books, dictionaries, and glossaries defining “instant message” with the “IM” designation. (The court did not, however, find IM to be generic.)

Other case law also indicates Google shouldn’t think the inclusion is “appropriate.” The Seventh Circuit advises that “[a] serious trademark holder is assiduous in endeavoring to convince dictionary editors, magazine and newspaper editors, journalists and columnists, judges, and other lexicographically influential persons to avoid using his trademark to denote anything other than the trademarked good or service.” Illinois High School Ass’n. v. GTE Vantage, Inc., 99 F.3d 244 (7th Cir. 1996).

One redeeming quality of the definition is that “googling” is limited to using Google and not conducting searches in general. But perhaps Google’s domination of the search market makes it think that when someone talks of “conducting a search” (now a/k/a “googling”), he or she could not possibly be talking about using Yahoo!, MSN, or Ask.com.

July 2, 2006 Privacy

Blogger does not have to disclose information obtained in investigation for story

A recent decision from the United States District Court for the Northern District of Illinois in the case of Bond v. Utreras examines the scope of discovery available from a nonparty who may have information relating to a matter. What makes the case provocative is that the party from whom discovery was sought is a blogger. Unlike the recent California Court of Appeal decision in O’Grady v. Superior Court, 139 Cal.App.4th 1423 (May 26, 2006), the Bond case does not implicate the doctrine of journalistic privilege. It does, however, demonstrate a court’s willingness to favor the confidentiality of facts obtained by one investigating a story. The court recognized and responded to the chilling effect that could occur if bloggers were routinely required by law to disclose information obtained during the investigative process.

Jamie Kalvern “fancies himself as being a voice of the people in the [Chicago housing] projects.” On the blog The View From the Ground, Kalvern published a multipart post titled “Kicking the Pigeon”, which purported to be an account of alleged misconduct by members of the Chicago Police Department. The post provided a significant amount of detail about a particular incident, and stated that it was based in part on interviews with persons having first hand knowledge.

One of the victims of the alleged misconduct filed a civil rights lawsuit against the police officers involved. During discovery, the defendants deposed Kalvern and served him with a broadly-worded subpoena duces tecum seeking, among other things, documents relating to any allegations of misconduct by police officers at the housing project where the incident is said to have taken place. Because Kelvern refused to answer certain questions at the deposition and failed to produce documents pursuant to the subpoena, the defendants moved to compel. The court denied the motion.

The court cited to the case of McKevitt v. Pallasch, 339 F.3d 530 (7th Cir. 2003) which advised that “rather than speaking of privilege, courts should simply make sure that a subpoena duces tecum directed to the media, like any other subpoena duces tecum, is reasonable in the circumstances, which is the general criterion for judicial review of subpoenas.” Because Kalvern was a nonparty, the court concluded that he should be entitled to somewhat greater protection than would a party in similar circumstances. Mere relevance of the information would not be enough to justify compelling the disclosures the defendants sought.

Although the court did not go so far as to establish a per se rule for heightened protection for journalists, it did acknowledge that Kalvern’s journalistic efforts would be undermined if he got the reputation of being one ready to disclose confidential information. That would ruin his “street cred”. Accordingly, in light of the circumstances, the court held that forcing to comply with the subpoena, and to answer the deposition questions, would be unduly burdensome.

Bond v. Utreras, No. 04-2617, (N.D.Ill., June 27, 2006).

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