Internet Library of Law
and Court Decisions

All Decisions - Internet Library of Law and Court Decisions

Adult Entertainment - Updated November 01, 2007

Court holds that the Communications Decency Act (“CDA”), 47 U.S.C. Section 230, immunizes operator of online adult dating service from claims arising out of a user’s false statement in her user-profile that she was over 18.  Relying on this profile, plaintiff met and had consensual sexual relations with a minor, for which he was subsequently arrested.  Plaintiff brought this suit, seeking redress.  Importantly, the contract between the parties expressly provided that SexSearch.com does not “assume any responsibility for verifying the accuracy of the information provided by other users of the Service.”  Because plaintiff sought to hold SexSearch.com, a provider of Interactive Computer Services, liable for its publication of content authored by another, his claims, whether couched as breach of contract, fraud or negligent misrepresentation, were barred by application of the CDA.  Plaintiff’s breach of contract claim similarly failed because SexSearch did not assume responsibility for verifying the age of users.

Court issues preliminary injunction against Cybernet Ventures, which operates an Age Verification Service, based on the use by web sites operated by third parties of various images in which plaintiff held the copyright, or featuring a model who had assigned her right of publicity to plaintiff. 

Cybernet Ventures operates the Age Verification Service "Adult Check."  Participating web sites put a script on their site which direct first time users to Cybernet, who sells them access to the Adult Check family of sites.  The user is thereafter free to visit Adult Check sites for a set period of time.  The fees generated by this user are paid to Cybernet, who splits them with the web site which sent the user to Cybernet.  To assist the user in finding Adult Check sites to his liking, Cybernet provides both a series of links as well as a search engine.  It also advertises its network. 

Cybernet takes an active interest in the content of Adult Check sites, employing a staff of 12 to review the site both before it is admitted to the Adult Check family, and periodically thereafter.  The content of the site is reviewed by Cybernet to prevent the inclusion of prohibited images.  Cybernet also provides comment on the site's layout.  The images on each site, however, are not provided by Cybernet.  Instead, each site is run by a third party, who is responsible for locating the images, arranging to have the site hosted, and advertising the site.

Perfect 10, which holds the copyright in a number of images of nude women made available to the public both on its web site and in a magazine, brought this suit, charging that web sites in the Adult Check family contained over 10,000 images in which Perfect 10 held the copyright. 

The court determined that Perfect 10 was likely to prevail on its claims contributory and vicarious copyright infringement against Cybernet, as well on its claims of unfair competition under Cal. Bus. and Professions Code Section 17200.  The court held that Perfect 10 was likely to prevail on its contributory infringement claim because Cybernet was likely to be held to have the requisite notice of the infringing activities at issue, and to have materially contributed to this infringement by its operation of the Age Verification Service, and particular its collection of fees for, and advertising of the web sites in question.

The court further held that Perfect 10 was likely to prevail on its vicarious infringement claim, because Cybernet had the ability to control the web sites, as evidenced by the review of its content it conducted, and received a direct financial benefit from the presence on these web sites of the infringing images.  Lastly, the court held that Perfect 10 was likely to prevail on its unfair competition claim, because Cybernet was likely to be held to have aided and abetted a violation of various models' right to publicity, again by virtue of its knowledge of infringement, and contributed thereto by virtue of its operation of the AVS system.

The court further held that Cybernet was unlikely to be able to avoid this liability under the safe harbor provisions of the Digital Millennium Copyright Act, because the court was likely to hold both that the DMCA policy Cybernet adopted failed to comply with the DMCA, and that Cybernet failed to reasonably implement such a policy, or terminate repeat infringers.  Cybernet was also unlikely to be able to seek the protections of the DMCA because it received a financial benefit directly attributable to infringing activity it had the right and ability to control.

The court accordingly issued a preliminary injunction, which prohibited Cybernet from utilizing or linking to the images in question.  The injunction further obligated Cybernet to stop linking to sites containing the images in question where Cybernet had either notice thereof, or knew or should have known of the presence of the images, under circumstances specified in the injunction.  The injunction also obligated Cybernet to undertake reviews both of sites seeking to become members of the Adult Check network, and of designated existing sites, to ascertain whether they were using any of the images at issue, and to bar such new sites from entering the network without proper rights documentation.  The scope of this injunction is discussed in greater depth in the accompanying "in depth" analysis of this decision.

Plaintiffs operate the Voyeurdorm.com web site, at which subscribers, for a price, can view the activities of five women in a house located in Tampa, Florida, including those that occur in bedrooms, bathrooms and showers. Reversing the decision of the District Court, the United States Court of Appeals for the Eleventh Circuit held that plaintiffs' operation of this web site does not constitute a violation of the Tampa City Code, which prohibits the operation of an adult entertainment establishment in the residential neighborhood in which the house at which plaintiffs' filming activities took place is located.

Advertisements Online - Updated November 03, 2008

This section of the Internet Law Library contains a host of court decisions that address the legality of the use of another's trademark to trigger the display of various forms of online advertising, typically marketing a competitor's product, including sponsored links displayed on search engine results pages as part of a keyword advertising program, and pop-up ads that are displayed in a separate window on the user's computer screen.  Among other issues, these cases address whether such use of a party's trademark constitutes a use in commerce, or a trademark use of the trademark sufficient to give rise to trademark infringement claims. 

Reversing the court below, the Second Circuit dismisses trademark infringement claims brought by a mark holder and website operator against a distributor of pop-up ads.  Such claims fail because "as a matter of law, [defendant] WhenU does not 'use' [plaintiff] 1-800's trademarks within the meaning of the Lanham Act, 15 U.S.C. § 1127 when it (1) includes 1-800's website address … in an unpublished directory of terms that trigger delivery of WhenU's contextually relevant advertising to [computer] users; or (2) causes separate, branded pop-up ads to appear on a [computer] user's computer screen either above, below, or along the bottom edge of the 1-800 website window."

The absence of such a use by WhenU of plaintiff's trademarks is fatal to 1-800 Contacts' trademark infringement claims, and mandated reversal of the District Court's grant of preliminary injunctive relief.  The District Court had enjoined WhenU from including the domain name of plaintiff's website in its unpublished directory, or causing pop-up ads to be displayed when that domain name is entered into the URL bar of a web browser, or as a search term.

In reaching this result, the Second Circuit agreed with the decisions of two other district courts - the Eastern District of Virginia in U-Haul Inc. v. WhenU.com Inc., 279 F. Supp. 2d 723 (E.D.Va. 2003) and the Eastern District of Michigan in Wells Fargo & Co., et al. v. WhenU.com Inc., 293 F.Supp.2d 734 (E.D.Mich. 2003) - each of which similarly held that WhenU's activities did not infringe the respective plaintiffs' trademarks because such activities did not constitute the requisite use of the plaintiffs' respective marks.

Finding plaintiff likely to prevail on its claims of trademark infringement, the District court issued a preliminary injunction, enjoining the pop-up advertiser WhenU from delivering ads which are triggered by a consumer's entry of plaintiff's domain name in either his browser or a search engine, or from including plaintiff's domain name in defendant's proprietary directory, which is used to identify the ads to be delivered to consumers.  Defendant WhenU delivered pop-up ads of plaintiff's competitor to computer users when they typed plaintiff's domain name into either their browser or a search engine.  The court found such conduct likely to cause actionable "initial interest confusion" and to allow defendants to divert consumers seeking plaintiff's products to their own offerings, and thereby unfairly profit from plaintiff's goodwill.  Applying the eight factor Polaroid test, the court found that consumers were likely to be confused by defendants' actions, despite the branding of defendant's advertisements as "a WhenU offer."  As such, the court held that plaintiff was likely to prevail on its trademark infringement claims, and enjoined defendants from continuing to use plaintiff's domain name as a trigger for the delivery of advertisements. 

The court also held that plaintiff was unlikely to prevail on its copyright infringement claims, which arose out of the delivery of pop-up advertisements in a "window" which partially covered the 'window' in which plaintiff's site appeared on a consumer's computer screen.  The court found that this conduct neither violated plaintiff's right to display its copyrighted website, nor its right to create derivative works therefrom.  This later ruling was premised on the court's determination that defendant's ads are not sufficiently fixed to constitute an infringing derivative work.

The court's holding on plaintiff's trademark infringement claims is at odds with that reached by two other district courts - the District Court for the Eastern District of Virginia in U-Haul International, Inc. v. WhenU.com, 279 F.Supp. 2d 723 (E.D.Va. 2003), and the District Court for the Eastern District of Michigan in Wells Fargo & Co. v. WhenU., 2003 WL 22808692 (E.D. Mich. 2003), each of which refused to issue similar injunctive relief.  As the Southern District of New York court noted, "this Court disagrees with, and is not bound by these findings."

Federal District Court holds that the use of plaintiff's 'JR Cigars' trademark as a keyword in GoTo.com's pay-for priority search engine to trigger the display of advertisements from third party competitors constitutes a "trademark use" sufficient to support trademark infringement and dilution claims under the Lanham Act.  Such trademark use arises out of GoTo.com's acceptance of bids from JR Cigar's competitors for a linkage to plaintiff's marks, by which GoTo trades on the value of those marks.  Such trademark use also arises out of GoTo's act of giving such advertisers priority over 'natural' search results, and thereby steering potential customers away from JR Cigar to its competitors.  Finally, such trademark use arises out of GoTo.com's use of a "Search Term Suggestion Tool" to assist in marketing JR Cigar's marks to its competitors, which tool shows the search traffic attracted by plaintiff's mark.

The Court went on to deny cross-motions by JR Cigar and GoTo.com for summary judgment, holding issues of fact precluded its determination of the likelihood of consumer confusion arising out of such usage of plaintiff's marks, and hence from resolving the trademark infringement claims at issue.

Finally, the Court dismissed claims advanced by plaintiff under both New Jersey's Consumer Fraud Act, N.J.S.A. §56:8 et seq. and the federal Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §6102(b).  The Court held that plaintiff lacked standing to proceed under New Jersey's Consumer Fraud Act, and that the reach of the Telemarketing Act did not extend to the acts at issue in the case at bar.

Court holds that the Communications Decency Act ("CDA") immunizes defendant Craigslist, Inc. ("Craigslist") from liability for publishing housing ads authored by third parties that allegedly violate the Fair Housing Act, 42 U.S.C. § 3604(c) ("FHA").  In reaching this result, the Court held that the immunity afforded internet service providers under section 230(c)(1) of the CDA only extends to claims seeking to hold an ISP liable as a publisher for content authored by third parties, and not to all claims arising out of the ISP's role in giving the public access to such content.  Because the FHA claims at issue were premised on Craigslist's publication of offensive ads authored by third parties, the Court held they were barred by the immunity granted under Section 230(c)(1).

Affirming the District Court below, the Seventh Circuit holds that Craigslist cannot be held liable for violating the Fair Housing Act as a result of its online publication of discriminatory housing ads authored by third parties. To hold Craigslist liable for such conduct would require it to be treated as a ‘publisher’ of these advertisements, which is prohibited by Section 230(c)(1) of the Communications Decency Act.  As a result, the Seventh Circuit affirms the District Court’s grant of summary judgment, dismissing plaintiff’s Fair Housing Act claims against Craigslist.

Court holds that unauthorized internet reseller of plaintiff’s tanning products is not guilty of trademark infringement as a result of its use of plaintiff’s trademarks in the meta tags of a website at which such products are sold, and as search engine keywords triggering the display of a link to such a website.  In reaching this result, the Court rejected plaintiff’s claim that such use of its marks causes actionable ‘initial interest confusion’ by directing those searching for plaintiff’s site to that of the defendant.  To sustain such a claim, holds the court, defendant’s conduct must be deceptive.  Plaintiff failed to meet this burden because defendant’s site does indeed offer plaintiff’s products for sale, and thus, its use of plaintiff’s mark in the site’s meta tags is not deceptive, but rather accurately describes the contents of defendant’s site.  This was true, held the Court, notwithstanding the fact that S & L offered plaintiff’s competitors products for sale on its site as well.

The Court also dismissed trademark dilution claims arising out of defendant’s use of plaintiff’s marks.  The Court held that, under the circumstances, defendant’s use of plaintiff’s marks in the meta tags of its site, and as search engine key words, constituted a permissible nominative fair use of those marks.  To establish that a use of a trademark qualifies as a permissible nominative fair use, the defendant must ‘do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.’  Notably, the Court reached this result because plaintiff failed to submit adequate evidence as to the impact this use of its marks had on the listing of defendant’s site in search results for plaintiff’s mark.  The Court left open the possibility that such a use of plaintiff’s mark may not qualify as a nominative fair use if in fact it caused defendant’s site to appear at or near the top of search engine results for plaintiff’s mark, and thereby suggested that plaintiff sponsored or endorsed defendant’s site. 

The Court denied so much of defendant’s motion for summary judgment which sought dismissal of copyright infringement claims arising out of its use of electronic renderings of plaintiff’s products to promote the sale of such products on its web site.  Issues of facts as to whether defendant copied such images from plaintiff’s web site, or created its own, precluded an award of summary judgment.  In allowing this claim to proceed to trial, the Court rejected defendant’s argument that its alleged use of plaintiff’s images was protected as a fair use.  Notwithstanding the fact that defendant’s use did not effect the potential market for plaintiff’s images – which plaintiff does not offer for sale – the Court rejected defendant’s fair use argument, pointing to the fact that its use was commercial, and copied plaintiff’s image, which was a creative work, in its entirety.

Finally, the Court rejected plaintiff’s claim for intentional interference with contractual relations, which arose out of prohibitions contained in contracts with plaintiff’s distributors precluding their resale of plaintiff’s products to Internet resellers such as defendant.  Defendant obtained plaintiff’s products from tanning salons, to whom the distributors were permitted to sell such products.  Because there was no evidence either that such tanning salons were acting as defendant’s agent in purchasing goods from plaintiff’s distributors, or that defendant directly purchased such goods from the distributors in breach of the prohibitions contained in their agreements, this claim failed.

Court holds that the Communications Decency Act immunizes defendants from various non-intellectual property claims arising out of their making available on their adult social networking sites an anonymous profile authored by an unknown third party which plaintiff claims falsely appears to people who know her to be her own.  The Court holds that this immunity also covers non-intellectual property claims arising out of defendants reposting this profile on third party sites, making slight alterations to the profile as to the participant’s age, and using the profile in teasers and other advertisements for defendants’ site.  As a result, the Court dismissed claims plaintiff advanced for defamation, intentional infliction of emotional distress, intentional, reckless, negligent and/or willful and wanton conduct, and violations of the New Hampshire Consumer Protection Act, arising out of such alleged misconduct.

The Court held that the Communications Decency Act did not, however, immunize defendants from intellectual property claims plaintiff advanced, both under applicable federal and state laws, including right of publicity claims advanced under New Hampshire state law.   Plaintiff was accordingly allowed to proceed with claims that defendants, by including identifiable aspects of plaintiff’s persona in advertisements and ‘teasers’ in an effort to increase the profitability of their websites, violated her right to publicity.

The Court further held that plaintiff could proceed with Lanham Act false designation of origin and false advertising claims against the defendants.   The false advertising claim was based on the inclusion of the profile at issue in ‘teasers’ and other advertisements for defendants’ site.  These acts allegedly deceived consumers into registering for defendants’ services in the hope of interacting with plaintiff, and caused injury to her reputation as a result, including alleged lost employment opportunities.  The false designation of origin claims similarly arose out of defendants’ use of the profile at issue in marketing their sites, which falsely implied plaintiff’s affiliation with, or sponsorship and approval of, defendants’ site and service.

Court holds that the FTC is likely to prevail on its claims that defendants violated the Federal Trade Commission Act ("FTCA"), 15 U.S.C. § 45(a)(1).  Defendants were charged with downloading to consumers' computers, without their knowledge or consent, both spyware and adware that delivered pop-up advertisements for anti-spyware software, as well as "exploit code" which altered consumers' home pages, and redirected their browsers to websites selected by defendants.  Apparently, this occurred when consumers visited defendants' websites.  The Court found that this conduct likely ran afoul of the FTCA's prohibition against the use of "unfair or deceptive acts or practices" in commerce.  The Court accordingly issued 'temporary injunctive relief' requiring defendants to remove from their websites the software script that allowed defendants to download this software to consumers' computers without their knowledge.

Court holds that defendants, individual officers of co-defendant Search Cactus LLC (“Search Cactus”) can be held personally liable for violations of the Ohio Consumer Sales Practices Act (“OCSPA”) arising out of the transmission by Search Cactus of allegedly misleading and deceptive promotional emails, if “the officer took part in the act, specifically directed the act, or participated or cooperated in the act.”  Because the complaint alleged that the individual defendants approved the content of the promotional emails in question, the Court denied the individual defendants’ motion to dismiss, and allowed plaintiff, a recipient of such emails, to pursue his OCSPA claim against them.

Court denies Google's motion to dismiss trademark infringement and dilution claims asserted by American Blind, which claims arose out of Google's alleged use of American Blind's trademarks to trigger the display of third party advertisements in search engine results for those marks.  The Court declined, on this motion, to hold that use of American Blind's trademarks in this fashion was insufficient to give rise to trademark infringement or dilution claims because it did not constitute a use of the marks to identify the source of goods or services supplied by Google.  The Court did dismiss the tortious interference with prospective business advantage claim asserted by American Blind, holding that American Blind had failed to allege the interference with sufficiently certain economic relationships necessary to proceed with such a claim.

District Court holds that Google’s use of defendant American Blind & Window Factory’s (“ABWF”) trademarks to trigger the display of competitors’ ads as part of Google’s “Ad Words” program is a use of those marks in commerce within the meaning the Lanham Act.  These competitors’ ads are displayed by Google as ‘sponsored links’ and do not contain defendant’s trademarks.  The Court accordingly allows ABWF to proceed with trademark infringement claims arising from such use of its marks, finding that ABWF had presented sufficient evidence of consumer confusion to survive Google’s motion for summary judgment.  This evidence included the results of a survey that reported that 29% of consumers believed that such “sponsored links” were affiliated with the company that owned the trademark the consumer used to initiate his search.  The Court held as a result that whether consumers were in fact confused by “sponsored links” that do not contain defendant’s mark was an issue of fact requiring resolution at trial.

The Court did dismiss so much of defendant’s claims that were premised on its “American Blind” and “American Blinds” marks, which the Court held were descriptive.  Because ABWF did not submit sufficient evidence to establish that these (then) common law marks had developed sufficient secondary meaning to be entitled to protection from Google’s conduct at the time Google began its allegedly infringing activity, the Court dismissed so much of ABWF’s claims as were grounded on the alleged use of its American Blind and American Blinds marks.

Finally, the Court dismissed ABWF’s Federal and California dilution claims, finding that ABWF had failed to submit sufficient evidence that its marks were “famous,” a prerequisite to such dilution claims.  It should be noted that the court designated its decision as “not for citation.”

In a bench ruling, Court holds that the display by search engine giant Google of third party advertisements denominated "sponsored links", which ads are triggered by the entry of a trademark as a search term, does not run afoul of the Lanham Act provided the "sponsored links" do not contain the searched-for trademark.  However, the display of "sponsored links" which do contain the searched-for trademark are likely to confuse consumers and thus was held to run afoul of the Lanham Act.

The Court did not resolve the issue of Google's potential liability for the display of such third party ads, noting that Google had a policy prohibiting its advertisers from displaying "sponsored links" containing trademarks of third parties when such marks are used as the triggering search term.  It should also be noted that the Court's finding that consumers would not be confused by "sponsored links" that did not contain a trademark was based, in large part, on its rejection of survey evidence presented by the mark holder.  The Court rejected this evidence, despite its showing of consumer confusion, because the consumers were simultaneously shown both ads that did and did not contain the trademarked term.

Court denies motion to dismiss brought by search giants Google and Overture, and allows plaintiff GEICO to proceed with trademark infringement and unfair competition claims arising out of defendants' alleged practice of selling advertising triggered by the entry of plaintiff's trademarks as search terms, which advertisements are displayed in the search results generated by such searches.

The Court held that the First Amendment, and the guaranties afforded Google and Yahoo thereunder, barred claims seeking redress as a result of Google and Yahoo's refusal to run advertisements on their search engines they did not wish to run.  In reaching this result, the Court followed decisions that afforded newspapers similar First Amendment protections when challenges arose concerning their refusal to run advertisements they deemed objectionable.  As a result, the Court dismissed claims advanced by plaintiff arising out of the defendants' refusal to run his advertisements, including claims that the defendants defrauded him and engaged in deceptive business practices, violated his First Amendment rights, and failed to meet the duties imposed on those, like inn keepers, engaged in a public calling.

The Court also held that Google and Yahoo were immunized from such claims by the Communications Decency Act, 27 U.S.C. Section 230, which "bars 'lawsuits seeking to hold a service provider liable for its exercise of a publisher's traditional editorial functions - such as deciding whether to publish, withdraw, alter or postpone content.'" It should be noted that plaintiff was proceeding pro se.

In six related lawsuits arising out of the sale by online Canadian-based pharmacies of both branded and generic versions of plaintiff's popular anticholesterol medication "Zocor," the Court granted motions to dismiss trademark infringement claims challenging defendants' purchase of the keyword "Zocor" from search engines to trigger the display of "sponsored links" to defendants' websites.  Such purchases do not constitute the requisite 'use in commerce' of plaintiff's mark necessary to sustain such claims.  The Court also granted defendant CrossBorder's motion to dismiss trademark infringement claims arising out of its use of plaintiff's trademark "Zocor" on its website, at which CrossBorder sold both plaintiff's own product, as well as a generic version described as "generic simvastatin."  "Simvastatin" is the active ingredient in "Zocor."  Because it sold branded Zocor at its website, this was a permitted fair use of plaintiff's mark.

The Court declined at this early stage of the proceedings to dismiss the trademark infringement and dilution claims advanced against the remaining defendants.  Defendants link the "Zocor" mark to web pages at which they sold both branded Zocor and generic products described alternatively as "generic Zocor," "Zocor generic" or "Zocor-generic."  The Court was unwilling on this motion to determine whether such uses were likely to confuse consumers as to the source and sponsorship of these generic products, and hence unwilling to declare them permitted fair uses of plaintiff's trademarks.

Finally, the Court granted the motion to dismiss for want of personal jurisdiction of defendant CanadaDrug's CEO.  This individual, a Canadian resident, was neither alleged to have personally undertaken any actions in the United States in furtherance of the infringing activities at issue, nor been a "primary actor" therein.

In this domain name dispute decided in accordance with the Uniform Domain Name Dispute Resolution Policy (“UDRP”), the Panel holds that respondent Navigation Catalyst Systems Inc. (“NCS”) violated the UDRP by registering 35 domain names that contained complainant’s “myxer tones” mark, or variations thereof, which NCS used as pay-per-click landing pages, featuring advertisements of complainant’s competitors.  In reaching this result, the Panel held that respondent’s use of another’s mark in the domain names of pay-per-click landing pages was not a legitimate use of the domain sufficient to defeat complainant’s claim under the UDRP.  The Panel further held that respondent had acted with the requisite bad faith because it had used complainant’s mark to attract users to  advertisements for its competitors.  This finding was supported by the fact that respondent continued to register offending domain names even after the commencement of the instant UDRP proceeding.  Finally, the Panel rejected respondent’s contention that it did not act in bad faith because it was unaware of complainant’s mark.  The Panel held it was reasonable to conclude that respondent was in fact aware of complainant’s prior use of its mark at the time it registered the domains in question because a trademark and even an internet search would have revealed both a pending trademark application for complainant’s mark, and its use thereof.

Court allows plaintiff to proceed with ‘click-fraud’ claim against defendant Findwhat.com, a search engine operator.  The complaint alleged that to increase its revenues from pay-per-click advertisements posted on its site by plaintiff, defendant Findwhat.com directed defendant Advertising.com to engage ‘bots’ and individuals to click on plaintiff’s advertisements.  This had the effect of increasing defendant Findwhat.com’s revenues, as plaintiff paid it on a pay-per-click basis.  The complaint alleged that defendant Findwhat also bid on pay-per-click search terms, thereby improperly increasing the price plaintiff had to bid therefore to obtain higher placement for such terms.  The Court held that such misconduct could run afoul of the implied covenant of good faith and fair dealing in the parties’ contract, and accordingly allowed plaintiff to proceed with a breach of contract claim against defendant Findwhat.com.

Findwhat.com changed its name to Miva, Inc. in June 2005.

The Court did dismiss the balance of the claims plaintiff asserted.  Its unjust enrichment claims failed because there was a valid contract governing the subject matter of plaintiff’s claim.  Plaintiff’s negligence claims failed because of the absence of any independent duty on the part of defendant Findwhat.com to monitor the source of the ‘clicks’ plaintiff received.  Such an obligation would be governed by the terms of the parties’ contract. 

Finally, plaintiff’s fraudulent concealment claim failed because of plaintiff’s failure to plead such claim with the requisite particularity.  Plaintiff was granted leave to replead this claim, premised on defendant Findwhat.com’s alleged duty to disclose that it was improperly causing a third party to click on plaintiff’s ads so as to increase Findwhat.com’s revenues.  Such a claim, if properly alleged, would serve to support a civil conspiracy claim against defendant Advertising.com, which was the party that allegedly arranged to have a ‘bot’ click on plaintiff’s ads.

Reversing the decision of the court below, the Ninth Circuit Court of Appeals denied the motion of defendants Netscape Communications Corp. ("Netscape") and Excite, Inc. ("Excite")  for summary judgment, and allowed plaintiff Playboy Enterprises Inc. ("Playboy") to proceed with trademark infringement and dilution claims brought as a result of defendants' practice of keying banner ads for 'adult' products to plaintiff's trademarks.  Keying is a practice used by the operators of search engines to generate revenue via the sale of banner ads.  For a fee, the search engine operator will display an advertiser's ad along with, and on, a search results page, when a consumer types one of a series of designated terms into the operator's search engine.  In this fashion, defendants keyed the display of their clients' adult-oriented ads to plaintiff's marks.  The Ninth Circuit held that when the advertiser's banner ad is not labeled so as to identify its source, this practice could result in trademark infringement by application of the 'initial interest confusion' doctrine.  The Ninth Circuit accordingly refused to dismiss plaintiff's trademark infringement claims.  The Ninth Circuit further held that issues of fact also precluded the dismissal of plaintiff's dilution claims.

Judge Berzon wrote a concurring opinion, in which he sharply criticized Brookfield Communications, the Ninth Circuit decision from which the 'initial interest confusion' doctrine springs, and the overbroad interpretation he believes it has been given by other jurists. Specifically, Judge Berzon believes that keying clearly labeled ads to plaintiff's marks should not give rise to a trademark infringement claim because the consumer is not confused when he elects to visit the clearly labeled web site of the mark holder's competitor, in lieu of that of the mark holder.

Federal District Court holds that Google's use of plaintiff's trademark "Rescuecom" as a keyword in Google's "Ad words" program to trigger the display of "sponsored link" advertisements from third party competitors for a fee is not a "trademark use" of plaintiff's mark, as the mark is not being used to identify the source of any goods or services.  The same holds true of Google's use of plaintiff's trademark in its "Keyword Suggestion Tool," in which Google recommends to potential advertisers, including plaintiff's competitors, keywords they may be interested in using, for a fee, as a trigger for the display of their advertising.  Notably the advertisements themselves, which appear along with search results for plaintiff's mark, were not alleged to display plaintiff's Rescuecom mark. 

As a result, the Court grants Google's motion to dismiss trademark infringement, unfair competition and dilution claims brought by plaintiff under the Lanham Act, as such claims require a showing of actionable "trademark use" which, the Court holds, Rescuecom cannot make.  Having dismissed plaintiff's federal claims, the Court declined to exercise pendant jurisdiction over plaintiff's state law claims, including a claim for tortuous interference.

In reaching this result, the District Court elected not to follow decisions reached by the courts in Geico v. Google, 330 F.Supp. 2d 700 (E.D. Va. 2004) and Edina Realty v. MLS Online.com, 2006 WL 737064 (D.Minn., March 20, 2006) which had denied motions to dismiss trademark infringement claims arising out of similar activity.  The Court, instead, followed the path taken by the court in Merck & Co. Inc. v. Mediplan Health Consulting, Inc., 425 F.Supp. 2d 402 (S.D.N.Y. 2006), which dismissed similar claims on the ground, inter alia, that there was no "trademark use."

Second Circuit holds plaintiff Time Warner Cable Inc. (“Time Warner”) likely to prevail on false advertising claims advanced under Section 43 of the Lanham Act as a result television advertisements defendant Directv ran, which were found to be literally false.  Affirming the decision of the District Court, the Second Circuit held that, when seen in context, these advertisements falsely claim that the quality of the picture a user of an HD TV receives from Directv is better than the picture received from Time Warner cable.  Irreparable injury was presumed because, even though the advertisements at issue did not directly refer to Time Warner, the viewing audience would see the advertisement as targeted at plaintiff.  As a result, the Second Circuit affirmed so much of the District Court’s decision that enjoined Directv from further publication of these offending advertisements in markets where Time Warner operates.

In reaching this result, the Second Circuit held that an “advertisement can be literally false even though it does not explicitly make a false assertion, if the words or images, considered in context, necessarily and unambiguously imply a false message.”

The Second Circuit held, however, that internet banner advertisements that promoted Directv’s products, while literally false, constituted non-actionable puffery, because they made claims so exaggerated that no consumer could rely on them.  The banner advertisements at issue depicted a split screen.  One side of the screen presented a clear, crisp picture that was represented to be the picture a user would view if receiving his signal from Directv.  The other side of the screen contained a picture that was blurry and pixilated, which was represented as the picture the consumer would see if receiving a signal from “other tv”, or “basic cable.”  The ads urged consumers to “find out why Directv’s picture beats cable.”  While this depiction was literally and demonstrably false, because the pictures from both sources were equivalent, the Second Circuit held it was so exaggerated as to constitute non-actionable puffery on which no consumer could rely.  As a result, the Second Circuit reversed so much of the District Court’s decision which enjoined Directv from continuing to run these banner advertisements. 

Said the Court: “[T]he category of non-actionable puffery encompasses visual depictions that, while factually inaccurate, are so grossly exaggerated that no reasonable consumer would rely on them in navigating the marketplace.”

Court grants defendants' motion for summary judgment, and dismisses trademark infringement, copyright infringement and unfair competition claims brought by website owner against distributor of pop-up ads.  Defendants distribute a software program, which causes pop-up ads to be displayed on a user's computer screen in a window that covers all or part of plaintiff's website.  The court held that such conduct does not constitute a use of plaintiff's trademark, a prerequisite to a trademark infringement claim.  Quite the contrary, the display results from the computer user's consensual download of defendants' software, and his ability to control, via the multitasking capabilities of window's operating environment, what appears on his own computer screen.  Similarly, defendants' acts do not infringe plaintiff's copyright in the material that appears on plaintiff's website, because defendants neither display plaintiff's copyrighted materials nor make a derivative work thereof.  Defendants' ads instead appear in a separate window on a user's computer screen, which operates independently of plaintiff's website, and leaves the content appearing thereon untouched.

Denying cross-motions for summary judgment, the Court allows the Government to pursue civil claims against defendant Cyberheat Inc. ("Cyberheat") for violation of the CAN-SPAM Act arising out of the transmission of sexually explicit emails by its affiliates that did not meet the strictures of the Act.  While Cyberheat did not directly pay its affiliates to transmit such emails, it paid them "finder's fees" for subscribers their promotional activities produced - including subscribers produced by email - and provided affiliates with promotional materials that could be used - via links - in promotional emails.  The court held that questions of fact as to defendant's knowledge of its affiliates' activities, and the steps defendant could or did take to prevent violations of the Act after it became aware of consumer complaints, prevented the court from determining whether Cyberheat should be held either vicariously liable for the acts of its affiliates, or to have initiated or procured the transmission of the offending emails within the meaning of the CAN-SPAM Act.   The court reached this result notwithstanding the fact that Cyberheat's contracts with its affiliates contained explicit prohibitions against the transmission of emails that violate CAN-SPAM.

The court held that because it was in the business of sending sexually explicit materials over the Internet, defendant owed a duty to the public to exercise reasonable care to prevent those who did not wish to see such materials from being involuntarily exposed to such uninvited intrusions.  The question of whether defendant Cyberheat met this duty was left for another day.

Court issues a preliminary injunction, enjoining defendant Gator Corporation ("Gator") from causing pop-up ads to appear on a user's computer screen at the same time the user is viewing any of the 16 web sites operated by the plaintiff news organizations.  Such ads appear as a result of the operation of Gator's software, which a user has installed on his computer.  Gator's software apparently tracks the user's Internet usage, and delivers ads to his computer that defendant believes will interest the user based on his prior Internet usage  When these ads appear on a user's screen, they partially cover up the web site that also appears there.  Gator did not have plaintiffs' permission to cause ads to appear in this fashion.  The court held that plaintiffs were likely to prevail on their claim that causing pop-up ads to appear in this manner is an infringement of plaintiffs' trademarks, which are found on the web pages the pop-up ads partially cover up.   The court accordingly issued a preliminary injunction enjoining defendant from continuing this activity "on" plaintiffs' sites.

Court denies website operators' application for a preliminary injunction, and refuses to enjoin defendant WhenU.com, Inc. from delivering advertisements, triggered by a computer user's visit to plaintiffs' sites, that either pop-up or under those sites.  Defendant WhenU delivers such ads via its software applications Save and Save Now!  These applications are typically consensually downloaded by the user to his or her computer as the quid pro quo of his free receipt of another software application.

The Court held that WhenU's delivery of these ads neither infringes the trademarks found on plaintiffs' sites, nor their copyrights in the material thereon.  WhenU's activities - including the use of plaintiffs' marks in a directory which determines the ads a user receives, and the display of ads in windows that partially obscure plaintiffs' websites but do not contain plaintiffs' marks - do not constitute a use of plaintiffs' marks in commerce, a prerequisite to a trademark infringement claim.  Plaintiffs' trademark infringements claims also failed because plaintiffs did not present evidence sufficient to establish that users would likely be confused by WhenU's activities, and conclude that plaintiffs sponsored WhenU's ads.  Rather, the Court held, users with Save and Save Now! installed on their computers are likely to conclude that WhenU is the sponsor of the ads in question, both because the ads so inform the user, and because of their familiarity with such displays.

The Court held that plaintiffs' copyright infringement claims failed because the appearance of WhenU's ads in a window that partially obscures plaintiffs' sites does not constitute the creation of an unauthorized derivative work in violation of plaintiffs' exclusive right to create the same.  Rather, plaintiffs' copyrighted works - the content of their websites - remain unaltered on the servers on which they are hosted, and simply appear simultaneously with WhenU's advertisements in separate windows opened by and with the consent of the user on whose computer screen they appear.  Plaintiffs' copyright infringement claims also failed because any images appearing on a user's screen are simply too transitory to constitute the creation of a work.  As such, WhenU and the users cannot be held to have created a derivative work, and thus cannot be held to have infringed plaintiffs' copyrights.

Court issues preliminary injunction, enjoining enforcement of Utah's Spyware Control Act, which, inter alia, prohibits the delivery of 'pop-up' ads that obscure any portion of an Internet website, and bars advertisers from downloading programs that deliver ads to a consumer's computer unless the consumer's consent to such download is obtained in the manner specified by the Act.  The Court issued such relief because it found that plaintiff was likely to prevail on its claim that those portions of the Act run afoul of the Commerce Clause of the United States Constitution.

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Court holds that competitor’s purchase of sponsored links from Google that are triggered by the entry of plaintiff’s “Boston Duck Tours” mark constitute a trademark use of plaintiff’s mark actionable under the Lanham Act.  Recognizing that the courts have reached conflicting answers to this question, the Court stated:

In short, the emerging view outside of the Second Circuit is in accord with the plain language of the statute.  Because sponsored linking necessarily entails the ‘use’ of the plaintiff’s mark as part of a mechanism of advertising, it is ‘use’ for Lanham Act purposes.

The Court further holds that the display of such sponsored link advertisements by defendant in the case at bar does not violate either the Lanham Act, or a prior preliminary injunction issued by the Court, because the ads market defendant as “Super Duck Excursions” and ‘serve[] to distinguish the defendant from the plaintiff.”  The preliminary injunction previously issued by the Court had enjoined defendant from continuing to use the phrase “duck tours” as a trademark or service mark in the greater Boston area, as such use was likely to infringe plaintiff’s ‘Boston Duck Tours’ mark.  As a result, defendant had changed its name from “Super Duck Tours” to “Super Duck Excursions.”

Court holds that alleged purchase and use of a competitor’s trade marks as key words to trigger the display of sponsored ads in a search engine is a use of that mark in commerce subject to the strictures of the Lanham Act.  The ads in question did not feature the searched-for mark.  Said the District Court of New Jersey:

The Court is mindful of the challenges that sometime arise in applying existing legal principles in the context of newer technologies.  As expressed by the Edina Realty court, supra, Defendants’ alleged use of Plaintiff’s mark is certainly not a traditional ‘use I commerce.’  Nonetheless, the Court finds Plaintiff has satisfied the ‘use’ requirement of the Lanham Act in that Defendants’ alleged use was ‘in commerce’ and was ‘in connection with any goods or services.’15 U.S.C. Section 1125(a)(1).  First, the alleged purchase of the keyword was a commercial transaction that occurred “in commerce,’ trading on the value of Plaintiff’s mark.  Second, Defendants’ alleged use was both “in commerce” and “in connection with any goods or services” in that Plaintiff’s mark was allegedly used to trigger commercial advertising which included a link to Defendants’ furniture retailing website.  Therefore, not only was the alleged use of Plaintiff’s mark tied to the promotion of Defendants’ goods and retail services, but the mark was used to provide a computer user with direct access (i.e. a link) to Defendants’ website through which the user could make furniture purchases.  The court finds that these allegations clearly satisfy the Lanham Act’s “use” requirements.

Following the lead of the Second Circuit in 1-800 Contacts, Inc. v. WhenU.com, 414 F.3rd 400 (2d Cir. 2005) and of other district courts in the Second Circuit, the Court holds that the use of plaintiff’s mark either as a keyword to prompt the appearance of sponsored links advertising defendant’s site in Google’s search engine, or in the metatags of defendant’s site to trigger higher search engine placement, does not constitute a use in commerce of plaintiff’s mark sufficient to give rise to trademark infringement or dilution claims, either under the Lanham Act or New York state law.  Such use of plaintiff’s mark, reasoned the court, is the equivalent to store product placement, where the store places its own generic products on store shelves adjacent to more well-known brands to take advantage of the consumer’s attraction thereto.  As such a use is permissible, so to is the use of plaintiff’s mark in keyword advertising. 

The Court relied on decisions in Merck & Co., 425 F.Supp.2d 402, Rescuecom Corp. v. Google, Inc., 456 F.Supp.2d 393 (N.D.N.Y., 2006) , and Site Pro-1 Inc. v. Better Metal LLC, No. 06-CV-6508 (ILG)(RER)(EDNY, May 9, 2007), each of which “held that the purchase of a trademark as a ‘Sponsored Link’ is not ‘use’ within the meaning of the Lanham Act.” 

Said the Court:

It would be inconsistent with the reasoning set forth in 1-800 Contacts to conclude that the use of trademarks in keywords and metatags constitutes Lanham Act ‘use’ where, as here, defendant does not place the trademark on any product, good or service nor is it used in any way that would indicate source or origin.  Here, the use of plaintiff’s trademark is strictly internal, and, because such use is not communicated to the public, the use does not indicate source or origin of the mark.

As a result, the Court denied plaintiff’s motion to amend its complaint to assert, inter alia, claims of trademark infringement and dilution arising out of the use of its mark in keyword advertising and metatags.  The Court held that such amendment would be futile, as the proposed claims could not withstand a motion to dismiss.

In should be noted that, according to the court, ‘courts in other circuits have generally sustained such claim.’  However, the Court elected to follow the precedent cited above and deny plaintiff’s motion to amend.

Affiliates - Updated April 12, 2007

Court denies summary judgment motion by Lands' End "affiliates," seeking dismissal of claims arising out of affiliates' undisclosed use of typo domains to redirect traffic to Lands' End's website, and to profit on the sales made to consumers delivered to Lands' End's site in this fashion.  As affiliates, defendants received a percentage of sales made by Lands' End to consumers they brought to Lands' End's website.  The Court accordingly allowed plaintiff to proceed with claims that defendants' conduct violated the Anticybersquatting Consumer Protection Act ("ACPA") and breached the parties' affiliate agreements.  The Court also allowed plaintiff to pursue fraud claims arising out of defendants' concealment of this use of Lands' End typo domains.  The Court did grant so much of the defendants' summary judgment motion which sought dismissal of false advertising claims plaintiff advanced under both the Lanham Act and Wisconsin state law, holding that defendants did not mislead consumers by their conduct.  Consumers were unaware of the redirection, and received exactly what they expected to receive - Lands' End merchandise from Lands' End.

Denying cross-motions for summary judgment, the Court allows the Government to pursue civil claims against defendant Cyberheat Inc. ("Cyberheat") for violation of the CAN-SPAM Act arising out of the transmission of sexually explicit emails by its affiliates that did not meet the strictures of the Act.  While Cyberheat did not directly pay its affiliates to transmit such emails, it paid them "finder's fees" for subscribers their promotional activities produced - including subscribers produced by email - and provided affiliates with promotional materials that could be used - via links - in promotional emails.  The court held that questions of fact as to defendant's knowledge of its affiliates' activities, and the steps defendant could or did take to prevent violations of the Act after it became aware of consumer complaints, prevented the court from determining whether Cyberheat should be held either vicariously liable for the acts of its affiliates, or to have initiated or procured the transmission of the offending emails within the meaning of the CAN-SPAM Act.   The court reached this result notwithstanding the fact that Cyberheat's contracts with its affiliates contained explicit prohibitions against the transmission of emails that violate CAN-SPAM.

The court held that because it was in the business of sending sexually explicit materials over the Internet, defendant owed a duty to the public to exercise reasonable care to prevent those who did not wish to see such materials from being involuntarily exposed to such uninvited intrusions.  The question of whether defendant Cyberheat met this duty was left for another day.

Alcohol - Updated May 11, 2002

Court holds that those provisions of North Carolina's Alcoholic Beverage Control law which prohibit out-of-state retailers from selling liquor directly to North Carolina consumers, while allowing in-state wineries to make such sales, are unconstitutional violations of the Commerce Clause of the United States Constitution.  The dormant Commerce Clause prohibits states from enacting regulations, such as those at bar, which directly discriminate against interstate commerce.  The court held that the legislation at issue was not saved by operation of the Twenty First Amendment, which grants the States the power to regulate in-State liquor sales.  The Twenty First Amendment does not trump the Commerce Clause; rather, when faced with a conflict between their competing concerns, courts engage in a balancing test, asking "whether the interests implicated by [the] state regulation are so closely related to the powers preserved by the Twenty First Amendment that the regulation may prevail …".  Here, North Carolina did not identify the state interests served by the challenged regulation.  As a result, the District Court assumed the purpose of the legislation was to protect local wineries from out-of-state competitors.  The Court held that such an improper purpose mandates a finding that the statute is an unconstitutional violation of the Commerce Clause.  The Court accordingly enjoined North Carolina from enforcing the statutes at issue, including those laws "that prohibit … out-of state wine dealers from directly shipping wines to … North Carolina residents."

Court denies motion brought by defendants to dismiss claim that N.Y. Alcohol and Beverage Control Law ("ABC Law") Sections 102 (1)(a), (c) and (d) is unconstitutional because it violates the Commerce Clause, the Privileges and Immunity Clause and the First Amendment.

(Court dismissed plaintiff's claim that defendant, by allegedly selling alcoholic beverages over the Internet to Massachusetts residents without the license required under Massachusetts law, had tortiously interfered with plaintiff's business relationships with consumers. The Court held that the licensing statute, Mass. M.G.L. Chapter 138, did not create a private right of action in liquor wholesalers to enforce it. Instead, enforcement was within the purview of the state's Alcoholic Beverage Control Commission.)

Americans With Disabilities Act - Updated September 26, 2006

Court holds that defendant Southwest Airlines Co.'s web site is not a "place of public accommodation" under Title III of the Americans with Disabilities Act, ("ADA") and accordingly that Southwest has no obligation under Title III to make its web site accessible to the visually impaired.  Title III of the ADA prohibits those who operate "places of public accommodation" from discriminating against individuals with disabilities.  The Court held that under the plain and unambiguous language of the ADA a "public accommodation must be a physical, concrete structure."  Because defendant's website was not such a structure, the Court dismissed plaintiffs' claims for relief under Title III of the ADA.

Denying, in part, a motion to dismiss, the Court allowed plaintiffs to proceed with claims that allege that the failure of defendant Target Corporation ("Target") to make its Target.com website accessible to the blind violates various statutes that prohibit discrimination against the disabled, including the Americans with Disabilities Act ("ADA"), 42 U.S.C. 12182.  The Court did, however, dismiss so much of plaintiffs' claims that sought to challenge the accessibility of those portions of the Target.com site that "offer information and services unconnected to Target stores."  At this time, plaintiffs were only allowed to proceed with claims that challenged the accessibility of portions of the Target.com site that, if inaccessible, would "impede the full and equal enjoyment of goods and services offered in Target stores."  The Court noted that it may, in the future, permit plaintiffs to pursue broader claims if it was established that Target's site and stores are part of an integrated merchandising effort.

The Court denied plaintiffs' motion for mandatory injunctive relief, seeking to compel Target to make its site accessible to the blind.  Issues of fact as to whether the site, as presently constructed, was accessible to blind internet users using 'screen reader' programs precluded a finding at this time that plaintiffs were likely to prevail on the merits of their claims, and mandated denial of their request for injunctive relief.

Anticybersquatting Consumer Protection Act - Updated October 08, 2008

This section of the Internet Law Library contains a host of court decisions that address whether a party's use of another's trademark in a domain name runs afoul of the Anticybersquatting Consumer Protection Act.  Analyzed court decisions address both commercial uses of the mark - in a domain operated by a competitor, by an affiliate of the mark holder, by a cybersquatter looking to profit thereon, or by a party itself holding rights in the mark in question - as well as noncommercial uses of the mark - such as in the domain of a complaint or gripe site.  Cases also address a number of issues that arise under the Anticybersquatting Consumer Protection Act, including whether the domain owner acted with a bad faith intent to profit from his use of another's mark in his domain name, and the applicability of the Anticybersquatting Consumer Protection Act to 'typo' domains.

The Sixth Circuit affirms the District Court's award of summary judgment to plaintiffs, and holds that defendant Bob D'Amato infringed and diluted plaintiffs' famous "Audi," "Quatro," and Audi Four Ring Logo marks, and violated the Anticybersquating Consumer Protection Act.  Defendant was held to have infringed plaintiffs' marks by operating a website at the domain www.audisport.com, at which both goods such as hats and shirts bearing the "Audi Sport" logo, and advertising space, were offered for sale.  The Sixth Circuit accordingly affirmed the District Court's decision, which permanently enjoined defendant from making continued infringing use of Audi's trademarks, directed D'Amato to transfer the audisport.com domain to plaintiffs, and awarded plaintiffs Audi AG ("Audi") and Volkswagen of America Inc. ("Volkswagen") attorneys' fees as the prevailing party.  The Court reached this result notwithstanding both defendant's claim that his use of Audi's marks on his website in connection with the sale of goods was orally authorized by an Audi dealer, and his placement of a disclaimer on defendant's site after receipt of a cease and desist letter.  A written agreement between Audi and the dealer made clear that the dealer lacked authority to so authorize defendant's use of Audi's trademarks.

In this domain name dispute, the Ninth Circuit holds that the use of another’s trademark as the domain name for a non-commercial gripe site does not constitute trademark infringement or dilution in violation of the Lanham Act.  To run afoul of the Lanham Act, a mark must be used in connection with the sale of goods or services.  A web site which is merely critical of another’s goods or services does not fit this bill.  The Ninth Circuit accordingly affirmed the District Court’s grant of summary judgment, dismissing plaintiff’s trademark infringement and dilution claims.

The Ninth Circuit reversed, however, so much of the District Court’s decision which dismissed plaintiff’s Anticybersquatting Consumer Protection Act (“ACPA”) claim.  The ACPA does not have a commercial use requirement, and, accordingly, establishing that the mark was used as the domain for a non-commercial gripe site does not absolve the griper from potential liability under the ACPA.  Because that was the basis on which the lower court dismissed plaintiff’s ACPA claim, its dismissal was reversed.  The matter was remanded to the District Court to determine whether defendant used the mark with a bad faith intent to profit therefrom, in violation of the ACPA.

The court holds that the provisions of the Anticybersquatting Consumer Protection Act that permit a trademark holder to proceed with an in rem action against a domain name do not violate the Due Process clause of the United States Constitution.

Plaintiff, holder of a federally registered trademark in the mark "Chambord" for sale of a liqueur and assorted food products, brought this action under the Anticybersquatting Consumer Protection Act, and for trademark infringement and dilution, against defendant, who holds a federally registered trademark in the mark "Chambord" for the sale of coffee makers. The action was triggered by defendant's registration of the domain name "chambord.com," at which it planned to, but had not yet offered for sale its coffee makers. The court dismissed the action, holding, inter alia, that (a) the ACPA claim failed because defendant had not acted in bad faith in continuing to utilize its federally registered mark for the sale of coffee makers; (b) the trademark infringement claim failed because the initial interest confusion doctrine (a consumer looking for company's As site finds company B's instead) was inapplicable to situations where the parties in question did not offer competing goods; and (c) the dilution act claim failed because plaintiff's mark was not famous at the time defendant commenced its use of the mark.

Affirming the District Court, the Eighth Circuit holds that plaintiffs are likely to prevail on Anticybersquatting Consumer Protection Act ("ACPA") claims arising out of defendant's registration of numerous domain names incorporating plaintiffs' trademarks, which domains defendant linked to a website advocating a ban on abortions.  This anti-abortion website also contained links to other sites which solicited funds, via the sale of goods or donations, to aid anti-abortion causes.  In reaching this result, the Eighth Circuit rejected defendant's claim that his use of plaintiffs' trademarks in this fashion was protected by the First Amendment.

In this domain name dispute, Court enjoined defendants from continuing to utilize the domain name ernestandjuliogallo.com, and directed them to transfer the name to plaintiff E. and J. Gallo Winery ("Gallo"), which holds a trademark in the mark "Ernest and Julio Gallo." The court further awarded Gallo statutory damages under the Anticybersquatting Consumer Protection Act ("ACPA") in the amount of $25,000 as a result, inter alia, of defendants' registration of the domain name at issue, and their use of that domain name to operate a web site that commented on this lawsuit, and contained articles critical of alcohol consumption. Defendants had also registered some 2000 other domain names, a number of which contained the names of famous companies, cities and buildings.

Court issues permanent injunction under the Anticybersquatting Consumer Protection Act ("ACPA"), enjoining defendant, described by the court as a "notorious cybersquatter," from continuing to operate web sites at domains containing common misspellings of plaintiff's registered service marks. The court also awarded plaintiff $530,653.34, which included both the maximum $100,000 statutory award for each domain name improperly used, as well as plaintiff's attorney's fees and costs.

Finding plaintiff likely to prevail on claims of trademark infringement and cybersquatting, Court issues preliminary injunction directing defendants, purported competitors operating a business under the same name as plaintiff, to transfer to plaintiff 74 domain names which contain plaintiff's trademarks or variations thereof, during the pendency of this suit.  The Court further directed plaintiff to remove the existing content on the sites found at those domains and replace it with an "under construction" notification, and pay all registration fees for these domains which may become due.  The Court reached this result notwithstanding the fact that defendants had registered the main domain at issue, gardenoflife.com, before plaintiff commenced its use of that mark in commerce.  On this motion, the Court rejected defendants' claim that they had been using the mark "gardenoflife" in commerce continuously since 1974.  The Court found instead that defendants' use of the mark did not commence until after plaintiff's.  As a result, and because defendants registered many of the domains at issue after plaintiff had entered into negotiations with defendants for the purchase of the gardenoflife.com name, which domains contained variations of plaintiffs marks unrelated to defendants' business, the court found plaintiff likely to prevail on claims of trademark infringement and cyberquatting.

In this in rem action commenced under the Anticybersquatting Consumer Protection Act, the Court holds that it can direct a top level domain registry – here Verisign – located in Virginia to cancel the domain registration of a domain found to be registered in violation of the ACPA.  In this case, the Court directed that such cancellation be effected unilaterally by the domain registry, which was directed to place the domain name on ‘hold’ status, thereby rendering it inactive, until such time as it is transferred to the trademark holder.

The Court holds that such relief is appropriate here, given the fact that the Korean domain name registrar with whom the domain name at issue was registered refused to transfer the domain as directed in a prior judgment issued by the Court.  After the Court issued this order, the domain registrant obtained an injunction from a Korean court, enjoining the registrar from transferring the domain.  The Korean registrar, in the face of this subsequent order, refused to comply with the US Court’s direction to transfer the domain to plaintiff.

The Court, on default, found that the domain registrant had violated the ACPA by registering the domain name at issue – globalsantafe.com – one day after Global Marine and SantaFe announced their agreement to merge into an entity to be called GlobalSantaFe.

Court finds that a disgruntled customer violated the Anticybersquatting Consumer Protection Act ("ACPA") by registering a domain name containing defendant Microfinancial's trademark, at which domain plaintiff operated a website critical of defendant.  The Court determined that plaintiff had registered the domain name with a bad faith intent to profit therefrom, in large part because plaintiff had offered to transfer the domain to Microfinancial if it refunded certain lease payments plaintiff had made which were at the heart of his dispute with defendant, as well as funds plaintiff claims defendant improperly received from third parties.  The Court accordingly granted Microfinancial summary judgment on its ACPA claim.

Court holds plaintiff infringed defendants' trademarks, and violated the Anticybersquatting Consumer Protection Act ("ACPA"), as a result of his operation of a 'typo' web site at the domain Fallwell.com at which he criticized the Rev. Falwell's views on homosexuality, and expressed his own contrary views on that subject.  At one time, the site informed interested visitors of a book plaintiff considered relevant to this discussion, and provided a link to Amazon.com at which they could purchase it.  The Court reached this result notwithstanding the fact that plaintiff's site featured a prominent disclaimer, advising users that it was not defendants' official site.

Court denies summary judgment motion by Lands' End "affiliates," seeking dismissal of claims arising out of affiliates' undisclosed use of typo domains to redirect traffic to Lands' End's website, and to profit on the sales made to consumers delivered to Lands' End's site in this fashion.  As affiliates, defendants received a percentage of sales made by Lands' End to consumers they brought to Lands' End's website.  The Court accordingly allowed plaintiff to proceed with claims that defendants' conduct violated the Anticybersquatting Consumer Protection Act ("ACPA") and breached the parties' affiliate agreements.  The Court also allowed plaintiff to pursue fraud claims arising out of defendants' concealment of this use of Lands' End typo domains.  The Court did grant so much of the defendants' summary judgment motion which sought dismissal of false advertising claims plaintiff advanced under both the Lanham Act and Wisconsin state law, holding that defendants did not mislead consumers by their conduct.  Consumers were unaware of the redirection, and received exactly what they expected to receive - Lands' End merchandise from Lands' End.

In this domain name dispute, Court grants Mattel, the holder of numerous trademarks in and including the word "Barbie," summary judgment, holding that defendant violated the Anticybersquatting Consumer Protection Act ("ACPA") by registering the domain names "barbiesbeachwear.com" and "barbiesclothing.com," causing those who accessed such domains to view a commercial web site selling women's apparel operated by the defendant, and effectuating a single $10 sale of merchandise to an investigator hired by plaintiff who accessed one of the domains in question. The court ordered defendant to relinquish the domain names at issue, and to pay Mattel $2000 in damages. The court declined to award Mattel its attorneys' fees.

Court holds that defendant's use of plaintiff's service mark in the domain names of noncommercial web sites critical of plaintiff does not constitute a violation of the Anticybersquatting Consumer Protection Act ("ACPA") because this was a "bona fide noncommercial" use of the mark which defendant had reasonable grounds to believe was lawful.  In reaching this result, the Court determined that defendant was motivated not by an intent to use his critical web site to extract money from plaintiff, but instead by a desire to express his dissatisfaction with plaintiff's alleged conduct.  The Court accordingly granted defendant's motion for partial summary judgment, and dismissed plaintiff's ACPA claim.  Left for another day were libel and trade libel claims arising out of the sites' content, as well as a Federal Dilution Act claim under 15 U.S.C. § 1125(c) arising out of the defendant's use of plaintiff's service mark.

Court denies motion to dismiss made by foreign domain name registrant, and allows trademark owner to proceed with in rem action, seeking relief under both the Anticybersquatting Consumer Protection Act, and the Lanham Act for trademark infringement.  The ACPA gives a trademark holder the right to proceed in rem to have a domain name transferred to it, or its registration cancelled, and allows a United States court to exercise jurisdiction over a res – the domain name – where the registry or registrar for such domain name is located in the United States.  This is true notwithstanding the fact that the United States court lacks personal jurisdiction over the domain name registrant.

The Fourth Circuit, affirming the decision of the district court below, held that defendant was guilty of service mark infringement and unfair competition, and had violated the Anticybersquatting Consumer Protection Act ("ACPA"), as a result of his creation and operation of a web site at the domain www.peta.org, which contained plaintiff's federally registered service mark "peta." In reaching this conclusion, the Fourth Circuit rejected defendant's defense that his site, titled "People Eating Tasty Animals," was a parody of plaintiff's "People for the Ethical Treatment of Animals" organization because the domain name containing plaintiff's mark did not appear simultaneously with that aspect of the web site containing the parody of plaintiff's organization.

In this domain name dispute, the Second Circuit affirmed the holding of the District Court, which enjoined plaintiff Sporty's Farm LLC ("Farm") from continuing to use a domain name containing defendant's federally registered trademark "Sporty's" and directed plaintiff to take such steps as were necessary to transfer the domain name at issue to defendant. The Second Circuit's decision was based on the newly enacted Anticybersquatting Consumer Protection Act, and not on the Federal Trademark Dilution Act, which had been relied upon by the District Court below.

Reversing the District Court, the Fifth Circuit holds that defendant's operation of a non-commercial gripe site at a domain which varied from plaintiff's mark solely by the subtraction of the letter "s" did not violate either the Federal or Texas State Dilution Acts, nor did it run afoul of the Anticybersquatting Consumer Protection Act ("ACPA").  The Court determined that defendant's actions were not motivated by the requisite bad faith intent to profit from the use of the mark, but rather, by defendant's desire to inform the public about his dispute with plaintiff and the services it offered him.  The absence of such bad faith was fatal to plaintiff's ACPA claim.  Plaintiff's Federal Dilution Act claim failed because defendant's use was not commercial.

Court holds that defendant violated the Anticybersquatting Consumer Protection Act by registering sixteen domain names containing misspellings of plaintiff’s trademark, at which domains defendant operated web sites that voiced his complaints about plaintiff’s business practices.  Defendant did not offer any goods or services for sale at these web sites, and there is no mention in the record of any attempts by defendant to try and sell the domain names to the plaintiff.

Affirming the decision of the district court below, the Tenth Circuit dismisses trademark infringement, unfair competition and cybersquatting claims brought by plaintiff Utah Lighthouse Ministry as a result of defendant Allen Wyatt’s operation of a non-commercial website at domains containing the names of both plaintiff and its principals, which website in turn linked to articles criticizing plaintiff’s principals found on defendant Fair’s website.  Plaintiff was created to criticize the Church of Jesus Christ of Latter-day Saints.  Fair is an organization that responds to criticisms of that Church.  Wyatt’s website was designed to look like that of the plaintiff, incorporating elements and content found thereon with slight alterations, and contained no disclaimer as to the site’s affiliation with the plaintiff. 

The Tenth Circuit affirmed the dismissal of plaintiff’s Lanham Act trademark infringement and unfair competition claims on the grounds that plaintiff had failed to establish that defendant had used its trademark in commerce.  In reaching this result, the Court held that links from Wyatt’s website to that of Fair, at which books were offered for sale, were too attenuated to constitute a commercial use because the links took the user to pages of that site containing criticism of plaintiff, and not to those pages of the site at which books were offered for sale.  The Court further held that the use of plaintiff’s trademark in the operation of a site that diverted consumers from plaintiff’s commercial site to a non-commercial site was not a commercial use sufficient to sustain a Lanham Act claim.  In reaching this result, the Court refused to follow a contrary decision of the Fourth Circuit. 

The Tenth Circuit also dismissed plaintiff’s trademark infringement claim on the ground that plaintiff failed to establish the requisite likelihood of consumer confusion arising out of defendant Wyatt’s operation of his site.  The Court relied both on its analysis of the traditional likelihood of confusion factors, as well as its determination that defendant’s site was a successful parody of that of the plaintiff.

Finally, the Tenth Circuit dismissed plaintiff’s cybersquatting claim, advanced under the Anticybersquatting Consumer Protection Act (“ACPA”), on the ground that the defendants lacked the requisite bad faith intent to profit from their use of plaintiff’s mark, given their site was non-commercial, and intended to criticize plaintiff.   The Tenth Circuit held that such claim also failed because defendant Wyatt fell within the protection of the ACPA’s safe-harbor provision, which precludes a finding of bad faith intent to profit if ‘the court determines that the [defendant] believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.’

The Fourth Circuit, affirming the determination of the district court below, held that plaintiff violated the Anticybersquatting Consumer Protection Act ("ACPA") by registering and offering to sell to defendant the domain name vw.net, which contains defendant Volkswagen's famous "vw" mark.

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In this in rem action commenced under the Anticybersquatting Consumer Protection Act (“ACPA”), the Court modifies its previously issued judgment, and directs a Virginia based domain registry – Public Interest Registry – to unilaterally cancel the registration of the domain name AOL.org and transfer it to plaintiff America Online.  The Court had previously found that this domain had been registered in violation of the ACPA, and had issued a judgment directing it domain registrar to transfer it to America Online.  The domain registrar, a Chinese entity, refused to comply, instead permitting the domain registrant to transfer the domain to another domain registrar, this time located in Korea.  This registrar too refused to transfer the domain to America Online.  Accordingly, the Court held that under the ACPA it was empowered to unilaterally direct a domain registry to cancel a domain, and transfer it to the trademark holder.

Court finds plaintiff Ballistic Products Inc. likely to prevail on its claim that its competitor - defendant Precision Reloading Inc. – violated the  Anticybersquatting Consumer Protection Act as a result of its registration of two “typo” domain names, containing misspellings of plaintiff’s then common law trademark.  Defendants registered these domain names to “attract potential customers” and pointed them to their own web site, at precisionreloading.com, where they sold competing products.  Finding such actions likely to confuse consumers, the Court issued a preliminary injunction, enjoining defendants from further use of the “typo” domains, and directed their immediate transfer to the plaintiff.

The Court further held that it could assert personal jurisdiction over the non-resident defendants.  The Court held that defendant Precision Reloading Inc. had sufficient contact with Minnesota to permit the assertion of general personal jurisdiction over it.  It had over the last 18 months sold over $21,000 in product to Minnesota customers, and purchased over $32,000 of merchandise from Minnesota sellers.  It had also distributed 223 catalogues to Minnesota residents, advertising its products, advertised nationally in publications sent to Minnesota and operated a website that received numerous ‘hits’ some of which were likely to be from Minnesota residents.  Specific jurisdiction could be exercised over both Precision and the remaining defendants under the ‘effects test’ articulated by the Supreme Court in Calder v. Jones.  The Corporate defendants committed tortuous misconduct directed against the plaintiff, a Minnesota company, the effects of which would be felt by that company in Minnesota.  Said the Court:

Defendants’ registration of domain names that are slight misspellings of Ballistic’s trademark and domain name was an action directed at Minnesota such that Defendants’ should ‘reasonably anticipate being haled into court’ in Minnesota. … ‘[a]n individual injured in Minnesota need not got to Connecticut to seek redress from persons who, though remaining in Connecticut, knowingly caused the injury in Minnesota.’ 

The Court held that the individual defendants, officers of Precision, “are primary participants in an alleged wrongdoing intentionally directed at a forum state resident, and jurisdiction over them is proper on that basis.”  It was the individual defendants who came up with the idea of registering the ‘typo’ domain names at issue to attract business for the defendant Precision Reloading. 

Court finds plaintiff guilty of trademark infringement and unfair competition in violation of the Lanham Act, and cybersquatting in violation of the Anticybersquatting Consumer Protection Act, as a result of its purchase and use in commerce of the domain name cosmos.com.  Plaintiff’s use infringed the rights of defendant in its registered trademarks Cosmos and Cosmos Tourama, which were used by affiliated companies, through licenses, to promote and market travel and vacation tours.  Plaintiff’s website featured information on travel tours provided by third parties.  Plaintiff both purchased its domain, and began this use, after Cosmos European Travels had registered its mark, and commenced its use in commerce.

In finding that plaintiff’s conduct ran afoul of the Anticybersquatting Consumer Protection Act, the court found that plaintiff had acted with a bad faith intent to profit from its use of its mark.  In reaching this result, the Court relied, in part, on the fact that plaintiff had failed to conduct a trademark search at the time it purchased the cosmos.com domain from a third party.  Such a search, held the Court, would have made plaintiff aware of defendant’s rights in its mark, and its use in the travel industry.  The Court also relied on the fact that plaintiff, after being conducted by consumers seeking defendant, offered for a fee to enter into various arrangements with defendant that would give it access to the cosmos.com domain.  Said the Court:

It is equally important … to step back and examine the larger picture to determine whether it is consistent with a finding of bad faith.  It is.  The larger picture does not reveal an ongoing business entity that, prior to purchasing a domain name, made a reasonable investigation to ensure that the name was non-infringing and then purchased a relatively obscure domain name.  to the contrary, the big picture here reflects that plaintiffs did not engage in any business until they purchased the disputed domain name and when they did so, they made no effort to ascertain whether the ‘cosmos’ name was a registered trademark, as it then had been for eleven years.  Nor did plaintiffs make any reasonable investigation to determine whether the name was used in the travel industry.  Had plaintiffs conducted the proper investigation, they not only would have easily discovered that defendant had registered the cosmos’ and ‘cosmos tourama’ marks, but they also likely would have seen evidence of the fact that defendant had spent millions of dollars promoting the ‘cosmos’ mark and had succeeded in generating a large amount of revenue in the travel business ($400 million over five years).  In the larger picture, these facts loom large, and  it is hard to see how they could have been missed by plaintiffs.  Furthermore, within three years of purchasing the cosmos.com domain name, plaintiffs, armed with the certain knowledge that many consumers thought the cosmos.com website belonged to defendant, sought to sell defendant space and access to the site for a substantial sum of money.  This is closely akin to purchasing a domain name with an intent to exploit it by selling it to the registered owner of the trademark incorporated in the domain name.  In sum, the big picture is fully consistent with a finding of bad faith.

In addition, the fact that plaintiff was now known as CosmosTravels.com, Inc., did not permit it to avoid a finding of bad faith., as this name change occurred only after the domain name at issue had been purchased.  Said the Court “If such a name change could preclude a finding of bad faith, an entity could escape the effect of the ACPA simply by registering an infringing domain name and then changing its business name to match the infringing domain name.”

As a result of its determination, the Court directed plaintiff to transfer the cosmos.com domain to defendant. 

On the parties’ cross-motions for summary judgment, the Court finds the corporate defendants guilty of copyright infringement as a result of their unauthorized use of two of plaintiff’s copyrighted photographs in advertisements for their businesses. 

The Court further held that defendant Andrew Vilenchik, the sole board member and shareholder of defendant Vilana Financial, could not be held vicariously liable for defendant’s copyright infringement, because he did not have or derive a sufficiently direct financial interest from the use of plaintiff’s photographs.

The Court granted plaintiff summary judgment, dismissing defendants’ claim that his use of defendants’ trademark in the path of his site’s domain name violated the Anticybersquatting Consumer Protection Act.  Defendants’ claim failed both because they failed to submit sufficient evidence that plaintiff had a bad faith intent to profit from this use of the mark, and because use of the mark in the path of the domain name does not constitute actionable use of the mark in a domain name

The Court also dismissed trademark infringement claims brought by defendants as a result of plaintiff’s use of their trademark in a website that purportedly disparaged defendants as a result of their use of the photographs at issue, and in the meta tags of that site.  The court held defendants failed to establish the requisite likelihood of consumer confusion sufficient to sustain such a claim, given that the parties were not competitors – plaintiff was a photographer, and defendants sold real estate and mortgage services – and plaintiff’s website was highly critical of defendants.  In reaching this result the court noted that “a defendant’s use of a trademark in metatags in a descriptive manner can constitute a non-infringing fair use.”

Finally, the Court left for trial defendants’ remaining claims, which included deceptive trade practices, interference with contractual and business relationships, and misappropriation of name and likeness, all of which arose out of the disparaging remarks posted on plaintiff’s website about the defendants.  This site included a photograph of defendant Vilenchik.  Because issues of fact existed as to the truth of these statements, the court reserved decision on these claims until trial.

It should be noted that plaintiff ultimately prevailed at trial, was awarded approximately $20,000 on his copyright infringement claims, and that defendants’ remaining claims were dismissed.

In an action brought by Mattel under the Anticybersquatting Consumer Protection Act, as a result of defendants’ registration of the domain names BarbieToy.com and BarbieRetro.com, the Southern District of New York held that it could exercise personal jurisdiction over a non-resident defendant because “defendants solicited sales over the Internet, accepted an order from a resident of this state, and shipped goods into this state to fill that order.”  As a result, the Court denied defendants’ motion to dismiss this action for want of personal jurisdiction.  The defendants were retailers who primarily sold vintage toy reproductions.  At some point, they expanded their product line to include licensed ‘Barbie Classic’ items.  The domain names were purchased to promote this product line, and redirected the user to defendants’ website at which such items were offered for sale.  Plaintiff arranged to purchase two Barbie items from defendants’ website, which defendants shipped to plaintiff in New York.  As stated above, this purchase was sufficient to establish personal jurisdiction over the defendants in New York.

The Court nonetheless transferred the case to Texas, where the defendants reside, pursuant to 28 U.S.C. Section 1401(a).  Said the Court:

In the interests of justice and trial efficiency, this action should be transferred to the Southern District of Texas.  The locus of operative facts is in both the Southern District of Texas and New York;  Defendants documents related to the website in question are located in Houston Texas; Mattel is a worldwide manufacturer with offices all over the United States and Defendants are a one man outfit, located only in Houston Texas, maintaining the action in New York will pose a heavy financial burden on defendants; neither party is located in the Southern District of New York and Defendants are located in Houston, Texas.

Finding that defendant cybersquatters violated both the Anticybersquatting Consumer Protection Act (“ACPA”) and the Federal Trademark Dilution Act (“FTDA”), the court directed defendants to transfer to plaintiff domain names containing plaintiff’s famous “Pinehurst” mark, enjoined defendants from further using “Pinehurst” in a domain name, and awarded plaintiff both statutory damages in the amount of $100,000 and attorneys fees.   Plaintiff is the owner of the world famous Pinehurst Golf Resort.  The court found that defendants had registered the domain names in question – pinehurstresort.com and pinehurstresorts.com - with a bad faith intent to profit therefrom because, among other things, they had registered over 8000 domain names, many of which contained the trademarks of well-known corporations, golf courses or law firms, had offered, in settlement, to transfer the domain names at issue to plaintiff in exchange for a ‘contribution’ to their legal expenses and had registered additional ‘typo’ domains after the commencement of this suit.  Such a finding also rested on defendants’ stated purpose in registering these and other domains, which was to “mess” with “corporate America,” as well as on the fact that the domains at issue had been registered by an entity named NameIsForSale.com 

In reaching this result, the court rejected defendants’ claim that their conduct was a permissible ‘parody’ of plaintiff’s mark.  Such a defense failed, in part, because the content of defendants’ site – on which was located images of a miniature golf course and a trailer park – was not seen until after the user had already made a decision to enter the site based on the domain names at issue, which did not parody plaintiff or its golf course.  Said the court “A parody must convey two simultaneous and contradictory messages, that it is the original but also that it is not the original and is instead a parody. … Looking at Defendants’ domain names alone, there is no suggestion of a parody. … The domain names convey the first message, that it is the original, but the second message, that it is ‘not the original and that it is a parody, is discovered only by accessing the website and reading through the website’s content.”

The court further held that defendant had violated the FTDA by virtue of having registered the domain names in question, and thereby having prevented plaintiff from using them in commerce.  This reduced the selling power of plaintiff’s famous
”Pinehurst” mark, thereby diluting it.  Said the court:  “Because of the unique nature of domain names in electronic commerce and the resulting economic harm when marks are registered as domain names by cyberpirates, Defendants’ use of Plaintiff’s service marks in their Pinehurst domain names constitutes dilution.”

Reversing the court below, the First Circuit holds that a domain registrant who loses a UDRP proceeding and is directed to transfer his domain name to a trademark holder may pursue relief under the Anticybersquatting Consumer Protection Act.  This statute expressly provides that:

A domain name registrant whose domain name has been suspended, disabled, or transferred under a policy described under clause (ii) may, upon notice to the mark owner, file a civil action to establish that the registration or use of the domain name by such registrant is not unlawful under this chapter.  The Court may grant injunctive relief to the domain name registrant, including the reactivation of the domain name or transfer of the domain name to the domain name registrant.

Said the First Circuit:

Section 1114(2)(D)(v) grants domain name registrants who have lost domain names under administrative panel decisions applying the UDRP an affirmative cause of action in federal court for a declaration of nonviolation of the ACPA and for the return of the wrongfully transferred domain names.

A successful plaintiff can recover the domain lost in the UDRP proceeding.

In reaching this result, the court rejected defendants’ argument, accepted by the court below, that there was no actionable case or controversy that could be the subject of plaintiff’s action for declaratory judgment, because defendants had no intention of pursuing a claim against plaintiff for violation of the Anticybersquatting Consumer Protection Act.  Because this dispute had been brought to WIPO for resolution, and because it had resolved the dispute adversely to plaintiff, resulting in his loss of his domain name, an actual controversy did in fact exist. 

The First Circuit also rejected defendants’ argument that, by agreeing to the UDRP in his registration agreement, plaintiff contractually agreed both to be bound by any decision rendered in a UDRP proceeding by an authorized provider, and waived any rights he may have under the ACPA.

As a result, the First Circuit allowed plaintiff to pursue his claim that he was the valid owner of the domain Corinthians.com.  Plaintiff had registered this domain with NSI.  Defendants owned a Brazilian trademark in Corinthiao, the Portuguese equivalent of “Corinthians,” which is the name of a well-known soccer team in Brazil.  A WIPO panel found plaintiff to be a cybersquatter, in large part because he offered to sell the domain to defendants, and had not, according to the panel’s decision, made any use of it prior to his receipt of a cease and desist letter from defendants in response to his solicitation.  After this contact, but before the commencement of the UDRP proceeding, plaintiff posted on his website biblical quotations.  The domain was subsequently transferred to the defendants. 

The First Circuit allowed plaintiff to pursue his claim that he was not in violation of the Anticybersquatting Consumer Protection Act and seek the return of the domain name.

Additional cases can be found in the Domain Name section of the Index.

Anticybersquatting Consumer Protection Act - In Rem - Updated February 23, 2008

The court holds that the provisions of the Anticybersquatting Consumer Protection Act that permit a trademark holder to proceed with an in rem action against a domain name do not violate the Due Process clause of the United States Constitution.

In this in rem action commenced under the Anticybersquatting Consumer Protection Act, the Court holds that it can direct a top level domain registry – here Verisign – located in Virginia to cancel the domain registration of a domain found to be registered in violation of the ACPA.  In this case, the Court directed that such cancellation be effected unilaterally by the domain registry, which was directed to place the domain name on ‘hold’ status, thereby rendering it inactive, until such time as it is transferred to the trademark holder.

The Court holds that such relief is appropriate here, given the fact that the Korean domain name registrar with whom the domain name at issue was registered refused to transfer the domain as directed in a prior judgment issued by the Court.  After the Court issued this order, the domain registrant obtained an injunction from a Korean court, enjoining the registrar from transferring the domain.  The Korean registrar, in the face of this subsequent order, refused to comply with the US Court’s direction to transfer the domain to plaintiff.

The Court, on default, found that the domain registrant had violated the ACPA by registering the domain name at issue – globalsantafe.com – one day after Global Marine and SantaFe announced their agreement to merge into an entity to be called GlobalSantaFe.

Court denies motion to dismiss made by foreign domain name registrant, and allows trademark owner to proceed with in rem action, seeking relief under both the Anticybersquatting Consumer Protection Act, and the Lanham Act for trademark infringement.  The ACPA gives a trademark holder the right to proceed in rem to have a domain name transferred to it, or its registration cancelled, and allows a United States court to exercise jurisdiction over a res – the domain name – where the registry or registrar for such domain name is located in the United States.  This is true notwithstanding the fact that the United States court lacks personal jurisdiction over the domain name registrant.

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In this in rem action commenced under the Anticybersquatting Consumer Protection Act (“ACPA”), the Court modifies its previously issued judgment, and directs a Virginia based domain registry – Public Interest Registry – to unilaterally cancel the registration of the domain name AOL.org and transfer it to plaintiff America Online.  The Court had previously found that this domain had been registered in violation of the ACPA, and had issued a judgment directing it domain registrar to transfer it to America Online.  The domain registrar, a Chinese entity, refused to comply, instead permitting the domain registrant to transfer the domain to another domain registrar, this time located in Korea.  This registrar too refused to transfer the domain to America Online.  Accordingly, the Court held that under the ACPA it was empowered to unilaterally direct a domain registry to cancel a domain, and transfer it to the trademark holder.

Antitrust - Updated May 08, 2008

Court dismisses action seeking redress as a result of Google’s alleged downward manipulation of the “Page Rank” it assigned plaintiff’s website.  This act allegedly reduced the ranking of plaintiff Kinderstart.com’s search engine in various Google Search results which, in turn, adversely impacted both the traffic and advertising revenue plaintiff Kinderstart.com’s site generated.  “Page Rank” is a system offered by Google for rating the usefulness of websites.  Google’s search engine utilizes the relative “Page Ranks” it assigns to websites in determining the order in which to deliver responsive search results to a user’s query. 

In its Second Amended Complaint, plaintiff claimed such acts constituted violations of the Sherman Antitrust Act, the Lanham Act and California Business and Professions Code Section 17200, as well as plaintiff’s right to free speech under both the Federal and California constitutions.  Plaintiff Kinderstart.com also alleged that it was defamed by Google’s alleged statement that the low “Page Rank” it assigned plaintiff’s site was arrived at objectively, without human manipulation.

The Court found that Kinderstart.com had failed to state a claim, and accordingly dismissed its complaint with prejudice.

The Second Circuit held that Network Solutions Inc. ("NSI") was immune from the Sherman Antitrust claims advanced by the plaintiff because the challenged actions, NSI's refusal to take steps necessary to increase the number of generic Top Level Domains ("gTLDs"), were undertaken at the direction of agencies of the Federal Government. The Second Circuit also dismissed plaintiff's First Amendment claims, which arose out of plaintiff's inability to operate a web site at any but the existing gTLDs.

(Court holds that defendant Network Solutions Inc. ("NSI") is immune from liability for the Sherman Act antitrust claims advanced by plaintiff because the actions which gave rise to plaintiff's claim were performed pursuant to an agreement with a federal instrumentality.

Pursuant to a Cooperative Agreement entered into with the National Science Foundation ("NSF"), NSI is at present the exclusive domain name registry for four generic top level domains, including ".com". It also operates the "A Root Server," an essential tool for the matching of alphanumeric domain names such as www.phillipsnizer.com to the Internet Protocol numbers assigned to each web site, and for locating web sites in general.

When a user accesses an alphanumeric domain name on his browser, his computer sends out an inquiry to ascertain the IP Number associated with that alphanumeric domain name. If a corresponding IP number is found on the root servers, the user is taken to the appropriate web site. If the IP number is not found, no connection is made.

In an effort to operate a competing domain name registry, PGMedia accepted domain name registrations for approximately 530 new generic top level domains. PGMedia's complaint was that neither the "A root server" nor any of the Internet's other root servers recognize its new gTLDs. As a result, Internet users could not access these sites with the same ease that they accessed other domain names. PGMedia sought to have NSI modify the "A Root Server" so that it would recognize PGMedia's new gTLDs. On instruction from both NSF and the Department of Commerce, NSI refused this request. This refusal formed the basis of plaintiff's Sherman Act claim. In holding NSI immune from this claim because it was acting pursuant to a contract with a federal agency, the court relied on the courts' decisions in Thomas v. Network Solutions, Inc., 2 F.Supp. 2d 22 (D.D.C. 1998)("Because NSI is acting in compliance with a government cooperative agreement, therefore, it is entitled to immunity from suit under the Sherman Act.") and Beverly v. Network Solutions Inc., 1998 U.S. Dist. Lexis 8888 (N.D. Cal., June 12, 1998))

Antitrust Quick Hits

Court holds that distribution of open source software under the GNU General Public License, which allows use of the software and creation of derivative works therefrom for free, provided that all derivative works are similarly distributed under the terms of the same license, does not violate the antitrust laws.  As stated by the Court "the GPL and open-source software have nothing to fear from the antitrust laws." 

Arbitration - Updated September 22, 2007

Court holds that both PayPal's User Agreement, and the arbitration clause found therein, are unconscionable under California law.  The Court accordingly denies motions by PayPal to compel users who commenced putative class action suits arising out of PayPal's allegedly inappropriate handling of customer accounts and/or complaints to resolve their claims via arbitration.  The Court held that the User Agreement and the arbitration clause therein are unconscionable because they: (1) permit PayPal to issue binding amendments to the User Agreement at any time without notice to users; (2) obligate users to arbitrate their disputes pursuant to the commercial rules of the AAA, which is cost prohibitive in light of the average size of a PayPal transaction; (3) obligate users who reside nationwide to arbitrate in Santa Clara county, California, where PayPal is located; (4) permit PayPal to freeze and maintain possession of the funds in customer accounts until any dispute is resolved; and (5) require users to pursue their claims individually, and not via a class action.  Taken together, the Court held these provisions made the User Agreement unconscionable, and appear to represent an attempt by PayPal "to insulate itself contractually from any meaningful challenge to its alleged practices."

Reversing the court below, an Illinois intermediate appellate court, applying Texas law, holds purchasers of Dell computers bound by Terms and Conditions of Sale posted and available on Dell’s website at the time of purchase.  Importantly, the court held plaintiffs bound by these terms notwithstanding the fact that they were only available via hyperlink on Dell’s site, and further, that the consumer did not have to affirmatively click an “I accept” icon to indicate his assent to be bound thereby.  The Court held that by purchasing their computers online, plaintiffs entered into an online contract which included the Terms and Conditions, because they were advised on Dell’s website that their purchases were subject thereto.

As a result, the court held plaintiffs bound by the arbitration clause contained in the Terms, which mandated that they arbitrate disputes arising out of the purchase of their computers before the National Arbitration Forum.  In reaching this result, the court rejected plaintiffs’ claims that such a clause was procedurally and substantively unconscionable.

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Court held plaintiffs, purchasers of Dell computers and related service agreements, are not bound by the Terms and Conditions Agreement that accompanied such machines on shipment.  The Court held that a browse-wrap agreement was not created upon the initial ordering of the machines, because the link to the Terms and Conditions Agreement at issue was found “inconspicuously” at the bottom of the web page of Dell’s website at which such products were ordered.  According to the Court “this was not sufficient to put plaintiffs on notice of the terms and conditions of the sale of the computer.  As a result, a browse wrap agreement found on Dell’s webpage cannot bind the parties to the arbitration agreement” found in the Terms and Conditions.

The Court further held that a shrink-wrap agreement was not formed between Dell and the plaintiff purchasers, binding plaintiffs to the Terms and Conditions, notwithstanding the fact that those Terms accompanied the computers on shipment to plaintiffs, and were also sent with acknowledgements of plaintiffs’ orders.  The Court reached this conclusion because the Terms at issue did not give plaintiffs the option to reject them by returning the computer to Dell.  Said the Court:

This Court, employing the same logic, finds that the binding effect of the Terms and Conditions Agreement also hinges on whether a reasonable person would have known that return of the product would serve as rejection of those terms.  Accordingly, this Court finds that Plaintiffs did not “knowingly consent” to the terms and conditions of the agreement because they were not given sufficient notice of the method to reject those terms.  Therefore, Plaintiffs are not bound by the arbitration clause therein. 

Because the plaintiffs were not party to the Terms and Conditions, the court denied Dell’s motion to stay this action and compel plaintiffs to arbitrate their claim that Dell improperly charged tax on both the sale of ancillary services plaintiffs purchased with their Dell computers, as well as associated transportation costs.

Applying Texas law, the Court also held that the arbitration provision found in Dell’s Terms and Conditions was in any event an unenforceable illusory contract.  Thus, the Terms and Conditions provided that “these terms and conditions are subject to change without prior written notice at any time, in Dell’s sole discretion …”.  Because Dell retained such an unfettered right to modify or terminate the contract at any time, the Court held that “the language in the Terms and Conditions Agreement fails to bind Defendants in any genuine way.  Accordingly, this Court finds that the arbitration agreement is illusory and therefore unenforceable.” 

Of note, the court held that the fact that the arbitration provision, if binding, would bar plaintiffs from pursing their claims as a class action was not, by itself, a ground to invalidate such a clause under Texas law or render it unconscionable.

Ninth Circuit holds that customer is not bound by contractual amendments to service contract posted by long distance company on its website of which customer had no notice.

Talk America undertook to provide phone services to customers previously serviced by AOL.  Thereafter, Talk America attempted to change the terms of its contracts with these customers by including in the parties’ contracts provisions that increased applicable service charges and compelled customers to arbitrate any disputes they may have with the company.  These new amendments also included a class action waiver, and a New York choice of law provision.  These changes were posted on defendant Talk America’s website.  However, according to plaintiff, a former AOL customer who continued to use Talk America’s services after the changeover, he was given no notice of these contractual changes.  He alleged that he had no need to visit Talk America’s site as he had set-up his account so that applicable charges were automatically billed to, and paid by, his credit card.

In these circumstances, the Ninth Circuit held that plaintiff could not be compelled to arbitrate his disputes with Talk America arising out of these contractual revisions, and particularly the rate increases they mandated.  The Ninth Circuit accordingly granted plaintiff’s writ of mandamus, holding that the District Court clearly erred in granting Talk America’s motion to compel arbitration.

Court holds that an individual who access America Online’s (“AOL”) services via the account of another is not bound by its Terms of Service merely as a result of such use, absent notice that the Terms provide that by such use, he is agreeing to be bound thereby.  The Court stated that “the Second Circuit seems to require that the license terms appear on the screen, in view of the user, for the user to be on notice of them.”  In this case, the user claims that he was able to access AOL’s services via his step-father’s account without either being presented with AOL’s Terms of Service, or being asked to accept them.
 
The Court further held, however, that by accessing AOL’s service via the account of another, plaintiff became a sublicensee, with no greater rights to use AOL’s service than the actual account holder himself.  As that account holder himself had agreed to be bound to AOL’s Terms of Service when he signed up for its service, plaintiff too was bound by those Terms of Service.

As a result, the Court held that plaintiff was bound by the Forum selection clause contained in AOL’s Terms of Service, and accordingly transferred the case to Virginia, where the clause mandated all disputes be litigated.

Court holds that a License Agreement that appears on-screen in a pop-up window is a writing within the meaning of the Federal Arbitration Act (“FAA”).  As such, the Court directs plaintiffs, in accordance with the terms of their License Agreement with RealNetworks, to arbitrate their claims that RealNetworks was impermissibly invading their privacy and trespassing on their property by secretly monitoring the listening and internet usage habits of users of its products.

To be enforceable under the FAA, an arbitration agreement must be contained in a writing.  Popular dictionaries at the time of the statute’s enactment defined a writing as “1.  the act or art of forming letters or characters on paper, wood, stone, or other material, for the purpose of recording the ideas which characters and words express, or of communicating them to others by visible signs. 2.  Anything written or printed; anything expressed in characters or letters.”  Relying on this definition, the Court held that a license agreement that appeared on screen was such a writing, because it constituted letters or characters formed on screen to record or communicate ideas, and could be easily printed and/or saved.  Notably, the court reached this latter conclusion despite the absence of a print or save button on the pop-up window in which the License terms appeared.  It was sufficient, held the court, that the user’s computer allowed him to right click his mouse over the terms of the License agreement, and copy and paste them into a word processing program.  The Court also noted that, once accepted by the user, the License Terms were downloaded to his computer, and stored in a file titled either  “RealPlayer License Agreement” or “RealJukebox License Agreement” depending on the product used.  As such, held the Court, the agreement between the parties qualified as a written arbitration agreement, which could be enforced in accordance with the FAA.

Finally, the court rejected the intervenor’s challenge to the Arbitration agreement on the grounds of procedural and substantive unconscionability.  As a result, the Court affirmed its earlier decision, and directed plaintiffs to arbitrate their disputes with RealNetworks.

Attorney Client Privilege - Updated February 17, 2008

Court holds that the use of a company's e-mail system by an employee to send personal e-mails to the employee's personal counsel does not, without more, waive any attorney client privilege in such communications.  Whether a waiver had occurred must instead be resolved by examining the employee's subjective and objective expectations that the communications would be confidential.  In analyzing this question, Courts should look for guidance to cases that address an employee's privacy rights in e-mail sent over company e-mail systems, which hinge on the resolution of a similar question -- the reasonableness of an employee's expectation of privacy in such e-mails.  Issues of fact as to the existence and application of company computer usage policies, and whether employees were warned that the Company could inspect e-mails sent over the company's system, prevented the Court from resolving the issue at this time.

The Court further held that any privileges attendant to certain additional e-mails between company employees and their personal counsel had been waived by their voluntary transmission of such e-mails both to counsel representing the company, and to a consultant rendering services to the company.

Affirming the decision of the Magistrate Judge, the District Court holds that an employee did not waive any attorney client or work product privileges that may exist in various email communications with her personal counsel transmitted to and from the employee's personal AOL email account by using a company laptop to send them from her home.  Plaintiff's employer had obtained these emails by "restoring" deleted files stored on the hard drives of these company laptops.  The Court reached this result notwithstanding the fact that the Company had a computer usage policy, of which the employee was aware, that warned employees that they had no right of privacy in Company computer equipment, the contents of which could be inspected by the Company.

Court holds that employees waived both the attorney client and work products privileges by using a company computer system to transmit otherwise privileged communications to their counsel.  These communications were sent from private password protected email accounts, and not from the company's own email system.   Importantly, however, copies of these emails were retained by the company's system in "temporary internet files."  As the company could and did obtain these emails by reviewing its own system, the court held that plaintiffs had waived applicable privileges by failing to maintain the confidentiality of these communications in light of the company's electronic communications policy.  That policy advised the employees not to use the company system for personal purposes, and warned them that they had no right of privacy in any materials sent over the system.  The court reached this result notwithstanding its determination that the employees had no knowledge that copies of their email communications were so retained in the company's computer system.

Court holds that communications between plaintiff and his counsel, sent from and to  plaintiff over his employer’s email system, were not protected from disclosure by the attorney client privilege because these communications were not made in confidence.  In reaching this result, the Court relied, in large part, on the email policy that governed the use of this company email system.  This policy advised all employees that the company email system should not be used for personal purposes, and that employees had no personal privacy right in email sent over the company email system, which the employer could access and disclose at any time. 

Notably, the Court reached this result notwithstanding the fact that New York’s Civil Practice Law and Rules (“CPLR”) section 4548 provides that “no communication privileged under this article shall lose its privileged character for the sole reason that it is communicated by electronic means, or because persons necessary for the delivery or facilitation of such electronic communication may have access to the content of the communication.”  (Emphasis added).  The Court held that it is the presence of the employer’s computer use policy, and not the fact that the material was transmitted over the company’s email system, that rendered the communication non-privileged.

The Court further held that plaintiff waived any work product privilege attendant to his communications with counsel by transmitting them over a company email system, as they were subject to the email policy recited above, which permitted the company to examine and disclose such communications at any time.  By such actions, the court held that plaintiff was so careless with these materials that he waived any work product privilege attendant thereto and could not claim their disclosure was inadvertent.

As a result, the Court denied plaintiff’s motion for a protective order, which sought to compel his employer to return these communications with counsel to plaintiff.

The Court granted in part and denied in part an employer’s motion to compel production and inspection of the hard drive of a laptop the company furnished to an employee.  The Court held that the company could inspect the contents of the laptop, and any emails sent by the employee over the company email system, because the company had in place a policy that advised its employees that they had no expectations of privacy therein.  However, the Court held that the attorney client and marital communications privilege protected from disclosure “any web-based generated emails, or materials created by Sims[,] to communicate with his counsel or his wife.”  Said the Court:

[T]o the extent that the laptop contains web-based emails sent and received by plaintiff Sims and any other material prepared by plaintiff Sims to communicate with his counsel, the Court agrees with plaintiff that such information is protected under the attorney-client privilege and the marital communications privilege.  Notwithstanding defendant Lakeside’s policy in its employee manual, public policy dictates that such communications shall be protected to preserve the sanctity of communications made in confidence.

Attorneys Fees - Updated October 03, 2007

The Sixth Circuit affirms the District Court's award of summary judgment to plaintiffs, and holds that defendant Bob D'Amato infringed and diluted plaintiffs' famous "Audi," "Quatro," and Audi Four Ring Logo marks, and violated the Anticybersquating Consumer Protection Act.  Defendant was held to have infringed plaintiffs' marks by operating a website at the domain www.audisport.com, at which both goods such as hats and shirts bearing the "Audi Sport" logo, and advertising space, were offered for sale.  The Sixth Circuit accordingly affirmed the District Court's decision, which permanently enjoined defendant from making continued infringing use of Audi's trademarks, directed D'Amato to transfer the audisport.com domain to plaintiffs, and awarded plaintiffs Audi AG ("Audi") and Volkswagen of America Inc. ("Volkswagen") attorneys' fees as the prevailing party.  The Court reached this result notwithstanding both defendant's claim that his use of Audi's marks on his website in connection with the sale of goods was orally authorized by an Audi dealer, and his placement of a disclaimer on defendant's site after receipt of a cease and desist letter.  A written agreement between Audi and the dealer made clear that the dealer lacked authority to so authorize defendant's use of Audi's trademarks.

In this domain name dispute, Court issued permanent injunction enjoining use of "cardservice" in domain name because such use infringed trademark in "cardservice international."  The court further awarded plaintiff attorneys fees under the Lanham Act to compensate plaintiff for its efforts in stopping defendant from continuing this conduct.

In this domain name dispute, Court issued permanent injunction enjoining use of "cardservice" in domain name because such use infringed trademark in "cardservice international."  The court further awarded plaintiff attorneys fees under the Lanham Act to compensate plaintiff for its efforts in stopping defendant from continuing this conduct.

Court issues permanent injunction under the Anticybersquatting Consumer Protection Act ("ACPA"), enjoining defendant, described by the court as a "notorious cybersquatter," from continuing to operate web sites at domains containing common misspellings of plaintiff's registered service marks. The court also awarded plaintiff $530,653.34, which included both the maximum $100,000 statutory award for each domain name improperly used, as well as plaintiff's attorney's fees and costs.

Granting defendant’s motion pursuant to California’s anti-SLAPP statute, Cal. Code Civ. Pro. Section 425.16, the court affirms the dismissal of plaintiff GTX Global Corp.’s (“GTX”) complaint, and awards defendant Andrew Left (“Left”) attorneys fees expended both in defending this suit and plaintiff’s appeal from the decision of the court below.  SLAPP is an acronym that stands for “Strategic Lawsuits Against Public Participation.”  GTX had sued Left, who runs the stocklemon.com website, for publishing statements critical of GTX.  GTX charged that these statements were defamatory, and asserted claims of trade libel, interference with prospective economic advantage, and securities fraud against Left arising out of their publication.

The court found that Left’s statements were subject to the protections afforded by the anti-SLAPP statutes, because they addressed matter of public interest.  Finding that GTX had failed to submit any evidence that defendant’s challenged statements were false or defamatory, the court accordingly dismissed the suit.

The Ninth Circuit affirmed so much of the District Court's decision which held that defendant infringed plaintiff's trademark by his "pervasive" use of plaintiff's mark in both the metatags and text of his websites, on which he sold a competing product.  The Ninth Circuit also affirmed so much of the District Court's decision which awarded plaintiff substantial attorneys' fees for this infringement, agreeing with the lower court's determination that this was an "exceptional" case justifying such an award in light of defendant's willful use of the mark.

The Ninth Circuit reversed and remanded so much of the District Court's decision that held that defendant's conduct diluted plaintiff's mark, in light of the Supreme Court's recent decision in Moseley v. V. Secret Catalogue, Inc, which mandated proof of actual dilution to sustain a trademark dilution claim.

Court refuses to hold defendants in contempt for violating an order and judgment which "enjoined defendants, in the United States, from 'advertising or promoting' apparel bearing Jeri-Jo's registered trademark ENERGIE ...". While plaintiffs held a valid US trademark in the ENERGIE mark, defendants held trademarks in the ENERGIE mark in Italy, France and Germany, as well as the right to market products bearing the mark in a number of other foreign countries as well. As a result, the court refused to hold defendants in contempt as a result of their operation of a web site at the domain "www.energie.it" at which United States users could view but apparently not buy clothing bearing the "ENERGIE" mark, nor did the court require defendants to delist the "energie.it" url from search engines. The court did, however, require defendants to remove hyperlinks to the "energie.it" site containing the word "ENERGIE" from two other web sites defendants operated at www.missixty.com and www.sixty.net, at which sites defendants apparently sold non-infringing apparel. The court also awarded plaintiffs the attorneys' fees expended in bringing on the instant application.

Court holds that Section 1399-11 of New York's Public Health Law runs afoul of the Commerce Clause of the United States Constitution, and accordingly permanently enjoins its enforcement. Section 1399-11 prohibits the shipments of cigarettes to consumers in New York. The statute's prohibitions apply to both retailers and common carriers, and effectively preclude the use of the Internet and mail order catalogues as a means of selling cigarettes to New Yorkers. "The statute … thus restrict[s] retail sales of cigarettes in New York to face-to-face transactions at in state retail locations." The Court held that the statute was unconstitutional because it violated the "dormant" aspects of the Commerce Clause, which prohibit States from passing legislation which discriminates against, or unduly burdens, interstate commerce.

The court awarded $46,000 to compensate for the attorney's fees expended in stopping defendant's infringement of plaintiff's common law trademark, which defendant used in both its domain name and meta tags.

Reversing the court below, the Sixth Circuit awards plaintiff Thoroughbred Software International (“Thoroughbred Software”) $183,794.25 in “actual” damages it sustained as a result of defendant Dice Corporation’s (“Dice”) distribution of unauthorized copies of plaintiff’s software to its customers, which software was never used.  Such ‘actual’ damages were held to be the license fees plaintiff would have charged Dice for its use and/or distribution of the software in question.  These actual damages were awarded pursuant to 17 U.S.C. section 504(b) of the Copyright Act.  In reaching this result, the Sixth Circuit rejected defendant’s argument that Thoroughbred Software was not entitled to such relief because it could not prove that defendant’s infringing acts caused Thoroughbred Software any actual injury, as the software in question was never used.  The requisite ‘causal connection’ between defendant’s infringement and plaintiff’s loss of anticipated revenue was satisfied by the parties’ contract, which obligated defendant to pay a license fee for each copy it made and distributed of plaintiff’s software.

The Sixth Circuit also vacated the District Court’s denial of attorney’s fees to Thoroughbred Software as the prevailing party in a copyright infringement action, and remanded the matter for further consideration in light of the Court’s decision on appeal.

Attorneys FeesAttorneys FeesAttorneys Fees Quick Hits

Court dismisses trade libel and other claims brought by plaintiff ComputerXpress Inc. arising out of defendants’ publication of statements critical of plaintiff, its products, and its management on Internet message boards under California’s SLAPP (“strategic lawsuit against public participation”) statute, Cal. Code of Civil Procedure section 425.16.  This statute obligates a plaintiff that commences a suit arising out of “an act in furtherance of [defendant’s] right of petition or free speech … in connection with a public issue …” to demonstrate a prima facie case before being permitted to proceed with suit.  If the plaintiff fails to meet this burden, his claim will be subject to dismissal on a special motion to strike.  “Acts in furtherance of a person’s right of petition or free speech” under the Statute include “any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest.”

The Court held that statements published on Internet message boards such as that at issue – Raging Bull – are statements published in a public forum within the meaning of California’s SLAPP statute.  The Court further held that statements concerning a public company and its business, which may affect numerous investors, are statements in connection with an issue of public interest.  As such, held the Court, the defendants were entitled to the protections of the SLAPP statute.

Finding that ComputerXpress failed to present sufficient evidence to establish a prima facie claim, the Court dismissed so much of its complaint that rested on the Internet postings at issue.  The Court rested its determination, in part, on its conclusion that the challenged statements were non-actionable statements of opinion.  “[W]hile the postings certainly could be considered disparaging, their tone and content identified them as statements of opinion and not fact.  …. [T]hey were hyperbolic, informal, and lacked the characteristics of typical fact-based documents.  Moreover, they were replete with explicit statements of opinion such as “IMO (in my opinion) “what I think is fraud” “I firmly believe” “is that fraud?” and “my guess is.”

The Court did allow plaintiff to proceed with fraud and interference with contractual relations claims arising out of independent acts unconnected with the challenged Internet postings at issue.  These claims arose out of disparaging statements made by defendants to a particular customer of ComputerXpress, as well as out of purported misrepresentations defendants made concerning their own business at a time plaintiff was considering its acquisition.  As to these claims, defendants’ motion to strike was denied.

Finally, the Court held that defendants were entitled to recover under California’s SLAPP statute those attorneys fees they had expended in moving to dismiss the claims on which they prevailed, but not those fees expended in moving to dismiss the remainder of the complaint.  Such an award was rendered pursuant to section 425.16(c) which provides that “a prevailing defendant on a special motion to strike shall be entitled to recover his or her attorney’s fees and costs.”  Said the Court: “Defendants consequently are entitled to recover attorney fees and costs incurred in moving to strike the claims on which they prevailed, but not fees and costs incurred in moving to strike the remaining claims.”

Finding that defendant cybersquatters violated both the Anticybersquatting Consumer Protection Act (“ACPA”) and the Federal Trademark Dilution Act (“FTDA”), the court directed defendants to transfer to plaintiff domain names containing plaintiff’s famous “Pinehurst” mark, enjoined defendants from further using “Pinehurst” in a domain name, and awarded plaintiff both statutory damages in the amount of $100,000 and attorneys fees.   Plaintiff is the owner of the world famous Pinehurst Golf Resort.  The court found that defendants had registered the domain names in question – pinehurstresort.com and pinehurstresorts.com - with a bad faith intent to profit therefrom because, among other things, they had registered over 8000 domain names, many of which contained the trademarks of well-known corporations, golf courses or law firms, had offered, in settlement, to transfer the domain names at issue to plaintiff in exchange for a ‘contribution’ to their legal expenses and had registered additional ‘typo’ domains after the commencement of this suit.  Such a finding also rested on defendants’ stated purpose in registering these and other domains, which was to “mess” with “corporate America,” as well as on the fact that the domains at issue had been registered by an entity named NameIsForSale.com 

In reaching this result, the court rejected defendants’ claim that their conduct was a permissible ‘parody’ of plaintiff’s mark.  Such a defense failed, in part, because the content of defendants’ site – on which was located images of a miniature golf course and a trailer park – was not seen until after the user had already made a decision to enter the site based on the domain names at issue, which did not parody plaintiff or its golf course.  Said the court “A parody must convey two simultaneous and contradictory messages, that it is the original but also that it is not the original and is instead a parody. … Looking at Defendants’ domain names alone, there is no suggestion of a parody. … The domain names convey the first message, that it is the original, but the second message, that it is ‘not the original and that it is a parody, is discovered only by accessing the website and reading through the website’s content.”

The court further held that defendant had violated the FTDA by virtue of having registered the domain names in question, and thereby having prevented plaintiff from using them in commerce.  This reduced the selling power of plaintiff’s famous
”Pinehurst” mark, thereby diluting it.  Said the court:  “Because of the unique nature of domain names in electronic commerce and the resulting economic harm when marks are registered as domain names by cyberpirates, Defendants’ use of Plaintiff’s service marks in their Pinehurst domain names constitutes dilution.”

Auctions - Updated October 09, 2002

Reversing the decision of the court below, an intermediate California appellate court holds that plaintiff had adequately plead a breach of contract claim arising out of defendant's failure to deliver a domain name put up for auction on the Internet.  The court accordingly allows plaintiff to proceed with his claim, and seek redress as a result of defendant The.TV corporation's failure to register plaintiff as the owner of the domain name golf.tv.

Audio File - Updated January 21, 2000

(Plaintiffs, various trade organizations representing creators, manufacturers and distributors of sound recordings, sought to enjoin defendant from marketing a product called the Rio in alleged violation of the Audio Home Recording Act of 1992, 17 U.S.C. §§ 1001 et seq. ("AHRA"). The Rio is a portable handheld device capable of receiving, storing and re-playing digital audio files. Digital audio files can be downloaded from personal computers, stored on the Rio's hard drive, and played back. The Rio's hard drive memory card can be removed and reinstalled in other Rios, permitting downloaded audio files to be exchanged among Rio owners. The Rio does not posses any digital audio output capability, however, and therefore cannot be used to create additional copies of downloaded files.

The court determined that the Rio was a digital audio recording device subject to the strictures of the AHRA. However, the court determined that injunctive relief was unwarranted, and denied plaintiffs' motion. Any harm caused by the sale of the Rio (such as its use in copying music illegally posted to the Internet) could be redressed by the statute's royalty payment scheme.)

The Ninth Circuit denied plaintiffs' application for a preliminary injunction prohibiting defendant from marketing the Rio PMP 300 ("Rio"). The Rio is a portable handheld device capable of receiving, storing and replaying digital audio files. To operate the Rio, a user downloads digital audio files from a personal computer to the Rio's hard drive. These files can then be "played back" and heard through headphones connected to the Rio. The hard drive's memory card can be removed and reinstalled in other Rios, permitting downloaded audio files to be exchanged among Rio owners. The Rio does not possess any digital audio output capability, however, and therefore cannot be used to create additional copies of downloaded files.

Plaintiffs claimed that defendant's marketing of the Rio violated the Audio Home Recording Act of 1992, 17 U.S.C. Sections 1001 et seq. ("AHRA"), which requires all "digital audio recording devices" to be equipped with technology designed to prevent the device's use in mass copying of copyrighted sound recordings. The Ninth Circuit disagreed, holding that the Rio was not a "digital audio recording device" subject to the strictures of the AHRA. Instead, it was a device that merely facilitated an individual's non-commercial, personal use of copyrighted recordings. Said the Ninth Circuit: "The Rio merely makes copies in order to render portable, or "space shift", those files that already reside on a user's hard drive. ... Such copying is paradigmatic non-commercial personal use entirely consistent with the purposes of the Act."

The Ninth Circuit accordingly denied plaintiffs' application for injunctive relief.

Automobile - Updated January 21, 2001

Court rejects Ford Motor Company's ("Ford's") claims that enforcement proceedings undertaken by the Texas Department of Transportation ("Texas DOT") to prevent Ford, through a web site, from acting as an automobile dealer and selling used cars to Texas consumers, violates the Commerce Clause of the United States Constitution, or deprives Ford of its rights under either the First Amendment or the Due Process or Equal Protection clauses.

Billing - Updated January 21, 2001

Court holds that the FTC is likely to succeed on its claim that defendants' practice of billing telephone line subscribers for international telephone calls made from their telephone lines for the purpose of viewing pornographic web sites violates Section 5(a) of the Federal Trade Commission Act ("FTC Act"). Such violation occurs because the line subscribers are billed even if they neither visited the websites in question nor authorized anyone to do so. The court enjoined defendants from continuing to utilize such billing practices to collect for visits to pornographic web sites unless either (i) the line subscriber receiving the bill has entered into a verifiable agreement authorizing such billing, or (ii) the bill expressly states that the line subscriber is not obligated to pay the bill unless he has personally agreed or authorized another to agree to pay for the services in question and provides the line subscriber with a convenient method to cancel the bill if such is not the case.

Blogs - Updated April 21, 2008

Court denies bloggers' motion for a protective order, which sought to quash a subpoena served by plaintiff Apple Computer, Inc. ("Apple") on Nfox, the e-mail service provider for the blog PowerPage.  The subpoena sought materials, including e-mails, that would permit Apple to identify the individual(s) who transmitted trade secret information about an Apple product to PowerPage, which information PowerPage subsequently published on its blog/website.  The Court held that the bloggers were not entitled to such relief under California's 'Shield Law,' as that statute only protects journalists from being found in contempt for failing to produce information, and does not support a motion to quash.  Similarly, such relief could not be grounded on the privilege afforded journalists under the First Amendment, as this privilege cannot be used to prevent the disclosure of information related to criminal activity such as that at issue here, the disclosure of trade secrets.  Because Apple had made a prima facie case that a crime had occurred, it was entitled to the requested discovery.

Granting defendant’s motion for summary judgment, the District Court dismisses defamation, trademark infringement, and invasion of privacy claims brought by plaintiffs against a blogger.  The claims arose out of defendant’s publication of articles on his blog, featuring plaintiff’s trademark, that were critical of plaintiffs’ eBay auction listing business. 

The Court held plaintiff’s trademark dilution claims failed because defendant used the mark in connection with “news reporting and news commentary,” a non-actionable use under the Federal dilution statute.  The Court held plaintiffs’ defamation claims failed because the statements at issue – which purportedly accused plaintiff Schmidt of being a “yes man” ‘who overpromised and underdelivered’ were non-actionable statements of opinion.  Finally, the Court held plaintiffs’ invasion of privacy claims – which were premised on a link on defendant’s blog to another site which contained a picture of plaintiffs – failed.  The Curt rested this holding on its determination both that South Carolina does not recognize a claim for false light invasion of privacy, and that, in any event, the link and article in question did not cast plaintiffs in a false light.  The Court also grounded its rejection of this claim on its holding that the link and corresponding use of the photo did not constitute a viable ‘wrongful appropriation of personalty’ invasion of privacy claim, given that plaintiffs had consented to the use of their photo on the internet site on which it was contained.

Granting defendant’s motion pursuant to California’s anti-SLAPP statute, Cal. Code Civ. Pro. Section 425.16, the court affirms the dismissal of plaintiff GTX Global Corp.’s (“GTX”) complaint, and awards defendant Andrew Left (“Left”) attorneys fees expended both in defending this suit and plaintiff’s appeal from the decision of the court below.  SLAPP is an acronym that stands for “Strategic Lawsuits Against Public Participation.”  GTX had sued Left, who runs the stocklemon.com website, for publishing statements critical of GTX.  GTX charged that these statements were defamatory, and asserted claims of trade libel, interference with prospective economic advantage, and securities fraud against Left arising out of their publication.

The court found that Left’s statements were subject to the protections afforded by the anti-SLAPP statutes, because they addressed matter of public interest.  Finding that GTX had failed to submit any evidence that defendant’s challenged statements were false or defamatory, the court accordingly dismissed the suit.

Following the decision of the Delaware Supreme Court in John Doe No. 1 v. Cahill, the Texas Court of Appeals holds that to obtain the identity of an anonymous individual who allegedly posted defamatory statements online, a plaintiff must submit evidence of the validity of his defamation claim sufficient to survive a motion for summary judgment.  This, held the Court, requires the plaintiff to submit sufficient evidence of each element of his claim that is within his control – he is not required, however, before discovery of the speaker’s identity, to demonstrate that the speaker acted with ‘actual malice’, if such is an element of the defamation claim at issue.

Because the trial court directed the disclosure of the anonymous speaker’s identity without first requiring such a showing, the Court of Appeals conditionally granted the defendant’s application for a writ of mandamus, and remanded the case for further consideration in light of the Court’s opinion.

The Court further held that the Cable Communications Policy Act, 47 U.S.C.A. Section 551(2)(B), does not provide an independent basis for obtaining such disclosure.  While the statute does apply to requests in civil actions brought by private parties seeking to pursue defamation claims, the Court held it only permitted such disclosure pursuant to a properly issued ‘court order.’  This, in Texas, required submission of evidence sufficient to establish a prima facie case, as stated above.

Magistrate Judge grants in part and denies in part a motion to quash a subpoena issued pursuant to the Digital Millennium Copyright Act (“DMCA”).  The Magistrate Judge denied so much of the motion to quash which sought to prevent disclosure of the identity of the anonymous individual who posted a copy of a letter sent by a lawyer, for which the lawyer had obtained copyright registration, demanding the removal of other anonymous posts from a blog. 

The Court recommended granting so much of the motion to quash which sought to prevent disclosure of the identity of the anonymous individual who made the allegedly offensive posts that counsel sought to have removed in the demand letter in question.

Reversing the court below, the California Court of Appeals holds that the Stored Communications Act prohibits an ISP that hosted a blog's email account from disclosing e-mails sent to the blog in response to a subpoena issued in a civil litigation.  The subpoena sought production of e-mails that would permit Apple Computer ("Apple") to identify the individual(s) who transmitted trade secret information about an as yet unreleased Apple product to the blog/website Power Page, which information was the source of articles Power Page subsequently published on its blog/website.

The Court further held that petitioners, who acted as publishers of, and/or editors or reporters for, the news blogs that published the stories at issue about this Apple product, were entitled to a protective order against their disclosure of the confidential sources of their stories.  Notwithstanding Apple's claim that the information petitioners received from these services constituted trade secrets disclosed in violation of confidentiality agreements each of its employees had signed, the Court held such disclosure barred by both California's Reporter's Shield Law and the First Amendment.  The Court held that the Shield Law, which prohibits a court from holding in contempt a publisher, editor or reporter of "a newspaper, magazines or other periodical publication" for failing to disclose the source of a published story, protected petitioners, publishers and/or reporters of news blogs, from having to disclose the sources of the stories at issue.  The First Amendment similarly provided protection, given Apple's failure to fully exhaust other avenues of disclosure before pursuing discovery from petitioners.

Browse-Wrap Agreements - Updated April 02, 2008

Court holds that minors entered into valid ‘click wrap’ agreement with defendant IParadigms LLC (“IParadigms”) by clicking an “I agree” icon which appeared directly below an online Usage Agreement, and indicated their assent to be bound thereby.  Plaintiffs were high school students that were directed by the schools they attended to submit class work to defendant IParadigm’s “Turnitin” website to check for plagiarism.  As part of this submission process, plaintiffs were obligated to assent to the site’s Usage Agreement.  Because the Usage Agreement contained a limitation of liability clause precluding liability to plaintiffs as a result of their use of the Turnitin site, the Court rejected plaintiffs’ copyright infringement claims, which arose out of defendant’s storage of plaintiffs’ class work in a database used to check student homework for plagiarism.

In reaching this result, the Court rejected plaintiffs’ claims that, as minors, they were not bound by the terms of the site’s Usage Agreement.  Because they had accepted the benefits of the agreement – the ability to submit their class work for grade to their respective schools was dependent upon their use of the site – they could not escape the contractual conditions upon which such benefits were rendered.

The Court further held that plaintiffs’ copyright infringement claims failed because defendant had made a permissible fair use of their works.  In reaching this result, the Court relied on the fact that Turnitin’s use of plaintiffs’ school work was highly transformative of the original works, in that it added plaintiffs’ school work to a non-publicly available database used only to check for plagiarism by students.  The Court also rested its holding of fair use on the fact that defendant’s use did not impact the market for plaintiffs’ works, as the copies Turnitin made thereof were not available to the public, but rather maintained in a non-public database.

The Court rejected the counterclaims advanced by defendant iParadigms, including a claim for indemnification as a result of the commencement of this action.  This claim was based on a separate “Usage Policy” found on the Turnitin site.  The Court held that plaintiffs were not bound by this policy, which was not linked or otherwise referenced in the Usage Agreement to which plaintiffs were in fact bound.  There was no evidence that plaintiffs were aware of this separate “usage policy,” which was contained in a link on each page of the Turnitin site.  As a result, and because the parties’ contract stated that it constituted the full agreement between the parties, the plaintiffs’ use of the site was held not to create a valid browse wrap agreement, and the claim for indemnification, predicated on the Usage Policy, was dismissed.

The remaining counterclaims advanced by iParadigms arose out of the use of the site by one of the plaintiffs to submit class work to an institution he did not attend.  These claims for trespass to chattels, and violations of both the Computer Fraud and Abuse Act and Virginia Computer Crimes Act, failed due to the absence of the requisite damage.

Plaintiff held bound by Amendment to telephone services contract which obligated plaintiff to arbitrate disputes with the telephone service company, the terms of which Amendment were posted online.  Plaintiff was held bound as a result of her receipt of an invoice that gave her both notice of the Amendment and a location on the Internet at which its terms could be viewed, as well as the opportunity to cancel her contract if she did not wish to be bound thereby.  Plaintiff was held bound despite the fact that she neither read the terms of the Amendment, nor in any way affirmatively indicated her assent to be bound thereby.  Because the Amendment obligated plaintiff to arbitrate her dispute with defendant Sprint, the Florida District Court of Appeals affirmed the lower court's grant of defendant's motion to compel arbitration.

Court holds Terms of Use on defendant's websites constitute binding agreements between website operator and website user, where notices on the sites provide that the Terms  will create such an agreement if a user continues to utilize the site, and plaintiff used the sites with both actual knowledge of the Terms, and with imputed knowledge arising out of repeated use of the sites via a "robot."  Court accordingly dismisses plaintiff's declaratory judgment action for improper venue, as the Terms of Use mandated suit be brought in Illinois, and plaintiff commenced suit in California.

Reversing the court below, an Illinois intermediate appellate court, applying Texas law, holds purchasers of Dell computers bound by Terms and Conditions of Sale posted and available on Dell’s website at the time of purchase.  Importantly, the court held plaintiffs bound by these terms notwithstanding the fact that they were only available via hyperlink on Dell’s site, and further, that the consumer did not have to affirmatively click an “I accept” icon to indicate his assent to be bound thereby.  The Court held that by purchasing their computers online, plaintiffs entered into an online contract which included the Terms and Conditions, because they were advised on Dell’s website that their purchases were subject thereto.

As a result, the court held plaintiffs bound by the arbitration clause contained in the Terms, which mandated that they arbitrate disputes arising out of the purchase of their computers before the National Arbitration Forum.  In reaching this result, the court rejected plaintiffs’ claims that such a clause was procedurally and substantively unconscionable.

Court allows pro se litigant to proceed with breach of contract claims against the Internet Archive, operator of the Way Back Machine, arising out of the Internet Archive's reproduction and display of historical versions of defendant's website without her consent.  Defendant alleged that such copying of her site constituted an acceptance of the site's terms of use, which require the payment of exorbitant fees for such copying, and even greater amounts as liquidated damages should the copier fail to pay the required copying fees.  The court denied plaintiff's motion to dismiss this claim, holding the counterclaims stated a viable cause of action for breach of contract.  In reaching this result, the court noted it could not determine if the Internet Archive knew at the time it copied defendant's site that that act constituted an acceptance of the site's terms of use.  The court could not resolve that question on the instant motion because the record before it was unclear both as to the manner in which such terms of use were displayed on defendant's site, as well as to whether Internet Archive received any notice thereof, given  its claim to only have accessed the site via a web crawler, and not via an individual.

The Court did dismiss so much of defendant's counterclaims that advanced claims for conversion, civil theft and RICO arising out of the same copying activities.  The Court dismissed the conversion claims both because Internet Archive did not exercise sufficient dominion over defendant's property merely by copying her site and displaying it online, and because Internet Archive removed defendant's site, and thereby ceased exercising any dominion over it, promptly upon her request.

The Internet Archive did not move to dismiss copyright infringement claims defendant asserted arising out of its copying activities, which will also go forward.

In this mandamus proceeding, California's Court of Appeals, by a two to one vote, holds a party suing as a private Attorney General subject to the same forum selection clause as the consumers it is seeking to protect.  As such consumers would be bound as a result of their use of Net2Phone's website to the provisions of its Terms of Use, so too is their private advocate.  The Court of Appeals accordingly directed that the action Consumer Cause commenced on the consumers' behalf in California be stayed because the Terms of Use contained a forum selection clause which mandated suit in New Jersey.  The Court upheld the forum selection clause notwithstanding the fact that New Jersey, unlike California, does not permit private advocates such as plaintiff to pursue claims on behalf of injured consumers.

Affirming the court below, the Second Circuit holds that Register.com is likely to prevail on breach of contract claims arising out of Verio Inc.'s use of data obtained from Register.com's Whois database in violation of the database's Terms of Use, which prohibit use of that information for unsolicited advertising.  In reaching this conclusion, the Second Circuit held that Register.com's Terms of Use are likely to create a contract between Register.com and Verio, because Verio repeatedly used Register.com's Whois database with actual knowledge that the Terms provided that such use would constitute assent to be bound by the data use restrictions contained in the Terms.  Notably, the Second Circuit reached this result notwithstanding the fact that Verio did not click an "I Agree" icon indicating its agreement to be so bound.  More importantly, the Court found Register.com likely to prevail despite the fact that Verio did not see these Terms until after it had already completed the act - using the Whois database - which purportedly indicated its assent to be bound thereby. 

The Second Circuit also found both that Verio's use of a search robot to gather Whois data likely constituted a trespass to chattels, and that certain of Verio's promotional activities violated the Lanham Act.

As a result, the Second Circuit affirmed the District Court's issuance of a preliminary injunction, enjoining Verio from either utilizing a search robot to obtain information from Register.com's Whois database, or utilizing information obtained from that database to assist in the transmission of mass unsolicited advertising by telephone, direct mail or e-mail.

Court issues a preliminary injunction enjoining Verio, Inc. from either utilizing a search robot to obtain information from Register.com's Whois database, or utilizing information derived from that database for mass unsolicited advertising by telephone, direct mail or electronic mail. Court holds that Verio's actions will likely constitute a breach of plaintiff's Terms of Use, as well as a violation of both the Computer Fraud and Abuse Act and the Lanham Act and a trespass to chattels. In reaching this conclusion, the court holds that Register.com's Terms of Use are likely to create a contract between Register.com and the users of its Whois database, notwithstanding the fact that these users are not required to click an "I Agree" button indicating their agreement to be so bound.

Finding defendant Boardfirst violated the terms of a browsewrap agreement entered into by its use of plaintiff Southwest Airlines’ website, the Court issued a permanent injunction, enjoining Boardfirst from accessing Southwest Airlines’ website on behalf of its customers to obtain boarding passes.  Southwest Airlines’ passengers engaged Boardfirst to obtain such boarding passes in the hopes of getting better seat assignments on Southwest Airlines flights.  Southwest Airlines has no assigned seating.  Those passengers who are the first to seek boarding passes within the designated time period are awarded “A” boarding passes, which, in turn, allow them to board the plane, and select their seat, first.  In reaching this result, the Court held that Boardfirst had the requisite knowledge that its use of plaintiff’s site would form a valid browsewrap contract by virtue, inter alia, of its receipt of cease and desist letters from Southwest Airlines apprising it of that fact.

The Court denied so much of Southwest Airline’s motion for summary judgment which sought to hold Boardfirst liable for violating of the Computer Fraud and Abuse Act, 18 U.S.C. Section 1030.  The Court held that issues of fact as to whether Southwest Airlines sustained the injury needed to sustain such a claim precluded an award of summary judgment.  The Court further held that it could not, at this time, determine whether Boardfirst accessed Southwest Airline’s site “without authorization” or in excess of authorization, an additional prerequisite to a CFAA claim.

Finally, the Court found that Boardfirst’s conduct violated Section 33.02 of the Texas Penal code, which makes it an offense to “knowingly access a computer network, or computer system without the effective consent of the owner.”  The Court reserved for trial the issue of whether such violation caused Southwest Airlines recoverable damages.

The court, in granting defendant's motion to dismiss plaintiffs' breach of contract claim, held that a contract is not created simply by use of a web site on which is posted at the bottom of the site's home page terms and conditions that provide that such use constitutes the user's assent to be bound by the site's Terms and Conditions. The court left open the possibility, however, that use of a web site, coupled with knowledge of Terms and Conditions which declare such use evidence of assent to be bound thereby, could create a binding contract, and granted plaintiffs leave to replead their claim.

The court further held that "hyperlinking [without framing] does not itself involve a violation of the Copyright Act ... since no copying is involved." In addition, the court held that "deep linking by itself (i.e. without confusion of source) does not necessarily involve unfair competition."

The court refused at the outset of a litigation, however, to dismiss plaintiffs' claim that defendant, by deep linking, was tortuously interfering with plaintiffs' prospective business advantage, by depriving them of advertising revenue that might otherwise be achieved if the user were forced first to go to the site's home page (with the necessary increase in traffic that would generate) before he could proceed to an event page.

Lastly, the court held that defendant did not infringe plaintiffs' copyright in their site by extracting data concerning concert and other entertainment events from plaintiffs' web site (such as location, date and time of the event) and presenting it on defendant's web site in its own format. The court further held that plaintiffs could not attempt to recast such a claim into either state law misappropriation, trespass, unfair business practice or unjust enrichment claims, as those claims, to the extent they prohibited conduct permitted under the copyright act, were preempted thereby.

Court holds that a binding agreement can be formed by the use of a web site, without more, if the user has actual knowledge that the site's Terms and Conditions so provide.  As a result, the Court denied defendant Tickets.com's summary judgment motion, which sought dismissal of breach of contract claims arising out of Tickets.com's use of a search robot to obtain information about concerts from plaintiff Ticketmaster's web site.  The Court held that issues of fact as to defendant's knowledge of the site's Terms and Conditions at the time it used plaintiff's site precluded a determination as to the binding nature of such Terms.

The Court did grant so much of Tickets.com's summary judgment motion which sought dismissal of trespass to chattels claims Ticketmaster asserted as a result of such activity.   These claims failed because of the absence of evidence that "the use or utility" of Ticketmaster's computers were being adversely affected by Tickets.com's use of a search robot to gather information from plaintiff's site.

Finally, the Court dismissed several copyright infringement claims brought by Ticketmaster.  These included infringement claims arising out of the temporary copying into the RAM of defendant's computers of data from plaintiff's site, including materials in which plaintiff held a copyright.  These materials were copied as an intermediate step to obtaining, and displaying on Tickets.com's own site, factual information contained therein.  The Court held such copying was a protectable fair use given the only materials retained at the end of the process were the facts -- as to concert locations, dates and times -- contained therein, which facts were not protected by copyright.  Infringement claims arising out of deep linking to interior pages of plaintiff's website were dismissed because, by deep linking into plaintiff's site, Tickets.com was not showing or displaying plaintiff's copyrighted materials (which instead were being displayed by plaintiff itself).  Finally, infringement claims arising out of copying the URLs from such interior pages were dismissed because such URLs did not have sufficient originality to be copyrightable.

This case arises out of the use of automated devices by ticket brokers and others to purchase tickets from plaintiff Ticketmaster, and thereby prevent the public from purchasing those tickets themselves. 

In this case, the Court holds that plaintiff Ticketmaster LLC (“Ticketmaster”) is likely to prevail on claims of direct and contributory copyright infringement as a result of defendant RMG Technologies Inc. (“RMG”) distribution of a software application that permits its clients to circumvent Ticketmaster.com’s CAPTCHA access controls, and use Ticketmaster’s  copyrighted website in manners prohibited by the site’s Terms of Use.  Among other things, Ticketmaster prohibits the use of automated devices such as the software application at issue to access Ticketmaster’s site and search for and purchase tickets to events.  Because defendant was likely to be held to have exceeded its license to use Ticketmaster’s copyrighted site, the Court held it was likely to be found guilty of direct copyright infringement, having made unauthorized copies of plaintiff’s site in its computer’s RAM when it viewed the site to create and test its product.

By distributing its software application to third parties, and encouraging them to use it in violation of Ticketmaster’s Terms of Use, the Court held plaintiff was also likely to prevail on claims of contributory copyright infringement.

The Court further held that Ticketmaster was likely to prevail on claims that defendant RMG breached its contract with Ticketmaster by using the site in a manner prohibited by the site’s Terms of Use, which, among other things, prohibited use of the site for commercial purposes, and use of automated devices on the site.  These Terms of Use were likely to be binding on defendant RMG, because it used the site with notice of the Terms, which advised that such use would constitute assent to be bound thereby.

Finally, the Court held that plaintiff Ticketmaster was likely to prevail on claims that defendant, by distributing its software application, violated the Digital Millennium Copyright Act, because it trafficked in a device designed both to circumvent technological measures that control access to, and protect, a copyrighted work – namely plaintiff’s website.

The Court held that defendant’s conduct was likely to cause plaintiff irreparable injury.  Because it constituted infringement of plaintiff’s copyright, such irreparable harm was presumed.  In addition, plaintiff submitted evidence that the use of automated devices on its site by ticket brokers and others was injuring its reputation and good will with the public, who attributed their inability to obtain tickets to events to misdeeds in which plaintiff and its employees were involved.

As a result, the Court issued a preliminary injunction, enjoined defendant from further trafficking in or using its software application.

Browse-Wrap AgreementsBrowse-Wrap AgreementsBrowse-Wrap AgreementsBrowse-Wrap AgreementsBrowse-Wrap Agreements Quick Hits

Court held plaintiffs, purchasers of Dell computers and related service agreements, are not bound by the Terms and Conditions Agreement that accompanied such machines on shipment.  The Court held that a browse-wrap agreement was not created upon the initial ordering of the machines, because the link to the Terms and Conditions Agreement at issue was found “inconspicuously” at the bottom of the web page of Dell’s website at which such products were ordered.  According to the Court “this was not sufficient to put plaintiffs on notice of the terms and conditions of the sale of the computer.  As a result, a browse wrap agreement found on Dell’s webpage cannot bind the parties to the arbitration agreement” found in the Terms and Conditions.

The Court further held that a shrink-wrap agreement was not formed between Dell and the plaintiff purchasers, binding plaintiffs to the Terms and Conditions, notwithstanding the fact that those Terms accompanied the computers on shipment to plaintiffs, and were also sent with acknowledgements of plaintiffs’ orders.  The Court reached this conclusion because the Terms at issue did not give plaintiffs the option to reject them by returning the computer to Dell.  Said the Court:

This Court, employing the same logic, finds that the binding effect of the Terms and Conditions Agreement also hinges on whether a reasonable person would have known that return of the product would serve as rejection of those terms.  Accordingly, this Court finds that Plaintiffs did not “knowingly consent” to the terms and conditions of the agreement because they were not given sufficient notice of the method to reject those terms.  Therefore, Plaintiffs are not bound by the arbitration clause therein. 

Because the plaintiffs were not party to the Terms and Conditions, the court denied Dell’s motion to stay this action and compel plaintiffs to arbitrate their claim that Dell improperly charged tax on both the sale of ancillary services plaintiffs purchased with their Dell computers, as well as associated transportation costs.

Applying Texas law, the Court also held that the arbitration provision found in Dell’s Terms and Conditions was in any event an unenforceable illusory contract.  Thus, the Terms and Conditions provided that “these terms and conditions are subject to change without prior written notice at any time, in Dell’s sole discretion …”.  Because Dell retained such an unfettered right to modify or terminate the contract at any time, the Court held that “the language in the Terms and Conditions Agreement fails to bind Defendants in any genuine way.  Accordingly, this Court finds that the arbitration agreement is illusory and therefore unenforceable.” 

Of note, the court held that the fact that the arbitration provision, if binding, would bar plaintiffs from pursing their claims as a class action was not, by itself, a ground to invalidate such a clause under Texas law or render it unconscionable.

Ninth Circuit holds that customer is not bound by contractual amendments to service contract posted by long distance company on its website of which customer had no notice.

Talk America undertook to provide phone services to customers previously serviced by AOL.  Thereafter, Talk America attempted to change the terms of its contracts with these customers by including in the parties’ contracts provisions that increased applicable service charges and compelled customers to arbitrate any disputes they may have with the company.  These new amendments also included a class action waiver, and a New York choice of law provision.  These changes were posted on defendant Talk America’s website.  However, according to plaintiff, a former AOL customer who continued to use Talk America’s services after the changeover, he was given no notice of these contractual changes.  He alleged that he had no need to visit Talk America’s site as he had set-up his account so that applicable charges were automatically billed to, and paid by, his credit card.

In these circumstances, the Ninth Circuit held that plaintiff could not be compelled to arbitrate his disputes with Talk America arising out of these contractual revisions, and particularly the rate increases they mandated.  The Ninth Circuit accordingly granted plaintiff’s writ of mandamus, holding that the District Court clearly erred in granting Talk America’s motion to compel arbitration.

Court holds that an individual who access America Online’s (“AOL”) services via the account of another is not bound by its Terms of Service merely as a result of such use, absent notice that the Terms provide that by such use, he is agreeing to be bound thereby.  The Court stated that “the Second Circuit seems to require that the license terms appear on the screen, in view of the user, for the user to be on notice of them.”  In this case, the user claims that he was able to access AOL’s services via his step-father’s account without either being presented with AOL’s Terms of Service, or being asked to accept them.
 
The Court further held, however, that by accessing AOL’s service via the account of another, plaintiff became a sublicensee, with no greater rights to use AOL’s service than the actual account holder himself.  As that account holder himself had agreed to be bound to AOL’s Terms of Service when he signed up for its service, plaintiff too was bound by those Terms of Service.

As a result, the Court held that plaintiff was bound by the Forum selection clause contained in AOL’s Terms of Service, and accordingly transferred the case to Virginia, where the clause mandated all disputes be litigated.

Court denies motion to dismiss, and allows Pollstar to proceed with common law misappropriation and unfair competition claims arising out of Gigmania's alleged copying and reposting on its own website of factual concert listings found on Pollstar's site.  The complaint alleged that this information was "hot news" which is protected against misappropriation if plaintiff can show that it "(i) generates or collects information at some cost or expense (ii) the value of the information is highly time-sensitive; (iii) the defendant's use of information constitutes free-riding on the plaintiff's costly efforts to generate or collect it' (iv) the defendant's use of the information is in direct competition with a product or service offered by the plaintiff; (v) the ability of the other party to free-ride on the efforts of the plaintiff would so reduce the incentive to produce the product or service that its existence or quality would be substantially threatened."

The Court also allowed Pollstar to proceed with claims the Gigmania's conduct breached a browse-wrap license agreement between the parties, which prohibits the acts complained of.  The Contract provides that use of the information found on the site constitutes acceptance of the contract's terms.  Notably, the court allowed this claim to proceed despite the fact that notice of such terms were given "in small gray text on a gray background" which, in turn, contained a link to the actual contract terms, without the usual "underlining" signifying such a link.

CAN-SPAM Act - Updated November 22, 2008

This section of the Internet Law Library contains a host of court decisions addressing the Federal CAN-SPAM Act, 15 U.S.C. Section 7701, et seq., the ability of Internet Service Providers and others to use it to prevent the transmission of unwanted spam and unsolicited commercial email, the type of communications it covers and the obligations CAN-SPAM imposes on those who transmit unsolicited commercial email.

Court denied motion to dismiss complaint charging the defendant Union and two of its organizers with violating the CAN-SPAM Act by sending email solicitations promoting union membership to Verizon employees which purported to come from Verizon managers who did not authorize their transmission.  The Virginia District Court held that it could exercise personal jurisdiction over the non-resident Union organizers because both the corporate servers used to transmit these emails, as well as some of the employees who received them, were located in Virginia. 

The Court further held that plaintiff Verizon had stated valid CAN-SPAM claims against the defendants.  In reaching this result, the Court rejected defendants’ contentions that their solicitations constituted non-commercial speech promoting union membership exempt from the strictures of CAN-SPAM.  Because the Union rendered a service – representation of employees – for a fee – union dues – the emails constituted commercial speech.  As such, held the Court, the failure of these emails to accurately describe their source, or to appropriately advise that they were, in fact, advertisements, as well as their failure to provide mandated opt-out instructions, rendered their senders potentially liable for violations of CAN-SPAM.

The Court holds that the inclusion of allegedly false information in the body of an e-mail does not constitute a violation of either Sections 7704(a)(i) or (b)(A)(ii) of the CAN-SPAM Act, 15 U.S.C. §7701 et seq. and accordingly dismisses a complaint asserting claims alleging their violation.

Court holds defendant's unauthorized transmission of commercial e-mails automatically converted by recipient's cell phone carrier into text messages runs afoul of the Federal Telephone Consumer Protection Act, 47 U.S.C. §227 ("TCPA").  Such conduct constitutes a prohibited use of an "automatic dialing system" to make a "call" to a "telephone number assigned to a cellular telephone service." 47 U.S.C. §227 (b)(1)(A)(iii).  The Court further held that the TCPA was neither preempted by the CAN-SPAM Act's regulation of such conduct, nor an unconstitutional regulation of speech that violated the First Amendment.

Finding plaintiff MySpace likely to prevail on its claims that defendant Sanford Wallace violated the CAN-SPAM Act, 15 U.S.C. Section 7704, as a result of his transmission of unsolicited commercial emails to MySpace users, the Court issued a preliminary injunction, enjoining defendant, inter alia, from further use of MySpace or its internet messaging service, from establishing or maintaining MySpace accounts, or from using MySpace for commercial purposes.

Defendant sent email messages to MySpace users that redirected them to a website containing a MySpace logo at which defendant solicited their user name and passwords.  Defendant used this information to hijack and log onto those users’ profiles, from which he then sent messages to the users’ MySpace ‘friends’ inviting them to visit defendant’s websites.  These email messages did not comply with CAN-SPAM.  Among other things, they did not contain a valid physical address for defendant, did not provide opt out instructions, or provide a valid return email address at which defendant could be contacted to request that no further emails be sent.  Moreover, they did not, in their header information, identify defendant as their source.  As such, held the Court, plaintiff was likely to establish a number of violations of CAN-SPAM, and was accordingly entitled to injunctive relief. 

In reaching this result, the Court found that CAN-SPAM applied to emails sent from one MySpace user to another, over the MySpace network.  The Court also noted that CAN-SPAM applied to instant messages.

Court holds that defendant’s creation and use of 95 MySpace accounts to transmit unsolicited commercial email promoting its communications products runs afoul of both the CAN-SPAM Act, and California Business and Professions Code Section 17529.5, and violates MySpace’s Terms of Service.  Defendant created these accounts without identifying itself as the account holder.  The emails violated CAN-SPAM because they failed to contain either a valid physical address for defendant the Globe.com, or instructions on how to avoid receiving further email solicitations.  In addition, they were impermissibly sent to MySpace user email addresses generated by use of a script software program, another violation of CAN-SPAM.  They were also sent from email accounts obtained through false or fraudulent pretenses, as a result of defendant’s failure to accurately identify itself as the account holder.   

The Court found that these emails also violated California B & P Code Section 17529.5, both because they contained false header information that failed to identify the Globe.com as their source, and because they contained misleading subject lines that failed to accurately describe the emails’ contents.

Finally, the Court found defendant’s conduct violated MySpace’s Terms of Service, which prohibited the use of MySpace accounts both for commercial purposes and to transmit spam, and prohibited the use of scripts to generate email addresses for the transmission of commercial email to MySpace account holders.  As such, the Court held defendant liable for liquidated damages of $50 for each email sent as mandated by the Terms of Service.  In reaching this result, the Court rejected defendant’s challenge to such clause on the ground that it was an unenforceable penalty provision.

The Fourth Circuit affirms the dismissal of claims brought by defendants under CAN-SPAM and Oklahoma statutory and common law arising out of defendants’ receipt of 11 unsolicited commercial emails from plaintiff Cruise.com.  Defendants’ claims were premised both on their assertion that the email at issue contained inaccurate contact information, and that plaintiffs continued to send them commercial email after receipt of a complaint from defendants concerning the emails.

The Court dismissed the claims defendants advanced under an Oklahoma state statute that sought to regulate the transmission of commercial email that contained any false information as to its source, holding that state statute preempted by the Federal CAN-SPAM Act.  The Court dismissed the trespass to chattels claim asserted by defendants on the grounds that defendants did not establish that they sustained more than nominal damages as a result of their receipt of the commercial emails in question.  The Fourth Circuit held this failing fatal to defendants’ trespass to chattel claim.  Finally, the Fourth Circuit dismissed defendants’ CAN-SPAM Act claim, holding the immaterial errors in the header/source information of commercial emails was not actionable under CAN-SPAM.  Defendants could readily identify and contact the sender of the emails in question from the information contained therein.  Defendants’ claims that plaintiffs violated CAN-SPAM’s provisions concerning the removal of a recipient from future emails upon request failed because defendants did not show plaintiffs engaged in “a pattern or practice” of failing to honor such requests, a prerequisite to such a claim under CAN-SPAM.

CAN-SPAM ActCAN-SPAM ActCAN-SPAM Act Quick Hits

Denying in large part defendants’ motion to dismiss, the Court held that plaintiff, an internet service provider, stated claims under both CAN-SPAM and California Business and Professions Code Section 17529 et seq., as a result of the transmission of allegedly deceptive and unsolicited commercial email to plaintiff’s servers.  These emails were allegedly sent to generate leads for defendants mortgage brokers’ businesses.  The complaint alleged that the emails in question were sent by ‘spammer defendants’ at the request of ‘lead generators’ who, in turn, had contracts with the defendant mortgage brokers to provide leads of prospective customers.  The Complaint alleged that the mortgage brokers “knew or consciously avoid knowing” that the lead generators and spammer defendants were violating CAN-SPAM, and of the injury being cause plaintiff thereby.  The Complaint further alleged that the emails at issue violated CAN-SPAM both because they contained false and misleading headers, indicating that they were purportedly sent from domains that were registered to unknown or false entities, and because they contained misleading subject lines that did not accurately describe the content of the emails, and instead implied that the user’s loan was approved or pre-approved.

A party can be guilty of violating CAN-SPAM even if it did not transmit the email at issue.  As explained by the Court, “to state a claim against the Mortgage Defendants under the CAN-SPAM Act, plaintiff must ‘prove that they paid or induced the Spammer defendants to initiate commercial email messages and that the Mortgage Defendants acted either with actual knowledge, or by consciously avoiding knowing, that the Spammer Defendants’ acts were illegal.”  Because the plaintiff’s complaint did just that, the Court denied, in large part, defendants’ motion to dismiss.

Court holds that the ‘Good Samaritan’ provisions of the Communications Decency Act (“CDA”), 47 U.S.C. Section 230(c)(2), immunize Internet Service Providers such as defendant Comcast from ‘good faith’ actions taken to block email marketers from sending email solicitations to users of the ISP’s services.  Plaintiff e360Insight brought this action in response to actions taken by Comcast to block it from sending email solicitations to Comcast customers.  Under the CDA, Comcast is entitled to immunity for “any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be … objectionable, whether or not such material is constitutionally protected …”.  230(c)(2)(A).  Thus, to be entitled to immunity, the ISP must show both that the materials it blocked are 'objectionable' and that it acted in good faith in blocking them.  The Court applied a subjective standard in determining whether the emails in question were objectionable and hence subject to blocking under the statute – i.e. the materials are objectionable if Comcast believes them to be objectionable.  Importantly, it did not matter if the emails complied with CAN-SPAM.  Said the Court:

compliance with CAN-SPAM, Congress decreed, does not evict the right of the provider to make its own good faith judgment to block mailings. …  Under the law, a mistaken choice to block, if made in good faith, cannot be the basis for liability under federal or state law.  To force a provider like Comcast to litigate the question of whether what it blocked was or was not spam would render Section 230(c)(2) nearly meaningless. 

Because Comcast believed the emails at issue were objectionable, and because plaintiff failed to adequately plead that Comcast did not act in good faith when it made its decision to block plaintiff’s emails, Comcast was entitled to immunity, and the Court dismissed the claims plaintiff asserted against it for violation of the Computer Fraud and Abuse Act and of plaintiff’s rights under the First Amendment, as well as for tortuous interference with prospective economic advantage and violation of the Illinois Consumer Fraud Act.

Affirming the Court below, the Fifth Circuit holds that the University of Texas at Austin (“UT”) can block unsolicited commercial email sent by plaintiff White Buffalo Ventures (“White Buffalo”) to UT students that promote plaintiff’s online dating services.  Importantly, UT can take such action notwithstanding the fact that White Buffalo’s commercial emails comply with CAN-SPAM.

In reaching this result, the Fifth Circuit rejected White Buffalo’s arguments that UT’s conduct constituted state action preempted by CAN-SPAM.  The Court held that UT was a state actor, and that its determination to block unsolicited commercial email was a state regulation that fell within the ambit of CAN-SPAM’s preemption clause, found in section 7707(b)(1).  This section provides that CAN-SPAM preempts state regulation of email unless such regulation ‘prohibits falsity or deception’ in the email.

However, the statute further provides that ‘nothing in this chapter shall be construed to have any effect on the lawfulness or unlawfulness … of the adoption, implementation or enforcement by a provider of Internet access service of a policy of declining to transmit, route, relay , handle or store certain types of electronic mail messages.’  Section 7707(c).   As the provider of Internet access service – students are enabled by UT to access the internet via its wireless network, and to use email addresses UT provides – this section expressly permitted UT to adopt a policy blocking those who send spam to its network.

The Fifth Circuit held that Section 7707(c) conflicts with Section 7707(b)(1), and thus draws into question the limits of the preemptive effect of CAN-SPAM.   Given these conflicting provisions, held the Court, the presumption against preemption counseled against finding UT’s regulations invalidated by CAN-SPAM.  As such, the Court rejected White Buffalo’s argument that CAN-SPAM mandated that UT’s policies be invalidated on the ground that they ran afoul of CAN-SPAM, or were preempted thereby.

The Court similarly rejected White Buffalo’s claim that UT’s bar on the transmission of its commercial emails ran afoul of the First Amendment.  The Court held that the regulation was reasonably calculated to protect a substantial governmental interest – protecting users of its email network from the hassle associated with unwanted spam – and was no more extensive than necessary to protect that interest. 

The Fifth Circuit did hold that an absolute ban on the transmission of White Buffalo’s emails may be an overly broad restriction – from a First Amendment prospective – if the only interest protected was the capacity of UT’s system to handle the needs of its user community.  Summary judgment was inappropriate, on the record then before the Court, to sustain such a contention.  

Additional cases can be found in the Spam/Junk Email section of the Internet Library.

The full text of both the CAN-SPAM Act, and the FTC's Rules Implementing the CAN-SPAM Act of 2003, 16 C.F.R. Part 316, can be found in the Statute section of the Internet Library.

Choice of Law - Updated December 15, 2007

Court holds Bahamian law governs Illinois resident's negligence action arising out of personal injuries sustained in a jet ski accident at a Bahamian resort, notwithstanding fact that plaintiff booked his trip by accessing resort's website via a computer in Illinois.  This result is mandated by Illinois' conflict of law principles, which require a dispute to be governed by the law of the jurisdiction that has the "most significant relationship" to the events out of which the suit arose.

Court holds that defendants, individual officers of co-defendant Search Cactus LLC (“Search Cactus”) can be held personally liable for violations of the Ohio Consumer Sales Practices Act (“OCSPA”) arising out of the transmission by Search Cactus of allegedly misleading and deceptive promotional emails, if “the officer took part in the act, specifically directed the act, or participated or cooperated in the act.”  Because the complaint alleged that the individual defendants approved the content of the promotional emails in question, the Court denied the individual defendants’ motion to dismiss, and allowed plaintiff, a recipient of such emails, to pursue his OCSPA claim against them.

Court dismisses defamation claims advanced against defendant, operator of the website ripoffreport.com, arising out of defendants’ publication of statements authored by a third party that were critical of plaintiffs.  The Court held such claims barred by application of the Communications Decency Act (“CDA”), 47 U.S.C. Section 230.  Notably, the court refused to issue plaintiff relief notwithstanding the fact that the author of the statements at issue allegedly requested without success that defendants remove them from ripoffreport.com.

The Court also declined to enforce a preliminary injunction issued on default by a Canadian court, directing defendants to remove the statements at issue from their website, on the ground that United States courts will not enforce injunctions issued by foreign courts.

United States District Court issues a declaratory judgment declaring unenforceable in the United States an order of a French Court which, inter alia, directs that Yahoo Inc., under threat of continuing penalties, prevent French citizens from accessing Nazi items offered for sale by third parties on Yahoo.com's auction site, and "to take all necessary measures to dissuade and render impossible any access via Yahoo.com to the Nazi artifact auction service and to any other site or service that may be construed as constituting an apology for Nazism or a contesting of Nazi crimes." Court issues such relief because of its determination that enforcement of this order would violate Yahoo's First Amendment rights.

Court holds that the prerequisite for the issuance of declaratory relief, the existence of an actual case or controversy, have been met as a result of the threat of enforcement of the French Court's order, and the ongoing penalties associates therewith. The Court also rejects defendants' contention that appropriate application of the abstention doctrine obligated the Court to refrain from resolving the instant litigation. Because the action seeks to litigate a question most properly decided by a United States court - namely the enforceability of the French Court's order in the United States - and not to relitigate the issue before the French court (whether Yahoo's site runs afoul of French law) the court declined to abstain from resolving it. Nor did principles of comity require the enforcement of the French Court's order, because to do so would run afoul of the United States' policies embodied in the First Amendment of the United States Constitution.

Cigarette - Updated January 01, 2002

Court holds that Section 1399-11 of New York's Public Health Law runs afoul of the Commerce Clause of the United States Constitution, and accordingly permanently enjoins its enforcement. Section 1399-11 prohibits the shipments of cigarettes to consumers in New York. The statute's prohibitions apply to both retailers and common carriers, and effectively preclude the use of the Internet and mail order catalogues as a means of selling cigarettes to New Yorkers. "The statute … thus restrict[s] retail sales of cigarettes in New York to face-to-face transactions at in state retail locations." The Court held that the statute was unconstitutional because it violated the "dormant" aspects of the Commerce Clause, which prohibit States from passing legislation which discriminates against, or unduly burdens, interstate commerce.

Click Fraud - Updated January 08, 2008

Court allows plaintiff to proceed with ‘click-fraud’ claim against defendant Findwhat.com, a search engine operator.  The complaint alleged that to increase its revenues from pay-per-click advertisements posted on its site by plaintiff, defendant Findwhat.com directed defendant Advertising.com to engage ‘bots’ and individuals to click on plaintiff’s advertisements.  This had the effect of increasing defendant Findwhat.com’s revenues, as plaintiff paid it on a pay-per-click basis.  The complaint alleged that defendant Findwhat also bid on pay-per-click search terms, thereby improperly increasing the price plaintiff had to bid therefore to obtain higher placement for such terms.  The Court held that such misconduct could run afoul of the implied covenant of good faith and fair dealing in the parties’ contract, and accordingly allowed plaintiff to proceed with a breach of contract claim against defendant Findwhat.com.

Findwhat.com changed its name to Miva, Inc. in June 2005.

The Court did dismiss the balance of the claims plaintiff asserted.  Its unjust enrichment claims failed because there was a valid contract governing the subject matter of plaintiff’s claim.  Plaintiff’s negligence claims failed because of the absence of any independent duty on the part of defendant Findwhat.com to monitor the source of the ‘clicks’ plaintiff received.  Such an obligation would be governed by the terms of the parties’ contract. 

Finally, plaintiff’s fraudulent concealment claim failed because of plaintiff’s failure to plead such claim with the requisite particularity.  Plaintiff was granted leave to replead this claim, premised on defendant Findwhat.com’s alleged duty to disclose that it was improperly causing a third party to click on plaintiff’s ads so as to increase Findwhat.com’s revenues.  Such a claim, if properly alleged, would serve to support a civil conspiracy claim against defendant Advertising.com, which was the party that allegedly arranged to have a ‘bot’ click on plaintiff’s ads.

Click-Wrap Agreement - Updated April 02, 2008

This section of the Internet Law Library contains court decisions analyzing how to enter into binding contracts online.

Court holds that minors entered into valid ‘click wrap’ agreement with defendant IParadigms LLC (“IParadigms”) by clicking an “I agree” icon which appeared directly below an online Usage Agreement, and indicated their assent to be bound thereby.  Plaintiffs were high school students that were directed by the schools they attended to submit class work to defendant IParadigm’s “Turnitin” website to check for plagiarism.  As part of this submission process, plaintiffs were obligated to assent to the site’s Usage Agreement.  Because the Usage Agreement contained a limitation of liability clause precluding liability to plaintiffs as a result of their use of the Turnitin site, the Court rejected plaintiffs’ copyright infringement claims, which arose out of defendant’s storage of plaintiffs’ class work in a database used to check student homework for plagiarism.

In reaching this result, the Court rejected plaintiffs’ claims that, as minors, they were not bound by the terms of the site’s Usage Agreement.  Because they had accepted the benefits of the agreement – the ability to submit their class work for grade to their respective schools was dependent upon their use of the site – they could not escape the contractual conditions upon which such benefits were rendered.

The Court further held that plaintiffs’ copyright infringement claims failed because defendant had made a permissible fair use of their works.  In reaching this result, the Court relied on the fact that Turnitin’s use of plaintiffs’ school work was highly transformative of the original works, in that it added plaintiffs’ school work to a non-publicly available database used only to check for plagiarism by students.  The Court also rested its holding of fair use on the fact that defendant’s use did not impact the market for plaintiffs’ works, as the copies Turnitin made thereof were not available to the public, but rather maintained in a non-public database.

The Court rejected the counterclaims advanced by defendant iParadigms, including a claim for indemnification as a result of the commencement of this action.  This claim was based on a separate “Usage Policy” found on the Turnitin site.  The Court held that plaintiffs were not bound by this policy, which was not linked or otherwise referenced in the Usage Agreement to which plaintiffs were in fact bound.  There was no evidence that plaintiffs were aware of this separate “usage policy,” which was contained in a link on each page of the Turnitin site.  As a result, and because the parties’ contract stated that it constituted the full agreement between the parties, the plaintiffs’ use of the site was held not to create a valid browse wrap agreement, and the claim for indemnification, predicated on the Usage Policy, was dismissed.

The remaining counterclaims advanced by iParadigms arose out of the use of the site by one of the plaintiffs to submit class work to an institution he did not attend.  These claims for trespass to chattels, and violations of both the Computer Fraud and Abuse Act and Virginia Computer Crimes Act, failed due to the absence of the requisite damage.

Court holds Terms of Use on defendant's websites constitute binding agreements between website operator and website user, where notices on the sites provide that the Terms  will create such an agreement if a user continues to utilize the site, and plaintiff used the sites with both actual knowledge of the Terms, and with imputed knowledge arising out of repeated use of the sites via a "robot."  Court accordingly dismisses plaintiff's declaratory judgment action for improper venue, as the Terms of Use mandated suit be brought in Illinois, and plaintiff commenced suit in California.

On this appeal, the Appellate Division affirmed the determination of the Superior Court of New Jersey that the plaintiffs had entered into a binding contract by agreeing on-line via the click of a mouse to be bound by the terms of the Microsoft Network's subscriber agreement. The terms of this agreement appear in a scrollable window next to blocks containing the words "I agree" or "I disagree." The user cannot commence use of the Microsoft Network unless she clicks the "I agree" button. Each of the plaintiffs clicked the "I agree" button, thereby indicating their assent to be bound by the terms of the subscriber agreement. Both the trial and appellate courts held this created an enforceable contract between the defendants and their subscribers.

The Appellate Division went on to uphold the validity of the forum selection clause contained in these subscriber agreements, which clause mandates that all suits arising out of or related to the subscriber agreement be brought in courts located in Kings County, Washington.

Court holds that plaintiff entered into a binding online click-wrap agreement by clicking an 'I Agree' icon, which indicated he had read, understood and agreed to the terms of the parties' contract.  The contract's terms were available for review online by clicking on a link which appeared on the Register.com website just above the 'I Agree' icon.  As a result, the Court dismissed the claims advanced by plaintiff, because plaintiff commenced suit in a forum other than the exclusive jurisdiction specified in the forum selection clause contained in the parties' contract; asserted state law claims under the laws of a state which were rendered inapplicable by the contract's choice of law provisions, and asserted claims that failed in light of the contract's terms.

Affirming the court below, the District of Columbia Court of Appeals holds that plaintiff entered into a binding contract online with Verizon Internet Services ("VIS") by clicking an "Accept" icon, indicating his assent to be bound by the contract.  This icon appeared directly below a "scroll box" on VIS's website which contained the terms of the contract.  The terms were not all visible online when the user initially viewed the web page on which the "scroll box" was found.  Rather, to review all of the contract's terms, the user was required to use the "scroll box" to scroll through them. 

The Court of Appeals also affirmed the dismissal of a putative class action commenced by plaintiff arising out of his dissatisfaction with VIS's DSL service, because the suit was not commenced in Virginia, the jurisdiction specified in the contract's forum selection clause as the exclusive jurisdiction in which disputes could be heard.

In the course of dismissing plaintiff's suit for improper venue, the court affirmed the validity of a click-wrap agreement entered into by AOL and one of its customers. AOL moved to dismiss this suit on the ground that a forum selection clause in the parties' contract mandated that the suit be brought in Virginia, where defendant's base of operations was located. The court agreed, and dismissed the suit.

In reaching this conclusion, the court held that the parties' contract, entered into online by the click of an "I agree" button, was enforceable. According to AOL, before a user can access AOL's system, he must first click on an "I agree" button indicating his assent to be bound by AOL's Terms of Service. This button first appears on a screen in which the user is offered a choice to either read, or agree to be bound by, AOL's Terms of Service. It also appears at the foot of the Terms of Service, where the user is offered the choice of clicking either an "I agree" or "I disagree" button, by which he accepts or rejects the Terms of Service.

Said the court:

Our Court ... stated the general rule that a party who signs an instrument manifests his assent to it and cannot later complain that he did not read the instrument or that he did not understand its contents. Here, plaintiff effectively "signed" the agreement by clicking "I agree" not once but twice. Under these circumstances, he should not be heard to complain that he did not see, read, etc. and is bound to the terms of his agreement.

Court holds plaintiff bound by a click-wrap agreement entered into by her travel companion with defendant Expedia Inc. (“Expedia”) when she purchased tickets and hotel accommodations on plaintiff’s behalf.  The travel companion was acting as plaintiff’s agent, and by her acceptance of the agreement, bound plaintiff to its terms.  As such, the Court dismissed plaintiff’s claims against Expedia for personal injuries sustained at the hotel she visited when her sandal broke, causing her to fall down stairs and into an ornamental pond, holding them barred by the liability disclaimer contained in the parties’ agreement.  The Court further held that plaintiff’s claims against Expedia failed because it owed her no duty to warn of dangerous conditions that allegedly existed at the resort in question.

The Court did deny defendant Gap Inc.’s (“Gap”) motion for summary judgment, and allowed plaintiff to proceed with her claims that a defective sandal she purchased from Old Navy, owned by the Gap, failed, causing her to fall and sustain the injuries at issue.  The Court rejected the Gap’s motion that such claims should be barred by application of the spoliation doctrine, as plaintiff had not preserved the sandal in question.  The Court held plaintiff could not be held responsible for the absence of the sandal, as she had left it at the resort at the time of the injury, while she was rushed to the hospital, and was unable to locate it subsequently.  Issues of fact as to whether the Gap actually manufactured the sandal in question would await trial for resolution.

(Court enjoined defendants both from sending spam which falsely stated it came from plaintiff's e-mail service, and from using Hotmail accounts as mailboxes for "spam" reply. Court held that such conduct violated plaintiff's Term's of Service, which prohibited the use of Hotmail accounts to facilitate the transmission of spam. To use plaintiff's service defendants, after being afforded the opportunity to view the Terms of Service, clicked on a box indicating their assent to be bound thereby. As such, the Court's holding reflects its willingness to uphold the validity of a click-wrap agreement between the parties. The Court also held that defendants' conduct constituted trademark infringement and dilution, as well as trespass to chattels and a violation of the Computer Fraud and Abuse Act.)

Reversing the court below, an Illinois intermediate appellate court, applying Texas law, holds purchasers of Dell computers bound by Terms and Conditions of Sale posted and available on Dell’s website at the time of purchase.  Importantly, the court held plaintiffs bound by these terms notwithstanding the fact that they were only available via hyperlink on Dell’s site, and further, that the consumer did not have to affirmatively click an “I accept” icon to indicate his assent to be bound thereby.  The Court held that by purchasing their computers online, plaintiffs entered into an online contract which included the Terms and Conditions, because they were advised on Dell’s website that their purchases were subject thereto.

As a result, the court held plaintiffs bound by the arbitration clause contained in the Terms, which mandated that they arbitrate disputes arising out of the purchase of their computers before the National Arbitration Forum.  In reaching this result, the court rejected plaintiffs’ claims that such a clause was procedurally and substantively unconscionable.

Court holds that plaintiff is bound by the terms of a license agreement that appeared on its computer screen when it loaded defendant's software, because plaintiff indicated its assent to be bound thereby by clicking on an "I agree" icon at the foot of the license agreement. Court reached this conclusion despite the fact that the plaintiff had ordered the software in a purchase order it sent to defendant before clicking on the "I agree" icon, which purchase order did not contain the limitation of damage clause found in the license agreement. The court held such a result was appropriate under UCC Section 2-204, which states that "a contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract." (Emphasis added). The court further held that such a result was appropriate under UCC Section 2-207, which permits the addition of additional terms to a contract, here the purchase order, either on explicit or implicit consent. The court found the requisite explicit consent present in plaintiff's act of clicking on the "I agree" icon. The necessary implicit consent was also present because the additional terms in the license agreement came as no surprise to, and caused no hardship for, the plaintiff.

Court holds that plaintiff entered into a valid agreement by clicking on an icon indicating its assent to be bound to displayed software license terms, and thereafter using defendant's software and services.  As a result, the Court, honoring a forum selection clause found in the parties' agreement, transferred the case before it from Kansas to California, the venue for suit designated in the forum selection clause.  In reaching this result, the Court rejected plaintiff's claim that it was not bound to the agreement because its assent had been given by an individual who lacked the authority to bind it to such an agreement.  The Court found that plaintiff had failed to establish this contention due to its failure to identify the individual(s) who give their assent.  In any event, plaintiff was bound because it had ratified its agent's acts by using the software and associated services for a period of six years.

In this mandamus proceeding, California's Court of Appeals, by a two to one vote, holds a party suing as a private Attorney General subject to the same forum selection clause as the consumers it is seeking to protect.  As such consumers would be bound as a result of their use of Net2Phone's website to the provisions of its Terms of Use, so too is their private advocate.  The Court of Appeals accordingly directed that the action Consumer Cause commenced on the consumers' behalf in California be stayed because the Terms of Use contained a forum selection clause which mandated suit in New Jersey.  The Court upheld the forum selection clause notwithstanding the fact that New Jersey, unlike California, does not permit private advocates such as plaintiff to pursue claims on behalf of injured consumers.

Court holds that plaintiff, by clicking an "I accept" icon agreeing online to be bound by the Terms of Service governing use of an online discussion group set forth in a scrollable window, viewable ten lines at a time, was bound by the forum selection contained therein.  Finding such a clause enforceable, the Court dismissed a claim brought by plaintiff asserting that defendant Google breached this agreement, because this claim was not brought in the designated forum.

The Court also held that Section 230 of the Communications Decency Act ("CDA") immunized an ISP hosting an online discussion group from claims that its failure to remove objectionable content posted on the discussion group's web page gave rise to claims of tortious interference with contractual relations. 

Finally, the Court denied the motions of two additional defendants to dismiss the claims asserted against them for want of personal jurisdiction.  The Court held that the first defendant was subject to specific jurisdiction in New York because of its operation of a commercial website via which it sold $6000 of products a year to New York residents.  The second defendant was similarly subject to suit because he had entered into a contract with a New York company, which contract allegedly gave rise to the claims asserted against him.

Affirming the court below, the Second Circuit holds that Register.com is likely to prevail on breach of contract claims arising out of Verio Inc.'s use of data obtained from Register.com's Whois database in violation of the database's Terms of Use, which prohibit use of that information for unsolicited advertising.  In reaching this conclusion, the Second Circuit held that Register.com's Terms of Use are likely to create a contract between Register.com and Verio, because Verio repeatedly used Register.com's Whois database with actual knowledge that the Terms provided that such use would constitute assent to be bound by the data use restrictions contained in the Terms.  Notably, the Second Circuit reached this result notwithstanding the fact that Verio did not click an "I Agree" icon indicating its agreement to be so bound.  More importantly, the Court found Register.com likely to prevail despite the fact that Verio did not see these Terms until after it had already completed the act - using the Whois database - which purportedly indicated its assent to be bound thereby. 

The Second Circuit also found both that Verio's use of a search robot to gather Whois data likely constituted a trespass to chattels, and that certain of Verio's promotional activities violated the Lanham Act.

As a result, the Second Circuit affirmed the District Court's issuance of a preliminary injunction, enjoining Verio from either utilizing a search robot to obtain information from Register.com's Whois database, or utilizing information obtained from that database to assist in the transmission of mass unsolicited advertising by telephone, direct mail or e-mail.

Court issues a preliminary injunction enjoining Verio, Inc. from either utilizing a search robot to obtain information from Register.com's Whois database, or utilizing information derived from that database for mass unsolicited advertising by telephone, direct mail or electronic mail. Court holds that Verio's actions will likely constitute a breach of plaintiff's Terms of Use, as well as a violation of both the Computer Fraud and Abuse Act and the Lanham Act and a trespass to chattels. In reaching this conclusion, the court holds that Register.com's Terms of Use are likely to create a contract between Register.com and the users of its Whois database, notwithstanding the fact that these users are not required to click an "I Agree" button indicating their agreement to be so bound.

Affirming the decision of the court below, the Second Circuit Court of Appeals holds that plaintiffs are not bound by the terms of a license agreement purporting to govern the use of a software product they downloaded because plaintiffs neither had reasonable notice thereof, nor adequately manifested their assent to be bound thereby.  The software in question could be downloaded from a page on defendant Netscape's web site by clicking on a button which said "download".  The terms of the license agreement in question were not contained on this web page, however, and the only notice the user received of the license agreement was found on a portion of the web page below the download button.  Typically, this notice appeared "below the fold" and was not on that portion of the page which first appeared on the user's screen when he went to download the program.  This notice informed the user that his use of the software would be governed by the terms of a license agreement, which terms could be seen by clicking on a link provided on the web page.  Once the program was downloaded, the user received no further notice of either the license agreement or its terms.  The Court held that this procedure did not create a binding contract between the parties.

The Second Circuit further held that the terms of a license agreement plaintiffs did agree to, governing their use of Netscape's browser, did not obligate them to arbitrate the claims they raised in this litigation.  These included claims that Netscape violated both the Electronic Communications Privacy Act and the Computer Fraud and Abuse Act by causing Netscape's Smart Download software, a Netscape browser 'plug in', to send information to Netscape about plaintiffs' downloading activities.

Court holds that act of downloading software does not indicate assent to be bound by terms of license agreement, where a link to such terms appears on, but below that portion of the web page that appears on the user's screen when such downloading is accomplished. As a result, the Court holds that under California law, plaintiffs are not bound by the terms of such license agreement, or the arbitration clause contained therein, despite language in the license agreement which provides that by installing or using the software, the user consents to be bound by the terms of the license agreement.

The court, in granting defendant's motion to dismiss plaintiffs' breach of contract claim, held that a contract is not created simply by use of a web site on which is posted at the bottom of the site's home page terms and conditions that provide that such use constitutes the user's assent to be bound by the site's Terms and Conditions. The court left open the possibility, however, that use of a web site, coupled with knowledge of Terms and Conditions which declare such use evidence of assent to be bound thereby, could create a binding contract, and granted plaintiffs leave to replead their claim.

The court further held that "hyperlinking [without framing] does not itself involve a violation of the Copyright Act ... since no copying is involved." In addition, the court held that "deep linking by itself (i.e. without confusion of source) does not necessarily involve unfair competition."

The court refused at the outset of a litigation, however, to dismiss plaintiffs' claim that defendant, by deep linking, was tortuously interfering with plaintiffs' prospective business advantage, by depriving them of advertising revenue that might otherwise be achieved if the user were forced first to go to the site's home page (with the necessary increase in traffic that would generate) before he could proceed to an event page.

Lastly, the court held that defendant did not infringe plaintiffs' copyright in their site by extracting data concerning concert and other entertainment events from plaintiffs' web site (such as location, date and time of the event) and presenting it on defendant's web site in its own format. The court further held that plaintiffs could not attempt to recast such a claim into either state law misappropriation, trespass, unfair business practice or unjust enrichment claims, as those claims, to the extent they prohibited conduct permitted under the copyright act, were preempted thereby.

Court holds that a binding agreement can be formed by the use of a web site, without more, if the user has actual knowledge that the site's Terms and Conditions so provide.  As a result, the Court denied defendant Tickets.com's summary judgment motion, which sought dismissal of breach of contract claims arising out of Tickets.com's use of a search robot to obtain information about concerts from plaintiff Ticketmaster's web site.  The Court held that issues of fact as to defendant's knowledge of the site's Terms and Conditions at the time it used plaintiff's site precluded a determination as to the binding nature of such Terms.

The Court did grant so much of Tickets.com's summary judgment motion which sought dismissal of trespass to chattels claims Ticketmaster asserted as a result of such activity.   These claims failed because of the absence of evidence that "the use or utility" of Ticketmaster's computers were being adversely affected by Tickets.com's use of a search robot to gather information from plaintiff's site.

Finally, the Court dismissed several copyright infringement claims brought by Ticketmaster.  These included infringement claims arising out of the temporary copying into the RAM of defendant's computers of data from plaintiff's site, including materials in which plaintiff held a copyright.  These materials were copied as an intermediate step to obtaining, and displaying on Tickets.com's own site, factual information contained therein.  The Court held such copying was a protectable fair use given the only materials retained at the end of the process were the facts -- as to concert locations, dates and times -- contained therein, which facts were not protected by copyright.  Infringement claims arising out of deep linking to interior pages of plaintiff's website were dismissed because, by deep linking into plaintiff's site, Tickets.com was not showing or displaying plaintiff's copyrighted materials (which instead were being displayed by plaintiff itself).  Finally, infringement claims arising out of copying the URLs from such interior pages were dismissed because such URLs did not have sufficient originality to be copyrightable.

Affirming the court below, the Eleventh Circuit holds plaintiff bound by online amendments to its agreement with defendant posted to defendant's website.  As those amendments raised the rates due for defendant's services, which increased rates plaintiff refused to pay, the Eleventh Circuit affirmed the District Court's grant of summary judgment to defendant on its breach of contract claim.  The Court found support for its decision in the parties' agreement, which bound plaintiff to tariffs "as the same may exist or be modified in the future [by defendant] . . . and/or as the same may appear on [defendant's] website."

Click-Wrap AgreementClick-Wrap Agreement Quick Hits

Court held that plaintiff, by clicking a “continue” icon in the course of completing a user profile for an online dating service, was bound by the site’s Terms of Use, available via a hyperlink on the webpage he was viewing.  The “continue” icon appeared at the foot of the initial webpage the user saw in the course of completing his profile, and just to the right of a sentence that read “I am 18 years old and I have read and agree to the True Terms of Use and Code of Ethics.”  The phrase ‘Terms of Use’ were linked to the site’s Terms of Use, which appeared in a pop-up window when a user clicked on this link.  The Terms of Use advised the user that “once you click on the ‘continue’ button at the end of this sign-up form, you are agreeing to be bound by the Terms of this Agreement.”

Importantly, the Court found plaintiff bound despite his claim that he was not asked to agree to be bound by the Terms of Use as part of the sign-up process.  This evidence was effectively refuted by that supplied by the defendant, which demonstrated that all users, to obtain a profile, must click the ‘continue’ icon.

Similarly, the fact that the Terms were available via a hyperlink did not prevent plaintiff from being bound thereby.  Said the Court:

Respondents presented substantial evidence that appellant had to click on the ‘continue’ button in order to register for his trial membership on the Web site, and that doing so constituted an agreement to the ‘Terms of Use’ on the Web site.  Appellant may not have read the ‘Terms of Use’ but they were readily available to him on the True.com Web site if he clicked on the ‘Terms of Use’ link near the ‘Continue’ button.  Under these circumstances, where appellant obviously had access to the Internet and was entering into a contract on the Internet, there was nothing inherently unfair in requiring him to access contractual terms via hyperlink, which is a common practice in Internet businesses.  The trial court did not abuse its discretion in finding that appellant agreed to the forum selection clause contained in the ‘Terms of Use.’

The Appellate Court nonetheless reversed the lower court’s decision, which had dismissed plaintiff’s claims because of the forum selection clause contained in True’s Terms of Use.  The clause in question, held the Appellate Court, only provided that disputes arising out of a party’s use True.com’s online dating service may be brought in the Texas.  Because this clause did not mandate that such suits must brought in Texas, the lower court needed to analyze, under traditional forum non conveniens analysis, whether California or Texas was the appropriate forum in which the suit should proceed.  The forum selection clause at issue provided “you agree to personal jurisdiction by and venue in the State of Texas and the U.S. District Court for the Northern District of Texas.”  The case was remanded to the lower court for the performance of this analysis.

Court held plaintiffs, purchasers of Dell computers and related service agreements, are not bound by the Terms and Conditions Agreement that accompanied such machines on shipment.  The Court held that a browse-wrap agreement was not created upon the initial ordering of the machines, because the link to the Terms and Conditions Agreement at issue was found “inconspicuously” at the bottom of the web page of Dell’s website at which such products were ordered.  According to the Court “this was not sufficient to put plaintiffs on notice of the terms and conditions of the sale of the computer.  As a result, a browse wrap agreement found on Dell’s webpage cannot bind the parties to the arbitration agreement” found in the Terms and Conditions.

The Court further held that a shrink-wrap agreement was not formed between Dell and the plaintiff purchasers, binding plaintiffs to the Terms and Conditions, notwithstanding the fact that those Terms accompanied the computers on shipment to plaintiffs, and were also sent with acknowledgements of plaintiffs’ orders.  The Court reached this conclusion because the Terms at issue did not give plaintiffs the option to reject them by returning the computer to Dell.  Said the Court:

This Court, employing the same logic, finds that the binding effect of the Terms and Conditions Agreement also hinges on whether a reasonable person would have known that return of the product would serve as rejection of those terms.  Accordingly, this Court finds that Plaintiffs did not “knowingly consent” to the terms and conditions of the agreement because they were not given sufficient notice of the method to reject those terms.  Therefore, Plaintiffs are not bound by the arbitration clause therein. 

Because the plaintiffs were not party to the Terms and Conditions, the court denied Dell’s motion to stay this action and compel plaintiffs to arbitrate their claim that Dell improperly charged tax on both the sale of ancillary services plaintiffs purchased with their Dell computers, as well as associated transportation costs.

Applying Texas law, the Court also held that the arbitration provision found in Dell’s Terms and Conditions was in any event an unenforceable illusory contract.  Thus, the Terms and Conditions provided that “these terms and conditions are subject to change without prior written notice at any time, in Dell’s sole discretion …”.  Because Dell retained such an unfettered right to modify or terminate the contract at any time, the Court held that “the language in the Terms and Conditions Agreement fails to bind Defendants in any genuine way.  Accordingly, this Court finds that the arbitration agreement is illusory and therefore unenforceable.” 

Of note, the court held that the fact that the arbitration provision, if binding, would bar plaintiffs from pursing their claims as a class action was not, by itself, a ground to invalidate such a clause under Texas law or render it unconscionable.

For additional cases, see Contract.

Clip-Art - Updated January 01, 2000

(Defendant NAFED was guilty of direct copyright infringement because, without plaintiff's permission or authorization, NAFED obtained copies of plaintiff's copyrighted clip art and uploaded it onto computers hosting NAFED's website accesible to those using the web. Defendant Northwest, however, which hosted NAFED's site on its computers and made it available to those using the Internet, was neither liable for direct nor vicarious copyright infringement. Northwest only provided the means to copy plaintiff's work, much like the owner of a public copying machine used by a third party to copy protected material. It did not actually engage in the copying itself and accordingly, was not guilty of direct infringement. And because Northwest only received a flat fee from NAFED for its hosting activities that did not vary based on the use of NAFED's site, it did not profit from defendant NAFED's infringing activities, and hence was not guilty of vicarious infringement.)

Co-Branding Agreement - Updated May 17, 2006

After a lengthy trial, the Court found that defendant Amazon.com had breached an agreement it had entered into with plaintiff ToysRUs.com LLC ("Toys R Us"), by permitting third parties to sell toys on Amazon's web site.  Finding that this breach went to the substance of the parties' agreement - which as interpreted by the Court provided that Toys R Us was to be the sole third party toy retailer on Amazon's web site - the Court granted Toys R Us's request that the agreement be terminated.  Notwithstanding its finding that such a breach had occurred, the Court did not award Toys R Us damages.  The Court also rejected counterclaims asserted by Amazon, arising out of Toys R Us's alleged failure to maintain levels of inventory sufficient to meet customer demand.

Communications Decency Act - Updated November 22, 2008

This section of the Internet Law Library contains a host of court decisions that address the extent of the immunity afforded by the Communications Decency Act, 47 U.S.C. Section 230, to Internet Service Providers, commercial websites, search engines, message boards, web hosting companies, gripe site operators and others for making available to the public content authored by third parties.

Communications Decency Act preempts state law claims against ISP for negligence, breach of contract, intentional infliction of emotional distress, alter ego liability, injunctive relief and violation of civil rights arising from IPS's distribution of material written by another that contained derogatory comments about plaintiffs, including that they were the "ring leaders" of an "international conspiracy" to further "Satanic Ritual Abuse" of children.

Court holds that the Communications Decency Act, 47 U.S.C. § 230 ("CDA") immunizes web hosting company from liability arising out of its hosting of a third party's website that allegedly contained defamatory statements about plaintiff.  Following the Fourth Circuit's decision in Zeran v. AOL, the Court holds that such immunity exists notwithstanding any notice the web hosting company received concerning the defamatory nature of the content it was hosting.  The Court also dismisses plaintiff's defamation claims against the originator of the content at issue, holding it lacks personal jurisdiction over him.  The Court reached this result notwithstanding the fact that this defendant had contracted with an Arizona web hosting company to host the website which contained the defamatory statements at issue.  The Court held the exercise of jurisdiction over the defendant would be unreasonable given the fact he was a non-resident, the parties each operated Bali-related travel services, and the dispute was governed by Bali law.

Court holds that the Communications  Decency Act, 47 U.S.C. § 230 ("CDA"), immunizes defendant Yahoo, Inc. ("Yahoo") from tort claims arising out of its alleged failure to timely honor promises to remove from Yahoo's web site objectionable content about plaintiff posted by a third party.  The content consisted of "profiles" contained both nude photos of plaintiff, and accurate contact information.

Reversing the Court of Appeals, the California Supreme Court holds that Section 230 of the Communications Decency Act ("CDA") immunizes defendant Ilena Rosenthal ("Rosenthal") from defamation claims arising out of her republication in two online newsgroups of an allegedly defamatory article authored by a third party.  In reaching this result, the California Supreme Court rejected the Court of Appeals' attempts to limit the immunity afforded by Section 230(c)(1) of the CDA to publishers, while leaving exposed to defamation claims "distributors" of defamatory statements who have notice of the defamatory nature of the statements they distribute.  The Supreme Court held that such "distributors," commonly know as "secondary publishers," are entitled to the same broad immunity afforded publishers under the CDA.  As explained by the Fourth Circuit in Zeran v. AOL, cited with approval by the California Supreme Court, the CDA "creates a federal immunity to any cause of action that would make service providers liable for information originating with a third party user of the service" except claims such as those arising under the Intellectual Property laws, specifically exempted by the statute.

The Supreme Court also held that the broad immunity afforded under the statute to the providers of interactive computer services extended by operation of the statute's express language to "users" of such services.  "Users" protected by the CDA included those who use an interactive computer service to access the Internet and thereby to post or republish on the Internet a defamatory statement authored by a third party.  As stated by the Court, "by declaring that no 'user' may be treated as a 'publisher' of third party content, Congress has comprehensively immunized republication by individual Internet users."

Rejecting Zeran v. America Online, (4th Cir. 1997) and its progeny, an intermediate California Appellate court holds that the Communications Decency Act ("CDA") does not immunize a user of interactive computer services from a defamation claim arising out of her republication of statements authored by a third party, when the user knew or had reason to know of the falsity of those statements.  As a result, the Appellate Court reversed to much of the decision of the trial court below which had dismissed a defamation claim brought against defendant Ilena Rosenthal as a result of her republication in Usenet postings of a statement authored by a third party (defendant Timothy Bolen) which accused plaintiff Polevoy of criminal conduct.

The trial court had also rested its dismissal under California's Anti-SLAPP statute of plaintiffs' defamation claims on its determination that Polevoy lacked the requisite probability of success because, as a public figure, he could not prove that defendant Rosenthal acted with 'malice' when republishing Bolen's statements.  The Appellate court rejected this determination, holding that plaintiff may be able to establish that Rosenthal acted with the required malice, and therefore could proceed, notwithstanding Rosenthal's allegation that she had checked the veracity of the statements she was republishing with the alleged victim.  The Appellate Court held that such was insufficient to require dismissal of plaintiff's complaint, because of the alleged bias of both the victim and the original author of the posting against the plaintiff.

The Appellate Court did affirm the lower court's dismissal of defamation claims advanced by plaintiff Barrett, because the statements at issue were non-actionable opinion, as well as the trial court's decision to award Rosenthal attorney's fees expended in pursuing her Anti-SLAPP motion to dismiss (though reducing the recoverable amounts to reflect the reversal of that court's decision as to the claims asserted by Polevoy).

This decision, if followed, could have important ramifications for internet service providers and others who regularly repost publications authored by third parties without reviewing their content.  Under the court's ruling, service providers can be liable for defamation as a result of their republication of such statements if they know or have reason to know of the falsity of those statements.  According to the court "distributor liability would [generally] not require a service provider to review communications in advance of posting them but only to act reasonably after being put on notice that the communication is defamatory."  As a result, once the service provider receives notice (from the allegedly defamed individual) of falsity, it must either undertake adequate steps to ascertain the veracity of the statement, remove it, or face potential liability.  This creates tremendous uncertainty as the court did not specify what such adequate steps would be.  Indeed, as noted above, in the case at bar, where plaintiff alleged he was defamed by a statement that he had engaged in criminal conduct, the court held that contacting the victim was not sufficient as a matter of law to warrant dismissal of plaintiff's suit because of the victim's purported bias against plaintiff Polevoy.  Subsequent developments in this case should be watched closely by those interested in this field.

In this defamation suit, the Ninth Circuit Court of Appeals holds that the operator of a listserv and website is a user of interactive computer services entitled to the protections of the Communications Decency Act ("CDA") against liability arising out of his publication of information provided by another information provider.  Because, however, the author of the information at issue claimed he did not mean for the defendant operator of the listserv to publish it, the Ninth Circuit remanded the case to the District Court for a determination as to whether the listserv operator was entitled to immunity under the CDA in this particular case.  Such immunity should be granted, held the Ninth Circuit, if the information in question was provided to the listserv operator by a third party under circumstances in which a reasonable person would conclude that the third party provided the information for publication on the Internet.  The Ninth Circuit accordingly vacated so much of the District Court's decision which denied defendant's motion to dismiss this defamation action under California's Anti-SLAPP statute, which motion was to be reconsidered on remand.  The Ninth Circuit also affirmed the District Court's rejection of plaintiff's defamation claims against Mosler, which were predicated solely on its placement of ads on the website at issue.

Court in large part grants defendants’ motion for summary judgment, and dismisses claims arising out of defendants’ operation of a website on which third parties, and defendants themselves, posted a number of statements critical of plaintiff Best Western International Inc.  Left unresolved by the Court’s motion were plaintiff’s claims that a number of additional posts authored by defendants were in fact defamatory.

Best Western is a non-profit member corporation, which assists its members in running their hotels.  Defendants are members of Best Western who operate hotels, their spouses, and an individual who assisted in the creation of the website at issue.  The member defendants are bound by the terms of membership agreements with plaintiff. 

The Court held that the immunity granted defendants under the Communications Decency Act barred plaintiff from seeking to hold them liable for defamatory posts authored by third parties that appeared on defendants’ website.  Defamation claims arising out of 50 posts defendants themselves authored failed because plaintiff did not present sufficient evidence to establish that defendants acted with the requisite degree of fault necessary to sustain a defamation claim.  Thus, plaintiff failed to establish that defendants acted with either actual malice or negligence in making these statements, or with knowledge of their alleged falsity.   In reaching this result the Court noted that possessing ill will toward plaintiff was insufficient to establish ether that defendants acted with the requisite degree of fault, or that they were guilty of defaming plaintiff. 

The Court also rejected tortuous interference with contract or prospective advantage claims arising out of the posting on defendants’ site of statements urging plaintiff’s members to switch to a competitor’s organization.  The Court held that plaintiff failed to prove either that such statements caused it any injury, or that defendants or the competitor acted improperly in making these posts.  In reaching this result, the Court noted that plaintiff’s competitor is free to make posts that promote itself and its own economic interests.

Finally, the Court rejected various breach of contract claims advanced by plaintiff, asserting that defendants breached the parties’ membership agreement by making public confidential information, or failing to meet the membership agreement’s requirement to use their best efforts to maintain positive relationships with customers.  As to the former, the Court held there were no such prohibitions in the parties’ agreement that bound defendants.  As to the later, the Court held that the prohibitions applied to other aspects of defendants’ business, with which obligations defendants complied.

The Court did allow plaintiff Best Western to pursue breach of contract claims arising out of the use by the member defendants of Best Western’s trademark on the website at issue, which use purportedly violated the parties’ membership agreement.

Court holds defamation claim against AOL as a result of its making available a gossip column written by a third-party content provider titled the"Drudge Report" was barred by the Communications Decency Act. Court reached this conclusion notwithstanding the fact that AOL had reserved the right to exercise control over the Report's editorial content, and further, had promoted the report as a gossip column, thereby acknowledging the nature of the report's general content and the risks inherent therein.

The court denied defendant Drudge's motion to dismiss for want of personal jurisdiction. Drudge's maintenance of an interactive website, on which his Report appeared, which permitted users to subscribe to the Drudge report via e-mail, and solicited contributions from forum residents to defray publication costs, combined with other contacts with Washington D.C., including a visit to D.C. to promote the report, and mail and phone contacts to obtain gossip, made the exercise of jurisdiction over him appropriate.

Ninth Circuit holds that operator of online dating service is immunized by the Communications Decency Act ("CDA") from defamation, invasion of privacy, misappropriation of right of publicity and negligence claims arising out of the unauthorized posting on defendant's website by a third party of a fictitious dating profile.  This profile contained fictitious information about plaintiff, an actress, as well as accurate contact information and photographs of her.  This information was posted in response to a form questionnaire prepared by defendant to which all users of its service had to respond.

Court grants motion of defendants Metrosplash.com and Lycos for summary judgment, and dismisses claims of invasion of privacy, defamation, misappropriation of right of publicity and negligence brought against them by plaintiff Carafano, an actress.  These claims arose out of the posting of a dating profile by a third party on the defendants' Matchmaker website, which profile allegedly contained fictious information about plaintiff, as well as accurate contact information and photographs of her.  This information was posted in response to a form questionnaire prepared by defendants to which site members had to respond.

The court rejected defendants' argument that plaintiff's claims were barred by application of Section 230 of the Communications Decency Act.  While the defendants were "interactive service providers" within the meaning of the statute by virtue of their operation of the Matchmaker website, defendants were not entitled to the statute's protection because of the role they played in originating the content in question.  Such protections are available only as to claims arising out of information provided by an information content provider other than the defendant.  The court barred defendants from using the CDA as a shield because the information in question was posted in response to a questionnaire prepared by defendants.

Nonetheless, the court dismissed each of the claims raised by plaintiff against defendants.  Plaintiff's invasion of privacy claim failed because the information in question, her address, was "newsworthy," making its publication non-actionable.  The defamation claim was dismissed because, given plaintiff's status as a public figure, she could not show that defendants acted with actual malice in publishing the statements in question, a prerequisite to such a claim.  Such malice was absent because defendants were unaware of the information contained in "plaintiff's" profile at the time it was posted to defendants' site by a third party, and thus did not entertain any serious doubt as to its truth at the time it was published.  Plaintiff's misappropriation of right of publicity and negligence claims failed for the same reason, plaintiff's inability to establish that defendants acted with the requisite actual malice.

Court holds that the Communications Decency Act ("CDA") immunizes defendant Craigslist, Inc. ("Craigslist") from liability for publishing housing ads authored by third parties that allegedly violate the Fair Housing Act, 42 U.S.C. § 3604(c) ("FHA").  In reaching this result, the Court held that the immunity afforded internet service providers under section 230(c)(1) of the CDA only extends to claims seeking to hold an ISP liable as a publisher for content authored by third parties, and not to all claims arising out of the ISP's role in giving the public access to such content.  Because the FHA claims at issue were premised on Craigslist's publication of offensive ads authored by third parties, the Court held they were barred by the immunity granted under Section 230(c)(1).

Affirming the District Court below, the Seventh Circuit holds that Craigslist cannot be held liable for violating the Fair Housing Act as a result of its online publication of discriminatory housing ads authored by third parties. To hold Craigslist liable for such conduct would require it to be treated as a ‘publisher’ of these advertisements, which is prohibited by Section 230(c)(1) of the Communications Decency Act.  As a result, the Seventh Circuit affirms the District Court’s grant of summary judgment, dismissing plaintiff’s Fair Housing Act claims against Craigslist.

Court holds that the Communications Decency Act (“CDA”), 47 U.S.C. Section 230(c)(1), mandates dismissal of so much of plaintiff’s defamation claim that arises from the publication by third parties of comments critical of plaintiff on a website defendants operate known as the “ripoffreport.com.”  The CDA further mandates dismissal of claims arising out of defendants’ promotion of its site and the allegedly objectionable content thereon, making the site more accessible to search engines and users, or soliciting contributions to assist in making the information on the site available.  The Court did , however, allow plaintiff to pursue defamation claims arising out of the headlines for third party content authored by the defendants, which themselves purportedly contained defamatory content.

Court holds that the Digital Millennium Copyright Act ("DMCA") immunizes Amazon.com, Inc. ("Amazon") from copyright infringement claims arising out of the sale by nonaffiliated third party vendors on Amazon.com of photographs in which plaintiff claims a copyright.  In reaching this result, the Court held that Amazon had met both the DMCA's threshold requirements, as well as the requirements necessary to qualify for the protection of the safe harbor provisions of 17 U.S.C. § 512(c).  512(c) protects service providers from liability for copyright infringement by reason of their storage of infringing materials at the direction of a third party.

The Court dismissed plaintiff's Lanham Act claim, finding that it was the Copyright Act, and not the Lanham Act, that provided any remedy for the alleged wrongs at issue.  The Court also dismissed plaintiff's Washington State law Consumer Protection Act and tortious interference with business relations claims, finding Amazon immunized therefrom by operation of the Communications Decency Act.

Finally, the Court held that issues of fact precluded dismissal of copyright infringement claims plaintiff asserted arising out of the alleged use of one of its copyrighted images in an advertisement on a separate website owned by Amazon.

A California intermediate appellate court holds that the Communications Decency Act ("CDA"), 47 U.S.C. Section 230(c), immunizes an employer from claims arising out of the transmission by a then employee of threatening emails to, and posts about, plaintiffs from his office computer.  As a result, the Court of Appeals affirmed the dismissal of intentional infliction of emotional distress claims advanced by plaintiffs against Agilent Technologies.  Plaintiffs had sought to hold Agilent Technologies responsible for its employee's threatening conduct on theories of respondeat superior, negligent supervision/retention, and ratification. 

The Court further held defendant entitled to summary judgment dismissing such claims on the facts before it.  The respondeat superior claim failed because the evidence established that the employee was acting outside the scope of his employment when he transmitted the threatening emails in question.  The negligent supervision/retention claim similarly failed because there was no evidence that Agilent Technologies was aware of its employee's activities when he was transmitting the emails at issue from his office computer.  Agilent only learned of this misconduct after the fact, at which time it terminated the employee.  Finally, there was no evidence that the defendant employer ratified its employee's misconduct.

Communications Decency Act immunizes operator of message board from defamation claims arising out of posts appearing thereon that were authored by others.  Such immunity extends to the defendant operator notwithstanding plaintiff’s claim that the defendant edits posts that appear on his boards, and selects posts that will either be published thereon, or removed therefrom.  The Court accordingly dismissed with prejudice defamation claims asserted by plaintiff Anthony DiMeo III arising out of offensive postings that appeared on defendant’s message boards. 

The Court also dismissed plaintiff’s claim that defendant violated the criminal statute 47 U.S.C. § 223 (a)(1)(C), which prohibits use of a telecommunications device anonymously to harass another.  Defendant neither acted anonymously – his name appeared both in the domain name and title of the message boards found on his website – nor did he use a telecommunications device, within meaning of the statute, in operating his web site.

Analysis of the Third Circuit's decision can be found below in the Quick Hits section of this page.

Relying heavily on Zeran v. AOL, 129 F.2d 327 (4th Cir. 1997) cert. denied, 118 S.Ct. 2341 (1998), the Florida District Court of Appeal affirmed the lower court's holding that the Communications Decency Act preempts state law claims advanced against an information service provider arising out of the ISP's allegedly improper participation in the sale or distribution of obscene material due to its alleged notice that a third party was using the ISP's chat rooms to market pornographic materials. The Court also affirmed that lower court's holding that the CDA preempts state law claims arising out of events that occurred prior to the CDA's enactment, but which claims were not asserted until after the CDA's enactment.

Communications Decency Act preempts state law claim of improper participation in sale or distribution of obscene material asserted against information service provider as a result of its alleged notice that third party was using ISP's chat rooms to market pornographic materials. Court further held that CDA applies retroactively to preempt state law claims arising out of events that occurred prior to the CDA's enactment, but which claims were not asserted until after the CDA's enactment.

Court holds that the Communications Decency Act immunizes defendants from various non-intellectual property claims arising out of their making available on their adult social networking sites an anonymous profile authored by an unknown third party which plaintiff claims falsely appears to people who know her to be her own.  The Court holds that this immunity also covers non-intellectual property claims arising out of defendants reposting this profile on third party sites, making slight alterations to the profile as to the participant’s age, and using the profile in teasers and other advertisements for defendants’ site.  As a result, the Court dismissed claims plaintiff advanced for defamation, intentional infliction of emotional distress, intentional, reckless, negligent and/or willful and wanton conduct, and violations of the New Hampshire Consumer Protection Act, arising out of such alleged misconduct.

The Court held that the Communications Decency Act did not, however, immunize defendants from intellectual property claims plaintiff advanced, both under applicable federal and state laws, including right of publicity claims advanced under New Hampshire state law.   Plaintiff was accordingly allowed to proceed with claims that defendants, by including identifiable aspects of plaintiff’s persona in advertisements and ‘teasers’ in an effort to increase the profitability of their websites, violated her right to publicity.

The Court further held that plaintiff could proceed with Lanham Act false designation of origin and false advertising claims against the defendants.   The false advertising claim was based on the inclusion of the profile at issue in ‘teasers’ and other advertisements for defendants’ site.  These acts allegedly deceived consumers into registering for defendants’ services in the hope of interacting with plaintiff, and caused injury to her reputation as a result, including alleged lost employment opportunities.  The false designation of origin claims similarly arose out of defendants’ use of the profile at issue in marketing their sites, which falsely implied plaintiff’s affiliation with, or sponsorship and approval of, defendants’ site and service.

Affirming the decision of the District Court below, the Fifth Circuit holds that section 230(c)(1) of the Communications Decency Act immunizes the social networking site Myspace Inc. from claims of negligence and gross negligence arising out of the alleged sexual assault of a minor made possible by her posting of a ‘user profile’ on Myspace.com.  As a result of this posting, a male, age 19, made contact with the minor, who falsely represented she was 18, and sexually assaulted her.  The Fifth Circuit held Myspace was immunized from plaintiff’s negligence and gross negligence claims, because they sought to hold Myspace liable for its role in making content authored by a third party – the minor’s user profile and personal information contained therein – available to third parties. 

In reaching this result, the Fifth Circuit rejected plaintiff’s attempt to avoid the bar of the CDA by arguing that they sought to hold Myspace liable for its alleged failure to institute adequate safety measures to protect minors, particularly from sexual predators.

Because the Fifth Circuit held that Section 230(c)(1) of the CDA barred plaintiffs’ claims, the Court did not review so much of the District Court’s decision that held that those claims were also barred by both Section 230(c)(2) of the Communications Decency Act, as well as applicable principles of Texas common law.

Court holds that those engaging in web site hosting activities are immunized by the Communications Decency Act, 47 U.S.C. 230(c) from liability arising out of their involvement, via those activities, in the dissemination or publication of information originating from third parties. Section 230(c)(1) provides 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." The court held that those who provide web hosting services are service providers within the meaning of the CDA, and hence entitled to the immunity it provides. Said the court: "by offering web hosting services which enable someone to create a web page, [defendants] are not magically rendered the creators of those web pages. See 47 U.S.C. 230(c)(1). As such, plaintiffs' new characterization of [defendants] as web hosts neither prevents these defendants from being deemed service providers protected by immunity under the CDA nor makes them content providers unprotected by the CDA's immunity."

Court dismissed claims of defamation and negligence asserted by plaintiff company against America Online ("AOL") arising out of AOL's posting of allegedly inaccurate stock quotes concerning plaintiff on its website, which quotes had been supplied to AOL by third-party content providers. Court held that such claims were barred by 47 U.S.C. §230, and the immunity granted thereunder to providers of "interactive computer services" such as AOL, for publication of content prepared by third-party information content providers. This dismissal was mandated even though AOL attempted to have its vendors correct the errors at issue.

A divided three judge panel of the Ninth Circuit limited the immunity afforded by the Communications Decency Act (“CDA”), 47 U.S.C. section 230, for website operators involved in the publication and distribution of the responses to questionnaires completed by third parties concerning their roommate preferences. 
The Panel unanimously held that the CDA did not immunize defendant Roommates.com from potential liability for drafting and posting questionnaires that sought information from those using the site about their roommate preferences.  These questionnaires, among other things, sought information about the preferred sexual orientation of the prospective roommate, and were used to create member profiles.  The Panel held that the CDA did not immunize Roommates.com from potential liability under the Fair Housing Act (“FHA”) for requiring members to answer questions that potentially enabled other members to discriminate for or against them.

By a vote of 2 to 1, the Panel further held that the CDA did not immunize Roommates.com from potential liability under the FHA for publishing and distributing member profiles created in response to Roommates.com’s questionnaires.  Roommates.com used the content of a user’s responses to its questionnaires to determine who among its members should receive notice that they were seeking a roommate, and/or be permitted to view that user’s profile.  For example, an individual with children was not shown a listing for an apartment occupied by an individual seeking a roommate without children.  The court held that by categorizing, channeling and limiting the distribution of user profiles, Roommates.com was sufficiently involved in the creation of the distributed information to lose the immunity afforded by the CDA to interactive service providers who make available content drawn by third parties. As a result, the Ninth Circuit allowed plaintiffs to proceed with claims that by such conduct, Roommates.com violated the FHA.

Finally, by a vote of 2 to 1, the Court held that the CDA did immunize Roommates.com from potential FHA liability arising out of its publication of users’ responses to Roommates.com’s requests for “Additional comments” concerning their roommate preferences.  In this section of its questionnaire, Roommates.com “strongly recommend[ed the user] tak[e] a moment to personalize your profile by writing a paragraph or two describing yourself and what you are looking for in a roommate.”  This question produced the most provocative – and potentially discriminatory - responses found in user profiles.  The court held that the responses to this question constituted content created by third parties within the meaning of the CDA.  As a result, held the Court, by application of the CDA, Roommates.com could not be held liable for publishing these responses on its website.

Court finds defendants guilty of engaging in unfair business practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. Section 45(a), by obtaining and selling confidential customer phone records without the affected customers’ authorization.  The Court found that defendant Abika.com arranged for the purchase of these phone records from third party vendors, which they subsequently resold via their website to third parties.  Illegal means were used by these vendors to obtain the confidential phone records, a fact of which, the Court found, defendant was aware.

In reaching this result, the Court rejected defendants’ claim that they were immunized from suit by application of Section 230 of the Communications Decency Act (“CDA”).  Defendants attempted to come within the ambit of the CDA by casting themselves as a search engine that put those seeking to purchase phone records in touch with ‘researchers’ seeking to sell them.  This characterization of their conduct was rejected by the Court.   The Court held that CDA immunity was not available to defendants because the claims at issue did not seek to treat them as the publisher of information, a prerequisite to such immunity.  Rather, they arose out of defendants’ purchase and resale of confidential information to third parties that was obtained through illegal means.  The Court further held that CDA immunity was not available because of defendants’ role in causing the information at issue to be obtained.  As such, defendants were held to have ‘participated in the creation or development of the information, and thus do not qualify for Section 230 immunity.’

Finally, the Court rejected defendants’ claim that the FTC was equitably estopped by its prior failure to prosecute phone record brokers from doing so here.  Such alleged inactivity was insufficient to estop the government from enforcing the laws of the land.

California intermediate appellate court affirms the decision of the trial court, and dismisses claims brought by plaintiffs against eBay under both California's Autographed Sports Memorabilia statute and California's Unfair Competition law, as well as for negligence, arising out of plaintiffs' purchase of allegedly non-authentic autographed sports memorabilia offered for sale by third parties on eBay's web site. Plaintiffs sought to hold eBay liable under California's Autographed Sports Memorabilia statute as a result of eBay's alleged failure to supply certificates warranting the authenticity of the goods purchased.  The court held that eBay was not obligated to supply the certificates because it was not a "dealer" of sports memorabilia within the meaning of the statute, as the goods in question were sold by third parties.  The court further held that section 230 of the Communications Decency Act ("CDA") immunized eBay from any liability arising out of its failure to supply these certificates.  The court held that, however couched, plaintiffs' claim sought to hold eBay liable for the allegedly false descriptions of the goods supplied by third parties.  As the CDA creates "federal immunity to any cause of action that would make interactive service providers liable for information originating with a third party use of the service" (excepting intellectual property claims) plaintiffs' Autographed Sports Memorabilia claims had to be dismissed.

The court held that plaintiffs' negligence and Unfair Competition claims were also barred by the CDA as each of these claims was also premised on content supplied by third parties.  These claims attacked eBay for giving the sellers of the goods at issue positive ratings concerning their past sales history, and urging purchasers to rely thereon in making their decision to purchase goods from those sellers.  These positive ratings were, however, simply an accurate reporting of customer feed back supplied by third parties concerning their alleged transactions with the sellers.  As such, eBay could not be held liable for the inaccuracy of such positive ratings because to do so would be to hold eBay liable for content originated by third parties, which is barred by the CDA.

Court dismisses defamation claims advanced against defendant, operator of the website ripoffreport.com, arising out of defendants’ publication of statements authored by a third party that were critical of plaintiffs.  The Court held such claims barred by application of the Communications Decency Act (“CDA”), 47 U.S.C. Section 230.  Notably, the court refused to issue plaintiff relief notwithstanding the fact that the author of the statements at issue allegedly requested without success that defendants remove them from ripoffreport.com.

The Court also declined to enforce a preliminary injunction issued on default by a Canadian court, directing defendants to remove the statements at issue from their website, on the ground that United States courts will not enforce injunctions issued by foreign courts.

Affirming the decision of the court below, the Third Circuit holds that the Communications Decency Act ("CDA") immunizes America Online ("AOL") from claims arising out of the transmission by unrelated third parties in an AOL chat room of (i) a "punter program", which disrupts the operation of the recipient's computer, and (ii) defamatory messages concerning the plaintiff.  The Third Circuit further holds that AOL's allegedly negligent failure to prevent such events from occurring did not breach its Member Agreement, in which it expressly disclaimed liability for the transmissions of others.

Court holds that neither the Communications Decency Act or the First Amendment immunize an Internet hosting company from potential liability under the Lanham Act for hosting the website of a third party which allegedly infringed plaintiff's trademark. As a result, the court denied defendant Mindspring's motion to dismiss, and allowed Gucci to proceed with its claim that, by hosting a third parties' site containing allegedly infringing materials, despite notice of the same, Mindspring was guilty of direct or contributory trademark infringement and false designation of origin in violation of the Lanham Act, as well as violations of state trademark and unfair competition statutes.

Court dismisses negligence and gross negligence claims asserted against defendant Myspace, Inc. (“Myspace”) arising out of the alleged sexual assault of a minor made possible by her posting of a “user profile” on Myspace.com.  As a result of this posting, a male, age 19, made contact with the minor who falsely represented she was 18, obtained her telephone number and arranged a meeting at which she was allegedly sexually assaulted.  The Court held Myspace immunized from such claims by application of the Communications Decency Act, 47 U.S.C. Section 230, because, at bottom, plaintiffs’ claims sought to hold Myspace liable as a result of its role in the publication of the minor’s user profile.  The Court also held plaintiffs’ claims barred by Section 230(c)(2)(A), as they sought to hold Myspace liable for its purported negligence in failing to verify the minor’s age.  The minor was 13 at the time she posted a user profile in which she falsely claimed to be 18.  Myspace does not permit those below 14 to use its services.

The Court also dismissed plaintiffs’ negligence claims, which sought to hold Myspace liable for its purported negligent failure to institute measures designed to protect minors from sexual predators and to take appropriate steps to verify their age.  The Court held that, like Federal Express and other common carriers, Myspace owed no duty to the minor which could form the basis of such a claim.

Finally, the Court dismissed plaintiffs’ fraud and negligent misrepresentation claims as a result of plaintiffs’ failure to plead such claims with the requisite particularity.

Court holds that the Communications Decency Act (“CDA”), 47 U.S.C. Section 230, immunizes operator of online adult dating service from claims arising out of a user’s false statement in her user-profile that she was over 18.  Relying on this profile, plaintiff met and had consensual sexual relations with a minor, for which he was subsequently arrested.  Plaintiff brought this suit, seeking redress.  Importantly, the contract between the parties expressly provided that SexSearch.com does not “assume any responsibility for verifying the accuracy of the information provided by other users of the Service.”  Because plaintiff sought to hold SexSearch.com, a provider of Interactive Computer Services, liable for its publication of content authored by another, his claims, whether couched as breach of contract, fraud or negligent misrepresentation, were barred by application of the CDA.  Plaintiff’s breach of contract claim similarly failed because SexSearch did not assume responsibility for verifying the age of users.

The Court held that the First Amendment, and the guaranties afforded Google and Yahoo thereunder, barred claims seeking redress as a result of Google and Yahoo's refusal to run advertisements on their search engines they did not wish to run.  In reaching this result, the Court followed decisions that afforded newspapers similar First Amendment protections when challenges arose concerning their refusal to run advertisements they deemed objectionable.  As a result, the Court dismissed claims advanced by plaintiff arising out of the defendants' refusal to run his advertisements, including claims that the defendants defrauded him and engaged in deceptive business practices, violated his First Amendment rights, and failed to meet the duties imposed on those, like inn keepers, engaged in a public calling.

The Court also held that Google and Yahoo were immunized from such claims by the Communications Decency Act, 27 U.S.C. Section 230, which "bars 'lawsuits seeking to hold a service provider liable for its exercise of a publisher's traditional editorial functions - such as deciding whether to publish, withdraw, alter or postpone content.'" It should be noted that plaintiff was proceeding pro se.

Court holds that the purported dispute resolution provisions contained in auction company’s online Terms and Conditions are unconscionable, and unenforceable against an individual dissatisfied with an auction in which she participated.  The dispute resolution provision mandated that the parties’ dispute be resolved in a binding proceeding before a representative of ‘In House Attorneys, P.C.’ in which each side was permitted only one hour to present their case, and could not call fact or expert witnesses nor be represented by counsel. 

As a result, the Court allowed plaintiff to proceed with claims against the defendant Hot Jewelry Auctions.com - who ran the auction - grounded on claims that defendant engaged in ‘shill bidding.’ 

Plaintiff was also allowed to proceed with claims against eBay as a result of her participation in this auction, via eBay’s Live Auction service.  In promoting this service, eBay claimed that “bidding on eBay Live Auctions is very safe.  All live auctions are run by reputable international auction houses, which are carefully screened by eBay before being authorized to sell to you.”  Notwithstanding the fact that eBay was responsible for this content, and derived a profit by promoting use of its Live Auction service, the Court held that it was immunized by application of the Communications Decency Act (“CDA”) from fraud and other claims arising out of so much of its promotional materials that advised consumers that eBay ‘carefully screened’ the auction houses allowed to participate in Live Auction.  The Court reasoned that to allow plaintiff to pursue such claims would expose eBay to “liabil[ity] for its exercise of a publisher’s traditional editorial functions” which is barred by the CDA.  As such, the Court barred plaintiff from pursuing claims that this representation was false because eBay allegedly did not ‘screen’ auction houses before permitting them to participate in such Live Auctions or because it knew that the auction house was engaged in illegal conduct – such as shill bidding – and failed to take appropriate steps in light thereof.   

The Court did permit plaintiff to proceed with claims arising out of eBay’s representation that such auctions were ‘safe,’ holding the same were not barred by application of the CDA because ‘eBay’s statements regarding safety affects and creates an expectation regarding the procedures and manner in which the auction is conducted and consequently goes beyond traditional editorial discretion.’  Nor were such claims barred by application of eBay’s Live Auction User agreement, which immunized eBay from any disputes a consumer might have with the auction house itself, as this dispute arose out of eBay’s own purported misconduct – namely misrepresenting that the auction was ‘safe.’  Because plaintiff had failed to plead with the requisite particularity that she relied on this statement in deciding to participate in the auction in question, however, her fraud claim was dismissed with leave to replead.

Court holds that plaintiff, by clicking an "I accept" icon agreeing online to be bound by the Terms of Service governing use of an online discussion group set forth in a scrollable window, viewable ten lines at a time, was bound by the forum selection contained therein.  Finding such a clause enforceable, the Court dismissed a claim brought by plaintiff asserting that defendant Google breached this agreement, because this claim was not brought in the designated forum.

The Court also held that Section 230 of the Communications Decency Act ("CDA") immunized an ISP hosting an online discussion group from claims that its failure to remove objectionable content posted on the discussion group's web page gave rise to claims of tortious interference with contractual relations. 

Finally, the Court denied the motions of two additional defendants to dismiss the claims asserted against them for want of personal jurisdiction.  The Court held that the first defendant was subject to specific jurisdiction in New York because of its operation of a commercial website via which it sold $6000 of products a year to New York residents.  The second defendant was similarly subject to suit because he had entered into a contract with a New York company, which contract allegedly gave rise to the claims asserted against him.

District Court dismisses claims charging Google with direct copyright infringement as a result both of its archiving Usenet postings that contain excerpts of plaintiff’s copyrighted works, and its display of excerpts of plaintiff’s copyrighted website in search results.  The District Court holds that Google has not engaged in the requisite volitional conduct necessary to be held guilty of direct copyright infringement because such copying is a by-product of the automated operation of Google’s search engine and related technologies.  As such, Google’s acts are akin to a user’s use of its ISP to transmit infringing material to a third party, which do not give rise to direct infringement claims against the ISP.  On appeal, the Third Circuit affirmed the dismissal of Parker’s direct infringement claims, on the grounds that Google’s archiving of infringing Usenet postings lacked the requisite “volitional conduct.”

Relying on Field v. Google, (D. Nevada 2006), the District Court also dismisses direct copyright infringement claims arising out of Google’s presentation to users of “archival” copies of plaintiff’s website in search results denominated “cache.”  The District Court holds that Section 512(b) of the Digital Millennium Copyright Act (“DMCA”), applicable to copyright infringement claims arising out of “system caching,” bars such claims here.

The District Court also dismissed vicarious and contributory copyright infringement claims arising out of Google’s archiving of Usenet posts created by third parties that themselves allegedly infringe plaintiff’s copyright, both because Google lacks the requisite knowledge of such inadequately identified infringing activity, and because it does not derive sufficient direct financial benefit therefrom.  This decision too was affirmed by the Third Circuit on appeal.

The District Court further dismissed defamation, invasion of privacy and negligence claims advanced by plaintiff arising both out of Google’s archiving of Usenet posts authored by third parties that allegedly defamed plaintiff, as well as out of Google’s storage and display in its “cache” of a website that purportedly defamed plaintiff.  Such claims are barred by the immunity afforded Google by Section 230 of the Communications Decency Act (“CDA”), a decision affirmed on appeal.

Finally, the District Court dismissed Lanham Act claims brought against Google as a result of its alleged republication of a website operated by a third party titled “the Official Roy Gordon FAQ.”  The District Court held that the third party was not violating the Lanham Act both because it was not using a mark in commerce as it was not selling anything on its site, and because consumers were not likely to be confused as to the origin of the site, given the criticism of plaintiff found thereon.  The Lanham Act claims against Google also failed because it was not a “moving force” or “active participant” in the creation of this site, or the alleged use thereon of plaintiff’s ‘mark.’  The Third Circuit affirmed the dismissal of the Lanham Act claims because of the absence of a likelihood of consumer confusion.  The Court also affirmed the dismissal of plaintiff’s trade disparagement claims because the statements at issue on the third party website were not made in the context of commercial advertising.

It should be noted that the plaintiff appeared pro se.  In addition, the Third Circuit’s opinion was denoted “Not Precedential.”

Court holds that Section 230 of the Communications Decency Act ("CDA") bars plaintiffs from pursuing claims against Kinko's arising out of allegedly defamatory statements an unaffiliated third party made in an Internet chat room from a computer rented to him by Kinko's.  The CDA prevented plaintiffs from pursuing claims that Kinko's aided and abetted both the third party's defamation of, and interference with plaintiffs' prospective business relationships by making the offending statements, as well as claims that Kinko's negligently failed to keep appropriate records of the use of its rented computers, and destroyed evidence of the same.

The Ninth Circuit allows Perfect 10 to pursue copyright infringement claims against defendants, who provide web hosting and credit card billing services, arising out of the unauthorized posting on the web by their third party customers of “adult” images in which Perfect 10 holds copyrights.  Questions of fact precluded a determination of whether defendants were immunized from monetary liability for such claims by the Digital Millennium Copyright Act (“DMCA”).  Such immunity extends only to service providers who “reasonably implement” a policy for terminating those of their customers that repeatedly infringe copyrights.  In considering this question, the Ninth Circuit held  courts should consider not only the manner in which the defendants responded to “take down” infringement notices sent by the plaintiff copyright holder, here Perfect 10, but also the manner in which they responded to similar notices from third party copyright holders.  Because the District Court failed to consider whether defendants terminated customers identified in such third party “take down” infringement notices, the Ninth Circuit could not determine whether defendants “reasonably implemented” a compliant DMCA policy, and thus whether they were entitled to DMCA immunity.  The case was accordingly remanded to the District Court for further consideration.

The Ninth Circuit held that defendants had no obligation to respond to the “take down” notices provided by Perfect 10, or take steps to prevent the infringing conduct alleged therein, due to Perfect 10’s failure to provide such notices under penalty of perjury.  Absent the sworn acknowledgement required under the DMCA that the complainant is both an authorized representative of the copyright owner, and has a good faith belief that the material at issue is unlicensed, the service provider has no obligation to act upon the notice. 

Nor, held the Ninth Circuit, were defendants obligated to take action against purported “red flag” sites defendants serviced, which included sites that purported without authorization to provide users with passwords to access plaintiff’s materials, or other websites bearing names such as “stolencelebritypics.com” or “illegal.net.”   The DMCA does not impose on service providers the obligation to conduct an affirmative investigation into the bona fides of such sites.  To qualify as a “red flag” site that imposes an obligation on a service provider to act, held the Ninth Circuit “it … need[s] to be apparent that the website instructed or enabled users to infringe another’s copyright.”

The Ninth Circuit allowed Perfect 10 to pursue direct copyright infringement claims against the defendants as a result of the posting of infringing images on hornybees.com.  The court held that sufficient evidence of defendants’ direct involvement in the operation of that site was presented to survive a motion for summary judgment.

Finally, the Ninth Circuit held that the Communications Decency Act immunized defendants from the unfair competition, false advertising and right of publicity claims advanced by Perfect 10.

Court holds that Section 230 of the Communications Decency Act ("CDA") immunizes Amazon.com from claims of breach of contract, negligent misrepresentation and tortious interference brought by plaintiff as a result of negative statements posted by third parties on Amazon.com's web site, and Amazon's failure to remove them in alleged violation of Amazon's guidelines governing such postings.  Section 230 provides 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."  The Court held that Amazon satisfied each of the elements necessary for protection under this statute.  First, Amazon was a provider of "interactive computer services" entitled to avail itself of the protections afforded by the statute because it operated a web site on which third parties could post comments, which Amazon made available to others.  Second, the content in question was provided by third parties, and not Amazon, despite Amazon's right to edit or remove the same.  And lastly, Amazon was immunized from the claims in question because each premised Amazon's liability on its failure to remove offending content originated by others, an editorial function for which the statute was intended to provide protection.

Court holds that Section 230 of the Communications Decency Act ("CDA") renders Ebay immune from a suit charging that the use by third parties of Ebay's web site to sell "bootleg" musical recordings violates Cal. Bus. and Professions Code Section 17200.

Court dismisses cyberstalking and security law claims advanced by plaintiffs under Florida state law against defendant Lycos, holding such claims barred by the immunity afforded Lycos under Section 230 of the Communications Decency Act (“CDA”).  Such claims arose out of statements critical of plaintiff Universal Communication Systems (“UCS”) and its CEO, Michael Zwebner, that were posted by third parties on a message board found on a website operated by Lycos at the domain Raging Bull.com  Plaintiffs claimed that defendants, including Lycos, were involved in a scheme to manipulate plaintiff’s stock price.  Plaintiffs claimed that defendants shorted UCS stock, and then posted derogatory comments on RagingBull.com in an attempt to drive the stock price down.  Such a claim, held the court, sought to hold Lycos liable for its role in the publication of these statements, which were authored by third parties, and as such was barred by operation of the CDA.  The cyberstalking claim was similarly barred because the act on which such claim rested was the publication of derogatory statements on the RagingBull.com message board authored by third parties.  As such, this claim too, sought to hold Lycos liable for its role in the publication of such statements, and was barred by application of the CDA. 

The court also dismissed federal cyberstalking claims asserted by plaintiffs against Lycos under 47 USC Section 223, holding that this statute did not create a private right of action for a civil suit.

Finally, the Court dismissed trademark dilution claims advanced by plaintiffs under Florida state law.  These claims were premised on the use of UCS’ trademark as the name for a message board on Raging Bull.com at which third parties posted statements critical of plaintiffs.  The Court held that, despite the fact that the message boards contained advertising, such a use did not constitute the requisite use in commerce of plaintiffs’ mark.  In addition, such use of plaintiffs’ mark to describe a message board that contained statements about plaintiffs was not actionable under the dilution act.

In the latest chapter of this long running dispute, the District Court holds that the Communications Decency Act, 47 USC Section 230, immunizes defendants from defamation claims arising out of the posting on their site – The Rip-Off Report - of allegedly defamatory statements about plaintiff that were allegedly authored by third parties.  In reaching this result, the Court rejected plaintiff’s contention that defendants were sufficiently involved in the creation of the posts at issue to be denied CDA immunity because they offered such third party posters the opportunity to categorize their reports in categories such as ‘con artists’, ‘corrupt companies’ and ‘false TV advertisements.’  The Court further held that plaintiff had failed to submit evidence sufficient to establish that defendants were involved in authoring the particular defamatory statements at issue so as to lose the immunity offered by the CDA.

Eleventh Circuit holds that plaintiff's defamation claims against operators of consumer complaint sites arising out of the posting on those sites of allegedly defamatory complaints purportedly authored by third parties is sufficient to survive a motion to dismiss predicated on the immunity afforded the operators of interactive computer services under the Communications Decency Act ("CDA").  The complaint alleged that defendants edited consumer complaints to include words such as "ripoff" and "scam", and fabricated others.  The ultimate resolution of defendants' entitlement to immunity for their involvement in the publication of the posts at issue will have to await the trial of this matter.

As a result of this determination, the Eleventh Circuit reversed the decision of the District Court, which had dismissed the action for want of personal jurisdiction.  The lower court's decision was grounded on its determination that no tort was committed by defendants in Florida, due to the application of the CDA.   The Eleventh Circuit rejected this determination, and remanded the matter to the District Court to determine whether the Court could appropriately exercise personal jurisdiction over the defendants consistent with the strictures of the Due Process clause of the United States Constitution.

Court holds that Section 230 of the Communications Decency Act (“CDA”) immunizes distributor of anti-virus and security software from claims of tortuous interference with contract, trade libel and unjust enrichment arising out of its distribution of software that labels plaintiff Zango’s software as malware, and enables a user to block or disable it.  Zango provides consumers free access to online videos, games and music in exchange for their agreement to the display of sponsors’ advertisements.  Notably, the Court holds defendant entitled to such immunity notwithstanding claims that it acted in bad faith when it so labeled plaintiff’s software.  According to the Court, ‘good faith’ is not a prerequisite to immunity under section 230(c)(2)(b) of the CDA.  All that is required is that a provider of an “interactive computer service” take “action  … to enable or make available to … others the technical means to restrict access to” material  “the provider or user considers … objectionable,” a standard defendant met.

The Court also held that it could exercise personal jurisdiction over the non-resident defendant in Washington as a result of its sale of software products to Washington residents which allegedly caused plaintiff injury in the forum.

The CDA preempts a state common law distributor liability cause of action against an interactive computer service provider arising from that provider's allegedy negligent distribution of defamatory material provided via its electronic bulletin board. Under CDA section 230 (c)(i), information service providers are granted imunity from such claims. This immunity is retroactive, and applicable to plaintiff's claim, brought after the enactment of the CDA, even though the events giving rise to his claim were completed before the CDA became effective.

Communications Decency ActCommunications Decency ActCommunications Decency ActCommunications Decency ActCommunications Decency ActCommunications Decency Act Quick Hits

Eleventh Circuit holds that Amazon.com’s display of a book cover that contains an unauthorized photograph of plaintiff on a product detail webpage used to promote Amazon.com’s sale of the book is not a commercial use of plaintiff’s image under Florida’s right of publicity statute – Fla. Stat. 540.08 - and hence is not actionable thereunder.   As such, the Eleventh Circuit affirmed, on different grounds, the District Court’s grant of summary judgment to Amazon.com, and dismissed plaintiff’s statutory right of publicity claim arising out of such unauthorized display.  The Court’s decision was grounded on its determination that, to be actionable under Section 540.08, plaintiff’s image must be used to ‘directly promote’ the sale of a product.  Because Amazon.com’s use of the book cover containing plaintiff’s image was ‘merely incidental to, and customary for, the business of internet book sales’ it was not an actionable commercial use of that image within the meaning of the statute.   Said the Court:

Amazon provides its online customers with a searchable book database with links to product detail pages for each book in its database.  Each product detail page provides the book’s cover image, the publisher’s description of the book, and in many instances editorial and customer content.  From the product detail page, customers may link to an order placement page, where they may complete their purchase and specify the shipping method.  In this manner, Amazon’s role as an internet bookseller closely parallels that of a traditional bookseller.  Because internet customers are unable to browse through shelves of books and observe the actual book cover photos and publisher content, Amazon replicates the bookstore experience by providing its customers with online cover images and publisher book descriptions. …

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[W]e find that, as a matter of business practice, Amazon’s use of book cover images closely simulates a customer’s experience browsing book covers in a traditional book store.  Thus, it is clear that Amazon’s use of book cover images is not an endorsement or promotion of any product or service, but is merely incidental to, and customary for, the business of internet book sales. …

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Under the allegations of Almeida’s complaint, we discern no set of facts by which an internet retailer such as Amazon, which functions as the internet equivalent to a traditional bookseller, would be liable for displaying content that is incidental to book sales, such as providing customers with access to a book’s cover image and publisher’s description of the book’s content.  Accordingly, we affirm the district court’s grant of summary judgment as to Amazon’s right of publicity claim, but we do so on the ground that Amazon did not use Almeida’s image for the purpose of directly promoting a product or service in violation of section 540.08

The Court spent much of its opinion discussing, without deciding, whether the Communications Decency Act barred plaintiff from pursuing the instant right of publicity claim against Amazon.  More particularly, the Court grappled with the question of whether the statute’s ‘intellectual property law’ exception, found in Section 230(e)(2), permitted plaintiff to pursue a right of publicity claim on the ground that such was in fact an intellectual property claim within the meaning of the statute.  This section provides that “nothing in [section 230 of the CDA] shall be construed to limit or expand any law pertaining to intellectual property.”  Because the Court ultimately found that plaintiff could not sustain her right of publicity claim on the merits, it did not reach this question.

Finally, the Eleventh Circuit affirmed the dismissal of plaintiff’s civil theft claim, finding that plaintiff had failed to submit evidence sufficient to establish that Amazon acted with the requisite ‘felonious intent’ when it purportedly misappropriate plaintiff’s property – namely her image – for its own use to promote its sale of books.  The Court held that there was no evidence that Amazon was aware when it posted the book cover in question on its website that the publisher was not authorized to use plaintiff’s image on the book’s cover.  When plaintiff contacted Amazon and so informed it, Amazon promptly removed the book cover from its site.

Court holds that Communications Decency Act does not bar fraud and negligent misrepresentation claims advanced against Yahoo as a result of its alleged creation of false user profiles.  These false user profiles were allegedly included in online dating services Yahoo operates to cause users such as plaintiff to sign-up for, or renew their subscriptions to, the service.   The Court further held that the Communications Decency Act did not bar claims that asserted that Yahoo falsely represented to subscribers that various expired user profiles were in fact still current in an effort to cause them to continue their subscriptions.  Said the Court:

Anthony alleges that Yahoo creates false profiles, not merely fails to delete them. ... In addition, Anthony claims that Yahoo sends users false profiles for the purpose of luring them into renewing their subscriptions. ... No case of which this court is aware has immunized a defendant from allegations that it created tortious content. ... If, as Anthony claims, Yahoo manufactured false profiles, then it is an 'information content provider' itself and the CDA does not shield it from tort liability.  In addition, the CDA does not defeat Anthony's allegations that Yahoo sent 'profiles of actual legitimate former subscribers whose subscriptions had expired and who were no longer members of the service, to current members of the service.  Admittedly, third parties created there profiles.  Nevertheless, the CDA only entitles Yahoo not to be 'the publisher or speaker' of the profiles.  It does not absolve Yahoo from liability for any accompanying misrepresentations.  Because Anthony posits that Yahoo's manner of presenting the profiles - not the underlying profiles themselves - constitute fraud, the CDA does not apply.

Affirming the decision of the court below, the Third Circuit holds that plaintiff’s claim for defamation, arising out of the posting of derogatory comments authored by third parties about plaintiff on a message board operated by the defendant, were barred by application of the Communications Decency Act, 47 U.S.C. Section 230.

To qualify for the statute’s protections, the defendant must be a “provider or user of an interactive computer service” and the claim must seek to treat him as “the publisher or speaker” of content “provided by another information content provider.”  Such, held the Third Circuit, was the case here.  By making available message boards on his website, Max was a provider of an interactive computer service.  Said the Court: “Max’s website is an interactive computer service because it enables computer access by multiple users to a computer server.”  Similarly, because the complaint did not allege that Max himself was the author of the offending posts at issue, they were content provided by another information content provider.  And finally, by asserting a defamation claim against Max, plaintiff sought to hold him liable as the publisher of this content.  Having made the showing necessary for immunity under Section 230 of the CDA, the Third Circuit affirmed the dismissal of plaintiff’s defamation claim.

The Third Circuit also affirmed the district court’s denial of plaintiff’s motion for leave to amend his complaint to assert claims for intentional infliction of emotional distress, and RICO violations, on the grounds of futility.  The former failed because the CDA afforded Max immunity from such claims, which, like the defamation claims, arose out of the posting by third party of offensive comments on a message board operated by Max.  The later failed as a result of plaintiff’s failure to allege the commission of any of the requisite criminal predicate acts.

It should be noted that the Third Circuit denoted its opinion non-precedential.

Court holds CDA Section 230 immunizes Yahoo from civil liability arising out of its hosting of an online ‘e-group’ named ‘Candyman’ on which illegal images depicting child pornography were exchanged.  The co-defendant, Mark Bates, was convicted for his involvement as the moderator of this online forum.  Plaintiff brought claims under 18 U.S.C. Section 2252A, which creates a private right of action for those aggrieved by a violation of 18 U.S.C. Section 2252, a criminal statute that prohibits the dissemination of child pornography.  The Court, in a case of first impression, held that the CDA immunized Yahoo from such civil claims, as well as claims of negligence, negligence per se, intentional infliction of emotional distress, invasion of privacy and civil conspiracy, arising out of its hosting of this forum.  The Court reached this result notwithstanding the fact that 47 U.S.C. Section 230(e)(1), titled “no effect on criminal law,” provides “nothing in this section shall be construed to impair the enforcement of  … Chapter … 110 (relating to sexual exploitation of children) of Title 18, or any other Federal Criminal Statute.”  Said the Court:

while the facts of a child pornography case such as this one may be highly offensive, Congress has decided that the parties to be punished and deterred are not the internet service providers but rather those who created and posted the illegal material, such as defendant Mark Bates, the moderator of the ‘Candyman’ e-group.

Court holds that the ‘Good Samaritan’ provisions of the Communications Decency Act (“CDA”), 47 U.S.C. Section 230(c)(2), immunize Internet Service Providers such as defendant Comcast from ‘good faith’ actions taken to block email marketers from sending email solicitations to users of the ISP’s services.  Plaintiff e360Insight brought this action in response to actions taken by Comcast to block it from sending email solicitations to Comcast customers.  Under the CDA, Comcast is entitled to immunity for “any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be … objectionable, whether or not such material is constitutionally protected …”.  230(c)(2)(A).  Thus, to be entitled to immunity, the ISP must show both that the materials it blocked are 'objectionable' and that it acted in good faith in blocking them.  The Court applied a subjective standard in determining whether the emails in question were objectionable and hence subject to blocking under the statute – i.e. the materials are objectionable if Comcast believes them to be objectionable.  Importantly, it did not matter if the emails complied with CAN-SPAM.  Said the Court:

compliance with CAN-SPAM, Congress decreed, does not evict the right of the provider to make its own good faith judgment to block mailings. …  Under the law, a mistaken choice to block, if made in good faith, cannot be the basis for liability under federal or state law.  To force a provider like Comcast to litigate the question of whether what it blocked was or was not spam would render Section 230(c)(2) nearly meaningless. 

Because Comcast believed the emails at issue were objectionable, and because plaintiff failed to adequately plead that Comcast did not act in good faith when it made its decision to block plaintiff’s emails, Comcast was entitled to immunity, and the Court dismissed the claims plaintiff asserted against it for violation of the Computer Fraud and Abuse Act and of plaintiff’s rights under the First Amendment, as well as for tortuous interference with prospective economic advantage and violation of the Illinois Consumer Fraud Act.

Court holds that the Communications Decency Act immunizes InfoUSA, a provider of proprietary databases providing information concerning individuals and businesses, from suit seeking to hold it liable for false listings about plaintiffs provided to it by third parties, which InfoUSA included in a database it subsequently licensed for use to others.  The Court reached this result notwithstanding InfoUSA's representation that it provides "the utmost quality information" and "call[s] every business to verify the information, so you can be assured of the most current and accurate listings."  Plaintiffs could not pursue a claim based on the alleged falsity of this representation, because to do so would necessarily treat InfoUSA as a publisher of this information, which is prohibited by the Communications Decency Act.  Said the Court:

Additionally, the Plaintiffs argue that the Defendant operated as an information content provider because the defendant assures the accuracy of its listings via its verification process.  The Plaintiffs are presumably alleging that they were harmed by third party content and that the Defendant is liable for failing to verify the accuracy of the content.  'Any such claim by [the plaintiffs] necessarily treats the [defendant] as 'publisher' of the content and is therefore barred by Section 230.'  The plaintiffs' argument that they seek to hold the Defendant liable for its alleged failure to verify the accuracy of the listing does not remove this case from the immunity provided by Section 230.'

In this suit, plaintiffs claimed they were harassed by third parties who found the false information contained about them in defendant InfoUSA's database offensive.

Communications Decency Act - Immunity Denied - Updated November 21, 2008

Rejecting Zeran v. America Online, (4th Cir. 1997) and its progeny, an intermediate California Appellate court holds that the Communications Decency Act ("CDA") does not immunize a user of interactive computer services from a defamation claim arising out of her republication of statements authored by a third party, when the user knew or had reason to know of the falsity of those statements.  As a result, the Appellate Court reversed to much of the decision of the trial court below which had dismissed a defamation claim brought against defendant Ilena Rosenthal as a result of her republication in Usenet postings of a statement authored by a third party (defendant Timothy Bolen) which accused plaintiff Polevoy of criminal conduct.

The trial court had also rested its dismissal under California's Anti-SLAPP statute of plaintiffs' defamation claims on its determination that Polevoy lacked the requisite probability of success because, as a public figure, he could not prove that defendant Rosenthal acted with 'malice' when republishing Bolen's statements.  The Appellate court rejected this determination, holding that plaintiff may be able to establish that Rosenthal acted with the required malice, and therefore could proceed, notwithstanding Rosenthal's allegation that she had checked the veracity of the statements she was republishing with the alleged victim.  The Appellate Court held that such was insufficient to require dismissal of plaintiff's complaint, because of the alleged bias of both the victim and the original author of the posting against the plaintiff.

The Appellate Court did affirm the lower court's dismissal of defamation claims advanced by plaintiff Barrett, because the statements at issue were non-actionable opinion, as well as the trial court's decision to award Rosenthal attorney's fees expended in pursuing her Anti-SLAPP motion to dismiss (though reducing the recoverable amounts to reflect the reversal of that court's decision as to the claims asserted by Polevoy).

This decision, if followed, could have important ramifications for internet service providers and others who regularly repost publications authored by third parties without reviewing their content.  Under the court's ruling, service providers can be liable for defamation as a result of their republication of such statements if they know or have reason to know of the falsity of those statements.  According to the court "distributor liability would [generally] not require a service provider to review communications in advance of posting them but only to act reasonably after being put on notice that the communication is defamatory."  As a result, once the service provider receives notice (from the allegedly defamed individual) of falsity, it must either undertake adequate steps to ascertain the veracity of the statement, remove it, or face potential liability.  This creates tremendous uncertainty as the court did not specify what such adequate steps would be.  Indeed, as noted above, in the case at bar, where plaintiff alleged he was defamed by a statement that he had engaged in criminal conduct, the court held that contacting the victim was not sufficient as a matter of law to warrant dismissal of plaintiff's suit because of the victim's purported bias against plaintiff Polevoy.  Subsequent developments in this case should be watched closely by those interested in this field.

In this defamation suit, the Ninth Circuit Court of Appeals holds that the operator of a listserv and website is a user of interactive computer services entitled to the protections of the Communications Decency Act ("CDA") against liability arising out of his publication of information provided by another information provider.  Because, however, the author of the information at issue claimed he did not mean for the defendant operator of the listserv to publish it, the Ninth Circuit remanded the case to the District Court for a determination as to whether the listserv operator was entitled to immunity under the CDA in this particular case.  Such immunity should be granted, held the Ninth Circuit, if the information in question was provided to the listserv operator by a third party under circumstances in which a reasonable person would conclude that the third party provided the information for publication on the Internet.  The Ninth Circuit accordingly vacated so much of the District Court's decision which denied defendant's motion to dismiss this defamation action under California's Anti-SLAPP statute, which motion was to be reconsidered on remand.  The Ninth Circuit also affirmed the District Court's rejection of plaintiff's defamation claims against Mosler, which were predicated solely on its placement of ads on the website at issue.

Court in large part grants defendants’ motion for summary judgment, and dismisses claims arising out of defendants’ operation of a website on which third parties, and defendants themselves, posted a number of statements critical of plaintiff Best Western International Inc.  Left unresolved by the Court’s motion were plaintiff’s claims that a number of additional posts authored by defendants were in fact defamatory.

Best Western is a non-profit member corporation, which assists its members in running their hotels.  Defendants are members of Best Western who operate hotels, their spouses, and an individual who assisted in the creation of the website at issue.  The member defendants are bound by the terms of membership agreements with plaintiff. 

The Court held that the immunity granted defendants under the Communications Decency Act barred plaintiff from seeking to hold them liable for defamatory posts authored by third parties that appeared on defendants’ website.  Defamation claims arising out of 50 posts defendants themselves authored failed because plaintiff did not present sufficient evidence to establish that defendants acted with the requisite degree of fault necessary to sustain a defamation claim.  Thus, plaintiff failed to establish that defendants acted with either actual malice or negligence in making these statements, or with knowledge of their alleged falsity.   In reaching this result the Court noted that possessing ill will toward plaintiff was insufficient to establish ether that defendants acted with the requisite degree of fault, or that they were guilty of defaming plaintiff. 

The Court also rejected tortuous interference with contract or prospective advantage claims arising out of the posting on defendants’ site of statements urging plaintiff’s members to switch to a competitor’s organization.  The Court held that plaintiff failed to prove either that such statements caused it any injury, or that defendants or the competitor acted improperly in making these posts.  In reaching this result, the Court noted that plaintiff’s competitor is free to make posts that promote itself and its own economic interests.

Finally, the Court rejected various breach of contract claims advanced by plaintiff, asserting that defendants breached the parties’ membership agreement by making public confidential information, or failing to meet the membership agreement’s requirement to use their best efforts to maintain positive relationships with customers.  As to the former, the Court held there were no such prohibitions in the parties’ agreement that bound defendants.  As to the later, the Court held that the prohibitions applied to other aspects of defendants’ business, with which obligations defendants complied.

The Court did allow plaintiff Best Western to pursue breach of contract claims arising out of the use by the member defendants of Best Western’s trademark on the website at issue, which use purportedly violated the parties’ membership agreement.

Court grants motion of defendants Metrosplash.com and Lycos for summary judgment, and dismisses claims of invasion of privacy, defamation, misappropriation of right of publicity and negligence brought against them by plaintiff Carafano, an actress.  These claims arose out of the posting of a dating profile by a third party on the defendants' Matchmaker website, which profile allegedly contained fictious information about plaintiff, as well as accurate contact information and photographs of her.  This information was posted in response to a form questionnaire prepared by defendants to which site members had to respond.

The court rejected defendants' argument that plaintiff's claims were barred by application of Section 230 of the Communications Decency Act.  While the defendants were "interactive service providers" within the meaning of the statute by virtue of their operation of the Matchmaker website, defendants were not entitled to the statute's protection because of the role they played in originating the content in question.  Such protections are available only as to claims arising out of information provided by an information content provider other than the defendant.  The court barred defendants from using the CDA as a shield because the information in question was posted in response to a questionnaire prepared by defendants.

Nonetheless, the court dismissed each of the claims raised by plaintiff against defendants.  Plaintiff's invasion of privacy claim failed because the information in question, her address, was "newsworthy," making its publication non-actionable.  The defamation claim was dismissed because, given plaintiff's status as a public figure, she could not show that defendants acted with actual malice in publishing the statements in question, a prerequisite to such a claim.  Such malice was absent because defendants were unaware of the information contained in "plaintiff's" profile at the time it was posted to defendants' site by a third party, and thus did not entertain any serious doubt as to its truth at the time it was published.  Plaintiff's misappropriation of right of publicity and negligence claims failed for the same reason, plaintiff's inability to establish that defendants acted with the requisite actual malice.

Court holds that the Communications Decency Act (“CDA”), 47 U.S.C. Section 230(c)(1), mandates dismissal of so much of plaintiff’s defamation claim that arises from the publication by third parties of comments critical of plaintiff on a website defendants operate known as the “ripoffreport.com.”  The CDA further mandates dismissal of claims arising out of defendants’ promotion of its site and the allegedly objectionable content thereon, making the site more accessible to search engines and users, or soliciting contributions to assist in making the information on the site available.  The Court did , however, allow plaintiff to pursue defamation claims arising out of the headlines for third party content authored by the defendants, which themselves purportedly contained defamatory content.

Court holds that the Communications Decency Act immunizes defendants from various non-intellectual property claims arising out of their making available on their adult social networking sites an anonymous profile authored by an unknown third party which plaintiff claims falsely appears to people who know her to be her own.  The Court holds that this immunity also covers non-intellectual property claims arising out of defendants reposting this profile on third party sites, making slight alterations to the profile as to the participant’s age, and using the profile in teasers and other advertisements for defendants’ site.  As a result, the Court dismissed claims plaintiff advanced for defamation, intentional infliction of emotional distress, intentional, reckless, negligent and/or willful and wanton conduct, and violations of the New Hampshire Consumer Protection Act, arising out of such alleged misconduct.

The Court held that the Communications Decency Act did not, however, immunize defendants from intellectual property claims plaintiff advanced, both under applicable federal and state laws, including right of publicity claims advanced under New Hampshire state law.   Plaintiff was accordingly allowed to proceed with claims that defendants, by including identifiable aspects of plaintiff’s persona in advertisements and ‘teasers’ in an effort to increase the profitability of their websites, violated her right to publicity.

The Court further held that plaintiff could proceed with Lanham Act false designation of origin and false advertising claims against the defendants.   The false advertising claim was based on the inclusion of the profile at issue in ‘teasers’ and other advertisements for defendants’ site.  These acts allegedly deceived consumers into registering for defendants’ services in the hope of interacting with plaintiff, and caused injury to her reputation as a result, including alleged lost employment opportunities.  The false designation of origin claims similarly arose out of defendants’ use of the profile at issue in marketing their sites, which falsely implied plaintiff’s affiliation with, or sponsorship and approval of, defendants’ site and service.

A divided three judge panel of the Ninth Circuit limited the immunity afforded by the Communications Decency Act (“CDA”), 47 U.S.C. section 230, for website operators involved in the publication and distribution of the responses to questionnaires completed by third parties concerning their roommate preferences. 
The Panel unanimously held that the CDA did not immunize defendant Roommates.com from potential liability for drafting and posting questionnaires that sought information from those using the site about their roommate preferences.  These questionnaires, among other things, sought information about the preferred sexual orientation of the prospective roommate, and were used to create member profiles.  The Panel held that the CDA did not immunize Roommates.com from potential liability under the Fair Housing Act (“FHA”) for requiring members to answer questions that potentially enabled other members to discriminate for or against them.

By a vote of 2 to 1, the Panel further held that the CDA did not immunize Roommates.com from potential liability under the FHA for publishing and distributing member profiles created in response to Roommates.com’s questionnaires.  Roommates.com used the content of a user’s responses to its questionnaires to determine who among its members should receive notice that they were seeking a roommate, and/or be permitted to view that user’s profile.  For example, an individual with children was not shown a listing for an apartment occupied by an individual seeking a roommate without children.  The court held that by categorizing, channeling and limiting the distribution of user profiles, Roommates.com was sufficiently involved in the creation of the distributed information to lose the immunity afforded by the CDA to interactive service providers who make available content drawn by third parties. As a result, the Ninth Circuit allowed plaintiffs to proceed with claims that by such conduct, Roommates.com violated the FHA.

Finally, by a vote of 2 to 1, the Court held that the CDA did immunize Roommates.com from potential FHA liability arising out of its publication of users’ responses to Roommates.com’s requests for “Additional comments” concerning their roommate preferences.  In this section of its questionnaire, Roommates.com “strongly recommend[ed the user] tak[e] a moment to personalize your profile by writing a paragraph or two describing yourself and what you are looking for in a roommate.”  This question produced the most provocative – and potentially discriminatory - responses found in user profiles.  The court held that the responses to this question constituted content created by third parties within the meaning of the CDA.  As a result, held the Court, by application of the CDA, Roommates.com could not be held liable for publishing these responses on its website.

Court finds defendants guilty of engaging in unfair business practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. Section 45(a), by obtaining and selling confidential customer phone records without the affected customers’ authorization.  The Court found that defendant Abika.com arranged for the purchase of these phone records from third party vendors, which they subsequently resold via their website to third parties.  Illegal means were used by these vendors to obtain the confidential phone records, a fact of which, the Court found, defendant was aware.

In reaching this result, the Court rejected defendants’ claim that they were immunized from suit by application of Section 230 of the Communications Decency Act (“CDA”).  Defendants attempted to come within the ambit of the CDA by casting themselves as a search engine that put those seeking to purchase phone records in touch with ‘researchers’ seeking to sell them.  This characterization of their conduct was rejected by the Court.   The Court held that CDA immunity was not available to defendants because the claims at issue did not seek to treat them as the publisher of information, a prerequisite to such immunity.  Rather, they arose out of defendants’ purchase and resale of confidential information to third parties that was obtained through illegal means.  The Court further held that CDA immunity was not available because of defendants’ role in causing the information at issue to be obtained.  As such, defendants were held to have ‘participated in the creation or development of the information, and thus do not qualify for Section 230 immunity.’

Finally, the Court rejected defendants’ claim that the FTC was equitably estopped by its prior failure to prosecute phone record brokers from doing so here.  Such alleged inactivity was insufficient to estop the government from enforcing the laws of the land.

Court holds that neither the Communications Decency Act or the First Amendment immunize an Internet hosting company from potential liability under the Lanham Act for hosting the website of a third party which allegedly infringed plaintiff's trademark. As a result, the court denied defendant Mindspring's motion to dismiss, and allowed Gucci to proceed with its claim that, by hosting a third parties' site containing allegedly infringing materials, despite notice of the same, Mindspring was guilty of direct or contributory trademark infringement and false designation of origin in violation of the Lanham Act, as well as violations of state trademark and unfair competition statutes.

Court holds that the purported dispute resolution provisions contained in auction company’s online Terms and Conditions are unconscionable, and unenforceable against an individual dissatisfied with an auction in which she participated.  The dispute resolution provision mandated that the parties’ dispute be resolved in a binding proceeding before a representative of ‘In House Attorneys, P.C.’ in which each side was permitted only one hour to present their case, and could not call fact or expert witnesses nor be represented by counsel. 

As a result, the Court allowed plaintiff to proceed with claims against the defendant Hot Jewelry Auctions.com - who ran the auction - grounded on claims that defendant engaged in ‘shill bidding.’ 

Plaintiff was also allowed to proceed with claims against eBay as a result of her participation in this auction, via eBay’s Live Auction service.  In promoting this service, eBay claimed that “bidding on eBay Live Auctions is very safe.  All live auctions are run by reputable international auction houses, which are carefully screened by eBay before being authorized to sell to you.”  Notwithstanding the fact that eBay was responsible for this content, and derived a profit by promoting use of its Live Auction service, the Court held that it was immunized by application of the Communications Decency Act (“CDA”) from fraud and other claims arising out of so much of its promotional materials that advised consumers that eBay ‘carefully screened’ the auction houses allowed to participate in Live Auction.  The Court reasoned that to allow plaintiff to pursue such claims would expose eBay to “liabil[ity] for its exercise of a publisher’s traditional editorial functions” which is barred by the CDA.  As such, the Court barred plaintiff from pursuing claims that this representation was false because eBay allegedly did not ‘screen’ auction houses before permitting them to participate in such Live Auctions or because it knew that the auction house was engaged in illegal conduct – such as shill bidding – and failed to take appropriate steps in light thereof.   

The Court did permit plaintiff to proceed with claims arising out of eBay’s representation that such auctions were ‘safe,’ holding the same were not barred by application of the CDA because ‘eBay’s statements regarding safety affects and creates an expectation regarding the procedures and manner in which the auction is conducted and consequently goes beyond traditional editorial discretion.’  Nor were such claims barred by application of eBay’s Live Auction User agreement, which immunized eBay from any disputes a consumer might have with the auction house itself, as this dispute arose out of eBay’s own purported misconduct – namely misrepresenting that the auction was ‘safe.’  Because plaintiff had failed to plead with the requisite particularity that she relied on this statement in deciding to participate in the auction in question, however, her fraud claim was dismissed with leave to replead.

Eleventh Circuit holds that plaintiff's defamation claims against operators of consumer complaint sites arising out of the posting on those sites of allegedly defamatory complaints purportedly authored by third parties is sufficient to survive a motion to dismiss predicated on the immunity afforded the operators of interactive computer services under the Communications Decency Act ("CDA").  The complaint alleged that defendants edited consumer complaints to include words such as "ripoff" and "scam", and fabricated others.  The ultimate resolution of defendants' entitlement to immunity for their involvement in the publication of the posts at issue will have to await the trial of this matter.

As a result of this determination, the Eleventh Circuit reversed the decision of the District Court, which had dismissed the action for want of personal jurisdiction.  The lower court's decision was grounded on its determination that no tort was committed by defendants in Florida, due to the application of the CDA.   The Eleventh Circuit rejected this determination, and remanded the matter to the District Court to determine whether the Court could appropriately exercise personal jurisdiction over the defendants consistent with the strictures of the Due Process clause of the United States Constitution.

Communications Decency Act - Immunity Denied Quick Hits

Court holds that Communications Decency Act does not bar fraud and negligent misrepresentation claims advanced against Yahoo as a result of its alleged creation of false user profiles.  These false user profiles were allegedly included in online dating services Yahoo operates to cause users such as plaintiff to sign-up for, or renew their subscriptions to, the service.   The Court further held that the Communications Decency Act did not bar claims that asserted that Yahoo falsely represented to subscribers that various expired user profiles were in fact still current in an effort to cause them to continue their subscriptions.  Said the Court:

Anthony alleges that Yahoo creates false profiles, not merely fails to delete them. ... In addition, Anthony claims that Yahoo sends users false profiles for the purpose of luring them into renewing their subscriptions. ... No case of which this court is aware has immunized a defendant from allegations that it created tortious content. ... If, as Anthony claims, Yahoo manufactured false profiles, then it is an 'information content provider' itself and the CDA does not shield it from tort liability.  In addition, the CDA does not defeat Anthony's allegations that Yahoo sent 'profiles of actual legitimate former subscribers whose subscriptions had expired and who were no longer members of the service, to current members of the service.  Admittedly, third parties created there profiles.  Nevertheless, the CDA only entitles Yahoo not to be 'the publisher or speaker' of the profiles.  It does not absolve Yahoo from liability for any accompanying misrepresentations.  Because Anthony posits that Yahoo's manner of presenting the profiles - not the underlying profiles themselves - constitute fraud, the CDA does not apply.

Communications Decency Act - Immunity Granted - Updated November 22, 2008

Communications Decency Act preempts state law claims against ISP for negligence, breach of contract, intentional infliction of emotional distress, alter ego liability, injunctive relief and violation of civil rights arising from IPS's distribution of material written by another that contained derogatory comments about plaintiffs, including that they were the "ring leaders" of an "international conspiracy" to further "Satanic Ritual Abuse" of children.

Court holds that the Communications Decency Act, 47 U.S.C. § 230 ("CDA") immunizes web hosting company from liability arising out of its hosting of a third party's website that allegedly contained defamatory statements about plaintiff.  Following the Fourth Circuit's decision in Zeran v. AOL, the Court holds that such immunity exists notwithstanding any notice the web hosting company received concerning the defamatory nature of the content it was hosting.  The Court also dismisses plaintiff's defamation claims against the originator of the content at issue, holding it lacks personal jurisdiction over him.  The Court reached this result notwithstanding the fact that this defendant had contracted with an Arizona web hosting company to host the website which contained the defamatory statements at issue.  The Court held the exercise of jurisdiction over the defendant would be unreasonable given the fact he was a non-resident, the parties each operated Bali-related travel services, and the dispute was governed by Bali law.

Court holds that the Communications  Decency Act, 47 U.S.C. § 230 ("CDA"), immunizes defendant Yahoo, Inc. ("Yahoo") from tort claims arising out of its alleged failure to timely honor promises to remove from Yahoo's web site objectionable content about plaintiff posted by a third party.  The content consisted of "profiles" contained both nude photos of plaintiff, and accurate contact information.

Reversing the Court of Appeals, the California Supreme Court holds that Section 230 of the Communications Decency Act ("CDA") immunizes defendant Ilena Rosenthal ("Rosenthal") from defamation claims arising out of her republication in two online newsgroups of an allegedly defamatory article authored by a third party.  In reaching this result, the California Supreme Court rejected the Court of Appeals' attempts to limit the immunity afforded by Section 230(c)(1) of the CDA to publishers, while leaving exposed to defamation claims "distributors" of defamatory statements who have notice of the defamatory nature of the statements they distribute.  The Supreme Court held that such "distributors," commonly know as "secondary publishers," are entitled to the same broad immunity afforded publishers under the CDA.  As explained by the Fourth Circuit in Zeran v. AOL, cited with approval by the California Supreme Court, the CDA "creates a federal immunity to any cause of action that would make service providers liable for information originating with a third party user of the service" except claims such as those arising under the Intellectual Property laws, specifically exempted by the statute.

The Supreme Court also held that the broad immunity afforded under the statute to the providers of interactive computer services extended by operation of the statute's express language to "users" of such services.  "Users" protected by the CDA included those who use an interactive computer service to access the Internet and thereby to post or republish on the Internet a defamatory statement authored by a third party.  As stated by the Court, "by declaring that no 'user' may be treated as a 'publisher' of third party content, Congress has comprehensively immunized republication by individual Internet users."

Court in large part grants defendants’ motion for summary judgment, and dismisses claims arising out of defendants’ operation of a website on which third parties, and defendants themselves, posted a number of statements critical of plaintiff Best Western International Inc.  Left unresolved by the Court’s motion were plaintiff’s claims that a number of additional posts authored by defendants were in fact defamatory.

Best Western is a non-profit member corporation, which assists its members in running their hotels.  Defendants are members of Best Western who operate hotels, their spouses, and an individual who assisted in the creation of the website at issue.  The member defendants are bound by the terms of membership agreements with plaintiff. 

The Court held that the immunity granted defendants under the Communications Decency Act barred plaintiff from seeking to hold them liable for defamatory posts authored by third parties that appeared on defendants’ website.  Defamation claims arising out of 50 posts defendants themselves authored failed because plaintiff did not present sufficient evidence to establish that defendants acted with the requisite degree of fault necessary to sustain a defamation claim.  Thus, plaintiff failed to establish that defendants acted with either actual malice or negligence in making these statements, or with knowledge of their alleged falsity.   In reaching this result the Court noted that possessing ill will toward plaintiff was insufficient to establish ether that defendants acted with the requisite degree of fault, or that they were guilty of defaming plaintiff. 

The Court also rejected tortuous interference with contract or prospective advantage claims arising out of the posting on defendants’ site of statements urging plaintiff’s members to switch to a competitor’s organization.  The Court held that plaintiff failed to prove either that such statements caused it any injury, or that defendants or the competitor acted improperly in making these posts.  In reaching this result, the Court noted that plaintiff’s competitor is free to make posts that promote itself and its own economic interests.

Finally, the Court rejected various breach of contract claims advanced by plaintiff, asserting that defendants breached the parties’ membership agreement by making public confidential information, or failing to meet the membership agreement’s requirement to use their best efforts to maintain positive relationships with customers.  As to the former, the Court held there were no such prohibitions in the parties’ agreement that bound defendants.  As to the later, the Court held that the prohibitions applied to other aspects of defendants’ business, with which obligations defendants complied.

The Court did allow plaintiff Best Western to pursue breach of contract claims arising out of the use by the member defendants of Best Western’s trademark on the website at issue, which use purportedly violated the parties’ membership agreement.

Court holds defamation claim against AOL as a result of its making available a gossip column written by a third-party content provider titled the"Drudge Report" was barred by the Communications Decency Act. Court reached this conclusion notwithstanding the fact that AOL had reserved the right to exercise control over the Report's editorial content, and further, had promoted the report as a gossip column, thereby acknowledging the nature of the report's general content and the risks inherent therein.

The court denied defendant Drudge's motion to dismiss for want of personal jurisdiction. Drudge's maintenance of an interactive website, on which his Report appeared, which permitted users to subscribe to the Drudge report via e-mail, and solicited contributions from forum residents to defray publication costs, combined with other contacts with Washington D.C., including a visit to D.C. to promote the report, and mail and phone contacts to obtain gossip, made the exercise of jurisdiction over him appropriate.

Ninth Circuit holds that operator of online dating service is immunized by the Communications Decency Act ("CDA") from defamation, invasion of privacy, misappropriation of right of publicity and negligence claims arising out of the unauthorized posting on defendant's website by a third party of a fictitious dating profile.  This profile contained fictitious information about plaintiff, an actress, as well as accurate contact information and photographs of her.  This information was posted in response to a form questionnaire prepared by defendant to which all users of its service had to respond.

Court holds that the Communications Decency Act ("CDA") immunizes defendant Craigslist, Inc. ("Craigslist") from liability for publishing housing ads authored by third parties that allegedly violate the Fair Housing Act, 42 U.S.C. § 3604(c) ("FHA").  In reaching this result, the Court held that the immunity afforded internet service providers under section 230(c)(1) of the CDA only extends to claims seeking to hold an ISP liable as a publisher for content authored by third parties, and not to all claims arising out of the ISP's role in giving the public access to such content.  Because the FHA claims at issue were premised on Craigslist's publication of offensive ads authored by third parties, the Court held they were barred by the immunity granted under Section 230(c)(1).

Affirming the District Court below, the Seventh Circuit holds that Craigslist cannot be held liable for violating the Fair Housing Act as a result of its online publication of discriminatory housing ads authored by third parties. To hold Craigslist liable for such conduct would require it to be treated as a ‘publisher’ of these advertisements, which is prohibited by Section 230(c)(1) of the Communications Decency Act.  As a result, the Seventh Circuit affirms the District Court’s grant of summary judgment, dismissing plaintiff’s Fair Housing Act claims against Craigslist.

Court holds that the Communications Decency Act (“CDA”), 47 U.S.C. Section 230(c)(1), mandates dismissal of so much of plaintiff’s defamation claim that arises from the publication by third parties of comments critical of plaintiff on a website defendants operate known as the “ripoffreport.com.”  The CDA further mandates dismissal of claims arising out of defendants’ promotion of its site and the allegedly objectionable content thereon, making the site more accessible to search engines and users, or soliciting contributions to assist in making the information on the site available.  The Court did , however, allow plaintiff to pursue defamation claims arising out of the headlines for third party content authored by the defendants, which themselves purportedly contained defamatory content.

Court holds that the Digital Millennium Copyright Act ("DMCA") immunizes Amazon.com, Inc. ("Amazon") from copyright infringement claims arising out of the sale by nonaffiliated third party vendors on Amazon.com of photographs in which plaintiff claims a copyright.  In reaching this result, the Court held that Amazon had met both the DMCA's threshold requirements, as well as the requirements necessary to qualify for the protection of the safe harbor provisions of 17 U.S.C. § 512(c).  512(c) protects service providers from liability for copyright infringement by reason of their storage of infringing materials at the direction of a third party.

The Court dismissed plaintiff's Lanham Act claim, finding that it was the Copyright Act, and not the Lanham Act, that provided any remedy for the alleged wrongs at issue.  The Court also dismissed plaintiff's Washington State law Consumer Protection Act and tortious interference with business relations claims, finding Amazon immunized therefrom by operation of the Communications Decency Act.

Finally, the Court held that issues of fact precluded dismissal of copyright infringement claims plaintiff asserted arising out of the alleged use of one of its copyrighted images in an advertisement on a separate website owned by Amazon.

A California intermediate appellate court holds that the Communications Decency Act ("CDA"), 47 U.S.C. Section 230(c), immunizes an employer from claims arising out of the transmission by a then employee of threatening emails to, and posts about, plaintiffs from his office computer.  As a result, the Court of Appeals affirmed the dismissal of intentional infliction of emotional distress claims advanced by plaintiffs against Agilent Technologies.  Plaintiffs had sought to hold Agilent Technologies responsible for its employee's threatening conduct on theories of respondeat superior, negligent supervision/retention, and ratification. 

The Court further held defendant entitled to summary judgment dismissing such claims on the facts before it.  The respondeat superior claim failed because the evidence established that the employee was acting outside the scope of his employment when he transmitted the threatening emails in question.  The negligent supervision/retention claim similarly failed because there was no evidence that Agilent Technologies was aware of its employee's activities when he was transmitting the emails at issue from his office computer.  Agilent only learned of this misconduct after the fact, at which time it terminated the employee.  Finally, there was no evidence that the defendant employer ratified its employee's misconduct.

Communications Decency Act immunizes operator of message board from defamation claims arising out of posts appearing thereon that were authored by others.  Such immunity extends to the defendant operator notwithstanding plaintiff’s claim that the defendant edits posts that appear on his boards, and selects posts that will either be published thereon, or removed therefrom.  The Court accordingly dismissed with prejudice defamation claims asserted by plaintiff Anthony DiMeo III arising out of offensive postings that appeared on defendant’s message boards. 

The Court also dismissed plaintiff’s claim that defendant violated the criminal statute 47 U.S.C. § 223 (a)(1)(C), which prohibits use of a telecommunications device anonymously to harass another.  Defendant neither acted anonymously – his name appeared both in the domain name and title of the message boards found on his website – nor did he use a telecommunications device, within meaning of the statute, in operating his web site.

Analysis of the Third Circuit's decision can be found below in the Quick Hits section of this page.

Communications Decency Act preempts state law claim of improper participation in sale or distribution of obscene material asserted against information service provider as a result of its alleged notice that third party was using ISP's chat rooms to market pornographic materials. Court further held that CDA applies retroactively to preempt state law claims arising out of events that occurred prior to the CDA's enactment, but which claims were not asserted until after the CDA's enactment.

Relying heavily on Zeran v. AOL, 129 F.2d 327 (4th Cir. 1997) cert. denied, 118 S.Ct. 2341 (1998), the Florida District Court of Appeal affirmed the lower court's holding that the Communications Decency Act preempts state law claims advanced against an information service provider arising out of the ISP's allegedly improper participation in the sale or distribution of obscene material due to its alleged notice that a third party was using the ISP's chat rooms to market pornographic materials. The Court also affirmed that lower court's holding that the CDA preempts state law claims arising out of events that occurred prior to the CDA's enactment, but which claims were not asserted until after the CDA's enactment.

Court holds that the Communications Decency Act immunizes defendants from various non-intellectual property claims arising out of their making available on their adult social networking sites an anonymous profile authored by an unknown third party which plaintiff claims falsely appears to people who know her to be her own.  The Court holds that this immunity also covers non-intellectual property claims arising out of defendants reposting this profile on third party sites, making slight alterations to the profile as to the participant’s age, and using the profile in teasers and other advertisements for defendants’ site.  As a result, the Court dismissed claims plaintiff advanced for defamation, intentional infliction of emotional distress, intentional, reckless, negligent and/or willful and wanton conduct, and violations of the New Hampshire Consumer Protection Act, arising out of such alleged misconduct.

The Court held that the Communications Decency Act did not, however, immunize defendants from intellectual property claims plaintiff advanced, both under applicable federal and state laws, including right of publicity claims advanced under New Hampshire state law.   Plaintiff was accordingly allowed to proceed with claims that defendants, by including identifiable aspects of plaintiff’s persona in advertisements and ‘teasers’ in an effort to increase the profitability of their websites, violated her right to publicity.

The Court further held that plaintiff could proceed with Lanham Act false designation of origin and false advertising claims against the defendants.   The false advertising claim was based on the inclusion of the profile at issue in ‘teasers’ and other advertisements for defendants’ site.  These acts allegedly deceived consumers into registering for defendants’ services in the hope of interacting with plaintiff, and caused injury to her reputation as a result, including alleged lost employment opportunities.  The false designation of origin claims similarly arose out of defendants’ use of the profile at issue in marketing their sites, which falsely implied plaintiff’s affiliation with, or sponsorship and approval of, defendants’ site and service.

Affirming the decision of the District Court below, the Fifth Circuit holds that section 230(c)(1) of the Communications Decency Act immunizes the social networking site Myspace Inc. from claims of negligence and gross negligence arising out of the alleged sexual assault of a minor made possible by her posting of a ‘user profile’ on Myspace.com.  As a result of this posting, a male, age 19, made contact with the minor, who falsely represented she was 18, and sexually assaulted her.  The Fifth Circuit held Myspace was immunized from plaintiff’s negligence and gross negligence claims, because they sought to hold Myspace liable for its role in making content authored by a third party – the minor’s user profile and personal information contained therein – available to third parties. 

In reaching this result, the Fifth Circuit rejected plaintiff’s attempt to avoid the bar of the CDA by arguing that they sought to hold Myspace liable for its alleged failure to institute adequate safety measures to protect minors, particularly from sexual predators.

Because the Fifth Circuit held that Section 230(c)(1) of the CDA barred plaintiffs’ claims, the Court did not review so much of the District Court’s decision that held that those claims were also barred by both Section 230(c)(2) of the Communications Decency Act, as well as applicable principles of Texas common law.

Court holds that those engaging in web site hosting activities are immunized by the Communications Decency Act, 47 U.S.C. 230(c) from liability arising out of their involvement, via those activities, in the dissemination or publication of information originating from third parties. Section 230(c)(1) provides 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." The court held that those who provide web hosting services are service providers within the meaning of the CDA, and hence entitled to the immunity it provides. Said the court: "by offering web hosting services which enable someone to create a web page, [defendants] are not magically rendered the creators of those web pages. See 47 U.S.C. 230(c)(1). As such, plaintiffs' new characterization of [defendants] as web hosts neither prevents these defendants from being deemed service providers protected by immunity under the CDA nor makes them content providers unprotected by the CDA's immunity."

Court dismissed claims of defamation and negligence asserted by plaintiff company against America Online ("AOL") arising out of AOL's posting of allegedly inaccurate stock quotes concerning plaintiff on its website, which quotes had been supplied to AOL by third-party content providers. Court held that such claims were barred by 47 U.S.C. §230, and the immunity granted thereunder to providers of "interactive computer services" such as AOL, for publication of content prepared by third-party information content providers. This dismissal was mandated even though AOL attempted to have its vendors correct the errors at issue.

A divided three judge panel of the Ninth Circuit limited the immunity afforded by the Communications Decency Act (“CDA”), 47 U.S.C. section 230, for website operators involved in the publication and distribution of the responses to questionnaires completed by third parties concerning their roommate preferences. 
The Panel unanimously held that the CDA did not immunize defendant Roommates.com from potential liability for drafting and posting questionnaires that sought information from those using the site about their roommate preferences.  These questionnaires, among other things, sought information about the preferred sexual orientation of the prospective roommate, and were used to create member profiles.  The Panel held that the CDA did not immunize Roommates.com from potential liability under the Fair Housing Act (“FHA”) for requiring members to answer questions that potentially enabled other members to discriminate for or against them.

By a vote of 2 to 1, the Panel further held that the CDA did not immunize Roommates.com from potential liability under the FHA for publishing and distributing member profiles created in response to Roommates.com’s questionnaires.  Roommates.com used the content of a user’s responses to its questionnaires to determine who among its members should receive notice that they were seeking a roommate, and/or be permitted to view that user’s profile.  For example, an individual with children was not shown a listing for an apartment occupied by an individual seeking a roommate without children.  The court held that by categorizing, channeling and limiting the distribution of user profiles, Roommates.com was sufficiently involved in the creation of the distributed information to lose the immunity afforded by the CDA to interactive service providers who make available content drawn by third parties. As a result, the Ninth Circuit allowed plaintiffs to proceed with claims that by such conduct, Roommates.com violated the FHA.

Finally, by a vote of 2 to 1, the Court held that the CDA did immunize Roommates.com from potential FHA liability arising out of its publication of users’ responses to Roommates.com’s requests for “Additional comments” concerning their roommate preferences.  In this section of its questionnaire, Roommates.com “strongly recommend[ed the user] tak[e] a moment to personalize your profile by writing a paragraph or two describing yourself and what you are looking for in a roommate.”  This question produced the most provocative – and potentially discriminatory - responses found in user profiles.  The court held that the responses to this question constituted content created by third parties within the meaning of the CDA.  As a result, held the Court, by application of the CDA, Roommates.com could not be held liable for publishing these responses on its website.

California intermediate appellate court affirms the decision of the trial court, and dismisses claims brought by plaintiffs against eBay under both California's Autographed Sports Memorabilia statute and California's Unfair Competition law, as well as for negligence, arising out of plaintiffs' purchase of allegedly non-authentic autographed sports memorabilia offered for sale by third parties on eBay's web site. Plaintiffs sought to hold eBay liable under California's Autographed Sports Memorabilia statute as a result of eBay's alleged failure to supply certificates warranting the authenticity of the goods purchased.  The court held that eBay was not obligated to supply the certificates because it was not a "dealer" of sports memorabilia within the meaning of the statute, as the goods in question were sold by third parties.  The court further held that section 230 of the Communications Decency Act ("CDA") immunized eBay from any liability arising out of its failure to supply these certificates.  The court held that, however couched, plaintiffs' claim sought to hold eBay liable for the allegedly false descriptions of the goods supplied by third parties.  As the CDA creates "federal immunity to any cause of action that would make interactive service providers liable for information originating with a third party use of the service" (excepting intellectual property claims) plaintiffs' Autographed Sports Memorabilia claims had to be dismissed.

The court held that plaintiffs' negligence and Unfair Competition claims were also barred by the CDA as each of these claims was also premised on content supplied by third parties.  These claims attacked eBay for giving the sellers of the goods at issue positive ratings concerning their past sales history, and urging purchasers to rely thereon in making their decision to purchase goods from those sellers.  These positive ratings were, however, simply an accurate reporting of customer feed back supplied by third parties concerning their alleged transactions with the sellers.  As such, eBay could not be held liable for the inaccuracy of such positive ratings because to do so would be to hold eBay liable for content originated by third parties, which is barred by the CDA.

Court dismisses defamation claims advanced against defendant, operator of the website ripoffreport.com, arising out of defendants’ publication of statements authored by a third party that were critical of plaintiffs.  The Court held such claims barred by application of the Communications Decency Act (“CDA”), 47 U.S.C. Section 230.  Notably, the court refused to issue plaintiff relief notwithstanding the fact that the author of the statements at issue allegedly requested without success that defendants remove them from ripoffreport.com.

The Court also declined to enforce a preliminary injunction issued on default by a Canadian court, directing defendants to remove the statements at issue from their website, on the ground that United States courts will not enforce injunctions issued by foreign courts.

Affirming the decision of the court below, the Third Circuit holds that the Communications Decency Act ("CDA") immunizes America Online ("AOL") from claims arising out of the transmission by unrelated third parties in an AOL chat room of (i) a "punter program", which disrupts the operation of the recipient's computer, and (ii) defamatory messages concerning the plaintiff.  The Third Circuit further holds that AOL's allegedly negligent failure to prevent such events from occurring did not breach its Member Agreement, in which it expressly disclaimed liability for the transmissions of others.

Court dismisses negligence and gross negligence claims asserted against defendant Myspace, Inc. (“Myspace”) arising out of the alleged sexual assault of a minor made possible by her posting of a “user profile” on Myspace.com.  As a result of this posting, a male, age 19, made contact with the minor who falsely represented she was 18, obtained her telephone number and arranged a meeting at which she was allegedly sexually assaulted.  The Court held Myspace immunized from such claims by application of the Communications Decency Act, 47 U.S.C. Section 230, because, at bottom, plaintiffs’ claims sought to hold Myspace liable as a result of its role in the publication of the minor’s user profile.  The Court also held plaintiffs’ claims barred by Section 230(c)(2)(A), as they sought to hold Myspace liable for its purported negligence in failing to verify the minor’s age.  The minor was 13 at the time she posted a user profile in which she falsely claimed to be 18.  Myspace does not permit those below 14 to use its services.

The Court also dismissed plaintiffs’ negligence claims, which sought to hold Myspace liable for its purported negligent failure to institute measures designed to protect minors from sexual predators and to take appropriate steps to verify their age.  The Court held that, like Federal Express and other common carriers, Myspace owed no duty to the minor which could form the basis of such a claim.

Finally, the Court dismissed plaintiffs’ fraud and negligent misrepresentation claims as a result of plaintiffs’ failure to plead such claims with the requisite particularity.

Court holds that the Communications Decency Act (“CDA”), 47 U.S.C. Section 230, immunizes operator of online adult dating service from claims arising out of a user’s false statement in her user-profile that she was over 18.  Relying on this profile, plaintiff met and had consensual sexual relations with a minor, for which he was subsequently arrested.  Plaintiff brought this suit, seeking redress.  Importantly, the contract between the parties expressly provided that SexSearch.com does not “assume any responsibility for verifying the accuracy of the information provided by other users of the Service.”  Because plaintiff sought to hold SexSearch.com, a provider of Interactive Computer Services, liable for its publication of content authored by another, his claims, whether couched as breach of contract, fraud or negligent misrepresentation, were barred by application of the CDA.  Plaintiff’s breach of contract claim similarly failed because SexSearch did not assume responsibility for verifying the age of users.

The Court held that the First Amendment, and the guaranties afforded Google and Yahoo thereunder, barred claims seeking redress as a result of Google and Yahoo's refusal to run advertisements on their search engines they did not wish to run.  In reaching this result, the Court followed decisions that afforded newspapers similar First Amendment protections when challenges arose concerning their refusal to run advertisements they deemed objectionable.  As a result, the Court dismissed claims advanced by plaintiff arising out of the defendants' refusal to run his advertisements, including claims that the defendants defrauded him and engaged in deceptive business practices, violated his First Amendment rights, and failed to meet the duties imposed on those, like inn keepers, engaged in a public calling.

The Court also held that Google and Yahoo were immunized from such claims by the Communications Decency Act, 27 U.S.C. Section 230, which "bars 'lawsuits seeking to hold a service provider liable for its exercise of a publisher's traditional editorial functions - such as deciding whether to publish, withdraw, alter or postpone content.'" It should be noted that plaintiff was proceeding pro se.

Court holds that the purported dispute resolution provisions contained in auction company’s online Terms and Conditions are unconscionable, and unenforceable against an individual dissatisfied with an auction in which she participated.  The dispute resolution provision mandated that the parties’ dispute be resolved in a binding proceeding before a representative of ‘In House Attorneys, P.C.’ in which each side was permitted only one hour to present their case, and could not call fact or expert witnesses nor be represented by counsel. 

As a result, the Court allowed plaintiff to proceed with claims against the defendant Hot Jewelry Auctions.com - who ran the auction - grounded on claims that defendant engaged in ‘shill bidding.’ 

Plaintiff was also allowed to proceed with claims against eBay as a result of her participation in this auction, via eBay’s Live Auction service.  In promoting this service, eBay claimed that “bidding on eBay Live Auctions is very safe.  All live auctions are run by reputable international auction houses, which are carefully screened by eBay before being authorized to sell to you.”  Notwithstanding the fact that eBay was responsible for this content, and derived a profit by promoting use of its Live Auction service, the Court held that it was immunized by application of the Communications Decency Act (“CDA”) from fraud and other claims arising out of so much of its promotional materials that advised consumers that eBay ‘carefully screened’ the auction houses allowed to participate in Live Auction.  The Court reasoned that to allow plaintiff to pursue such claims would expose eBay to “liabil[ity] for its exercise of a publisher’s traditional editorial functions” which is barred by the CDA.  As such, the Court barred plaintiff from pursuing claims that this representation was false because eBay allegedly did not ‘screen’ auction houses before permitting them to participate in such Live Auctions or because it knew that the auction house was engaged in illegal conduct – such as shill bidding – and failed to take appropriate steps in light thereof.   

The Court did permit plaintiff to proceed with claims arising out of eBay’s representation that such auctions were ‘safe,’ holding the same were not barred by application of the CDA because ‘eBay’s statements regarding safety affects and creates an expectation regarding the procedures and manner in which the auction is conducted and consequently goes beyond traditional editorial discretion.’  Nor were such claims barred by application of eBay’s Live Auction User agreement, which immunized eBay from any disputes a consumer might have with the auction house itself, as this dispute arose out of eBay’s own purported misconduct – namely misrepresenting that the auction was ‘safe.’  Because plaintiff had failed to plead with the requisite particularity that she relied on this statement in deciding to participate in the auction in question, however, her fraud claim was dismissed with leave to replead.

Court holds that plaintiff, by clicking an "I accept" icon agreeing online to be bound by the Terms of Service governing use of an online discussion group set forth in a scrollable window, viewable ten lines at a time, was bound by the forum selection contained therein.  Finding such a clause enforceable, the Court dismissed a claim brought by plaintiff asserting that defendant Google breached this agreement, because this claim was not brought in the designated forum.

The Court also held that Section 230 of the Communications Decency Act ("CDA") immunized an ISP hosting an online discussion group from claims that its failure to remove objectionable content posted on the discussion group's web page gave rise to claims of tortious interference with contractual relations. 

Finally, the Court denied the motions of two additional defendants to dismiss the claims asserted against them for want of personal jurisdiction.  The Court held that the first defendant was subject to specific jurisdiction in New York because of its operation of a commercial website via which it sold $6000 of products a year to New York residents.  The second defendant was similarly subject to suit because he had entered into a contract with a New York company, which contract allegedly gave rise to the claims asserted against him.

District Court dismisses claims charging Google with direct copyright infringement as a result both of its archiving Usenet postings that contain excerpts of plaintiff’s copyrighted works, and its display of excerpts of plaintiff’s copyrighted website in search results.  The District Court holds that Google has not engaged in the requisite volitional conduct necessary to be held guilty of direct copyright infringement because such copying is a by-product of the automated operation of Google’s search engine and related technologies.  As such, Google’s acts are akin to a user’s use of its ISP to transmit infringing material to a third party, which do not give rise to direct infringement claims against the ISP.  On appeal, the Third Circuit affirmed the dismissal of Parker’s direct infringement claims, on the grounds that Google’s archiving of infringing Usenet postings lacked the requisite “volitional conduct.”

Relying on Field v. Google, (D. Nevada 2006), the District Court also dismisses direct copyright infringement claims arising out of Google’s presentation to users of “archival” copies of plaintiff’s website in search results denominated “cache.”  The District Court holds that Section 512(b) of the Digital Millennium Copyright Act (“DMCA”), applicable to copyright infringement claims arising out of “system caching,” bars such claims here.

The District Court also dismissed vicarious and contributory copyright infringement claims arising out of Google’s archiving of Usenet posts created by third parties that themselves allegedly infringe plaintiff’s copyright, both because Google lacks the requisite knowledge of such inadequately identified infringing activity, and because it does not derive sufficient direct financial benefit therefrom.  This decision too was affirmed by the Third Circuit on appeal.

The District Court further dismissed defamation, invasion of privacy and negligence claims advanced by plaintiff arising both out of Google’s archiving of Usenet posts authored by third parties that allegedly defamed plaintiff, as well as out of Google’s storage and display in its “cache” of a website that purportedly defamed plaintiff.  Such claims are barred by the immunity afforded Google by Section 230 of the Communications Decency Act (“CDA”), a decision affirmed on appeal.

Finally, the District Court dismissed Lanham Act claims brought against Google as a result of its alleged republication of a website operated by a third party titled “the Official Roy Gordon FAQ.”  The District Court held that the third party was not violating the Lanham Act both because it was not using a mark in commerce as it was not selling anything on its site, and because consumers were not likely to be confused as to the origin of the site, given the criticism of plaintiff found thereon.  The Lanham Act claims against Google also failed because it was not a “moving force” or “active participant” in the creation of this site, or the alleged use thereon of plaintiff’s ‘mark.’  The Third Circuit affirmed the dismissal of the Lanham Act claims because of the absence of a likelihood of consumer confusion.  The Court also affirmed the dismissal of plaintiff’s trade disparagement claims because the statements at issue on the third party website were not made in the context of commercial advertising.

It should be noted that the plaintiff appeared pro se.  In addition, the Third Circuit’s opinion was denoted “Not Precedential.”

Court holds that Section 230 of the Communications Decency Act ("CDA") bars plaintiffs from pursuing claims against Kinko's arising out of allegedly defamatory statements an unaffiliated third party made in an Internet chat room from a computer rented to him by Kinko's.  The CDA prevented plaintiffs from pursuing claims that Kinko's aided and abetted both the third party's defamation of, and interference with plaintiffs' prospective business relationships by making the offending statements, as well as claims that Kinko's negligently failed to keep appropriate records of the use of its rented computers, and destroyed evidence of the same.

The Ninth Circuit allows Perfect 10 to pursue copyright infringement claims against defendants, who provide web hosting and credit card billing services, arising out of the unauthorized posting on the web by their third party customers of “adult” images in which Perfect 10 holds copyrights.  Questions of fact precluded a determination of whether defendants were immunized from monetary liability for such claims by the Digital Millennium Copyright Act (“DMCA”).  Such immunity extends only to service providers who “reasonably implement” a policy for terminating those of their customers that repeatedly infringe copyrights.  In considering this question, the Ninth Circuit held  courts should consider not only the manner in which the defendants responded to “take down” infringement notices sent by the plaintiff copyright holder, here Perfect 10, but also the manner in which they responded to similar notices from third party copyright holders.  Because the District Court failed to consider whether defendants terminated customers identified in such third party “take down” infringement notices, the Ninth Circuit could not determine whether defendants “reasonably implemented” a compliant DMCA policy, and thus whether they were entitled to DMCA immunity.  The case was accordingly remanded to the District Court for further consideration.

The Ninth Circuit held that defendants had no obligation to respond to the “take down” notices provided by Perfect 10, or take steps to prevent the infringing conduct alleged therein, due to Perfect 10’s failure to provide such notices under penalty of perjury.  Absent the sworn acknowledgement required under the DMCA that the complainant is both an authorized representative of the copyright owner, and has a good faith belief that the material at issue is unlicensed, the service provider has no obligation to act upon the notice. 

Nor, held the Ninth Circuit, were defendants obligated to take action against purported “red flag” sites defendants serviced, which included sites that purported without authorization to provide users with passwords to access plaintiff’s materials, or other websites bearing names such as “stolencelebritypics.com” or “illegal.net.”   The DMCA does not impose on service providers the obligation to conduct an affirmative investigation into the bona fides of such sites.  To qualify as a “red flag” site that imposes an obligation on a service provider to act, held the Ninth Circuit “it … need[s] to be apparent that the website instructed or enabled users to infringe another’s copyright.”

The Ninth Circuit allowed Perfect 10 to pursue direct copyright infringement claims against the defendants as a result of the posting of infringing images on hornybees.com.  The court held that sufficient evidence of defendants’ direct involvement in the operation of that site was presented to survive a motion for summary judgment.

Finally, the Ninth Circuit held that the Communications Decency Act immunized defendants from the unfair competition, false advertising and right of publicity claims advanced by Perfect 10.

Court holds that Section 230 of the Communications Decency Act ("CDA") immunizes Amazon.com from claims of breach of contract, negligent misrepresentation and tortious interference brought by plaintiff as a result of negative statements posted by third parties on Amazon.com's web site, and Amazon's failure to remove them in alleged violation of Amazon's guidelines governing such postings.  Section 230 provides 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."  The Court held that Amazon satisfied each of the elements necessary for protection under this statute.  First, Amazon was a provider of "interactive computer services" entitled to avail itself of the protections afforded by the statute because it operated a web site on which third parties could post comments, which Amazon made available to others.  Second, the content in question was provided by third parties, and not Amazon, despite Amazon's right to edit or remove the same.  And lastly, Amazon was immunized from the claims in question because each premised Amazon's liability on its failure to remove offending content originated by others, an editorial function for which the statute was intended to provide protection.

Court holds that Section 230 of the Communications Decency Act ("CDA") renders Ebay immune from a suit charging that the use by third parties of Ebay's web site to sell "bootleg" musical recordings violates Cal. Bus. and Professions Code Section 17200.

Court dismisses cyberstalking and security law claims advanced by plaintiffs under Florida state law against defendant Lycos, holding such claims barred by the immunity afforded Lycos under Section 230 of the Communications Decency Act (“CDA”).  Such claims arose out of statements critical of plaintiff Universal Communication Systems (“UCS”) and its CEO, Michael Zwebner, that were posted by third parties on a message board found on a website operated by Lycos at the domain Raging Bull.com  Plaintiffs claimed that defendants, including Lycos, were involved in a scheme to manipulate plaintiff’s stock price.  Plaintiffs claimed that defendants shorted UCS stock, and then posted derogatory comments on RagingBull.com in an attempt to drive the stock price down.  Such a claim, held the court, sought to hold Lycos liable for its role in the publication of these statements, which were authored by third parties, and as such was barred by operation of the CDA.  The cyberstalking claim was similarly barred because the act on which such claim rested was the publication of derogatory statements on the RagingBull.com message board authored by third parties.  As such, this claim too, sought to hold Lycos liable for its role in the publication of such statements, and was barred by application of the CDA. 

The court also dismissed federal cyberstalking claims asserted by plaintiffs against Lycos under 47 USC Section 223, holding that this statute did not create a private right of action for a civil suit.

Finally, the Court dismissed trademark dilution claims advanced by plaintiffs under Florida state law.  These claims were premised on the use of UCS’ trademark as the name for a message board on Raging Bull.com at which third parties posted statements critical of plaintiffs.  The Court held that, despite the fact that the message boards contained advertising, such a use did not constitute the requisite use in commerce of plaintiffs’ mark.  In addition, such use of plaintiffs’ mark to describe a message board that contained statements about plaintiffs was not actionable under the dilution act.

In the latest chapter of this long running dispute, the District Court holds that the Communications Decency Act, 47 USC Section 230, immunizes defendants from defamation claims arising out of the posting on their site – The Rip-Off Report - of allegedly defamatory statements about plaintiff that were allegedly authored by third parties.  In reaching this result, the Court rejected plaintiff’s contention that defendants were sufficiently involved in the creation of the posts at issue to be denied CDA immunity because they offered such third party posters the opportunity to categorize their reports in categories such as ‘con artists’, ‘corrupt companies’ and ‘false TV advertisements.’  The Court further held that plaintiff had failed to submit evidence sufficient to establish that defendants were involved in authoring the particular defamatory statements at issue so as to lose the immunity offered by the CDA.

Court holds that Section 230 of the Communications Decency Act (“CDA”) immunizes distributor of anti-virus and security software from claims of tortuous interference with contract, trade libel and unjust enrichment arising out of its distribution of software that labels plaintiff Zango’s software as malware, and enables a user to block or disable it.  Zango provides consumers free access to online videos, games and music in exchange for their agreement to the display of sponsors’ advertisements.  Notably, the Court holds defendant entitled to such immunity notwithstanding claims that it acted in bad faith when it so labeled plaintiff’s software.  According to the Court, ‘good faith’ is not a prerequisite to immunity under section 230(c)(2)(b) of the CDA.  All that is required is that a provider of an “interactive computer service” take “action  … to enable or make available to … others the technical means to restrict access to” material  “the provider or user considers … objectionable,” a standard defendant met.

The Court also held that it could exercise personal jurisdiction over the non-resident defendant in Washington as a result of its sale of software products to Washington residents which allegedly caused plaintiff injury in the forum.

The CDA preempts a state common law distributor liability cause of action against an interactive computer service provider arising from that provider's allegedy negligent distribution of defamatory material provided via its electronic bulletin board. Under CDA section 230 (c)(i), information service providers are granted imunity from such claims. This immunity is retroactive, and applicable to plaintiff's claim, brought after the enactment of the CDA, even though the events giving rise to his claim were completed before the CDA became effective.

Communications Decency Act - Immunity GrantedCommunications Decency Act - Immunity GrantedCommunications Decency Act - Immunity GrantedCommunications Decency Act - Immunity Granted Quick Hits

Affirming the decision of the court below, the Third Circuit holds that plaintiff’s claim for defamation, arising out of the posting of derogatory comments authored by third parties about plaintiff on a message board operated by the defendant, were barred by application of the Communications Decency Act, 47 U.S.C. Section 230.

To qualify for the statute’s protections, the defendant must be a “provider or user of an interactive computer service” and the claim must seek to treat him as “the publisher or speaker” of content “provided by another information content provider.”  Such, held the Third Circuit, was the case here.  By making available message boards on his website, Max was a provider of an interactive computer service.  Said the Court: “Max’s website is an interactive computer service because it enables computer access by multiple users to a computer server.”  Similarly, because the complaint did not allege that Max himself was the author of the offending posts at issue, they were content provided by another information content provider.  And finally, by asserting a defamation claim against Max, plaintiff sought to hold him liable as the publisher of this content.  Having made the showing necessary for immunity under Section 230 of the CDA, the Third Circuit affirmed the dismissal of plaintiff’s defamation claim.

The Third Circuit also affirmed the district court’s denial of plaintiff’s motion for leave to amend his complaint to assert claims for intentional infliction of emotional distress, and RICO violations, on the grounds of futility.  The former failed because the CDA afforded Max immunity from such claims, which, like the defamation claims, arose out of the posting by third party of offensive comments on a message board operated by Max.  The later failed as a result of plaintiff’s failure to allege the commission of any of the requisite criminal predicate acts.

It should be noted that the Third Circuit denoted its opinion non-precedential.

Court holds CDA Section 230 immunizes Yahoo from civil liability arising out of its hosting of an online ‘e-group’ named ‘Candyman’ on which illegal images depicting child pornography were exchanged.  The co-defendant, Mark Bates, was convicted for his involvement as the moderator of this online forum.  Plaintiff brought claims under 18 U.S.C. Section 2252A, which creates a private right of action for those aggrieved by a violation of 18 U.S.C. Section 2252, a criminal statute that prohibits the dissemination of child pornography.  The Court, in a case of first impression, held that the CDA immunized Yahoo from such civil claims, as well as claims of negligence, negligence per se, intentional infliction of emotional distress, invasion of privacy and civil conspiracy, arising out of its hosting of this forum.  The Court reached this result notwithstanding the fact that 47 U.S.C. Section 230(e)(1), titled “no effect on criminal law,” provides “nothing in this section shall be construed to impair the enforcement of  … Chapter … 110 (relating to sexual exploitation of children) of Title 18, or any other Federal Criminal Statute.”  Said the Court:

while the facts of a child pornography case such as this one may be highly offensive, Congress has decided that the parties to be punished and deterred are not the internet service providers but rather those who created and posted the illegal material, such as defendant Mark Bates, the moderator of the ‘Candyman’ e-group.

Court holds that the ‘Good Samaritan’ provisions of the Communications Decency Act (“CDA”), 47 U.S.C. Section 230(c)(2), immunize Internet Service Providers such as defendant Comcast from ‘good faith’ actions taken to block email marketers from sending email solicitations to users of the ISP’s services.  Plaintiff e360Insight brought this action in response to actions taken by Comcast to block it from sending email solicitations to Comcast customers.  Under the CDA, Comcast is entitled to immunity for “any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be … objectionable, whether or not such material is constitutionally protected …”.  230(c)(2)(A).  Thus, to be entitled to immunity, the ISP must show both that the materials it blocked are 'objectionable' and that it acted in good faith in blocking them.  The Court applied a subjective standard in determining whether the emails in question were objectionable and hence subject to blocking under the statute – i.e. the materials are objectionable if Comcast believes them to be objectionable.  Importantly, it did not matter if the emails complied with CAN-SPAM.  Said the Court:

compliance with CAN-SPAM, Congress decreed, does not evict the right of the provider to make its own good faith judgment to block mailings. …  Under the law, a mistaken choice to block, if made in good faith, cannot be the basis for liability under federal or state law.  To force a provider like Comcast to litigate the question of whether what it blocked was or was not spam would render Section 230(c)(2) nearly meaningless. 

Because Comcast believed the emails at issue were objectionable, and because plaintiff failed to adequately plead that Comcast did not act in good faith when it made its decision to block plaintiff’s emails, Comcast was entitled to immunity, and the Court dismissed the claims plaintiff asserted against it for violation of the Computer Fraud and Abuse Act and of plaintiff’s rights under the First Amendment, as well as for tortuous interference with prospective economic advantage and violation of the Illinois Consumer Fraud Act.

Court holds that the Communications Decency Act immunizes InfoUSA, a provider of proprietary databases providing information concerning individuals and businesses, from suit seeking to hold it liable for false listings about plaintiffs provided to it by third parties, which InfoUSA included in a database it subsequently licensed for use to others.  The Court reached this result notwithstanding InfoUSA's representation that it provides "the utmost quality information" and "call[s] every business to verify the information, so you can be assured of the most current and accurate listings."  Plaintiffs could not pursue a claim based on the alleged falsity of this representation, because to do so would necessarily treat InfoUSA as a publisher of this information, which is prohibited by the Communications Decency Act.  Said the Court:

Additionally, the Plaintiffs argue that the Defendant operated as an information content provider because the defendant assures the accuracy of its listings via its verification process.  The Plaintiffs are presumably alleging that they were harmed by third party content and that the Defendant is liable for failing to verify the accuracy of the content.  'Any such claim by [the plaintiffs] necessarily treats the [defendant] as 'publisher' of the content and is therefore barred by Section 230.'  The plaintiffs' argument that they seek to hold the Defendant liable for its alleged failure to verify the accuracy of the listing does not remove this case from the immunity provided by Section 230.'

In this suit, plaintiffs claimed they were harassed by third parties who found the false information contained about them in defendant InfoUSA's database offensive.

Communications Decency Act - Intellectual Property Law Exception - Updated May 29, 2008

Court holds that the Communications Decency Act immunizes defendants from various non-intellectual property claims arising out of their making available on their adult social networking sites an anonymous profile authored by an unknown third party which plaintiff claims falsely appears to people who know her to be her own.  The Court holds that this immunity also covers non-intellectual property claims arising out of defendants reposting this profile on third party sites, making slight alterations to the profile as to the participant’s age, and using the profile in teasers and other advertisements for defendants’ site.  As a result, the Court dismissed claims plaintiff advanced for defamation, intentional infliction of emotional distress, intentional, reckless, negligent and/or willful and wanton conduct, and violations of the New Hampshire Consumer Protection Act, arising out of such alleged misconduct.

The Court held that the Communications Decency Act did not, however, immunize defendants from intellectual property claims plaintiff advanced, both under applicable federal and state laws, including right of publicity claims advanced under New Hampshire state law.   Plaintiff was accordingly allowed to proceed with claims that defendants, by including identifiable aspects of plaintiff’s persona in advertisements and ‘teasers’ in an effort to increase the profitability of their websites, violated her right to publicity.

The Court further held that plaintiff could proceed with Lanham Act false designation of origin and false advertising claims against the defendants.   The false advertising claim was based on the inclusion of the profile at issue in ‘teasers’ and other advertisements for defendants’ site.  These acts allegedly deceived consumers into registering for defendants’ services in the hope of interacting with plaintiff, and caused injury to her reputation as a result, including alleged lost employment opportunities.  The false designation of origin claims similarly arose out of defendants’ use of the profile at issue in marketing their sites, which falsely implied plaintiff’s affiliation with, or sponsorship and approval of, defendants’ site and service.

Court holds that neither the Communications Decency Act or the First Amendment immunize an Internet hosting company from potential liability under the Lanham Act for hosting the website of a third party which allegedly infringed plaintiff's trademark. As a result, the court denied defendant Mindspring's motion to dismiss, and allowed Gucci to proceed with its claim that, by hosting a third parties' site containing allegedly infringing materials, despite notice of the same, Mindspring was guilty of direct or contributory trademark infringement and false designation of origin in violation of the Lanham Act, as well as violations of state trademark and unfair competition statutes.

The Ninth Circuit allows Perfect 10 to pursue copyright infringement claims against defendants, who provide web hosting and credit card billing services, arising out of the unauthorized posting on the web by their third party customers of “adult” images in which Perfect 10 holds copyrights.  Questions of fact precluded a determination of whether defendants were immunized from monetary liability for such claims by the Digital Millennium Copyright Act (“DMCA”).  Such immunity extends only to service providers who “reasonably implement” a policy for terminating those of their customers that repeatedly infringe copyrights.  In considering this question, the Ninth Circuit held  courts should consider not only the manner in which the defendants responded to “take down” infringement notices sent by the plaintiff copyright holder, here Perfect 10, but also the manner in which they responded to similar notices from third party copyright holders.  Because the District Court failed to consider whether defendants terminated customers identified in such third party “take down” infringement notices, the Ninth Circuit could not determine whether defendants “reasonably implemented” a compliant DMCA policy, and thus whether they were entitled to DMCA immunity.  The case was accordingly remanded to the District Court for further consideration.

The Ninth Circuit held that defendants had no obligation to respond to the “take down” notices provided by Perfect 10, or take steps to prevent the infringing conduct alleged therein, due to Perfect 10’s failure to provide such notices under penalty of perjury.  Absent the sworn acknowledgement required under the DMCA that the complainant is both an authorized representative of the copyright owner, and has a good faith belief that the material at issue is unlicensed, the service provider has no obligation to act upon the notice. 

Nor, held the Ninth Circuit, were defendants obligated to take action against purported “red flag” sites defendants serviced, which included sites that purported without authorization to provide users with passwords to access plaintiff’s materials, or other websites bearing names such as “stolencelebritypics.com” or “illegal.net.”   The DMCA does not impose on service providers the obligation to conduct an affirmative investigation into the bona fides of such sites.  To qualify as a “red flag” site that imposes an obligation on a service provider to act, held the Ninth Circuit “it … need[s] to be apparent that the website instructed or enabled users to infringe another’s copyright.”

The Ninth Circuit allowed Perfect 10 to pursue direct copyright infringement claims against the defendants as a result of the posting of infringing images on hornybees.com.  The court held that sufficient evidence of defendants’ direct involvement in the operation of that site was presented to survive a motion for summary judgment.

Finally, the Ninth Circuit held that the Communications Decency Act immunized defendants from the unfair competition, false advertising and right of publicity claims advanced by Perfect 10.

Communications Decency Act - Intellectual Property Law Exception Quick Hits

Eleventh Circuit holds that Amazon.com’s display of a book cover that contains an unauthorized photograph of plaintiff on a product detail webpage used to promote Amazon.com’s sale of the book is not a commercial use of plaintiff’s image under Florida’s right of publicity statute – Fla. Stat. 540.08 - and hence is not actionable thereunder.   As such, the Eleventh Circuit affirmed, on different grounds, the District Court’s grant of summary judgment to Amazon.com, and dismissed plaintiff’s statutory right of publicity claim arising out of such unauthorized display.  The Court’s decision was grounded on its determination that, to be actionable under Section 540.08, plaintiff’s image must be used to ‘directly promote’ the sale of a product.  Because Amazon.com’s use of the book cover containing plaintiff’s image was ‘merely incidental to, and customary for, the business of internet book sales’ it was not an actionable commercial use of that image within the meaning of the statute.   Said the Court:

Amazon provides its online customers with a searchable book database with links to product detail pages for each book in its database.  Each product detail page provides the book’s cover image, the publisher’s description of the book, and in many instances editorial and customer content.  From the product detail page, customers may link to an order placement page, where they may complete their purchase and specify the shipping method.  In this manner, Amazon’s role as an internet bookseller closely parallels that of a traditional bookseller.  Because internet customers are unable to browse through shelves of books and observe the actual book cover photos and publisher content, Amazon replicates the bookstore experience by providing its customers with online cover images and publisher book descriptions. …

*                                         *                                                       *

[W]e find that, as a matter of business practice, Amazon’s use of book cover images closely simulates a customer’s experience browsing book covers in a traditional book store.  Thus, it is clear that Amazon’s use of book cover images is not an endorsement or promotion of any product or service, but is merely incidental to, and customary for, the business of internet book sales. …

*                                          *                                                       *

Under the allegations of Almeida’s complaint, we discern no set of facts by which an internet retailer such as Amazon, which functions as the internet equivalent to a traditional bookseller, would be liable for displaying content that is incidental to book sales, such as providing customers with access to a book’s cover image and publisher’s description of the book’s content.  Accordingly, we affirm the district court’s grant of summary judgment as to Amazon’s right of publicity claim, but we do so on the ground that Amazon did not use Almeida’s image for the purpose of directly promoting a product or service in violation of section 540.08

The Court spent much of its opinion discussing, without deciding, whether the Communications Decency Act barred plaintiff from pursuing the instant right of publicity claim against Amazon.  More particularly, the Court grappled with the question of whether the statute’s ‘intellectual property law’ exception, found in Section 230(e)(2), permitted plaintiff to pursue a right of publicity claim on the ground that such was in fact an intellectual property claim within the meaning of the statute.  This section provides that “nothing in [section 230 of the CDA] shall be construed to limit or expand any law pertaining to intellectual property.”  Because the Court ultimately found that plaintiff could not sustain her right of publicity claim on the merits, it did not reach this question.

Finally, the Eleventh Circuit affirmed the dismissal of plaintiff’s civil theft claim, finding that plaintiff had failed to submit evidence sufficient to establish that Amazon acted with the requisite ‘felonious intent’ when it purportedly misappropriate plaintiff’s property – namely her image – for its own use to promote its sale of books.  The Court held that there was no evidence that Amazon was aware when it posted the book cover in question on its website that the publisher was not authorized to use plaintiff’s image on the book’s cover.  When plaintiff contacted Amazon and so informed it, Amazon promptly removed the book cover from its site.

Complaint and Gripe Sites - Updated November 21, 2008

This section of the Internet Law Library contains court decisions which analyze the legality of consumer complaint web sites which are highly critical of a business entity.

Read my latest article, Pruning the Gripe Vine, published in the January 2005 edition of Corporate Counsel.

In Bally, the court awarded defendant summary judgment, dismissing claims of trademark infringement and dilution brought by plaintiff as a result of defendant's operation of a web site titled "Bally sucks", at which defendant airs criticism of plaintiff's health club operations. The site opens with the image of plaintiff's federally registered trademark "Bally", across which appears the word "sucks." The site states it is unauthorized, and no products are sold or offered for sale on the site. Plaintiff's trademark infringement claims failed because plaintiff could not establish that consumers were likely to be confused by this use of the "Bally" mark as to the source of the "Bally sucks" website. Quite the contrary, the court concluded that the average consumer would assume that plaintiff Bally neither approved nor sponsored the site. Plaintiff's dilution claim failed, in part, because defendant's use of the mark was not commercial, an essential element of a dilution claim. The court also held that a dilution by tarnishment claim could not be sustained as a result of the placement of a link on a website that, without authorization, contains a parties' trademark, which link took the user to another site which allegedly contained offensive materials, but not the trademark at issue. Of note, the court determined that a party has the right to use an entity's trademark in meta tags to promote a non-commercial site critical of the entity that owns the mark.

Plaintiff bank brought defamation claims against defendant Mario Menendez-Rodriguez, a Mexican resident and journalist, defendant Narco News, a web site, and defendant Al Giordano, its publisher, arising, in part, out of statements defendants made concerning Roberto Hernandez-Ramirez, plaintiff's largest shareholder, general director and chairman of its board of directors, and the bank itself. In these statements, defendants accused Hernandez-Ramirez of being a "drug trafficker", and of having used gains from illegal endeavors to acquire the plaintiff bank. The Narco News also allegedly claimed that "bank officials have been arrested for drug-money laundering …". Defendants allegedly made the statements in question in a newspaper published in Mexico, Por Esto! with which defendant Menendez-Rodriguez is affiliated, in an interview given to The Village Voice, a New York publication, during a panel discussion at Columbia University in New York, and/or in articles published on the Narco News web site.

The court, on defendants' motions, dismissed the complaint. The claims advanced against defendant Menendez-Rodriguez were dismissed on the ground that the court lacked personal jurisdiction over him given the plaintiff's failure to allege facts sufficient to show that Menendez-Rodriguez, a non-resident, "transacted purposeful business activity bearing a substantial relationship to the subject matter of the lawsuit in [New York]." The defamation claims against the remaining defendants were dismissed as a result of plaintiff's failure to allege facts sufficient to state a claim against them. The court determined that these defendants were media defendants entitled to heightened protection under the First Amendment. Given that they were reporting on matters of public concern plaintiff, to state a claim against them, had to allege facts sufficient to show both that the statements they allegedly made were false, and that they were made with "actual malice," that is with knowledge that the statements were false or made with reckless disregard for the truth. The court held that plaintiff had not alleged facts sufficient to establish that the remaining defendants had acted with actual malice, given, inter alia, their reliance on articles appearing in Por Esto! for the statements they made, and accordingly dismissed the complaint against them.

Court in large part grants defendants’ motion for summary judgment, and dismisses claims arising out of defendants’ operation of a website on which third parties, and defendants themselves, posted a number of statements critical of plaintiff Best Western International Inc.  Left unresolved by the Court’s motion were plaintiff’s claims that a number of additional posts authored by defendants were in fact defamatory.

Best Western is a non-profit member corporation, which assists its members in running their hotels.  Defendants are members of Best Western who operate hotels, their spouses, and an individual who assisted in the creation of the website at issue.  The member defendants are bound by the terms of membership agreements with plaintiff. 

The Court held that the immunity granted defendants under the Communications Decency Act barred plaintiff from seeking to hold them liable for defamatory posts authored by third parties that appeared on defendants’ website.  Defamation claims arising out of 50 posts defendants themselves authored failed because plaintiff did not present sufficient evidence to establish that defendants acted with the requisite degree of fault necessary to sustain a defamation claim.  Thus, plaintiff failed to establish that defendants acted with either actual malice or negligence in making these statements, or with knowledge of their alleged falsity.   In reaching this result the Court noted that possessing ill will toward plaintiff was insufficient to establish ether that defendants acted with the requisite degree of fault, or that they were guilty of defaming plaintiff. 

The Court also rejected tortuous interference with contract or prospective advantage claims arising out of the posting on defendants’ site of statements urging plaintiff’s members to switch to a competitor’s organization.  The Court held that plaintiff failed to prove either that such statements caused it any injury, or that defendants or the competitor acted improperly in making these posts.  In reaching this result, the Court noted that plaintiff’s competitor is free to make posts that promote itself and its own economic interests.

Finally, the Court rejected various breach of contract claims advanced by plaintiff, asserting that defendants breached the parties’ membership agreement by making public confidential information, or failing to meet the membership agreement’s requirement to use their best efforts to maintain positive relationships with customers.  As to the former, the Court held there were no such prohibitions in the parties’ agreement that bound defendants.  As to the later, the Court held that the prohibitions applied to other aspects of defendants’ business, with which obligations defendants complied.

The Court did allow plaintiff Best Western to pursue breach of contract claims arising out of the use by the member defendants of Best Western’s trademark on the website at issue, which use purportedly violated the parties’ membership agreement.

Court refuses to enjoin defendants from operating web sites critical of plaintiffs' business, or from utilizing plaintiffs' common-law service mark in meta tags on those sites to attract visitors seeking information about plaintiffs. The court also refused to enjoin defendants from continuing to publish allegedly libelous statements about plaintiffs on their web sites.

In this domain name dispute, the Third Circuit affirms District Court's decision, enjoining defendant from continuing to use plaintiff's mark in the domain name of a gripe site he operated at that domain, and directing defendant to cancel his registration of that domain.  The courts' rulings were premised on their determinations that plaintiff, the Board of Directors of the Sapphire Bay Condominiums West, was likely to prevail on its claims that defendant's conduct infringed and diluted plaintiff's mark in violation of the Lanham Act.  Notably, defendant's gripe site initially proclaimed itself the "Official Web Site of Sapphire Bay Condominiums West."  The Third Circuit noted that its decision was "not precedential."

In this domain name dispute, the Ninth Circuit holds that the use of another’s trademark as the domain name for a non-commercial gripe site does not constitute trademark infringement or dilution in violation of the Lanham Act.  To run afoul of the Lanham Act, a mark must be used in connection with the sale of goods or services.  A web site which is merely critical of another’s goods or services does not fit this bill.  The Ninth Circuit accordingly affirmed the District Court’s grant of summary judgment, dismissing plaintiff’s trademark infringement and dilution claims.

The Ninth Circuit reversed, however, so much of the District Court’s decision which dismissed plaintiff’s Anticybersquatting Consumer Protection Act (“ACPA”) claim.  The ACPA does not have a commercial use requirement, and, accordingly, establishing that the mark was used as the domain for a non-commercial gripe site does not absolve the griper from potential liability under the ACPA.  Because that was the basis on which the lower court dismissed plaintiff’s ACPA claim, its dismissal was reversed.  The matter was remanded to the District Court to determine whether defendant used the mark with a bad faith intent to profit therefrom, in violation of the ACPA.

Court holds that the Communications Decency Act (“CDA”), 47 U.S.C. Section 230(c)(1), mandates dismissal of so much of plaintiff’s defamation claim that arises from the publication by third parties of comments critical of plaintiff on a website defendants operate known as the “ripoffreport.com.”  The CDA further mandates dismissal of claims arising out of defendants’ promotion of its site and the allegedly objectionable content thereon, making the site more accessible to search engines and users, or soliciting contributions to assist in making the information on the site available.  The Court did , however, allow plaintiff to pursue defamation claims arising out of the headlines for third party content authored by the defendants, which themselves purportedly contained defamatory content.

Affirming the District Court, the Eighth Circuit holds that plaintiffs are likely to prevail on Anticybersquatting Consumer Protection Act ("ACPA") claims arising out of defendant's registration of numerous domain names incorporating plaintiffs' trademarks, which domains defendant linked to a website advocating a ban on abortions.  This anti-abortion website also contained links to other sites which solicited funds, via the sale of goods or donations, to aid anti-abortion causes.  In reaching this result, the Eighth Circuit rejected defendant's claim that his use of plaintiffs' trademarks in this fashion was protected by the First Amendment.

The Fourth Circuit vacated an injunction issued by the District Court which directed defendants to remove content from their web site critical of the plaintiff. The court held such relief warranted because the injunction failed to properly specify the reasons for its issuance as required by Fed. R. Civ. P. 65(a). The court further held such relief warranted because the district court's injunction raised serious First Amendment concerns due to the injunction's apparent failure to "burden no more speech than necessary to serve a significant government interest." In reaching this conclusion, the Fourth Circuit stated: "[J]ust because speech is critical of a corporation and its business practices is not a sufficient reason to enjoin the speech. As the First Circuit stated, if a trademark owner could 'enjoin the use of his mark in a noncommercial context found to be negative or offensive, then a corporation could shield itself from criticism by forbidding the use of its name in commentaries critical of its conduct." The case was remanded to the District Court for further consideration.

A divided three judge panel of the Ninth Circuit limited the im