Monthly Archives: August 2012

DOJ Seizes Illegal Mobile Phone App Download Websites

On Tuesday August 21, 2012, three websites were shut down and seized by federal officials because of pirated phone apps present on the digital devices. This is the first time the U.S. DOJ has taken websites down for selling or giving away mobile phone apps. While they have targeted websites and servers in the past for other reasons, this is the first case involving only mobile apps.

The websites affected were applanet.net, appbucket.net, and snappzmarket.com – all of which, at the time of this writing, simply display a message from the FBI about the takedown. Because some of the computers running the websites were located outside the United States, officials dealt with French and Dutch law enforcement officials. Additionally, a total of nine search warrants were executed in several states as part of the operation.

“Cracking down on piracy of copyrighted works, including popular apps, is a top priority of the Criminal Division,” Assistant Attorney General Lanny A. Breuer said in a statement recently.

He continued, “Software apps have become an increasingly essential part of our nation’s economy and creative culture, and the Criminal Division is committed to working with our law enforcement partners to protect the creators of these apps and other forms of intellectual property from those who seek to steal it.”

While law enforcement is covering the criminal aspect, there is also the possibility of filing a civil case in court to go after those who disregard copyright laws and sell or misuse the intellectual property of others – including mobile apps. If you remember, this practice is not limited to any one individual. Recently, Zyngawasfacingcopyrightinfringement charges over some of their games, notably The Ville.

History of Mobile App Piracy

As soon as mobile phone apps started to appear, there were those who started pirating the software. The fact that they were used on a cellphone and were typically not that expensive to buy didn’t stop many people from making the software available to others for a price – without giving the software developers or the copyright holder any of the proceeds.

Simple, small software was very easy to copy or “crack,” which is one of the reasons it became popular to do so. At the same time, more and more people were getting into mobile applications for their iPhone or Android cellphones, which made a tempting target for those who value money over copyright laws.

As you might imagine, a lot of the big players in the seedy underworld of pirated mobile apps used webservers that were not located in the United States in order to attempt to hide their criminal activity. However, because the FBI has such a good history of working with other countries when it comes to software piracy (except for China, perhaps), they have been able to go after those who are hosting mobile applications in other countries.

Changing Tech and Changing Laws

While copyright laws have been used to protect software since personal computers first became popular, there has been a slight hesitation to go after mobile app piracy. However, this is changing as more has been found out about how the illegal app networks and marketplaces are run online.

The Justice Department launched an IP Task Force in 2010 to protect intellectual property claims and to keep up with all the changing technology. Not everyone is happy about the practices that have happened, however. The American Civil Liberties Union has problems with the way that websites and servers have been seized in some cases.

In 2011, several websites that were innocent were inadvertentlytakendown while officials were going after an online child pornography ring. The DHS and DOJ law enforcement operation targeted a total of 10 websites that were providing explicit child pornography. While seizing those servers, they also took out another top level domain and everything that was hosted under it – at least temporarily.

Another problem that many people are having is with Google and Apply, who provide the frameworks for the mobile apps. the Yankee Group and Skyhook Wireless conducted a survey in 2011 with 75 Android developers. They found that more than half believed Google wasn’t doing enough to prevent piracy of mobile apps. Matt Gemmell has been quoted as saying, “People pirate Android apps because it’s easy.”

Future of Illegal App Downloads

What does this mean for the future of illegal smartphone app downloads? They are likely to continue, but this move by the FBI shows that they are actively working to take these websites off of the Internet. However, if you are a software developer and you know someone is stealing your Intellectual Property, you can go after the people doing it.

An IP attorney can help you protect your mobile app from piracy. Whenever you have intellectual property that is worth something or can generate revenue, you need to make sure you do everything you legally can to protect your assets. Hiring a professional intellectual property lawyer can allow you to know what you need to do and when you need to do it in order to protect your mobile apps or anything else you have copyrighted.

At Kelly / Warner Law, we have an experienced legal team that can answer any questions you have about mobile app piracy, intellectual property or any type of copyright infringement. We’re here to assist you. In the Information Age, it is important to do all that you can to protect your digital assets, even smartphone apps for iPhone or Android phones.

How Pirating For Personal Use Became Illegal: The LaMacchia Loophole & The NET Act

internet law litigation
The LaMacchia Loophole is why illegal downloading is now, well, illegal.

Believe it or not, not so long ago, illegal downloading was legal.  But that all changed when MIT student, David LaMacchia, successfully argued the dismissal of his case by reasoning that pirating activities weren’t personally profitable, and therefore not sanctionable under the Copyright Act. Shortly after the decision, officials got to work closing the “LaMacchia Loophole” and ultimately passed the No Electronic Theft Act (NET Act).

LaMacchia’s File Sharing Set-Up (What Got Him In Trouble)

David LaMacchia, a then 21-year-old student at the Massachusetts Institute of Technology, was a fan of file sharing. To satiate his pirating penchant, LaMacchia set up a network where people could upload their files to an anonymous encrypted server called Cynosure. Once there, LaMacchia would upload the Cynosure files to another encrypted server, Cynosure II, from which people could download files. LaMacchia asked that users keep his network on the down-low, but it wasn’t too long before the traffic volume was too much for the university to ignore.

A Massachusetts federal grand jury indicted LaMacchia in April 1994 for “conspiring with persons unknown” in violation of the wire fraud statute (18 U.S.C. Sec. 1343). Prosecutors alleged that since LaMacchia didn’t pay proper licensing or royalty fees, he caused more than $1 million in losses.

On September 30, 1994, LaMacchia filed a motion to dismiss the case. LaMacchia argued that “copyright prosecutions for alleged copyright infringement must be brought, if at all, under the Copyright Act, and could not be brought under statutes enacted by Congress to prohibit interstate theft and fraud” – a legal precedence established in Downling v. United States (1985). Moreover, prosecuting using federal felony wire-fraud statutes would have made criminal “the myriad of home computer users who succumb to the temptation to copy even a single software program for private use.” The ruling judge, Justice Richard Stearns, had no other choice but to dismiss the case.

Along Comes the NET Act

Nobody likes to lose – especially government officials. So after the “LaMacchia Loophole” was exposed, politicians got to work drafting and passing the No Electronic Theft Act (NET Act). Essentially, the bill criminalized illegal downloading by changing Titles 17 and 18 of the United States Code to include the “receipt, or expectation of receipt, of anything of value, including the receipt of other copyrighted works.” Prior to the amendment, the law only called for sanctions against those who enjoyed “commercial advantage or private financial gain” as a result of violating copyright statutes.

In addition, the NET Act made clear that criminal prosecutions could not go forward unless “1 or more copies or phonorecords of 1 or more copyrighted works, which have a total retail value of more than $ 1,000” over a given “180-day period.”

Online copyright infringement is a complicated area of law. The key to successful Internet intellectual property litigation is a lawyer who understands the nuances of copyright, trademark and trade dress violations in the context of the Web. With a dedicated Internet law practice, Kelly / Warner are those attorneys. Who knows, we may be able to find the next “LaMacchia Loophole” on your behalf. Contact us today to begin the conversation.

HireRight Solutions Ordered to Pay 2nd-Largest Penalty in FTC History for Violating Fair Credit Reporting Act

HireRight Solutions lost their shirt in FRCA/FTC case.

The Federal Trade Commission (FTC), with the assistance of the United States Department of Justice (DOJ), prevailed in a civil suit against HireRight Solutions for violating provisions of the Fair Credit Reporting Act (FRCA). The United States District Court for the District of Columbia ordered HireRight Solutions to pay a $2.6 million penalty for providing clients (potential employers for job applicants) with outdated and erroneous information that could bar a job applicant from employment.

According to the FTC, HireRight failed to investigate disputed claims found in the consumer reports they provided regarding job applicants they screened for employers. There were instances of when HireRight supplied a consumer report to the job applicant’s potential employer that showed the applicant had a criminal record, but didn’t reveal it was expunged. In other instances, the same crime showed up on the consumer report numerous times.

Think of the angst the job applicant, who in good faith checked “No” next to the question: “In the past seven years have you been convicted of a felony?” only to find out they won’t be hired because he/she allegedly falsified the job application.

On top of that, HireRight Solutions did not provide written notification to consumers when they provided information to prospective employees, as required by the FCRA.

Surely a $2.6 million penalty sends a clear message to companies and businesses who are required to operate within the bounds of the Fair Credit Reporting Act. Naturally, providing consumers with accurate and up-to-date data in their personal consumer report without taking shortcuts or bypassing certain provisions of the act is the right thing to do. It’s just common sense.

In addition to paying $2.6 million, the court ordered HireRight to:

  • adhere to reasonable practices and procedures to ensure the accuracy of consumer reports;
  • provide a copy of a consumer’s report to the consumer;
  • comply with statutory requirements regarding consumer reporting agencies for using information that is public record;
  • investigate disputes brought by consumers and provide consumers with the results of the investigation; and
  • reinvestigate dispute claims as requested.

As a proprietor and business owner, you should be aware of what the Federal Trade Commission requires in order to protect consumers. That means potential applicants for employment also qualify as consumers under the FCRA for the purposes of conducting a background check.

Take the time to find out what the FTC requires and what pitfalls to avoid when hiring new employees. An experienced business attorney, who understands the stringent requirements and nuances of FTC regulations, is an attorney that can help make sure your business continues to move forward.

Do Social Media Networks Own Your Account Records Like A Bank?

Twitter attorneys are warmed up and ready to spar over a New York judge’s decision on whether or not prosecutors have the right to subpoena the social media company for Malcolm Harris’ user account information. An Occupy Wall Street protester, Malcolm Harris was accused of disturbing the peace on October 1, 2011. Judge Matthew A Sciarrino, Jr. – a self-styled “social media expert” (who was disciplined in 2009 for trying to “friend” lawyers on Facebook) – ruled that neither the Twitter account holder nor the social media service could quash a subpoena issued by the DA’s office. Those in support of Harris argue that Sciarrino’s decision flies in the face of established United States’ legal traditions regarding anonymous free speech.

Facts of the Case

According to prosecutors, On October 1, 2011, Malcolm Harris – Twitter handle @destructuremal – violated the law by disrupting traffic on the Brooklyn Bridge. As a result, Harris is being brought up on charges. The District Attorney’s office believes Malcolm’s tweets – both public and deleted – are necessary to mount of a proper defense.

After receiving the subpoena on January 26, 2012, Twitter notified Mr. Harris on January 30, 2012 of the request. Harris informed Twitter representatives that he planned to file a motion to quash the subpoena; the social media network indicated they would not comply with the request until the court ruled on Harris’ motion.

Harris’ Attempt To Get The Subpoena Quashed Denied

In April of this year, Judge Matthew A. Sciarrino, Jr. ruled on Harris’ motion. While Sciarrino acquiesced that NY courts have yet to rule whether a criminal defendant can quash a subpoena served to a social network, he evoked a 1976 SCOTUS decision (United States v. Miller) which established that bank records are the property of a bank and that an account holder can’t assert ownership or possession over a bank’s records.

Sciarrino also cited the second circuit court decision in United States v. Lifshitz (2004) which concluded that “individuals do not have a reasonable expectation of privacy in Internet postings or e-mails that have reached their recipients.” To back-up this point, Sciarrino highlighted the fact that Twitter’s own Terms of Service read:

By submitting, posting or displaying Content on or through the Services, you grant us a worldwide, non-exclusive, royalty-free license to use, copy, reproduce, process, adapt, modify, publish, transmit, display and distribute such Content in any and all media or distribution methods (now known or later developed)

As such, Sciarrino argued that by agreeing to the terms of service, users are aware that their words will be “quickly broadcast…around the world,” and therefore should have no expectation of twitter privacy if their account is set to public. He pounded home his point by saying:

Every single time the defendant used Twitter’s services the defendant was granting a license for Twitter to use, display and distribute the defendant’s Tweets to anyone and for any purpose it may have. Twitter’s license to use the defendant’s Tweets means that the Tweets the defendant posted were not his. The defendant’s inability to preclude Twitter’s use of his Tweets demonstrates a lack of proprietary interests in his Tweets.

Malcolm Harris also said that his tweets had nothing to do with the disorderly conduct charge, and therefore shouldn’t be needed by the prosecutors. The judge, however, averred that the DA needed the Twitter records in order to refute the defendants anticipated defense.

After Malcolm Harris failed to get the subpoena quashed, Twitter stepped up to the plate and took their turn at bat challenging the subpoena. Sciarrino denied Twitter’s motion to quash, as well. Twitter, however, announced  they would file an appeal to the ruling.

So now we wait to see what comes next in this important test case for online privacy and social media. For as the American Civil Liberties Union pointed out, “What is surprising is that the court continued to fail to grapple with one of the key issues underlying this case: do individuals give up their ability to go to court to try to protect their free speech and privacy rights when they use the Internet? [T]he answer has to be no.”

Are Paid Testimonials Legal? What About Fake Testimonials?

are paid testimonials legal
Are paid testimonials illegal? Are fake testimonials legal as long as you have a disclaimer? Internet lawyer, Aaron Kelly, explains the legalities of fake and paid testimonials.

FTC Guidelines For Online Testimonials

It’s a common question: Can I get in trouble for using fake testimonials?  What about paid testimonials without proper disclosures? The simple answer is, “Yes”. However, there are ways to legally include reviews and testimonials on a website; you just have to know what needs to surround the content. Below, we’ll go over the basics of false advertising under United States law, review a few fake and paid testimonial case studies, and then conclude with a brief discussion about international considerations.

The FTC In Twenty Seconds

If you reside in the United States (or court customers in the United States), the Federal Trade Commission is the government body of which you should be most aware. The FTC is the regulatory agency tasked with prohibiting “unfair and deceptive acts or practices in commerce.” They’re also the authors of the Dot Com Disclosures (a.k.a., The Online Marketers’ Bible).  If you’re going to land in legal quicksand as a result of fake testimonials or false advertising, there’s a 99% chance that the people doing the prosecuting with be the FTC.

What Constitutes False Advertising in the United States?

U.S. law codifies false advertising as:

“a means of advertisement other than labeling, which is misleading in a material respect; and in determining whether an advertisement is misleading, there shall be taken into account (among other things) not only representations made or suggested by statement, word, design, device, sound, or any combination thereof, but also the extent to which the advertisement fails to reveal facts material in the light of such representations or material with respect to consequences which may result from the use of the commodity to which the advertisement relates under the conditions prescribed in said advertisement, or under such conditions as are customary or usual.”

In other words, false advertising in the United States is not just about the actual aspects of a given ad; regulations also consider missing information and how omitted material can lead to consumer deception.

What the FTC says About Disclosing Ads on Twitter

“The FTC isn’t mandating the specific wording of disclosures. However, the same general principle – that people have the information they need to evaluate sponsored statements – applies across the board, regardless of the advertising medium. A hashtag like “#paid ad” uses only 8 characters. Shorter hashtags – like “#paid” and “#ad” – also might be effective.”

The overall impression a marketing piece conveys is important in the eyes of U.S. regulators.  While one statement may not, by itself, get you in trouble, the combination of the statements, images, and claims may be considered deceptive when looked at as a whole.  So why is this important?  Well, the excuse “I didn’t mean it that way” doesn’t matter any more, and will not convince regulatory agencies to cut your a break.

For example, the overall impression that landed marketers in hot water for hocking Acai was the claim that they could lose weight without diet and exercise, that they could burn fat easily, that they could feel more energized, that they lost XX amount of weight in a week, and then showed before and after stock photos of dramatic weight loss.  Any of these aren’t necessarily problematic alone, but taken together they give the overall impression that if you took Acai you could sit at home and lose 10 pounds while eating a tub of butter and watching Dr. Oz reruns.  That just doesn’t work anymore.

Does The FTC Consider Fake & Paid Testimonials Illegal?

The FTC released a set of “common sense” guidelines when it comes to online advertising. The commission lays out the main foundations of the guideline as such:

  • Endorsements must be truthful and not misleading.
  • If the advertiser doesn’t have proof that the endorser’s experience represents what consumers will achieve by using the product, the ad must clearly and conspicuously disclose the generally expected results in the depicted circumstances.

If there’s a connection between the endorser and the marketer of the product that would affect how people evaluate the endorsement, it should be disclosed.  It’s common sense to think that if someone is paid to provide a particular statement, they may be biased and the FTC wants to make sure that people understand that.

If we apply the above points, it’s safe to argue that the one cut-and-dry rule of online testimonials and reviews is that if it’s 100% fake (i.e., you make up a fake news reporter, complete with a picture you pulled off Google images, who claims to have tried the product and lost a significant amount of weight), then it is not compliant. Same thing goes for any paid testimonials if they are not properly disclosed – paid being defined as any material exchange for a positive review.

Here’s another example: you cannot give someone free hosting for a positive testimonial about your new software and not mention that fact in the review. Now, let’s say you have three friends named Jane, John, and Jackie. If each of them uses your software, and writes an unsolicited positive review, then it’s legal. It’s best, though, not to include unsolicited testimonials from family members.

An FTC spokesperson explained, “While decisions will be reached on a case-by-case basis, the online post by a person connected to the seller, or someone who receives cash or in-kind payment to review a product or service, should disclose the material connection the reviewer shares with the seller of the product or service.”

Case Tactic Outcome
Lifestyle Lift – 2009 Employees wrote positive reviews of the company and were instructed to do so; emails found by the AG’s office proved that employees were instructed to write anonymous reviews in the voice of satisfied customers. Settled with the NY AG’s office for $300,000; Andrew Cuomo , the AG at the time, said that the “attempt to generate business by duping consumers was cynical, manipulative and illegal.”
Reverb Communications – 2010 Paid for positive reviews on iTunes. Had to delete all paid testimonials and agreed not to do it anymore. Didn’t have to pay, as reverb was one of the first to be brought up on charges after the 2009 FTC guideline changes for online testimonials.
Acai Berry Debacle – 2011 Niche market where many affiliates set up “fake news” websites with fake customer testimonials. FTC launched national crack-down on the activity; froze accounts of affiliate marketers; clearly stated their position that hawking acai berries with fake reviews would result in legal troubles and fines.

So, Be Straight, Can I Legally Get Away With Fake Testimonials If I have a Nearby Link to a Disclaimer?

You’re crafty, so you may be thinking, “can’t I just pay someone for a testimonial, and then put them up on my website, and then simply have a disclaimer in the site’s terms of service – which nobody reads anyway?” While having a link disclaimer may protect in some areas, the FTC has hammered home the point that a link to a disclosure that all your testimonials are paid is insufficient.

Proper disclosure dictates both clear and conspicuous disclaimers within close proximity of the statement being made.  So using before and after photos of someone who was paid, along with their statement, but burying the “disclaimer” in the footer won’t cut it.

To comply, you should put the disclaimers in close proximity to the content being annotated. You cannot make the text a similar color to the background; the word must be readable without squinting. If the FTC deems that a “significant minority” of the population would not be able to clearly make out the word, it’s considered not in legal compliance.  Any other disclaimers you may have can be at the bottom but as long as the person is giving the opportunity to read them and they stand out (use bold and all caps for the heading).

Lastly, we regularly see people utilizing paid testimonials from fiverr.  Be careful.  While you may think that your properly disclosed “paid” video testimonial from a “real” person on fiverr is compliant, be warned that unless the person has actually used the product in question you’re just toeing that line.  A testimonial from a person who is not actually a bona fide user of the product, but is making claims about it, may land both you and that person in trouble.  It is, however, a legal gray area if the person is a bona fide, actual user, of the product and is making statements about their actual experiences of the product (so long as you disclose this fact).  Nonetheless, you should still only use actual users of the product who have signed testimonial affidavits and where you have made proper disclosures.

International Considerations

If you market to consumers outside of the United States, it’s important to comply with various international standards – especially in the EU. For example, in the United Kingdom, “falsely representing oneself as a consumer” is listed as one of the 22 prohibitions in the “Consumer Protection From Unfair Trading” regulations. If breeched, perpetrators can be fined up to £5000 or a jail sentence of up to two years in some instances.

Another type of law to look out for in various countries are “monetary advantage by deception” rules.

Making sure that you’re online marketing efforts are compliant should be a top priority of anybody doing business online – -whether you’re an affiliate marketer, a brick-and-mortar business owner with a Web presence, a startup, or an Internet entrepreneur. Contact the online marketing lawyers at Kelly / Warner today to arrange a consultation.

Internet Lawyer Looks At New ‘Anti-Piracy’ Google Update

Google Internet Law
Google is doing its part as a content distribution company by launching an anti-piracy search update.

First the “Penguin” and “Panda” updates changed search results dramatically, and now there is the “Emanuel” update – a term coined by Search Engine Land, in honor of media agency executive (read: RIAA & MPAA mouth piece), Ari Emanuel. What will the new Google update accomplish? Technically, it will incorporate “copyright takedown requests” as a search factor, which will push file-sharing and BitTorrent sites down in the SERPs. Politically, it will appease the entertainment industry who has been whining about Google’s inaction when it comes to piracy.

How Will Google Be Incorporating The New Anti-Piracy Update?

In a three-paragraph statement, Amit Singhal, SVP, Engineering, posted on the company blog that Google “will begin taking into account a new signal in [their] rankings: the number of valid copyright removal notices we receive for any given site. Sites with high numbers of removal notices may appear lower in our results.” Singhal also explained that since Google “re-booted” their copyright removal procedures, they now have “much more data” and can as such incorporate the information into their algorithm.

What, Exactly, Does Google Mean By The Term “Valid”?

The word that jumps out when reading Google’s new anti-piracy update is “valid” — what do they mean by that? Are they talking about a valid complaint or a valid takedown request? After all, a valid takedown request simply means that all the proper paperwork was completed; but it doesn’t mean that the request is actually sound. Google acquiesces this fact in their announcement:

“Only copyright holders know if something is authorized, and only courts can decide if a copyright has been infringed; Google cannot determine whether a particular webpage does or does not violate copyright law.”

In other words, this update is a potential disaster in the making if the signal threshold is low. For example, what happens if Google receives 2 takedown requests for Flowershop A in week 1; now let’s assume that the two requests were sent in by rivals, Flowershops B and C. Will Flowershop A drop in the rankings until they can afford to hire an attorney to remedy the situation? Take it one step further and assume that the requests were sent in a week before Mother’s Day – the busiest flower day of the year – thus causing Flowershop A to drop in rankings during their most profitable window. Like I said, this update is a potential disaster in the making.

Of course, though, it’s important to point out that it’s never a good idea to compete via fake litigation. First of all, you run the risk of being counter-sued and losing a lot more than your attempt at gaming earned. Judges and juries don’t take kindly to those who use the justice system for personal gain. Moreover, if word of your deception leaks, you lose the trust of customers and therefore perhaps your business.

That being said, even if nobody tried to file a false DMCA takedown request, that doesn’t mean this new update will go off without a hitch. After all, just a few weeks ago, the Curiosity Mars landing was removed based on a faulty DMCA request.

Why An Anti-Piracy Search Update Now?

Google insists the impetus for adding an anti-piracy component to their algorithm is new data. But the street gospel is that Google’s sudden change of heart has more to do with the fact that they’re no longer just a search engine, but instead a content distribution company looking for partners — partners like the Recording industry Association or America and the Motion Picture Association of America.

Super-agent (and the inspiration for Ari Gold), Ari Emanuel, co-CEO of William Morris Endeavor, recently heckled the search-turned-content giant at an industry conference: “I don’t want them to censor results, but they have a bunch of smart guys there that can figure this stuff out….Look, Google can filter and does filter for child pornography. They do that already. So stealing is a bad thing, and child pornography is a bad thing.” Translation: if you want to get into the distribution game, you better start at least feigning disgust with piracy.

Like all Google updates, we won’t learn the true ramifications of this one for another few weeks when the data starts rolling in. At that time, analysts will be able to determine if sites that receive thousands of takedown requests (like filetube.com, isohunt.com and torrenthoud.com) will be the only ones affected, or if savvy competitors will be able to launch weak, but technically valid, search-foiling “DMCA attacks” against foes.

 

How Much Do You Know About The TPPA?

The Internet is abuzz with talk of the Trans-Pacific Strategic Economic Partnership Agreement, known in an abbreviated form as the Trans-Pacific Partnership Agreement (“TPPA”).  Although there has been much speculation about how the TPPA will affect international commerce, the problem with such speculation is that many of the negotiations have been shrouded in secrecy.

Kelly Warner PLLC has researched the potential implications of TPPA based on what few documents have been disclosed publicly; a partial analysis of TPPA is below.  Because the current draft of the TPPA is not publicly available, this article relies on an early draft made public by the New Zealand government on the New Zealand Ministry of Foreign Affairs & Trade’s website.  Since the publication of that draft, the language of the treaty may have changed.

Current Treaty Rights Unaffected

To begin with our analysis, it is important to note that the state parties “affirm their existing rights and obligations with respect to each other under the TRIPS Agreement and any other multilateral agreement relating to intellectual property to which they are party.”  So, for example, the TPPA is not going to have any effect on the Berne Convention for the Protection of Literary and Artistic Works or the Paris Convention for the Protection of Industrial Property, if a party to TPPA is already a party to one of those treaties.

Right to Cancellation & Opposition

According to the New Zealand draft, each part to TPPA “shall afford an opportunity for interested parties to oppose the application of a trade mark and request cancellation of a registered trade mark.”  Since Section 102.02 of the United States Patent and Trademark Office’s Trademark Trial and Appeal Board Manual of Procedure already provides for an opposition and cancellation procedure, this will have no impact on business owners in the United States.  It may, however, affect business owners in other states party to the TPPA, or American business owners who wish to register their trademarks in those foreign states, if those foreign states do not already have an opposition or cancellation mechanism.  If such procedures apply retroactively to marks which have been registered prior to the adoption of TPPA by a signatory state, it could have a serious impact on businesses. If the TPPA is ratified with these provisions, those that have enjoyed their trademark registration for decades, may find themselves facing a cancellation request from someone else.

First Amendment Impact

According to Article 10.6 of the New Zealand draft, “The Parties shall provide the legal means for interested parties to prevent commercial use of country names of the Parties in relation to goods in a manner which misleads consumers as to the origin of such goods.”  From the language of the Article, and its location under “Intellectual Property,” it appears that this is not about determining where goods are manufactured, but whether a country endorses a product.

The broad application of this section, without any caveat protecting freedom of the press, would appear to conflict with the First Amendment to the United States Constitution.  It does not take much imagination to think of ways in which this Article could, if implemented in the United States, could conflict with the First Amendment.

For example, in the early days of Sacha Baron Cohen’s character “Borat,” a number of news reporters and others seemed to be legitimately fooled into believing that he was from the country of Kazakhstan.  Had he sold a book or produced a fake film, a law implemented by Article 10.6 could be used to prevent him from continuing to do so.  Without providing protection for commentary, parody, and other valid components of freedom of speech, Article 10.6 may not be constitutional in the United States, and may negatively affect the freedoms of people in other member countries where the right to speak freely has no real protections against the legislature.

Three-Step Test

Aside from the wording of the New Zealand draft, there have also been recent reports from Australia about leaked documents indicating there may a different “three step test” regarding fair use exemptions for use of copyrighted content that restricts the test currently in place for the unpaid use of others’ intellectual property.  Unfortunately, there is much speculation but little substantive information available about what such a test would entail and how it would differ from the current tests of various member states.  However, we would recommend watching news reports to determine how exactly the test will change, as this could affect all sorts of commentators and people who parody other materials, depending on how such a test is worded.

Conclusion

The TPPA affects a number of areas other than intellectual property.  For the purposes of this analysis, we have focused only on a partial list of policy effects that the TPPA might have on intellectual property laws in member states.  It appears that the provisions about cancellation and opposition would have little effect on current American intellectual property law, though Article 10.6, if implemented in its current form, could conflict with the First Amendment’s protections of those who use satire to mock certain countries.  The reported but vague stories about a three-step test for fair use of copyrights or trademarks should also be watched for further developments, as it could affect any Internet publishers who publish their content firsthand (rather than those who allow third party submissions subject to Digital Millennium Copyright Act safe harbors).  We will continue to monitor the coverage of the TPPA and publish more if we discover any major developments.

Facebook Argues A “Like” Is Free Speech

Facebook comes to the rescue of a deputy sheriff in Virgina who was fired over a Facebook “like.” The social media company argues that likes should be protected speech under the First Amendment.

Several months ago, a Virginia judge ruled against a deputy sheriff who said he was fired for Facebook “liking” his boss’ election opponent. The judge in the case declared that clicking a “like” button does not constitute “speech,” as nothing was actually spoken.

Plaintiff Daniel Ray Carter appealed the ruling. And now, Facebook is supporting the once deputy sheriff by way of an amicus brief arguing that a “like” is the 21st century version of a political bumper sticker.

Main points from the Facebook brief:

  1. When a user likes something on Facebook, a picture of the “liked” thing, and usually some accompanying text, appear on the user’s profile. As such, when Carter liked Adams’ Facebook page, the words “Jim Adams for Hampton Sheriff” and a picture of Jim appeared on Carter’s page – much like a “vote for” lawn sign. Conversely, Carter’s name and photo appeared on the campaign’s Facebook page in a list of people who supported Adams, further proving that he was a political supporter of the sheriff’s opponent.
  2. Symbolic speech, like arm bands and flag burning, are considered free speech; therefore, Facebook “likes” should also qualify.
  3. “If Carter had stood on a street corner and announced, ‘I like Jim Adams for Hampton Sheriff,’ there would be no dispute that his statement was constitutionally protected speech.”

Also, deposed co-workers said they knew Carter would be “out of there” when news broke of his support for Adams.

Facebook’s brief is comprehensive and includes lots of supporting case law, from Givhan v. Western Line Consol School District (1979) to Adams v. Trustee of the University of North Carolina-Wilmington (2011). The social media company’s argument is cogent and most likely will go a long way in getting the current ruling over turned.

In addition to Facebook, The American Civil Liberties Union also filed a brief in support of Carter.

This is a case to keep an eye on. To stay abreast of the latest, sign up for our Internet law newsletter today.

Mobile Advertising Moving Forward into 2013

Mobile Advertising Lawyer
2013 Mobile Advertising Law Outlook

Mobile advertising is a fast-growing marketing medium. Over the past year, advertising on mobile devices has grown by more than 60%, and the outlook for 2013 is equally as strong, if not stronger.

Why Is Mobile Advertising On The Rise (The Psychological Reason)

One of the main reasons mobile advertising is on the rise is increased use of rich media versus banner ads. Industry experts have found that consumers stay engaged for a longer period of time and produce a higher click through rate (CTR) in mobile advertising with video and picture ads. This holds true for not only mobile phones, but also for tablets. With the rise of the number of tablets entering the marketplace, participants in mobile advertising recognize the need to include tablets as a growing and thriving medium.

But with all the different types of mobile advertising participants, some industry experts believe the ecosystem needs to start consolidating in 2013 to keep advertising on a trajectory toward market growth.

According to those with a firm grasp on the mobile scene, consolidating video, analytics, virtual currency, in-app payments, rich media, LBS, mediation and demand-side platforms, along with other monetization avenues for mobile advertising, is something that needs to happen in order to keep things moving forward.

Mobile Advertising Legalities To Consider

If you’re just sticking your toe into the sea of mobile advertising for the first time, or have been fully immersed for quite some time, there are some things you’ll want to consider whether the mobile advertising marketplace consolidates or not.

In order to have a truly profitable campaign (meaning: you don’t want arouse a legal tussle), you’ll want to know the potential pitfalls that can, and do, arise from any type of advertising campaign — in print, online, or via mobile devices.

  1. Do you know how to navigate FTC and FCC regulations?
  2. Do you know what the CARD Act is, and how it can affect your mobile campaign?
  3. What about the Gramm-Leach Bliley Act? Or the host of other banking regulations regarding mobile payments?

The above are just a few examples of the legal issues that mobile marketers need to consider before pushing all of your chips to the center of the table.

Contact A Mobile Advertising Attorney

If you’re ready to go “all in” by using mobile ads, make sure you have the advice of an attorney experienced in mobile law and mobile advertising. A mobile law attorney who understands and has experience with getting the most out of an advertising campaign’s CPM and generating a higher CTR is much better suited to meet your needs than an attorney that may confuse CPM and CTR with the make and model of a luxury car.

Authors Guild Says, “Infringement!” Google says, “Fair Use!”

Search engine behemoth, Google, recently filed for the dismissal of a class-action lawsuit filed by The Authors Guild. The civil suit against Google goes back to 2004 when a handful of authors claimed Google violated the copyright of their works via Google’s book scanning project.

The authors allege that Google hindered their opportunity to profit from the intellectual property that they, the authors, created.  To smooth things over, Google offered a settlement of $125 million, but Judge Denny Chin rejected the settlement in 2011.

The trial continues to grind forward.

Google, however, insists they’re complicit with US Code Title 17, section 107, which governs the “fair use” doctrine of copyrighted material. Google asserts that the snippets of the roughly 4,000,000 books — out of approximately 20 million — constitutes fair use and helps authors since their searchable index makes it easier for people to buy the authors’ works. Google also avers that their digitizing book project, which was largely developed to assist research libraries, is in no way illegal.

Essentially, Google is saying no harm no foul.

Therefore, on July 27, 2012, Google moved to have the trial dismissed on the grounds that the authors represented by the Authors Guild have not demonstrated that Google caused them economic harm.

According to the Authors Guild, however, Google is guilty of “massive copyright infringement.” The Authors Guild is asking for a summary judgment against Google that will ensure copyright protection for their clients.

In order to win the case, the Authors Guild must prove that the authors they represent suffered economic harm from Google’s actions. They must also provide proof that Google exceeded what’s allowed under the fair use doctrine that would deprive the claimants from monetary gain.

The Authors Guild has until August 24th to respond to Google’s motion to dismiss.

No matter the outcome of the class-action suit against Google, there are some things you need to know about copyright infringement and fair use.

First, when someone creates a written work in digital or paper format, the moment the work is created it is a copyrighted work. The same goes for audio, video, and multimedia intellectual property.

However, in order to fully protect your copyright against those who would infringe upon it, it’s important to have your copyright registered with the United States copyright office. A registered copyright gives you the ability to protect and defend your copyright in a court of law.

Next, there’s this little thing called, “the fair use doctrine.” The fair use doctrine allows limited amounts of your copyrighted material to be used for educational purposes, reviews, parody, research, and reporting the news.

Here are a few things to ask yourself when determining if someone else has exceeded fair use of your copyrighted material:

  • How much of your copyrighted work is being used?
  • Is it a substantial amount that’s being used out of the entire body of the material?
  • Is the material being used commercially or used in a not-for-profit setting to educate people?
  • Is the other party reaping the benefits of economic gain from your material?

The answers to these questions may not be so clear. That’s why it’s a good idea to talk to an attorney who understands intellectual property and copyright laws. An experienced online copyright lawyer can help you determine whether or not someone has infringed your copyright by exceeding what’s allowable under the fair use doctrine.

Are Music Labels The Ultimate Copyright Trolls?

Are labels and organizations like the RIAA really the ultimate copyright trolls? Are they really the ones who are stealing from artists?

For better or worse, piracy is a part of the digital age. Politicians and special interest groups consider it a money-sucking plague, while statistics continue to show that online copyright violations have had, at worse, a neutral effect, and at best, a positive effect on certain entertainment sectors. Truth be told, the stats are so alarming it makes you wonder if anti-piracy advocates are self-perpetuating a litigation industry that ultimately only benefits label executives and association big-wigs.

Furthering that notion are two recent developments highlighted on TorrentFreak.com. The first being the revelation that the €550,000, which Pirate Bay defendants have to pony-up, will go back into a copyright litigation kiddy and not artists’ wallets; the second, a leaked slide-show wherein the RIAA admits that SOPA was an “important principle, but legislation not likely to have been effective tool for music.” While the leaked presentation may have been written after the failed SOPA attempt, and thus reflective of post-SOPA sensibilities, it still highlights that the RIAA’s agenda may really be about public relations as opposed to problem solving.

The Pirate Bay Copyright Incident Comes To an End; Jail-Time & Large Fines Handed Down

While they put up a long and noble fight, the Swedish Supreme Court found the infamous Pirate Bay four — Peter Sunde, Fredrik Neij, Gottfrid Svartholm and Carl Lundström — guilty of criminal intellectual property infringement. As punishment, they received jail sentences and were ordered to pay about $1,000,000 to various “harmed” labels, including EMI Music, Universal Music and Sony Music. Pecuniary damages were calculated by figuring out what the defendants would have had to pay if they licensed the music legally.

Money Not Going To Artists

If you thought, however, that even a small part of that money would be given back to the actual artists, think again. According to TorrentFreak, who got a look at IFPI legal documents, monies collected from the Pirate Bay case will be funneled directly back into anti-piracy measures, not content creators’ pockets. According to the RIAA, “any funds recouped are re-invested into our ongoing education and anti-piracy programs.”

“As far as I know,” began Sunde in a statement, “no money ever won in a lawsuit by IFPI or the RIAA has even gone to any actual artist.” He continued, “It’s more likely the money will be spent on cocaine than the artists that they’re ‘defending’.” (Thems fightin’ words!)

The Real Numbers?

The RIAA, MPAA and federal government often cite extraordinarily high loss numbers when speaking about the impact of piracy on the United States. A figure commonly used by anti-piracy advocates, which was calculated by a known lobbying group, is $58 billion in loss. But according to other reports, while the music industry has seen about an $8 million dollar loss over the past several years, the movie, TV and Satellite industry enjoyed a nearly 50% increase in revenues over the past few years – resulting in a net gain, despite increased piracy, which has led some to pontificate that piracy may actually be good for the entertainment industry.

What’s Next?

The court made its ruling, but will the labels even recover the monies owed?  “We have filed applications with Sweden’s Enforcement Agency to secure assets to satisfy these funds,” read a document about the case, “[s]o far very little has been recovered as the individuals have no traceable assets in Sweden and the Enforcement Agency has no powers to investigate outside Sweden. There seems little realistic prospect of recovering funds.”

Perhaps, however, the Pirate Bay Four best explained the hypocrisy of the whole pecuniary situation, “They [the labels] say that people who download give money to thieves – but if someone actually ends up paying (in this case: three individuals) then it’s been paid for. So who’s the thief when they don’t give the money to the artists?”

In light of the labels’ plans for recovered damages, I’ll ask again: do you think entertainment executives and lobbyists are slyly creating their own closed-loop litigation revenue stream? One that cheats artists’ out of money by exploiting common anti-theft sensibilities? But then again, I guess a troll, is a troll, is a troll — no matter who they know or the size of their coffers. #fightcopyrighttrolls

Will The CFAA Take Center Legal Stage Over The Next Year?

Will the Computer Fraud and Abuse Act Take Center Legal Stage In The Months To Come?

Last week, Reuters, ran a piece on how the Computer Fraud and Abuse Act (CFAA) may take center stage in legal circles over the coming months. Specifically, the Justice Department has until August 8th to decide whether or not they want to request a U.S. Supreme Court review of a long-running, controversial employment case, in which the CFAA figures prominently.

The CFAA In Ten Seconds

Ratified 28-years ago – when most homes still didn’t have a personal computer – officials passed the Computer Fraud and Abuse Act. Its intended goal was to develop a law to punish hackers. But lately it’s being used to prosecute employees who download sensitive data.

A multi-section bill, the CFAA covers a lot of ground, but perhaps the most controversial line is the explanation of what constitutes illegality, that being: “intentionally access[ing] a computer without authorization or exceed[ing] authorized access.”

The Curious Case of David Nosal & The Dismissal of CFAA Charges

Take the David Nosal case, for example. Gleaning from reports, he and a few colleagues allegedly pulled what sounds like the modern-day equivalent of the Sterling, Cooper, Draper, Pryce midnight pack-up when making moves to open their own company. Irate over the situation, in 2008, their former boss filed lawsuits against all the alleged conspirators. Some accepted the charges and their resultant fate, but David Nosal decided to fight the charges – which included a CFAA count.

After extensive litigation and court appearances, the appeals court, in a 9 to 2 ruling, dismissed the charges related to the CFAA.

The Justice Department Ain’t Happy About the Dismissal

Over the past six years, approximately 1,050 CFAA-related cases (half federal, half civil) have been filed. But lawmakers and law enforcement agencies want to see that number go up in the future. Ostensibly to extend their sphere of influence, the U.S. Justice Department is keen to use the CFAA when prosecuting.

So would a lot of corporations.

Oracle is so invested in the measure that they filed a brief in support of the Justice Department that argued trespass doctrines are rooted in common law standards and should therefore be applicable when defining the scope of the CFAA. They argued that “Among [common law standards] is the concept of restricted authorization: a person commits trespass not only when he or she enters property or a portion of it when told not to; a person commits trespass also when he or she has authorization to enter for some purposes but enters for different ones.”

If the Justice Department does seek a SCOTUS review, and it doesn’t end up in the department’s favor, they risk losing one of their most effective “bullets.” If they win, however, it could theoretically usher in a new “Minitru-esque” era where logging onto Facebook or Twitter, or engaging in a little digital retail therapy at work, could land you in a lot of – possibly criminal — trouble.

Proposed Amendments to The CFAA

In an effort to satisfy the Justice Department’s wishes to make ample use of the CFAA, there has been talk of amending the arguably antiquated act to protect the average employee who may dabble in a little Internet activity during, say, their lunch hour. Specifically, officials are knocking around ways to exclude harmless violations from being prosecuted under the bill (i.e., social network users signing up using a pseudonym).

The Computer Fraud and Abuse Act has been widely interpreted in various courts. If you have a legal issue involving the CFAA, contact us today to explore your options. Our Internet lawyers are well-versed in all things CFAA-related and can help you work out the ideal solution.