Monthly Archives: December 2013

Online Copyright Case Study: Experian Information Solutions v. Nationwide Marketing Services

Online Copyright
An Arizona judge tossed an online copyright lawsuit between two Internet marketing firms.

An Arizona Federal District Court tossed an online copyright infringement case. One marketing research company sued another marketing research company for allegedly encroaching on a proprietary database. In the end, the judge sided with the defense, reasoning that no actual copyright had been violated. It’s a noteworthy case that every data compilation company and online marketing outlet should take a minute to consider.

Facts of the online copyright infringement case:

  1. Experian Information Solutions, Inc. runs an information database called InSource.
  2. InSource is an analytical compilation of “data related to consumer socio-demographic, lifestyle, culture and behavior” that employs “a proprietor analytical system to accurately and comprehensively categorize millions of consumers into a compilation of datasets.”
  3. InSource claims to purchase some data from “original sources” and cull other information from customers via exclusive methods.
  4. Solutions Inc. has a registered copyright for the way it collects and manages its data, not for the data itself.
  5. Nationwide Marketing Services can fairly, if not simply, be described as a lead list company.
  6. Solutions Inc. believes Nationwide Marketing Services violated Solution’s InSource copyright by taking “data elements from other sources and commingled […] elements with data from the InSource Database to create a database of children’s birth data from the ages of 2 through 17.”

Judge Susan R. Bolton waded through the arguments. In the end she dismissed the case on the grounds that Solutions Inc. failed to state an actionable item. In other words, since Solutions’ copyright had nothing to do with the data, the judge saw no possible way to wave a lawsuit through since the claimants failed to show how the defendants violated the process-centric copyright. In the judge’s own words: “[The] Plaintiff has alleged only that [the defense] copied non-copyrightable data.”

 

Big Money Trade Libel

social media privacy in 2013
Texas Supreme Court To Consider Trade Libel Case. Question to ponder: What Should Be The Punitive Damages For Defamatory  Smack Talk These Days?

Two competing waste disposal companies are putting the Texas Supreme Court to the test. The Lone Star State’s highest court must consider a nuanced legal question over the next couple of months: What is a reasonable punitive punishment for online defamation?

The Case of the Cut-Throat Companies

In one corner is Waste Management; in the other, Texas Waste Disposal; both are successful waste disposal services operating in Texas; ostensibly, neither is afraid to employ cut throat competition tactics. The Hatfield and McCoy rivalry between the two parties is perhaps best explained by way of a recent lawsuit between the adversaries.

In the not so distant past, Waste Management and Texas Disposal System were jockeying to win government contracts in San Antonio and Austin. During this time, with viper-like precision, Waste Management sent out a blast fax regarding “environmental concerns” at Texas Disposal System’s landfills. The die was cast; Waste Management publicly shaded TDS.

Then Came The Trade Libel Lawsuit

Outraged, TDS sued Waste Management for trade libel and emerged victorious after the first round of litigation. A judge awarded the besmirched business $5 million in damages,

But that wasn’t enough for TDS. So, back to court they went – this time to the state’s Supreme one — where TDS argued for more, More, MORE! During the hearing, Team TDS told the justices that WM’s fax folly resulted in “extended economic damage” for its client – damage that far exceeded $5 million.

Court to Consider: Are We Becoming Immune To Bad Press Thanks To The Internet?

Which way will the Texas Supreme Court sway? Will they sympathize with TDS? Will they force WM to give till they “can’t give no ‘mo”!? Will they view TDS’s ask as an egregious money grab? At this point, nobody knows. Two judges, however, did lob some provocative sound bites into the Coliseum that may hint at their current inclinations.

Chief Justice Nathan Hecht said: “It makes me wonder if we haven’t just gotten used to all of these comments about business.” Could he be suggesting restraint when it comes to punitive damages for defamation since we’ve all “gotten used to” Internet grips and they, therefore, have less of an impact?

Justice Eva Guzman opined: “There are anonymous communications that show up all over the place and so the question is: Did you prove that they believed the contents of this anonymous communication carried the weight to change their opinion?” That statement speaks for itself.

Don’t expect a decision soon, according to reports, the court is expected to render its ruling in spring 2014.

Case Study: Online Defamation and Copyright Infringement In One Lawsuit

California lawyer Dionne Choyce wants a community watchdog group to pay for allegedly defaming him and his practice – but the court isn’t making things easy for him. In a recent ruling, Judge Jon Tigar shot-down several of Choyce’s motions – but not all. A suit dealing with both online copyright infringement and defamation, Dionne Choyce v. SF Bay Area Independent Media Center [SFBAIMC], et al. is a textbook case study on the importance of small details when pursuing civil actions.

Lawyer Is Trashed On San Francisco Forum

Layer42 hosts Indybay.org, a website of the San Francisco Bay Area Independent Media Center, a “non-commercial, democratic collective of bay area independent media makers and media outlets.” In April 2012. A posting appeared on Indybay.org titled, “Attorney Dionne Choyce, who embezzled from homeless, may serve prison time.” A month later, another negative Choyce post donning the title, “The Choyce Law Firm Evicted From Building” appeared on the same site. Both posts featured a picture of Dionne Choyce – a picture lifted from his website.

Lawyer Files Lawsuit Claiming Defamation and Online Copyright Infringement

Outraged by the articles, Choyce submitted a civil claim against SFBAIMC, Layer42 and Cernio Technology, another ISP tangentially involved in the hosting of Indybay.org. In the filing, he alleged intellectual property infringement and defamation. Judge Jon Tigar caught the case.

ISP Shoots Back A Response, Claiming DMCA and CDA Immunity, Plus anti-SLAPP Motion

Soon after Choyce’s filing, Layer42 submitted a response. In it, the company argued three main points:

  1. Choyce never stated a claim on which action could be took;
  2. As an ISP, it was protected from being held liable for defamation under section 230 of the Communications Decency Act; in addition, the company was protected from copyright infringement under Digital Millennium Copyright Act provisions.
  3. The case should be dropped pursuant to California’s anti-SLAPP statute.

Ultimately, the judge did not agree with all of Layer42’s conclusions, but Choyce’s claims didn’t pass muster with Tigar either.

Judge Says “Not Quite” To Both Parties

Judge Tigar did not agree with layer42’s DMCA safe harbor argument, but dismissed the copyright claim because Choyce did not register his copyright, nor did he have an in-process application. More than that, Choyce had not applied for registration within the 3 months after the alleged infringement occurred. Due to his lack of registered copyright, Tigar explained that the claim “must be dismissed,” but that Choyce can choose to amend the complaint if he applies for copyrights. That said, the judge also reminded Choyse that if he does resubmit the claim, he can’t ask for statutory damages or attorney’s fees related to the infringement action because he didn’t apply for copyright within 3 months of the original publication. He can amend the complaint to show that he has since applied for a copyright, but he can only seek redress appropriate for unregistered copyrights.

Choyce tried to subvert Section 230 of the CDA by alleging the ISPs had a hand in creating the works in question. The judge, however, wasn’t buying what Choyce was selling, concluding that the beleaguered lawyer’s claim itself made the case for Layer42’s immunity.

“The only factual allegations in the entire complaint that relate specifically to Layer42 is the allegation that it provides Internet hosting, connectivity and infrastructure,” wrote the judge. “That allegation does nothing to establish Layer42’s liability; in fact, all it does is establish its presumptive immunity. The facts alleged in the complaint fail to state a claim for defamation or libel against defendant Layer42.net,” he concluded.

Judge Tigar granted in part and denied in part the defense’s anti-SLAPP motions; he agreed with the defense that the embezzlement statements were fair game as they were a matter of public interest; he disagreed with the defense about the eviction statements and waved Choyce through to pursue argue for a defamation remedy relating to those statements only.

The last day Choyce can file his amend complaint is December 22.

TripAdvisor Prevails In Defamation Lawsuit

TripAdvisor wins another online defamation lawsuit.
TripAdvisor wins another online defamation lawsuit.

Well folks, it looks like the TripAdvisor defamation saga of the Grand Resort Hotel in Pigeon Forge, TN has come to an end. After being branded the “Dirtiest Hotel in America” on TripAdvisor’s 2011 “awards list,” Kenneth Seaton – proprietor of the Grand Resort Hotel – waged legal war against the online review website. And this past week, his battle came to a close.

Why Did The Innkeeper Sue TripAdvisor For Defamation?

Understandably upset about the high-profile slight against his guest house, Kenneth Seaton filed an online libel lawsuit against TripAdvisor.com. The innkeeper also alleged false light invasion of privacy, trade libel and tortious interference with prospective business relationships.

TripAdvisor’s write-up never mentioned Seaton by name, though. As such, the judge quickly tossed the false light invasion of privacy claim. After all, a person can’t be seen “in a false light” if said offending material doesn’t identify the individual. The judge did, however, allow Seaton to pursue the other claims.

Notably, Seaton’s side opted to focus on the hyperbolic nature of the word “dirtiest”. If they hadn’t, the statement could easily be viewed as an opinion and, therefore, not defamatory. For one person’s clean, is another person’s pig sty.

Did The Innkeeper Win His Defamation Lawsuit Against TripAdvisor?

Ultimately, Seaton lost. To make matters more heartbreaking for the Grand Resort Hotel operator, the bank foreclosed on his hotel, forcing him to shut down his hospitality business.

Perhaps poetically, Trip Advisor ceased compiling and publishing their “best and worst of” list after 2011. As such, Kenneth Seaton will go down in history as the last victim of TripAdvisor.com’s potentially business-crushing “awards” program.

New LLC Operating Agreement Rules Coming Soon To California

California's new LLC operating agreement rules
California’s new LLC Rules Go Into Effect on January 1, 2014

On January 1, 2014 California’s Revised Uniform Limited Liability Company Act goes into effect. An update of the 1994 LLC law, the new statute will impact Golden State Limited Liability Companies with either a vague or nonexistent operating agreement.

The primary difference between the old and new laws is the number of “default rules”. Default rules are a set of obligations and provisions that kick in if an issue of dispute is not addressed in an operating agreement or if the parties don’t have an operating agreement. The new LLC law has more default rules than the old statute.

Here’s what you need to know:

California LLC Law Rule Change #1: Managers and Members Have More Leeway To Take Action

Under the new rules, individuals in a member- or manager-run LLC cannot take any action “outside the ordinary course of business” without obtaining unanimous consent of all members. As such, if your business’s current operating agreement specifies instances when members and managers can act, vote or protest a decision, then the new law won’t have an effect on your operation.

On the other hand, if your business’s old operating agreement does delineate or disclaim additional voting rights, nor include language that specifies voting rights as “described in the LLC Law,” then the January 1, 2014 changes will have an effect on your company. Why? Because any member could, in theory, have a valid cause of action if he or she finds out a decision was made without his or her approval. So if you do want everyone with a stake in your LLC having equal voting rights, and your current operating agreement does not address the issue, run, do walk, to get your agreement updated to specify limitations on a manager’s or member’s authority.

California LLC Law Rule Change #2: Assignees are now Transferees

Under the old law, any non-member to whom a membership interest was transferred was called an “assignee;” now they’re called “transferees.” Under the old law, assignees didn’t enjoy member rights. Under the new law: “An amendment to the operating agreement made after a person becomes a transferee is effective with regard to any obligation or LLC or its members to the transferee.” In other words, managers and member can theoretically vote to lower transferees’ piece of the pie on the day the transferee takes possession of the membership interest, which could lead to some nasty battles. If you want to avoid the hassle, update your operating agreement to address this new default LLC rule in California.

Membership Interests: Membership interests are considered personal property and therefore can be freely transferred by the holder to either members or non-members. Typically holders of membership interests have no governing or voting rights, just an economic interest.

California LLC Law Rule Change #3: Change in Dissociation Guidelines

Dissociation of a member to transferee status is a new provision of the 2014 California LLC law. Since the previous law didn’t provide for dissociation, businesses will probably want to add language to their operating agreements addressing the issue. Beginning on January 1, 2014, events that can trigger a dissociation include:

  1. Death of a member;
  2. Assignment of a conservatorship or appointed a guardian;
  3. A court order saying a member is incapable of carrying out duties;
  4. Member becomes a bankruptcy debtor and the LLC is member managed.

So, if you don’t want members to lose rights in the event of any of the above, make sure you change your current operating agreement to reflect the changes.

Moreover, a contradiction exists in the new California LLC law. On one hand, it states that dissociated members don’t have the right to access any records except for accounting records from the LLCs dissolution. However, another part of the law grants “a holder of transferable interest” the right to access certain LLC records and information. Again, make ensure your operating agreement covers this scenario or the new default rules take effect.

California LLC Law Rule Change #4: Personal Representatives Have Fewer Rights

Under the 1994 LLC law, members’ personal representatives had the right to exercise full member rights. Under the new law, however, the representative of a deceased or legally incompetent member only has the rights of a transferee.

California LLC Law Rule Change #5: Indemnification Added

The old law did not require the indemnification of any individual doing work on behalf of the LLC, so pre-2014 operating agreements may not even mention it. The new rules state that the LLC must indemnify members and managers of managed LLCs respectively, so long as he or she has fulfilled his or her “statutory duties.”

If you need an attorney to review your LLC operating agreement, contact Kelly Warner Law.

Canadian Online Marketing Regulations FAQ

canadian internet lawsWhat is the Canadian Competition Bureau?

The Canadian Competition Bureau is an Independent law enforcement agency that monitors Canadian online marketing regulations. The Competition Bureau is responsible for the administration and enforcement of:

  1. Competition Act
  2. Consumer Packaging and Labeling Act
  3. Textile Labeling Act
  4. Precious Metals Marketing Act

What law governs Canadian online marketing regulations?

Canada’s Competition Act — commonly called C-34 — is the law governing business conduct in Canada including online marketing. C-34 covers both civil and criminal actions.

In general, what does C-34 say about false and misleading advertising online?

C-34 asserts that “any representation in any form, which is false or misleading in a material aspect, is prohibited.” It also states, “A representation is material if it could lead a person to a course of conduct that, on the basis the representation, he or she believes to be advantageous.”

What Canadian online marketing regulations does C-34 address?

The Competition Act addresses issues related to “commercial” websites and email. Though, depending on the circumstances, statements made in chat rooms, news groups and message boards can also fall under the act.

What actions does C-34 prohibit?

Among other things, C-34 prohibits:

  1. Deceptive telemarketing;
  2. Pyramid schemes;
  3. Advertising at bargain price a product not available in reasonable quantities;
  4. Selling a product at a price above the advertised price;
  5. Conducting contests, lotteries or games of chance or skill without making fair and adequate disclosure of, among other things, material facts that could affect winning potential.

Canada’s online marketing law also sets parameters for multilevel marketing plans.

What if I put a disclaimer about a product or service on another page of the website? Will that satisfy Canadian online marketing regulations?

C-34 addresses Internet user behavior. In doing so, the law requires that any disclosure information must appear in close proximity to the thing it is annotating. In the language of the Canadian government:

“Businesses should not assume that consumers read an entire website, just as they do not read every word on a printed page. Accordingly, information required to be communicated to consumers to ensure that a representation does not create a false or misleading impression should be presented in such a fashion to make it noticeable and likely to be read.”

Under Canadian online marketing regulations, who is responsible for an advertisement or website in violation of C-34?

According to Canadian law, “The person who has caused the [false or misleading] representation to be made” can be charged under C-34. While everyone involved in a marketing campaign may not be responsible for an ad violation, officials may consider the roles of:

  1. Designers
  2. Ad agencies
  3. Selling Company
  4. Media outlets
  5. Host/ISPs

Officials look at facts on a “case-by-case basis” when determining causation. Ultimately, courts pin the penalty on the entity that controlled the project. For example, if a company hires an advertising agency to create material, the contracting company has the ultimate say on “whether [or not] the campaign proceeds.” As such, the contracting company would be responsible. Hosts and ISPs would not be held responsible under similar circumstances.

What is the Canadian online marketing regulation “publisher’s defense” rule?

Section 74.07 of Canada’s Competition Act outlines the “publisher’s defense.” It states that anybody who “prints or publishes or otherwise disseminates a representation, including an advertisement, on behalf or another person in Canada” is not responsible for any marketing violations.  But there is a hitch. In order to successfully evoke the publisher’s defense, an entity must have its client’s address to ensure that the publisher is not simply “acting as a conduit” for the business.

C-34 has a section called “Applying the Competition Act On-Line.” What are the main points?

  1. General impression and literal meaning are both considered when reviewing an ad for legal action.
  2. Asterisks are a universally well-known signal of a disclaimer and should be used when possible.
  3. “A disclaimer can only qualify a representation; it cannot give or retract a false or misleading representation.”
  4. Ideally, a disclaimer should appear on the same screen and close to the statement it references.
  5. Writing “see below for eligibility restrictions” is an acceptable way to alert consumers of a related disclaimer; “See below for details” is an unacceptable disclaimer alert.
  6. Consistency with hyperlinks is important.
  7. Pop-ups and links to other pages can be used, but each case is examined individually. Basically, don’t be tricky.
  8. “Hyperlinking a single word or phrase in an advertisement may not be adequate.”
  9. If you use “attention grabbing tools” for disclaimers you can’t use the same tools in the ad, so as not to distract.
  10. Disclaimers must not use similar colors as foregrounds and backgrounds.
  11. Consider how people view and navigate a page and put disclaimers in appropriate places. When fitting, businesses should make clicking through to a disclaimer compulsory.

What disclosures are required according to Canadian online marketing regulations?

Canada’s competition law does not outline each and every disclosure that needs to be made. In some ways the Canadian government expects folks to practice common sense. But C-34 does highlight two types of disclosures that MUST be made:

  1. Section 55 addresses Multi-level Marketing – Multilevel marketing plans must include disclosures regarding earning potentials.
  2. Section 74.06 Contests – Entities must disclose “facts which materially affect the chance of winning.” Additionally, “Notice of a contest should not require an extra step, such as sending an email or placing a phone call.” According to the law, clicking on a hyperlink is not considered an “extra step.” “

Do businesses based in other countries have to adhere to Canadian online marketing regulations?

If a website can be accessed in Canada and/or Canadians can purchase the goods on a given website, then said website must adhere to Canadian law. C-34 states: “The [Competition] Bureau will assert Canadian jurisdiction over foreign entities to the fullest extent authorized by law whenever necessary to protect the Canadian market from false or misleading representations and deceptive marketing practices.”

UK Online Marketing Compliance Q&A

UK online marketing compliance summary
UK Online Marketing Compliance Rules.

“Since the Internet can’t decipher nation-state borders, must I adhere to Internet law standards in other countries?” It’s an oft-asked question and the answer is “yes”. To tweak a cliche: When in the UK, do as the British. And since national boundaries are non-existent online, your website is, technically, “in the UK,” which means you should take time to review UK online marketing compliance standards. To help you out, below is a list of frequently asked UK online marketing compliance questions — and answers.

What agency monitors UK online marketing compliance?

UK online marketing compliance standards are monitored by a self-regulatory organization called the Advertising Standards Authority (ASA). The group’s stated duty is to “Regulate the content of advertisements, sales promotions and direct marketing in the UK” by investigating “complaints made about ads, sales promotion or direct marketing.” Guy Parker has been the ASA’s chief executive since 2009.

Is the UK ASA a government agency?

No. The ASA cannot interpret or enforce legislation, but the group’s “Code of Advertising Practice” is reflective of UK legislation. However, the ASA is funded by an “advertising tax.”

If a claim is made in an advertisement, what level of proof is necessary to verify the claim’s accuracy?

Like in the United States, claims made in UK advertisements must be accurate and verifiable. UK online marketing compliance rules state that “before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove all claims, whether direct or implied, that are capable of objective substantiation.”

Is “puffery” or exaggeration allowed under UK online marketing compliance rules?

Puffery and exaggeration are unacceptable according to UK online marketing compliance standards. Official rules state: “No marketing communication should mislead, or be likely to mislead, by inaccuracy, ambiguity, exaggeration, omission or otherwise.”

Does the ASA have authority over online marketing compliance in the United Kingdom?

Since 2011, the ASA has held domain over the following UK online marketing compliance issues:

  1. Advertisements on websites;
  2. Paid-for ads on the Internet, including pop-ups, banners and sponsored links;
  3. Online sales promotion that appears in “British Web Space”;
  4. Email marketing.

Does the ASA have authority over marketing claims made in personal e-mail messages?

Private electronic correspondences do not fall under the purview of the UK Advertising Standards Authority. Though, some confusion exists as to whether or not the ASA can take action on SMS messages. It’s best to consult an attorney who can review your exact campaign and determine if it crosses a legal line.

Do any other agencies monitor aspects of UK online marketing compliance?

Yes, several. Most online advertisers, however, should concern themselves mainly with the Institute of Sales Promotion and the ASA. The Institute of Sales Promotion follows the same rules as the ASA and alerts the ASA when it believes a breach of sales promotion law has occurred. Examples of sales promotions include:

  1. By One Get One Free;
  2. 25% Extra For Free;
  3. Loyalty Rewards;
  4. Lotto, scratch cards, prize drawings.

If I want to make a UK online marketing compliance complaint to the ASA, will my identity be kept confidential?

When the ASA receives a grievance, it is required to keep the complainants’ personally identifiable information (PII) private, unless specifically given permission by the claimant. If, however, the complainant is a competitor of, or has a vested interest in, the subject of the complaint, the claimant must agree to be named. This is done to cut down on petty complaints.

What does the ASA do after it receives a complaint?

When the ASA receives a complaint, it immediately informs the entity being investigated. Then, industry experts investigate the claims and ask for substantiation of any questionable assertions in the marketing material. For example, if you are promoting a weight loss product and promise potential customers that they are “Guaranteed To Lose 20 Pounds in 3 Days!” then you’ll have to provide scientific proof to the ASA that your product consistently results in users losing 20 pounds in 3 days.

When the agency completes its investigation, a summary of findings and recommendations is compiled and sent to the advertiser and complainant. A copy of the report is then submitted to the ASA adjudication council, who votes on the issue and posts its decision online.

What if I do not agree with the ASA’s decision? Are appeals possible?

Appeals are possible. A formal request for one must be made within 21 days of the adjudication and can only be requested by the advertiser or complainant. Moreover, appeals can only be sought when:

  1. New evidence is available;
  2. One of the parties can elucidate a substantial flaw in ASA adjudication or investigation process during their case.

In the case of an appeal, an independent reviewer often enters the fray. The independent reviewer has final say on whether or not an appeal is accepted.

What actual power does the UK Advertising Standards Authority hold?

Though the ASA is not a part of the government, it does wield certain powers like:

  1. Bad publicity;
  2. Copy Control – The ASA can order a brand to have all ads reviewed by CAP (the Copy Advice Team) before publishing;
  3. CAP Compliance Team Intervention – The CAP compliance team administers ASA mandates. The government department performs various tasks to keep the system moving along smoothly. The CAP compliance team will call media owners and instruct them not to accept certain ads.
  4. Direct line to Broadcasting Licensing Authorities and the Office of Fair Trading – The Office of Fair Trading has the power to fine businesses and bring lawsuits. The department works closely with the ASA and comes down hard on repeat offenders if the ASA gives the signal. The Office of Fair Trading derives its authority under the 1998 Control of Misleading Advertising Regulations Act.

What are some notable UK marketing compliance cases?

  1. A 2004 ad for the Apple Power Mac G5 used the phrase “the world’s fastest personal computer.” Since it is a claim that can be proved empirically, the ASA launched an investigation.
  2. In 2008, the ASA banned an Apple iPhone ad that promised the phone could “access all of the Internet.” Since iPhone did not support Flash — and a host of other major plugins – the ASA forbade Apple from using the terminology.
  3. The ASA made the Israeli Tourism Board remove ads that contained a map of the country that included the West Bank, Gaza Strip and Golan Heights.
  4. L’Oreal was forced to stop running ads that included Penelope Cruz, Julia Roberts and Christy Turlington under the premise that the three women were not representative of actual results. Additionally, the ASA decided the ads contained misleading before and after pics.
  5. Brennan was banned from running an ad for the JB7 music player because the copy supposedly “glorified illegal downloading.” In its report, the ASA reasoned that Brennan “repeatedly made reference to the benefits of the product being able to copy music but did not make it clear that it was illegal to do so without permission of the copyright owner.” Another time Brennan was sanctioned for not making clear that a docking station didn’t come with the device.
  6. A local furniture store in Northampton couldn’t use the catch phrase, “Sofa King Low” because the line would likely cause “serious widespread offense.”

Do online marketers in the United States have to worry about the UK Advertising Standards Authority?

Yes! If your ads are accessible in “British web space” it’s under the purview of the ASA.

If you need to speak with a U.S. lawyer well-versed in UK online marketing compliance standards, contact us today.

Judge Deems Digitizing Books Fair Use

Google Privacy PolicyGoogle wins again! The online giant emerged victorious from their intellectual property scrap with the Author’s Guild. They battled over Google’s book digitization project, and the circuit court’s final decision was “fair use”. Did presiding judge Denny Crane Chin make the right call? Let’s quickly examine the suit.

A Short Summary Of The Google Book Scanning Lawsuit

The case of the book scanning behemoth began in 2005. Writers complained that their works were being copied and posted online for free and without permission. After a judge had denied a posse of authors’ class action certification, the Author’s Guild grabbed the conch and filed a lawsuit against Google on behalf of its members.

And, as the saying goes, they were off! Each clever legal maneuver was met with an equally cunning move. Litigation ensued. Years passed.

Denny Chin Must Decide

After exhausting every possible option and argument, Judge Chin retired to consider the arguments. Was Google correct? Was its digital book project a huge benefit to society? Since the company made efforts to ensure that entire books didn’t find their way online, could it be considered an infringement? Or was the Author’s Guild correct in saying that Google was essentially stealing writers’ work for its own profit?

Advantage Google

In the end, Chin sided with Big G. In his ruling, he reasoned that digitizing books is “transformative” and in theory could help to boost book sales, not impede them. Additionally, Chin opined, “In my view, Google Books provide significant public benefits. Indeed, all society benefits.”

The use of the word transformative is important when analyzing intellectual property cases as transformation is a crucial element of the fair use doctrine. Specifically, if a work is significantly altered in some way, it’s considered transformative, and, therefore, falls into the fair use category.

Needless to say, the Author’s Guild is none too pleased with the ruling and plans to appeal, arguing that Google’s project “exceeds the bounds of fair use.”

Fair Use and Online Intellectual Property

We don’t see a judge reversing this decision, though, since only snippets of the books are made available online. Moreover, the question of whether or not a search engine is liable for IP infringement for displaying informative “extracts” from a given webpage was already explored and answered in the seminal case Kelly v. Arriba Soft Corporation.

In brief, the issue at hand in Arriba was whether or not a search engine had the right to display low-quality thumbnails in its search results. In the end, courts ruled that low resolution images were fair use and allowable.

Snippets of a book could be considered the literary equivalent to a low-res thumbnail. So, if we follow the Arriba logic, it’s safe to say that Google will probably continue to come out on top – even at the appeals level.

Teacher Acussed Of Being A “Perv” Wins Defamation Suit Against Students

A group of Catholic school tweens lost a defamation lawsuit brought by one of their teachers.
A group of Catholic school tweens lost a defamation lawsuit brought by one of their teachers.

A Catholic School teacher in San Jose is probably sleeping a little sounder this week after winning a defamation lawsuit with prurient implications.

Tweens Cause Torment For Gym Teacher

This case and trial sounds like a sub-plot from the movie “Saved”. In summary, a group of girls at the Holy Spirit school in Almaden Valley accused a gym teacher, John Fischler, of being a “perv” and “creeper” who was peeking into the female locker room when he shouldn’t have been.

As you might imagine, the accusations spread like wildfire through the community and caused tremendous torment for Fischler and family. Adamant that the accusations were the fabrications of mean girls, he decided to sue.

Gym Teachers Says, “Oh Yeah!? See You In Court!”

So off to the Santa Clara County Superior Court the parties went to argue their points. According to reports, during the trial, one of the accusers left the witness stand to perform cheerleading moves for the jury. The impromptu show flopped. Instead of finding the routine cute, the jurors sat stone faced, visibly put off by the girl’s demeanor. They also weren’t impressed by the defendants’ propensity to giggle during proceedings.

Ultimately, after both sides rested their cases, the 12 jurors ruled in favor of the teacher to the tune of $362,653.

Gym Teacher: 1; Tweens: 0

The decision was mostly on the fact that the parents didn’t take their complaints to the school immediately. Instead, they took the rumourmongering route. The jury wondered: if children were being subjected to sexual inappropriateness from a teacher, wouldn’t the parents make a bee line for the principal’s office? Moreover, law enforcement and school officials eventually investigated the matter and cleared Fischler of all charges. Yet, the gossiping parents continued with their loud whisper campaign.

Who Has To Pay Since The Defendants Were Minors?

It’s unlikely that 10 and 11 year old girls have a few hundred thousand lying around in case of legal emergency. So who has to pay the damages? Guess what folks: the parents are financially responsible. #sayonarasanta

What can we learn from this defamation case?

  1. Don’t giggle in court;
  2. Refrain from engaging in impromptu performances during legal proceedings; and
  3. Steer clear of your community’s gossip mill – especially after an allegation has and law enforcement officials have cleared the suspect.

Do you need a defamation attorney? Contact Kelly Warner Law today.

Whatch’You Talkin’Bout Facebook?

Facebook Legal NewsWhile Facebook has made efforts, the social media giant isn’t exactly concerned with online privacy. Bottom line: advertising is the company’s cash cow — and effective advertising involves pinpointing consumers’ personal interests, and then offering up relevant ads. So how does one go about deciphering consumers’ desires? Why by keeping track of their online activity, of course. And in order to keep tabs on prospective buyers, online privacy laws must be slack enough to allow for customer identification and tracking. As such, every so often Internet companies tweak their privacy policies to make way for new marketing opportunities. Facebook recently made changes to their terms – and the changes have privacy stalwarts crying foul.

Facebook’s Online Privacy Track Record = Abysmal

Since going global, Mark Zuckerberg’s production hasn’t exactly earned a gold star for their online privacy efforts. Most notably, back in 2007, the social networking giant unleashed Beacon, a feature which displayed users’ online purchases in their timelines.

Facebook made a big mistake with Beacon – huge – by:

  1. Not alerting people of the feature; and
  2. Making Beacon opt-out default, causing it to “go live” unbeknownst to users;

Adding fuel to the fire, at the time, Facebook’s privacy settings were so confusing that folks couldn’t figure out how to turn Beacon off. To give you an idea of the calamity the program caused: Beacon foiled one guy’s engagement plans.

Long story short, a class action lawsuit ensued. In the end, the courts ordered that an overseer monitor Facebook’s privacy policy and its implementation.

Parents and Privacy Advocates Seeing Red Over Recent Facebook Privacy Policy Changes

For some time, the status quo prevailed, privacy wise, on Facebook. Then several weeks ago, Facebook announced an impending change of their policy. It caused a stir.

Most notably, the company changed a passage concerning minors’ use of the platform. In the new version, the language used assumed that people under the age of 14 had an in-depth pow-wow with their parents about the dangers and privacy concerns of Facebook, and then had gotten permission to join the platform.

Needless to say, the parent peanut gallery cried foul, as did online privacy advocates. Folks were fuming because it seemed as if Facebook was trying to skirt compliance with the Children’s Online Privacy Protection Act – and a host of state laws regarding minors’ use of social media and privacy.

Facebook Staff Swears They Were Just Trying To “Start A Conversation”

According to Facebook, though, “the [new] language was about getting a conversation started.”

Did the word “disingenuous” just pop into your head? Yeah, you not alone. If Facebook wanted to jumpstart a conversation about minors’ online privacy, the company could easily have:

  1. Orchestrated a conference and panel discussion;
  2. Set up a website which explored the issue;
  3. Put a link at the top of their GUI inviting everyone to join a forum to discuss the issue;
  4. Sent out a press release requesting feedback.

But instead, Facebook tried to slip the new language into their privacy policy with as little fanfare as possible.

Whatever conversation Facebook was trying to start never got off the ground because users were not having it. When the clamor reached fever pitch, Facebook finally backed down, claiming, “We were not seeking and would not have gained any additional rights as a result of this addition. We received feedback, though, that the language was confusing and so we removed the sentence.”

Mentioning “additional rights” is interesting in this context. No, Facebook would probably not have gained any additional rights by inserting an assumption into the privacy policy. But if it had stuck, the company would probably have been able to do a lot more with the data gathered about minors –thereby giving the company significant flexibility in its advertising initiatives.

If it had worked, it may have been the legal loophole maneuver of the year. Better luck next time, Palo Alto.