LAW, COMPUTERS AND THE INTERNET Notes: national and state borders are blurred b/c of the technology. The question is how do traditional legal concepts survive in this new medium? I. JURISDICTION 1. Types: a. Personal jurisdiction: the power of a court to adjudicate a particular defendant so that the judgments of that would be enforceable and recognized elsewhere. b. General jurisdiction: a defendant has had continuous or systematic doings with the state so hailing him into court is legitimate. c. Specific jurisdiction: some kind of minimum contacts with the state and some kind of cause of action that arises out of those contacts, so hailing him into that state seems fair and reasonable. 2. Theories of jurisdiction: a. Everyplace theory: Website reaches anywhere in the world so anywhere where it‟s visible, there is jurisdiction. b. No place theory: actions that occur in the Internet occur no place and there should be allowed to evolve a cyberspace court that would adjudicate disputes in cyberspace. c. Whatever activity that takes place on a website, takes place on the server (the originating server). 3. Test: a. Minimum contacts: fair for the person to be hailed in a forum state. i. Whether the defendant purposefully established contacts with the forum state. b. The claim asserted by the defendant must arise out of those contacts. c. Exercise of jurisdiction must be reasonable. i. Reasonable if it does not offend traditional notions of fair play and substantial justice. 4. Zippo sliding scale: likelihood that PJ can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet. a. Is it passive? Is it an interactive? b. Number and quality of the contacts? 5. The Zippo Spectrum: a. (Integral) At one end, there is the case where a defendant clearly does commerce over the Internet. Defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmissions of computer files over the Internet – PJ is proper. b. (Passive) At the other end, where a defendant has simply posted information on an Internet web site which is accessible to users in foreign jurisdictions. Passive websites that do little more than make information available to those who are interested in it. – PJ not proper. c. (Interactive) Middle ground are interactive websites where a user can interact with the host computer. i. The exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of information that occurs on the website. ii. In order to be fortuitous or coincidental, the company cannot have any subscribers in the forum state and communications regarding the company must come from an outsider. 6. Purposeful Availment: WEB PAGES a. Bensusan Restaurant Corp. v. King: BLUE NOTE CASE i. Issue: whether the creation of a web site, which exists either in MO or in cyberspace, is an offer to sell the product in NY. ii. Held: no personal jurisdiction. 1. PJ: the mere fact that a person can gain information on the allegedly infringing product is not the equivalent of a person advertising, selling or making an effort to target its product in NY. No allegation or proof that any infringing goods were shipped into NY or that any other infringing activity directed at NY or caused by King to occur there. a. Substantial revenue: must derive substantial revenue required from ISC, not mere participation. b. Foreseeability: defendant expects or should reasonably expect the act to have consequences in that state. D must make a discernable effort to serve, directly or indirectly, a market in the forum state. c. Significant economic injury: only indirect financial loss resulting from the fact that the injured person resides in NY. 2. Purposeful Availment: no benefits derived from NY. a. Stream of commerce, but w/o more, is not purposefully directing toward the forum state. 3. Continuous and systematic business: D did not actively seek out or encourage NYers to enter the site. b. Zippo Manufacturing Co. v. Zippo Dot Com, Inc. i. ZM is in PA, ZDC in CA. ZDC owns website with three levels of membership: Free, Original, and Super (payment over Internet or phone). ii. Held: personal jurisdiction proper. 1. Minimum contacts: ZDC has done more than create and interactive web site through which it exchanges information with PA residents in hopes of using that information for commercial gain later. a. Litigation arose out of contacts. b. Purposeful availment: ZDC has done more than advertise on the internet: ZDC has sold passwords and worked to furnish its services in PA; entered into 7 contracts with ISPs to furnish service to customers in PA. c. Continuous and systematic activity: when a defendant makes a conscious choice to conduct business with the residents of a state, it has clear notice that it is subject to suit there. Even a single contact is sufficient, but focus is always on the nature and quality of the contacts; not the quantity. 7. Electronic transactions: a. Compuserve Inc. v. Patterson i. Defendant (TX) was a customer of plaintiff, an Ohio-based Internet service provider. Defendant marketed his product over Internet through plaintiff's company. D alleges infringement and P sues for declaratory relief in OH. ii. Held: PJ proper. 1. Traditional notions of fair play and substantial justice: D has knowingly made an effort to market a product in other states with CompuServe as his distribution center. 2. Purposeful availment: Personal jurisdiction is proper where a nonresident defendant both (a) enters into a licensing contract for the plaintiff to manufacture and sell equipment in the forum state, and (b) contemplates the ongoing marketing of that equipment in the forum state and elsewhere. Patterson entered into a written contract and purposefully perpetuated the relationship with repeated communications. Continuous relationship with CompuServe. iii. Note: The mere signing of a contract does not equal personal jurisdiction. Patterson though, deliberately entered into a written contract and injected his software into the stream of commerce. Person opting-in to the contract has to take affirmative steps to agree. b. Origins Natural Resources, Inc. v. Kotler i. Defendant was a California resident who had never lived or done business in New Mexico. Defendant corporation sold clothing over the internet and plaintiff purchased an item over the internet. Plaintiff contended that the purchase was sufficient to satisfy PJ. ii. Held: PJ not proper. 1. Plaintiff has failed to carry its burden of establishing that D has purposely availed himself to the benefits and protection of NM law. 2. Merely advertising from another forum into NM has not been considered constitutionally sufficient. iii. Note: One article is not enough. 8. Presence a. Amberson Holdings LLC v. Westside Story Newspaper i. Defendants' only tie to New Jersey under the traditional analysis was a contract, which was not substantial enough to find minimum contacts. Plaintiffs argued that defendants' use of a New Jersey server added credence to a finding of minimum contacts. ii. Held: PJ not proper. 1. D has maintained a contractual relationship with NJ for hosting services, but defendants don‟t manufacture products, direct sales, solicit...W/o any additional contacts no PJ. 2. Unreasonable for defendant to be hailed into NJ federal court simply b/c it is utilizing a NJ server. iii. Note: just b/c you are utilizing a server and have a contract, w/o more, no PJ. b. United States v. Thomas i. D operating a BBS from CA. Agent received a complaint, sent in an application with $55 and defendant authorized him to log-on. ii. Held: PJ proper. 1. Under the violation, the Government does not have to prove that defendants had specific knowledge of the destination. c. Cable News Network LP v. Cnnews.com i. Chinese company registered the domain name cnnews.com with its domain name registrar in VA in good faith. D asserts that its audience is in China and does not advertise outside of China and transacts no business in the US. ii. Held: PJ proper. 1. The owner of a mark may maintain an in rem action against an infringing domain name if the action is brought in the jurisdiction where the registrar is located and if no in personam. 2. In an Anticybersquatting Consumer Protection Act in rem action, it is not necessary that the allegedly infringing registrant have minimum contacts with the forum; it is enough that the registry is located in the forum. 3. 15 U.S.C.S. § 1125(d)(2)(A)(ii) makes clear that in rem actions may be brought under the Anticybersquatting Consumer Protection Act only if in personam jurisdiction over the domain name registrant does not exist. iii. Note: this case deals with in rem only: when owner cannot obtain in personam jurisdiction or in due diligence, could not find someone II. REGULATORY AUTHORITY 1. Anti-Cybersquatting Consumer Protection Act of 1998 (ACCPA): a civil cause of action for trademark infringement on domain names which are protected. 2. Test to see if a statute or policy violates the Dormant Commerce Clause: a. Look at the text and the policy: does it involve interstate AND b. Commerce AND... c. Does the statute overtly discriminate out of state goods? i. If YES, then stop (unconstitutional). ii. If NO, then 1. If it is an indirect regulation, balance in-state benefits vs. burden on interstate commerce OR 2. Is this an area of commerce that demands constant national treatment? d. Question: Is the Internet national and does it need national protection, or is for the states? 3. State Regulation of Speech a. American Libraries Association v. Pataki i. NY made it illegal to distribute material “harmful to minors” over the Internet. Applies to all Internet activity. ii. Held: unconstitutional 1. Interstate? YES: it‟s global (packet switching and packets are going to move throughout the state AND caching). 2. Commerce (does not mean is it for profit)? YES b/c the Internet represents an instrument of interstate commerce -> the NY Act is closely concerned w/interstate commerce. 3. Overt discrimination? NO, it does not. a. Does this regulate acts beyond NY borders? Benefits vs Burdens? YES, it exports its state‟s policies -> extreme burden on ISC. b. Area of commerce demand national treatment? YES, effective regulation will require national cooperation. If states regulate, conflicting obligations would arise. 4. Unsolicited Commercial E-mail a. State of WA v. Heckel i. Heckel (OR) began sending unsolicited commercial e-mail (UCE), or "spam," over the Internet. He marketed a book on how to profit from the Internet, sending between 100,000 and 1,000,000 UCE messages per week. WA made it illegal to use false or misleading information in the subject line of UCE messages, and through other misrepresentations. ii. Held: constitutional 1. Interstate? YES 2. Commerce? YES. 3. Overt discrimination? NO, Act applies evenhandedly to in-state and out-of-state spammers. a. Benefits vs Burdens? Local Benefits win. The Act protects the interests of ISPs (more investment in computer equipment, higher operational costs), actual owners of forged domain names (economic harm of registered owners shutting down sites due to forged e- mail addresses), and e-mail users (not able to respond, causes frustration, wastes time and money). Only burden is truthfulness. b. Demand national treatment? Well, the inquiry under the dormant CC is not whether the states have enacted different anti-spam statutes, but whether those differences create compliance costs that are clearly excessive in relation to the putative benefits. The Act only addresses the conduct of spammers targeting WA customers. b. Distinguish from Pataki: i. Only applies to e-mail, not the entire Internet. So people outside of the state that wanted to put something on the Internet could be in violation of NY law b/c someone could view in NY. E-mail is different. ii. Does not applies to communications that incidentally reach WA state (as in, those that are merely routed). III. OBSCENITY AND INDECENCY Nature of the medium itself is at issue and will decide the level of scrutiny. You still need to go through the analysis: What is the compelling government interest? What are the means chosen? 1. Content Regulation a. Reno v. ACLU -> CDA i. At issue is the constitutionality of two statutory provisions enacted to protect minors from “indecent” and “patently offensive” communications on the Internet. Criminal penalties. ii. Held: CDA unconstitutional. 1. Application of strict scrutiny. 2. Note: it would not be strict scrutiny if there was a special justification such as: a. A history of extensive Government regulation of the broadcast medium – neither before or after enactment of CDA has the Internet ever been subject to gov‟t supervision or regulation. b. Scarcity of available frequencies at its inception – Internet NOT A SCARCE EXPRESSIVE COMMODITY c. Invasive nature – communications over the Internet NOT INVASIVE. 3. Look for a compelling government interest: a. Of course with children and pornography. 4. The community standards criteria: any communication to a nationwide audience will be judged by the standards of the community most likely to be offended by the message. 5. Look at the less restrictive means analysis: providing some tolerance for parental choice, making exceptions for messages with artistic or educational value. But is it narrowly tailored? 2. Content levels of speech: a. Strict scrutiny: statute must reflect a compelling government interest and least restrictive means to achieve that interest; narrowly tailored. i. No statute survives strict scrutiny. b. Intermediate scrutiny: statutes affecting historically discriminated against groups will be looked at with intermediate scrutiny; government interest only needs to be substantial or important; the means must be narrowly tailored to accomplish a purpose. c. Relaxed scrutiny: statute must reflect legitimate government interest and the means must be rationally related. d. Broadcast scrutiny: substantial? Narrowly tailored? Rationally related? e. Note: default level of scrutiny is strict scrutiny; Content-Based is always strict scrutiny. 3. Obscenity v. Indecency: a. Obscene material: i. Depicts or describes, in terms patently offensive as measured by contemporary community standards, sexual or excretory activities or organs; AND ii. Taken as a whole, appeals to the “prurient interest” (designed to be titillating); AND iii. Taken as a whole, lacks serious literary, artistic, political or scientific value. b. Indecent material: i. Depicts or describes, in terms patently offensive as measured by contemporary community standards, sexual or excretory activities or organs. 4. Filtering a. Mainstream Loudoun v. Bd. Of Trustees of the Loudoun Co. Library i. Plaintiffs, library patrons, claimed that a library policy that used Internet site blocking software to block child pornography and obscene material imposed an unconstitutional restriction on plaintiffs' U.S. Const. amend. I rights. At issue is whether a public library may enact a policy prohibiting the access of library patrons to certain content-based categories of Internet publications. ii. Held: defendant library enjoined from prohibiting access to certain content-based categories of Internet publications because that policy was unconstitutional under a strict scrutiny standard of review and was an improper prior restraint on speech. 1. Notes: Content-based limitation on speech will be upheld only where the state demonstrates that the limitation is necessary to serve a compelling state interest and that it is narrowly drawn to achieve that end. 2. Test: a. Whether the interests asserted by the state are compelling. b. Whether the limitation is necessary to further these interests AND c. Whether the limitation is narrowly drawn to achieve those interests. 3. Compelling interest: minimizing access to illegal pornography and avoiding the creation of a sexually hostile environment are compelling interests. 4. Necessity of policy to further interests: D must demonstrate that the Policy is necessary to further that interest. D must demonstrate that in the absence of the Policy, a sexually hostile environment might exist and/or there would be a problem w/individuals accessing child pornography or obscenity or minors accessing materials that are illegal as to them. Here, barely any evidence. 5. Narrowly tailored: there are other means available (segregation of terminals, casual monitoring). a. Whether less restrictive means are available. b. Whether the Policy is overinclusive – it limits the access of all patrons. c. Whether the filtering software is the least restrictive filtering software available. b. ACLU v. Ashcroft i. COPA (CDA Lite): Child Online Protection Act provided for civil and criminal penalties for anyone who knowingly and with knowledge of the character of the material, in interstate or foreign commerce by means of the WWW, makes any communication for commercial purposes that is available to any minor and that includes any material that is harmful to minors. Harmful to minors is defined. ii. Elements: 1. With respect to minors, it panders to the minor‟s prurient interest. 2. Depicts or describes something patently offensive with respect to minors. 3. Taken as a whole, lacks serious literary, artistic, political, or scientific value for minors. iii. Strict Scrutiny: 1. Compelling interest: YES. 2. Narrowly Tailored: a. Material Harmful to Minors – although the statute itself says „taken as a whole‟, the court here says that the statute applies to each individual image; so „taken as a whole‟ really has no meaning. i. Is the definition of minors, really clear? Something harmful to a 5-year old might not be harmful to a 16-year old. But the site must be tailored to a 5-year old. b. Commercial Purposes: it applies to any commercial site including one that has advertising. c. Affirmative Defenses. 3. Least Restrictive Means: in findings of fact the DC concluded that blocking or filtering technology may be used to block Web sites and other content on the Internet inappropriate to minors. iv. Lower court: Unconstitutional: using community standards as a standard for a national medium, would allow the most conservative community the most weight as to define. v. SC: community standards alone is not enough. vi. This court: Community standards aside, this statute is not narrowly tailored to serve the government interest. 5. Alternatives to Filtering a. United States v. American Library Association i. Federal assistance is given to libraries. Through e-rate (established through Telecommunications Act of 1996) to allow discounts for Internet access for libraries AND direct grants to library administrative agencies. Now, the government wants to put a condition on the assistance: put on a filter if you want to use it. ii. CIPA: Children‟s Internet Protection Act – filters needed to protect minors from material harmful to minors. iii. Congress can impose conditions on grants, but not unconstitutional conditions. iv. The Court says that libraries make decisions on whatever they want to acquire. 1. The Internet is a way of getting access to material. 2. Congress can decide what libraries can acquire. 3. Condition is legal (similar to we‟ll give you a grant as long as you allow wheelchair access to disabled citizens). 4. Libraries already filter their materials. IV. OPEN ACCESS Cable v. TV: functionally the same, but the regulations are different. A cable modem operator is going to have an easier time holding a monopoly on his cable than a telephone operator will have on his telephone line. 1. Precedent a. Miami Herald Publishing Company v. Tornillo i. The statute provided that a political candidate had the right to demand that a newspaper print any reply of the candidate to criticisms by the newspaper. ii. Held: statute unconstitutional. 1. Two problems: a. It will take up space. b. (Chilling Effect) If a newspaper has an obligation to print opposing viewpoints, what about the newspaper‟s viewpoint? i. Less likely to enter controversial fields if you know you‟re going to have to print opposing viewpoints. 2. This is a content-based regulation; the content triggers the regulation. 3. The newspaper is a form of expression; editorial discretion. 4. Fails under 1st Amendment b/c of its intrusion into the function of editors: a. A newspaper is more than a passive receptacle or conduit for news, comment, and advertising. The choice of material to go into a newspaper, and the decisions made as to limitations on the size and content of the paper, and treatment of public issues and public officials constitute the exercise of editorial control and judgment. iii. Turner Broadcasting System, Inc. v. FCC 1. Case involves the constitutionality of the must-carry provisions which require cable operators to carry the signals of a specified number of local broadcast television stations. 2. Intermediate level of scrutiny b/c the Court finds that the regulation is content-neutral. 3. Government must demonstrate that the recited harms are real, not merely conjectural, and that the regulation will in fact alleviate these harms in a direct and material way. b. Open Access i. Comcast Cablevision of Broward Co. Inc. v. Broward Co. 1. Defendant county adopted an ordinance requiring a cable television system that offers its subscribers high-speed Internet service to allow competitors equal access to its system. 2. Court applies strict scrutiny and saying that it fails strict scrutiny, it then goes to a content-neutral analysis. 3. The harm the ordinance is purported to address does not exist: Cable possesses no monopoly power w/respect to Internet access. Most Americans obtain Internet access through the telephone. Local telephone companies provide dial up Internet access to many more people than cable companies. a. Fails content-neutral scrutiny as well. ii. AT&T Corp. v. City of Portland 1. This court upheld an open access requirement to preserve competition. 2. City of Portland & Comcast cases disagree on two things: (1) whether the "open access" requirement is a regulation of speech, and (2) if it is, whether the requirement passes the O'Brien content-neutral 1st amendment analysis. See pp. 221-24. The federal law that pre-empts the City of Portland case is the Communications Act, 47 USC 541(b)(3), which forbids a franchising authority from regulating the provision of "telecommunications service by a cable operator." The 9th circuit found that offering cable modem service is "telecommunications service" rather than "cable service." V. TORT LIABILITY §230 removes tort liability from ISP for third party torts. 1. ISP Liability for Defamation: a. Cubby v. CompuServe, 776 F.Supp. 135 (1991): CompuServe did not exercise the requisite control to be deemed a publisher of information posted to its bulletin boards and third-party databases. i. Is CompuServe a distributor or publisher of materials? ii. Court: just a distributor (similar to a newsstand or book store). iii. No publisher liability for ISP. iv. Cubby has to serve the person that libeled him. v. ISP NOT LIABLE FOR WHAT THIRD PARTIES POST b. Stratton Oakmont, Inc. v. Prodigy Servs. Co., 23 Media L. Rep (BNA) 1794 (1995): Prodigy had exercised sufficient editorial control to be deemed a publisher based on its use of automatic screening software and its holding itself out as exercising editorial functions. i. Court: Prodigy holds itself out as exercising editorial controller, thus it‟s a publisher. ii. IF AN ISP HOLDS ITSELF OUT AS A CENSOR AND FAILS TO DO THEN, THEN IT CAN BE HELD LIABLE FOR THIRD PARTY ACTS THAT IT FAILS TO POLICE. 2. Should the ISP‟s police their own boards? NO, b/c if you do and something gets through, you‟re liable. 3. CDA Safe Harbor: 47 USCA § 230 (c) Protection for “good samaritan” blocking a. Elements: i. ISP or user is not the publisher of information provided by other content provider. ii. ISP or user is not liable for good-faith action to restrict access to objectionable material. iii. Inconsistent state law is pre-empted. b. This law does not affect intellectual party law. c. No state law cause of action that conflicts with this survives. d. Congress overrules Stratton Oakmont. e. UNLESS THE ISP HAS REALLY TAKEN CHARGE OF THE CONTENT, IT IS IMMUNE TO LIABILITY (Drudge is as far as it will go). 4. Liability after the CDA a. Zeran v. AOL i. Victim of a hoax. His name and telephone number were posted for the purpose of purchasing shirts. He requested AOL remove postings. AOL kept screwing it up. Zeran attempts to plead his claims as ones of negligence (negligent distribution), although they are really indistinguishable from a defamation action. ii. Held: CDA safe harbor bars his claims. 1. Policy reasons for §230: a. Allowing a cause of action against a ISP for defamatory or other tortuous conduct by third parties would have a chilling effect; impossible to screen postings. b. To encourage policing without incurring liability; have the ISP make an effort to police their own networks. b. Blumenthal v. Drudge (lots of involvement sans liability) i. It is alleged that this is a joint work between Drudge and AOL. Under the licensing agreement, AOL may remove content that AOL reasonably determines to violate AOL‟s then standard terms of service. ii. Held: AOL not a publisher; although AOL has the right to edit, there is no evidence that it did so in this case; AOL did not act as publisher and distributor; just b/c Drudge is paid does not make AOL the originator of the material. 1. Congress has conferred immunity from tort liability as an incentive to Internet service providers to self-police the Internet for obscenity and other offensive material, even where the policing is unsuccessful or not even attempted. 2. Drudge wrote the essential content, but AOL did not edit or transform. 5. CDA Safe Harbor Cases: Non-defamation Claims: a. Aquino v. Electriciti Inc. (1997): emotional distress. Exempt b/c of CDA b. Doe v. America Online (1998): Obscenity. c. Aware Woman Center for Choice v. CompuServe (1999): Right to privacy; Court: no cause of action. 6. International Law a. Licra and UEJF v. Yahoo! Inc. (2000) i. Injunction issued ordering technical measures to make it impossible for French Internet users to access website. Court ordered $13,000 per day fine if Yahoo did not meet a three-month deadline to install technical measures. ii. Complaint: US Law immunizes ISP‟s such as Yahoo! from responsibility and liability for the content of postings by third parties, as provided by §230 of the CDA. If permitted to stand, the French judgment would give foreign nationals a cause of action against US-based ISPs that US citizens do not have. iii. Held: protected under 1st Amendment. 1. Decision: although France has the sovereign right to regulate what speech is permissible in France, this Court may not enforce a foreign order that violates protected speech in the US. a. No decision on §230. 7. Finding John Doe a. Subpoena the ISP to get information on the John Does. b. ISP not immune from discovery. c. Out of state discovery allowed for information relevant to the case as per Fed. R. of Civ. Proc. 8. Defenses: a. ISP Respondents Can Raise: i. Lack of complete information as to John Doe‟s identity. ii. Procedurally defective or invalid subpoena – always check the rules! iii. Overbroad requests – explaining your request saves time and money. b. John Doe‟s Defenses: i. John Doe may be able to challenge the Court‟s jurisdiction over him before discovery begins. ii. 1st Amendment Right to Anonymity. iii. Anti-SLAPP (Strategic Lawsuit Against Public Participation) Legislation: the suit is its own reward by scaring John Doe. 1. Initial Showing by Defendant (in connection with a public issue). 2. Burden Shifts to Plaintiff (to show probability of success). c. If John Doe objects: i. For motion to compel discovery of an anonymous defendant, some courts require: 1. Effort to notify the anonymous party. 2. Set forth the defamatory statements. 3. Make prima facie case. 4. Balance right to anonymity vs. strength of plaintiff‟s case. d. Global Telemedia v. John Does 1-35 i. Plaintiff was a publicly traded telecommunications company. Defendants posted negative and allegedly libelous messages on an internet bulletin board which were the subject of the complaint. ii. Held: defendant's postings were an exercise of their free speech in connection with a public issue. Next, the court found that defendants' statements were opinion. Even if the statements were actionable statements of fact, plaintiffs could not show they were damaged. 9. The Right to Remain Anonymous a. In re Subpoena Duces Tecum to AOL i. A court should only order an ISP to provide information concerning the identity of a subscriber when the court is satisfied by the pleadings or evidence supplied to that court that the party requesting the subpoena has a legitimate, good faith basis to contend that it may be the victim of conduct actionable in the jurisdiction where suit was filed and the subpoenaed identity information is centrally needed to advance that claim. b. Doe v. 2TheMart.com Inc. i. By subpoena, defendant sought to obtain the identity of 23 speakers who participated anonymously on Internet message boards operated by the internet service provider. ii. Test in considering whether a subpoena should issue: 1. The subpoena seeking the information was issued in good faith and not for any improper purpose. 2. The information sought relates to a core claim or defense. 3. The identifying information is directly and materially relevant to that claim or defense AND 4. Information sufficient to establish or to disprove that claim or defense is unavailable from any other source. iii. Held: Defendant failed to demonstrate that the identity of the Internet users was directly and materially relevant to a core defense in the underlying securities litigation. Further, defendant failed to demonstrate that the information it needed to establish its defense was unavailable from any other source. VI. DOMAIN NAMES 1. Overview: a. Translation of DNS into IP. b. Top level domain: .edu, .com, .gov c. Secondary level domain: nyls, espn, nytimes. d. Words can be intellectual property. e. Network Solutions Incorporated = VeriSign. i. Given a monopoly over some top level domain names. ii. You could register any name you wanted and as many as you wanted. iii. Not until 6 months of nonpayment would NSI discontinue the name. iv. They depended on the individuals warranting that they could register what they sought to register. v. NSI‟s dispute resolution was only open if you had a federal trademark registration; but trademarks are a matter of use at common law. 2. Two different forums for dispute resolution when someone registers a domain name that someone else wants (or holds a trademark in) a. Anti-Cybersquatting Consumer Protection Act: punish, enjoin or disallow a bad faith registration in a domain name confusingly similar to a famous trademark. i. Bad faith factors. b. ICANN (Uniform Dispute Resolution Process): very similar to ACCPA (part of the Lanham Act) but a more streamlined process; stripping of the domain name from the infringer. i. Bad faith factors. c. Choosing which resolution is a matter of tactics. 3. Domain names and Trademark Law a. Panavision Int‟l, LP v. Toeppen i. Toeppen owns the web site Panavision.com. Toeppen offered to settle the matter if Panavision would pay him $13,000 for the domain name. After Panavision rejected that offer, Toepeen registered Panavision‟s other trademark, Panaflex.com and displayed the word „hello.‟ ii. Commercial use? YES 1. His business is to register trademarks and profit from the sale; so long as he held the Internet registrations, he curtailed Panavision‟s exploitation of the value of its trademarks. iii. Dilution (b/c Panavision can still use other domain names)? YES 1. A significant purpose of a domain name is to identify the entity that owns the web site; potential customers will be discouraged if they cannot find its web page by going to Panavision.com but have to wade through web sites. iv. Notes: Dilution applies to famous marks: taking a famous mark and using it on dissimilar goods so that the selling power of the mark itself is whittled away. 1. Ex. Kodak running shoes: no one would think that Kodak is making running shoes; but by taking a famous mark and using it on dissimilar goods, you are diluting the mark. v. Confusion: likely to cause confusion that the registrant of the mark supports the defendant‟s mark. vi. „In commerce‟: Toeppen claims that he‟s not using this mark in commerce; this Court does not find it necessary that someone actually sell something; plus he‟s in the business of registering domain names and selling them = in commerce. vii. Toeppen‟s argument: not trademark use, but just an address. 1. Court: significant reason for a domain address is to identify the IP address and the entity. b. Planned Parenthood Federation of America Inc. v. Bucci i. Bucci, an anti-abortionist, registered the domain name Plannedparenthood.com and welcomed the user with the words “Welcome to the PLANNED PARENTHOOD HOME PAGE!” Bucci put up the image of the book The Cost of Abortion with links to an anti-abortion book. ii. In Commerce: 1. 2 reasons why the „in commerce‟ standard applies: a. Defendant‟s actions affect plaintiff‟s ability to offer plaintiff‟s services as health and information services; the effect of those activities on plaintiff‟s interstate commerce activities would place defendant within the reach of the Lanham Act. b. Internet users constitute a national audience who must use interstate telephone lines to access defendant‟s web site; the nature of the Internet indicates that establishing a typical home page on the Internet for access to all users would satisfy the „in commerce‟ requirement. iii. §1114: prohibits any person w/o consent of the registrant of the mark, from using the mark which is likely to cause confusion, mistake or deception. 1. Is defendant‟s use of plaintiff‟s mark properly viewed as in connection with the distribution or advertising of goods or service? Yes. a. Defendant chose to place materials about the book to plug his book; there is no personal profit requirement for §1114. b. Defendant‟s home page is merely one portion of his broader effort to educate Catholics about the anti- abortion movement; defendant offers informational services for use in convincing people that certain activities are morally wrong; defendant‟s use of plaintiff‟s mark is in connection with the distribution of services b/c it is likely to prevent some users from reaching plaintiff‟s own web site. c. Lockheed Martin Corp. v. Network Solutions, Inc. i. Lockheed requested that NSI cancel the allegedly infringing registrations and cease registering domain name combinations with „skunk works.‟ ii. NSI did nothing and Lockheed settled with the third parties, but NSI did not immediately cancel the registrations and later permitted a new registrant to register skunkworks.com. iii. Contributory infringement: 1. Occurs when the defendant either intentionally induces a third party to infringe the plaintiff‟s mark or supplies a product to a third party with actual or constructive knowledge that the product is being used to infringe the service mark. 2. Lockheed must prove that NSI supplies a product to third parties with actual or constructive knowledge that its product is beings used to infringe Skunk Works. 3. Court: consider the extent of control exercised by the defendant over the third party‟s means of infringement. a. Service: NSI does not supply the domain-name combination; it only translates the domain-name combination to the registrant‟s IP address and routes the information or command to the corresponding computer. b. Direct control and monitoring rule: NSI‟s rote translation services does not entail the kind of direct control and monitoring required to justify an extension of the supplies a product requirement. 4. ANTI-CYBERSQUATTING LAWS a. Anticybersquatting Consumer Protection Act of 1999: established a civil action for a person with a bad faith intent to profit from, or who registers, traffics in, or uses a domain name that: i. In the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark. ii. In the case of a famous mark that is famous at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark. b. A bad faith intent may not be found if the registrant believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful (nine factors defined on pg. 283). c. Levels: i. Generic terms (apples) are not eligible for trademark protection. 1. Some become not eligible for trademark protection (Kleenex, jell-o). ii. Descriptive terms (red apples) are not eligible for trademark protection. 1. (Distinctive) Descriptive terms with secondary meaning (red delicious apples, playboy) are eligible for trademark protection. iii. (Distinctive) Suggestive terms: (eve‟s apples) something that makes you think even if only a little. iv. (Distinctive) Arbitrary terms: (Apple Computers) v. (Distinctive) Fanciful: (Kodak, Exxon) d. Distinctive terms give rise to a cause of action. e. Cybersquatting: Use of a company trademark as the domain name of an unrelated domain name i. Gripe sites: ...sucks.com 1. Weapons: trademark infringement, dilution, ACCPA, UDRP 2. When it is a legitimate gripe site, it is out of the trademark realm. a. No likelihood that the gripe site is endorsed by the original company. b. Company has a right to negative information. c. Not commercial, not confusing. d. Distinction between trademark use and other uses. ii. Uniform Dispute Resolution Policy: when registrars commit to ICANN, they submit to UDRP. 1. Informal process, not binding in a court of law. 2. Alternative dispute resolution process. 3. All done on paper filings. 4. Only relief is transfer of domain name. 5. Proceedings are only a challenge and a response. 6. If either side is dissatisfied with the result, it can go to federal court. iii. Strategic decision: balancing of interests 1. ACCPA: Expensive but you get relief; more publicity; can enjoin from future use 2. UDRP: Quick, 70-80% of time trademark owner wins, arbitrators are familiar and experienced. f. Electronics Boutique Holdings Corp. v. Zuccarini i. Under the ACCPA, a person who registers, traffics in, or uses a domain name that is identical or confusingly similar to a distinctive or famous mark registered to someone else with a bad-faith intent to profit form that mark is subject to suit. ii. Identical or confusingly similar: The profitability of Zuccarini‟s enterprise is completely dependent on his ability to create and register domain names that are confusingly similar to famous names. iii. Bad-faith intent to profit: Zuccarini registered the domain misspellings to generate advertising revenue for himself. iv. Safe Harbor: Zuccarini would need to establish that he reasonably believed that his use of the domain misspellings were fair and lawful...but he decided not to participate. g. Bruce Springsteen v. Jeff Burgar and Bruce Springsteen Club i. Under paragraph 4 of the UDRP, the Complainant‟s burden is to prove: 1. Whether the domain name is identical or confusingly similar to trade marks or service marks in which the Complainant has rights. 2. The domain name owner has no rights or legitimate interests in respect of the domain name. a. Before any notice of the dispute, the Respondent had shown demonstrable preparations to use the domain name in connection with a bona fide offering of goods or services. b. The Respondent has been commonly known by the domain name, even if he has acquired no trade mark or service mark rights. c. The respondent is making a legitimate non-commercial fair use of the domain name, w/o intent for commercial gain to misleadingly divert customers or to tarnish the trade or service mark. 3. The domain name has been registered in bad faith: a. Evidence that the Registrant obtained the domain name primarily for the purpose of selling, renting, or otherwise transferring it to the Complainant or to a competitor. b. Registrant obtained the domain name in order to prevent the owner of the trade or service mark from reflecting that mark in a corresponding domain name, providing that there has been a pattern of such conduct. c. Registrant has obtained the domain name primarily for the purpose of disrupting the business of a competitor. d. By using the domain name, the Registrant has intentionally attempted to attract, for commercial gain, Internet users to his site by creating a likelihood of confusion with the Complainant‟s mark as to source, sponsorship, affiliation or endorsement of the site. VII. INTRO TO IP 1. Overview: a. Translation of DNS into IP. b. Top level domain: .edu, .com, .gov c. Secondary level domain: nyls, espn, nytimes. d. Words can be intellectual property. e. Network Solutions Incorporated = VeriSign. i. Given a monopoly over some top level domain names. ii. You could register any name you wanted and as many as you wanted. iii. Not until 6 months of nonpayment would NSI discontinue the name. iv. They depended on the individuals warranting that they could register what they sought to register. v. NSI‟s dispute resolution was only open if you had a federal trademark registration; but trademarks are a matter of use at common law. f. Two issues: i. Instant transmission ii. Universal replicability (digital) VIII. TRADEMARK ISSUES 1. Commercial area of law that deals with identifying the source of goods and services. 2. Internet causes problems: a. Domain names: gripe sites; to what extent is it protected free speech and trademark infringement. b. Metatags: the imbedding of someone else‟s trademark in your site to divert traffic to your site. c. Search engines and keyword buys can influence a search engine. 3. Trademark: a. Trademark Dilution Act (1996): use of a mark on dissimilar good which dilutes the value of the mark; dilution law actually protects the mark. i. Infringement = likelihood of confusion. ii. Dilution: trademark is used in a way that diminishes its selling power (jaguar watches) 1. Tarnishment: trademark used for commercial purposes that puts it in an unfavorable light for a competitive advantage (Snuggle v. 3DO) 4. Gripe sites a. Bally Total Fitness Holding Corp. v. Faber: Dilution i. Bally is suing Faber based on his use of Bally‟s marks in a web site he designed, “Bally sucks.” ii. Sleekcraft eight factor test: Bally fails this test. 1. Strength of the mark: Bally; where does the trademark sit on the scale? a. Bally has strong marks. 2. Proximity of the goods: Faber; whether the goods are related? One outfit using a tiger to sell cereal and a tiger used to sell gasoline. a. Bally uses the Internet to generate revenue and disseminate info. b. Faber uses the site to criticize Bally and provide a forum for expressing opinions. c. Court: no competition; although both are used for information about Bally, the sites have fundamentally different purposes. 3. Similarity of the marks: Faber; do the tigers look alike. a. “Sucks” implies criticism and Bally‟s mark cannot be seen without seeing the word „sucks.‟ 4. Evidence of actual confusion: Faber; the plaintiff receives letters stating they were look for plaintiffs and found someone else OR through surveys. a. Bally: confusion is obvious b/c of the strength of the marks. b. Court: a reasonably prudent user would not mistake Faber‟s site for Bally‟s. 5. Marketing channels used: Faber; are the goods being marketed in the same channels (department stores, on tv) a. Court: Bally has not shown that Faber uses all of the channels for marketing, but only one site. b. Bally‟s goods and Faber‟s goods are not related, therefore, the fact that marketing channels overlap is irrelevant. 6. Type of goods and the degree of care likely to be exercised by the purchaser: Faber; people will exercise more care on a high- ticket item. a. Bally: search engines might find Faber‟s site; thus the user may fail to continue searching. b. Court: Faber does not use Bally in his domain name. c. The user may want to find a site that criticizes Bally. 7. Defendant‟s intent in selecting the mark: Neutral; conscious intent to rip off the mark. a. Faber is exercising his right to publish critical commentary about Bally. b. Trademark rights are limited by 1st Amendment concerns. 8. Likelihood of expansion of the product lines: Faber; „bridging the gap‟; tiger selling the gasoline likely to bridge the gap to cereal. a. Bally has no intention of expanding into an anti-Bally site. iii. Remember, bad faith registration of domain name is under ACCPA. 5. Metatags: a. Brookfield Communications v. West Coast Ent. Corp. i. Moviebuff case. ii. Initial interest confusion: 1. West Coast improperly benefits from the goodwill that Brookfield developed in its mark. iii. West Coast acted affirmatively in placing Brookfield‟s trademark in the metatags of its site thereby creating initial interest confusion. iv. Defense: fair use of a trademark: you can use a trademark owner‟s trademark to talk about the owner‟s goods. 1. Problem is when you use the trademark but you talk about your own goods. v. Movie Buff is an English word so that can be used, but you cannot omit the space. vi. Furthermore, you can use it in comparative advertising. b. Playboy Enterprises v. Terri Welles i. The metatag keywords include “playmate, playboy...” ii. In addition to initial interest confusion, other factors are relevant: 1. Evidence of the initial interest confusion as being damaging and wrongful OR 2. Evidence that confusion between two products will mistakenly lead the consumer to believe there is some connection between the two and therefore develop an interest in the defendant‟s line that it would otherwise not have OR 3. Evidence that the situation offers an opportunity for sale not otherwise available by enabling defendant to interest prospective customers by confusion with the plaintiff‟s product. iii. Plaintiff has failed to present any facts indicating any of the factors. iv. No evidence that Welles has intended to divert plaintiff‟s customers to her site by trading on Playboy‟s goodwill. v. PMOY is something that she was; so even though it was trademark uses, it is a fair use b/c it describes something true about Terri Welles and it does not deceive the public. c. Playboy Enterprises v. Netscape i. Defendants are infringing and diluting its trademarks by linking banner ads with the search terms “playboy” and “playmate.” ii. In either infringement or dilution theory, you have to show that defendants used plaintiff‟s mark in commerce. iii. Infringement: Core element is the likelihood of confusion to confuse customers about the source of the products. 1. Court: plaintiff has not so shown. 2. Plaintiff relies on initial interest confusion (upon realizing that a user is not at the site initially sought, she may stay; thus the competitor has captured the trademark holder‟s potential visitors or customers). 3. The holder of a trademark may not remove a word from the English language merely by acquiring trademark rights in it. iv. Dilution: To establish dilution, a plaintiff must show that: 1. Defendants have use of a junior mark sufficiently similar to the famous mark to evoke in a relevant universe of consumers a mental association of the two that 2. Has caused 3. Actual economic ham to the famous mark‟s economic value by lessening its former selling power as an advertising agent for its goods and services. v. No showing that the words were used as trademarks, instead of independently in a no-trademark sense. vi. Use in metatags: playboy, playmate, herbal essences are all common English words so „use‟ of the words would not necessarily constitute trademark infringement. IX. COPYRIGHT ISSUES 1. Copyright: Idea/expression dichotomy; No protection for facts. a. Original work of authorship. b. Fixed in a tangible medium of expression, now known or later invented. c. Perceptible directly or by aid of device. d. Now known or later invented. e. Exclusive rights to reproduce, distribute, create derivative works, perform, display. 2. Digital Millennium Copyright Act: a. ISP not liable for copyright infringement by 3rd parties if: i. Not the initiator of the transmission ii. Transmission is automatic iii. No ISP selection of recipients iv. No copy made by ISP v. No modification of content. b. 17 USC §512(c)(1)(C): Not liable if upon notification of claimed infringement – responds expeditiously to remove or disable access to the material that is claimed to be infringing or to be the subject of infringing activity, c. 17 USC 1201(a) Anti-circumvention provision: no person shall circumvent a technological measure that effectively controls access to a work protected under this title. i. Universal City Studios v. Reimerdes: prohibits devices primarily designed for the purpose of circumventing encryption; violation of anti-circumvention provision. d. Provisions: i. No person shall circumvent a technological measure that effectively controls access to a work protected under this title – 17 USC §1201 ii. §1201(a)(2) prohibits the manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that: 1. Primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title; 2. Has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a work protected under this title; OR 3. Is marketed by that person or another acting in concert with that person with that person‟s knowledge for use in circumventing a technological measure that effectively controls access to a work protected under this title. iii. The criminal law is shown in the Sklyarov Case. 1. Mens rea was willfully and not knowingly, so no conviction. 3. Fair Use: §107: Fair use doctrine. a. Defense to infringement. b. Elements: i. Purpose and character of the use. 1. Is it transformative? Does it do something else than what the original does? Ex. Books are entertainment. Reviews are analysis = fair use. 2. Is it commercial? **NOTE: if it‟s trademark and commercial, parody defense does not apply! Commercial character always trumps transformativeness. Ex. John Deere/Snuggles. ii. Nature of the copyrighted work: creative work always has more protection than a factual work. iii. Amount and substantiality of the portion copied. 1. The heart. iv. Effect on the market for the original. 1. This practice of swapping music files, would this practice, if widely followed, diminish the market for the original copyrighted work? 4. Application to Napster: If the direct infringement of the copyrighted works is fair use, then no infringement or contributory infringement. a. Purpose and character of the use: i. Transformative: NO. Not transformative; complete songs. ii. Commercial nature: YES. The fact that Napster users get for free something they would ordinarily pay for, that counts as commercial use due to economic advantages. b. Nature of the copyrighted work: i. YES. c. Amount and substantiality of the portion copied: i. Songs or CD‟s? ii. YES anyway. d. Effect on the market for the original: i. First, reduces CD sales. ii. Second, raises barriers for entry into the market. iii. **There were two surveys that purported to show losses of CD sales coincident with the rise of Napster. 1. There was a problem with the survey: decline in CD sales before Napster. e. All tip against finding individuals‟ swapping of files as fair use. f. Even though substantial noninfringing uses, Napster encouraged it a lot so it comes out of the realm of noninfringing uses. 5. 4 big cases: a. NY Times v. Tasini: a database (by entering a collective work into...so individual works are retrievable) you have disassembled the magazine into individual articles. i. Tasini was the head of a union. Union brought suit for including freelance articles in online databases. ii. Court: exploitation of their individual articles and use that was not permitted w/o permission. iii. §101: a collective work is a work, such as periodical issue, anthology, or encyclopedia, in which a number of contributions constituting separate and independent works in themselves, are assembled into a collective whole. iv. At what point did the NY Times and its collective work and the individual rights, part company? v. §201(c): copyright in each separate contribution to a collective work is distinct from copyright in the collective work as a whole, and vests initially in the author of the contribution. vi. In the absence of an express transfer of the copyright or of any rights under it, the owner of the copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing the contribution as part of that particular collective work, any revision of that collective work, and any later collective work in the same series. b. What is „presented to‟ or „perceptible by‟ the reader? i. Nexis: list of articles in ASCII format ii. NYOTD: same iii. General Periodicals on disk: user can „jump‟ w/o „flipping‟ 1. Page by page photos. iv. Each of these are not a revision. c. Practical implications: i. Deletions of freelance articles. ii. Move to „all rights‟ contracts iii. Loss of access to complete electronic archives d. A&M Records v. Napster: P2P. Potential contributory or vicarious copyright infringement on the part of Napster or whoever distributing the P2P technology. The level of liability of such a service depends on its LEVEL OF KNOWLEDGE AND PARTICIPATION IN THE SHARING BY USERS. i. Not the technology, but the behavior of the users and Napster. ii. Test: 1. Contributory copyright infringement: a. Knowledge b. Material Contribution: help lines, play lists 2. Vicarious copyright infringement: a. Financial benefit: selling advertising space. b. Supervision: help lines e. Kelly v. Arriba Soft: anti-circumvention provisions. f. Issue: Can a search engine retrieve copyrighted images w/o violating the copyright in the images? i. *Note: totalnews.com: you see the Washington Post in the frame of totalnews.com, but the space on the outside is advertised. ii. Copyright violation here is the display. Showing the infringed website within the host website you are displaying: 1. Without permission 2. And in a manner that would not be approved of (the site is framed and cut off). iii. Issues: framing of the site and the thumbnail sketches. iv. Defense of fair use were raised for both issues. 1. Framing: no question that the host site was inviting users to d/l the image w/o permission. All fair use factors tipping in favor of the other. a. Transformative? NO b. Commercial use? YES, b/c it is offering for free something that people would ordinarily have to pay for. c. Nature of the work? d. Interference with the market for the original? Definitely might. A consolidation of news sources here takes away the need to visit sites individually. e. Framing is a violation of the display right and no fair use. 2. Thumbnail sketches: a. Transformative? YES, not using the purpose to reproduce the images in their entirety. Ordinarily, when something is reproduced in its entirety, it would be infringement. But not here b/c you are using it as a thumbnail in a search engine. b. Commercial use? Using it as a different function. c. Nature of the use? Low resolution image. d. Interference with the market for the original? Will not act as a substitute for the original. 3. FRAMING violates the display right. g. Universal Studios v. Reimerdes: free speech analysis. What is this code? Is it expressive or functional? To what extent can Congress legislate code in a certain way? Content-neutral analysis. i. First case to interpret Anti-Circumvention provision of DMCA ii. 17 USC 1201(a) iii. Prohibits devices “primarily designed for the purpose of circumventing” encryption. iv. Court: this is a violation of DMCA. 1. This software is useful only for decoding CSS. v. Linking: 1. Not only was the site enjoined for posting the DeCSS code, but they were enjoined for linking to other sites. vi. The nature of the code itself: 1. Can you prevent this person from expressing this code? vii. 1st Amendment: 1. What is the government interest? 2. What is the means to further that interest. 3. Court is looking not for least restrictive means, but narrowly tailored. viii. The defense the DeCSS raises is a 1st Amendment right to speak this code. DMCA is violative of the 1st Amendment. 1. What is the government interest in the speech? 2. What is the means to further that interest (the means used to suppress that speech)? 3. Court is looking not for least restrictive means, but narrowly tailored. 4. But what type of speech is it? a. Computer code is speech to some extent, but it is more and less than speech. It is functional/action. b. It is more important for its functional use rather than its expressive use. c. This is content neutral scrutiny which is less than content-based scrutiny. d. The restriction on this kind of code falls on the functional capability of the code. Any impact on the dissemination of programmers‟ ideas is purely incidental. ix. There may be no injunction against, nor liability for, linking to a site containing circumvention technology absent clear and convincing evidence that those responsible for the link: 1. Know at the relevant time that the offending material is on the linked-to site 2. Know that it is the circumvention technology that may not lawfully be offered AND 3. Create or maintain the link for the purpose of disseminating that technology. x. And it will not subject website operators to liability for linking to a site containing proscribed technology where the link exists for purposes other than dissemination of that technology.