TechLaw

Opportunity Missed to Make Novel CDA 230 Precedent

The disappointment is palpable at Prof. Eric Goldman's Technology & Marketing Law Blog over the district court's failure to say anything (other than "denied") about the merits of Google's motion to dismiss American Airline's trademark claim over Google's sale of trademarked terms as search keywords. Prof. Goldman would have liked a clear statement from the court that the sale of trademarked term as a search keyword is not a commercial use of the mark.

Also missed was an opportunity to hear the court's views on Google's argument that Section 230 of the Communications Decency Act immunizes Google from all of American Airline's state-law claims. Google also claims CDA Section 230 immunity to American's federal Lanham Act claim for false representation because, Google argues, a federal false representation claim is not an intellectual property claim; thus, it doesn't fall within CDA Section 230's exception for intellectual property claims.

CDA Section 230 immunity is the "Where's Waldo" of liability defenses: if you look hard enough you can find it. As far as I can tell Google has not claimed CDA immunity in any prior lawsuits (Geico, Rescuecom, American Blind) challenging its sale of trademarks to trigger advertising for the mark owner's competitor. In the American Airlines case, however, Google is claiming that the advertising content (links and text) triggered by searches on American's marks are third-party content -- similar to a comment on a blog or a message on an online bulletin board. Holding a provider or user of interactive computer services liable for third party content is forbidden by CDA Section 230. "American's complaint is an attempt to impose liability on Google for ads created and placed by third parties," Google argued in its motion to dismiss. "This admitted attempt to impose liability on Google as a publisher of third-party content is explicitly prohibited by the CDA."

The court's answer to that argument would have made for interesting reading.

The case is American Airlines Inc. v. Google Inc., No. 07-cv-487 (N.D. Tex. Oct. 24, 2007).

Hulu to Lulu: We're No YouTube

Lulu.com lost its bid for an injunction against Hulu.com last week, though in the process Lulu might have secured admissions further limiting the prospects of the much-maligned Hulu venture.

Hulu is the NBC- and News Corp.-funded video distribution site that, some say, is already doomed to failure. NBC executives said last weekend that they were pulling their material entirely from YouTube in favor of distribution on their own site, Hulu. The NBC distribution arrangement is not an exclusive one and Hulu is going to have to start from scratch generating traffic, so right from the beginning Hulu has its work cut out for it.

The Lulu lawsuit promises to make matters worse for Hulu. In papers opposing Lulu's motion for a preliminary injunction shuttering the site, Hulu's lawyers promised to stay out of the user-generated content business. At least for now.

Lulu, online self-publishing service that permits users to publish text, audio, and video (at lulu.tv), alleged in a trademark and cyberpiracy suit against Hulu that their names were confusingly similar and that Lulu and Hulu were in the business: distribution of user-generated content. Lulu alleged that Hulu -- which is still in beta and hasn't done anything yet -- will offer user-uploaded content just like Lulu. Lulu argued that it will be "overrun by the massive resources of Fox and NBC-Universal." Worse, Internet users will assume that Lulu, not Hulu, is the trademark infringer, Lulu's attorneys claimed. Lulu noted that Hulu's trademark registration application covered a wide selection of media businesses and that Hulu's chief executive officer declared in discovery that Hulu intended to engage in all the lines of business mentioned in its trademark registration application.

However, the court said that Lulu was making too much from this evidence. It cited for support a statement in Hulu's brief that "Hulu's business [will be] focused exclusively on premium content -- television shows and films -- via the internet, and it will do that -- and only that -- on launch." With this assertion in mind, the court decided that Lulu had nothing immediate to fear from Hulu, and it denied the injunction for lack of a showing of irreparable harm to Lulu.

The case is Lulu Enterprises v. N-F Newsite a/k/a Hulu LLC, No. 5:07-cv-347 (E.D.N.C. Oct. 19. 2007).

"Executed an Electronic Signature ... Over the Phone"

Yesterday's post about a woman who unwittingly executed an electronic signature by making an on-the-record statement in a courtroom reflected my surprise that an e-signature could be made in this manner. Apparently,  creating an electronic signature via voice recording is not all that uncommon. A Ninth Circuit case from earlier this summer, Shroyer v. New Cingular Wireless Services, No. 06-55964 (9th Cir. Aug. 17, 2007), involved a class of consumers who

executed an electronic signature over the telephone to assent to the terms of the Agreements. [The plaintiff] selected the answer "Yes" in response to the statement "You agree to the terms as stated in the Wireless Service Agreement and terms of service."

The court found unconscionable a clause waiving class arbitration, but it doesn't appear from the opinion that the plaintiff raised the issue of whether a valid contract containing the terms of service had been created over the telephone.

After UETA, In-Court Acknowledgment of Divorce Settlement Becomes "Electronic Signature"

Here is a curious case. A divorce settlement calling for a transfer of real property is read into the record on the day set for trial. Both parties orally acknowledge the settlement in court, and the court's reporter duly transcribes their remarks. However, one party later refuses to sign the agreement. She claims, among other things, that enforcement of the settlement agreement would be unlawful because state law requires a writing to transfer real property.

The Kansas Court of Appeals recently entertained this argument and rejected it, remarking along the way  that an electronic signature was created in the trial judge's courtroom, thereby satisfying the state-law requirement of a writing for real property transactions.

The court said this was so because Kansas had adopted the Uniform Electronic Transactions Act. Under UETA -- with some exceptions that aren't relevant here -- qualifying digital records, sounds, symbols, you-name-it, will be treated as "writings" if a writing is required by state law. UETA, the court said, "probably" makes the electronically produced record of the divorce litigant's in-court statement the legal equivalent of a written signature:

The record does not disclose the type of equipment used by the court reporter, but it would be quite rare today for a court reporter's equipment not to at least require electricity. The UETA deems records generated by electronic means, including the use of electrical or digital magnetic capabilities, to be electronic records.

In order for a record to qualify as an electronic signature, a party must also adopt the record "with the intent to sign." The court doesn't make much of an effort to explain how the litigant in this case "adopted ... with the intent to sign" the court reporter's record of her remarks. Apparently, it was enough that the litigant uttered aloud her acknowledgment of the divorce settlement that had been recited in open court. "[A]ssuming that the court reporter's equipment was consistent with modern practice, it would appear that the electronic capture of Mieko's oral assent that this was the agreement would satisfy the statute of frauds."

The case is In re Marriage of Takusagawa, No. 95,508 (Kan. Ct.App. Sept. 7, 2007)

 

Deadlines, Rules Announced for 700 MHz "Open Access" Auction

Theresa Cavanaugh and Chris Fedeli at Davis Wright Tremaine summarize today the Federal Communications Commission's recently announced dates and procedures for Auction 73, the highly publicized wireless spectrum auction that will impose limited open access requirements on successful bidders in some of the spectrum available. The application filing deadline is Dec. 3, 2007. The auction itself will begin Jan. 24, 2008.

In a related item, Wall Street Journal columnist Walt Mossberg blisters the federal government today for leaving the cell phone industry in a position to control the content that traverses their networks as well as the devices that connect to it.

A shortsighted and often just plain stupid federal government has allowed itself to be bullied and fooled by a handful of big wireless phone operators for decades now. And the result has been a mobile phone system that is the direct opposite of the PC model. It severely limits consumer choice, stifles innovation, crushes entrepreneurship, and has made the U.S. the laughingstock of the mobile-technology world, just as the cellphone is morphing into a powerful hand-held computer.

Bullied and fooled? Considering the influence that net neutrality's foes have traditionally wielded in Washington (AT&T alone gave over $38 million to federal office seekers during 1990-2006; Verizon gave $15.5 million during the same period), it's something of a miracle that any open access requirements were imposed at all. If baseball was played like telecom policymaking, the umpire would consult with the pitcher, and the pitcher's attorneys, before calling every ball or strike. What the FCC did in the 700 MHz auction was brave, not cowardly, given the way business usually gets done here.

Destinations for Law and Love on dotMobi Auction Block

What do college hotties, sexy moms, and chicas desnudas have in common with attorneys and judges?

They are all among the 5,500 domains up for auction as "premium domain names" in the .mobi top-level domain space, a recently created top-level domain dedicated to mobile content. The Internet Corporation for Assigned Names and Numbers was kind enough to permit the dotMobi consortium -- a group composed mostly of dominant telecom and high tech companies -- to reserve thousands of domain names for  itself for later "distribution using non-traditional allocation models" outside of the familiar trademark owner sunrise and first-come, first-served processes. Right now, dotMobi is selling its reserved domain names via public auction.

The first auctions took place beginning Sept. 26. According to the dotMobi Blog, the following domains were recently auctioned off: poker.mobi ($150,000), ringtones.mobi ($145,000), news.mobi ($110,000), shopping.mobi ($55,000), email.mobi ($50,000), buy.mobi ($32,500), podcast.mobi ($25,000), cash.mobi ($12,500), pda.mobi ($8,000), and zipcodes.mobi ($8,000).

Readers of this blog should be aware that attorneys.mobi, lawyer.mobi, and lawyers.mobi will be auctioned via an online auction on Oct. 31. Again, full details are available at the dotMobi registry site.

Hypocrisy Note: After years of playing Hamlet on the subject of creating a .xxx top-level domain for what  in polite company is called adult content, ICANN finally denied the sponsor's application earlier this year. But the well-heeled dotMobi consortium appears to have succeeded where poor little ICM Registry could not. Among the "premium names" that ICANN permitted dotMobi to reserve for later resale are 21 variations on "adult," 19 variations on "porn," dozens of sexual references, and all seven of comedian George Carlin's "Seven Words You Can Never Say on Television."

Court Certifies Class in ADA Action Against Target Corp.

Executives at retailers who also operate Web sites should stop whatever they are doing right now and read Judge Marilyn Hall Patel's latest opinion in the National Federation of the Blind v. Target Corp., No. 06-1802 (N.D. Cal. Oct. 2, 2007). Judge Patel -- who mentioned at several points in the opinion that she was not evaluating the merits of the plaintiffs' Americans With Disabilities Act claims -- certified classes consisting of blind persons who:

    (1) were deterred from shopping at Target because of problems they had navigating the Target Web site ("The layout of the website was extremely confusing and large portions of information appeared to be missing," one declarant stated.)

    (2) experienced increased time and expense while on Target's premises because they were unable to "pre-shop" on the Web site (One declarant stated that she was required to ask a Target clerk read a gift registry aloud because she had been unable to read it on the Web site).

These declarants, Judge Patel said, meet the court's previously announced formulation of an actionable ADA claim: an inaccessible Web site that impedes full and equal enjoyment of the goods and services offered in Target's physical stores.

Though the ADA contains a "nexus" requirement -- i.e., that the Web site accessibility faults impair a disabled person's use of the store's physical premises -- no such nexus is required under California's Unruh Civil Rights Act and the Disabled Persons Act, Judge Patel also ruled. Plaintiffs still have some hurdles to overcome on these state-law claims, however. The Unruh Act requires a showing of intent to discriminate, and the DPA claim requires the court to interpret, for the first time, the meaning of "full and equal access" in the context of a Web site design.

The bar set by Judge Patel is a low one. All retail shoppers benefit from reviewing the availability of merchandise online prior to visiting the retail store. If Target's online operation is ultimately found to violate the Americans With Disabilities Act, I am sure that most, of not all, large retailers suffer the same problem. The state-law claims will apply to any Web site doing business in California.

Friends Don't Let Friends Become Agents

I ran across a case last week in which the court used an agency theory to bind an individual to terms and conditions in a click-wrap deal -- a deal entered into by an acquaintance. Before reading this case, I would have guessed that a Web site's terms and conditions would not be enforceable in this situation but, as is so often the case, I was wrong.

Several years ago a dental hygienist from Boston asked a friend (aka, the "agent") to book a hotel room for the both of them in Ocho Rios, Jamaica. The agent booked the room at the Turtle Beach Towers using Expedia.com and in the process agreed to a click-contract that disclaimed legal liability for

... THE ACTS, ERRORS, OMISSIONS, REPRESENTATIONS, WARRANTIES, BREACHES OR NEGLIGENCE OF ANY SUCH SUPPLIERS OR FROM ANY PERSONAL INJURIEIS [sic], DEATH, PROPERTY DAMAGE, OR OTHER DAMAGES OR EXPENSES RESULTING THEREFROM.

Well, wouldn't you know it, on her very first night in Ocho Rios, sometime around  11 p.m., the dental hygienist, not the agent, suffered a flip-flop malfunction while descending a flight of stairs on the Turtle Beach Towers premises, causing her to pitch forward into a turtle pond at the bottom of the stairway, resulting in a severe laceration to her leg.

Naturally, she sued Expedia.com. The Web site was negligent in not warning her that the Turtle Beach Towers stairway was poorly lit, that it lacked a handrail, and that the turtle pond at the bottom of the staircase was lethal, she claimed.

To Expedia.com's argument that it had disclaimed all liability for this sort of thing in its online terms and conditions, the hygienist replied that she had not assented to the terms and had not even read them because, she noted, her night at the Turtle Beach Towers had been booked by her friend. The trial court called the hygienist's argument "clearly without merit." The friend, it said, was acting as the hygienist's agent when booking the room.

"Family members, friends, and work colleagues routinely book travel plans for others, and it would be extraordinarily cumbersome to require that each traveler book his or her own ticket," the court said. "Each such arrangement is necessarily an agency relationship: the person booking the tickets is acting as an agent on behalf of the other members of the traveling party."

Implicit in that agency relationship, the court said, is the power to bind the hygienist (the principal) to contracts such as Expedia.com's liability disclaimer.

The court went on to explain that both principal and agent had adequate notice of the Expedia.com disclaimer language, relying on a series of harsh decisions involving accidents on cruise ships. As it turns out, there are many cases enforcing liability limitations printed on paper tickets against persons who traveled on cruise ships but who did not purchase the ticket themselves.  The rationale expressed in those cases was that the traveling companions were properly chargeable with notice of the liability limitation where they had even the most fleeting opportunity to look at the tickets but, for whatever reason, did not. In one case cited by the court here, DeCarlo v. Italian Line, 416 F. Supp. 1136, 1137 (S.D.N.Y. 1976), the person who purchased the cruise tickets actually died during the voyage. The plaintiff, who suffered a non-fatal injury, had about 30 days (from the time the tickets were purchased until the purchaser died on the ship) to learn of the liability limitations.

The case is Hofer v. The Gap Inc., No. 05-40170 (D. Mass. Sept. 28, 2007).

High Court Turns Away CDA Section 230 Petition

The U.S. Supreme Court today declined to review Delfino v. Agilent Technologies Inc., No. 06-1561, a case out of California that contained a handful of disputed issues involving Section 230 of the Communications Decency Act. The lower court opinion is mostly known for the court's conclusion that the defendant, a technology company not in the business of providing online services, was nevertheless a "provider ... of interactive computer services" and thus entitled to CDA immunity in a tort suit arising out of its employee's computer use.  The court was persuaded that the defendant's provision of e-mail and Internet connectivity to employees was enough to make it an "interactive computer services" provider.

I'm sure most attorneys were surprised -- but pleased -- to see Delfino anoint each and every Internet-connected business with CDA immunity. Likely few wanted -- or expected -- the high court to spend a precious cert grant on this issue.

Still on the high court's docket is Perfect 10 v. CCBill LLC, No. 07-266 (cert. petition filed Aug. 27, 2007), a case seeking review of the Ninth Circuit's conclusion that the CDA immunizes interactive computer services providers from state-law intellectual property claims. The CDA exemption for "any law pertaining to intellectual property" is properly construed to mean federal intellectual property only, the Ninth Circuit decided.

Strategy After Roommates.com Decision: Proceed with Caution

Thomas R. Burke and Ambika K. Doran at Davis Wright Tremaine published a nice article today summarizing the state of CDA Section 230's publisher immunity for user-generated content following the Ninth Circuit's decision in Fair Housing Council of San Fernando Valley v. Roommates.com, No. 04-56916 (9th Cir. May 15, 2007).

Roommates.com held that an online roommate matching service was not eligible for CDA immunity from fair housing claims arising from user messages posted in response to structured, profile-building questions about roommate preferences. The ruling surprised traditional publishers, who are scrambling frantically to climb aboard the Web 2.0 bandwagon by incorporating user-generated content into their Web sites, because it created liability under circumstances where most attorneys had been counseling there was none. Roommates.com, in a very tiny nutshell, held that the Web publisher/defendant's involvement in shaping its users' comments through profile-building questions made it "responsible ... in part" for the users' comments; accordingly, under 47 U.S.C.§230(f)(3), the Web publisher was an "information content provider" fully liable for the legal consequences of the user comments.

Burke and Doran note that, even after Roommates.com, the basic principle that Web publishers enjoy CDA immunity for most causes of action arising from user-generated content remains intact. The acts of creating online bulletin boards, or seeking comment on a particular news story, are still protected by CDA immunity. The CDA's "good Samaritan" protection for instances in which Web publishers take steps to remove or filter offensive or libelous material also continues to be available to publishers. Finally, Web publishers still retain the ability to promote the presence of user-generated content on their sites without fear of losing their CDA immunity.

However, the article advises, "website operators should remain cautious about allowing users to post their own comments if the space provided for doing so overtly urges readers to post information that a court might deem illegal."

The Ninth Circuit is currently considering a petition seeking en banc rehearing of the Roommates.com decision.