Internet Law Info Blog

New Jersey Proposes Social Networking Safety Act

Proposed Legislation: Social Networking: Our attorneys previously co-authored an article entitled  Wrongful Posting on the Internet: The Privacy You Save Could be Your Own. It discussed privacy and other legal issues related to online statements. The article discussed real-life predicaments such as the unfortunate story of a young Missouri girl who committed suicide after having allegedly been harassed on the MySpace social networking website. As the use of social networking websites has grown exponentially, so too have the sordid stories of misuse of those sites for online harassment and sexual harassment.

Since the then-current law was devoid of remedies to specifically address the damages presented by this new trend, in their article, Mr. Nissenbaum and Ms. Magedoff predicted that state legislatures would begin to enact laws to specifically address these issues. New Jersey now appears to be at the forefront of this movement since the New Jersey legislature is currently considering the Social Networking Safety Act. The law proposes imposition of civil penalties for social networking users who transmit a harassing or sexually offensive communication through a social networking website. An offender would be liable to a website operator for $1000.00 plus attorneys fees and would be liable to the recipient of the communication for the greater of (a) actual damages (including compensatory and punitive damages) or (b) $50000.00 plus attorneys’ fees. Notably, certain versions of the pending bill appear to be aimed at communications both (a) to minors under 13 years old and (b) in the event that the communications are sent from someone who is at least 3 years older than the recipient, to those who are younger than 16.

It is critical to understand how this potential law might apply to social networking website operators. Similar to the Federal Communications Decency Act’s immunity, the proposed law seeks to provide a limited immunity to the website operator. However, the it would also impose certain requirements on the website to ensure that it qualifies for that immunity. Specifically, there is a statutory reporting protocol that would need to be adhered to by the website OR they would need to clearly and conspicuously state on the website specific, statutorily-mandated language that indicates they are not complying with those requirements. Failure to adhere to one of these requirements could result in the website operator being liable for the harassing or sexually offensive speech of its users.

Accordingly, all social networking website operators need to be aware of the new requirements that would be imposed upon them if this bill passes. Inevitably, the law would require certain changes to the website text and/or its terms and conditions. Moreover, it is important that website operators understand that this law is aimed at communications that are directed at New Jersey residents. Therefore, it arguably would not make a difference whether the website itself is based in New Jersey; if New Jersey residents utilize the website, it will arguably need to comply with the edicts of the law.

We strongly recommend that all website operators keep abreast of this pending legislation and ensure that they consult with counsel if the law is enacted to be sure that they are complying in a manner that allows them to take advantage of the limited immunity being offered under the law.

Comments/Questions: ljm@gdnlaw.com

© 2009 Nissenbaum Law Group, LLC

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The Confines of a Cybersquatting Claim: Western District of New York Case Emphasizes Limitations

Cybersquatting: The United States District Court for the Western District of New York recently found that cybersquatting had not occurred in connection with the registration of a similar domain name. In Dudley v. HealthSource Chiropractic, Inc., 2008 WL 4507714, the Court found that even though the mark at issue was protectable; and even though the allegedly infringing domain name was similar to the protected mark; the plaintiff could nevertheless prevail on a claim arising out of a violation of the Anti-cybersquatting Consumer Protection Act (ACPA).

The ACPA is a federal statute instituted in connection with federal trademark law. The ACPA specifically prohibits the registration of a domain name that incorporates a famous or distinctive mark when that registration was conducted with a bad faith intent to profit from the registration. The most common example of cybersquatting is when a company or person beats the legitimate trademark owner to the registration punch and then offers to sell the domain name at an exorbitantly inflated rate to the trademark owner. For instance, if someone registered www.dietcoke.com, before the Coca-Cola company did and then approached Coca-Cola with an offer to sell the domain to the company for hundreds of thousands of dollars, that would be a clear example of cybersquatting. However, the bad faith intent to profit can often be demonstrated in other, less obvious, ways as well. For example, an argument could be made that the operation of a commercial website on the allegedly infringing domain would likewise be considered an “intent to profit.” Similarly, arguments have been made that even if the website is not commercial in and of itself, but it sells advertising space, that the infringer arguably is using the infringing aspects of the domain with a “bad faith intent to profit.”

Nevertheless, the Court in Dudley, indicated that there are some limitations on the use of the ACPA. Dudley was based on a claim by a chiropractor who had been operating in Rochester, New York under the business name HealthSource Chiropractic. In connection with that business, he had registered the domain name healthsourcechiropractic.com. Mr. Dudley then sued the defendant based on its use of the business name “HealthSource Chiropractic” and its adoption of the domain name healthsourcechiro.com. In making its determination, the Court noted that Dudley was the prior user to the mark and accordingly had senior rights. Importantly, this was despite the fact that HealthSource Chiropractic, Inc., the defendant, had registered the mark with the USPTO first. This underscores the important legal principle that prior use trumps registration.

The Court noted that the defendants’ domain name was confusingly similar to the plaintiff’s common law trademark. It is important to note that the Court distinguishes the standard that is applied for this purpose. Specifically, the Court noted that “for purposes of a claim made under the ACPA, ‘‘[c]onfusingly similar’ is a different standard from the ‘likelihood of confusion’ standard for trademark infringement’ . . . [U]nder the ACPA, ‘whether a domain name is confusingly similar to a trademark is to be evaluated ‘without regard to the goods or services of the parties.’” The Court further noted that for ACPA evaluation purposes, the Court compares the plaintiff’s mark and the defendant’s domain name. In this regard, the factors that are reviewed include “their intrinsic sounds, sight, and meaning, without reference to goods or services with which the domain name is associated by the parties’ use.”

Notwithstanding the fact that applying this test the Court found that the mark and domain name were similar, the Court determined that the defendant had not engaged in cybersquatting. This decision was specifically based on a determination that the defendant had not had the requisite bad faith intent to profit. The Court then proceeded to analyze various factors to determine whether or not the bad faith intent was present. The factors examined include: (a) whether the defendant has trademark rights in the domain name; (b) whether the domain name consists of a legal name; (c) prior use of the domain name in connection with the bona fide offering of services; (d) bona fide noncommercial or fair use of the mark; (e) intent to divert consumers; (f) offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain; (g) information when applying for registration of the domain name; (h) acquisition of multiple domain names which are identical or confusingly similar; and (i) whether the mark incorporated into the domain name is a distinctive and famous mark.

However, critical to the Court’s determination was its conclusion that the defendant’s acts were not that which had been targeted by the ACPA. Again, the Court noted that the ACPA’s focus was aimed at those who “‘register well-known brand names as Internet domain names in order to extract payment from the rightful owners of the marks, . . . register well-known marks to prey on consumer confusion by misusing the domain name to divert customers from the mark owner’s site to the cybersquatter’s site, and target distinctive marks to defraud customers, . . .’ Here, it is clear that the defendants did not purchase a domain name for the purpose of holding it ransom so as to later extract payment from the ‘rightful’ owner of the mark.” The Court specifically noted in this determination that the defendant’s own use of the mark had commenced prior to it learning of the plaintiff’s use. In other words, the mere fact that the domain name incorporated a trademark, and that the two were “confusingly similar” was not enough.

Comments/Questions: ljm@gdnlaw.com

© 2009 Nissenbaum Law Group, LLC

Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com

New York Imposes Education Requirement Relating to Internet Safety

Internet Law: New York Legislation: Internet Safety: New York legislators have taken a solid stance in moving to protect children from online predators. They have done so by imposing curriculum requirements relating to Internet safety within the New York Education Law.

Specifically, the new law provides that the Commissioner of Education needs to “develop age-appropriate resources and technical assistance for schools to provide to students in grades three through twelve and their parents or legal guardians concerning the safe and responsible use of the internet. The resources shall include, but not be limited to, information regarding how child predators may use the internet to lure and exploit children, protecting personal information, internet scams and cyber-bullying.”

The new law was imposed with the specific and stated intention of raising “awareness of the need for vigilance and to ensure that students and parents have comprehensive, age appropriate internet safety resources throughout their school tenure that will enable students to maximize the internet’s potential while protecting them from sexual predators and others with malicious intentions.

The law is effective as of September 4, 2008. However, the New York legislature provided the Commissioner with 180 days to develop the resources referenced in the statutory requirement.

Comments/Questions: ljm@gdnlaw.com

© 2008 Nissenbaum Law Group, LLC

Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com

New York Federal Court Rejects Contributory Trademark Infringement Suit Brought by Tiffany Against eBay for the Sale of Counterfeit Goods

Internet Law: New York Caselaw: Trademark Infringement: On July 14, 2008, the U.S. District Court for the Southern District of New York issued a decision siding with eBay in a landmark trademark infringement lawsuit brought against the online auction site by Tiffany, Inc. and Tiffany and Company (collectively, “Tiffany”). Tiffany, Inc. v. eBay, Inc., Case No. 04-Civ-4607 (S.D.N.Y. July 14, 2008). In its suit, Tiffany sought to hold eBay liable for the sale of counterfeit Tiffany jewelry by eBay sellers under the doctrine of contributory trademark infringement. The Court rejected Tiffany’s claim, declining to accept a theory of liability which would have drastically expanded the reach of contributory trademark infringement.

Prior to bringing suit, Tiffany had informed eBay that a substantial amount of counterfeit Tiffany jewelry was being sold on the auction site. Tiffany demanded that eBay immediately suspend access to the site to any sellers that Tiffany identified as selling counterfeit goods. It also insisted that eBay remove any listings that offered five or more of the same Tiffany item for sale, contending that where a listing offered a large number of the same Tiffany item, the item was likely counterfeit. In response, eBay refused to comply with Tiffany’s requests.

In bringing its claim, Tiffany argued that eBay should be held liable for contributory trademark infringement because it had been put on notice (by Tiffany) that its sellers were engaging in counterfeit sales and thus it should have “reasonably anticipated” the wrongful sales of counterfeit (and infringing) merchandise occurring on its site. Accordingly, Tiffany argued, eBay had a legal obligation to proactively investigate and remove any listings that raised a suspicion of wrongdoing.

The Court disagreed with Tiffany, holding that eBay should be absolved of liability as long as it takes appropriate steps to suspend access to the site and remove listings when it receives specific knowledge that a particular listing is infringing. The Court noted that a trademark owner has the burden of policing its own mark. It found that eBay cannot be held liable for contributory infringement simply because of its generalized knowledge that some of its sellers might be engaging in infringing behavior.

In support of its decision, the Court cited Coca-Cola Co. v. Snow Crest Beverages, an earlier contributory infringement case having a similar fact pattern. 64 F.Supp. 980 (D. Mass. 1946), aff’d, 162 F.2d 280 (1st Cir. 1947). In that case, Coca-Cola claimed that Snow Crest had contributorily infringed its mark by selling an item called “Polar Cola” to bartenders who mixed it into “rum and Coke” drinks. Coca-Cola argued that Snow Crest should have reasonably anticipated the infringement because Coca-Cola’s lawyers had informed Snow Crest that the practice was occurring in a number of bars. Coca-Cola did not, however, provide names of specific bars where the alleged infringing behavior was occurring. The Coca-Cola Court refused to impute knowledge of the infringing behavior to Snow Crest based on a “blanket demand” by Coca-Cola.

Just as the Coca-Cola Court had held that Snow Crest should be liable based on generalized notice of what some of its buyers might be doing, the Court in Tiffany v. eBay held that generalized notice that some of its users might be selling counterfeit goods on its site was insufficient to impute knowledge to eBay of any specific acts of actual infringement. The Court reasoned that “the doctrine of contributory trademark infringement should not be used to require defendants to refuse to provide a product or service to those who merely might infringe the mark.” The Court took particular note of the fact that eBay had devoted a substantial amount of resources to establishing and implementing procedures to combat the sales of counterfeit goods.

The decision is a favorable one for entities offering services similar to eBay. Its holding sends the message that such intermediaries will not be responsible for investigating and policing all of the potentially infringing activity on their sites. It also highlights an additional potential defense for websites that are sued for its “members” acts, emphasizing the importance of detailed notice. On the other hand, the decision should also serve as a warning to trademark owners that they bear the burden of policing others’ use of their marks. Moreover, it accentuates the importance of a trademark owner providing very specific and detailed notice in the event of an infringement.

Notably, in a separate case brought against eBay in the Tribunal de Commerce in Paris, the court’s holding went in the opposite direction. There, the court found that eBay was not taking adequate measures to prevent the auction of unauthorized and counterfeit goods. It is interesting to note that different jurisdictions are interpreting website responsibility differently, thus creating different legal standards for the operation of a website in different areas.

Comments/Questions: ljm@gdnlaw.com

© 2008 Nissenbaum Law Group, LLC

Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com

Internet Websites May Be Vulnerable to Regulation by Foreign Countries

Commentary: International Websites: The Internet has been amazing tool; enabling even the smallest voice to reach people throughout the world. It has, in fact, breathed new life into many small businesses who now can reach millions of potential customers in mere keystrokes. Many companies elect not to, or do not think to, limit the reach of their website. As a result, it may be accessible to the international public, and the Company could be deemed to be offering its goods or services to customers throughout the world. Again, this may be beneficial from a business standpoint, but it presents some legal vulnerabilities. Quite simply, different countries have different rules and standards by which a website must operate.

By offering its goods or services to other countries’ residents, a foreign court could claim that it has jurisdiction over a US-based company. So, even if the company has lawfully established the website in the United States, and is complying with the Federal and State laws here but the website is accessible to residents in another country, that company could still be vulnerable to legal attack for failure to adhere to that country’s (or their state or provincial) laws.

The difference in international website standards was recently highlighted in the Beijing Olympics. A lot of press came out of the Olympic Games for China’s censorship of certain Internet content. There, the government merely banned access to certain websites. However, other countries may not be so proactive, and may instead allow access to the website but hold the website operator liable for illegalities on the site or in connection with the sale. The vulnerability regarding the international scope of websites also takes a prominent role in regard to the different definitions of “obscenity.” Other countries have different standards as to what is “obscene” as compared to the United States. Therefore, what might be acceptable here, and what might even be considered to be artwork here, may be banned as pornography elsewhere. Another example is that the European Union tends to generally have stricter rules when it comes to privacy regulations.

Unfortunately, this vulnerability is complicated in that there may be different standards in each locality in addition to those differing national standards. This is a challenge even within the United States. For instance, the Internet is not generally regulated at the Federal level. Rather, each state can have its own rules and regulations relating to the operation of an e-commerce company. For instance, California has an entire regime of laws relating to privacy protections and disclaimers that need to be on a website. Regardless from where a website is based, if it is marketing to California residents, it will arguably need to comply with those laws.

Accordingly, if a website is simply launched and offers services to everyone, there are numerous legal vulnerabilities given all of the levels of legal regulation to which it may be exposed. One of the best ways to manage this risk is to limit in some way the people to whom the company is offering its goods or services. This can be included in the website terms and conditions or other legal disclaimers, where a company can specifically require the user to indicate that they are a resident of a certain country or state. Moreover, a company could establish protocols to be sure that orders are not accepted from residents of certain states and territories. Therefore, a company can limit the reach of its offerings to those states and countries that it has evaluated with legal counsel to ensure that the website and its goods and services will not run afoul of the laws of those areas.

Comments/Questions: ljm@gdnlaw.com
© 2008 Nissenbaum Law Group, LLC

Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com

U.S. Supreme Court Upholds Third Legislative Effort by Congress to Stamp Out Child Pornography on the Internet

Internet Law: Supreme Court Caselaw: In a recent decision, the United States Supreme Court upheld a law aimed at regulating child pornography in the age of the Internet. U.S. v. Williams examined a facial attack against the PROTECT Act of 2003, which prohibits not only the possession or transmission of a pornographic image depicting a minor, but also any advertisement, distribution or solicitation which reflects the belief, or which is intended to cause another to believe that, such an image is being distributed. In other words, the Act reaches beyond actual child pornography to also apply to the distribution or solicitation of material that an individual mistakenly believes to be child pornography. The Court rejected the plaintiff’s argument that the statute was vague and overbroad in scope and thus contradictory to deep rooted First Amendment principles.

This holding follows cases invalidating, or otherwise holding as unconstitutional, Internet laws aimed at preventing child pornography. In upholding the statute, the Court essentially held that the doctrine of mistake trumps the First Amendment. The mistake doctrine is a criminal law principle under which a mistake about the facts is no defense. In the context of the Williams decision, the doctrine is relevant in that the PROTECT Act applies not only when actual child pornography is actually being distributed, but also when a party is either distributing material with the mistaken belief that it is child pornography or attempting to persuade another party to purchase material by fraudulently advertising it as child pornography. The Williams Court reasoned that offers to engage in illegal transactions, when those transactions would not technically be deemed unlawful, are outside the protection of the First Amendment. As such, First Amendment protection will turn on whether an individual traffics in material that he believes to be unprotected, and not on whether that material is actually protected.

Notably, the PROTECT Act is the third legislative effort to regulate child pornography at the federal level. The first two efforts by Congress were the Communications Decency Act of 1996, which was partially overturned by the Supreme Court in 1997, and the Child Online Protection Act (COPA), which was struck down by the U.S. Circuit Court of Appeals for the Third Circuit in 2008. In both instances, the Court upheld legal challenges to the statutes on the ground that they were unconstitutionally overbroad. Similar to the PROTECT Act, the reach of COPA went beyond actual child pornography, prohibiting material that merely appeared to be or conveyed the impression that it was child pornography.

With the Williams decision, the Supreme Court has taken a harder line. The PROTECT Act seeks to punish not only those individuals who deal in actual child pornography, but also the individuals who support the production, distribution and possession of such material. The effect of the decision will depend on how stringently trial courts enforce the Act, which will turn on the evidentiary standard that prosecutors must overcome in proving that a defendant intended to distribute material that he believed to be, or that he wanted others to believe was, actual child pornography. For example, if a defendant distributes pornography depicting an individual who appears to be 14 years old, but is really 20 years old, a court may nonetheless deem the defendant to have violated the Act. Again, such determinations will depend on the approach that the trial courts take in enforcing the Act.

Comments/Questions: ljm@gdnlaw.com

© 2008 Nissenbaum Law Group, LLC

Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com

Privacy Policies Can Be Held Against You Too

Commentary: As Mr. Horn previously discussed in his post, Ebay Liable for Breach of Contract Based on Violation of Terms and Conditions, the Missing Link case underscored the need to take caution in preparing website terms and conditions. There, eBay was held liable for failing to comply with its own terms and conditions. As Mr. Horn explained, this case emphasizes the importance of drafting terms and conditions that are directly applicable to the website and with which the company can comply. However, equally important is that the company is prepared and able to comply with the edicts of its privacy policy.

Privacy policies are critical documents for an e-commerce company. They generally outline what information is being collected by a company and how that information will be utilized. They are required in certain instances and by certain state laws. Moreover, the Federal Trade Commission (FTC) has offered precise guidelines with regard to the implementation of a privacy policy.

Notably, the FTC does not generally compel a company to adopt a privacy policy on its website. A significant number of cases brought by the FTC relating to website privacy policies not only concern the failure to have a policy, but also relate to enforcement actions against companies who fail to adhere to posted privacy policies they do have. In essence, while it is advisable to post a privacy policy, to do so and not adhere to it would be worse than not posting it at all. For example, in one of the landmark decisions in this area, the FTC brought suit against GeoCities, Inc., based on inconsistencies between its privacy practices and its stated policies. A settlement agreement was reached which required GeoCities to change its data collection policies and adopt a new privacy policy to protect consumer rights. In re GeoCities. Notably, this case is also beneficial because the settlement that was reached is instructive of the types of practices the FTC deems appropriate with regard to privacy policies and provides suggestions on implementation (i.e., where the notice should be placed on the website).

Again, this underscores the importance of making sure that the privacy policy, and all of a website’s legal disclaimers, are appropriate for its business. It is critical that the company take time to develop and precisely customize website terms and conditions and privacy policies. These documents need to suit the business’s needs, obtain the rights it needs against customers and website users, but also establish corporate standards that are reasonable and with which the company can easily comply.

Comments/Questions: ljm@gdnlaw.com

© 2008 Nissenbaum Law Group, LLC

Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com

Parker v. Google: Internet Law is too Unsettled to be Frivolous

Pennsylvania Caselaw: In Parker v. Google, 2008 WL 2600299 (United States District Court for the Eastern District of Pennsylvania 2008), the Court was presented with a lawsuit filed by Gordon Roy Parker, a pro se (a person without a lawyer) against Google. In that case, Parker alleged copyright infringement, defamation, invasion of privacy and negligence relating to the fact that Google catalogues and utilizes digitally stored information that belongs to him. The Court dismissed those claims, in part, on the basis that “Google’s automatic archiving of postings and excerpting of websites did not include the necessary volitional element to constitute direct copyright infringement.” Id at 1. Further, many of the claims were barred by the Communications Decency Act which provides for immunity for websites that are merely a conduit for information or opinion of others.

For these and other reasons, the Court found that Parker had not stated viable causes of action against Google. The latter then moved for reimbursement of its attorneys’ fees based upon the frivolousness of the pleading and the language of the Copyright Act which provides for the option of an award of attorneys’ fees to the prevailing party.

The Court denied Google’s motion. Interestingly, its basis for the denial was that Internet law is so new and unsettled, that it would not be fair to punish a nonprevailing party with an order to reimburse his adversary’s attorneys fees. Indeed, the Court noted that the case was filed in 2004, and at that earlier time, “many facets of Internet law were even less settled than today.”

Comments/Questions: ljm@gdnlaw.com

© 2008 Nissenbaum Law Group, LLC
Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com

eBay Liable for Breach of Contract in Violation of Terms and Conditions

General Caselaw: A recent federal court decision from the Northern District of California in found that eBay violated its contract with a vendor based on the timing of making products searchable. In Missing Link, Inc. v. eBay Inc., 2008 WL 1994886 (N.D. Cal. 2008), the plaintiff-vendor alleged that eBay failed to make the posted products searchable for more than four hours after the vendor had posted the items for purchase.

The Court held that the delay constituted a breach of contract because it was contrary to the provisions of the website’s terms and conditions which specifically stated that any item listed would be posted immediately. Accordingly, the Court held eBay to that timetable and held it liable for breach in that four hours was not “immediate.”

The Court refused to accept eBay’s argument that the four hour lag was excusable. It noted that the merchandise could not be found by using the search function in eBay. The Court noted that since eBay is so vast it is extremely unlikely that any potential customer would be able to go directly to the posting without using eBay’s search function.

This case emphasizes the importance of carefully crafting terms and conditions for an Internet website. Terms and conditions should not be merely “borrowed” from a competitor’s website, even if the competitor operates in the same industry or provides the same or similar products or services. Every website has unique aspects that need to be accounted for. It is critical that a website’s terms and conditions match the precise intent of the parties, because those terms and conditions are meant to create a contract with the visitor to the website.

The fact that the website’s terms and conditions form a binding contract is a double-edged sword. It greatly enhances a company’s rights and protections against its users. In fact, it provides an opportunity to bind a customer to a contract and business model where no other contract may exist. However, by the same token, the company will be also bound; and its failure to adhere to its own terms would make the company liable for breach. Finally, website terms and conditions should not be considered a static agreement. It should be reviewed periodically to be sure to account for changing technologies and any changes in the website’s business procedures.

Comments/Questions: ljm@gdnlaw.com

© 2008 Nissenbaum Law Group, LLC

Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com

The Digital Millennium Copyright Act: A valuable tool or a dangerous weapon?

Internet Law: It is critical that website operators fully understand their rights and responsibilities under the Digital Millennium Copyright Act (“DMCA”). This is particularly important for operators of social networking sites, blogs or other sites that allow third parties to publish content on the site. As more and more “traditional” websites now allow such postings -- one of the many aspects of the Web 2.0 age -- the importance of the DMCA grows.

The DMCA is a Federal statute that was enacted in the 1990’s which essentially modified copyright law in order to account for new technology, including the Internet. One aspect of the statute specifically provides for a limited immunity for websites posting content that might arguably infringe another’s copyright rights. Essentially, the law outlines certain protocols for webmasters to utilize, which includes providing an adequate way for those whose work has been infringed upon to contact the website and request the removal of the content. The DMCA generally says that if the website has engaged such protocols, and takes down content that is properly reported to it, it can have immunity from a copyright infringement claim. For this reason, it is critical that all websites who host third party content ensure that they are properly engaging in the protocols provided by the DMCA and include the appropriate instructions in their posted terms and conditions.

A little-known aspect of the DMCA applies to those reporting infringements. While the DMCA protocols allow a person whose rights have been infringed to request that the website remove the protected content, the statute also provides a penalty for a person who wrongfully utilizes this protection. The law provides for liability against the wrongful reporter, including payment of attorney’s fees, which may be payable to (a) the alleged infringer; (b) the website that removed the content; and/or (c) the copyright owner or licensee of the copyright owner. Essentially, the damages might be paid by anyone in one of those three categories who is injured as a result of the false report. Specifically, the DMCA states that: “[a]ny person who knowingly misrepresents under this section – (1) that material or activity is infringing, or (2) that material or activity was removed or disabled by mistake or identification, . . .” is liable under the Act. 17 U.S.C. 512(f). In sum, there are two ways of being liable under this provision: (a) for indicating that a work is infringing if it is not or (b) for indicating that a work which was removed was in fact, not infringing and should have remained posted.

This penalty-based aspect of the statute was recently highlighted in a case currently pending in Illinois relating to the YouTube.com posting of rodeo competitions. In that case, Showing Animals Respect & Kindness v. Prof’l Rodeo Cowboys Association, an animal rights group posted video from a rodeo event on YouTube. The Rodeo Association then contacted YouTube and requested that the videos be removed because they infringed upon the Association’s copyright. SHARK, the animal rights group, filed suit indicating that the Association’s request violated the DMCA because it was based on a false claim. Its argument was that the Association knew that there was no copyright in the rodeo event, and therefore the request that the videos be taken down was not a rightful request to prevent infringement, but rather constituted a wrongful means of trying to remove content that was unfavorable to them. The case is ongoing.

Clearly, those reporting infringements should take caution in doing so. The Rodeo case highlights the importance of being reasonably certain that one has a viable claim for copyright infringement before making a request that a posting be removed under the DMCA.

Comments/Questions: ljm@gdnlaw.com

© 2008 Nissenbaum Law Group, LLC

Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com