e-Commerce Docket Sheet

On the requirement that a transaction processor “transfer the ownership of [a] good for sale,” the court was not required to instruct the jury on the title-transfer rule under the Uniform Commercial Code (UCC). MercExchange, L.L.C. v. eBay, Inc., 2005 U.S. App. LEXIS (Fed. Cir. Mar. 15, 2005). The appeals court concluded that the district court's refusal to give the requested instruction was not erroneous, because the transfer of ownership limitation in the claim did not require the transfer of title pursuant to the UCC, or pursuant to any particular steps or legal formalities. The appellate court reversed the district court's denial of a permanent injunction, ruling that the court's expression of a “general concern” with respect to the issuance of business-method patents by the U.S. Patent Office “is not the type of important public need that justifies the unusual step of denying injunctive relief.”

In evaluating whether there is a likelihood of confusion between trademarks for wine products, the use of the Internet as a marketing channel is of little relevance where neither party uses the Internet as a “substantial marketing and advertising channel.” Sutter Home Winery, Inc., v. Madrona Vineyards, L.P., No. C 05-0587 (N.D. Cal. Mar. 23, 2005). The court also considered whether the parties used the trademarks in conjunction with Web-based products, and whether their marketing channels overlapped in other ways. Noting that “wine is not a 'Web-based product,'” and that neither party's online sales amounted to a substantial percentage of its revenues, the court concluded that the parties' online marketing efforts should not be given “any great significance” in the likelihood-of-confusion analysis.

The trademark-infringement and related claims based on a search engine's sale of a plaintiff's trademark words as search terms cannot be rejected on the limited factual record before the court on a motion to dismiss for failure to state a claim. Google v. American Blinds & Wallpaper Factory, Inc., No. C 03-05340 JF (N.D. Cal. Mar. 30, 2005). The court concluded that under the “expansive holding” of the Ninth Circuit in Playboy Enterprises v. Netscape and the liberal standard applicable to motions to dismiss, it could not determine that the trademark owner would be unable to prevail on its claims under any set of facts. In particular, the court rejected the argument that the sale of the trademark terms as search terms did not constitute a “use” of the trademarks.

In the absence of a written agreement, a company that engaged a computer consultant to update and host its Web sites has an implied, nonexclusive license to use, reproduce, derive and display the Web sites. Attig v. DRG, Inc., No. 04-CV-3740 (E.D. Pa. Mar. 30, 2005). The court held that a nonexclusive license arises where “1) a person (the licensee) requests the creation of a work, 2) the creator (the licensor) makes that particular work and delivers it to the licensee, and 3) the licensor intends that the licensee copy and distribute his work.” The court granted summary judgment in favor of the defendant company on the consultant's copyright-infringement complaint, commenting that “common sense” supported a finding that the consultant intended the company to have an implied license for services for which it had paid, because a finding that there was no such implied license would be equivalent to a finding that the work, ie, the Web sites, were of no value.

A proposal pursuant to Fed. R. Civ. P. 4(f) to serve process on a foreign defendant by e-mail does not satisfy constitutional standards in the instance when the e-mail address proposed by the plaintiff is not indisputably connected to the defendant. Ehrenfeld v. Mahfouz, 2005 U.S. Dist. LEXIS 4741(S.D.N.Y. Mar. 23, 2005). The court noted that the plaintiff had not provided information on which it could conclude that the defendant maintained the Web site, monitored the e-mail address or would be likely to receive information transmitted to the e-mail address. Also, the information that the plaintiff provided suggested that the defendant did not use the e-mail address “for receiving important business communications.” The court concluded, however, that other alternative means of service the plaintiff proposed satisfied the requirements of the rule.

Although a plaintiff seeking recovery of a $1 million prize from an Internet gaming company had shown that in personam jurisdiction over the company's subsidiaries was proper, discovery would be required to establish jurisdiction over the parent company itself. Uebler v. Boss Media, 2005 U.S. Dist. LEXIS 5056 (E.D.N.Y. Mar. 29, 2005). The court noted that the plaintiff could have established jurisdiction over the subsidiaries, which were not named as defendants in the action, because they operated the “highly interactive” Web site, the “primary function” of which was to allow customers to gamble over the Internet. The court found that jurisdiction could be established over the parent company under New York law if discovery established that its activities “show a disregard for the separate corporate existence of the subsidiary.”

The video game-license agreement provision granted licensees exclusive rights to online versions of classic video games “playable solely when connected to a Licensee Web Site” didn't encompass versions of the games sold online or on CD-ROM but that required online authentication at the time of play. Atari, Inc. v. Games, Inc., 2005 U.S. Dist. LEXIS 4014 (S.D.N.Y. Mar. 11, 2005). The court concluded that the language defining the exclusive license “clearly limits” the nonexclusive license to games playable solely when connected to a licensee Web site, and does not preclude the sale of other versions of the same games that “[a]t most … require a brief connection” to another licensee's Web site to authenticate the user's license. The court also reasoned that its analysis was supported by “carve out” language under which the licensor expressly retained the right to sell “retail versions” of the classic video games.

Patent Claim On Ownership Transfer
Doesn't Require UCC Jury Instruction

On the requirement that a transaction processor “transfer the ownership of [a] good for sale,” the court was not required to instruct the jury on the title-transfer rule under the Uniform Commercial Code (UCC). MercExchange, L.L.C. v. eBay, Inc., 2005 U.S. App. LEXIS (Fed. Cir. Mar. 15, 2005). The appeals court concluded that the district court's refusal to give the requested instruction was not erroneous, because the transfer of ownership limitation in the claim did not require the transfer of title pursuant to the UCC, or pursuant to any particular steps or legal formalities. The appellate court reversed the district court's denial of a permanent injunction, ruling that the court's expression of a “general concern” with respect to the issuance of business-method patents by the U.S. Patent Office “is not the type of important public need that justifies the unusual step of denying injunctive relief.”

In evaluating whether there is a likelihood of confusion between trademarks for wine products, the use of the Internet as a marketing channel is of little relevance where neither party uses the Internet as a “substantial marketing and advertising channel.” Sutter Home Winery, Inc., v. Madrona Vineyards, L.P., No. C 05-0587 (N.D. Cal. Mar. 23, 2005). The court also considered whether the parties used the trademarks in conjunction with Web-based products, and whether their marketing channels overlapped in other ways. Noting that “wine is not a 'Web-based product,'” and that neither party's online sales amounted to a substantial percentage of its revenues, the court concluded that the parties' online marketing efforts should not be given “any great significance” in the likelihood-of-confusion analysis.

The trademark-infringement and related claims based on a search engine's sale of a plaintiff's trademark words as search terms cannot be rejected on the limited factual record before the court on a motion to dismiss for failure to state a claim. Google v. American Blinds & Wallpaper Factory, Inc., No. C 03-05340 JF (N.D. Cal. Mar. 30, 2005). The court concluded that under the “expansive holding” of the Ninth Circuit in Playboy Enterprises v. Netscape and the liberal standard applicable to motions to dismiss, it could not determine that the trademark owner would be unable to prevail on its claims under any set of facts. In particular, the court rejected the argument that the sale of the trademark terms as search terms did not constitute a “use” of the trademarks.

In the absence of a written agreement, a company that engaged a computer consultant to update and host its Web sites has an implied, nonexclusive license to use, reproduce, derive and display the Web sites. Attig v. DRG, Inc., No. 04-CV-3740 (E.D. Pa. Mar. 30, 2005). The court held that a nonexclusive license arises where “1) a person (the licensee) requests the creation of a work, 2) the creator (the licensor) makes that particular work and delivers it to the licensee, and 3) the licensor intends that the licensee copy and distribute his work.” The court granted summary judgment in favor of the defendant company on the consultant's copyright-infringement complaint, commenting that “common sense” supported a finding that the consultant intended the company to have an implied license for services for which it had paid, because a finding that there was no such implied license would be equivalent to a finding that the work, ie, the Web sites, were of no value.

A proposal pursuant to Fed. R. Civ. P. 4(f) to serve process on a foreign defendant by e-mail does not satisfy constitutional standards in the instance when the e-mail address proposed by the plaintiff is not indisputably connected to the defendant. Ehrenfeld v. Mahfouz, 2005 U.S. Dist. LEXIS 4741(S.D.N.Y. Mar. 23, 2005). The court noted that the plaintiff had not provided information on which it could conclude that the defendant maintained the Web site, monitored the e-mail address or would be likely to receive information transmitted to the e-mail address. Also, the information that the plaintiff provided suggested that the defendant did not use the e-mail address “for receiving important business communications.” The court concluded, however, that other alternative means of service the plaintiff proposed satisfied the requirements of the rule.

Although a plaintiff seeking recovery of a $1 million prize from an Internet gaming company had shown that in personam jurisdiction over the company's subsidiaries was proper, discovery would be required to establish jurisdiction over the parent company itself. Uebler v. Boss Media, 2005 U.S. Dist. LEXIS 5056 (E.D.N.Y. Mar. 29, 2005). The court noted that the plaintiff could have established jurisdiction over the subsidiaries, which were not named as defendants in the action, because they operated the “highly interactive” Web site, the “primary function” of which was to allow customers to gamble over the Internet. The court found that jurisdiction could be established over the parent company under New York law if discovery established that its activities “show a disregard for the separate corporate existence of the subsidiary.”

The video game-license agreement provision granted licensees exclusive rights to online versions of classic video games “playable solely when connected to a Licensee Web Site” didn't encompass versions of the games sold online or on CD-ROM but that required online authentication at the time of play. Atari, Inc. v. Games, Inc., 2005 U.S. Dist. LEXIS 4014 (S.D.N.Y. Mar. 11, 2005). The court concluded that the language defining the exclusive license “clearly limits” the nonexclusive license to games playable solely when connected to a licensee Web site, and does not preclude the sale of other versions of the same games that “[a]t most … require a brief connection” to another licensee's Web site to authenticate the user's license. The court also reasoned that its analysis was supported by “carve out” language under which the licensor expressly retained the right to sell “retail versions” of the classic video games.