e-Commerce Docket Sheet

Following a Markman hearing, the district court issued a claim construction opinion in a dispute over alleged infringement of the plaintiff's electronic-commerce patent relating to 'a computer system for facilitating international computer-to-computer commercial transactions ' which enable international purchases of goods over the Internet.' De Technologies, Inc. v. Dell, Inc., No. 7:04CV00628 (W.D. Va. Feb. 14, 2006). The patent owner claims that defendant computer manufacturer infringes the patents in conducting its international import and export business. The court construed disputed terms that define the operation of transaction-related software programs and the presentation of transaction-related information to users, including language and currency options, international shipping options, calculation of destination-based costs and determination of total costs, among other aspects of the disputed patents.

Ownership of a domain name is not established by evidence showing that a particular party paid the renewal fee for the domain-name registration. Delor v. Intercosmos Media Group, Inc., No. 04-3262, 2006 U.S. DIST. LEXIS 5053, (E.D. La. Feb. 9, 2006). The court denied the plaintiff's motion to reconsider a prior ruling that the plaintiff was not the owner of the domain name in dispute, finding that the evidence showing that the plaintiff had paid the renewal fee would not have affected its prior ruling. Commenting on the relationship between actual ownership of a domain name and registration of a domain name in the Internet Registry, the court noted that provisions in both the ICANN Registrar Accreditation Agree-ment and the Network Solutions Inc. Domain Name Registration Agreement contemplate that ownership of a domain name may change independent of any transactions involving the domain-name registration system.

An attorney may outsource the storage of electronic client files to an outside service provider, if the attorney 'reasonably safeguards' client information from inadvertent or unauthorized disclosure. State Bar of Nevada Standing Committee on Ethics and Professional Responsibility, Formal Opinion No. 33 (Feb. 9, 2006). The Committee commented that an attorney's responsibility is to act 'competently and reasonably' to protect electronic client information and communications from disclosure, subject to the same standards applicable to storing confidential paper files in a third-party warehouse. The Committee concluded that outsourced electronic storage is permissible provided that the attorney: 1) 'exercises reasonable care' in selecting a service provider that 'can be reasonably relied upon to keep the information confidential'; 2) 'has a reasonable expectation that the information will be kept confidential'; and 3) 'instructs and requires' the service provider to keep client information 'confidential and inaccessible.'

The opinion is available at www.nvbar.org/Ethics/Op%2033%20Electronic%20Data%20storage.pdf.

The fact that an e-mail address contains a corporation's name does not establish the authority of the e-mail sender to act on behalf of the corporation. CSX Transportation, Inc. v. Recovery Express, Inc. No. 04-12293-WGY, 2006 U.S. Dist. LEXIS 3770 (D. Mass. Feb. 1, 2006). In granting the corporation's motion for summary judgment dismissing the plaintiff's complaint for breach of contract, the court ruled that the plaintiff had been unreasonable as a matter of law in relying solely on an e-mail domain name in concluding that the sender was acting on the authority of the corporation. The court compared the e-mail domain name to 'low-tech' indicia of authority such as business cards containing a company name and logo or company stationery, noting that no cases were found in which these indicia, by themselves, were held sufficient to sustain a claim of apparent authority. The court commented that if the granting of an e-mail domain name were found to 'cloak the recipient with carte blanche authority to act,' then 'every subordinate employee with a company e-mail address ' down to the night watchman ' could bind a company to the same contracts as the president.'

Card payment-processing services company CardSystems Solutions Inc., has settled Federal Trade Commission (FTC) charges stemming from a breach in the security of its computer systems that resulted in millions of dollars of unauthorized charges to consumer credit and debit cards. In re CardSystems Solutions, Inc., File No. 052 3148 (FTC Feb. 23, 2006). According to the FTC, CardSystems provided merchants with products and services used in obtaining approval for credit and debit-card purchases from card-issuing banks, and in doing so saved on its computer network personal information such as card number and expiration date on tens of millions of consumers. The FTC charged that the company's failure to adequately secure this sensitive customer data from unauthorized access constituted an unfair consumer practice. CardSystems and the company that recently acquired it agreed to implement a comprehensive information-security program and obtain audits by an independent third-party security professional every other year for 20 years. The FTC press release is available at http://ftc.gov/opa/2006/02/cardsystems_r.htm.

In a trademark-infringement action, a jury finding of likelihood of confusion is supported by a showing that the operator of a Web site created initial interest confusion by using the plaintiff's trademarks as metatags. Australian Gold, Inc. v. Hatfield, No. 03-6218, 2006 U.S. App. LEXIS 2909 (10th Cir. Feb. 7, 2006). The circuit court affirmed the lower court's ruling rejecting the defendants' argument that they were entitled to judgment as a matter of law because no direct
evidence of actual confusion was presented. The court found that the defendant had created initial interest confusion by using the plaintiff's trademarks as metatags, using the plaintiff's trademarks on its Web site and purchasing the plaintiff's trademarks as search terms to attain a more favorable ranking in search-engine results. The court concluded that the jury's factual finding of likelihood of confusion was further supported by the degree of similarity between the metatags and the plaintiff's marks, the strength of the marks, the similarity of the products and the degree of customer care likely to be exercised.

The exercise of specific jurisdiction over an out-of-state enterprise, based on the transmission into Utah of a single unsolicited commercial e-mail, violates due process where no 'substantial connection' to the forum state has been shown. Fenn v. Mleads Enterprises, Inc., No. 20041072, 2006 Utah LEXIS 8 (Utah Feb. 10, 2006). The court ruled that the plaintiff failed to show that 'the nature and quality of the e-mail supports the exercise of personal jurisdiction in Utah,' or that the enterprise on whose behalf a marketing company had sent the e-mail either 'purposefully availed itself of the benefits of conducting business in Utah,' or 'knew its email may injure persons in Utah.' The court noted that the uncontradicted evidence indicated that the marketing company that sent the e-mail on behalf of the enterprise possessed the plaintiff's e-mail address but had no information concerning the plaintiff's geographic location. Also, there was no evidence of direct communication between the enterprise and the plaintiff, nor any evidence of injury to the plaintiff.

Uncontradicted evidence showing that a user could not install downloaded software without clicking 'Yes' upon the presentation of clickwrap license terms supports the entry of summary judgment on the licensor's claim that the defendant, who admitted to using the software, assented to the terms of the license. Recursion Software, Inc. v. Interactive Intelligence, Inc., No. 3:03-cv-271, 2006 U.S. Dist. LEXIS 7314 (N.D. Tex. Feb. 27, 2006). The court noted that clickwrap licenses are valid and enforceable under applicable Texas law. The court declined, however, to grant summary judgment on the licensor's claims that the defendant breached the license, because there were issues of material fact precluding summary judgment on the defendant's defenses of laches, estoppel and waiver.

A plaintiff company that chooses a corporate name that is identical to the defendant's existing .com domain name, and then registers and uses an identical .net domain name in its e-mail addresses and on its Web site, is responsible for at least some of the consumer confusion that results. Digital Telemedia Inc. v. C. I. Host, Inc., 2006 U.S. Dist. LEXIS 5475 (S.D.N.Y. Feb. 8, 2006). In denying the plaintiff company's motion for summary judgment on the issue of infringement, the court noted that the plaintiff chose to rename itself 'logicworks,' and registered and used the logicworks.net domain name, with full knowledge of the fact that the defendant's logicworks.com domain name was already registered to an entity known as 'Logicworks Corporation.' The court commented that the plaintiff company 'had to know' that the 'first instinct' of many customers and potential customers would be to use the .com extension rather than the .net extension when sending e-mail or accessing the plaintiff company Web site.

 District Court Construes Terms
In e-Commerce Patent Dispute