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e-Commerce Docket Sheet
Sale of Trademark Terms By Search Engine
Actionable Under Lanham Act
A search engine's sale of trademark terms as search terms to competitors of the trademark owner, and the ranking of paid search results based on the bid price, constitutes a 'use in commerce' within the meaning of the Lanham Act. 800-JR Cigar, Inc. v. GoTo.com, 2006 U.S. Dist. LEXIS 48279 (D. N.J. July 17, 2006). The court concluded that trademark use was also established by the search engine's return of paid search results before unpaid search results, and by the operation of the search engine's 'suggestion tool,' that identified the plaintiff's trademark terms to its competitors as effective search terms. The court declined, however, to grant summary judgment in favor of the plaintiff on its trademark claims, because of material issues of fact concerning the search engine's intent in using the trademark terms, and the likelihood of consumer confusion resulting from the search engine's use.
Release of Product Information Negates
Basis For Trade Secret Injunction
A company seeking a preliminary injunction to prevent a competitor's alleged misappropriation of trade-secret protected information on a new product cannot meet the irreparable harm standard where the company itself posted specifications for the new product on its own Web site. Roman Chariot, LLC v. JMRL Sales & Services, Inc., No. 06-626, 2006 U.S. Dist. LEXIS 46620 (D. N.J. July 11, 2006). The court found that not only were the product specifications posted on the Web site, but it was undisputed that the alleged secrets and ideas embodied in the company's unique kind of sightseeing bus had already been disclosed to the public through the use of the new buses on the public highways. The court noted that the information on the company Web site included a detailed description of the dimensions, features and materials, and passenger and driver areas of the buses.
Consumer Seeking Less Costly ISP Cannot
Represent Class Seeking Faster Service
A consumer who stated in his deposition that he signed up with the defendant Internet service provider (ISP) to save money cannot represent a proposed class of consumers who had allegedly been deceived regarding the connection speed of the service. Newman v. RCN Telecom Services, Inc., No. 05 Civ. 4816, 2006 U.S. Dist. LEXIS 52314 (S.D. N.Y. July 27, 2006). The court concluded that the consumer failed to meet the requirement set forth in Fed. R. Civ. P. 23(a), which proposed that a class representative have a claim typical of the proposed class of plaintiffs. The court denied class certification because the consumer could not fairly and adequately represent a proposed class of plaintiffs who allegedly were harmed because they were induced to subscribe to the defendant's Internet service based on allegedly false and misleading representations as to the speed of the service.
Online Travel Site May Be Liable for Municipal Hotel Tax
An online travel site may be liable for payment of a hotel tax imposed by a municipal ordinance. City of Fairview Heights v. Orbitz, Inc., No. 05-CV-840, 2006 U.S. Dist. LEXIS 47085 (S.D. Ill. July 12, 2006). The court concluded that the municipality's complaint sufficiently alleged that the travel site was an 'owner' liable for the tax because the ordinance included in the definition of an owner 'any person ' receiving consideration for the rental of such hotel or motel room.' The court also rejected the online travel site's argument that it was not liable for tax on the difference between what it received from consumers who booked rooms through the travel site, and the actual, discounted rate that the travel site paid to the hotels and motels that provided the rooms. The court noted that the ordinance imposes a tax on the 'rent charged' to the person occupying the room, and that there was no basis for concluding that the drafters of the ordinance intended for the tax to be paid only on the 'net cost' of the room paid by the travel site to the hotels and motels rather than the actual cost paid by the occupant to the travel site.
Internet Retailer's Display Of Plaintiff's Image on
Book Cover No Violation of FL's Right of Publicity
An Internet retailer's online display of a book cover does not infringe the rights of the person depicted in the photo under the Florida right-of-publicity statute. Almeida v. Amazon.com, Inc., Nos. 04-15341 & 04-15561, 2006 U.S. App. LEXIS 17989 (11th Cir. July 18, 2006). The court ruled that the retailer did not use the image for 'trade, commercial or advertising purposes' within the meaning of the Florida law. The court noted that the commercial purpose requirement has been interpreted to require an unauthorized use that 'directly promotes' a product or service, and that the use of an image in a publication offered for sale is not such a use. The court commented that the use of book-cover images on the defendant's Internet retail site 'closely simulates a customer's experience browsing book covers in a traditional book store,' and that the use of the book-cover images is 'merely incidental to, and customary for, the business of internet book sales.'
Sale of Motion Pictures Altered to Remove
Offensive Content Infringes Copyright
The sale of motion pictures that have been altered to remove scenes depicting sex, nudity, profanity and gory violence that the sellers or some buyers might find offensive violates the copyright owners' right of reproduction and right to distribute copies. Clean Flicks of Colorado, LLC v. Soderbergh, No. 02cv01662, 2006 U.S. Dist. LEXIS 47700 (D. Colo. July 6, 2006). The court rejected the fair-use defense asserted by the commercial entities, including their public-policy argument that their activities had social value because they provided consumers with the 'opportunity to view movies in the setting of the family home without concern for any harmful effects on their children.' The court noted that Congress enacted the Family Movie Act of 2005, Pub.L.No. 1099,119 Stat. 218, which amended '110 of the Copyright Act, to provide an exemption for the editing of motion pictures by a member of a private household if no fixed copy of the altered version of the motion picture is created, but declined to enact a broad exemption for the kind of for-profit activity in which the commercial entities engaged.
Manufacturer's Alleged Policy Aimed At Limiting Net Sales
Is Actionable Under Antitrust Statutes
Allegations that a product manufacturer's minimum advertised price policy presented 'a significant obstacle' to the distribution of those products at lower prices by Internet retailers states a claim under federal and New York antitrust statutes. Worldhomecenter.com, Inc. v. Thermasol, Ltd, No. 05 Civ. 3298, 2006 U.S. Dist. LEXIS 46323 (E.D. N.Y. July 10, 2006). The court ruled that the bare allegation that the manufacturer imposed the price policy in response to complaints received from its non-Internet retailers, who felt that Internet-based retailers were ruining their market, sufficiently alleged an agreement to restrain trade even without a showing of factual specifics regarding the complaints or the alleged agreement. The court dismissed the plaintiff's claims under the New York Deceptive Trade Practices Act, but on the grounds that the manufacturer's alleged anti-competitive conduct 'was not premised on consumer deception.'
Lawsuit Over Drop In Search Engine Ranking Dismissed
A multi-count lawsuit brought against Google over a decline in the plaintiff advertiser's search-engine ranking and AdSense revenue has been dismissed, but with leave to amend most claims. Kinderstart.com, LLC v. Google, Inc., No. 2006 U.S. Dist. LEXIS 45700 (N.D. Cal. July 13, 2006). The advertiser alleged that its Web site was highly ranked by the defendant search engine's PageRank system and derived significant income from participation in its AdSense advertising program. It also alleged that the revenue suffered a precipitous drop when the search engine 'blocked' the Web site from its search results and reduced its PageRank to zero for unknown reasons. The court dismissed the advertiser's First Amendment, antitrust and California law, constitutional, fraud and tort claims, and rejected the argument that the search engine is a common carrier subject to the constraints of the Federal Communications Act. In particular, the court concluded that assessing whether a search ranking is an actionable factual statement or a protected statement of opinion would require consideration of matters outside the pleadings. The court nevertheless dismissed the plaintiff's defamation claim with leave to amend, ruling that plaintiff's generalized allegations of harm resulting from the change in its page ranking were insufficient to make a claim.
Agreement to Deliver Source Code
Does Not Require Commented Version
A software-development agreement that required the company producing the software to deliver the 'unencrypted source code' to another party does not require the delivery of the source code version that includes the programmer's comments. Automated Solutions Corp. v. Paragon Data Systems, Inc., No. 86067, 2006 Ohio App. LEXIS 3446 (Ohio Ct. App. July 6, 2006). The court noted that a programmer's comments 'are placed along side the code like an in-line, real-time, context-sensitive phrase translation book,' but do not affect the usability of the source code itself, nor do they have any effect on the compiled output, ie, the executable program produced from the source code. The court also rejected the argument that the removal of the programmer's comments rendered the source code 'encrypted,' commenting that even though the absence of the comments might make the code more difficult to understand, it would not affect the ability to use the software.
Purposeful Availment Not Shown in Trademark Action
Against Passive UK Web Site
In an action for alleged trademark infringement in the use of a domain name, purposeful availment sufficient to satisfy the requirements of due process is not shown where the sole basis for asserting long-arm jurisdiction over a UK resort is a non-interactive, passive Web site. Pebble Beach Co. v. Caddy, No. 04-15577, 2006 U.S. App. LEXIS 17381 (9th Cir. July 12, 2006). The court held that specific jurisdiction could not be predicated merely on the foreseeable effects that the use of the plaintiff's trademark term might have in California or the United States, and that 'something more,' ie, express aiming, must be shown. The appeals court upheld the lower-court ruling that the plaintiff trademark owner had failed to identify any conduct by the UK resort owner that either took place in or was purposefully directed at California or the United States. The court specifically rejected the plaintiff's arguments that the requisite 'express aiming' could be shown either by the selection of a '.com' domain name, the use of a famous U.S. trademark in the domain name, or the fact that the resort, and the area in which it was located, catered to foreign guests, particularly Americans.
Posting Job Opening On Net Job Site
Does Not Violate Anti-Solicitation Clause
The posting of a job description on an Internet job-posting site does not violate agreements prohibiting the defendant from 'soliciting' or 'taking away' the plaintiff's employees for a period of 3 years following the termination of their agreements. Slicex, Inc. v. Aeroflex Colorado Springs, Inc., No. 2:04-CV-615, 2006 U.S. Dist. LEXIS 51000 (D. Utah July 25, 2006). The court noted that the terms solicit and take away were not defined in the agreement. The court relied on the definition in Black's Law Dictionary to conclude that the term 'solicit' suggested a 'personal petition … addressed to a particular individual to do some particular thing.' Similarly, the court concluded that the term take away requires some 'specific, directed action' focused on one of the plaintiff's employees rather than to the public generally.
'In-Box' Arbitration Clause Claim Enforceable in TX
An arbitration clause in an agreement included with the mail-order purchase of a computer, which prohibits class-wide arbitration of product-defect disputes, is neither procedurally nor substantively unconscionable under Texas law. Sherr v. Dell, Inc., 05 CV 10097, 2006 U.S. Dist. LEXIS 51864 (S.D. N.Y. July 27, 2006). The court ruled that under the Federal Arbitration Act (FAA) and Texas law, the consumer seeking to avoid the arbitration clause had the burden of proving that the agreement was unconscionable. The court concluded that the agreement was not procedurally unconscionable because the consumer could have chosen to buy the computer from another supplier. The court also rejected the argument that the ban on class-wide arbitration was substantively unconscionable, commenting that there is no entitlement to proceed as a class under Texas law or the FAA.
Docket Sheet and Developments of Note are written by Julian S. Millstein, Edward A. Pisacreta and Jeffrey D. Neuburger, partners in the New York office of Brown Raysman Millstein Felder & Steiner LLP (www.brownraysman.com).
Sale of Trademark Terms By Search Engine
Actionable Under Lanham Act
A search engine's sale of trademark terms as search terms to competitors of the trademark owner, and the ranking of paid search results based on the bid price, constitutes a 'use in commerce' within the meaning of the Lanham Act. 800-JR Cigar, Inc. v. GoTo.com, 2006 U.S. Dist. LEXIS 48279 (D. N.J. July 17, 2006). The court concluded that trademark use was also established by the search engine's return of paid search results before unpaid search results, and by the operation of the search engine's 'suggestion tool,' that identified the plaintiff's trademark terms to its competitors as effective search terms. The court declined, however, to grant summary judgment in favor of the plaintiff on its trademark claims, because of material issues of fact concerning the search engine's intent in using the trademark terms, and the likelihood of consumer confusion resulting from the search engine's use.
Release of Product Information Negates
Basis For Trade Secret Injunction
A company seeking a preliminary injunction to prevent a competitor's alleged misappropriation of trade-secret protected information on a new product cannot meet the irreparable harm standard where the company itself posted specifications for the new product on its own Web site. Roman Chariot, LLC v. JMRL Sales & Services, Inc., No. 06-626, 2006 U.S. Dist. LEXIS 46620 (D. N.J. July 11, 2006). The court found that not only were the product specifications posted on the Web site, but it was undisputed that the alleged secrets and ideas embodied in the company's unique kind of sightseeing bus had already been disclosed to the public through the use of the new buses on the public highways. The court noted that the information on the company Web site included a detailed description of the dimensions, features and materials, and passenger and driver areas of the buses.
Consumer Seeking Less Costly ISP Cannot
Represent Class Seeking Faster Service
A consumer who stated in his deposition that he signed up with the defendant Internet service provider (ISP) to save money cannot represent a proposed class of consumers who had allegedly been deceived regarding the connection speed of the service. Newman v. RCN Telecom Services, Inc., No. 05 Civ. 4816, 2006 U.S. Dist. LEXIS 52314 (S.D. N.Y. July 27, 2006). The court concluded that the consumer failed to meet the requirement set forth in
Online Travel Site May Be Liable for Municipal Hotel Tax
An online travel site may be liable for payment of a hotel tax imposed by a municipal ordinance. City of Fairview Heights v. Orbitz, Inc., No. 05-CV-840, 2006 U.S. Dist. LEXIS 47085 (S.D. Ill. July 12, 2006). The court concluded that the municipality's complaint sufficiently alleged that the travel site was an 'owner' liable for the tax because the ordinance included in the definition of an owner 'any person ' receiving consideration for the rental of such hotel or motel room.' The court also rejected the online travel site's argument that it was not liable for tax on the difference between what it received from consumers who booked rooms through the travel site, and the actual, discounted rate that the travel site paid to the hotels and motels that provided the rooms. The court noted that the ordinance imposes a tax on the 'rent charged' to the person occupying the room, and that there was no basis for concluding that the drafters of the ordinance intended for the tax to be paid only on the 'net cost' of the room paid by the travel site to the hotels and motels rather than the actual cost paid by the occupant to the travel site.
Internet Retailer's Display Of Plaintiff's Image on
Book Cover No Violation of FL's Right of Publicity
An Internet retailer's online display of a book cover does not infringe the rights of the person depicted in the photo under the Florida right-of-publicity statute. Almeida v.
Sale of Motion Pictures Altered to Remove
Offensive Content Infringes Copyright
The sale of motion pictures that have been altered to remove scenes depicting sex, nudity, profanity and gory violence that the sellers or some buyers might find offensive violates the copyright owners' right of reproduction and right to distribute copies. Clean Flicks of Colorado, LLC v. Soderbergh, No. 02cv01662, 2006 U.S. Dist. LEXIS 47700 (D. Colo. July 6, 2006). The court rejected the fair-use defense asserted by the commercial entities, including their public-policy argument that their activities had social value because they provided consumers with the 'opportunity to view movies in the setting of the family home without concern for any harmful effects on their children.' The court noted that Congress enacted the Family Movie Act of 2005, Pub.L.No. 1099,119 Stat. 218, which amended '110 of the Copyright Act, to provide an exemption for the editing of motion pictures by a member of a private household if no fixed copy of the altered version of the motion picture is created, but declined to enact a broad exemption for the kind of for-profit activity in which the commercial entities engaged.
Manufacturer's Alleged Policy Aimed At Limiting Net Sales
Is Actionable Under Antitrust Statutes
Allegations that a product manufacturer's minimum advertised price policy presented 'a significant obstacle' to the distribution of those products at lower prices by Internet retailers states a claim under federal and
Lawsuit Over Drop In Search Engine Ranking Dismissed
A multi-count lawsuit brought against
Agreement to Deliver Source Code
Does Not Require Commented Version
A software-development agreement that required the company producing the software to deliver the 'unencrypted source code' to another party does not require the delivery of the source code version that includes the programmer's comments. Automated Solutions Corp. v. Paragon Data Systems, Inc., No. 86067, 2006 Ohio App. LEXIS 3446 (Ohio Ct. App. July 6, 2006). The court noted that a programmer's comments 'are placed along side the code like an in-line, real-time, context-sensitive phrase translation book,' but do not affect the usability of the source code itself, nor do they have any effect on the compiled output, ie, the executable program produced from the source code. The court also rejected the argument that the removal of the programmer's comments rendered the source code 'encrypted,' commenting that even though the absence of the comments might make the code more difficult to understand, it would not affect the ability to use the software.
Purposeful Availment Not Shown in Trademark Action
Against Passive UK Web Site
In an action for alleged trademark infringement in the use of a domain name, purposeful availment sufficient to satisfy the requirements of due process is not shown where the sole basis for asserting long-arm jurisdiction over a UK resort is a non-interactive, passive Web site. Pebble Beach Co. v. Caddy, No. 04-15577, 2006 U.S. App. LEXIS 17381 (9th Cir. July 12, 2006). The court held that specific jurisdiction could not be predicated merely on the foreseeable effects that the use of the plaintiff's trademark term might have in California or the United States, and that 'something more,' ie, express aiming, must be shown. The appeals court upheld the lower-court ruling that the plaintiff trademark owner had failed to identify any conduct by the UK resort owner that either took place in or was purposefully directed at California or the United States. The court specifically rejected the plaintiff's arguments that the requisite 'express aiming' could be shown either by the selection of a '.com' domain name, the use of a famous U.S. trademark in the domain name, or the fact that the resort, and the area in which it was located, catered to foreign guests, particularly Americans.
Posting Job Opening On Net Job Site
Does Not Violate Anti-Solicitation Clause
The posting of a job description on an Internet job-posting site does not violate agreements prohibiting the defendant from 'soliciting' or 'taking away' the plaintiff's employees for a period of 3 years following the termination of their agreements. Slicex, Inc. v. Aeroflex Colorado Springs, Inc., No. 2:04-CV-615, 2006 U.S. Dist. LEXIS 51000 (D. Utah July 25, 2006). The court noted that the terms solicit and take away were not defined in the agreement. The court relied on the definition in Black's Law Dictionary to conclude that the term 'solicit' suggested a 'personal petition … addressed to a particular individual to do some particular thing.' Similarly, the court concluded that the term take away requires some 'specific, directed action' focused on one of the plaintiff's employees rather than to the public generally.
'In-Box' Arbitration Clause Claim Enforceable in TX
An arbitration clause in an agreement included with the mail-order purchase of a computer, which prohibits class-wide arbitration of product-defect disputes, is neither procedurally nor substantively unconscionable under Texas law. Sherr v.
Docket Sheet and Developments of Note are written by Julian S. Millstein, Edward A. Pisacreta and Jeffrey D. Neuburger, partners in the
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Anti-Assignment Override Provisions
UCC Sections 9406(d) and 9408(a) are one of the most powerful, yet least understood, sections of the Uniform Commercial Code. On their face, they appear to override anti-assignment provisions in agreements that would limit the grant of a security interest. But do these sections really work?