e-Commerce Docket Sheet

Where the defendants in a trademark-infringement and cybersquatting action fail to answer or provide discovery concerning their gross receipts, for their expenses or for their profits derived from sales of infringing items, the court may rely on information obtained through third-party discovery in calculating a damages award. Silpada Designs, Inc. v. O'Malley, No. 04-2302, 2006 U.S. Dist. LEXIS 76301 (D. Kan. Oct. 19, 2006). The court relied on information from the eBay auction site and the PayPal online payment service when calculating the defendants' gross receipts from selling infringing items and, in the absence of any information regarding deductible expenses provided by the defendants, awarded one-half of the gross receipts figure to the plaintiff as defendants' profits. The court also awarded statutory damages of $10,000 for violation of the Anticybersquatting Consumer Protection Act, which is levied for the defendants' willful and deliberate use of an infringing domain name in advertising their infringing products.

An arbitration provision contained in a consumer agreement for cable- and Internet-access services that is presented on a scrollable computer screen at the time that service is supplied by installation is enforceable under New York law. Bar-Ayal v. Time Warner Cable, Inc., No. 03 CV 9905, 2006 U.S. Dist. LEXIS 75972 (S.D.N.Y. Oct. 16, 2006). The court rejected the consumer's argument that the agreement was unenforceable because the consumer would have had to scroll through more than 30 screens to read the entire agreement and, in particular, to reach the arbitration clause. The court noted that the agreement could be printed out on nine pages and read separately, commenting that: 'it is not significantly more arduous to scroll down to read an agreement on a computer screen than to turn the pages of a printed document.' The court also rejected the argument that the presentation of the terms was problematic because it was possible to click the 'accept' button without scrolling to the bottom of the agreement, noting that under New York law, an individual 'who signs or otherwise assents to a contract without reading it is bound by that contract, including its arbitration provision.'

A product manufacturer located outside the U.S. is subject to the jurisdiction of a federal court in Texas in patent-infringement litigation, according to a decision addressing a situation in which one of the manufacturer's distributors maintained an interactive Web site that allowed Texas consumers to purchase the allegedly infringing product. Litepanels, LLC v. Gekko Technology, Ltd, No. 2:06-CV-167, 2006 U.S. Dist. LEXIS 75017 (E.D. Tex. Oct. 16, 2006). The court noted that the Texas long-arm statute permits the exercise of jurisdiction over a defendant that commits a tort in Texas, and that the injury from the tort of patent infringement occurs in the state in which an infringing article is sold. The court concluded that the manufacturer had sufficient minimum contacts with Texas because the manufacturer 'put its product into the stream of commerce with the intent that it would be available to people in the United States and Texas.'

Allegations that posts by anonymous bloggers breached confidentiality and trademark-licensing agreements supports a corporation's motion for discovery directed at determining the bloggers' identities. Best Western International, Inc. v. Doe, No. CV006-1537, 2006 U.S. Dist. LEXIS 77942 (D. Ariz. Oct. 24, 2006). The court ruled that the corporation's allegations that the anonymous postings defamed the corporation, revealed confidential information, violated fudiciary duties and infringed the plaintiff's trademarks satisfied the 'prima facie claim' standard that applies to discovery. The court commented that the First Amendment 'does not absolutely protect Defendants' identities from disclosure,' and that the anonymous posters 'may not use the First Amendment to improperly encroach upon the valid contractual rights of the Plaintiff.'

Where a software developer seeking a preliminary injunction has shown a substantial likelihood of direct infringement of its product by the developer of a competing product, the court need not perform a side-by-side comparison of the products in order to find a likelihood of success on the merits of the developer's infringement claim. QSRSoft, Inc. v. Restaurant Technology, Inc., No. 06-C-7234, 2006 U.S. Dist. LEXIS 76120 (N.D. Ill. Oct. 19, 2006). The court granted the developer's motion for a preliminary injunction against the distribution of the competing product, noting that the developer had produced evidence showing that a potential customer had given employees of the developer's competitor access to a system provided to the potential customer on a trial basis, in violation of the terms of the evaluation license. The developer further showed that the competitor's employees had viewed, downloaded, saved, printed and copied each page of the Web site on the software system, and had also downloaded essential parts of the software product.

A Web site that was made available to real-estate brokers on a subscription basis, and allowed brokers to store confidential listings and customer records and to communicate with other subscribers by e-mail, may be an 'electronic bulletin board' within the meaning of the Electronic Communications Privacy Act (ECPA). Kaufman v. Nest Seekers, LLC, No. 05 CV 6782, 2006 U.S. Dist. LEXIS 71104 (S.D. N.Y. Sept. 26, 2006). The court denied the defendant's motion to dismiss the plaintiff's complaint for failure to state a claim, ruling that the plaintiff had sufficiently alleged that the Web site was an 'electronic bulletin board' that fits within the definition of an 'electronic communication service provider' under the ECPA. The court also ruled that the plaintiff had sufficiently alleged that subscriber e-mails were stored for accessing and viewing to meet 'electronic storage' definitions consistent with the meaning of the ECPA. The court also refused to dismiss the plaintiff's claim under the Computer Fraud and Abuse Act, ruling that the plaintiff's allegation that the cost of investigating the defendant's unauthorized access to the Web site exceeded $125,000 satisfied the $5000 minimum loss requirement under the Act.

Trademark Damages for Online Sales
Assessible Via PayPal, eBay Records

Where the defendants in a trademark-infringement and cybersquatting action fail to answer or provide discovery concerning their gross receipts, for their expenses or for their profits derived from sales of infringing items, the court may rely on information obtained through third-party discovery in calculating a damages award. Silpada Designs, Inc. v. O'Malley, No. 04-2302, 2006 U.S. Dist. LEXIS 76301 (D. Kan. Oct. 19, 2006). The court relied on information from the eBay auction site and the PayPal online payment service when calculating the defendants' gross receipts from selling infringing items and, in the absence of any information regarding deductible expenses provided by the defendants, awarded one-half of the gross receipts figure to the plaintiff as defendants' profits. The court also awarded statutory damages of $10,000 for violation of the Anticybersquatting Consumer Protection Act, which is levied for the defendants' willful and deliberate use of an infringing domain name in advertising their infringing products.

An arbitration provision contained in a consumer agreement for cable- and Internet-access services that is presented on a scrollable computer screen at the time that service is supplied by installation is enforceable under New York law. Bar-Ayal v. Time Warner Cable, Inc. , No. 03 CV 9905, 2006 U.S. Dist. LEXIS 75972 (S.D.N.Y. Oct. 16, 2006). The court rejected the consumer's argument that the agreement was unenforceable because the consumer would have had to scroll through more than 30 screens to read the entire agreement and, in particular, to reach the arbitration clause. The court noted that the agreement could be printed out on nine pages and read separately, commenting that: 'it is not significantly more arduous to scroll down to read an agreement on a computer screen than to turn the pages of a printed document.' The court also rejected the argument that the presentation of the terms was problematic because it was possible to click the 'accept' button without scrolling to the bottom of the agreement, noting that under New York law, an individual 'who signs or otherwise assents to a contract without reading it is bound by that contract, including its arbitration provision.'

A product manufacturer located outside the U.S. is subject to the jurisdiction of a federal court in Texas in patent-infringement litigation, according to a decision addressing a situation in which one of the manufacturer's distributors maintained an interactive Web site that allowed Texas consumers to purchase the allegedly infringing product. Litepanels, LLC v. Gekko Technology, Ltd, No. 2:06-CV-167, 2006 U.S. Dist. LEXIS 75017 (E.D. Tex. Oct. 16, 2006). The court noted that the Texas long-arm statute permits the exercise of jurisdiction over a defendant that commits a tort in Texas, and that the injury from the tort of patent infringement occurs in the state in which an infringing article is sold. The court concluded that the manufacturer had sufficient minimum contacts with Texas because the manufacturer 'put its product into the stream of commerce with the intent that it would be available to people in the United States and Texas.'

Allegations that posts by anonymous bloggers breached confidentiality and trademark-licensing agreements supports a corporation's motion for discovery directed at determining the bloggers' identities. Best Western International, Inc. v. Doe, No. CV006-1537, 2006 U.S. Dist. LEXIS 77942 (D. Ariz. Oct. 24, 2006). The court ruled that the corporation's allegations that the anonymous postings defamed the corporation, revealed confidential information, violated fudiciary duties and infringed the plaintiff's trademarks satisfied the 'prima facie claim' standard that applies to discovery. The court commented that the First Amendment 'does not absolutely protect Defendants' identities from disclosure,' and that the anonymous posters 'may not use the First Amendment to improperly encroach upon the valid contractual rights of the Plaintiff.'

Where a software developer seeking a preliminary injunction has shown a substantial likelihood of direct infringement of its product by the developer of a competing product, the court need not perform a side-by-side comparison of the products in order to find a likelihood of success on the merits of the developer's infringement claim. QSRSoft, Inc. v. Restaurant Technology, Inc., No. 06-C-7234, 2006 U.S. Dist. LEXIS 76120 (N.D. Ill. Oct. 19, 2006). The court granted the developer's motion for a preliminary injunction against the distribution of the competing product, noting that the developer had produced evidence showing that a potential customer had given employees of the developer's competitor access to a system provided to the potential customer on a trial basis, in violation of the terms of the evaluation license. The developer further showed that the competitor's employees had viewed, downloaded, saved, printed and copied each page of the Web site on the software system, and had also downloaded essential parts of the software product.

A Web site that was made available to real-estate brokers on a subscription basis, and allowed brokers to store confidential listings and customer records and to communicate with other subscribers by e-mail, may be an 'electronic bulletin board' within the meaning of the Electronic Communications Privacy Act (ECPA). Kaufman v. Nest Seekers, LLC, No. 05 CV 6782, 2006 U.S. Dist. LEXIS 71104 (S.D. N.Y. Sept. 26, 2006). The court denied the defendant's motion to dismiss the plaintiff's complaint for failure to state a claim, ruling that the plaintiff had sufficiently alleged that the Web site was an 'electronic bulletin board' that fits within the definition of an 'electronic communication service provider' under the ECPA. The court also ruled that the plaintiff had sufficiently alleged that subscriber e-mails were stored for accessing and viewing to meet 'electronic storage' definitions consistent with the meaning of the ECPA. The court also refused to dismiss the plaintiff's claim under the Computer Fraud and Abuse Act, ruling that the plaintiff's allegation that the cost of investigating the defendant's unauthorized access to the Web site exceeded $125,000 satisfied the $5000 minimum loss requirement under the Act.