by ·0 Comments

Single words and subject lines in electronic messages are “content” protected by the Stored Communications Act—Optiver Australia Pty, Ltd. v. Tibra Trading Pty. Ltd. & Ors., 2013 WL 256771 (N.D. Cal. Jan. 23, 2013)

Optiver sued its former employees in Australia for allegedly stealing its proprietary source code and using the code to start a competing company, Tibra.  The Australian court allowed Tibra to conduct discovery of emails from Google after finding Tibra’s discovery responses inadequate.  Optiver subpoenaed Google to produce documents relating to emails and Google Talk messages containing the terms “PGP” or “Optiver.”  Tibra moved to quash the subpoena, arguing that the Optiver was improperly requesting the content of communications in violation of the Stored Communications Act (SCA).

Optiver countered with three arguments.  First, “PGP” is the name of an encryption system, not content.  Second, Optiver said that it wanted the documents not to discover the substance of the communications, but to locate communications that might be relevant to the foreign litigation.  Third, if the email has been encrypted through PGP, Optiver cannot access the content without the proper encryption key and pass phrase, which it did not have.  The court was unpersuaded.  Content is content, no matter how insignificant, the court said.  The words “PGP” or “Optiver” in the body of a message qualify as content that the SCA protects.

Optiver also argued that subject lines of email communications and Google Talk messages are not protected by the SCA and should be disclosed.  Wrong again, the court said.  The subject line is “nothing less than a pithy summary of the message’s content.”  For support, the court pointed to the legislative history of the SCA.

by ·0 Comments

A personal cell phone is not a “facility” within the meaning of the Stored Communications Act—Navarro v. Verizon Wireless, L.L.C., 2013 WL 275977 (E.D. La. Jan.24, 2013)

A federal court in Louisiana recently ruled that a hacking and “sexting” victim could not sue under the Stored Communications Act (SCA).  The plaintiff (Navarro) visited a cell phone store and accepted the offer from a Verizon sales associate to try a new cell phone model for two weeks.  Navarro later returned the trial phone to the store and had a different Verizon sales associate (Stillwell) transfer data from the trial phone back to her phone.  After leaving the store, she received a message on her phone from an unknown number.  The message contained nude photographs of Navarro that she had taken using her phone’s camera.  When Navarro’s mother confronted the manager of the cell phone store, Stillwell admitted that he copied the photos from Navarro’s phone for his own use and accidentally sent them to Navarro from his phone.

Navarro sued Verizon and the cell phone for violating the SCA, among other theories.  She inadvertently omitted a claim for punitive damages under the SCA, however, and asked the court for permission to add such a claim.  The defendants argued that the claim would be futile because a personal cell phone is not a “facility” under the SCA.  Liability under the SCA requires the unauthorized intentional access of “a facility through which an electronic communication service is provided” to obtain, alter, or prevent “authorized access to a wire or electronic communication while it is in electronic storage in such system.”  18 U.S.C. § 2701(a).

The court agreed with the defendants.  In a Fifth Circuit case, the court concluded that the SCA envisions regulation of network service providers (like Verizon).  A home computer of an end user does not qualify for SCA protection.  Relying on that case, the court ruled that a personal cell phone is not a “facility.”  While a cell phone enables the use of an electronic communication service, it is not itself such a service.  The information stored on a cell phone therefore is not in “electronic storage.”  Navarro suggested that the defendants might have copied her photographs from a “cloud based” storage system run by Verizon, but there was no evidence of that, so the court rejected the theory.  Navarro was denied permission to add a punitive damages claim under the SCA.

by ·0 Comments

Use of Competitor’s Name in Keyword Advertising Ruled Not a Violation of Publicity Rights – Habush v. Cannon, 2013 WL 627251 (Wis. Ct. App. Feb. 21, 2013)

Can your business competitor use your name to promote itself and never mention your name to the public?  Keyword advertising makes that possible.  A competitor can bid on keyword search terms consisting of your company name to make links to its website appear whenever a person searches for your name on the Internet.  A law firm that fell prey to such an advertising strategy decided to sue its competitor for violating its publicity rights, which is a form of invasion of privacy.

Robert Habush and Daniel Rottier are shareholders in Habush Habush & Rottier, a well-known personal injury law firm in Wisconsin.  Another Wisconsin law firm also specializing in personal injury law, Cannon & Dunphy (C&D), bid on the keyword search terms “Habush” and “Rottier” through Google, Yahoo!, and Bing.  As a result, when a person searched for “Habush” or “Rottier” in one of the three search engines, links to C&D’s website would appear at the top of the list of “sponsored” results, i.e., those links produced by keywords that been bid on and paid for by advertisers.  Sponsored results generally appear above the “organic results” generated by the search engine’s algorithm.

Habush and Rottier sued C&D for violating Wisconsin’s invasion of privacy statute.  Under the statute, a person’s privacy could be invaded  by “[t]he use, for advertising purposes or for purposes of trade, of the name . . . of any living person, without having first obtained the written consent of the person . . . .”  The main question was whether C&D engaged in a “use” of Habush and Rottier’s names.

Habush and Rottier argued that any attempt to benefit from the commercial or other value of a person’s name or image is a “use.”  Under this interpretation, C&D “used” the names of Habush and Rottier.  C&D countered that the statute covers only “use” that is visible to the public.  Under that perspective, bidding on names for keyword advertising purposes is not a “use” because the public does not see the use of the names.

The court found both interpretations reasonable, but adopted C&D’s interpretation.  The court held back from ruling that unauthorized use of a name can never be an invasion of privacy unless the use is visible to the public, but it agreed with C&D that bidding on a competitor’s name to get one’s ad placed near links to the competitor’s website in search results is not a violation of the competitor’s publicity rights.

The court analogized competitive keyword advertising to “proximity advertising.”  Examples of proximity advertising include: a new car dealership opens across the street from an established car dealership; a business advertises on billboards next to a competitor’s billboards; a lawyer places a Yellow Pages ad near the phone listing of competing lawyers.  Although a competitor is trying to take advantage of the name of an established business in each of these scenarios, none involves an impermissible “use”, such as when a competitor puts the name of an established business in its ad or on its product.  The court similarly did not see a problem with using a third party—in this case, a search engine—to engage in proximity advertising.

LegalTXTS Notes: This is a pretty novel case because most competitive keyword advertising cases are based on theories of trademark infringement or dilution.  Since Habush and Rottier are personal names, they might not have acquired sufficient second secondary meaning to qualify for trademark protection, so publicity rights was invoked as a creative alternative.

Hawai‘i has its own publicity rights statute, so would the outcome have been different had the lawsuit been filed in Hawai‘i?  Hawai‘i courts have not had the occasion to interpret the statute, but if you buy the reasoning of the court in Habush, the answer is probably not.  The Hawai‘i statute is similar enough to the Wisconsin statute for the logic of Habush to apply.

As a partner in a law firm (and therefore a business owner), I’m not sure how I feel about Habush.  I think the court rightly rejected the interpretation that any attempt to benefit from the commercial value of a person’s qualifies as a violation of publicity rights.  That’s a pretty broad proposition.  But something about the decision makes it hard to swallow.  There’s an element of deception the court doesn’t adequately address.  I wonder if, instead of claiming violation of publicity rights, Habush and Rottier could have sued under an unfair competition theory.

by ·0 Comments

Court Finds That State Law Claims Against Online Forum Operator For Misappropriation, Theft, and Tortious Interference Hinge on “Publisher” or “Speaker” Status–Stevo Design, Inc. v. SBR Marketing Ltd., 2013 WL 308996 (D. Nev. Jan. 25, 2013)

A Nevada federal court held that Communications Decency Act (CDA) immunity barred state tort claims asserted in a lawsuit involving the dissemination of sports betting information.  The court’s holding was based on a liberal interpretation of what it means to be a “publisher” or “speaker” under section 230 of the CDA.

Stevo Design, Inc. (Stevo) sells licenses for access to its sports betting reports.  SBR operates a website with a discussion forum where users may post messages relating to sports betting and handicapping and to send messages to other users.  SBR encourages activity on its website by awarding loyalty points to users for doing different things on the website, including posting original content.  The loyalty points may be redeemed for credits at offshore gambling websites.  Stevo claimed that SBR and its users published Stevo’s protected works on the SBR website without obtaining a license.

In addition to bringing claims for copyright and trademark infringement, Stevo asserted a slew of state-law claims against SBR.  SBR asked the court to dismiss these state-law claims.  The court first determined if SBR qualified for CDA immunity.  The key question was whether SBR had a hand in developing the online content at issue.  If so, then SBR does not enjoy CDA immunity.

Relying on Fair Housing Council of San Fernando Valley v. Roomates.com, 521 F.3d 1157 (9th Cir. 2008), the court concluded that SBR did not “develop” the offending online content.  SBR encouraged its users to post original content.  It did not specifically encourage its users to publish information illegally on the website.  The fact that SBR users could freely contribute loyalty points to each other further evidenced the minimal role that SBR played in monitoring the content of forum posts.  That SBR “sporadically” tried to eliminate infringing content did not persuade the court that SBR was a developer of unlawful content—the CDA allows interactive computer services to perform some editing of user-generated content without becoming liable for all unlawful messages they do not edit or delete.

Having determined that SBR qualified for CDA immunity, the court next considered the impact of immunity on the state-law claims.  CDA immunity effectively precludes the operator of the interactive computer service from being considered the “publisher or speaker” of user-generated content.  As a result, only claims requiring the defendant to be the “publisher or speaker” are barred by CDA immunity.  Applying the meaning of “publisher or speaker” status liberally, the court concluded that CDA immunity barred each of the state-law claims:

Misappropriation of trade secrets: Misappropriation involves either “acquisition” or “disclosure” of a trade secret.  The court easily found that “disclosure” of trade secrets through user posts on the SBR website to require there to have been publishing or “speaking.  The court found “acquisition” to be a closer question, but the only kind of acquisition alleged in the complaint involved user posts on the SBR website, so the CDA barred that kind of misappropriation as well.

Misappropriation of licensable commercial property:  The court is not sure such a claim exists under Florida common law, but assuming it is a form of misappropriation, the plaintiff must have suffered competitive injury due to the defendant’s taking of information.  Stevo alleged that SBR injured it giving away its copyrighted information for free.  The only way SBR could have done that was by disclosing the information, i.e., it acted as a publisher or speaker.

Contributory misappropriation of licensable commercial property:  This claim merely required that SBR induced others to speak or publish.  The court refused to allow circumvention of CDA by alleging that the defendant induced publication or speech instead of itself doing the publishing or speaking.  Since SBR did not tell users what kind of information to include in their posts or encourage infringing content, it enjoyed immunity from this claim.

Civil theft:  Common law theft is defined as obtaining or using the property of another with intent to appropriate the property to his or her unauthorized use.  The only plausible way SBR procured or used Stevo’s property was through publication.  This claim is barred.

Tortious interference with contractual relations:  This claim requires interference with a business relationship.  The only interference that could be inferred from the complaint involved SBR’s publication of Stevo’s works.  As this claim depended on SBR’s status as the publisher, it is barred.