Essentials Of Cyberspace Law Cal Bar Cyberspace Commt

Business Law Essentials Series

Essentials of Cyberspace Law

User Generated Content, Privacy, and Advertising

California Bar Cyberspace Committee

January 27, 2010

A Presentation of the Cyberspace Law CommitteeEssentials of Business Law SeriesJanuary 27, 2010

Where UsedWhere Used

�� WebsitesWebsites

�� SaaSSaaS

�� ServicesServices�� ServicesServices�� SkypeSkype

�� DeliveryDelivery

�� ResearchResearch

�� OtherOther

�� Social NetworkingSocial Networking

Legal IssuesLegal Issues

�� EnforceabilityEnforceability

�� ModificationModification

�� ProvisionsProvisions�� ProvisionsProvisions

EnforceabilityEnforceability

�� Best PracticesBest Practices

�� Notice is KeyNotice is Key

�� Require ConsentRequire Consent�� Require ConsentRequire Consent

�� “I agree” buttons“I agree” buttons

�� Required scrollingRequired scrolling

�� Does Use Indicate Consent?Does Use Indicate Consent?

EnforceabilityEnforceability

�� Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir. Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir. 2002) (lack of notice vitiates consent)2002) (lack of notice vitiates consent)

�� Register.com Inc. v. Verio Inc. 126 F.Supp.2d 238 (S.D.N.Y. 2000), Register.com Inc. v. Verio Inc. 126 F.Supp.2d 238 (S.D.N.Y. 2000), aff’d 356 F.3d 393 (2aff’d 356 F.3d 393 (2ndnd Cir. 2004) (postCir. 2004) (post--download notice on download notice on repeated downloads constitutes notice)repeated downloads constitutes notice)repeated downloads constitutes notice)repeated downloads constitutes notice)

�� Southwest Airlines Co. v. BoardFirst LLC (N.D. Tex 2007) (home Southwest Airlines Co. v. BoardFirst LLC (N.D. Tex 2007) (home page legend provides sufficient notice for binding contract)page legend provides sufficient notice for binding contract)

�� Ticketmaster LLC v. RMG Techs. Inc. Ticketmaster LLC v. RMG Techs. Inc. (C.D. Cal. 2007) (in (C.D. Cal. 2007) (in preliminary injunction matter, terms of use enforceable where court preliminary injunction matter, terms of use enforceable where court believed that defendants would be shown to have been notified of believed that defendants would be shown to have been notified of and assented to terms)and assented to terms)

ModificationModification

Douglas v. U.S. District Court for the Central District of Douglas v. U.S. District Court for the Central District of California 495 F.3d 1062 (9California 495 F.3d 1062 (9thth Cir. 2007) (customer was Cir. 2007) (customer was not bound to revised contract terms because the not bound to revised contract terms because the customer had not received notice of, or assented to, the customer had not received notice of, or assented to, the changes)changes)changes)changes)

Harris v. Blockbuster Inc. 622 F. Supp. 2d 396 (N.D. Tex Harris v. Blockbuster Inc. 622 F. Supp. 2d 396 (N.D. Tex 2009) (unlimited unilateral ability to modify or terminate 2009) (unlimited unilateral ability to modify or terminate renders contract illusory, citing Morrison v. Amway Corp. renders contract illusory, citing Morrison v. Amway Corp. 517 F.3d 248 (5517 F.3d 248 (5thth Cir. 2008) and distinguishing In re Cir. 2008) and distinguishing In re Halliburton 80 S.W.3d 566 (Tex. 2002) Halliburton 80 S.W.3d 566 (Tex. 2002)

ModificationModification

Notice is KeyNotice is Key

Best PracticesBest Practices

�� Establish Modification Right Initially and ClearlyEstablish Modification Right Initially and Clearly

�� Highlight all Material ChangesHighlight all Material Changes

�� Collect and Retain Evidence of AssentCollect and Retain Evidence of Assent

�� Create An Opportunity for RejectionsCreate An Opportunity for Rejections

Use Common SenseUse Common Sense

ProvisionsProvisions

�� Contract LanguageContract Language�� SituationalSituational�� GeneralGeneral

�� Entire Agreement Entire Agreement �� Privacy PoliciesPrivacy Policies�� (A.V. v. iParadigms 544F.Supp.2d 473 (E.D. Va. 2008)(browse wrap terms unenforceable (A.V. v. iParadigms 544F.Supp.2d 473 (E.D. Va. 2008)(browse wrap terms unenforceable �� (A.V. v. iParadigms 544F.Supp.2d 473 (E.D. Va. 2008)(browse wrap terms unenforceable (A.V. v. iParadigms 544F.Supp.2d 473 (E.D. Va. 2008)(browse wrap terms unenforceable

when not incorporated into click through license)when not incorporated into click through license)

�� Modification ProcessModification Process�� Social Networking Specific ProvisionsSocial Networking Specific Provisions

�� Copyright Infringement Notices (DMCA)Copyright Infringement Notices (DMCA)�� Content LimitationsContent Limitations�� Redistribution RightsRedistribution Rights�� IndemnificationIndemnification�� Right to Remove Posting and Terminate AccountRight to Remove Posting and Terminate Account

ALI PrinciplesALI Principles

�� ALI Principles of the Law of Software Contracts, ALI Principles of the Law of Software Contracts, May 19, 2009May 19, 2009

�� Modification requires consents after notice of the Modification requires consents after notice of the modification and termination requires reasonable modification and termination requires reasonable modification and termination requires reasonable modification and termination requires reasonable noticenotice

�� Disclaimable implied IP infringement Disclaimable implied IP infringement indemnification obligation indemnification obligation

�� Nondisclaimable warranty of no hidden material Nondisclaimable warranty of no hidden material defectsdefects

ECPA and the Impact of

Outdated Privacy Law


January 27, 2010

Nicole A. Ozer

Technology and Civil Liberties

Policy Director

ACLU of Northern California

www.aclunc.org/tech

[email protected]

The 4th Amendment clearly

protects your data…

• At home or on a device in your possession

– Judicial search warrant (probable cause)

– Notice at time of search– Notice at time of search

• BUT much weaker if in another’s hands

– Couch (accountant)

– Miller (bank)

– Smith (telephone company)

Congress tried in ECPA (1986)

For the person or business whose records are

involved, the privacy or proprietary interest in that

information should not change. Nevertheless,

because it is subject to control by a third party

computer operator, the information may be

subject to no constitutional privacy protection�.subject to no constitutional privacy protection�.

Thus, the information may be open to possible

wrongful use and public disclosure by law

enforcement authorities as well as unauthorized

private parties.

- Senate Judiciary Committee (1986)

Federal communications

privacy laws

• Wiretap Act or “Title III” (part of ECPA)

– interception = getting content of communications in real

time (in transit)

• Pen register and trap-and-trace statute• Pen register and trap-and-trace statute

– addressing data of communications in real time

• Stored Communications Act (SCA) (also ECPA)

– access to stored communications, records of

communications, subscriber data

Always complex

and getting worse

• “famous (if not infamous) for its lack of clarity”

– Steve Jackson Games v. U.S. Secret Service(5th Cir. 1994)(5th Cir. 1994)

• “fraught with trip wires”

– Forsyth v. Barr (5th Cir. 1994)

• “a fog of inclusions and exclusions”

– Briggs v. American Air Filter (5th Cir. 1980)

Just a few things have changed

since 1986:

Cloud computing2006: Google docs launched

Rise of social networking2004: Facebook launched

Internet searchInternet search1998: Google founded

1994: Yahoo & Amazon founded

The beginning of everything1990: World Wide Web created

Cell phones … VOiP … Online book search …

ECPA challenges today

• It’s confusing and outdated

– ECPA defines service providers in language that does not make sense in today’s technological world.

– Different levels of protection can apply to the same piece of communication over it’s lifetime.

– It clearly applies to public providers, like hotmail. But – It clearly applies to public providers, like hotmail. But what about a nonpublic provider like a university?

• New technologies are left behind

– It’s not clear if or how it applies to modern digital services, like cloud computing, social networking, or Internet search history.

Lifecycle of an email

Unopened

> 180 days

< 180 days Warrant

Subpoena

or 2703(d) with notice

Opened

with notice

Header info

Basic subscriber

info (name, address,

connection records, etc)

Subpoena

or 2703(d) NO notice req’d

That’s confusing. And email was

one of the specific technologies

that existed in 1986 and that

ECPA was intended to protect.

What about newer services

that didn’t exist in 1986? How

does ECPA protect them?

� Search

� Location-based services

� Cloud Computing� Cloud Computing

A campaign to educate and activate the public, businesses, and policy makers to upgrade privacy laws and keep pace with laws and keep pace with our modern online world.

Updates…

www.aclunc.org/tech

www.aclunc.org/techblog

www.dotRights.org

[email protected]

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25

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TM Use Limited to Search Term27


J.G. Wentworth SSC Ltd v. Settlement Funding LLC, 2007 WL 30115 (E.D. Pa. Jan. 4, 2007) (granting motion to dismiss).


Morningware, Inc. v. Hearthware Home Products, Inc., 2009 WL 3878251 (N.D. Ill. Nov. 16, 2009)

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Use of another trademark “in a manner calculated to capture initial consumer attention, even though

Initial Interest Confusion31

attention, even though no actual sale is finally completed as a result of the confusion.”Brookfield Communications Inc. v. West Coast Entertainment Corp., 174 F.3d 1036 (9th Cir. 1999).

B Tal

• Improperly Benefits From Goodwill of Trademark

• False Detour From Information Super-highway– Analogy to false detour sign directing

Rationale

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– Analogy to false detour sign directing consumers to take wrong exit. “Unable to locate West Coast, but seeing the Blockbuster store right by the highway entrance, they may simply rent there.” Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 1062 (9th Cir. 1999).

• Bait and Switch– “Initial interest confusion can be viewed as a

variation on the practice of ‘bait and switch.’”3 J. Thomas McCarthy, McCarthy on Trademarks & Unfair Competition § 23:26 (4th ed. 2003).

Initial Interest Confusion Territory33

Counterpoint

� Not a Detour, Merely a Lane ChangeNot a Detour, Merely a Lane ChangeNot a Detour, Merely a Lane ChangeNot a Detour, Merely a Lane Change� Web surfers are accustomed to false starts

and are unlikely to be dissuaded when they end up at the wrong site. Chatam Int'l v. Bodum, Inc., 157 F.Supp.2d 549, 559 (E.D. PA 2001).

� No different than supermarket placing No different than supermarket placing No different than supermarket placing No different than supermarket placing store brand next to branded productsstore brand next to branded productsstore brand next to branded productsstore brand next to branded products.

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store brand next to branded productsstore brand next to branded productsstore brand next to branded productsstore brand next to branded products.� FragranceNet.com, Inc. v. FragranceX.com,

493 F. Supp. 2d)(E.D.N.Y 2007)

� Legally Significant Confusion?Legally Significant Confusion?Legally Significant Confusion?Legally Significant Confusion?� “The [District] court’s refusal to enter the

‘initial interest confusion’ thicket is well taken given the unlikelihood of ‘legally significant’ confusion.” Hasbro Inc. v. Clue Computing, Inc., 232 F.3d 1, 2 (1st Cir. 2000).

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Cyber Squatting Remedies

� ICANN’s Uniform Domain Name Dispute Resolution Policy

� Establishes arbitration process for bad faith domain registration

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faith domain registration

� 2329 cases filed in 2008

� Only remedy is transfer of domain

� Anti-Cyber Squatting Consumer Protection Act (15 U.S.C. § 1125(d))

� Lanham Act remedies for bad faith registration of domain name

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Dealing with Gripe Sites

� Trademark Claims� Absent commercial use no TM violation or cyber squatting

� Copyright� Fair use defense

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� Fair use defense

� Defamation� First Amendment and SLAPP protection

� Third-Party postings� Website immune under Communications Decency Act

Dealing with Gripe Sites

� Trademark Claims� Absent commercial use no TM violation or cyber squatting

� Copyright� Fair use defense

39

� Fair use defense

� Defamation� First Amendment and SLAPP protection

� Third-Party postings� Website immune under Communications Decency Act

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CAN-SPAM Act of 2003

CANCANCANCAN----SPAM SPAM SPAM SPAM DOES NOTDOES NOTDOES NOTDOES NOT . . .. . .. . .. . .

� “Can Spam” “Can Spam” “Can Spam” “Can Spam” –––– except for except for except for except for wireless spamwireless spamwireless spamwireless spam

� Include a “Do Not Email Include a “Do Not Email Include a “Do Not Email Include a “Do Not Email Registry”Registry”Registry”Registry”

CANCANCANCAN----SPAM SPAM SPAM SPAM ISISISIS . . .. . .. . .. . .

� An antiAn antiAn antiAn anti----fraud and disclosure fraud and disclosure fraud and disclosure fraud and disclosure statutestatutestatutestatute

� Applies to an email where Applies to an email where Applies to an email where Applies to an email where the “primary purpose” is the “primary purpose” is the “primary purpose” is the “primary purpose” is commercial advertisement or commercial advertisement or commercial advertisement or commercial advertisement or

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Registry”Registry”Registry”Registry”

� Impose an “ADV” labeling Impose an “ADV” labeling Impose an “ADV” labeling Impose an “ADV” labeling requirementrequirementrequirementrequirement

� Create a general private right Create a general private right Create a general private right Create a general private right of actionof actionof actionof action

the “primary purpose” is the “primary purpose” is the “primary purpose” is the “primary purpose” is commercial advertisement or commercial advertisement or commercial advertisement or commercial advertisement or promotion of a product or promotion of a product or promotion of a product or promotion of a product or serviceserviceserviceservice

� Non profits are not exemptNon profits are not exemptNon profits are not exemptNon profits are not exempt

� No volume requirementNo volume requirementNo volume requirementNo volume requirement

CAN-SPAM Principal Requirements

From line must

identify initiator

Subject line must not be deceptive.

Adult Messages must provide notice.

UCE must be

identified

as

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Postal Address for AdvertiserRequires Working Opt-Out

Mechanism for Advertiser

as

“advertisement”

CAN-SPAM Plaintiffs

� FTC

� State AGs

� Internet Access Service Provider (IASP)

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Provider (IASP)� Adversely Effected by Violation

� Cannot be faux-IASP

� No Consumer Private No Consumer Private No Consumer Private No Consumer Private Right of ActionRight of ActionRight of ActionRight of Action

Preemption of State Law

CANCANCANCAN----SPAM PREEMPTS SPAM PREEMPTS SPAM PREEMPTS SPAM PREEMPTS ALLALLALLALLSTATE REGULATION OF EMAIL STATE REGULATION OF EMAIL STATE REGULATION OF EMAIL STATE REGULATION OF EMAIL EXCEPT STATE LAWS:EXCEPT STATE LAWS:EXCEPT STATE LAWS:EXCEPT STATE LAWS:

� Regulating falsity or deception in email

44

� Regulating falsity or deception in email

� Not specific to email, including State trespass, contract, or tort law; or

� Other State laws to the extent that those laws relate to acts of fraud or computer crime

45

FTC Disclosure Guidelines46

The Offer

� *

*Earnings Disclaimer - Your level of success in attaining the results claimed in our materials depends on the time you devote to the program, ideas and techniques mentioned, your finances, knowledge and various skills.

�

*By submitting this form you request that

47

�

*By submitting this form you request that your account be activated and give your authorization to immediately charge your credit card $2.98 for access to the Business Kit for Google. After the 7 day trial you will be billed $89.90 each month for continued access to the Business Kit for Google. Your Business Kit access will continue each month until revoked by you. You may cancel at anytime by writing to 230 West 400 South, Suite 100 Salt Lake City, UT 84101 or calling 1-800-497-4988 or International customers please call 00-1-646-205-0230

Landing Page48

Transaction Page49

ALSO NO REFERENCE TO

CHARGE ON FIRST PAGE

Transaction Page (con’t)50

FTC Complaint51

FTC v. Infusion Media, Inc., Civil Action No. 09-CV-01112 (D. Nev. 2009)

FTC Advertising Guidelines

� AdvertisingAdvertisingAdvertisingAdvertising Dot Com Disclosures: Information About Online Advertising [PDF]

� Advertising and Marketing on the Internet: The Rules of the Road

� Frequently Asked Advertising

� Comparative AdvertisingComparative AdvertisingComparative AdvertisingComparative AdvertisingStatement of Policy Regarding Comparative Advertising

� DeceptionDeceptionDeceptionDeception FTC Policy Statement on Deception

� Deceptive PricingDeceptive PricingDeceptive PricingDeceptive Pricing FTC Guides Against Deceptive Pricing

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� Frequently Asked Advertising Questions: A Guide for Small Business

� Joint FTC/FCC guides on Long Distance Advertising [PDF]

� Advertising Substantiation Advertising Substantiation Advertising Substantiation Advertising Substantiation FTC Policy Statement Regarding Advertising Substantiation

� Bait AdvertisingBait AdvertisingBait AdvertisingBait Advertising FTC Guides Against Bait Advertising

Against Deceptive Pricing

� Dietary SupplementsDietary SupplementsDietary SupplementsDietary Supplements Dietary Supplements: An Advertising Guide for Industry

FTC Staff Comment on Draft Report of the Commission on Dietary Supplement Labels

FTC Staff Comment on FDA Proposed Rule on Statements Made for Dietary Supplements

FTC Advertising Guidelines (con’t)

� Endorsements and TestimonialsEndorsements and TestimonialsEndorsements and TestimonialsEndorsements and TestimonialsFTC Guide Concerning the Use of Endorsements and Testimonials

� EnvironmentEnvironmentEnvironmentEnvironment FTC Guides for the Use of Environmental Market Claims (Green Guides)

� Food AdvertisingFood AdvertisingFood AdvertisingFood Advertising Enforcement Policy Statement on Food Advertising

� JewelryJewelryJewelryJewelry Guides for the Jewelry, Precious Metals, and Pewter Industries

� UnfairnessUnfairnessUnfairnessUnfairness FTC Policy Statement on Unfairness

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� EyeEyeEyeEye----Care Surgery Care Surgery Care Surgery Care Surgery FDA/FTC Joint Letter on PRK

� FTC Staff Guides on Refractive Eye Surgery

� Use of the Word "Free"Use of the Word "Free"Use of the Word "Free"Use of the Word "Free" FTC Guide Concerning the Use of the Word "Free"

UnfairnessUnfairnessUnfairnessUnfairness FTC Policy Statement on Unfairness

� Vocational and Distance Education Vocational and Distance Education Vocational and Distance Education Vocational and Distance Education SchoolsSchoolsSchoolsSchools Guides for Private Vocational and Distance Education Schools [PDF]

� WeightWeightWeightWeight----Loss ProductsLoss ProductsLoss ProductsLoss Products Red Flag: Bogus Weight Loss Claims Web Site

� Red Flag: Bogus Weight Loss Claims Brochure

The Internet Law Center Internet Law Center Internet Law Center Internet Law Center is dedicated to helping businesses navigate the evolving legal standards for today’s digital economy, while also contributing to the development of the policies of tomorrow. The firm serves a diverse client base that includes startups and public companies both online and offline across North America and Asia.

The professionals of the Internet Law Center possess years of practical experience as lawyers and entrepreneurs with internet

About the Internet Law Center54

practical experience as lawyers and entrepreneurs with internet companies and have played a leading role in shaping Internet law and policy. This unprecedented combination of business, legal and policy experience makes the Internet Law Center uniquely qualified to provide the professional advice needed to address emerging issues of internet law in an uncertain economy.

Sign up for the Cyber Report Cyber Report Cyber Report Cyber Report – our award winning newsletter which was named one of the Top 100 Internet Law Resources. It is also available on our blog (along with other materials) at www.ilccyberreport.wordpress.com....

Bennet is one of the nation’s leading Internet attorneys and founder of the Internet Law Center. He is Co-Chair of the California Bar Cyberspace Committee and a frequent speaker on the latest developments in Internet law at conferences throughout North America. Bennet also is a regular guest on Webmaster Radio’s “InBoxed”.

About Bennet Kelley

55

Bennet has played a leading role in shaping Internet law and policy having testified and lobbied on Internet issues in Washington and Sacramento, winning praise from a key Congressional committee for his contributions to federal spyware legislation.

In addition, the Internet Law Center’s newsletter, Cyber Report, was named one of the top 100 Internet law resources and recognized by the LA Press Club.

Bennet KelleyBennet KelleyBennet KelleyBennet Kelley

Internet Law CenterInternet Law CenterInternet Law CenterInternet Law Center

Contact56

100 Wilshire Blvd, Suite 950, Santa Monica, CA 90401

(310) 452-0401

[email protected]

www.internetlawcenter.net

Twitter: InternetLawCent / SlideShare: InternetLawCenter

Business Law Essentials Series


User Generated Content, Privacy, and Advertising

California Bar Cyberspace Committee

January 27, 2010