New Media and Technology Law Blog : Technology Lawyers & Attorneys : Proskauer Rose Law Firm : Trademarks, Patents & Copyright

The debate over the applicability of the Computer Fraud and Abuse Act in cases of alleged employee disloyalty has yielded quite a few rulings over the last several years, and generated a circuit split last September with the Ninth Circuit decision in LVRC Holdings LLC v. Brekka, 581 F.3d 1127 (9th Cir. 2009). In that civil action alleging employee theft and misappropriation of trade secrets, the appeals court rejected an expansive interpretation of the CFAA, concluding that an employee's authorization to access an employer's computer network is not automatically revoked when the employee is acting in a manner that is disloyal to the employer's interest. The Ninth Circuit explicitly rejected the contrary reasoning of the Seventh Circuit in International Airport Centers, LLC v. Citrin, 440 F.3d 418 (7th Cir. 2006). In the Citrin case, Judge Posner authored a panel ruling that under common law agency principles, an employee who breaches the duty of loyalty to an employer thereby lacks authorization within the meaning of the CFAA.

The battleground in those two cases was whether a former employer could bring a civil action under the CFAA against former employees who accessed the employer's computer network, while still employed, for disloyal purposes. The prize in these and many other such cases is the opportunity for the employer to pursue what what would have otherwise likely been largely a matter of state law in federal court. But the CFAA is primarily a criminal statute, and expansive interpretation could (and has) resulted in federal criminal prosecutions in what have been typically state law cases.

However, the Ninth Circuit's narrower construction in LVRC v. Brekka ruling has now been applied in  one of those criminal cases, resulting in the dismissal of some but not all of the CFAA charges against one defendant in United States v. Nosal, 3:08-cr-00237-MHP(N.D. Cal. Jan. 6, 2009)

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Apple probably could not have satisfied all the wild and hopeful imaginings of everyone who weighed in on what its new iPad device would look like, and what its functionality would be. Whether or not the iPad will be the content distribution game-changer that so many are looking for is another matter, but it's still a pretty interesting device. In any case, however, the iPad does at least raise certain legal issues to consider.

As smart as lawyers have become in trying to address new technologies in agreements, there is always the question of whether a particular device or distribution method falls within the scope of the agreement.  In some cases, the party drafting the agreement is lucky enough to have their counterparty agree to unlimited, unrestricted descriptions of technology (e.g., in all media, technology and distribution methods, now known or hereafter to become known, anywhere in the Universe).  However, all the parties to technology oriented transactions are aware of the importance of this issue, and the counterparty in more cases than not will push back to limit the scope to the "intended" technology.

Which leads us to the question: Where will the iPad fall within the scope of these types of agreements? 

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We have previously described as "robust," the protection afforded interactive service providers from liability for defamatory contents posted by third parties by Section 230 of the Communications Decency Act.  But in Blockowitz v. Williams, 1:09-cv-03955 (N.D. Ill. Dec. 21, 2009), involving post-judgment efforts to have defamatory postings removed from a consumer complaint Web site ,  the protection comes, not from CDA Section 230, but from Fed. R. Civ. P. 65, which governs the enforcement of injunctions.

Perhaps predictably, for followers of CDA Section 230 jurisprudence, the consumer complaint Web site involved is the Ripoff Report, operated by perennial defendant Xcentric Ventures, Inc.

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Since the Seventh Circuit opinion in ProCD v. Zeidenberg (7th Cir. 1996), judicial analysis of standard form contracts has proceeded along lines that have, in general, been more favorable to the efforts of sellers and licensors seeking to enforce the provisions of "agreement now, terms later" contracts. The ProCD v. Zeidenberg analysis of the relevant UCC provisions endorsed the enforceability of additional terms included in shrinkwrap and mail order "in the box" contracts on the theory that a purchaser or licensee who disagreed with the later-presented terms could reject the terms and avoid contract formation by returning the goods.

Over time, the ProCD v. Zeidenberg approach to later-presented terms has become the majority view. But just because a court adopts the ProCD v. Zeidenberg analysis, it will not necessarily find that a "terms later" contract is enforceable. That was the case in Defontes v. Dell, decided on December 10 by the Rhode Island Supreme Court.

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 To the great frustration of plaintiffs and their attorneys, and even some judges, courts have construed Section 230 of the Communications Decency Act in such a way as to make it virtually impossible to hold a Web site operator liable for defamatory material that is posted on the site by a third party, even if the operator has knowledge of the defamatory nature of the material and refuses to remove it. Many plaintiffs have tried to plead around the robust protection provided by Section 230, but only a very few have succeeded. One of them is Cecilia Barnes, who alleged that she was defamed by false dating profiles posted by an ex-boyfriend on Yahoo!'s dating Web site. Any claim that Yahoo! was liable for the posting of the profiles by the ex-boyfriend is precisely the sort of claim that is barred by Section 230. But Barnes claimed that a separate promise by a Yahoo! employee to remove the profiles was not precluded.

Earlier this year, in Barnes v. Yahoo!, Inc., 570 F.3d 1096 (9^th Cir. 2009), the Ninth Circuit agreed with Barnes. The court concluded that because her claim alleged a separate undertaking by Yahoo!, distinct from the act of publishing the profiles, it did not implicate the Section 230 provision that bars holding a Web site operator liable as the “publisher” of information provided by a third party. The circuit court remanded the case for further consideration of Barnes's surviving claim, which has now withstood a further motion to dismiss in the district court in Barnes v. Yahoo!, Inc., 2009 U.S. Dist. LEXIS 116274 (D. Ore. Dec. 8, 2009).

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Jacobsen v. Katzer involves a dispute over rights in software code distributed pursuant to the open source Artistic License. Last year the case yielded one of the very few judicial rulings dealing with open source software. As we wrote at the time, the U.S. Court of Appeals for the Federal Circuit rejected the argument that open source licenses are enforceable only in a breach of contract action. In a broadly worded opinion that endorsed the open source approach to licensing, the court held that open source license restrictions are enforceable under U.S. copyright law, thereby making the federal courts, and the potent remedies under the Copyright Act, available to open source licensors.  
 
The case was remanded to the district court for further proceedings, and has now yielded another ruling favorable to the plaintiffs on a number of critical points, including eligibility of software code that is distributed for free for copyright infringement damages.  Jacobsen v. Katzer, No. C 06-01905 (N.D. Cal. Dec. 10, 2009) .

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Can the submission of user-generated content pursuant to an invitation posted on a Web site give rise to  implied  contractual obligations on behalf of the Web site owner?  Although the recent case  of  Thome v. The Alexander & Louisa Calder Foundation, 2009 NY Slip. Op., 2009 N.Y. App. Civ. LEXIS 8707 (N.Y. App. Div. 1st Dept. Dec. 1, 2009)  does not specifically address user-generated content and rather involves  the submission of an art work for authentication by an artist's foundation , the opinion in close enough to be of interest to parties that accept  user-generated  submissions via a Web site.

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Let's say that anybody could write comments on your Web site that were visible to third parties and that you couldn't prevent it. Those comments might include links to competitive Web sites or products, defamatory statements, or just unwelcome negative comments. And let's say that your only recourse, if you felt the comments were inappropriate, would be to e-mail a complaint to an enormous media company that might or might not agree that the comments should be removed.

Well, if you download and install the Google Toolbar, and navigate to your Web site, you can find out if that is happening on your site right now.

A we discussed in October at our 15th annual seminar (“New Media, Technology and the Law:
Issues on the Near Horizon,” Google recently debuted the “Sidewiki” function on the Google Toolbar. Google touts the Sidewiki functionality as allowing users “to contribute helpful information next to any  webpage.” But brand managers and Web site owners may not think that some of the information that is contributed by users of the Sidewiki functionality is “helpful” at all.

 

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Vernor v. Autodesk, Inc. is a closely followed case in which an eBay reseller of software argues that his resales are protected by the copyright first sale doctrine, and software company Autodesk is arguing that because the AutoCad software Mr. Vernor is auctioning on eBay is licensed, not sold, Mr. Vernor is not an owner of the copies within the meaning of the doctrine. Vernor instituted this action seeking a declaratory judgment that his resales did not constitute direct or contributory copyright infringement.

In May 2008, the court denied Autodesk's motion for summary judgment dismissing Vernor's complaint. As we blogged at the time, the court ruled that the original transation between Autodesk and Vernor's transferor (an architectural firm that purchased the AutoCAD software for use in its practice) constituted a sale, and thus the subsequent transfer of the software to Vernor was a further sale protected by the first sale doctrine. Following discovery, the court has now concluded that there are no materially relevant facts different from those before the court, and that judgment should be entered in favor of Vernor.

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