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.
What If I Told You Somebody Was Scribbling on Your Web Site?
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.
Vernor v. Autodesk and the First Sale Doctrine: The District Court Has Nothing Further to Add, Judgment for Reseller
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.
Arbitration Provision Unenforceable, Where Online Retailer’s Link to Browsewrap Terms and Conditions Was Not “Prominently Displayed”
When Cynthia Hines returned a vacuum cleaner to online retailer Overstock.com, she was reimbursed for the full amount of her purchase, but Overstock deducted a $30 restocking fee, citing a provision in its Web site Terms and Conditions. Hines filed a purported class action in federal court in the Eastern District of New York asserting that she had been advised that she could return the vacuum without incurring any charge, and that she was not aware that a restocking fee would be charged.
When Overstock moved to dismiss or stay the action, citing the arbitration provision in the same Terms and Conditions, Hines similarly argued that she was not aware of the arbitration provision. According to Hines, she was not on either actual or constructive notice of the Terms and Conditions because they were referenced only in a hyperlink in small type at the bottom of the page of the Overstock Web site, between the link to the privacy policy and the Overstock.com registered trademark. She argued: "I did not scroll down to the end of the page(s) because it was not necessary to do so, as I was directed each step of the way to click on to a bar to take me to the next step to complete the purchase."
In Hines v. Overstock.com, Inc., 2009 U.S. Dist. LEXIS 81204 (E.D. N.Y. Sept. 4, 2009), Judge Sterling Johnson, Jr., agreed with Hines, finding that under the law of New York (where Hines resides), or under the law of Utah (where Overstock.com is located), Overstock.com had not carried its burden of providing the existence of a valid arbitration agreement. There was no meeting of the minds sufficient to form a contract, Judge Johnson ruled, because Hines had neither actual nor constructive notice of the Terms and Conditions, as required by the Second Circuit ruling in Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir. 2002):
Notably, unlike in other cases where courts have upheld browsewrap agreements, the notice that "Entering this Site will constitute your acceptance of these Terms and Conditions," … was only available within the Terms and Conditions. Hines therefore lacked notice of the Terms and Conditions because the website did not prompt her to review the Terms and Conditions and because the link to the Terms and Conditions was not prominently displayed so as to provide reasonable notice of the Terms and conditions. Very little is required to form a contract nowadays – but this alone does not suffice."
Compare the result in Hines v. Overstock.com with the result in another recent ruling, PDC Laboratories, Inc. v. Hach Co., 2009 U.S. Dist. LEXIS 75378 (C.D. Ill. Aug. 25, 2009), a case involving a transaction between commercial parties. The court ruled that the incorporation of a limitation of damages clause in terms and conditions of sale available via a hyperlink displayed during an online ordering process was not procedurally unconscionable. Relying on Hubbert v. Dell Corp., 359 Ill. App. 3D 976, 835 N.E. 2D 113 (5th Dist. 2005), an opinion involving a consumer transaction, the court concluded that the terms and conditions were conspicuous within the meaning of the Uniform Commercial Code where the hyperlink leading to them was in underlined, blue, contrasting text and was displayed three times during the ordering process. The court further noted that attention was specifically brought to the terms and conditions by a reference in the directions for the "final order step" of the ordering process.
Citing Plain Language of the Computer Fraud and Abuse Act, Ninth Circuit Rules Employee’s Disloyal Act Does Not Terminate Authorization to Access Employer’s Computer
The federal Computer Fraud and Abuse Act, 18 U.S.C. §1030, criminalizes access to a computer that is either "without authorization" or that "exceed[s] authorized access," and provides a civil right of action for violations as well. In the last several years, a split has developed in the federal courts on the question of whether an employee’s access to an employer’s computer, even if it was authorized in the ordinary course of business, ceases to be authorized if the purpose if the access is to further an act that is disloyal to the employer. The Ninth Circuit has now weighed in on the issue in an opinion rendered today in LVRC Holdings, LLC v Brekka, No. 07-17116 (9th Cir. Sept. 15, 2009), and has taken a position diametrically opposed to that of an influential Seventh Circuit opinion, International Airport Centers, LLC v. Citrin, 440 F.3d 418 (7th Cir. 2006).
The Beat Goes On: In SCO v. Novell, Tenth Circuit Remands UNIX Copyright Ownership Issue for Trial
The Tenth Circuit has ruled in the closely watched SCO v. Novell appeal, and while it upheld a judgment in favor of Novell for royalties due from The SCO Group, the appeals court remanded for a trial on the issue of ownership of the copyrights in the UNIX code that
No Special Rules for Internet Defamation, Says New York Judge
If you refer to a professional model a "skank" and a "ho," that’s defamation, not mere opinion or hyperbole, and it is no less defamatory for having been said on a blog, a Supreme Court judge in New York ruled in In re Application of Cohen (N.Y. Sup. Ct. N.Y.
Ninth Circuit Limits Standing under CAN-SPAM Act. Preempts Washington Anti-Spam Statute
Gordon v. Virtumundo (9th Cir. Aug. 6, 2009) concerns whether plaintiff James Gordon, a serial CAN-SPAM Act litigant and “professional plaintiff,” had standing to bring a civil action for damages under the Act. There have been inconsistent rulings on CAN-SPAM standing in the lower courts, several of them involving Gordon. Compare the lower court ruling in this case, Gordon v. Virtumundo, Inc., 2007 U.S. Dist. LEXIS 35544 (W.D. Wash. May 15, 2007), that because Gordon did not experience “substantial actual harm” as a result of unsolicited commercial e-mail sent to its users he lacked standing under the Act with Gordon v. Ascentive, LLC, 2007 U.S. Dist. LEXIS 44207 (E.D. Wash. June 19, 2007), finding that Gordon’s provision of free e-mail accounts to a small number of individuals conferred standing to pursue CAN-SPAM civil claims.
Here, the Ninth Circuit upheld the district court ruling above that dismissed Gordon’s claims for lack of standing. The appeals court also upheld the district court’s conclusion that the Washington anti-spam statute is preempted by CAN-SPAM, and therefore Gordon’s claims under the Washington statute were properly dismissed as well.
In determining the issue of standing, the court construed 5 U.S.C. § 7706(g)(4), which permits a civil action under the Act to be brought by a “provider of Internet access service adversely affected by a violation of” specified sections of Act.
New Jersey Appellate Court Says, Take “Loving Care” with Employee Personal Communications
In Stengart v. Loving Care Agency, 2009 N.J. Super. LEXIS 143 (App. Div. June 26, 2009), a New Jersey appellate court refused to enforce a provision in an employer’s electronic communications policy that purported to give the employer ownership of all employee personal communications on the employer’s system. The particular messages at issue were sent by an executive to her attorney on her personal, password-protected Web mail account. The opinion contains some valuable reminders for employers that promulgate such policies, and a caution for attorneys who may be called upon to review such communications.
Heads Up for a Ruling on the ‘”Remote DVR” Petition for Certiorari
UPDATE: The U.S. Supreme Court denied the petition for certiorari on June 29, 2009.
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The petition we are talking about here is the petition for certiorari filed in the US. Supreme Court in the case more formally known as The Cartoon Network LP, LLP v. CSC Holdings, Inc. (2d Cir. 2008), petition for cert. filed sub nom. Cable News Network, Inc. v. CSC Holdings, Inc. The dispute concerns Cablevision’s plans to deploy a remote DVR system that would permit subscribers to record content broadcast over the Cablevision network to remote servers maintained by Cablevision, for playback at will. Cablevision brought the action seeking a declaratory judgment that the deployment and use of the system would not infringe the copyrights of content owners who provide programming to Cablevision.
Talking about video recorders and copyright is, of course, a U.S. Supreme Court déjà vu moment – the Court ruled in 1984 in Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417 (1984), that the sale of home video recorders used to tape television program for later viewing did not constitute contributory copyright infringement.