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How Section 230 might not help Amazon in the Parler lawsuit

Tue, 12 Jan 2021 19:43:58 GMT

Parler sued Amazon [PDF of complaint] yesterday alleging three things: antitrust violations, breach of contract and tortious interference. Each of these claims relates to Amazon’s decision to kick Parler off of AWS servers. To use Section 230’s language, Amazon took action to “restrict access to or availability of material.”

That language comes from Section 230(c)(2), which reads more fully as:

No provider . . . of an interactive computer service shall be held liable on account of . . . any action voluntarily taken in good faith to restrict access to or availability of material that the provider . . . considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected.

Said more plainly, a company in Amazon’s position should not face legal trouble if it acts in good faith to take down material that it thinks fits into certain categories of bad – even if removal of the material would violate a person’s free speech interests.

It is easy to see how Amazon might claim this form of Section 230 immunity to defend itself from Parler’s claims. (Please note that this is a separate issue from whether Parler’s claims are any good on their merits. Amazon will have good defenses other than Section 230, but we are not talking about those right now.)

So why might Section 230 not help? For one, a court may find that Amazon did not act in good faith. Second, material taken down may not fall into one of Section 230(c)(2)’s listed categories of bad.

Key to evaluating both of these issues is that Amazon kicked all of Parler offline, not just particular pieces of content that were bad. Among the material removed was content that was entirely benign. I posted there, and I know what I put up was entirely lawful and friendly. I do not have data as to what portion of Parler content was truly awful versus what was lawfully disagreeable. (Perhaps the hackers who may have violated the Computer Fraud and Abuse Act will compile this for us.) But I would venture to guess the really bad stuff (that is, stuff that was excessively violent, filthy, etc.) was just a small fraction of Parler. Does Amazon’s ham-fistedness in taking down the entire platform in these circumstances fit within what we mean by “good faith”? That is a good question for litigation.

As for the question of whether the material taken down actually falls within one of Section 230(c)(2)’s categories of bad, we can look to what the Ninth Circuit said in Enigma Software Group USA, LLC v. Malwarebytes, Inc., 946 F.3d 1040 (9th Cir. 2019), in which the court held that Section 230 did not immunize an anti-malware software provider that flagged a competitor’s software on the basis of it being “otherwise objectionable”. This anti-competitive activity could not be the kind of conduct that is “otherwise objectionable” and supportive of immunity.

In this case, to the extent Parler can show that Amazon is motivated by marketplace reasons hostile to Parler (e.g., did Twitter try to persuade Amazon to take Parler down?), the court may not agree that Parler fits into any of Section 230(c)(2)’s bad categories, including being “otherwise objectionable”.

About the author: Evan Brown is a technology and intellectual property attorney in Chicago. This post originally appeared on evan.law.

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Is it defamation to accuse someone of sending a bogus DMCA takedown notice?

Tue, 29 Dec 2020 18:48:00 GMT

Tecmo Bowl still has devoted fans

Esports aren’t only about 21st century video games. Apparently there is a relatively robust community of Tecmo Bowl enthusiasts who – though the game is three decades old – gets together to compete in tournaments. A couple of members of that community got into it with one another online, and the spat spawned some fierce litigation. That scuffle raised the question of whether accusing someone of sending a bogus DMCA takedown notice is defamatory.

The online scuffle

Plaintiff was upset about posts defendant made in the forum of a Tecmo Bowl tournament website. One of plaintiff’s claims was that defendant had wrongfully accused plaintiff of sending bogus DMCA takedown notices to Facebook concerning a page related to a previous Tecmo Bowl tournament.

Claims of bogus DMCA takedown notices defamatory?

So plaintiff sued defendant in Texas state court for defamation, and lost. He believed that he had established a defamation claim, since defendant had – in plaintiff’s view – accused plaintiff of violating the law by abusing the DMCA process. So plaintiff sought review with the Court of Appeals of Texas. But that higher court agreed with the lower court. It was proper to dismiss the defamation case.

The court evaluated whether an objectively reasonable reader of the forum posts would draw the implication that plaintiff had committed a crime. Specifically, plaintiff had asserted that defendant accused plaintiff of committing perjury, since DMCA takedown notices have to be sworn to. See 17 U.S.C. §512(c)(3)(A)(vi).

But the court did not agree with plaintiff’s theory. It found “that the general public, or more accurately the reasonable reader, is not likely aware of what a “DMCA claim” [is] or what the acronym DMCA even means.” So in this court’s view, and on these facts, accusing someone of sending a DMCA takedown notice that was bogus was not defamatory.

Hawkins v. Knobbe, 2020 WL 7693111 (Ct. App. Texas) December 28, 2020

See also:

Need help with an online issue? Let’s talk.

About the author:

Evan Brown is an intellectual property and technology attorney in Chicago. This post originally appeared on evan.law.

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Intellectual property issues in a speaker’s agreement

Mon, 26 Oct 2020 01:05:20 GMT

Let’s say you’re going to host a conference — these days that would be an online conference — and you want to invite people to give presentations. You will want to enter into a contract with those presenters to cover some of the obvious logistical items: the presenter is obligated to show up, the presentation will be on a certain topic, it will last for a certain amount of time, and there may be payment. And there are some important intellectual property issues that the speaker’s agreement should also address.

Marketing and promotion of the event

One important intellectual property issue in a speaker’s agreement has to do with the marketing and promotion of the event. This involves primarily the right of publicity. You are likely going to want to generate materials, such as social media posts, that have the name and the image of the presenter. You will want to seek to get a release from the presenter that authorizes you to use his or her name and image in connection with the marketing and promotion of the event.

Handout materials

A second issue that you will need to deal with has to do with handout materials or other accompanying documentation for the presentation. You will want to make sure that you have the appropriate copyright license from the presenter allowing you to copy and distribute those materials. You should also consider getting assurances from the presenter that those materials will not infringe any third party intellectual property rights. And you may want to have the agreement say that the presenter will indemnify you and pay the cost of the defense if you get sued by a third party because the handout materials infringe.

Video or audio of the presentation

A third intellectual property issue that you will want to think about in connection with a speaker’s agreement has to do with any content that you generate at the event. Say, for example, you film the presentation and you want to make the video available to the world so it can see what the event was like. On this point we are back to the discussion of the right of publicity. Obviously the presenter’s name and image is going to be in that content. So you want to make sure that you have a release for that.

As the host of the event, you will likely want to own the copyright in the video. The presenter may ask for a carveout — that is, clarification that though you own the copyright in the video, the presenter retains ownership of the underlying content presented.

Need help with intellectual property issues in a speaker’s agreement?

Please feel free to give me a call or send an email. Dial (630) 362-7237, or email ebrown@internetcases.com.

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How do you identify an anonymous hacker?

Wed, 14 Oct 2020 21:47:46 GMT

An unknown person allegedly hacked plaintiff’s information systems and temporarily rendered plaintiff’s email system inoperable. Not knowing who to sue, plaintiff sued a number of “John Doe” defendants under the Computer Fraud and Abuse Act and the Stored Communications Act. It was yet to identify the anonymous hacker.

But that was as far as plaintiff could go without the court’s help. Since plaintiff did not know the real names of the defendants, it could not serve the complaint on them. To learn defendants’ identities, plaintiff sought permission from the court to seek expedited discovery.

Early discovery to identify an anonymous hacker

Under the rules of procedure, a party may not start serving discovery requests (including subpoenas) until the plaintiff and defendant have held their Rule 26(f) conference. But the parties cannot hold that conference unless their identities are known. So, in circumstances where “good cause” exits, courts will allow plaintiffs to send subpoenas before the Rule 26(f) conference.

In this case, plaintiff asked for permission to send a subpoena to the internet service provider associated with the IP address used to hack plaintiff’s system.

When is there good cause to grant early discovery?

The court found good cause to permit limited discovery prior to the Rule 26(f) conference. Without information from the ISP, plaintiff could not amend its complaint to name the appropriate defendant, let alone effectuate service of that pleading.

The court recognized that the subscriber whose information was on file with the internet service provider may not be personally responsible for the allegedly wrongful access. But he or she may have information that would assist in identifying the alleged bad actor. The court found, therefore, that the subscriber’s identity was relevant and discoverable under the broad scope of applicable rules.

The court’s order allowing expedited discovery contained certain important limitations, to curb against potentially expansive and intrusive discovery. It permitted plaintiff to serve a subpoena on the internet service provider. But plaintiff could only seek the name and address of the subscriber associated with the IP address used to access plaintiff’s systems.

Re: Gaaays In Spaaace v. John Does (1-10) et al., 2020 WL 6042289 (D.N.J. October 13, 2020)

Evan Brown is a technology and intellectual property attorney in Chicago. This content originally appeared on evan.law.

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Can you violate the CFAA by deleting data on your own computer?

Mon, 12 Oct 2020 00:38:20 GMT

The Computer Fraud and Abuse Act (CFAA) has a provision that makes it unlawful to “knowingly cause the transmission of a program, information, code, or command, and as a result of such conduct, intentionally cause damage without authorization, to a protected computer.” Can a person violate that provision of the CFAA by deleting data on his or her own computer? A recent federal case answered that question.

Plaintiff sued its former chief technology officer under the CFAA after it learned that the former executive wiped the hard drive of his personal laptop he had used for company business. Defendant moved to dismiss, arguing primarily that the purpose of the CFAA is to target hackers. And he argued that there is a circuit split over what it means for an employee to access a computer without authorization or in excess of authorization.

The court denied the motion to dismiss. It acknowledged there is a circuit split on what it means for an employee to access a computer without authorization or in excess of authorization. Int’l Airport Ctrs., LLC v. Citrin, 440 F.3d 418 (7th Cir. 2006) and LVRC Holdings LLC v. Brekka, 581 F.3d 1127 (9th Cir. 2009) exemplify this split. But the court noted that this case did not present the question of authorization to access a computer. Instead, the relevant CFAA provision discusses unauthorized damage.

Looking at the plain language of the CFAA, the court found no basis to dismiss the complaint. So the court in effect said that a person can violate the CFAA by deleting data on his or her computer. The factual question of whether the particular defendant in this case did that will proceed to trial.

New Touch Digital Inc. v. Cabral, 2020 WL 5946067 (D.D.C. October 7, 2020)

About the author:

Evan Brown is a technology and intellectual property attorney in Chicago. This content originally appeared on evan.law.

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Why get a copyright registration?

Wed, 07 Oct 2020 22:55:39 GMT

A work of authorship is protected by copyright at the moment it is created. If you take a photo or write some software or draft some text, copyright law protects that work the moment it becomes fixed in a tangible medium of expression for more than a transitory duration. You do not need a registration to own a copyright. It exists automatically. But there are certain benefits conferred by registering a copyright.

Copyright registration allows the holder to sue for infringement.

One benefit from having a registration is that the holder of the copyright can sue for infringement. This is a requirement for litigation – a court will not let a copyright infringement case go forward unless the plaintiff shows that it has a registration certificate. And that registration certificate needs to be in hand — it is not enough for the plaintiff to have just applied to register the copyright. It actually needs to have the registration issued.

Better evidence.

A second benefit of having a copyright registration certificate is the evidentiary weight that it carries in court. If the registration is obtained in the five years following the first publication of the work, the judge will look at that registration certificate and give it great importance in ascertaining whether the plaintiff has a valid copyright in the work.

Statutory damages and attorney’s fees.

A third benefit of having a registration is that in certain circumstances the plaintiff can recover its costs and attorneys fees, and be entitled to recover statutory damages. These damages can range anywhere from $750 all the way up to $150,000 per work infringed.

To be entitled to these things the plaintiff must have obtained a timely copyright registration. To be timely, it has to either have been obtained before the infringement began, or if it was obtained after the infringement began, it was obtained within the first three months following the first publication of the work. The key is that timing matters — it is generally advisable to register a work within the first three months following first publication.

Need help with a copyright registration?

Please feel free to give me a call at (630) 362-7237, or send email to ebrown@internetcases.com.

About the author:

Evan Brown is a technology and intellectual property attorney in Chicago. This content originally appeared on evan.law.

Why parties should enter into nondisclosure agreements

Wed, 23 Sep 2020 02:13:45 GMT

Nondisclosure agreements (or NDAs) are important contracts. There are a number of reasons why parties may want to enter into them.

The first reason is probably the most obvious reason. Parties have proprietary or sensitive information that they don’t want to become publicly known, or known to a competitor. So they enter into nondisclosure agreements to put restrictions on how the parties use or disclose confidential information The agreement contains provisions that give remedies such as injunctive relief if there is a breach or a threatened breach of the nondisclosure agreement. This is an important tool.

A second reason for entering into a nondisclosure agreement is related to the first one. Having a nondisclosure agreement gives the parties the confidence to meaningfully collaborate. If there is a nondisclosure agreement in place, the parties can freely exchange information, and that makes the potential innovation from their collaboration much more robust.

And a third third reason for entering into a nondisclosure agreement relates to the law of trade secrets. The parties may trust one another completely, and may not even think for a moment that the other side would misuse its confidential information or disclose it in a way that is harmful. But it is important to enter into nondisclosure agreements to protect the trade secret status of information. The law of trade secrets only protects information that has been the subject of efforts to keep secret. So the nondisclosure agreement can be important evidence that the party has taken the right steps to protect its trade secrets.

Let’s talk

Nondisclosure agreements can be complex. There are a number of issues to consider and appropriate strategies to take. If you have questions about a nondisclosure agreement, give me a call at (630) 362-7237, or send me an email at ebrown@internetcases.com.

About the author:

Evan Brown is a technology and intellectual property attorney in Chicago. This content originally appeared on evan.law.

Section 230 immunity protected Twitter from claims it aided and abetted defamation

Tue, 22 Sep 2020 02:24:54 GMT

Twitter enjoyed Section 230 immunity for aiding and abetting defamation because plaintiffs’ claims on that point did not transform Twitter into a party that created or developed content.

An anonymous Twitter user posted some tweets that plaintiffs thought were defamatory. So plaintiffs sued Twitter for defamation after Twitter refused to take the tweets down. Twitter moved to dismiss the lawsuit. It argued that the Communications Decency Act (CDA) at 47 U.S.C. §230 barred the claim. The court agreed that Section 230 provided immunity to Twitter, and granted the motion to dismiss.

The court applied the Second Circuit’s test for Section 230 immunity as set out in La Liberte v. Reid, 966 F.3d 79 (2d Cir. 2020). Under this test, which parses Section 230’s language, plaintiffs’ claims failed because:

(1) Twitter was a provider of an interactive computer service,
(2) the claims were based on information provided by another information content provider, and
(3) the claims treated Twitter as the publisher or speaker of that information.

Twitter is a provider of an interactive computer service

The CDA defines an “interactive computer service” as “any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server.” 47 U.S.C. § 230(f)(2). The court found that Twitter is an online platform that allows multiple users to access and share the content hosted on its servers. As such, it is an interactive computer service for purposes of the CDA.

Plaintiffs’ claims were based on information provided by another information content provider

The court also found that the claims against Twitter were based on information provided by another information content provider. The CDA defines an “information content provider” as “any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service.” 47 U.S.C. § 230(f)(3). In this case, the court found that plaintiffs’ claims were based on information created or developed by another information content provider – the unknown Twitter user who posted the alleged defamatory content. Plaintiffs did not allege that Twitter played any role in the “creation or development” of the challenged tweets.

The claim treated Twitter as the publisher or speaker of the alleged defamatory information

The court gave careful analysis to this third prong of the test. Plaintiffs alleged that Twitter had “allowed and helped” the unknown Twitter user to defame plaintiffs by hosting its tweets on its platform, or by refusing to remove those tweets when plaintiffs reported them. The court found that either theory would amount to holding Twitter liable as the “publisher or speaker” of “information provided by another information content provider.” The court observed that making information public and distributing it to interested parties are quintessential acts of publishing. Plaintiffs’ theory of liability would “eviscerate” Section 230 protection because it would hold Twitter liable simply for organizing and displaying content exclusively provided by third parties.

Similarly, the court concluded that holding Twitter liable for failing to remove the tweets plaintiffs found objectionable would also hold Twitter liable based on its role as a publisher of those tweets, because deciding whether or not to remove content falls squarely within the exercise of a publisher’s traditional role and is therefore subject to the CDA’s broad immunity.

The court found that plaintiffs’ suggestion that Twitter aided and abetted defamation by arranging and displaying others’ content on its platform failed to overcome Twitter’s immunity under the CDA. In the court’s view, such activity would be tantamount to holding Twitter responsible as the “developer” or “creator” of that content. But in reality, to impose liability on Twitter as a developer or creator of third-party content – rather than as a publisher of it – Twitter would have to directly and materially contribute to what made the content itself unlawful.

Plaintiffs in this case did not allege that Twitter contributed to the defamatory content of the tweets at issue, and thus pled no basis upon which Twitter could be held liable as the creator or developer of those tweets. Accordingly, plaintiffs’ defamation claims against Twitter also satisfied the final requirement for CDA immunity: the claims sought to hold Twitter, an interactive computer service, liable as the publisher of information provided by another information content provider. Ultimately, Twitter had Section 230 immunity for aiding and abetting defamation.

Brikman v. Twitter, Inc., 2020 WL 5594637 (E.D.N.Y., September 17, 2020)

About the author:

Evan Brown is an attorney in Chicago practicing copyright, trademark, technology and in other areas of the law. His clients include individuals and companies in many industries, as well as the technology companies that serve them. Twitter: @internetcases

Need help with an online legal issue?

Let’s talk. Give me a call at (630) 362-7237, or send me an email at ebrown@internetcases.com.

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How Portland has not demonstrated long-term commitment to a ban on facial recognition technologies

Thu, 10 Sep 2020 18:31:59 GMT

Portland, Oregon yesterday passed a ban on facial recognition technology. Officials cited two primary reasons for the ban. First, current facial recognition technologies less accurately identify people who are not young, white and/or male. Second, everyone should have some sense of anonymity and privacy when in public places.

Should the facial recognition ban focus on disparate impact?

Do Portland’s efforts to “improve people’s lives, with a specific focus on communities of color and communities with disabilities” demonstrate an effective long-term commitment to keeping invasive facial recognition technology at bay? Such a focus implies that when facial recognition technologies get better and less biased, they should then be deployed full scale, because then everyone will be harmed equally.

That’s one of the problems with looking to ban a technology based on its nascent state and accompanying imperfect implementation. Given the choice between arguing (1) that a technology is being harmfully implemented now, and (2) that the technology, no matter how perfect it is, infringes some fundamental human right, I’d go with number (2) every time.

We will find ourselves halfway down the slippery slope

We know the accuracy of this technology will increase with the development of better cameras, smarter algorithms and more data. When that happens, if you are still seeking to argue against its harmful effects on fundamental rights such as anonymity and privacy, you will already have slid halfway down the slope. With your previous “best” argument made moot, your argument now – an appeal to fundamental rights – will have less impact.

So maybe we should focus on the real issues – the fundamental right of anonymity and privacy for everyone – rather than leading with a social justice argument. Not that the social justice rationale is a bad one now. But later, having made it the primary argument and it then becoming moot, the rationale will be a liability.

About the author

Evan Brown is a technology and intellectual property attorney in Chicago. Follow him on Twitter at @internetcases. Phone: (630) 362-7237. Email: ebrown@internetcases.com.

What are the legal issues around web scraping?

Wed, 09 Sep 2020 01:20:32 GMT

Web scraping is that activity where a party uses automated software to crawl the internet and copy data and other content, usually so that it can compile that together and make its own product offering. This may be of concern to you because you are a company that does web scraping. Or you may be a web publisher and there are other parties that are scraping your content. Let’s examine some of the legal issues around web scraping.

Breach of contract

One of the questions that commonly arises around web scraping is whether the activity is a breach of contract. More specifically, the question is whether the use of automated software violates the terms of service of the website that is being scraped. You often see website terms of service prohibit the use of spider and other automated crawling software to access and use the site. Parties who own websites that are being scraped will often look to see whether the scraping of their site is a breach of contract.

Copyright infringement

Another common question arising when analyzing web scraping is lawful whether scraping constitutes copyright infringement. This is a difficult argument to make if all that is being scraped is data, because mere facts usually are not subject to copyright protection. But if there is other content being scraped, such as images or specific compilations of data, the question of copyright infringement becomes a bit easier to answer in that unauthorized copying is an likely an infringement.

Computer Fraud and Abuse Act

The Computer Fraud and Abuse Act is another topic that often comes up in discussions about web scraping. This is a federal law that makes it unlawful for a person to access a protected computer without authorization, or in excess of a specific authorization. So the question becomes whether that access by the automated web scraper violates the Computer Fraud and Abuse Act. There are some important things that have to be proven for a plaintiff to succeed under the Computer Fraud and Abuse Act, and one of those is loss or damage that results from the unauthorized access. It is a very fact intensive inquiry that has to be made, but the Computer Fraud and Abuse Act is one thing that parties should think about in the context of web scraping.

Trade secrets

The question of trade secrets is another good one to raise in the context of web scraping. A trade secret is any information that a company has that gives that company a commercial advantage in the marketplace because it is secret. The information also has to be the subject of protective efforts — the company has to try to keep the information secret. For example, if information on a website is put there in a way that is behind certain protective barrier,s and the party doing the scraping circumvents those barriers, it could be that there is a misappropriation of trade secrets, particularly if that information is used for some competitive purpose.

Let’s talk

Web scraping legal issues can be complex. Scraping presents certain legal risks to the ones doing it, and the law provides certain powerful remedies when web scraping runs afoul of the rules. If you have questions about web scraping, give me a call at (630) 362-7237, or send me an email at ebrown@internetcases.com.

About the author

Evan Brown is a technology and intellectual property attorney in Chicago. This content originally appeared on evan.law.

YouTube creator’s misrepresentation case over DMCA takedown notices lacked certain key evidence

Sun, 06 Sep 2020 17:56:36 GMT

Plaintiff ran a YouTube channel. Defendant sent takedown notices under the Digital Millennium Copyright Act (DMCA) to YouTube alleging that plaintiff infringed defendant’s copyright. Plaintiff sued defendant under 17 U.S.C. §512(f), which provides for recovery when a person sends a DMCA takedown notice based on “knowingly materially misrepresented” facts.

The district court granted defendant’s summary judgment motion. Plaintiff sought review with the Eleventh Circuit. On appeal, the court affirmed the lower court’s finding that defendant did not knowingly materially misrepresent facts when it sent the DMCA takedown notices to YouTube.

The DMCA’s good faith standard

The DMCA relieves online service providers (such as YouTube) of liability for storing copyright infringing content if, among other things, the service provider properly responds to the copyright holder’s takedown notice. The notice must state that the copyright holder has a “good faith belief” that the identified content infringes. The copyright holder can be liable for damages if it “knowingly materially misrepresents” that the identified content infringes. Copyright law provides that if use of content is fair use, then it is not infringing.

In 2016, the Ninth Circuit evaluated the questions of what it means for a DMCA takedown notice sender to have a “good faith belief” and to “knowingly materially misrepresent” that content infringes. In that case (Lenz v. Universal Music Corp., 815 F.3d 1145 (9th Cir. 2016)), the court held that having a “good faith belief” that certain content infringes requires that the copyright holder, before sending a takedown notice, consider if the potential infringement is a fair use. And the court held that failure to consider fair use before issuing a takedown notice is a misrepresentation of copyright infringement.

What diligence must a takedown notice sender undertake?

What kind of belief must the copyright holder have to be in line with the conduct required of the DMCA? The Lenz court held that a copyright holder’s subjective good faith belief that a use is both unauthorized and not fair use serves as a complete defense to a misrepresentation claim.

Counsel’s consideration of fair use was sufficient

In this case, defendant’s attorneys testified in affidavits that they investigated whether plaintiff’s YouTube uploads infringed. And they testified that they evaluated whether the uploads were fair use. So the court found that defendant, by relying on their attorneys’ investigations and opinions, reasonably believed in good faith that plaintiff’s videos infringed and did not constitute fair use, prior to filing the takedown notices.

The court found that plaintiff’s evidence did not show otherwise. Plaintiff testified in her deposition that she “knew” defendant did not consider fair use. She said that if defendant did consider fair use, it would not have sent the DMCA takedown notices. In the court’s view, this proffered evidence was just a bare and speculative statement, not evidence. It found that plaintiff failed to provide any meaningful evidence that defendant did not consider the fair use doctrine and that it did not have good faith when it submitted the takedown notices.

Johnson v. New Destiny Christian Center Church, Inc., 2020 WL 5289881 (11th Cir., September 4, 2020)

About the author:

Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases.

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Work Made For Hire – Part 3

Wed, 26 Aug 2020 02:57:44 GMT

In a couple of recent blog posts we have covered work made for hire generally and have looked at how it is defined. Let’s focus in this post on a key provision that should be in most independent contractor agreements because of the work made for hire doctrine.

The work made for hire framework

Remember that an employee will own the copyright in what an employee creates within the scope of his or her employment even without a written contract saying that. And with an independent contractor, certain kind of works can be work made for hire if the contract says that they are. There are at least two things to be concerned about because of this concept about work made for hire as it relates to independent contractors.

Why work made for hire creates concerns in contract drafting

The first concern is that if the independent contractor agreement is silent on the question of intellectual property ownership, the contractor, and not the hiring party, will own the copyright in the deliverables. Many hiring parties that have spent a lot of money for the work of an independent contractor have been distressed to learn this.

The second thing to be concerned about is the situation where the contract says the deliverables are to be work made for hire, but they are not a type of work that the Copyright Act says can be work made for hire. (We went through that list in part two of this series.) Software would in most circumstances probably fall into this category. If the contract just says the software will be a work made for hire, then the contract may not establish ownership in the party paying for the software to be developed, because it is not really a work made for hire when created by an independent contractor.

Contractor hereby assigns . . .

So you will often see contracts that say two things on this point. It will say that the deliverables are work made for hire. Then the contract will go on to say something along the lines of, to the extent the deliverables are not work made for hire, contractor hereby assigns all right, title and interest in and to the deliverables to the hiring party. If you have seen that language in an agreement before, you may have thought it was redundant but it serves a good purpose.

Blog posts in this series:

Need help with a work made for hire issue? Let’s talk.

Call me at (630) 362-7237, or send an email to ebrown@internetcases.com.

About the author

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Is a website liable for leaving up content that violates its terms of service?

Mon, 24 Aug 2020 01:09:00 GMT

In a recent post, we discussed how Section 230 protected a website from liability for trade libel. The court held that third parties, and not the website itself, provided the offending posts. If the court had believed the posts were written by the site itself (or one of its agents) that may have turned the site into an information content provider and thus outside Section 230’s protections.

Terms of service violation?

This case – East Coast Test Prep LLC v. Allnurses.com, Inc. – had some other interesting aspects of interest to website operators seeking to effectively regulate content. For example, plaintiff claimed the website breached its own terms of service by failing to take down content prohibited by those terms of service. And the site allegedly breached its terms by closing a discussion thread, denying plaintiff the opportunity to respond to libelous content. The court dismissed plaintiff’s breach of contract claims.

The website’s terms stated, in relevant part, that users were not allowed to post libelous information. And it said the site operator would immediately take down content violating the law or invading another’s privacy. The terms also said that the website promoted the “idea of lively debate”.

What the plaintiff claimed

When the site refused to take down the offending content, plaintiff (a member of the site who had agreed to the terms of service) claimed the site violated the terms of service. And he claimed that the site breached the terms by not allowing him to comment, thereby going against the site’s commitment to foster the “idea of lively debate”.

The court rejected these breach of contract claims. It held that defendant did not promise to identify and immediately remove any and all potentially false statements. Instead, it disallowed users from posting libelous information and merely informed users that it would remove illegal or inappropriate posts. And the statement that defendant promoted the idea of a lively debate was not a promise to keep the site’s discussion threads open, particularly in light of the provision that “[p]roblematic posts/threads may be deleted or closed.”

East Coast Test Prep LLC v. Allnurses.com, Inc., — F.3d —, 2020 WL 4809911 (8th Cir. August 19, 2020)

Let’s talk!

Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.

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Website avoided liability over user content thanks to Section 230

Thu, 20 Aug 2020 03:25:36 GMT

Section 230 protected a website from liability over content its users posted, in a recent case from the Eighth Circuit Court of Appeals.

Plaintiff sued defendant website operator for trade libel. The website had a forum board, and two forum board users posted that plaintiff was under federal investigation.

Likely recognizing Section 230 immunity would be an obstacle, plaintiff pled certain key facts about the posts’ authors. It claimed the two authors were longtime users. And it noted defendant occasionally paid its users to generate content. So plaintiff claimed the authors were “volunteers, employees, servants, contractors or agents of [defendant].” According to plaintiff’s logic, this would make the defendant website operator the “information content provider” of the offending posts.

The court did not buy that argument. Neither did the appellate court. The Communications Decency Act (at 47 U.S.C. §230) immunizes providers of interactive computer services against liability arising from content created by third parties. The Act provides that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

The court held that these facts that plaintiff put forward did not plausibly show that defendant website operator was an information content provider. Since the facts only showed that independent parties created the offending posts, Section 230 immunity applied.

East Coast Test Prep LLC v. Allnurses.com, Inc., — F.3d —, 2020 WL 4809911 (8th Cir. August 19, 2020)

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Do you need help with an internet law issue? Give me a call or drop me a line: (630) 362-7237 – ebrown@internetcases.com.

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Work made for hire – Part 2

Mon, 10 Aug 2020 20:06:36 GMT

[Looking for Part 1 of this three-part series? Go here.]

In this second part of a three-part series on work made for hire, we will explore what makes a work made for hire and then will look at the practical consequences of this doctrine.

What makes a work a work made for hire?

To determine what makes a work made for hire, we have to look at the Copyright Act (at 17 U.S.C. §101). The Copyright Act provides two different categories of work made for hire. The first category is comprised of those works of authorship made by an employee within the scope of his or her employment. Those works are automatically work made for hire even if there is not a contract between the employer and the employee saying that the creative works are. It just happens automatically.

The second category of work made for hire does not deal with employers and employees, but deals with independent contractors creating specially commissioned works. Here are the works that that the Copyright Act says can be a work made for hire (if the contract says it is a work made for hire):

contribution to a collective work
part of a motion picture or other audiovisual work
translation
supplementary work
compilation
instructional text
test
answer material for a test
atlas

The Copyright Act gives a little more information about what a supplementary work is. Think, for example, of when one author writes an introduction or a foreword for a book written by another author. Supplementary works can also include illustrations that an artist creates for another work.

What is the practical effect of something being a work made for hire?

Simply stated, a work made for hire is owned the very moment it is created. The party who did the hiring is the owner. The work is not even owned by the person who did the work, even for a millisecond before it is transferred to the employer or the party who hired the independent contractor. No, the employer or the party who hired the independent contractor is treated as the author and that party owns the work from the very moment it is created.

So from an even more practical perspective, if the work does not qualify as a work made for hire, and the party who does the hiring wants to own the copyright, there needs to be a written assignment.

Need help with a work made for hire issue? Let’s talk.

Call me at (630) 362-7237, or send an email to ebrown@internetcases.com.

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Work made for hire – Part 1

Wed, 29 Jul 2020 14:28:38 GMT

Work made for hire is an important concept for almost all employers employees, but people often misuse the term, or use it in a way that does not capture all of its nuance. We’ll take a look at this doctrine in three parts. Here are a few things to know as an introduction.

Work made for hire is a copyright concept

Work made for hire is a copyright issue. The Copyright Act defines work made for hire at 17 USC §101. The key question relates to who owns a particular creative work, whether that be written text, a photograph, a video, computer software, or any other type of work that copyright protects.

It pertains to employees and independent contractors

Another thing to know about work made for hire is that it addresses the question of who owns a creative work that is created by one party for someone else. That arise in the context of an employee working for an employer, or it could be an independent contractor working for the hiring party. In the employment situation, it is pretty straightforward – the employer owns what the employee creates within the scope of his or her employment. But in the independent contractor context, a lot depends on what the agreement says.

Work made for hire concepts address patents and trademarks differently than copyright

Work made for hire concepts apply differently to copyright than they do other forms of intellectual property. Ownership is treated differently when an employee or a contractor develops patentable subject matter, or develops material that could be used as a trademark. Patent applications list the actual employee as the inventor. And trademark rights generally do not come into existence until the company has used the mark in commerce.

Need help with a technology or intellectual property issue? Call me or send an email.

(630) 362-7237 | ebrown@internetcases.com

About the author

Evan Brown is a technology and intellectual property attorney in Chicago, helping clients with a wide variety of issues concerning copyright, trademark, domain names and technology services.

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Is merely making files available on the internet a "distribution” under the Copyright Act?

Thu, 25 Jun 2020 19:00:55 GMT

Suppose an online provider allows third parties to upload digital files (which, in this context, would be “phonorecords” for copyright purposes). If no one else obtains one of those files, whether by streaming or download, has there been a distribution? In other words, is merely making available a copyrighted work an exercise of the right to distribute under the Copyright Act? The recent case of SA Music v. Amazon addresses this question. The court said no.

The Copyright Act lists the exclusive rights a copyright holder enjoys. One of those rights is to “distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending”

Making available copyrighted works on Amazon

Plaintiffs held the rights in some well-known 20th century songs (such as “I’ve Got the World on a String”). They sued Amazon over the presence of unauthorized copies of those musical works on Amazon’s music service. Plaintiffs asserted that merely making those files available online was an unauthorized distribution under the Copyright Act. Amazon moved to dismiss for failure to state a claim. The court granted the motion.

The statutory text favored Amazon

Amazon had contended that the Copyright Act (at 17 U.S.C. § 106(3)) did not contemplate plaintiffs’ “making available” theory of liability. The court agreed with Amazon’s position, finding there was no distribution of the works at issue. It held that the statute makes clear that a violation of exclusive distribution rights requires actual dissemination of the work.

SA Music, LLC v. Amazon.com, Inc., 2020 WL 3128534 (W.D. Wash. June 12, 2020)

Evan Brown is an intellectual property and technology attorney.

Have a question?

Send an email to ebrown@internetcases.com to request a time to talk. Or call (630) 362-7237.

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Section 230 did not protect online car sharing platform

Wed, 24 Jun 2020 22:29:57 GMT

Plaintiff Turo operates an online and mobile peer-to-peer car sharing marketplace. It allows car owners to rent their cars to other Turo users. It filed a declaratory judgment action against the City of Los Angeles, asking the court to determine the service was not being run in violation of applicable law.

The city filed counterclaims against Turo alleging (1) violation of local airport commerce regulations; (2) trespass; (3) aiding and abetting trespass; (4) unjust enrichment; and (5) unlawful and unfair business practices under California statute.

Should Section 230 apply?

Turo moved to dismiss. It argued that the City’s counterclaims sought to hold Turo liable for content published by users on Turo’s platform. In Turo’s mind, that should make it immune under Section 230.

Section 230(c) provides, in relevant part, that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

Turo argued that the city’s claims were barred by Section 230 because they sought to hold Turo liable for its users’ actions. Those users published rental listings and selected LAX as the designated pickup point for car rentals. According to Turo, because the content of the rental listings were provided by third-party users, and because the city’s claims sought to hold Turo liable as an interactive computer service responsible for that content, Section 230 should apply.

No immunity, based on what the platform did

The court rejected Turo’s arguments that Section 230 immunized Turo from liability arising from the city’s counterclaims.

It held that Section 230 did not provide immunity because the city sought to hold Turo liable for its role facilitating online rental car transactions, not as the publisher or speaker of its users’ listings.

Citing to Force v. Facebook, Inc., 934 F.3d 53 (2d Cir. 2019), the court observed that “Section 230(c)(1) limits liability based on the function the defendant performs, not its identity.”

And the court compared the situation to the one in HomeAway.com, Inc. v. City of Santa Monica, 918 F.3d 676 (9th Cir. 2019). In that case, Section 230 did not immunize companies providing peer-to-peer home rental platform services from a government ordinance that required homeowners to register their properties with the city before listing them on a home sharing platform.

The court explained that Section 230 immunity did not apply because the government plaintiff did not seek to hold the platform companies liable for the content of the bookings posted by their users, but only for their actions of processing transactions for unregistered properties.

Turo v. City of Los Angeles, 2020 WL 3422262 (C.D. Cal., June 19, 2020)

Evan Brown is an intellectual property and technology attorney advising companies on issues relating to the internet and new technologies.

Have a question? Email Evan to set up a time to talk: ebrown@internetcases.com. Or call (630) 362-7237.

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Trademark license: 3 key ideas

Wed, 24 Jun 2020 16:52:08 GMT

A trademark license is important. Let’s say that your company is going to enter into an arrangement whereby it is going to manufacture and sell another company’s products, or your company is going to integrate another company’s services into its own offering. These could take the form of reseller agreements or distribution agreements.

A critical piece of that arrangement is a trademark license. Here are three key things to keep in mind when entering into a trademark license.

What trademarks are being licensed?

The first thing to keep in mind is that you will need to actually specify which marks are being licensed. Are they word marks? Logos? You will want to be precise about that, and the agreement should specify clearly which marks are the subject of the agreement. The parties should also define standards for how the marks should appear. And the agreement should contain minimum standards for the quality or performance of the goods or services that will be provided.

How will the marks be used under the trademark license?

The second thing to keep in mind when entering a trademark license is to determine how the marks are actually going to be used. Will they be affixed to the products? Are they going to be in product literature and marketing collateral? One must define the scope of the permitted use so that the parties have an understanding of the arrangement.

Quality assurance provisions

The third thing to keep in mind when negotiating a trademark license is the quality assurance provisions. A party granting rights may lose those rights if it does not have a meaningful remedy to stop wrong use. This may occur if the trademarks under the license agreement do appear as they should, or if the quality of the goods and services being provided does not meet certain standards.

Evan Brown is a technology and intellectual property attorney in Chicago. Need help? Call Evan at (630) 362-7237 or set up a time to talk by emailing him at ebrown@internetcases.com.

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Click fraud might violate CFAA

Fri, 19 Jun 2020 00:18:58 GMT

Click fraud is a problem in online advertising and in situations where companies and advertisers use publishers to promote their content. A federal court in Delaware recently addressed this problem.

Plaintiff job search engine sued one of its former “publishing partners” and its owners. Defendants sent out email messages with links to job search results. Plaintiff paid defendants on a “pay-per-click” basis – a certain amount each time someone clicked on one of the links.

The Alleged Click Fraud

Eventually plaintiff noted that “conversions” were low from defendants’ activities. That means there were a lot of clicks on links but not many actual job applicants. Plaintiff began to suspect defendants were artificially inflating the number of clicks – that is, committing click fraud. The contract between plaintiff and defendants prohibited this conduct.

After investigating, plaintiff learned one of its employees was allegedly working with defendants to engage in the click fraud scheme. Plaintiff sued defendants, asserting a number of claims, including one under the federal Computer Fraud and Abuse Act, 18 USC 1030 (“CFAA”).

Defendants moved to dismiss. The court denied the motion.

CFAA and Click Fraud

The CFAA imposes liability when a plaintiff pleads and proves that a defendant:

has accessed a protected computer (defined in the statute);
did so without authorization or by exceeding such authorization as was granted;
has done so knowingly and with intent to defraud; and
as a result has furthered the intended fraud and obtained anything of value.

Defendant argued that CFAA liability should not apply because there were no allegations of “hacking” in this case. The court rejected that argument.

The court looked to the case of CollegeSource, Inc. v. AcademyOne, Inc., 597 F. App’x 116 (3d Cir. 2015) to hold that if a defendant accesses the plaintiff’s computers and uses information in violation of a contractual agreement with the plaintiff, that could be enough to impose CFAA liability. And the court believed that is essentially what is alleged to have happened in this case: that defendants violated the terms of contractual agreements with plaintiff by causing illegitimate clicks to be directed to plaintiff’s computer servers.

Juju, Inc. v. Native Media, LLC, 2020 WL 3208800 (D. Del., June 15, 2020)

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