Google and other Search Engines

A Houston area woman has sued Facebook asking for $123 million because Facebook was slow to take down a fake a profile created by her ex-boyfriend with pornographic images.

You can see the story here

http://www.youtube.com/watch?v=GvJzYGu548o

 

The plaintiff sued Facebook and the ex-boyfriend for negligence, breach of contract, gross negligence, intentional infliction of emotional distress, invasion of privacy and defamation.  The request for $123 million is based on $.10 for every Facebook user.  You can read the amended petition here–Ali v. Facebook petition.

My guess is this case will likely be removed to federal court (both defendants are out of state) and then summarily dismissed as to Facebook.  As regular readers should know by now, website operators like Facebook are not liable for the content created by others under the Section 230 of the Communications Decency Act.  It provides that “No 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.” This federal law preempts any state laws to the contrary: “[n]o cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.”

Although sympathetic to the plight of the plaintiff, Section 230 unquestionably (and may result in sanctions against the plaintiff) immunizes Facebook from the negligence, invasion of privacy, intentional infliction of emotional distress and defamation claims.

It appears the plaintiff is heavily relying upon the fact it took Facebook a long time to take the fake profile down.  Facebook’s community guidelines do prohibit fake profiles. Facebook says it will take down posts and profiles in violation of the guidelines, but it never contractually commits to the users it will quickly police the site.  In fact, Facebook expressly says it will not guarantee an expedient removal stating:

If you see something on Facebook that you believe violates our terms, you should report it to us. Please keep in mind that reporting a piece of content does not guarantee that it will be removed from the site.

It is therefore questionable whether there is any contractual obligation on Facebook to take down offensive or fake profiles.  Regardless, most courts do not allow plaintiffs to artfully plead around the Communications Decency Act and have poured out similar breach of contract claims.

We will keep an eye on this case.  You can listen to my interview with KRLD Radio in Dallas about the case here. facebook lawsuit with Mitch Carr – KRLD

 

 

We created this infographic for some of our media clients to give them a one-page cheat sheet on the analysis they need to do when trying to decide whether they can use an image from the internet in a pinch.

The infographic includes all the caveats because rarely can a legal issue be discerned down to one page with so few words.  In fact, I wrote a three-part series on this very topic last year.  

To view this as a pdf, click Use of Images InfoGraphic.

 

With the short Thanksgiving week, I thought we would touch on a few interesting stories developing over the last couple of weeks.

Photographer gets $1 million+ verdict from AFP and Getty for copied Twitpics

In my three part series on using images from the web for your news stories, we talked about the Morel v. Agence France-Press case.  Agence France-Press, the Washington Post and Getty used images of the Haitian earthquake put on Twitter by photographer Daniel Morel.  The Washington Post settled, but the case went to trial last week against AFP and Getty.  AFP thought they had permission from the photographer to use the images, but they did not get permission from the right person.

Previously, a judge rejected AFP’s argument that it could use the images because they were put up on Twitter. The Twitter terms of service did not provide that the photographer gave his rights in the images away or grant anyone else the right to use the images outside of Twitter.  In the trial, it turns out AFP did not follow their internal guidelines on the use of images or take immediate corrective action.  The jury awarded the upper end of the statutory damages.

If you have policies, follow them.  If you make a mistake, you fix it as quick as you can. You can read about the case here and here.

Engineering gift for girls’ video spreads on Facebook – lawsuit follows.

I have a daughter.  I liked this commercial.

http://www.youtube.com/watch?v=UFpe3Up9T_g

I assumed they had the Beastie Boys’ permission.  Apparently, they did not and the Beastie Boys sent a copyright cease and desist letter.  The people at Goldiebox fought back and filed a suit asking the court to declare the parties’ rights.   Is it a parody or do the Beastie Boys have to do this to make sure more people don’t use their songs in commercials?  You can read more about the case here with some legal analysis from the EFF here.  At least Goldiebox will get some more attention with the lawsuit at the beginning of the holiday shopping season.

Want to criticize me, it will cost you!

KlearGear’s terms of service state:

“In an effort to ensure fair and honest public feedback, and to prevent the publishing of libelous content in any form, your acceptance of this sales contract prohibits you from taking any action that negatively impacts KlearGear.com, its reputation, products, services, management or employees.

Should you violate this clause, as determined by KlearGear.com in its sole discretion, you will be provided a seventy-two (72) hour opportunity to retract the content in question. If the content remains, in whole or in part, you will immediately be billed $3,500.00 USD for legal fees and court costs until such complete costs are determined in litigation. Should these charges remain unpaid for 30 calendar days from the billing date, your unpaid invoice will be forwarded to our third party collection firm and will be reported to consumer credit reporting agencies until paid.”

A Utah couple criticized KlearGear on RipOff Report.  Soon thereafter, KlearGear sent the couple a bill for $3,500.  KlearGear never sued, but did report the couple as delinquent to the credit reporting agencies.  We have talked about being proactive, but not too proactive, when it comes to online complaints.  Since the news of this broke, KlearGear has shut down its Facebook page and its Twitter feed to hide from the blow back.  You can read more here, here and here.  This is not the kind of press you want before the shopping season.

Update 11/27/13 –  a lawyer is now representing the couple and has sent a demand to KlearGear to remove the notation with the credit agencies or face a Fair Credit Reporting Act lawsuit.  Read about it here.

Reputable companies line up to support TheDirty.com

Finally, we update you on the Jones v. TheDirty case we have talked about before.  This is the suit by a former Cincinnati Bengals cheerleader against the website TheDirty.   A Kentucky judge allowed the case to proceed against the rumor and trash site despite Section 230 of the Communications Decency Act which normally provides immunity for website operators based on user generated content.  The jury awarded $380,000 and TheDirty.com appealed.

While some may believe the ends justified the means against this particular defendant, the refusal to dismiss this case flies in the face of almost every other Section 230 case.  In this case, the court wrote “the very name of the site, the manner in which it is managed, and the personal comments of defendant Richie” shows that the site “specifically encouraged development of what is offensive about the content.”  TheDirty.com asks people to “submit dirt.” Their submission form has entries for the “dirt,” and provides a link to upload photographs. The court seized on the fact that in response to the post about Jones, the site operator wrote “I love how the Dirty Army has a war mentality.”  Thus, no dismissal by the judge.

Section 230 has its place.  Imagine if Facebook, Google, or YouTube could be sued or had to police all of the user generated content.  I don’t think those services would exist.  That’s why many of them have filed amicus briefs with the Sixth Court of Appeals urging the court to reverse the ruling and dismiss the claims.  You can read more here about how and why the likes of Amazon, Google, LinkedIn, Google and Microsoft are asking for the reversal.

 

Rocky Mountain National Park

Because of an extended working vacation away from Houston’s heat in Colorado, I’ve been away from the blog.  Like my kids gearing up to go back to school, I’m getting back to the normal work mode back in the office while recovering from a separated shoulder from a mountain biking incident (riding across on overpass in Houston is apparently different than actual mountain biking).  As a warm-up, here are a few quick links to interesting stories from the last couple of weeks.

Another Adwords Trademark Dismissal

From Professor Goldman’s Technology and Marketing Law Blog — another unsuccessful keyword advertising lawsuit.  The plaintiff was a collection agency and the defendant was a law firm that bid on the plaintiff’s name that triggered the following ad:

a link titled “Stop Collection Calls—Is Allied Interstate Calling You?” Below the link are two lines of text, the first listing Defendants’ URL, www.creditlaw.com, and the second bearing the slogan “Stop the calls for free!”

Under most circumstances, I would advise clients to avoid using the competitor’s name in the ad copy.  But, this is one of those easy exceptions.  It is clear the law firm is not trying to confuse consumers into thinking the law firm is the same as the collection agency.  It is a pretty easy decision, but a good reminder of how trademark law plays into search engine advertising.

An Eraser Button for Minors on Social Media

Charlie bags his first 14’er — sort of because it was Mt. Evans and we drove most of the way.

We previously mentioned an eraser button for minors on social media.  It appears the California Legislature is also back from vacation which, according to Edwards Wildman’s Digilaw Blog, means the law may be a reality soon.

Hi-Jacked Sites

One of the most difficult things to do is help clients deal with IP theft from pirates outside of the U.S.  Seyfarth Shaw’s Trade Secret Blog provides some tips on how to deal with these issues–assuming you have enough clout to get your state attorney general involved.

Cascade Falls

Don’t let your independent contractor use your email.

Evan Brown’s Internet Cases blog discusses a recent Texas opinion regarding the dangers of letting an independent contractor use the company email.  An independent contractor cannot usually bind a company to an agreement because they don’t usually have the authority.  The company, however, can clothe the independent contractor with the indicia of authority and lead the other party to believe they are dealing with the right person.  One way to do that — have the independent contractor send emails from the company account.

Understanding the law and the government’s 

Sunrise in Grand County, Colorado

To get a good baseline understanding of the law underlying the government’s ability to (store, monitor, read, index, search – you choose the verb) / (phone records/meta data/emails/cell location information — you choose the object of the verb), NPR’s Morning Edition has a good story explaining the 1978 Supreme Court decision that may say all of this is perfectly legal.

The Tenth Circuit issued a decision yesterday in the 1-800 Contacts v. Lens.com case we discussed several years ago when originally filed.   For those of you who simply want the result, the Court of Appeals ruled:

1.  There was no evidence of likelihood of confusion – an essential element to a trademark claim.

2.  The court also threw out the secondary infringement claims based on the use of the trademarked term by Lens.com’s affiliate marketers because the agents, or sub-agents, lacked authority to include 1-800’s mark in ads for Lens.com.

3.  The court of appeals, however, sent the case back to the trial court on the one claim to determine whether Lens.com was liable for contributory infringement because the evidence could support a reasonable finding that Lens.com did not take reasonable steps to halt the display of 1-800’s marks in affiliate ads once it learned of such display.

The trademarked term was 1800CONTACTS.  Lens.com itself bid on the following nine terms (the Challenged Keywords) as AdWords keywords: “1-800 contact lenses”; “1800 contact lenses”; “800 contact lenses”; “800comtacts.com”; “800contacta.com”; “800contavts.com”; “800contaxts.com”; “800contzcts.com”; and “800conyacts.com.” Lens.com did not dispute that it bid on the Challenged Keywords, nor does 1-800 contend on appeal that Lens.com ever bid on the 1800CONTACTS mark itself. Additionally, 1-800 did not claim that any impressions created by Lens.com featured the 1800CONTACTS mark in their text.

Discovery revealed, however, that two Lens.com affiliates had bid on the keyword “1800Contacts” and close variations of 1-800’s mark. And at least one of the affiliates published at least one ad for www.JustLenses.com (one of Lens.com’s websites) that featured the phrase “1800 Contacts” in its advertising copy.

The main claims against Lens.com related to the conduct of the affiliates were based on two theories.  The first—vicarious infringement—imposes liability on a principal for the infringing acts of its agent.  The second—contributory infringement—is analogous to aiding and abetting.

The direct claim against Lens.com argued there was initial interest confusion when the trademarked term triggers the ad.  Initial-interest confusion results when a consumer seeks a particular trademark holder’s product and instead is lured to the product of a competitor by the competitor’s use of the same or a similar mark.  As the name implies, the improper confusion occurs even if the consumer becomes aware of the defendant’s actual identity before purchasing the product.

The court of appeals cited Lens.com’s expert report to find Lens.com’s use of the nine Challenged Keywords yielded 1,626 impressions for Lens.com or its associated websites over eight months. In only 25 (1.5%) of these 1,626 instances did the user click on the ad for Lens.com. (We do not know how many of the 25 made a purchase from Lens.com.) The users in those 25 instances may have been confused into thinking that Lens.com was affiliated with 1-800, or they may simply have wished to look at the offerings of those whom they knew to be 1-800’s competitors. What we can say, though, is that initial-interest confusion occurred at most 1.5% of the time that a Lens.com ad was generated by a Challenged Keyword in those eight months. This number cannot support an inference that Lens.com’s keyword activity was likely to “lure” consumers away from 1-800.

Finally, the court determined there was no evidence Lens.com instructed their affiliates to the use the 1-800 mark in the ad copy.  By doing so, the agents went beyond their scope and Lens.com could not be held vicariously responsible.  Lens.com may not have taken sufficient action, however, to stop the affiliates from using the trademarked term when notified about it and therefore, there could be a trial on the issue of contributory infringement.

What did we learn?

1.   Initial interest is becoming a difficult weapon for plaintiffs in these cases.  Professor Goldman, who will probably write about this decision soon, will be glad.  Update on 7-19-13 – he is.

2.  Don’t use the trademarked term in the copy.

3.  Instruct your affiliates on #2 and take action if you are told the affiliates have crossed the line.

4.  Finally, although I did not discuss the rejection of the plaintiff’s survey in the case, if you are going to do a survey to help show confusion, read this case and take heed.

 

The district court in New York dismissed Viacom’s lawsuit against YouTube yesterday.  Yes, this case has been on appeal and remanded several times.  You should read the details on Professor Goldman’s Technology and Marketing Law Blog here.  Viacom may appeal the  Second Circuit Court of Appeals once again, so it may not be over.

To summarize the decision, the district court ruled that unless Viacom can prove YouTube has actual knowledge that each uploaded clip is a copyright violation, Google is entitled to the immunity granted it by the Digital Millennium Copyright Act, the DMCA.

DMCA BASICS

The DMCA provides web hosts and internet service providers a “safe harbor” from copyright infringement claims resulting from content provided from others if certain procedures are followed. If the safe harbor qualifications are met, only the customer or user can be liable and not the actual website or ISP, i.e., YouTube.

To qualify for the safe harbor protection, the site must: (1) notify the customers of its policy; (2) follow proper notice and takedown procedures; (3) designate a copyright agent with the U.S. Copyright Office; (4) not have knowledge that the material or activity is infringing or of the fact that the infringing material exists on its network.

Summary of the Ruling

This case has centered on the last prong.  Viacom has been arguing YouTube generally knows copyrighted videos are uploaded and has benefited from a willful blindness to the infringement.  The court ruled there needs to be evidence that YouTube knows each and every individual clip is copyrighted at the time it us uploaded rather than knowing that it generally happens.  Specifically, the court wrote:

knowledge of the prevalence of infringing activity, and welcoming it, does not itself forfeit the safe harbor. To forfeit that, the provider must influence or participate in the infringement.

Viacom admitted there is no technology in place that would give YouTube actual knowledge regarding the copyrights attached to each individual video at the time it is uploaded.

What does it mean?

This ruling confirms the burden to track copyrighted material is on the copyright owner and not the website.  If you have a website that takes user-generated content, you should feel better.  Even if you know you some of your users often upload copyrighted materials, you will not be deemed to “have knowledge that the material or activity is infringing or of the fact that the infringing material exists on its network” until the copyright owner tell you.

As long as you satisfy the other safe harbor requirements, you should be safe.  Viacom may appeal and try to resuscitate the “willful blindness” argument.  There is also some concern that the words “influence” or “participate” in infringement may leave open a hole for copyright owners to go after certain websites more active in seeking and pushing the content.

[Update 4-22-13]  I should have put this ruling in context with the recent Ninth Circuit ruling in UMG v. Veoh.  The Ninth Circuit originally ruled in favor of Veoh, the online video site against the record company UMG, but decided to revisit the decision in the wake of the Second Circuit Court of Appeals’ decision in Viacom which took a slightly more narrow view of the immunity protections.  Last month, the Ninth Circuit ruled again in favor of Veoh affirming a broad support for the initial free flow of information on the Internet.  The Ninth Circuit detailed, however, the precautions Veoh used to prevent the initial downloading of copyrighted materials which raises the questions of whether there is a requirement to employ reasonably available methods to prevent the uploading of copyrighted material in the first place.  You can read more details in this post from Kimberly Herman of Sullivan & Worcester.

In the interest of levity and to show how long this case has been going, enjoy this clip from the Daily Show in 2007 that discussed the case.

 

CLICK HERE TO REGISTER

Social Media is becoming pervasive in today’s society. This CLE looks at how it intersects with legal issues crossing a broad spectrum of specialty areas to give all practitioners the information they need to be aware of the special risks and issues social media presents. Our speakers will look at how it affects brands, defamation for individuals and businesses, the new area of evidence and investigative tools social media presents and the ethical issues it presents for lawyers. Oh, and we will be having a beer too.


Thursday March 28, 2013
2:00-5:00 p.m.

Buffalo Bayou Brewing Company
5301 Nolda Street
Houston, Texas 77007 

Topics:

Brand Protection in the Online Space
Aparna Dave, Senior Counsel – Intellectual Property, Wells-Fargo

 

 

 

Evidence and Investigation In an Online World
Jana Woelfel, Strasburger & Price, LLP

 

 

Defamation and Privacy Online
Katie Sunstrom, Lorance & Thompson, PC

 

 

Ethics of Lawyers on Social Media
Travis Crabtree, Member, Looper Reed & McGraw, P.C.

 

 

CLE:
3 hours of CLE including .75 hours of ethics

Cost:
$200 per person ($150 Early Bird Special for those who register prior to March 8th)

More Information or to RSVP.

 

After looking at the most popular posts from 2012 in our last edition, today we look at what are likely going to be the big trends for 2013 in internet and marketing law.  

Privacy and COPPA – Although this issue is not likely to dominate the general business population, privacy and COPPA will continue to dominate the media’s coverage of internet law issues — just look at Instagram’s latest dustup.  Right before the new year, the FTC officially passed their COPPA regulations.  Although the changes have been in the works for almost a year, it will take a while for companies covered by the Children’s Online Privacy Protection Act – generally websites targeted or directed to users under 13 – to comply.  Surprisingly, respected folks like Nickelodeon have had COPPA issues and the FTC is watching the mobile app industry

Cyber-Security – An issue likely to catch people off guard is cyber security legislation that may be written broad enough to cover more than just the major telecoms.  Last year, efforts like the Cyber Intelligence Sharing and Protection Act (CISPA) and the Cybersecurity Act of 2012 failed to become law.  Both the CSA and CISPA drew critics mainly related to personal privacy.  The President may simply act by executive order.  The business question remains how broad will any laws be, what sites and service providers will have to comply, what will that mean and how much will that cost?  For more, David Gewirtz outlines the 14 Global Cybersecurity Challenges for 2013 on ZDNet.

Software and Tech Patent Reform – Whenever a programmer finds out I am a lawyer, I instantly get a tirade about our broken patent system.  I’m guessing Apple, Samsung and Motorola would agree.  In the well-covered battles,, the only winners appear to be the lawyers.  Although I don’t practice patent law (it is not a field where one dabbles, so I leave that to my colleague David Henry), I have a hard time deciphering what was to be learned from those expensive battles and what developers should do.   Maybe there is some hope for sensible patent reform

Amending the Communications Decency Act – The CDA is the law that prevents people from suing the likes of Yelp and RipOff Report for reviews generated by users.  It certainly makes sense not to allow lawsuits against Facebook and Google for defamation from other people’s content which would cripple those services.  But online defamation remains a hot issue and more people are fighting back.  I’m not sure if there will be any changes as the law is applied to consumer review sites, but what about loosening the law as it applies to sites whose whole sole purpose is to slander and then extort?  Sites that call people whores with photos and run SEO’ed pure gossip sites of private individuals, but then offer “reputational protection” services for a fee to remove the materials.  I purposefully don’t mention names or link to them so you won’t go check them out.  Instead, if you are interested, go to a good advocacy group like CiviliNation.   

The New Advertising Model – The FTC may push harder on Do Not Track legislation that could interrupt behavioral or targeting online advertising this year.  Facebook and everyone else is still trying to figure out mobile marketing.  I waxed philosophically at the end of last year about where advertising and user generated content may be going.  (Are the YouTube commercials you can’t escape getting longer and do I want to wait to see a 30 second video I am already skeptical about?)  Kirk Cheyfitz of PandoDaily says the best online ads of 2012 were not sctually ads.  There are bright minds trying to figure this out and I expect by the end of the year, we will talking about one of them and a new product, service or idea we haven’t heard of before.

The Texas Attorney General has been investigating whether Google places its own products over competitors in violation of anti-trust rules.  The Texas AG had not filed suit yet and technically still has not filed an anti-trust suit.  Instead, we learned this week that the Texas Attorney General sued to force Google to turn over documents related to the probe.   Google claims the documents should not be turned over because of the attorney-client privilege.

Spinsters will claim Google must have something to hide if it refuses to provide documents behind the shield of the attorney-client privilege.  It is the same argument taking place on the national stage with Attorney General Eric Holder, Congress and President Obama

This won’t be a rant or tome on the attorney-client privilege.  But,  sometimes you do withhold documents, even harmless ones, on the mere principal of preserving the privilege.  The attorney–client privilege is one of the oldest recognized privileges and is the only way clients and lawyers can have candid discussions about legal issues.  If everyone simply provided harmless privileged documents because they had nothing to hide, then there would be more logic to cast serious doubt when the privilege was actually invoked.  More details of the suit and a copy of the actual lawsuit can be found here from All Things D.

More important is the underlying anti-trust claim.  Basically, the Texas Attorney General wants to know if Google gives preference to its own products, like Google Places, over a competitor’s, like Yelp.  Given the market strength of Google, it could create problems. 

I know that if I started an online legal referral service that was highly ranked organically, I would be upset if Google started a paid online referal source called Google Lawyers and suddenly my site disappeared from the first page.

There is certainly enough smoke.  As explained in this Search Engine Land post, Google is under simlar heat from European officials, private litigants and other government investigators.  The link provide more details and analysis on the anti-trust claims.

The Texas AG’s suit is grabbing a lot of headlines right now.  Unfortunately, it will take some time to sort this out and there will be no ruling on Google’s business practices.  Instead, the result will be whether the documents have to be turned over.  I don’t envy the judge who is supposed to sift through 14,000 documents to make a decision on each one.  Of course, if the Texas AG wins, we may know more on the answer to the bigger question.  Does Google do evil?

 

Hopefully, you’ve decided to read on because you believe you may be victim to a fake competitor review and you are not looking for advice on how to get away with it.  If you are looking for advice on how to get away with it, you’ll have to look somewhere else.  If you are looking for some information on what happens when you are victim or need to persuade a client not to do it, then read on.

A Missouri court recently awarded a company $150,001 as the victim of three fake online reviews.  In the case of The Fireworks Restoration Company v. Hosto, two gentlemen formed two companies together.  As often happens when you mix business with friendship, the relationship went downhill and the parties split their businesses.  Mr. Hosto, apparently, was not happy with the result.

To invoke his revenge, Mr. Hosto pretended to be former customers of the business, The Fireworks Restoration Company, and left negative reviews on Google and Yahoo.  In the review, Mr. Hosto, using the name of an actual former customer, wrote, “dealing with these people was the biggest mistake I have ever made in my whole life.”  He continued, “It was a miserable experience and the job was done so poorly we decided to sell the house.  They were great salesman [sic] but their workman [sic] were idiots and the owner was not willing to help in any way . . . I was so happy just to get them out of my life I paid them much more than I should have because their law firm threatened to lien my house if I disagree[d] with any part of their bill. . . Do yourself a favor and call your insurance company and get a referal [sic] for legitimate business people.”  The review stayed on Yahoo for two months and on Google for two years.

Suspecting foul play, the company filed a John Doe lawsuit.  The suit allowed the company to subpoena information from Yahoo that provided enough information to confirm the suspicion that Mr. Hosto was the true author—a fact Mr. Hosto admitted when he was called out on the postings.  The company then sued Mr. Hosto for defamation.  As we have discussed before, the Communications Decency Act makes it difficult to sue Google or Yahoo for user generated content.

It was easy for the company to prove Mr. Hosto said false things about the company with malice with the intention to harm.  But, The Fireworks Restoration Company had difficulty proving it was damaged by the negative review resulting in a $1 award from the jury for lost profits.  The jury, however, decided to punish Mr. Hosto granting $150,000 in punitive damages.

The court of appeals upheld the jury’s award rejecting Mr. Hosto’s argument the company failed to present evidence of one actual customer who relied upon the fake online review.  Instead, in addition to the owner’s testimony and a consultant who talked about the importance of online reviews, two competitors in the same industry testified they read the reviews and that they opined it had to have had a negative impact on the company’s business which, prior to this, had a good reputation.

Aware of the difficulty of finding actual customers who were turned off by the review, the court wrote:

We reject Defendant’s contention that Plaintiff needed to produce testimony from potential customers who opted to turn elsewhere due to the web reviews. With the internet, consumers are able to compare businesses and their wares with unprecedented speed. Interpersonal contact is characteristically absent, so if a consumer declines to engage a business it encounters on the internet, that consumer continues his or her search and the business has no knowledge it has been passed by. As such, it would be unreasonably burdensome to impose upon a business plaintiff the requirement that it locate potential customers that it never knew in order to successfully demonstrate actual damage to its reputation. The deleterious impact of such a constraint far outweighs any benefits it would have in proving reputational harm.

Affirming the punitive damage award, the court wrote:

From the outset, Defendant’s conduct evinced a calculated desire to seriously damage Plaintiff’s business reputation and, in doing so, deliver, in Defendant’s words, “the knock-[out] punch [he] had looked forward to delivering for so long.” Defendant admitted that he was “bitter and wanted revenge.”…Even after having time to consider his actions, Defendant did not cease his conduct. Instead, he testified that he went online to post an additional fictitious review because he “felt something satisfying in” posting the initial derogatory reviews. Not until he received notification of Plaintiff’s suit did Defendant demonstrate any contrition, and even then his apologies were couched in a desire to forego litigation.

Many online reputation management gurus would explain that a few negative reviews actually give credence to the surrounding positive reviews, assuming the positive greatly outweighs the negative.  Nevertheless, there is no good reason to anonymously write a fake negative review of your competitor.  While ethics should be sufficient discouragement, with enough resources, a victim of the fake review can unmask your identity and take you to court.  As shown by the jury in Missouri, they don’t take too kindly to people seeking vengeance online with fake reviews.  Even if you don’t cause actual damages, they will make you pay.

For related materials, go the Visibility Magazine Legal Corner online archives and see DO YOU HAVE AN ONLINE ENDORSEMENT POLICY? The FTC thinks you should and They Can’t Do That on the Internet!