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.

 

Although the Governor called a special session extending the Texas Legislative session, the topics to be addressed are political ones and not the ones we have been tracking.  We can therefore wrap-up our watch of the three bills we were monitoring.

First, bring out your dead!

HB 318/SB 118 social media passwords

A bill that would have prohibited employers from demanding social media passwords from its employees and applicants garnered much attention, was passed by the house, but then died.  Texas will not join about a dozen other states who have passed similar laws to provide what I think is a solution to a non-existent problem.  I seriously doubt that between now and 2015, employers will run amok demanding social media passwords — especially with the pro-employment attention Texas has been getting (shameless plug for my hometown).  The National Conference of State Legislatures has a good page on the efforts by various states.

HB 1989 service by social media

This bill also generated attention, but did not get very far.  It would have allowed judges to authorize service of a lawsuit via social media.   The existing rules allow judges to authorize substituted service when necessary which could include social media assuming certain due process protections are in place.  This bill would have given judges more comfort with the idea, but its death does not mean it can’t still be done.   This Outside Counsel article by Michael Lynch suggests service of process via social media may become more common without extra rules or laws.

The lone survivor

Only SB 94 was passed and will become law on September 1, 2013.  It allows for private civil lawsuits against websites that allow advertisements for what the law calls “compelled prostitution,” better known as sex trafficking.  As explained in my initial post, there is a serious legal question of whether the Texas law would run afoul of Section 230 of the Communications Decency Act which generally shields website operators from liability for user generated content.  Hopefully, it is a purely academic discussion and this law is little used because of the lack of necessity.  If a website is sued, it will make for an interesting defense.

The Legislature now focuses on redistricting – expect some fireworks and perhaps another escape.

Is liking something expressive activity protected by the First Amendment?  Does being a Facebook “friend” create the appearance of impropriety requiring the judge to recuse himself from the case?  Leave it to Facebook to make us answer these questions.

You don’t like me, you just want my coupon . . .

The Fourth Circuit Court of Appeals is wrestling with the question of whether liking something on Facebook is protected First Amendment activity in the case of Bland v. Roberts.  A jailer in Virginia liked his boss’s opposition during a campaign for sheriff.  The incumbent won and the plaintiff was fired.  The sheriff said it was for competency issues, but the plaintiff said retaliation was the motivating factor for the termination.

Public employers, and some private employers in some states, cannot retaliate against an employee for taking part in Constitutionally protected activity that does not interfere with work.  In other words, you can’t fire a public employee just because they spoke out on a issue or supported a candidate.

So, it seems like a slam dunk case for our fired jailer.  The district court dismissed his case because the court ruled “liking” something on Facebook did not amount to a “substantive statement” worthy of protection.  The court determined that without more, the simple act of making one-click on Facebook does not reveal that someone is engaging in protected speech.  While it is true half of the people on Facebook would like Osama bin Laden to get a 15% discount at Target, “liking” a candidate or a cause is political speech.

It’s dangerous to predict the outcome of an appeal based on oral argument, but according to this report from Bloomberg, I would put my money on a reversal.

“Carter clicked the Like because he liked something,” U.S. Circuit Judge Stephanie Thacker said to a lawyer for Hampton Sheriff B.J. Roberts during the 40 minute hearing. “How is that any different than perhaps putting a sign in the yard saying ‘I Like Ike’?” she asked.

Facebook, which got a few minutes at the hearing to argue for a reversal, made similar arguments.

The opinion should be issued in a few months and will tell us whether the over 3 billion “likes” a day on Facebook are entitled to First Amendment protection.

It is not likely your “like” will make its way to the Supreme Court.  The lesson is to be careful of making employment decisions based on what you see on Facebook.  The issue is more problematic for public employers, but as we have discussed before even non-union private employers need to make sure their social media policies and employment decisions do not upset the NLRB.  “Liking” a complaint from a co-worker about working conditions cannot be the basis of a termination.  “Liking” Coke when you work at Pepsi in an at will state probably can be.

MAKING “FRIENDS” WITH THE JUDGE

Meanwhile, the court of appeals here in Texas held that being “friends” with a judge on Facebook should not be the basis of a criminal conviction reversal.

In Youkers v . Texas, the criminal defendant was accused of violating the terms of his parole supervision which sent him to jail for eight years.  On appeal, Youkers argued the father of the victim in the underlying crime was Facebook friends with the judge and sent the judge a Facebook message.  Therefore, the defendant argued, there was an improper bias and the conviction should be overturned.

The Facebook message

When you only hear part of the story, things look bad.  Yes, there was an ex parte Facebook message from the victim’s father to the judge.  The message, however, sought leniency for the defendant.  The judge also disclosed the message to everyone without any objection and warned the father not to do it again.

The Facebook “friendship”

The more interesting question is whether merely being friends with a judge on Facebook provides even an appearance of impropriety.  I’ve had interesting discussions about this topic at various ethics CLE’s with judges and private practitioners.  And, yes, I am Facebook friends with several judges.

The court of appeals ruled judges are not prohibited from using social media.  In Texas, unfortunately, we elect our judges.  The court realized the judges need to be on social media.

As pointed out in Professor Goldman’s Technology and Marketing Law Blog:

Merely designating someone as a “friend” on Facebook “does not show the degree or intensity of a judge’s relationship with a person.” ABA Op. 462. One cannot say, based on this designation alone, whether the judge and the “friend” have met; are acquaintances that have met only once; are former business acquaintances; or have some deeper, more meaningful relationship. Thus, the designation, standing alone, provides no insight into the nature of the relationship.

Without more, the defendant could not prove there was an improper evidence.

The ABA cautions judges to use social media within the existing ethical rules (endorsing political candidates is a tough one) and this case should give lawyers here in Texas a little more comfort about friending judges.  The practicing bar has a little more freedom.  Yet, the existing ethical rules still apply to our social media use.  For instance, we cannot imply we hold any sway with a particular jurist and a simple Facebook friendship does not do that – particularly when the elected judge is friends with hundreds of lawyers.

A lot of the judges are our friends.  Before they got on the bench, they were our colleagues.  Once on the bench, they are still our neighbors, our kids’ coaches and friends.  We socialize with them outside the courthouse.  With Facebook, there is just a record.

The State of Texas may find out and it may be more applicable to your site than you think.  In early filing for the 2013 legislative session, Democratic state Senator Leticia Van de Putte proposed a bill aimed at stopping at stopping human trafficking.  The entire text is here.

It allows for human trafficking victims to bring civil suits against the wrongdoers including websites, that allow advertisements promoting the compelled sex trade.  Specifically, it states a website can be liable if it:

publishes an advertisement that the [website] knows or reasonably should know constitutes promotion of  prostitution or aggravated prostitution and the publication of the advertisement results in compelling prostitution with respect to the victim. 

The Bill and Section 230

I’ll parse through the language below, but first I want to discuss how this law may interact with Section 230 of the Communications Decency Act.  Section 230 provides the operators of websites with immunity from any suits caused by the content created by others.  It states:

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.

It usually shields sites from defamation claims, but it has been applied to almost all claims that stem from the content  created by others.

So what happens if a website simply allows anyone to create ads, specifically adult services ads without having any say as to the content?  Would the CDA trump this Texas proposal?  Online adult listing companies have already prevailed on several related suits in MissouriWashington and Illinois.  If Texas passes the law, it is likely to legislate its way into a lawsuit. 

Numerous local and state officials have attempted to crack down on at least one known adult-listing service without much success.  The passage of the law in Texas could be a symbolic statement increasing the fervor for Congress to make changes to the CDA.  The CDA already expressly excludes liability for federal criminal laws including child pornography.  Thus, Congress could carve out a similar exemption as it relates to human trafficking.

The Language of the Texas Bill 

If the proposed law were to survive CDA and other challenges, it could present some interesting trial issues.  First, you have to parse through the definitions.  “Promotion of prostitution” is essentially pimping for one person.  “Aggravated promotion of prostitution” is running a pimping enterprise of more than one prostitute.  So, to be liable, the media company would have to know, or reasonably show know, that the advertisement is for promotion of prostitution (i.e., pimping). 

A successful plaintiff would not have to show, however, that the website operator knew the pimp was engaging in “compelling prostitution.”  Compelled prostitution means that through force or threat of force, you force someone to commit prostitution or cause a minor to commit prostitution–the human trafficking aspect.

While crass, the law essentially means that an advertisement for a “reputable pimp” who does not engage in “compelling prostitution” would be OK.  But, if you think that the advertising pimp is “reputable” and they turn out not to be because they force people or use minors, the website would be in trouble. 

Also interesting is that if you are the actual prostitute and you advertise, then the media company cannot be held liable because you are not engaging in “promotion of prostitution.”   

How would this apply to my site?

You may be thinking that I don’t run an adult classified listing site, so while interesting, I don’t care.  If you run any interactive site that allows for user generated content or messages, you may want to think again.  Under this provision, “advertisement” is defined to include communications that promote a commercial service on websites “operated for a commercial purpose.”  Read broadly, that could apply to every website that makes any money regardless of whether you accept classified listings or allow users to advertise, as we normally think of the term, on your site.  In other words, the “advertisement” that creates liability, could be a comment a user posted on your blog that makes some money.

So, if a pimp takes to Facebook and posts a free message promoting human trafficking, could Facebook be held liable?  Their liability would all come down to what did Facebook know or should it have known?

Human trafficking is a serious issue.  According to reports, adult classified that may involve adult trafficking is also serious business.  Without action from Congress, any efforts by Texas or other states to crack down on online advertising is likely to lead straight to the courthouse.

Earlier this month, a federal judge ruled that when a company took over a departing employee’s LinkedIn account, the company did not violate the Computer Fraud and Abuse Act in the case of Eagle v. Edcomm.

I blogged about this case in my prior post Who Owns Your Twitter Followers and LinkedIn Connections?  While the ruling has gotten some publicity (The Technology and Marketing Law Blog’s, Kevin O’ Keefe and Ars Technica), it certainly does not answer the question of who owns the LinkedIn account and what rights do employers have.  The narrow ruling on the CFAA clarifies the application of the statute designed for hackers, but doesn’t come close to resolving what a simple agreement would solve.

Background of the Case

Linda Eagle had a “personal” LinkedIn account with thousands of connections related to her banking education business–Edcomm.  Eagle sold Edcomm, but stayed on as an employee.  When things soured, the new owners fired Eagle and immediately changed the password to the LinkedIn account locking out Eagle.  The company redirected Eagle’s account to go to the new CEO’s account with a new picture and contact information.

The company claimed it created and maintained the account and there was an unwritten policy that employees turned over their LinkedIn accounts when they left.   Eagle provided Edcomm with her LinkedIn password and allowed the company to help her manage the account.    

In an earlier ruling, the court said the LinkedIn connections were not a trade secret because anyone could see them as they were publicly displayed.  The court, however, allowed the misappropriation of an idea claim to go forward based on a dispute about whose idea it was to generate the content on the LinkedIn account.

The Ruling  

The court has now dismissed Eagle’s claim under the CFAA and the Lanham Act.  As mentioned, the CFAA was designed to address hacking and it requires more than $5,000 in a statutorily-defined “loss.”  So, the issue before the court was not really whether the CFAA was violated or who owned the account, but whether Eagle, who was acting pro se at the time, suffered a sufficient “loss.”

The CFAA defines “loss” as “any reasonable cost to any victim, including the cost of responding to an offense, conducting a damage assessment, and restoring data, program, system or information to its condition prior to the offense, and any revenue lost, cost incurred, or other consequential damages incurred because of interruption of service.”  18 U.S.C. § 1030(e)(11).   

Eagle claimed she lost: (1) a $100,000 business opportunity because she could not access messages on LinkedIn; (2) monies to regain access to the account (she went at least 22 weeks without access); (3) damage to her reputation; and (4) loss of value to the account. 

The court responded: 

None of these allegations suffice to create a genuine issue of material fact as to the existence of cognizable damages under the CFAA for two reasons.  Primarily, Plaintiff is not claiming that she lost money because her computer was inoperable or because she expended funds to remedy damage to her computer.  Rather, she claims that she was denied potential business opportunities as a result of Edcomm’s unauthorized access and control over her account.  Loss of business opportunities, particularly such speculative ones . . . is simply not compensable under the CFAA.”

Thefore, the court dismissed the CFAA claim.  

The court summarily dismissed the Lanham Act claim because when anyone accessed Eagle’s account, they would find the new CEO’s name, photograph and new position so there could be no consumer confusion.

The court allowed the conversion, invasion of privacy and missappropriation state law claims to proceed in a trial that should be starting any day.  Those issues may actually shed light on who owns the account.

 But what is it all worth?

It seems to me that Eagle is spending a lot of efforts for loss of access to her account for 22 weeks.  She has already gone through two lawyers and is now pro se.  What was the real damage? From Edcomm’s perspective, what was the real gain?  If there were trade secrets on the account, there are prohibitions and ways to address that without seizing the entire account (or at least seizing it for that long). 

Who Owns What? 

If you’re a company and you want the account,  put it in a contract or employment policy.  If you’re an individual and you want the account, follow these guidelines:

  1. Have it under your name and don’t mix it with the company or brand.
  2. Set up the account yourself.
  3. Populate the content yourself.
  4. Don’t give out the password.

I’m looking forward to a case that parses through personal versus company accounts and when one can become the other.  As explained by Professor Goldman and Venkat Balasubramani, it is not even clear whether California’s new social media privacy law would help in this case because of the failure to make these factual distinctions.

Until there is precedential guidance, I think it is simply a balancing test as to who should own it.  For 99% of us, this won’t be an issue.  Why would anyone want my LinkedIn account or Twitter followers?  

If I amassed a million connections on followers under a LinkedIn Account or Twitter handle specifically referencing Looper Reed’s brand with Looper Reed’s assistance (think of media personalities), then it becomes a little more gray.  As any lawyer will tell you, eliminate the gray with a contract.

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!

Yesterday, I got the opportunity to speak with Colin O’Keefe of LXBN TV on the subject of the Dharun Ravi/Rutgers webcam spying case. In our brief interview, I explain why this case received the level of attention that it did, what social media’s role was in the proceedings and what we can learn from the case.  You can read my post from Friday when the jury handed down the guilty verdict.

Match.com was sued last week because a male user sexually abused a female user on the second date.  Facebook and MySpace already warded off similar suits from parents of children who were stalked online based, at least in part, on Section 230 Communications Decency Act immunity.

These stories are indeed tragic, but it reminds me of the famous defense theme: 

Tragedy Strikes – Blame is Quick to Follow

No amount of technical or legal safeguards can prevent evildoers from doing evil.  These sites do not guarantee the safety of the users and often include such disclaimers in their terms of service.  That fine print you agree to when you create an account does matter and is usually enforced.  There is a reason these sites are free to use.

In the Match.com suit, the Jane Doe plaintiff claims she was abused on the second date.  At that point, she did her own due diligence discovering he had a record of sexual assault.  Interestingly, the plaintiff is not seeking damages — right now.  Instead, she is seeking an order that would shut down the site until Match.com comes up with a way to determine the background of its users (suggesting it tie in to a credit card at sign up).

While it sounds like a reasonable idea, how far do you want to take it?  Bars are popular places where people meet, should they be required to run checks on their patrons?  How much information are you willing to give to Match.com before you create a profile? 

The answer appears to be a market one and not a legal one.  It appears there is a void in the market for a dating site that guarantees the background of the users.  If that is what people want, then there should be a site out there where all users are run through a criminal background check with the posted results for all to see.  Should we run a credit report too?  Would you pay to be on that site?  

You can listen to my radio interview with KRLD Radio on the case.

4-19-11 Update:  Despite concerns that a background check will provide a false sense of security, Match.com released a statement late Sunday night that it was going to try and check its customers against the national sex offender regitsry.

A few months ago, I wrote about a case where the search engine marketing firm was being sued for allegedly helping a company sell copycat goods.  According to a jury verdict from this week, you can take off the allegedly.

Cleveland Golf

The case is Roger Cleveland Golf Co. v. Prince in South Carolina.  In short, the web design/SEO/host firm was held liable for contributory trademark infringement to the tune of $770,750 for willful infringement.  Interestingly, the actual website operator was popped for only $28,250.   Something must have gone wrong for the SEO firm at trial.

The golf club manufacturer claimed the web firm coached the website operator, was geared for providing services for counterfeiters and should have known from the name of the site, copycatclubs, that the hosting SEO firm should have known there was something not kosher going on.  Unfortunately, you can’t tell much about the evidence presented or what exactly happened from the judgment or the jury’s verdict — other than to assume the jury really did not like the SEO firm.

This case is likely going to scare a lot of hosting and web marketing firms.  I don’t think it should.  It seems to be a perfect storm and not a benchmark of likely future results.  Remember, when I wrote about the case in December, we talked about the web firm’s motion to get out of the case was only 1.5 pages.

Nevertheless, there is a takeaway from this.    Sometimes, the best clients are the ones you say no to.  Even if not a legal liability, some clients aren’t worth it.  Second, plan for this contractually and have a process in place to evaluate risks your clients might bring you.  I wrote about the contractual protections in a prior Visibility Magazine article.  Finally, take a trademark claim seriously and hire the right person to defend you.

Plaintiffs’ counsel press release is here.

Professor Goldman’s analysis is here.