New Law Could Hold Service Providers Liable For Investor Misrepresentations

from the safe-harbors? dept

In general, we're big fans of the safe harbors found in the DMCA and the CDA, as they do what common sense should do instead: make sure that a third party is not held liable for actions of its users. Unfortunately, common sense isn't always so common, and some people have trouble understanding this concept. In fact, it appears that a new bill may go in the other direction when it comes to investor information. A proposed bill that is supposedly designed to allow the SEC to better protect investors from bad info would potentially hold service providers liable for information posted by users if the service provider has "actual knowledge that the material contains a misrepresentation [or] in the absence of actual knowledge, is aware of facts or circumstances from which it is apparent that the material contains a misrepresentation [and] upon obtaining such knowledge or awareness, fails to act expeditiously to remove, or disable access to, the material."

That would go against the basic Section 230 CDA safe harbors, so I'm not quite sure how you reconcile the two. In general, you can understand why it seems to make sense that service provider needs to remove such info, but it opens up all sorts of questions. Say someone in our comments posts some sort of misrepresentation. Are we now going to need to police that? If someone else tells us it's a misrepresentation, will we now need to delete the comment? Are we expected to investigate whether or not some random comment on the site is a misrepresentation? Policing such things on forums all over the place would place an incredible burden on any website that allows user generated content. Why not keep the Section 230 safe harbors and focus on holding the actual parties (those who posted it) responsible, rather than the tools they use?

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Craigslist's Dumb Lawsuit Against Spam Tools Provider

from the what-are-they-thinking? dept

It's hard to come up with an adjective to describe Craigslist's decision to sue Red Trumpet other than "dumb." Nothing good will come of this lawsuit for a variety of reasons, and Craigslist is asking for trouble in filing it. Now, I can understand why it sounded like a good idea. Last year, we wrote about the increasing problem of spam on Craigslist, highlighting how a variety of spammers had figured out ways around each attempt by Craiglist to stop the spam. And, yes, we absolutely agree that spam on Craigslist is a problem and a nuisance, and it's good that Craigslist is working hard to try to stop it. But that doesn't make this lawsuit make sense. The full lawsuit is below (it's a bit long), and highlights all of the different claims that Craigslist is making against Red Trumpet, a company that offers tools and services to help advertisers post messages on Craigslist (some of which may be spammy, though, certainly not all):

So what are the problems? Well, as Eric Goldman notes, Craigslist is "playing with fire" on a variety of legal doctrines, almost all of which could come back to bite Craigslist. For example, Craigslist is blaming Red Trumpet -- a service provider -- for the actions of its users in spamming the site. Think about that for a second. For the past couple of years, law enforcement officials have been trying to use that exact argument against Craigslist over things like prostitution posts on the site -- to which Craigslist has always put forth a strong defense that as a service provider (under Section 230 of the CDA) it's not liable for the actions of its users. Does Craigslist really want to try to establish a precedent that would chip away at Section 230 protections?

Next, Craigslist is making a really weak DMCA claim here. It's claiming that its various anti-spam technologies (captchas, phone verification, etc.) act as "technological protection measures" that Red Trumpet is circumventing... and thus running afoul of the DMCA's anti-circumvention rules. But the circumvention has nothing to do with violating Craigslist's "copyright," though the lawsuit makes a half-hearted attempt to claim that it does.

Then, there's the trademark claims. There are a few different ones, but it argues that Red Trumpet is violating Craigslist's trademark by mentioning Craigslist on its website and in its ads. While again, you can see why this is annoying to Craigslist, if the company is accurately describing services it provides (the ability to post on Craigslist) it's difficult to see the "confusion" being caused. The ad in question doesn't appear to imply any endorsement at all by Craigslist. And, does Craigslist really want to open up a can of worms concerning trademarks being used in ads? After all, there must be a ton of posts on Craigslist that mention trademarks.

Finally, there's Craigslist claiming that Red Trumpet violates the Computer Fraud and Abuse Act by accessing its site despite violating its terms of use. Does this sound familiar? It's the same argument that was used to try to punish Lori Drew, and was recently tossed out by a judge. Basically, it's claiming that if you happen to violate the terms of use of a site, and then still access the site, you've effectively "hacked" into the site. This is a really bad reading of the law, which is why it was good that the Drew ruling got tossed out. So why is Craigslist trying to re-establish that as a rule?

Yes, clearly, Craigslist is upset about the spam on the site -- and it should be. Plenty of users are upset about it, and Craigslist wants to help those users, help itself and stop the spam. But this particular lawsuit, with these claims, seem highly problematic -- such that even if Craigslist wins, the precedents it sets could come back to haunt Craigslist... and many other parts of the internet as well. Is Craigslist really so desperate to stop spam that it's willing to do all this other damage as well?

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Fixing Trademark Law

from the is-it-time? dept

Over at the Citizen Media Law Project, Kimberley Isbell, is discussing an article she recently wrote on how to fix trademark law, which is a worthwhile read. The article mainly focuses on "ambiguities" found in trademark law, with the idea of settling some of the issues and making the guidelines more complete. Specifically, she hopes for a more clear delineation of what "fair use" means in trademark law, a better understanding of what defines "use in commerce," and adding a "safe harbor" to cover trademark, since it's the loophole that's left out from the current DMCA and CDA safe harbors that protect third parties from liability online in other issues (such as copyright and defamation).

On the whole, I think it's a good discussion, but I'm not sure I agree entirely. While initially codifying fair use within trademark law sounds like a good idea, my recent conversation with William Patry may have changed my mind on that topic. He pointed out that codifying fair use in copyright law ended up doing more to narrowly limit how fair use was applied, rather than allow judges to make a more expansive and reasonable view of what constitutes fair use. He pointed to the writings of Pierre Leval on fair use, which should be required reading for anyone looking to understand fair use. Given an attempt to codify fair use in trademark law, we might end up with the same set of limitations. While having more clearly defined lines may seem like a good idea, it also provides less flexibility, and more of an opportunity to fence in fair use, rather than letting it adapt as necessary.

On the second suggestion, concerning "use in commerce," we agree that current definitions are all over the map, but again, I wonder if trying to codify it via Congress leads to more problems than solutions. Any attempt will almost certainly screw up unique cases, leading to trouble down the road. Finally, I do absolutely agree on a safe harbor need in trademark, especially as those looking to bring copyright and defamation lawsuits have recently been bending over backwards to sneak in a trademark claim as well to try to avoid the other safe harbors.

As for the improving trademark law in other ways, I would think that the best way to do so, would be to ditch the (relatively) recent concept of "dilution" as trademark infringement, and focus on the real purpose of trademark law: to prevent consumer confusion and "passing off" of one good as made by someone else. As such, I've long been a big proponent of the "moron in a hurry" test that actually has been used in some cases (i.e., "would a moron in a hurry confuse this product and believe it was made by or endorsed by the trademark holder"). Focusing on just that test as a determination of trademark infringement would likely solve many of the common problems with trademark law -- including, most likely, removing the need for either a codified fair use of "use in commerce" clause. Instead, you just apply the moron in a hurry test and toss those lawsuits that wouldn't confuse said morons.

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Time For A Quick Lesson In Why The DMCA Safe Harbors Are Important And Make Sense

from the back-to-school-time dept

I've been hearing some buzzing in the last few months among folks in lobbyist circles that the entertainment industry is actually hoping to cut back on the DMCA's safe harbors. There have been murmurings along these lines in the past -- though, it rarely goes far, since the industry is also afraid that opening up the DMCA at all could lead to edits of all the other parts, which they love. Still, with the recent decision tossing out Universal Music's misguided lawsuit against Veoh, a few folks have been posting opinion pieces suggesting that the DMCA safe harbors are either outdated, or misinterpreted in the Veoh decision, and somehow against Congress's intentions. Neither claim stands up to much scrutiny, but it's worth exploring the issues, and digging in a bit so that people understand the importance and value of the DMCA safe harbors.

Two examples of this type of thinking are represented by Paul Resnikoff, of Digital Music News, who suggests that the Veoh ruling is correct under the law, but the real problem is the DMCA's safe harbors are out-dated and should be done away with (or at least adjusted in favor of copyright holders). Then there's entertainment industry lawyer Chris Castle, who suggests that the ruling itself makes no sense and leaves copyright holders "without a remedy." Castle, in his usual manner, also spends some time insulting anyone who might disagree with him as well, which is quite charming.

Law professor Peter Friedman, who knows a thing or two (or much more) about copyright, does a nice job debunking Castle's questionable thesis, but I wanted to take things back a step and discuss both why the DMCA safe harbors are smart, exactly what Congress intended, applied correctly, and why that's all a good thing -- as opposed to the suggestions of Resnikoff and Castle.

First, you have to go back to one of the reasons why the safe harbors are even in the DMCA. The entire DMCA was basically a love letter to the entertainment industry -- giving them yet another massive extension of copyright and the power to control all sorts of things well beyond the Constitutional purpose of copyright ("to promote the progress..."). The most troubling of all was the anti-circumvention clause, which effectively gave copyright holders a veto (or at least a long legal speed bump) on technological device innovation. Equally troubling is the notice-and-takedown provision, which allows for content to be taken down on accusation, rather than actual evidence of infringement.

However, if Congress was going to grant this massive expansion of rights to the entertainment industry, which would allow them to lord over various internet companies, the internet companies wanted to make sure they had one thing: protection against misapplied liability. In an ideal world, such safe harbors wouldn't be needed, because it would be common sense that you don't sue the tool maker for how the tool is used. You don't sue AT&T if someone uses a phone to commit a crime. You don't sue Ford because someone broke the law with a car. Yet, people keep wanting to sue the tools providers on the internet. So, Congress, smartly, added the safe harbors for a single purpose: to make sure liability was properly applied. Liability should be on those who actually infringe the copyrights, not those who provide the tools that were used.

How could that possibly be controversial? Resnikoff's main complaint is that it's "an impossible task" for content holders to police their own works online. To which the only reasonable response is: as opposed to what? If it's an impossible task for copyright holders, it's more than impossible for the service providers. At the very least, the copyright holders know whether or not a use is authorized. The tool provider has no idea. Plenty of smart copyright holders are now releasing content for free on user-generated content sites like YouTube on purpose. Putting the onus on Google to figure out which ones are legit, and which ones are not makes no sense at all. Resnikoff also complains that the safe harbors do not require any sort of proactive effort, such as a filter, but that is a meaningless complaint. Due to so many lawsuits and a made up threat of "contributory infringement," pretty much all serious UGC companies have installed filters anyway, to help protect themselves against an "inducement" claim. So, that's hardly a complaint.

Castle's suggestion that this acceptance of the basic DMCA safe harbors leaves copyright holders "without a remedy" is a statement wholly without support. Jammie Thomas and Joel Tenenbaum -- facing huge awards from infringement trials -- might disagree, for example. All the safe harbors have done is say that the "remedy" should be from the party actually infringing, rather than the tool provider. This was exactly as Congress had intended, and not just in-line with the law, but also with basic common sense and common fairness.

So, as you hear stories being spun about how the safe harbors are somehow problematic, take a step back and understand what they're designed to do. Most of the assumptions being used against the DMCA's safe harbors are misunderstanding their purpose, and assuming that the point of the DMCA itself is to give near total control to copyright holders (never an intention of copyright law at any time in history). Instead, the safe harbors were to make sure that liability was applied properly: on those doing the actual infringing. Those complaining about the safe harbors seem to wish for a world where liability is applied to the easiest target, rather than the accurate target. Thankfully, Congress knew better than to allow that to happen.

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Class Action Copyright Suit Filed Against Scribd... By Jammie Thomas' Lawyers?

from the say-what-now? dept

Well, this is odd. Back in March, some book publishers and authors started blaming Scribd for hosting infringing scanned and uploaded books. Of course, they ignored the fact that Scribd is quite aggressive in taking down any infringing content that it discovers, and has a filtering system to try to catch as much as possible. Under any reasonable reading of the DMCA, Scribd is protected under the safe harbors. It's not doing the actual infringing itself, but providing a tool, and it appears to go above and beyond the legal requirements in trying to help authors and publishers.

Yet, given that noise back in March, you had to know that a lawsuit was brewing, and it's not too surprising to find out that the first one filed is a class action attempt. What is surprising, however, is that the lawyers bringing the case, Joe Sibley and Kiwi Camara, are the same lawyers who represented Jammie Thomas in her recent loss to the record labels. Camara and Sibley, in that case, failed to do some of the most basic things you would have expected in such a defense (though, they were brought on to her defense just before the trial began).

Their argument against Scribd doesn't seem to make much sense at all:

"Under the aegis of self-promoting misinterpretations of federal statutes," the lawyers wrote in their complaint, "the West Coast technology industry has produced a number of start-up firms premised on the notion that commercial copyright infringement is not illegal, unless and until the injured party discovers and complains of the infringing activity, and (the) infringer fails to respond to such complaints."

That's simply not true in any sense of what they describe. None of the companies -- Scribd included -- is claiming that infringement is not against the law. They're just saying -- and the law pretty clearly reflects this -- that it is not their liability for infringements done by users. No one is denying the right of the copyright holders to go after those who actually did the uploading. Camara and Sibley seem to be making up a strawman that completely ignores the actual arguments. They continue:

"Apparently (the West Coast start-ups) believe any business may misappropriate and then publish intellectual property, as long as it ceases to use a stolen work when an author complains...Many millions of dollars have been invested in this business plan."

Again, this is simply incorrect. The businesses themselves are not doing the "misappropriating" or the "publishing." That's the entire reason for the safe harbors in the DMCA, to recognize the difference between a tool provider and a user. That these lawyers can't understand the same difference is highly questionable -- especially right after a court set Universal Music straight on the very same issue. People keep acting as if the DMCA safe harbors mean that copyright infringement is somehow not enforced, but that's a plainly wrong understanding of what's happening in the world. The entire point of the safe harbors is to make sure that the correct party is liable. It still amazes me that otherwise intelligent people can't seem to recognize this distinction.

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Linden Lab Sued Over Copied Virtual Goods

from the dmca,-anyone? dept

Way back in 2003, when Linden Lab announced that individuals owned the real world copyright on virtual trinkets they made in the game, we noted that this was a bad idea that would lead to problems. It was, in effect, taking bad real world laws and bringing them into a virtual world. It was even worse, because it was taking real world laws that were designed for a world of scarcity, and bringing them into a world of abundance -- and effectively allowing the laws to reach from the real world into the virtual world. That's a recipe for trouble.

And, indeed, a few years back there were lawsuits over "copied" products, though the main one we know of ended with both sides dropping the case. However, a new lawsuit has been filed, but this time, Linden Lab itself is a target, and the guy suing is claiming both copyright and trademark infringement. It's the same basic story. A guy creates virtual things (in this case, "sex toys") in Second Life, others copy them, and he's pissed off, so he sues. But he's suing Linden Lab, perhaps because it's better to sue a company that actually has money.

But legally, it seems like a huge longshot. The copyright claim should get tossed out pretty quickly due to DMCA safe harbors. The guy filing the lawsuit claims they don't apply "because it is aware of the rampant infringement of Alderman's copyrights and trademarks, and hasn't take proactive steps to prevent that piracy." Unless there's specific evidence of Linden Lab being informed of a particular infringement that Second Life ignored, it's hard to see how this isn't protected by the safe harbor. The trademark claim isn't covered by safe harbors (which is a problem...), but it's difficult to see how anyone could claim that Linden Lab is the one violating anyone's trademark here. Yet again... someone who can't handle the fact that digital goods are copyable feels he needs to lash out and sue everyone, rather than adapt.

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Judge Tosses Universal Music Suit Against Veoh; Safe Harbors & Common Sense Prevail

from the google-should-be-happy dept

In a ruling that has to make the folks at Google/YouTube happy (despite not being a part of the case), a judge has granted summary judgment to Veoh over Universal Music, claiming that Veoh's video hosting site is protecting from liability of infringing videos due to the DMCA's safe harbors. This case, which has many similarities to Viacom's lawsuit against YouTube, has gone against Universal Music in almost every way. This is now the second time that Veoh has had such a lawsuit dismissed, and hopefully the judge in the YouTube case recognizes that this is, in fact, the right decision under the DMCA. This latest ruling isn't a huge surprise. Earlier this year, the judge seemed to reject all of Universal's arguments for why safe harbors shouldn't apply. Universal also got smacked down (twice) in its attempt to separately sue Veoh's investors for the actions of the company's users.

While Veoh, as a company, may be struggling, this is a huge victory for common sense. This case describes exactly the sort of situation that the DMCA safe harbors were designed to deal with. A service provider who has no direct say in what content is uploaded by users should not be liable for that content. It's great that judges are seeing this, and hopefully the judge in the YouTube case sees it the same way. Veoh's case isn't "over" yet, though, since Universal will appeal -- and has already claimed the ruling is "wrong." Yet, so far odds of a successful appeal are not looking good. Hopefully, the appeals courts will also correctly interpret safe harbors (and common sense) to recognize that a service provider should never be liable for the content put up by users.

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Dreadful Ruling: Web Hosts Hit With $32 Million Judgment For Content On Customers' Websites

from the chilling-effects dept

Well, this is bad. We've worried in the past about the lack of a specific safe harbor to protect trademark infringement claims being brought against third party service providers. The DMCA has a safe harbor that protects against copyright claims, and the CDA has a safe harbor that protects against all non-intellectual property claims, such as defamation. But trademark is a loophole... and because of that you can get some really dreadful results. Earlier this year, we noted that a court had ruled that web hosting firms could be liable for trademark infringement done by their customers. The case involved luxury goods retailer Louis Vuitton suing some web hosting firms for the actions of their customers. Any common sense ruling would find that the hosts are simply the tool providers, and it was the customers running the actual websites who were liable. That is, if there were common sense.

Instead, as Eric Goldman alerts us, the jury has sided with Louis Vuitton and awarded the company $32.4 million in damages from the web hosts.

This is a bad end result no matter how you look at it. If you do any sort of web hosting, your liability just went up by a tremendous amount, and you may now be expected to proactively police all your customers' websites for anything that might possibly be seen as trademark infringement. It's safe to say that this is not what Congress intended -- given the nature of the safe harbors it set up in the DMCA and the CDA. Hopefully, either a higher court will toss this out and/or Congress will finally get its act together and extend safe harbor protection to trademarks as well.

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Another Misguided Lawsuit: Ustream Sued Over Users' Actions

from the trademark-safe-harbors dept

It's no surprise these days to see that service providers are getting sued for the actions of their users, but it is always fun to see how the lawyers for the plaintiffs try to get around the obvious problems of DMCA or CDA safe harbors. The latest case involves boxing promoter One Ring suing Ustream, one of a number of live video streaming companies out there. Like the misguided lawsuit threat against Justin.tv, this involves a sports group suing the platform provider because a user turned their webcam towards the television, so that others could watch the stream. The DMCA pretty clearly makes these lawsuits entirely baseless, as the only liability is on the person who actually used the account and pointed the webcam at the TV (separately, the fact that you can potentially be guilty of copyright infringement for showing the world what you see with your own two eyes is quite troubling, but a discussion for a different day).

In this case, though, there's a little tidbit, brushed over by the original article, but which suggests how One Ring hopes to get around the DMCA safe harbors on copyright infringement. It's not just suing Ustream over copyright, but it's also claiming that since its logo was seen via the broadcast, Ustream is also guilty of trademark infringement. That's because there's an annoying loophole in that trademark is not technically covered by either the DMCA's safe harbors or the CDA's safe harbors. The DMCA only covers copyright, and the CDA specifically exempts "intellectual property," thus leaving trademark in nowhere's land between the two. Not surprisingly, this has become a popular loophole for lawyers to try to exploit (in fact, we were recently threatened on this very point).

That said, it still seems like Ustream should have a strong case. Even if trademark is not explicitly covered by a safe harbor, simple common sense should make it clear that the company should in no way be liable for the actions of its users. On top of that, claiming that its trademark infringement to show the One Ring logo is also quite questionable and hardly seems likely to stand up under scrutiny. Still, it's an annoying lawsuit that Ustream has to deal with, for no particular reason.

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Gucci Sues Credit Card Processors For Trademark Infringement

from the that's-a-stretch... dept

Rose M. Welch alerts us to the news that Gucci America has decided to sue a bunch of credit card processors for trademark infringement. Why? Because they processed the credit cards of some online sites that happened to sell fake Gucci bags. This, of course, makes no sense. None of the credit card companies were actually violating Gucci's trademarks at all, and I can't see how they can show those firms actually "used" its trademarks in commerce. This seems like a pure money grab. Gucci already received an award of $5.2 million from the site that used these credit card processors, so this just seems like going after more cash for the same issue, but suing companies further up the chain. I can't see Gucci having much success here, but it reminds us that there really ought to be a Section 230-style safe harbor for trademarks as well.

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Should Safe Harbors Apply To TV Advertising As Well?

from the seems-reasonable dept

Paul Alan Levy alerts us to an interesting situation (and question raised) involving General Motors appearing to suppress speech that it did not like, and wonders if Section 230 safe harbors should apply in broader media, as well. The case involves a consumer group that was concerned that the bankruptcy restructuring that General Motors is going through would protect it from certain liability claims from owners of cars with defects. So, they took their case to the public by creating a TV commercial and buying airtime via Comcast. GM, rather than refute the content of the ad, simply told Comcast that the ad contained inaccuracies, so Comcast pulled down the ad. However, as Levy notes, this allows GM to suppress the ad at the moment when it would be most effective, without ever needing to prove the inaccuracies (or respond to the "accuracies" of the ad).

In the last few months, we've seen some claim that Section 230 safe harbors should be scaled back because it's somehow "unfair" to treat online different than offline. I've taken issue with that line of reasoning, because in most cases the situations are quite different. The purpose of the safe harbors is to prevent the platform for being blamed for the actions of a user. But in a traditional newspaper, we're talking about content that has been approved and put in place by an editor.

Levy takes that point into account, but suggests why expanding (rather than limiting) Section 230 might make sense here:

There are, of course, significant differences between the burdens that a cable company like Comcast faces with respect to assessing ads and the situation facing an Internet host (such as Comcast, wearing a different hat) that enjoys the protection of Section 230. There are only so many hours on which ads can be shown on cable; and when Comcast receives a proposed ad, it must take the step of placing those advertisements amidst its programming. Thus, Comcast is in a position to perform pre-broadcast review of the text. This is very unlike the situation facing the provide of an online interactive computer service, which allows thousand or even millions of users to place content online with not opportunity for review. And equally important, Comcast earns significant revenues from each broadcast of a single ad, and hence is able to offset its profits from those broadcasts against the cost of review. This is unlike the situation for most statements posted online, with respect to which the host earns tiny sums, at best, either through a modest monthly fee for web server space, or through advertising on the web page.

But the potential impact on speech is the same -- the sponsor of a message on an important issue of public policy sees its message suppressed merely by claims of inaccuracy. Why should the broadcaster face the prospect of secondary liability for carrying the ad, and why shouldn't the opponent of the speech be put to the burden of responding in the marketplace of ideas and, if it really wants to suppress the speech, why shouldn't it have to go to court and persuade a judge that the speech is both false and defamatory before it gets the relief of suppressing the speech?

This makes a rather compelling point. While I still argue the entire concept of safe harbors like this shouldn't be needed if common sense worked, since common sense isn't so common these days, it does make sense to include safe harbors for situations like this where the company that acts as the "platform" has no reasonable expectation to thoroughly research the content first.

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Why Is It So Difficult To Understand The Difference Between A Platform And A User?

from the head-scratcher dept

In the US, thanks to safe harbor rules in the DMCA and the CDA, courts will often toss out misdirected lawsuits that go after a service provider for the actions of a user. To be honest, I've always questioned why we need such safe harbors in the first place, since it should just be basic common sense that a service provider shouldn't be liable for the actions of a user. But, of course, common sense just isn't that common. This can be seen, first, in all the lawsuits that require incantations of the safe harbors to get them tossed out, but even worse, in foreign countries that have no such safe harbor laws. Take for example, a case in India, where Google India is being blamed for content written by bloggers on Blogger. First, Blogger is run by Google, not Google India, so the lawsuit is doubly misdirected -- but, more importantly, Google itself cannot be responsible for what someone writes using its tool. That's like suggesting that Bic is responsible for what you write with its pens. The case involves a guy who was upset about what some bloggers wrote about him -- so of course, he had to sue Google. What's amazing is that the judge seems to have initially bought this as reasonable. It barred Google from hosting any blog that "defamed" this guy. Google has responded by trying to explain the basics of the internet to the judge and how it's impossible for Google to figure out if someone is defaming someone else using its software.

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Congress Looks To Extend Safe Harbors To Service Providers Hit By Foreign Rulings

from the good-news! dept

We've often talked about the importance of service provider "safe harbors" found in the CDA and the DMCA. To be honest, these safe harbor laws shouldn't be necessary at all, since it should be common sense that the user of a service is liable for his or her actions rather than the service provider. In practice, however, we've learned that common sense isn't so common -- and it's not unusual for individuals (and sometimes judges and politicians) to blame service providers. Thus, safe harbors are key to bringing common sense to the law. However, we've definitely seen that such common sense is often totally lacking in foreign countries that have no recognition at all concerning the separation between a service provider and a user. Witness, for example, LVMH's victory over eBay in France, or the fact that Google execs are facing criminal charges in Italy over a video of kids attacking a disabled boy that was uploaded to its site (and quickly removed).

It appears that US politicians have finally realized this is a problem. While it doesn't appear to be a blanket safe harbor, it appears that Congress is currently considering a bill that would allow US companies to ignore foreign rulings in defamation cases against service providers, where the issue is actually the action of a user. While limited to just defamation cases (for now), this is important, especially since so many other countries have more draconian defamation laws that lead to "defamation tourism" as people try to find the most favorable countries in which to file a defamation lawsuit. Making it so that the US won't recognize those rulings will help protect US companies from bogus and misguided defamation suits around the world.

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Public Citizen, EFF, CDT And CMLP Team Up To Question Recent Ruling On Section 230 Safe Harbor

from the this-is-important dept

A few weeks back, we wrote about a court ruling that said that Yahoo was protected against actions by users, thanks to Section 230 safeharbors, but that the company had effectively given up some of that protection by promising to remove some content. While the bigger issues in the case seemed to have been decided reasonably, some noticed that many of the finer points in the ruling were both sloppy and troubling. Eric Goldman ran down the details of the problems with the ruling. Now it appears that Yahoo is appealing not the major point of the case, but those specific troubling points made in the ruling, which could severely limit the effectiveness of using Section 230 to protect against frivolous lawsuits.

The issue may certainly sound like inside baseball, but it's important to anyone who runs an online service of any kind. Traditionally, when receiving a mistargeted lawsuit that tries to pin liability on a service provider, rather than the actual user, it's common to file a motion to dismiss based on section 230 safe harbors. However, in this ruling, the court said that you couldn't raise section 230 in a motion to dismiss, and that it could only be used as an "answer" and thus required a more involved (and potentially much more costly) procedure of asking the court for a ruling in the case, rather than just a dismissal. That would significantly raise the cost to many site owners in trying to dismiss these sorts of mistargeted lawsuits. It's nice to see a long list of defenders of the public and the internet sign on to explain to the court why this dicta is incorrect. Public Citizen, EFF, CDT and the Citizen Media Law Project all joined in with an amicus brief. Hopefully the court realizes the earlier sloppy ruling was a mistake, and the ability to dismiss using Section 230 safe harbors remains.

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Newt Gingrich's Lawyer Displays Ignorance Of Both Twitter And The Law In Sending C&D

from the wow dept

It really was just a few weeks ago that we were told that lawyers knew better than to send a clueless cease-and-desist letter... and then we get this story. Apparently a group that is in favor of a certain law that Newt Gingrich opposes sent out a Twitter message that included the @newtgingrich username to stir up some interest in a petition they were working on. This is part of how you use Twitter to communicate with others and get attention from certain people. But apparently Gingrich's lawyer was upset that Gingrich's name was being "used" in a message in favor of a law Gingrich opposes, and sent a ridiculously bad cease-and-desist letter that the folks at the Citizen Media Law Project dubbed: "How to Make Your Client Look Bad, in Three Easy Steps."

First, the lawyer clearly didn't understand Twitter and how it works since using @newtgingrich is the equivalent of sending a public letter "Dear Newt Gingrich" -- which certainly wouldn't be an abuse of his name. Second, the lawyer not only didn't understand Section 230, but insisted that Tucows, the registrar behind the site that hosted the petition (and also republished the tweet) was somehow responsible for the content of the Twitter message: "continued display of the offending tweet 'can expose any and all involved parties (including Twitter, ContactPrivacy.com and/or TuCows) to substantial ongoing, and even personal liability.'" Of course, that's not even close to true. Then, on top of that, the lawyer basically tried to throw in claims on every law he could think up:

trademark infringement, violation of Gingrich's and Anuzis' publicity rights, false advertising, false designation of origin, tortious interference with prospective economic advantage and contractual relations, common law and computer trespass (could Twitter trespass upon its own computer?), conversion, traditional fraud and wire fraud, breach of contract (i.e., Twitter's terms of service), violation of the Computer Fraud and Abuse Act, and even RICO violations.

All for a Twitter message. Seriously. So, what was that about lawyers knowing better than to send bogus cease-and-desist letters?

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Perfect 10 Shot Down Again; Will It Finally Realize That Search Engines Aren't Liable For Photos?

from the it's-time-to-give-it-up dept

Porn magazine publisher Perfect 10 has spent tons of money on a long series of fruitless lawsuits against the operators of search engines. The issue is that people with access to Perfect 10 photos had put them online, and (of course) search engines indexed these and included them in their image search features. Perfect 10 insisted that, since these search engines showed thumbnails of the images, the search engines were liable for the infringement. Except that courts keep throwing these cases out. But, that hasn't stopped Perfect 10. However, all it has to show for it is another loss. In its lawsuit against Amazon, for Amazon's A9 search subsidiary, the court has tossed out the lawsuit, pointing out that the DMCA safe harbors clearly protect Amazon, while also highlighting a bunch of pretty basic mistakes that Perfect 10 made in filing the lawsuit (you would think, having filed so many similar lawsuits, that it would get the specifics right). At some point, the company needs to realize that these lawsuits aren't getting it very far.

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Inducement Standard For Section 230 Could Put A Significant Chill On Innovation

from the uh-oh... dept

We've talked in the past about the importance of various "safe harbor" rules that help maintain that liability for any sort of lawbreaking is actually placed on the lawbreaker, rather than any tool provider/middleman used to break the law. In an ideal world, we wouldn't need such safe harbors, because it should be obvious: the person who breaks the law is guilty, while the person who makes tools that are used to break the law is not guilty. That's just common sense... but apparently not common enough. We were already quite troubled by the Supreme Court's surprising and disturbing decision to create a new "inducement" standard that chips away at the DMCA's safe harbors, but no such "inducement" standard has been applied to Section 230's safe harbors, which protects service providers from most non-copyright law-breaking by users.

Until now, that is.

Eric Goldman points out that in a recent ruling in a lawsuit between the New England Patriots and Stubhub, it appears that a court has suddenly come up with an "inducement" standard for section 230 as well, despite most other court rulings (with one major exception) giving pretty broad protections to any service provider. In this case, which we've discussed before, the New England Patriots were furious that season ticket holders might resell some of their tickets on StubHub, and even had a court force StubHub to hand over the names of its users (despite this being a massive privacy violation that also violates StubHub's own terms of service). While an earlier ruling indicated StubHub was protected by the section 230 safe harbors, this latest ruling says it's not, in part because StubHub knows about, helps and profits from ticket scalping on the site.

This is troubling for a variety of reasons. It still involves putting liability on a party who doesn't actually break the law. Furthermore, when using a standard that involves looking at whether or not the company profits from the law breaking, you effectively kill all safe harbors. Any commercial service provider, almost by default, will profit in some way from the law breaking, but that shouldn't make them liable for it. Also, as we've see quite clearly with the inducement standard encroaching on DMCA safe harbors, those on the other side of lawsuits will continue to try to stretch and twist the contours of what counts as "inducement." If this stands, it will create massive potential liabilities for online service providers, and there will be lots of expensive lawsuits. The end result will be a greatly chilled market for innovation.

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Taser Sues Second Life For Having Virtual Tasers

from the no,-seriously dept

Stun gun maker Taser is notoriously overprotective of its brand, even pushing judges and medical examiners never to list a Taser as a cause of death. However, this latest, as pointed out by Dave Title has the company going "virtual." Taser is suing Second Life because of virtual Tasers found in the game. Specifically, Taser seems upset that these virtual stun guns are being sold next to pornographic material, which (the company claims) will harm its brand. I'd argue that going around suing everyone probably does a lot more harm.

Of course, Second Life parent corp. Linden Lab doesn't actually make or sell these things, but just provides the platform -- so you might think that the company is protected by safe harbors. Except... one of the little loopholes in safe harbor rules is on trademark claims, which mostly aren't covered by either the DMCA's safe harbors or the CDA's. However, it should be covered by common sense (which is not so common, unfortunately).

If the virtual Tasers actually do infringe on Taser's trademark, then it seems that the liable party should be the user who made/sold them in the first place -- not Linden Lab, the platform creator. On top of that, there's the big question of whether or not this is actually trademark infringement at all. You could make an argument that users might believe that virtual Tasers were somehow endorsed by the company itself, but do such products really "harm" the Taser brand? Again, it seems a lot more harm is being done to the brand by silly lawsuits. And, yes, people will point out (they always do!), that the company has an obligation to protect its marks, but there are better ways to do so than suing.

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German Composer The Latest To Mistakenly Sue Google Over The Actions Of Others

from the who-knew-assigning-liability-was-so-confusing dept

The one good part of the DMCA are the safe harbors that help people recognize that you should be suing the party that actually did something wrong, rather than the company that made the tools they used. Unfortunately, even with these protections some people still sue the tools/service provider in the middle. Outside the US, it's even more complicated -- without the safe harbor provision, common sense seems to go out the window and you get people suing the service provider for no good reason, except perhaps jealousy. The latest such case involves German composer Frank Peterson, who is suing Google because others uploaded some of his music to YouTube. And, rather than come up with a way to capitalize on it, like so many others, he feels the need to sue. He's claiming millions in "damages" though he wants to force Google to open its books so he can determine the full extent of these imaginary damages. The article also quotes another publisher who makes this odd statement:

Some producers requested to make cover versions of our songs, but refrained to do so after realizing how many videos of the songs already existed for free on YouTube.

Really? It's difficult to believe this is true. The fact that there were videos of a particular song on YouTube would make others not want to cover that song? By what logic?

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JuicyCampus Runs Out Of Juice

from the there-go-the-lawsuits dept

If you've been on a college campus in the past couple of years, you're almost certainly aware of the site JuicyCampus -- which was a very open set of forums that encouraged people to gossip about others on campus. As you can imagine, things sometimes got pretty heated, and there were regular discussions in the legal community about the liability that JuicyCampus must face. It was definitely pushing the boundaries of safe harbor provisions concerning the separation of a site and what its users did on the site. However, it looks like we won't get a big test case involving JuicyCampus any time soon, as the site has abruptly shut down, citing the current economic climate. The site's founder claims that the cost of running the servers greatly outweighed any incoming advertising revenue, though plenty of people are guessing that pending lawsuits may have been a much bigger issue in the decision making process. Either way, given the popularity of the site, others will quickly fill the void, and perhaps we'll have new test cases in the near future.

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