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UDRP loser did not commit fraud on USPTO by saying it was exclusive user of mark

Salu, Inc. v. Original Skin Store, Slip Copy, 2010 WL 1444617 (E.D.Cal. April 12, 2010)

This is kind of a wonky trademark/domain name case. So if that’s not in your wheelhouse, don’t strain yourself.

Plaintiff sued defendant for infringement of plaintiff’s registered trademark. Defendant moved for summary judgment, claiming that the asserted trademark registration was obtained by fraud on the United States Patent and Trademark Office. Specifically, defendant argued that plaintiff misrepresented when it told the USPTO that its SKINSTORE mark had “acquired distinctiveness” (i.e., was not merely descriptive of the goods and servcies) by means of “substantially exclusive” use in commerce.

The court denied the motion for summary judgment.

Defendant had argued that plaintiff committed fraud by saying its use was exclusive. It pointed to a case under the Uniform Domain Name Dispute Resolution Policy (UDRP) that the plaintiff had brought against the user of the domain name eskinstore.com. The WIPO panel in that case refused to find a clear case of cybersquatting.

In this case, defendant argued that plaintiff’s earlier unsuccessful UDRP challenge to a similar mark showed there were third parties using the mark and therefore the claim of exclusivity was fraudulent.

The court rejected this argument, noting that the plaintiff had undertaken significant efforts to protect its exclusive rights in the trademark. (It had sent out an astounding 300 cease and desist letters in the past couple of years alone!)

Moreover, and more importantly, the court noted that the WIPO panel hearing the UDRP complaint specifically declined to determine cybersquatting had occurred, finding it to be a question of infringement better addressed by the United States courts.

Wife posts pics with boyfriend on MySpace, loses child custody

And you should have heard what the judge said in open court!

Lipps v. Lipps, 2010 Ark. App. 295, 2010 WL 1379803 (Ark. App. April 7, 2010). [Read the opinion]

This is one of those cases that’d do well as a movie on Lifetime Television for Women. Unlike other cases I talk about on this blog, this one only kind of deals with the internet Here the husband (an Iraq war veteran) saw pictures on MySpace of his wife in bed with another man, so he filed for divorce and sought child custody.

What’s worth paying attention to in this case is the “disparaging and intemperate remarks” made in open court by the judge.

At a hearing where the judge entered a temporary order granting joint custody of the couples’ infant son, the court admonished the wife/mother, characterizing her situation as “a nightmare every parent faces . . . when you have got a child that acts like a slut, quite frankly, a slut.”

Later in the case the judge granted sole custody to the husband. The wife sought review with the Arkansas appellate court. On appeal, that court affirmed the trial court’s order on custody.

The wife had argued that the trial court judge was biased, and asked for a new trial with an impartial judge. Although the appellate court was “deeply troubled” by judge’s rude remarks, it held that because the wife had not raised that argument in the trial court, and had not asked the judge to recuse himself, the court could not consider that question on appeal.

So the court affirmed the foul-mouthed judge.

The appellate opinion is embedded below:

2010-04-07_lipps_v_lipps

Supreme Court clarifies basis for why copyright suits over unregistered works should be dismissed

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Supreme Court overturns Second Circuit, holding that a copyright plaintiff’s failure to register the work before filing suit does not deprive the court of subject matter jurisdiction.

Reed Elsevier v. Muchnick, Slip. Op., 559 U.S. ___ (March 2, 2010) [View opinion here]

“Subject matter jurisdiction” refers to a court’s power to hear the matter before it. The Constitution sets out the general contours for the federal courts’ jurisdiction, and Congress enacts statutes that give more detail to this set of powers. Particular statutes can define whether the federal courts have subject matter jurisdiction over certain types of cases. For example, Congress has declared that the federal courts have exclusive jurisdiction over copyright cases (See 28 U.S.C. 1338).

If a court does not have subject matter jurisdiction over the type of matter before it, it has no power to adjudicate the case. So the question of whether subject matter jurisdiction exists is critical.

The Supreme Court just decided a case that deals with the scope of subject matter jurisdiction in copyright cases, and clarifies a notion that has been the subject of some uncertainty. The question the court decided was whether a federal court has subject matter jurisdiction over a copyright case when a work at issue is not the subject of a copyright registration.

Section 411(a) of the Copyright Act (at 17 U.S.C. 411(a)) provides, among other things, that “no civil action for infringement of the copyright in any United States work shall be instituted until . . . registration of the copyright claim has been made in accordance with this title.”

Some courts have held, and many litigants have argued, that this provision of Section 411 is a “jurisdictional prerequisite.” Said another way, some have argued that if the copyright plaintiff files suit without having secured a registration, the court is without subject matter jurisdiction over the case. In the case of Reed Elsevier, Inc. v. Muchnick, however, the Supreme Court held that Section 411 does not deprive the court of subject matter jurisdiction, but instead merely provides a “claim-processing rule,” akin to an element of the case.

The lower court proceedings

A group of freelance writers filed a class action copyright infringement case in federal court in New York. They settled the case and the judge approved the settlement. Some of the plaintiffs objected to the settlement on procedural grounds, and when the court entered final judgment, those objecting plaintiffs appealed to the Second Circuit. On its own motion, the Second Circuit raised the question of whether it had subject matter jurisdiction over the case, as some of the plaintiffs in the class had unregistered works.

The case took on a peculiar procedural aspect — neither side in the dispute argued that the federal court was without subject matter jurisdiction, but the Second Circuit decided anyway that it did not. (After all, subject matter jurisdiction pertains to the power of the court, not the rights of the parties, so parties cannot waive the absence of subject matter jurisdiction.) Concluding that it didn’t have jurisdiction, the Second Circuit reversed the approval of the settlement.

The defendants in the underlying case sought review with the Supreme Court, and the high court took on the case. It reversed the Second Circuit, holding that the court did indeed have jurisdiction, even though some of the plaintiffs’ copyrights at issue were unregistered.

The court’s holding

It is worth noting that this case does not address the bothersome question of whether Section 411 requires that a copyright plaintiff actually have a registration certificate in hand before filing the complaint, or whether he or she simply needs to have the application on file. The case also does not stand for the proposition that one can pursue copyright infringement litigation without having registered his or her copyright. A plaintiff without a registration will still lose, just for different reasons.

Justice Thomas wrote the majority opinion. He began the analysis by noting the court’s recent efforts to curtail “drive-by jurisdictional rulings,” which can “miss the critical differences between true jurisdictional conditions and nonjurisdictional limitations on causes of action.” It was with this eye toward careful analysis that the court looked to the present question.

The court reviewed the general approach it set out in the case of Arbaugh v. Y&H Corp., 546 U.S. 500 (2006) for distinguishing jurisdictional conditions from claim-processing requirements or elements of a claim, stating in part that “when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character.” Said another way, if a statute somehow limits the way a case can be brought before federal court but doesn’t come out and say that it’s a limitation on subject matter jurisdiction, it should not be read as limiting jurisdiction. In this way, the court’s approach is to broaden federal jurisdiction.

In this case, the court found that Section 411(a) did not “clearly state” that the registration requirement is jurisdictional. Moreover, the section of federal law that provides for federal court jurisdiction in general (28 U.S.C. 1331) and federal jurisdiction over copyright claims (28 U.S.C. 1338) says nothing about a requirement that there be a registration before the court has subject matter jurisdiction. Furthermore, Section 411 provides on its face certain exceptions for the registration requirement (e.g., no registration is required for non-United States works). The court observed that “it would be at least unusual to ascribe jurisdictional signifcance to a condition subject to these sorts of exceptions.”

What does it mean?

The case actually addresses a rather nuanced point of copyright law. And the effect of the holding will not change the end results of cases brought in the future with the same facts — after all, a non-registering plaintiff will still lose either way, now just for a different reason. Motions to dismiss copyright complaints alleging infringement of unregistered works will clearly fall under Fed. R. Civ. P. 12(b)(6) (failure to state a claim) and not 12(b)(1) (lack of jurisdiction).

But the question of a federal court’s jurisdiction is of significant import, regardless of how nuanced the question is, or the lack of difference in practical effect. The question of whether a court should dismiss a case because it doesn’t have the power to hear it, as compared to dismissing it because the plaintiff has not jumped through the appropriate hoops, is an important one.

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Group sex photos case heads to trial

Peterson v. Moldofsky, No. 07-2603, 2009 WL 3126229 (D.Kan. September 29, 2009)

Defendant took pictures of his ex-girlfriend “engaged in various sex acts with two other people.” Later he emailed some of the photos to his ex-girlfriend’s mother, ex-husband, ex-in laws, boss and co-workers.

The ex-girlfriend sued for intentional infliction of emotional distress and invasion of privacy. Defendant moved for summary judgment. The court denied the motion in large part.

Infliction of emotional distress

Defendant argued that the court should toss the intentional infliction of emotional distress claim because Plaintiff ex-girlfriend failed to show that Defendant’s conduct was sufficiently extreme and outrageous, and that the alleged distress exceeded what a reasonable person would experience in the circumstances.

The court rejected Defendant’s arguments. It found that an average citizen would think emailing photos of a person engaged in a manage a trois to one of the participants’ mother, among others, was outrageous. Moreover, Plaintiff’s distress was shown to be severe, as she had to get counseling. It sounds as if the court would have found it severe enough even without the counseling — Defendant’s conduct was “so shocking and outrageous as to give rise to an inference of severe emotional distress.”

Invasion of privacy

Plaintiff claimed two forms of invasion of privacy — intrusion upon seclusion and publication of private facts. The court held she had presented enough facts for the latter but not the former.

The court granted Defendant’s motion for summary judgment as to intrusion upon seclusion because no intrusion occurred. Plaintiff knew Defendant was there taking pictures of the activities. The court rejected Plaintiff’s argument that publication of the no doubt intimate photos constituted intrusion. It held that the disclosure of properly obtained information could not give rise to the claim.

But as to the argument that emailing the photos unlawfully publicized private facts, the court sided with Plaintiff. Defendant had argued that emailing the photos to only a half dozen or so people did not amount to “publication,” which is one of the elements of the tort. He pointed to Comment “a” of the Restatement (Second) of Torts §652D which says that “it is not an invasion of the right of privacy to communicate a fact . . . to a single person, or even to a small group of people.”

In rejecting this argument, the court engaged in what some might characterize as “Internet exceptionalism,” — applying the law in response to a perceived substantial difference between online and offline communication. The court observed that “the Internet enables its users to ‘quickly and inexpensively’ surmount the barriers to generating publicity that were inherent in the traditional forms of communication.” Finding this distinction to be significant, the court held that distribution of the photos even to a small group of people through the private means of electronic mail could be considered a “publication” for purposes of the tort of invasion of privacy.

Threesome photo courtesy Flickr user curgoth under this Creative Commons license.

Listen to This Week in Law Episode 20

This Week in Law (aka TWiL) Episode 20 is up. Hope you’ll give it a listen. I had a great time with my co-panelists Ben Franske, Colette Vogele, Ernie Svenson and host Denise Howell recording this episode. We talked about interesting things like copyright fair use, the first sale doctrine, and right-minded use of social media.

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What are the top 10 internet cases of 2008?

I’m working on gathering a list of the most important internet- and technology-related cases from the past year. There are many cases to choose from, and I’m trying to crowdsource the nomination process. I invite you to nominate the case or cases you think have been most significant by leaving a comment to this post. Think in terms of (1) the decision’s practical implications, (2) the novelty of the judge’s thinking, and (3) the “interestingness” of the facts.

For inspiration, browse the Internet Cases archives, or go visit Professor Goldman who doesn’t let much in the way of interesting cases slip by.

Thanks in advance for your help!

Veoh eligible for DMCA Safe Harbor

[Brian Beckham is a contributor to Internet Cases and can be contacted at brian.beckham [at] gmail dot com.]

Io Group, Inc. v. Veoh Networks, Inc., 2008 WL 4065872 (N.D.Cal. Aug. 27, 2008)

The U.S. District Court for the Northern District of California ruled that Veoh’s hosting of user-provided content is protected by the DMCA safe harbor provision, and that it does not have a duty to police for potential copyright infringement on behalf of third-parties, but rather must act to remove infringing content when so put on notice.

IO produces adult films; Veoh hosts, inter alia, its own “Internet TV channels” and user-posted content (much like YouTube). In June 2006, IO discovered clips from ten (10) of its copyrighted films ranging from 6 seconds to 40 minutes in length hosted on Veoh. Rather than sending Veoh a “DMCA Notice & Takedown” letter, IO filed the instant copyright infringement suit. (Coincidentally, Veoh had already removed all adult content sua sponte — including IO’s prior to the suit). Had Veoh received such a notice, so the story goes, it would have removed the content, and terminated the posting individual’s account.

When a user submits a video for posting, Veoh’s system extracts certain metadata (e.g., file format and length), assigns a file number, extracts several still images (seen on the site as an icon), and converts the video to Flash. Prior to posting, Veoh’s employees randomly spot check the videos for compliance with Veoh’s policies (i.e., that the content is not infringing third-party copyrights). On at least one occasion, such a spot check revealed infringing content (an unreleased movie) which was not posted.

Veoh moved for summary judgment under the DMCA’s Safe Harbors which “provide protection from liability for: (1) transitory digital network communications; (2) system caching; (3) information residing on systems or networks at the direction of users; and (4) information location tools.” Ellison, 357 F.3d at 1076-77. Finding that Veoh is a Service Provider under the DMCA, the Court had little trouble in finding that it qualified for the Safe Harbors. IO admitted that Veoh “(a) has adopted and informed account holders of its repeat infringer policy and (b) accommodates, and does not interfere with, “standard technical measures” used to protect copyrighted works”, but took issue with the manner in which Veoh implemented its repeat infringer policy.

Veoh clearly established that it had a functioning DMCA Notice & Takedown system:

  • Veoh has identified its designated Copyright Agent to receive notification of claimed violations and included information about how and where to send notices of claimed infringement.
  • Veoh often responds to infringement notices the same day they are received.
  • When Veoh receives notice of infringement, after a first warning, the account is terminated and all content provided by that user disabled.
  • Veoh terminates access to other identical infringing files and permanently blocks them from being uploaded again.
  • Veoh has terminated over 1,000 users for copyright infringement.

The Court held that Veoh did not have a duty to investigate whether terminated users were re-appearing under pseudonyms, but that as long as it continued to effectively address alleged infringements, it continued to qualify for the DMCA Safe Harbors; moreover, it did not have to track users’ IP addresses to readily identify possibly fraudulent new user accounts.

The Court further noted that: “In essence, a service provider [Veoh] is eligible for safe harbor under section 512(c) if it (1) does not know of infringement; or (2) acts expeditiously to remove or disable access to the material when it (a) has actual knowledge, (b) is aware of facts or circumstances from which infringing activity is apparent, or (c) has received DMCA-compliant notice; and (3) either does not have the right and ability to control the infringing activity, or – if it does – that it does not receive a financial benefit directly attributable to the infringing activity.”

The Court found that (1) there was no question that Veoh did not know of the alleged infringement — since IO did not file a DMCA Notice (2) it acted expeditiously to remove user-posted infringing content, (3) it did not have actual knowledge of infringement, (4) it was not aware of infringing activity, and (5) it did not have the right and ability to control the infringing activity (the Court did not address any financial benefit).

In sum: the Court “[did] not find that the DMCA was intended to have Veoh shoulder the entire burden of policing third-party copyrights on its website (at the cost of losing its business if it cannot). Rather, the issue [was] whether Veoh [took] appropriate steps to deal with [alleged] copyright infringement.”

There is much speculation as to how, if at all, this case will affect the Viacom / YouTube case. YouTube praised the decision, Viacom noted the differences. Each case turns on its own facts, but to the extent there are similarities, this decision is wind in YouTube’s sails.

Case is: IO Group Inc.(Plaintiff), v. Veoh Networks, Inc. (Defendant)

Listen to yours truly on This Week in Law

This Week in Law (TWiL) episode 16 is up, and it’s an interesting one. I was really happy to be part of a super deluxe panel comprised of host Denise Howell, Nicole Black, Marty Schwimmer and Ernie Svenson. We talked about a number of interesting topics like the DMCA anticircumvention provisions, ediscovery, Viacom v. Google and other subjects. Hope you’ll have a listen.