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Emails held sufficient to amend employment contracts in NY

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

The New York Court of Appeals, 1st Division recently upheld a lower court ruling that a series of “signed” emails is a sufficient writing to modify a contract.

Plaintiff Stevens sold his business (L-S) to Defendant Publicis under two contracts: a stock-purchase agreement including an initial up-front payment, and an employment contract whereby Plaintiff would continue as Chairman and CEO of the new company (PDNY) for three years with additional contingent fees based on earnings. Shortly after the acquisition, problems arose, including loss of a major client and failure to meet revenue and profit targets. Approximately halfway into the three-year term, Plaintiff was removed as CEO and presented 3 options for continued employment. The then-acting CEO of PDNY (Bloom) exchanged a series of emails with Plaintiff. The culmination of this exchange was an email from Bloom on behalf of PDNY describing his understanding of the parties’ terms regarding Plaintiff’s new role at PDNY that Plaintiff’s time would be allocated 70% towards new business development, 20% in maintaining former L-S clients, and 10% devoted to management/operations of PDNY.

Plaintiff responded the next day by email stating: “…I want to thank you again for helping me…That being said, I accept your proposal with total enthusiasm and excitement…” Bloom for PDNY replied the same day: “I am thrilled with your decision…all of us will continue to work in the spirit of partnership to achieve our mutual goal.”

The bottom of each email had the typed name of the sender.

The lower court held, and the Court of Appeals sustained that the parties had agreed in writing (by their emails) to modify Plaintiff’s duties under his employment contract, specifically because both sides expressed their unqualified acceptance of the modification to the contract. (Bloom’s email set forth the terms of the proposed contractual modification, Plaintiff accepted those terms by his email, and Bloom’s reply memorialized that acceptance). Plaintiff also confirmed his acceptance of the modified contract terms in another email to PDNY’s COO.

The Court of Appeals held that Plaintiff’s (and Bloom’s) emails “constitute ‘signed writings’ within the meaning of the statute of frauds, since plaintiff’s name at the end of his e-mail signified his intent to authenticate the contents.” Moreover, the signed writings (the emails) satisfied a requirement of the original employment contract that any modifications must be signed by all parties, i.e., the several emails served as counter-signatures. The same result may not have been reached in a different state, but at least in NY, “signed” emails can be valid for contract purposes.

Case is: Stevens v. Publicis, S.A., 602716/03.

On Shyftr and copyright infringement

Over the past few days a discussion has erupted about the recently-noticed RSS feed aggregator slash social networking site called Shyftr. The gist of the discussion — which can properly be characterized as a controversy — is about how Shyftr republished entire posts from others’ RSS feeds without obtaining prior consent. Rather than try to link to all the great posts out there addressing the issue, just go to this page to see my collection of links on the subject.

A lot of the discussion addresses the concern of Web publishers (mainly bloggers) about where feedback should reside. Services like Shyftr and Friendfeed provide the mechanism for users to comment (and thereby engage in a conversation) within those services, without any way for the original publisher to be directly notified of that disscussion. Brian Solis, whose post about Shyftr was the first to make me aware of this issue, addresses the conundrum by observing that “the conversation has left the building.

The other particularly unsavory bit of this Shyftr kerfuffle is the intimation that publishing entire feeds in the manner Shyftr was doing it is content theft. Tony Hung may have expressed that concern best. As an intellectual property lawyer, I read intimations of content theft as intimations of copyright infringement.

For as long as RSS has been around, or at least for as long as I’ve cared about RSS, lawyers have been speculating about where the edge of the envelope is when it comes to the manner of republication of feed content. Denise Howell in particular has artfully, and I think correctly, couched the question as one involving the doctrine of “implied license.”

One of the leading cases on implied copyright licenses is Effects Associates, Inc. v. Cohen, 908 F.2d 555 (9th Cir. 1990). The court held that the defendant horror movie producer was not an infringer when he used some footage he’d commissioned from the plaintiff special effects company, because the defendant had an implied license. But there was a real relationship between the parties — the allegedly infringed content was not merely appropriated from a source at large (like the Web). The special effects company “created a work at defendant’s request and handed it over, intending that defendant copy and distribute it.” It was that kind of situation that gave rise to an implied license. And the relation of the parties, along with their actions, was critical.

For this situation, Eric Berlin hits the nail on implied license’s coffin right on the head when he states that:

[A]n RSS feed still has elements of control. Publishers can advertise on their RSS feed for one, readers can click back to the original story to comment, and importantly publishers can track RSS feed subscribers and count those numbers against their overall “reach” in the blogosphere and on the Internet.

Those aspects underlie the intent that an average feed publisher will have when he or she puts content out there in a feed. It’s this intent that drives and defines the conduct of the publisher. Use of a full feed by another that eliminates these aspects of control is contrary to the publisher’s conduct, and in my book could hardly be defensible on an implied license basis.

But it’s a tempest in a teapot. Shyftr has announced on its blog that it is backing off from republishing full feeds. Wise move. Not all of us agree there should be an invitation to steal our content. Copyright protection, regardless of how antiquated some may want to characterize it as, provides some great peace of mind and gives a valuable means of control.

Shyftr’s change in course has probably been due in part to rumblings of DMCA takedown notices on the way. Interestingly, though, Shyftr doesn’t look like it has cared to try to put itself in the DMCA safe harbor. As of the time of this post, it does not provide any information on its site about a designated agent for receiving DMCA takedown notices. (See its Terms of Use and About pages.) Cavalier or just precarious?

How the decision is good for Section 230

Earlier today the Ninth Circuit, en banc, issued its opinion in the case of Fair Housing Council of San Fernando Valley, et al v., LLC. It is a long and detailed opinion, authored by Judge Kozinski, and as characterized by my friend Michael Erdman, leaves largely unprotected by immunity under 47 U.S.C. 230. To learn everything you need to know about the majority opinion without actually reading the case, read Michael’s post here. There’s no need for me to duplicate efforts in summarizing the case, as there’s little I could add in that regard.

This case is pretty big news in Internet law circles, and more than one person has asked me today what my take on it is. I actually don’t have much to say about whether the Ninth Circuit got the legal analysis right. They probably did. Judge Kozinski and his colleagues in the majority are brighter hungover than I am at full stride, so I’m in no real position to critique their analysis. Instead, my take on the case is a pragmatic, and I shudder to say, a political one.

I hope you’ve taken my suggestion and read Erdman’s summary of the case before getting to this point in this post, because you need to know what the facts are. The subject matter dealt allegations of violation of the fair housing laws. That’s a touchy issue, involving race, religion, sexual orientation, family status, etc. Smart people don’t touch those kinds of issues with a ten foot pole.

Had the Ninth Circuit ruled in’s favor, think about the ways that outcome could have been spun. Imagine, shall we say, a “progressive” Congressman standing up in Washington and saying, hey, with this Section 230 scheme, we give a license to Web site operators to run hate mills, build up bastions of bigotry, and sanctuaries for racism. In short, a victory could have given a battalion’s worth of ammunition — in the form of emotional, irrational rhetoric — to Section 230’s critics. Some in Congress would have called for its head.

This didn’t dawn on me until the other day when I was talking with a very liberal colleague. He knew nothing of Section 230 other than what I had explained to him in the previous five minutes (including a mention of the 3-judge panel decision), and he said something to the effect of, “wow, when it starts touching on issues like fair housing, Congress is bound to step in and not give the Web sites a free ride.”

So maybe you see where I’m going with this. Whether it’s right or wrong from a legal analysis standpoint, today’s decision stands for the proposition that online systems alleged to facilitate the violation of some touchy rights don’t always get a free ride.

The real irony, and for me the “take” on the case, is that although Section 230 immunity appears to be diminished a bit by the decision (look at how few circuit court opinions there are where the defendant lost), the defense loss is really a bullet dodged. By declining to hold that Section 230 provided immunity, the Court kept Section 230’s neck off the political chopping block. What a tragedy it would be, indeed, for political issues to cause our Congress to roll back a provision that has been so integral to the development of the Internets.

Seventh Circuit sides with Craigslist in Section 230 case

The legal blogosphere is abuzz with last Friday’s ruling in the case of Chicago Lawyers’ Committee for Civil Rights Under Law, Inc. v. Craigslist, Inc., — F.3d —-, 2008 WL 681168 (7th Cir. March 14, 2008). In a highly-anticipated opinion, Judge Easterbrook upheld the district court’s opinion, holding that under 47 U.S.C. 230, Craigslist could not be treated as the “publisher” of third party postings that allegedly violated the Fair Housing Act.

With life outside of blogging staying in the way of much of my activity here, I’m not going to be able to give the case any substantive analysis for awhile. And there’s a lot of quality information out there already on the case. Here are some links to just about everything you need to know about the opinion:

Event: David Donoghue at the Chicago Bar Association

A reminder to my Chicago-area readers — please consider attending tomorrow’s (2/19) meeting of the Chicago Bar Association’s Cyberlaw and Data Privacy Committee meeting. 12:15 p.m. at 321 South Plymouth Court in Chicago [map]. Dave Donoghue will be speaking about recent cyberlaw developments in the Northern District of Illinois. Satisfaction guaranteed or your money back. The event is free.

New guide to open source issues

[Update: Thanks, Dad, for alerting me to the typo. It’s a relief to know I’ll always have at least one reader!] 

The Software Freedom Law Center, one of the leading influencers in the free and open source software movement, has released what appears to be a helpful guide on understanding the legal issues associated with the use and development of open source software. As anyone involved with open source (whether on the legal side or the technical side) knows, these kinds of issues are erudite at best, and incomprehensible at worst. Having a comprehensive review in one place provides a helpful tool. Thanks to my friend Alex Newson for pointing out this publication.

Seeking a speaker for 2/19 event. Is it you?

Update: It’s going to be Dave Donoghue, who authors the very informative Chicago IP Litigation Blog. If you’re not already reading Dave’s blog, you should be. He does a bangup job of tracking intellectual property decisions coming out of the federal courts here in Chicago. At the 2/19 meeting, Dave will use his perspective gained from paying close attention to the local dockets to speak on the topic of “Northern District of Illinois Cyberlaw Trends”. If you’re in the area, or will be on Februray 19, please consider attending this noon-time event at the Chicago Bar Association building 321 S. Plymouth.


I’m the vice-chair of the Chicago Bar Association’s Cyberlaw and Data Privacy Committee, and we have a meeting coming up at noon on Tuesday, February 19, 2008. Problem is, our speaker prospects are falling through.

 If you can be in Chicago on 2/19 and would like to address a group of about 20-30 technology savvy attorneys on a topic of interest to you about law and technology, drop me a line [internetcases -at- gmail dot com]. I need to know ASAP, so please respond by the end of the day tomorrow (Friday, 2/1/08).

 CLE credit is of course available. Illinois rules allow you to get up to six hours credit for preparation time for each hour you talk.

Off topic: Sometimes I take this train

Click here if the video is not showing up in the RSS feed.

Night before last I spent three hours on the train ride home. The video above shows the reason for the delay. The train I took that night was backed up and delayed while they sorted out the mess in Hinsdale. Had I left work a few minutes earlier I would have been on the second train, i.e., the one that caused the minivan to burst into flames. Would have been pretty exciting/scary. Thank goodness no one was hurt.

Franklin Covey sues Lycos for posting of 7 Habits book

FranklinCovey v. Lycos, No. 07-cv-00974 (D. Utah, filed December 17, 2007). [Download the Complaint]

FranklinCovey owns the copyright in the bestselling book The 7 Habits of Highly Effective People. It has sued Lycos, owner of AngelFire, for copyright infringement, claiming direct and/or secondary liability for the posting of an entire copy of the work online.

The allegations are a bit ambiguous as to who FranklinCovey thinks actually posted the work online. In some parts of the complaint it accuses Lycos as having posted it, but at the same time, the allegations describe the multiple DMCA takedown notices that FranklinCovey sent, as if their theory is that Lycos is a provider for third party content.

It’s an allegation as to the DMCA that raised my eyebrows when reading the complaint. Here’s what Paragraph 34 says:

“Based on Defendants’ failure to expeditiously remove or disable access to this infringement, notwithstanding their actual knowledge thereof, Defendants have waived any defense to liability they may otherwise have had pursuant to 17 U.S.C. § 512 or otherwise.”

It’s the word “otherwise” that particularly piqued my interest.  Is this true? By failing to comply with a DMCA takedown notice, has Lycos really waived its defense to infringement liability?

Here’s what 17 USC 512(l) says:

(l) Other defenses not affected.–The failure of a service provider’s conduct to qualify for limitation of liability under this section shall not bear adversely upon the consideration of a defense by the service provider that the service provider’s conduct is not infringing under this title or any other defense.

Thoughts, anyone?