Attorney Evan Brown

January 24, 2024 Privacy

Website cookie banner was not enough for cruise line to sink federal wiretap lawsuit

cookie banner

Plaintiffs sued Carnival Cruise Line because they were upset about how much information carnival.com collected when they visited the site. “On carnival.com, no action goes unnoticed. Every click is counted, every keystroke is collected, and every cursor movement is catalogued.”

The claims centered around Carnival’s use of Clarity – a Microsoft session replay software that was deployed onto the user’s browser to collect a wide variety of information about the user’s system and browsing behavior. That collection was not limited to information from carnival.com. Clarity allegedly assigned each user a specific id that it used to associate and aggregate browsing behavior across all Clarity-enabled websites.

Plaintiffs asserted several claims, including one under the federal Electronic Communications Privacy Act (18 U.S.C. 2510 et seq.) (“ECPA”). They complained that Carnival intercepted Plaintiffs’ personal information, including their passport number, driver’s license number, date of birth, home address, phone number, email address and payment information, and used that information to trace users’ browsing history on other sites.

Carnival moved to dismiss for failure to state a claim under the ECPA. The court denied the motion.

No “party to the communication” exception

Carnival argued that the “party to the communication” exception of the ECPA absolved it of liability. 18 U.S.C. 2511(2)(d) provides that “[i]t shall not be unlawful … for a person … to intercept a[n] electronic communication where such person is a party to the communication.” But plaintiffs asserted that Microsoft, as the provider of the session replay code software, was a third party to the communication of the browsing information. Courts sometimes find third parties to be merely “extensions” of a website when such third parties’ services “merely function as a tape recorder.” But in this case, citing to Javier v. Assurance IQ, LLC, 649 F. Supp. 3d 891 (N.D. Cal. 2023), the court declined to find that Clarity had such limited functionality. The main problem for Carnival was that Clarity did more than just serve as a “tape recorder” – it used data to generate analytics such as heatmaps of user engagement and profiles of browsing history on other sites.

No consent for third party interception

Carnival also argued that the ECPA claim should be dismissed because plaintiffs had consented to the interception of their information. The court rejected this argument.

Carnival’s first argued that by merely sending a communication over the internet, plaintiffs expressed their consent. It cited to a 2001 Pennsylvania decision called Commonwealth v. Proetto, a criminal case in which that court found that a defendant accused of improperly soliciting a 15-year-old girl online could not claim that the girl’s decision to print out the defendant’s chat communication violated defendant’s right of privacy. In other words, the Pretto case stands for the notion that when one sends something over the internet, he or she loses control, from a privacy standpoint, over what the recipient will do with that information. The court distinguished the Proetto case, however, noting that it did not cover third-party interception, focusing instead on direct communication between two parties, and emphasizing that consent is given specifically to the receiver, not any incidental third party. This distinction was crucial in the present case, as Carnival needed to demonstrate that plaintiffs consented not just to Carnival, but also to third-party session replay providers – such as Microsoft in providing Clarity – involved in data collection.

So Carnival cited to Farst v. AutoZone, Inc., 2023 WL 7179807 (M.D. Pa. 2023) wherein the court dismissed similar claims in the context of online shopping, deeming it a public activity with no expectation of privacy in browsing habits. The court distinguished the Farst case, however, by noting that it did not focus not on the collection of sensitive information like this case did. In the current case, plaintiffs had made concrete allegations regarding the interception of sensitive information (e.g., driver’s license number, date of birth, home address).

Carnival’s second argument for plaintiffs’ consent to its recording policy hinged on a “Cookie Policy” banner on its website, suggesting that continued use of the site provided consent to the policy. Plaintiffs countered this by asserting that the website did not adequately notify users of this recording, and interaction with the site was possible without reviewing or agreeing to any privacy policy. The court observed that in assessing the validity of such “browsewrap” agreements, it should consider whether a website provides sufficient notice to a reasonably prudent user about the terms of the contract. In this case, the Cookie Policy banner was less noticeable due to its smaller text, inconspicuous color scheme, and placement away from key user interaction points, like large “SHOP NOW” or “SEARCH CRUISES” buttons. There was also no evidence that the banner appeared immediately or remained visible throughout a user’s visit. Consequently, the court found that – based on the facts alleged – a reasonably prudent user would not be adequately informed of the terms, siding with plaintiffs’ claim that they did not consent to the interception of their communications.

Rejection of Carnival’s other ECPA arguments

In denying the motion to dismiss the ECPA claims, the court rejected Carnival’s remaining arguments as well.

The court found that based on the facts alleged in the complaint, it was plausible to believe that the transmission of the information was contemporaneous, thereby qualifying as an “interception” under the statute.

It found that the information transmitted was not merely “record information” but that information such as an intent to travel, dates and locations were actual “contents” of the alleged communications.

And it rejected Carnival’s argument that the offending session replay code comprising Clarity was not a “device” prohibited by the statute. Carnival contended that it did not meet the definition of a “device” in the context of wiretapping laws, arguing that a “device” should be a physical object. The court held that that the combination of software and hardware involved in this case fell under the ambit of “device” as contemplated by the statute.

Price v. Carnival Corporation, 2024 WL 221437 (S.D. Cal., January 19, 2024)

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January 23, 2024 Personal Jurisdiction

RFK Jr.’s online defamation case against Daily Kos writer tossed on jurisdictional grounds

online defamation

Presidential candidate Robert Kennedy Jr. sued Daily Kos writer David Vickery over a blog post Daily Kos published on August 29, 2020. The post described Kennedy’s participation in a Berlin protest against COVID-19 measures and included various allegations that Kennedy asserted were untrue.

Jurisdictional Challenges

Vickery moved to dismiss the case, arguing the federal court sitting in New Hampshire where plaintiff brought the suit had no personal jurisdiction over Vickery. Kennedy argued that the New Hampshire court could exercise specific personal jurisdiction over Vickrey, based on the effects of the alleged defamation in New Hampshire. But Vickery argued his connection with New Hampshire was minimal – he resided in Maine, had not worked in New Hampshire for over a decade, and did not engage in activities connecting him to the state in the context of the Daily Kos article.

Court’s Analysis and Decision

Applying the principles laid out in the well-known case of Calder v. Jones, the court evaluated the “purposeful availment” aspect of personal jurisdiction. The court observed that Kennedy needed to demonstrate that Vickrey intentionally directed his conduct towards New Hampshire, anticipating that the impact of his actions would be felt there. But the court found that Kennedy’s claims did not hold up under this scrutiny. It found that the article was published long before Kennedy’s presidential run, negating any intention to influence New Hampshire voters specifically. And the continuation of the article’s online presence did not equate to republishing, a key consideration in defamation cases.

Conclusion

So the court ruled in favor of Vickrey, granting his motion to dismiss due to the lack of personal jurisdiction. Kennedy’s motion for preliminary discovery and an evidentiary hearing on the jurisdictional issue was also denied.

Kennedy v. Vickrey, 2024 WL 232104 (D.N.H., January 22, 2024)

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January 20, 2024 Computer Crime

Court dismisses hacking claim in fraudulent refund case

hacking claim fraudulent

Plaintiff is a lawyer who represented defendant in defendant’s divorce proceedings. During those proceedings, defendant terminated the representation and clawed back money he had paid plaintiff, which plaintiff claimed was properly paid. Plaintiff alleged this was a fraudulent act that resulted in a violation of the Computer Fraud and Abuse Act (“CFAA”) as well as several state law claims.

Plaintiff sued under the CFAA. Defendant moved to dismiss the claim. The court granted the motion.

The CFAA if the federal “anti-hacking” statute. It creates criminal and civil liability, among other things, for whoever intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains information from any protected computer.

The court held that plaintiff’s complaint did not plausibly allege facts showing that in his attempt to get the credit card company and bank to return the money he previously paid to plaintiff, defendant accessed a protected computer without authorization or while exceeding his authorized access in violation of the statute.

If found that plaintiff accused defendant of filing fraudulent complaints and refund requests with Chase Bank and American Express through their websites. However, there were no allegations saying he did anything than access publicly available websites. In line with the holding of hiQ Labs, Inc. v. LinkedIn Corp., 31 F.4th 1180 (9th Cir. 2022), this did not constitute “access without authorization” since no special permission was needed to access these areas. Using the language of hiQ, it noted that publicly available webpages have “erected no gates to lift or lower in the first place”.

Even if defendant had used password-protected sections, the court found there were no assertions that defendant did so without authorization or exceeded his authorized access, such as using false credentials or accessing restricted information.

The court also examined plaintiff’s allegations that defendant violated AmEx’s terms of service by using the website for fraudulent purposes. It found that these allegations alone did not establish liability under the CFAA. Since there were no facts indicating that defendant’s actions were analogous to computer misconduct like “breaking and entering,” which the CFAA aims to combat, the court granted the motion to dismiss.

Watters v. Breja, 2024 WL 201356 (N.D. Cal. January 18, 2024)

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January 17, 2024 Litigation, Section 230

Section 230 protected Meta from claims of discrimination for taking down Palestinian content

meta section 230

Pro se plaintiff sued Meta seeking to hold it liable for allegedly removing certain “Muslim and/or Palestinian content” while preserving “unspecified Jewish and/or Israeli content” and for allegedly banning certain Muslim users, while allowing unspecified Jewish users to continue using Meta’s services. He brought a civil rights claim for unlawful discrimination on the basis of religion in violation of Title II of the Civil Rights Act of 1964.

Meta moved to dismiss, arguing, among other things, that plaintiff lacked standing. The lower court granted the motion. Plaintiff sought review with the Third Circuit. On appeal, the court affirmed the dismissal.

No “informational injury”

The court observed that plaintiff had not alleged that he owned, created, controlled or had any personal involvement with the removed content other than having previously viewed it. Nor had he alleged any personal involvement with the banned users. Likewise, he had not argued that he was denied the same level of service that Meta offered to all its users. Instead, he had argued that he was entitled to relief as a Muslim being discriminated against by having Muslim-related news removed while Jewish content remained.

The court examined whether plaintiff could establish standing under the “information injury” doctrine. To establish standing under the informational injury doctrine, plaintiff “need[ed] only allege that [he] was denied information to which [he] was legally entitled, and that the denial caused some adverse consequence related to the purpose of the statute.” It went on to note that an entitlement to information allegedly withheld is the “sine qua non” of the informational injury doctrine.

It held that plaintiff had failed to establish standing under this doctrine because he did not show that he was legally entitled to the publication of the requested content or the removal of other content. Title II does not create a right to information. And the statute could not be understood as granting him a right to relief because he did not allege that he was personally denied the full and equal enjoyment of Meta’s services. Moreover, plaintiff was without relief under Title II because the statute is limited to physical structures of accommodations, and Meta, for purposes of the statute was not a “place of public accommodation.”

Section 230 Classics

And in any event, 47 U.S.C. § 230 precluded the court from entertaining these claims, which would have sought to hold Meta liable for its exercise of a publisher’s traditional editorial functions – such as deciding whether to publish, withdraw, postpone, or alter content. On this point, the court looked to the classic Section 230 holdings in Green v. America Online (AOL), 318 F.3d 465,(3d Cir. 2003) and Zeran v. America Online, Inc., 129 F.3d 327 (4th Cir. 1997).

Elansari v. Meta, Inc., 2024 WL 163080 (3d. Cir. January 16, 2024) (Not selected for official publication)

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January 16, 2024 Trademarks

Who owns the trademark rights in the name of a user-created community?

trademarks social platforms

In the realm of online communities, where does the ownership of trademark rights lie – with the platform hosting the community or the individual user who creates and develops it?

The intriguing case involving Reddit and the founder of the well-known r/WallStreetBets subreddit presents a scenario that addresses this question concerning online communities and intellectual property rights. The case deals with the ownership and alleged infringement of two trademarks: WALLSTREETBETS and WSB.

Reddit and WallStreetBets

Reddit is a widely-used social media platform that enables users to create, manage, and participate in communities known as subreddits, centered around various interests. Plaintiff Rogozinski launched r/WallStreetBets in January 2012 to establish a forum for discussions and information exchange about the financial industry. While preparing for the launch, plaintiff invested considerable time and effort in developing the subreddit’s unique identity. This included creating the WALLSTREETBETS logo, designing the site using CSS to modify Reddit’s template. Later he set up related online channels, including an Internet Relay Chat (IRC) chatroom, a Discord channel, and a Twitter account under the WALLSTREETBETS name. By 2020, the r/WallStreetBets subreddit had amassed over a million followers.

Reddit Got Mad

The conflict took shape when plaintiff filed an application to register the WALLSTREETBETS trademark with the USPTO in March 2020. Reddit subsequently suspended plaintiff’s account for a week, citing his attempt to monetize the community, and barred him from moderating on the platform. In January 2022, plaintiff filed to register the mark WSB, and the USPTO granted this registration in June 2022.

Then There Was Litigation

Plaintiff sought a declaratory judgment – which in this case was a request for the court to acknowledge his ownership of the WALLSTREETBETS and WSB trademarks. He also made a claim against Reddit for infringing these trademarks, together with various other claims arising under state law. On the infringement issue, his theory was that he did not give Reddit permission to use the WALLSTREETBETS trademark following his ban as a moderator of the r/WallStreetBets subreddit he created.

The court dismissed Plaintiff’s first complaint, which he filed in February 2023. That dismissal, however, came with the opportunity for plaintiff to amend his complaint to address these issues. Despite his efforts to fix the identified shortcomings in his amended complaint, Reddit argued that he had still failed to meet the necessary legal standards. The court agreed and dismissed the case again.

Court Says the Rights are Reddit’s

The Court’s placed significant emphasis on the principle of “first use in commerce,” a critical element in establishing trademark ownership. In his amended complaint, plaintiff attempted to demonstrate his early and significant involvement in the development and use of the trademarks in question. He detailed his efforts in creating the logo, designing the subreddit, and establishing associated online channels. However, the court remained unconvinced by these assertions, noting that plaintiff’s actions did not meet the threshold of “use in commerce” as required by trademark law. The Court also scrutinized the timing and nature of plaintiff’s activities in relation to the establishment and popularity of the subreddit, ultimately finding that these actions did not suffice to establish his ownership of the trademarks.

And the case addresses the interesting issue of who owns trademark rights in a user-generated community – the platform or the moderator/creator? Reddit asserted that it owned the trademark rights in the community. Specifically, citing a case from the USPTO’s Trademark Trial and Appeal board, In re Florists’ Transworld Delivery Inc., 2016 WL 3998062 (T.T.A.B. May 11, 2016), Reddit had argued that account holders like plaintiff “generally will not be able to rely on use of [their] social media account to support an application for registration of a mark for such service.” Reddit argued that “[j]ust as the applicant in In re Florists’ Transworld could not claim rights in connection with ‘creating an online community’ based on use of Twitter, Plaintiff cannot rely on his use of Reddit’s platform to support alleged service mark rights in connection with a ‘web based community'”.

Regarding the state law claims, the court looked to 47 U.S.C. 230, which provides immunity to providers of interactive computer services from liability for content posted by others. The court found that these claims, as presented, did not get around Reddit’s Section 230 immunity.

Rogozinski v. Reddit, Inc., 2024 WL 150727 (N.D. California January 12, 2024)

Read Franklin’s post at Creator Economy Law.

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January 15, 2024 Privacy

Beauty and the Biometrics: Federal court in Illinois tosses biometric data case brought against cosmetics giant

biometric privacy

A federal judge recently dismissed a class action lawsuit against The Estée Lauder Companies and one of its affiliates. This case involved allegations that these entities violated the Illinois Biometric Information Privacy Act (BIPA).

Background of the Case

Plaintiffs represented a proposed class and accused defendants of three distinct violations of BIPA. The dispute centered on the use of a virtual try-on tool that one of defendants had licensed to Estée Lauder which enabled customers to virtually test cosmetic products on brand websites. Plaintiffs claimed that they were not adequately informed about the capture and use of their biometric data, including facial mapping and facial geometry. They argued that there was a failure to provide clear consent and privacy policies regarding biometric data.

What BIPA Says

The law governs private entities’ collection, use, and storage of biometric identifiers and information. Plaintiffs contended that defendants did not comply with these requirements, specifically in failing to obtain written consent and establishing proper retention and destruction policies for biometric data.

What the Court Said

The court’s decision to dismiss the case hinged on plaintiffs’ inability to demonstrate that defendants used the biometric data in a manner that could identify individuals. The court referenced similar cases where allegations were dismissed due to the lack of plausible claims connecting biometric data collection with the capability to identify individuals.

The court found that plaintiffs did not provide sufficient factual allegations to establish that defendants could identify individuals using the facial scans. It compared other cases where claims were either dismissed or upheld based on the presence or absence of plausible allegations of identification capability. The case was dismissed without prejudice, meaning plaintiffs were given the opportunity to file an amended complaint by a specified date.

What It Means

This decision highlights the importance of clear legal standards for biometric data usage and the challenges plaintiffs face in proving violations under BIPA. It also underscores the need for companies to be transparent and compliant with privacy laws when implementing innovative technologies.

Castelaz v. The Estee Lauder Companies, Inc. et al., 2024 WL 136872 (N.D. Illinois, January 10, 2024)

IP warranty in the spotlight: Licensor’s failure to assure licensee of rights leads to litigation

intellectual property

In the recent breach of contract case in federal court in New York, we learn about what it takes for a copyright licensee to successfully assert that a warranty from the licensor as to copyright ownership has been breached. Licensee’s unsuccessful efforts to verify the truth of the facts warranted provided a key basis for the lawsuit to move forward.

Blake and Video Elephant entered into an agreement whereby Video Elephant granted a sublicense for Blake to use certain news, entertainment, sports, and other related content. Video Elephant’s business model was to procure such rights from content owners and then grant sublicenses to licensees such as Blake. The agreement contained a provision whereby Video Elephant “warrant[ed] that [the third party owner] is the sole owner of all copyright in [the content] which is granted to [Blake] under this Agreement other than such logos and trademarks and/or title name which are owned by [Blake].”

Assure or get sued

This warranty was crucial for Blake, as it helped Blake be assured that it could use and broadcast the content without the fear of copyright infringement claims from third parties. After Blake repeatedly attempted, without success, to verify whether the third party creator actually owned the intellectual property rights in the content, and after Video Elephant failed to offer adequate assurances that the third party had such rights, Blake filed a counterclaim in the ongoing litigation between the parties for breach of warranty.

Video Elephant moved to dismiss the counterclaim. The court denied the motion.

Due diligence dead end

Blake alleged that it conducted thorough investigations, consulting relevant rights databases and contacting business contacts in the movie industry, seeking to confirm the third party’s ownership of the rights. Despite these efforts, the ownership remained unverified, leading to Blake’s conclusion that the third party might not be the sole owner of the copyright in the licensed content. This situation, according to Blake, rendered it unable to use the content as intended under the agreement, thereby causing substantial damages.

Video Elephant, on the other hand, argued that Blake’s allegations were unfounded, asserting that Blake’s pleading failed to establish a claim for breach of express warranty. It argued that Blake had not demonstrated that the warranty was, in fact, breached.

Belief about doubt

In ruling in Blake’s favor, the court noted that Blake’s assertions “[u]pon information and belief,” that “[the third party] was not in fact the sole owner of all copyright rights in and to the content licensed” and Blake’s unsuccessful investigations into the ownership of the sublicensed content’s rights made the inference of breach plausible.

Moreover, the court found that under New York law, Blake had pled facts showing its reliance on the warranty as the basis for the agreement, since without such third party rights being granted, Blake would have been at risk of infringement liability. The court also found that the lack of assurances – and the resulting inability to use the content because of the resulting infringement risk – supported Blake’s allegations of “substantial damages”.

Video Elephant Ltd. v. Blake Broadcasting LLC, 2024 WL 68525 (S.D.N.Y. January 5, 2024)

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Google did not “trespass” on websites by placing ads in mobile app

trespass to chattels

Google’s Search App in the Android environment worked much like any web browser. When a user typed in a web address, the app would connect to the host web server and deliver up a copy of the requested web page to be viewed in the app. Between 2018 and 2020, Google configured the app so that a frame at the bottom of the screen accompanied the requested page. A user could click to expand the frame to display larger advertising banners. Google did not pay the owners of the websites over which these banners were displayed. The ads were triggered automatically using algorithms, presumably based on the content of the requested website.

A group of website operators sued Google in federal court, seeking to make the case into a class action. Plaintiffs asserted a number of claims under California law, including trespass to chattels and unjust enrichment. Google filed a motion to dismiss the case for failure to state a claim upon which relief could be granted. The lower court denied the motion to dismiss. Usually, a party who loses a motion to dismiss does not yet have the opportunity to appeal such a decision (that right is normally reserved for final decisions of a court). In this case, however, the court permitted Google to seek review of the denial of the motion to dismiss. On appeal, the Ninth Circuit reversed the lower court’s decision and ordered that the case be dismissed.

No trespass to chattels

Trespass to chattels is a tort that enables a party to recover when another has interfered with possession of personal property. It is in the nature of theft (what in civil proceedings would be called “conversion”) but “not sufficiently important to be classified as conversion”. Plaintiffs’ theory essentially was that when Google placed ads on top of their web pages, Google was messing with plaintiffs’ possessory interest in plaintiffs’ web pages. The “chattels” at issue were the copies of the web pages.

The court held that plaintiffs’ trespass to chattels claim failed because they did not allege a sufficient possessory interest in the copies of their web pages, nor did they allege an appropriate property interest in the pages.

As for the lack of possessory interest, the court observed that (1) the pages were created when a user visited the website using the Search App, (2) the copy existed on the user’s device, and (3) the page was deleted when the user left the page. Because the purported possessory interest was “entirely dependent” on the actions taken by individual users, plaintiffs could not claim ownership of such interest.

And as for the lack of property interest, the court held that the lower court erred in focusing the property-ownership analysis on the website itself, rather than the website copies that appeared on the user’s mobile device. It then applied a three-part test set out in Kremen v. Cohen, 37 F.3d 1024 (9th Cir. 2003) to determine that (1) a website copy is not “capable of precise definition” because there is no single way to display a website copy, (2) a website copy is not “capable of exclusive possession or control” because the user is the one who dispenses with the page in his or her local environment, and (3) there is no “legitimate claim to exclusivity” over website copies, making them different than other types of tangible property recognized as being subject to trespass.

Unjust enrichment claim preempted by federal copyright law

The court used a two-part test to assess whether plaintiffs’ state-law claim for unjust enrichment conflicted with the federal Copyright Act. The first step of the test examined the nature of how plaintiffs’ websites were presented, and led the court to determine that the websites involved the subject matter covered by federal copyright law.

In the second step, the panel compared the rights claimed by plaintiffs under their unjust enrichment claim to see whether they were equivalent to those rights protected by federal copyright law. The court held that it was appropriate to focus on the rights asserted by plaintiffs. It found that the described action of placing ads over the websites resulted in the creation of a derivative work – a right enumerated in the Copyright Act.

Additionally, the court found that plaintiffs’ state-law claim did not include any additional elements that would distinguish it from a typical federal copyright claim. This lack of an “extra element” was a key factor in the panel’s conclusion. As a result, the panel determined that plaintiffs’ state-law claim was indeed preempted by federal copyright law, aligning the state claim with the broader protections offered at the federal level.

What the case means for business

The ruling holds significant implications for digital enterprises, particularly concerning advertisement placement and risk management. This case underscores the legal complexities of embedding advertisements on digital platforms, highlighting the importance of legal compliance and awareness of intellectual property laws. Additionally, it emphasizes the need for diligent risk management in the company’s operations. This case serves as an important reminder of the potential legal risks associated with digital content and advertising practices, making it imperative for companies to maintain a proactive approach to legal compliance and risk mitigation in these areas.

Best Carpet Values, Inc. v. Google, LLC, 2024 WL 119670 (9th Cir., January 11, 2024)

No ACPA injunction because mark was not distinctive when domain name first registered

ACPA

This case had a bit of a weird result – even though the brand owner had a mark that was 20 years old, and the alleged cybersquatter in the meantime acquired a domain name on the open market identical to that mark, because the domain name was first registered (by an unrelated party) before the brand owner’s trademark rights arose, there was no relief under federal trademark law. One may question whether such a result creates a loophole for bad faith actors.

History of registration and rights

Someone – no one seems to know who – first registered the disputed domain name <trx.com> back in 1999. In 2003, plaintiff’s successor in interest (via bankruptcy) began using the trademark TRX, thereby acquiring rights in the mark. Defendant bought the domain name in 2022.

Plaintiff sued defendant under the Anticybersquatting Consumer Protection Act (ACPA), a part of U.S. trademark law that deals with bad faith domain name registration. Plaintiff sought a preliminary injunction ordering the transfer of the disputed domain name pending resolution of the lawsuit. The court denied the motion because it found that plaintiff had not established that plaintiff would likely succeed on the merits of the cybersquatting claim.

Outcome up for critique

The legal holding is potentially problematic, however, and represents a point on which different federal courts sitting in different parts of the country handle cybersquatting claims differently under the ACPA.

In this case, the court held that plaintiff’s cybersquatting claim depended on when the disputed domain name was first registered. Citing to a 2023 case from the same district, Blair v. Automobili Lamborghini SpA, which in turn relied on the Ninth Circuit’s opinion in GoPets Ltd. v. Hise, 657 F.3d 1024 (9th Cir. 2011), the court explained that liability for cybersquatting is possible “only when a person other than the trademark owner registers a domain name that is confusingly similar to a trademark that is distinctive at the time of the domain name’s registration.” It went on to note that “[i]n other words, if a domain name is registered before a particular trademark exists, the trademark owner cannot assert a viable cybersquatting claim against the domain name owner.”

So under this logic, because the domain name was registered prior to 2003 (when the rights in the TRX mark came into existence), there is no way plaintiff’s TRX mark could have been distinctive at the time of the domain name’s registration. The court came to this conclusion even though the record demonstrated that some unknown person, other than defendant, first registered the disputed domain name, and that defendant first acquired the domain name on the market many years after the TRX mark had become distinctive.

It is interesting to note that this outcome conflicts with decisions in other circuits that hold “re-registration” by a new owner counts as the time for evaluating whether a mark with which a domain name may be confusingly similar, is distinctive. See, e.g., Instructure, Inc. v. Canvas Technologies, Inc., 2022 WL 43829 (D. Utah, January 5, 2022). One could argue it is bad policy for the ACPA system to essentially absolve a bad faith actor who acquires a domain name that contains a protectible mark but was first registered by someone else not acting in bad faith, prior to the time the mark became strong.

JFXD TRX ACQ LLC, v. trx.com, 2024 WL 98424 (D. Ariz., January 9, 2023)

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January 9, 2024 Defamation

Second Circuit rules in favor of Barstool Sports in high profile online defamation case

The Second Circuit Court of Appeals has ruled in favor of Barstool Sports and certain of its employees in the longstanding defamation case brought by Michael Rapaport. The actor and comedian Rapaport and his company, Michael David Productions Inc., had appealed a lower court decision that had granted summary judgment to Barstool Sports and several of its employees, including founder David Portnoy.

Barstool Sports, a media and comedy brand established in 2004, is known for its unfiltered content across various platforms. Michael Rapaport, a prominent figure in entertainment, is similarly recognized for his candid commentary on social and political issues. The partnership between Rapaport and Barstool Sports began in 2017 but soon deteriorated, leading to a public and messy feud.

The Dispute

The conflict escalated when Rapaport had a disagreement with Barstool personality Adam Smith. This led to a series of derogatory exchanges on social media, ultimately resulting in Rapaport’s dismissal from Barstool. Portnoy publicly announced the split, citing Rapaport’s negative comments about Barstool’s fanbase. Following this, both parties continued to engage in a bitter exchange of insults online.

Lower Court Proceedings

Rapaport filed a lawsuit against Barstool, alleging defamation, among other claims. The defamation claim was based on multiple comments Barstool personalities made on various platforms. The district court, however, ruled in favor of Barstool, leading to Rapaport’s appeal.

The Appellate Court’s Decision

The appellate court observed the criteria under New York law for establishing defamation. The court differentiated between statements of fact and expressions of opinion, with the latter being protected and not actionable for defamation. The analysis focused on the context in which the statements were made, considering the nature of the language used and the broader setting of the dispute.

The court found that the statements made by Barstool, including accusations of racism, fraud, and other personal attacks, were part of a hyperbolic and vulgar feud, and were thus likely to be perceived as opinions rather than factual assertions. Moreover, the court noted that many statements were made on platforms where opinionated content is expected, further undermining the claim that they conveyed factual information about Rapaport.

Conclusion

The appellate court affirmed the district court’s judgment, emphasizing that the context and nature of the statements were key in determining their status as non-actionable opinions. The decision underlines the complexities of defamation claims in the digital era, where the line between fact and opinion can be blurred by the nature of the platform and the style of communication used.

This case serves as a reminder of the challenges in navigating defamation in the age of social media, where public figures often engage in heated exchanges that can have legal implications. The ruling reinforces the importance of context in evaluating such claims, setting a precedent for future defamation cases in the digital landscape.

Rapaport v. Barstool Sports Inc., 2024 WL 88636 (2nd Cir. January 9, 2023) [Link to decision]