InternetCases.com to host Blawg Review No. 10

Each week, a different law blogger takes a turn hosting a wrap-up of notable “blawg” postings from the past week. See, for example, Blawg Review #9 hosted this week by Juris Pundit. Blawg Review is a great way to see in a snapshot what’s new and interesting in the legal blogosphere.

InternetCases.com will be hosting Blawg Review #10, which will be posted on Monday, June 13, 2005. If you are a “blawgger” and write a posting about which you’re particuarly proud this week, or if you run across someone else’s blog posting that is law-related and noteworthy, let me know about it before the end of the day this coming Saturday, June 11. I’ll try my best to include it. Please see the submission guidelines.

Accusations that former employee posted obscene material on website were not defamatory

Mark Cody was fired from his job as general sales manager for WPWX-FM in Hammond, Indiana. Soon after his termination, someone posted obscene images on the WPWX website. Cody’s former boss, Taft Harris, wrongfully accused Cody of posting the images. In a meeting of the radio station’s employees, Taft stated, “This has got to be Mark Cody. I know Mark did this. I know he is responsible for this.”

Cody sued Harris and the owner of the radio station alleging various causes of action, including defamation. Cody claimed that Harris’s comments were defamatory per se, because they were disparaging of Cody’s professional reputation, i.e., his ability to manage a sales force.

The district court dismissed Cody’s defamation count, and the Seventh Circuit affirmed the dismissal. The court held that Harris’s statements were not defamatory per se, because instead of disparaging Cody’s ability as a sales manager, they merely attacked his personal integrity. Because there was no defamation per se, it was necessary for Cody to have pled and proven actual damages for defamation, which he had not done.

Cody v. Harris, — F.3d —, 2005 WL 1274352 (7th Cir., May 31, 2005).

No spam with those potatoes: Idaho federal court tosses CAN-SPAM complaint

Falsity in body of message not a violation of Act.

Internet Access Services Providers LLC filed suit in the U.S. District Court of Idaho against Real Networks under various provisions of the CAN-SPAM Act, 15 U.S.C. §7701 et seq. Real Networks moved to dismiss, and the court granted its motion. The court noted that pursuant to 15 U.S.C. §7704(a)(1), a commercial e-mail message must not contain materially false or misleading “header information.” Because the only falsity that the plaintiff alleged concerned a statement contained in the body of the email, the Act did not apply.

In denying the defendant’s award of legal fees and costs, the court declined to exercise its discretion to do so, given the relatively new and uncertain scope of the CAN-SPAM Act.

Internet Access Services Providers LLC v. Real Networks, Inc., 2005 WL 1244961 (D. Idaho, May 25, 2005).

Escort’s website relevant evidence for truthfulness

Defendant was hired as an independent “escort” and accompanied her client to the Embassy Suites Hotel in Livonia, Michigan. During the encounter, a scuffle ensued, and the defendant shot her client. She was charged with and convicted of assault with intent to commit murder. At trial, the defendant argued self-defense, claiming that her client had attacked her first.

Throughout the trial, the defendant had maintained that she did not engage in prostitution, and that there was nothing illegal about the services she provided. Although the question of whether the defendant was a prostitute was not related to any of the elements of the crime or to her defense, the prosecution wanted to challenge her truthfulness. To do that, the prosecution introduced into evidence the defendant’s website, which she apparently used to attract new clients.

The defendant argued that this evidence was improperly admitted because it was not relevant. The court disagreed, however, and held that it was relevant to her truthfulness, and that the jury could properly consider it to determine whether or not she was likely telling the truth in her testimony. The court further held that the website’s probative value outweighed its prejudicial effect.

People v. Earle, 2005 WL 1224611 (Mich.App., May 24, 2005).

Lost? Don’t bother suing if your GPS fails.

Amiel Dabush was 40 minutes late to a business meeting in Aberdeen, New Jersey, and he blamed his tardiness on the failure of the GPS system in his $70,000 Mercedes S-Class to show him the way. Although he didn’t lose any money or business from being late to the meeting, Dabush must have been pretty ticked-off, because he filed a class action lawsuit against Mercedes under New Jersey’s Consumer Fraud Act.

Dabush claimed that Mercedes misrepresented the quality of the GPS system in its marketing brochure which claimed, among other things, that “[i]f there’s a road that goes there, the S-Class can show you the way.”

The New Jersey Court of Appeals affirmed the trial court’s dismissal of the lawsuit on summary judgment, finding that Dabush’s “asserted loss was based on an unreasonable expectation of what was ‘promised’ in the brochure – a perfect navigation system that would include data of all locations and provide directions no matter where he happened to be at a particular point.” Such an asserted loss, the court held, was not an “ascertainable loss” required to sustain a cause of action under the state’s Consumer Fraud Act.

Dabush v. Mercedes-Benz USA, Inc., 2005 WL 1240196 (N.J.Super.A.D., May 26, 2005).

Presence of encryption software relevant evidence in criminal conviction

Anyone who tracks court decisions related to the Internet knows that criminal cases involving improper conduct with a minor are quite common, and generally have little or no legal significance. A recent decision of the Court of Appeals of Minnesota in the case of State v. Levie, however, is worth noting in that the decision affirmed a controversial evidentiary ruling. The trial court judge had allowed into evidence the mere fact that the defendant had the encryption software PGP installed on his computer. The judge had determined that the presence of the software was relevant evidence to show that the defendant had engaged in improper conduct with a minor.

The decision is puzzling for a couple of different reasons. The forensic report prepared by the police revealed that nothing on the defendant’s computer had been encrypted. Furthermore, the police officer who prepared the forensic report admitted that PGP “may be included on every Macintosh that comes out today.” Given the evidence of widespread use of PGP and the lack of any evidence to show the defendant had used the encryption software in connection with any crime, one is left to wonder why the court would find it, as it stated, “at least somewhat relevant.”

Apparently, the court believed that the mere ability to conceal wrongdoing showed an actual intent to commit a crime. But such a conclusion is troubling. How is the mere presence of PGP on the defendant’s computer any different than him having a lock on his front door? Would the court have drawn the same conclusion regarding relevancy if the defendant was on trial for something less heinous, say, securities fraud?

[More coverage here.]

State v. Levie, 2005 Minn. App. LEXIS 476 (May 3, 2005).

Web content and domain names denied trade secret status

Dynamic Scales hired Ivan Paramanandam (“Ivan”) and his consulting firm to develop an online retail store to sell scales. Ivan developed the site, and registered a staggering 400 domain names to be used in connection with it. Eventually the Dynamic Scales site became the largest online retail store in the scale industry.

After a dispute over compensation for his work, Ivan informed Dynamic Scales that he wished to get out of the scale business, and his relationship with Dynamic Scales was terminated. A few days later, however, Dynamic Scales learned that Ivan had set up his own online retail store. Ivan’s new site was “practically identical in both content and appearance” to the Dynamic Scales site.

Despite the striking similarities between the websites, Dynamic Scales forsook an action in federal court for copyright infringement, and instead filed an action in state court for violation of Indiana’s trade secrets statute [Ind. Code § 24-2-3-1 et seq.]. The complaint alleged that Ivan had misappropriated “[t]he information contained on [the Dynamic Scales] website” and the “domain names developed, created, and maintained by and for Dynamic Scales.”

Dynamic Scales sought a preliminary injunction against Ivan, and the trial court granted the request. Ivan sought review of the trial court’s award, and the appellate court reversed. It concluded that Dynamic Scales had failed to present a prima facie case of misappropriation of trade secrets.

One of the owners of Dynamic Scales had testified that it had taken no steps at all to protect the content of its website. To the contrary, he testified that “[w]e chose to show all our cards to our competition.” He further testified that information was “left out for the general public to see.” Given the lack of reasonable efforts to maintain the secrecy of the information, and the fact that the 400 domain names had been registered to make the site readily available to potential customers, the court held that the district court abused its discretion in awarding injunctive relief.

Paramanandam v. Herrmann, — N.E.2d —, 2005 WL 1220162 (Ind.App., May 24, 2005).

Dastar case applied to dismiss suit against web developer

The U.S. District Court for the District of Maryland has dismissed a copyright infringement and Lanham Act suit against a web developer for using in her online portfolio work done for a previous employer. The court held that it was without subject matter jurisdiction to hear the case where the plaintiff had not obtained copyright registrations over the works in issue, and that Section 43(a) of the Lanham Act could not apply to cover an alleged misappropriation of the “idea, concept or communication” embodied in the works at issue.

On January 5, 2005, Robin Euler left her job as a senior graphic and web designer for Mays & Associates (“Mays”), a “Maryland based, full service web and print design, marketing and communications company.” She then set up shop on her own using the name Red Robin Design [www.redrobindesign.com]. On her new company’s website, Euler placed a portfolio of her work, which included websites and print advertisements she had designed while working for Mays.

On February 11, 2005, Mays filed applications with the U.S. Copyright Office, seeking to register its copyrights in the websites and brochures Euler was using in her portfolio. Three days later, Mays filed suit in federal court in Maryland, alleging copyright infringement, unfair competition under Section 43(a) of the Lanham Act (15 U.S.C. § 1125(a)), and various state law claims. Euler moved to dismiss on the basis of lack of subject matter jurisdiction and for failure to state a claim upon which relief may be granted. The court granted Euler’s motion and dismissed the case.

Euler’s motion was based on two principal arguments: (1) that the court was without subject matter jurisdiction over the copyright claim, as Mays had not yet received registrations at the time of suit, and (2) that Mays’s cause of action under Section 43(a) of the Lanham Act was preempted by copyright law as called for in the U.S. Supreme Court case of Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23, 123 S.Ct. 2041 (2003).

In ruling in favor of Euler’s motion on the subject matter jurisdiction issue, the court held that Section 411 of the Copyright Act (17 U.S.C. § 411) requires a plaintiff to have actually received copyright registrations for the works at issue before filing suit. The court looked to the “ordinary, contemporary, and common meaning” of the words in Section 411(a) to determine that Congress intended to require “something more than application for a copyright prior to filing suit.” Because Mays had only applied for copyright protection and had not yet received registrations, the court was without subject matter jurisdiction.

On the Section 43(a) issue, the court held that Euler’s use on the Red Robin site of work she had done while employed by Mays could not constitute a false designation of origin. The court noted that under Dastar, Section 43(a) does not cover “any idea, concept, or communication” embodied in goods (and presumably services) offered for sale. Any misappropriation or other wrongdoing in this context would be covered by copyright law.

Mays & Associates Inc. v. Euler, — F.Supp.2d —, 2005 WL 1172326 (D.Md. May 18, 2005).