Court tells ISPs they can’t have their servers back

In the case of Voicenet Communications, Inc. v. Pappert, 2005 WL 546645 (March 9, 2005), the Third Circuit has upheld the U.S. District Court for the Eastern District of Pennsylvania’s denial of injunctive relief that would have ordered government officials to return certain items of computer hardware to the technology companies from which they were seized in a criminal investigation. The court held that the plaintiffs had failed to demonstrate irreparable harm that would result from the government’s continued possession of the equipment.

Plaintiffs Voicenet and Omni provide access to Usenet, through servers called “arrays.” In 2003, state and local officials seized numerous arrays owned by plaintiffs after being informed that the software on the servers was being used to access illegal pornography. When the officials would not return the arrays, plaintiffs filed suit, claiming violations of their First Amendment rights, and seeking, among other things, a preliminary injunction that would order the return of the arrays.

The District Court denied injunctive relief and the Court of Appeals affirmed. Voicenet and Omni had argued that they and their customers would suffer irreparable harm if the court did not grant the preliminary injunction. The appellate court held that plaintiffs had not shown irreparable harm from being denied possession of the arrays, in part because the arrays could have been replaced for approximately $20,000. The fact that money damages could provide relief precluded an award of injunctive relief.

The court further held that the District Court properly denied injunctive relief that would have required the officials to return to plaintiffs the subscriber records residing on the servers. The officials had promised not to view the records without first notifying the plaintiffs, who could then seek injunctive relief to prevent such viewing. The plaintiffs had argued that giving such discretion to the officials contravened the holding of ACLU v. Reno, 929 F.Supp. 824 (E.D.Pa. 1996). The court in that case had explained that “the First Amendment should not be interpreted to require us to entrust the protection it affords to the judgment of prosecutors.” In this case, however, the court held that no prosecutorial discretion remained, as “the officers’ assurances were absolute.”

Voicenet Communications, Inc. v. Pappert, 2005 WL 546645 (March 9, 2005) (Not selected for official publication).

E-mail gets country club member suspended

The recent Florida Court of Appeal case of Shumrak v. Broken Sound Club, 2005 Fla. App. LEXIS 3055 warns country club members to watch what they say in email to their club’s powers-that-be.

Plaintiff Shumrak sent an email to a member of his country club’s board of governors, commenting on the club’s general manager who was under investigation by the board. The board must have taken great offense to Shumrak’s comments, because as a result of the email, Shumrak was slapped with a six month suspension from the club. The board had exercised its sole discretion under an article of the club’s bylaws which allowed for suspension where a member’s conduct might “endanger the welfare, safety, harmony or good reputation of the Club or its members.”

Shumrak sued the club, claiming his suspension was improper. The trial court dismissed on the basis that it could not review a disciplinary decision of a private social club. The Court of Appeal affirmed. It did not buy Shumrak’s arguments that the club was more like a homeowner’s association, thus suspension would implicate property rights and be subject to review. Apparently, because Shumrak would be “suspended” for a limited period of time, and not “expelled,” his property rights were not brought into play.

Shumrak v. Broken Sound Club, Inc., 2005 Fla. App. LEXIS 3055 (March 9, 2005).

Electronic scans of National Geographic were proper revisions under Tasini standard

The Second Circuit has upheld the U.S. District Court for the Southern District of New York’s grant of summary judgment in favor of the National Geographic Society and related entities, holding that the creation and distribution of electronic versions of National Geographic did not infringe the copyrights of the contributing photographers and authors. Applying the standard set forth in New York Times v. Tasini, the court determined that the electronic version was a “privileged revision” under Section 201(c) of the Copyright Act.

In 1996, the National Geographic Society took each and every issue of National Geographic Magazine since 1888 and scanned them electronically, two pages at a time. The resulting images were placed on CD-ROMs and sold to the public. The compilation was called the Complete National Geographic.

The plaintiffs in this case, photographers and authors of numerous photos and articles that appeared in National Geographic over the years sued the National Geographic Society and related entities for copyright infringement. The plaintiffs alleged that the copyrights in their works were infringed when the works appeared in the Complete National Geographic.

Defendants argued that the electronic compilation did not infringe the plaintiffs’ copyrights because it was a privileged revision of a collective work as provided in Section 201(c) of the Copyright Act. The district court agreed with the defendants and granted summary judgment in their favor. The Second Circuit affirmed.

Section 101 of the Copyright Act defines a collective work as a “work, such as a periodical, issue, anthology, or encyclopedia in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole.”

An obvious example of a collective work is any magazine. The photographers that take the photos appearing in the magazine and the authors that pen the articles may own the copyrights in those individual works, but all the elements combined together give rise to a new work based on the way in which the elements are selected or arranged. The publisher of the magazine can own the copyright in the way the elements are selected or arranged, i.e., the collective work, while the copyrights in the individual works making up the magazine remain with the photographers and authors.

Section 201(c) of the Copyright Act sets forth how an owner of a copyright in a collective work may use the individual works. “[T]he owner of copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing [a] contribution as part of that particular collective work, any revision of that collective work, and any later collective work in the same series.”

In this case, the court employed the test set forth in the Supreme Court case of New York Times v. Tasini, 533 U.S. 483 (2001) to determine that the replication of the pages of the National Geographic magazine was acceptable under Section 201(c) of the Act, and thus did not give rise to copyright infringement. The Tasini case required an analysis of how the individual photos and articles were “presented to, and perceptible by” users of the electronic versions. Because the entire works were merely scanned as they appeared in the original print versions, the original context of the magazines was “omnipresent” in the electronic compilation. The court held that the electronic compilation was simply a new version of the magazine, and therefore privileged under Section 201(c) of the act.

Faulkner v. Mindscape Inc., — F.3d —-, 2005 WL 503652 (2d Cir., March 4, 2005).

Decision gives guidance on domain names as trademarks

John Welch at the TTABlog provides a detailed analysis of the Trademark Trial and Appeal Board’s recent decision in In re Eddie Z’s Blinds and Drapery, Inc. which affirmed the examiner’s refusal to register BLINDSANDDRAPERY.COM as a trademark.

If you’re familiar with the Trademark Trial and Appeal Board, you can stop reading this post and click on over to the TTABlog to read about the decision. For a little bit of context, read the next two paragraphs.

The Trademark Trial and Appeal Board (TTAB in shorthand) is a panel of administrative trademark judges in the United States Patent and Trademark Office that, among other things, hears appeals of trademark applicants who feel that their trademark registrations were wrongfully refused. In this context, the outcome of a proceeding is to determine whether the trademark in question is entitled to registration. The board does not award damages for trademark infringement or provide injunctive relief.

A generic term is not entitled to registration as a trademark. For example, one could not trademark the word APPLE if he or she is using the word when selling, well, apples. (The question of using the word APPLE in connection with different goods like computers is a separate inquiry – in such a case APPLE would not be generic, but would be arbitrary.)

InternetCases.com Podcast — March 4, 2005

This week’s InternetCases.com Podcast discusses the Eolas v. Microsoft and Harrison v. Microfinancial cases.

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.


(Approximately 7 minutes)

Seventh Circuit issues first ever reported appellate decision under 1935 Indian Arts and Crafts Act

The Seventh Circuit’s recent decision in the case of Native American Arts, Inc. v. The Waldron Corp. may be a bit off-topic for this blog – it’s not a case involving the Internet – but it’s still noteworthy because of its legal novelty and potential interest to trademark practitioners. This is the first reported appellate decision under the Indian Arts and Crafts Act, 25 U.S.C. §305 et seq., which was enacted way back in 1935. Judge Posner’s decision upheld the judgment in favor of the defendant, but overturned the district court’s determination that certain regulations under the Act are unconstitutional. The court held that a jury is not required to be instructed that an “unqualified use” of the word “Indian” or a particular tribe’s name gives rise to a false suggestion that an art or craft item is an “Indian product.”

Native American Arts, Inc. v. The Waldron Corp., — F.3d —, 2005 WL 475357 (March 2, 2005).

Court orders truck driver to deliver domain name

The U.S. District Court for the District of Massachusetts has determined that the registration of the domain name leasecomm.org by a disgruntled former customer was made in bad faith, thus violating the Anticybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. §1125(d). The court placed special emphasis on the fact that the registrant had offered to sell the domain name to the rightful owner of the LEASECOMM mark without having used the domain name in connection with a bona fide offering for sale of goods or services.

The procedural alignment of the parties in this case was a bit unique. Plaintiff Harrison, a retired truck driver, had lost a dispute with Defendant Microfinancial over the domain name leasecomm.org. The dispute had been submitted to arbitration pursuant to the Uniform Domain Name Dispute Resolution Policy before an administrative panel of the World Intellectual Property Organization (“WIPO”). Microfinancial, Inc. v. Harrison, Case No. D2003-0396. Before the domain name could be transferred as ordered by the WIPO panel, Harrison filed suit to enjoin the transfer. Microfinancial counterclaimed under the ACPA, and both parties moved for summary judgment. The court granted Microfinancial’s motion, holding that Harrison had a bad faith intent to profit from the use of the LEASECOMM mark.

Leasecomm, Inc. (“Leasecomm”) is a wholly-owned subsidiary of Microfinancial, and owns the mark LEASECOMM. The mark has been used in commerce since 1985 and is the subject of pending applications with the United States Patent and Trademark Office. Leasecomm also owns the domain names leasecomm.com and leasecomm.net.

Harrison had become unhappy with the terms of a business arrangement he had made with Leasecomm, and in retaliation, registered the domain name leasecomm.org. He established a site at leasecomm.org critical of Microfinancial and Leasecomm’s conduct. Harrison offered to “give” the leasecomm.org domain name to Microfinancial in return for compliance with various demands, including refunding money Microfinancial had allegedly “stolen” from “victims” and writing letters of apology.

Harrison claimed that his offer to transfer the domain name in exchange for compliance with his demands was merely “rhetorical and polemical” and thus did not evidence a serious offer to make a deal. The court rejected Harrison’s argument and found that “the undisputed evidence is clear that Harrison sought to use the offered transfer of the domain name to Microfinancial as leverage to obtain financial benefit for himself and others (whom he described as victims.)”

The court considered several other bad faith factors under the ACPA (e.g., Harrison had registered multiple domain names with were identical or confusingly similar to Microfinancial’s trademarks) to determine that the Harrison registered the domain name in bad faith. It concluded that no reasonable jury could have found that Harrison did not have a bad faith intent to profit from his use of the domain name.

Harrison v. Microfinancial, Inc., 2005 WL 435255 (D.Mass., February 24, 2005).

Court wrongly took judicial notice of facts contained on government website

The Sixth Circuit has overturned the U.S. District Court for the Southern District of Ohio’s dismissal of a class action lawsuit against the City of Columbus, holding that the magistrate judge improperly considered evidence contained on the city’s website. The magistrate had taken judicial notice of the information contained on the website, but the Court of Appeals held that the website was not a public record containing information the accuracy of which could not reasonably be questioned.

Plaintiffs filed suit against the City of Columbus, Ohio alleging that a mediation program established by the city to handle disputes over bad checks violated the Federal Fair Debt Collection Practices Act and the Ohio Consumer Sales Protection Act. The City moved to dismiss, arguing that the program was neither a “debt collector” under the Federal act nor a “supplier” under the Ohio law, and thus could not be liable under either of the statutes. The magistrate judge granted the motion to dismiss. In reaching its decision, the magistrate judge took judicial notice of information contained on the City’s website, namely, a statement that the program’s purpose was to resolve disputes, not collect debts.

The Court of Appeals overturned the magistrate judge’s dismissal and remanded the case for further proceedings. At issue was whether the judge properly took judicial notice of the information contained on the City’s website. Noting that a district court generally may take judicial notice of the existence of public records, the Court of Appeals held that “a court may only take judicial notice of a public record whose existence or contents prove facts whose accuracy cannot reasonably be questioned.”

The City had argued that the website was a public record simply because it was the record of a public entity. The Court swiftly determined, however, that the plaintiffs had reasonably questioned the accuracy of the information, and that they should have been given the opportunity to introduce contradictory evidence. The magistrate judge’s reliance on the website constituted reversible error.

The court gave a nod to public policy considerations that should prohibit a court from blindly accepting the contents of government websites: “If all online statements by a government agency could be relied upon as true by a court considering a motion to dismiss, government agencies could defuse any complaint alleging improper governmental motives merely by stating an arguably proper motive on their website. Such a result could eviscerate all sorts of fraud, civil rights, and other laws requiring investigations into governmental motives.”

Passa v. City of Columbus, 2005 U.S. App. LEXIS 2832 (6th Cir. February 16, 2005).

Misappropriation of web development services not unfair competition

In Atari, Inc. v. Games, Inc., arising from a dispute over an agreement to license games for online use, the U.S. District Court for the Southern District of New York dismissed defendant’s counterclaim for unfair competition, holding that such a claim could not stand where (1) alleged misappropriation was merely of services and not of knowledge, and (2) counterclaimant had not shown it was the exclusive owner of rights allegedly infringed.

In early 2004, the parties entered into an agreement whereby Games would acquire the domain name Games.com, the website located there, and an exclusive right to provide online versions of certain games such as Scrabble. The parties structured the transaction to occur over a period of time, culminating in a final payment to be made by Games, at which time Games would acquire the exclusive license to the website and online versions of the games.

Before the exclusive license was to be turned over to Games, Atari was to continue developing the Games.com site, and was to incorporate advertising on the site to raise revenue. Atari was slow in implementing the advertising, and Games assisted in implementing the advertising before it was to acquire the exclusive license.

Soon before the date the final payment was due, Games learned that there was another online version of Scrabble available, which would violate the exclusivity of its license. For various reasons, the parties ended up in litigation, asserting claims and counterclaims against one another.

Among the counterclaims that Games brought forth was one for unfair competition. The plaintiffs moved to dismiss, and the court granted plaintiffs’ motion.

As one aspect of its unfair competition claim, Games asserted that Atari had misappropriated the “labor and know-how” of Games employees who had figured out how to place advertising on the Games.com website during the period before the site was to be transferred. The court noted that “under New York law, ‘the gravamen of a claim of unfair competition is the bad faith misappropriation of a commercial advantage belonging to another by infringement or dilution of a trademark or trade name or by exploitation of proprietary information or trade secrets.'” The court held that Atari’s alleged misappropriation of “labor and know-how” in implementing the advertising did not meet the gravamen of an unfair competition claim because Games did not allege that it had employed any skill that was proprietary to it, or that could not have been provided by many other companies. The court stated “[t]he alleged misappropriation is therefore of Games’s services, not knowledge, and this will not support an unfair competition claim.”

The other aspect of Games’s unfair competition claim was that the presence of the other versions of the games online infringed rights exclusively held by Games. The court rejected this claim, however, after an examination of the agreement revealed that Games never held such exclusive rights. The grant of such exclusive rights was contingent on the final payment, which admittedly never was made.

Atari, Inc., v. Games, Inc., 2005 WL 447503 (S.D.N.Y., February 24, 2005).

Posts navigation

1 2 3 78 79 80 81 82 83