By Robert Swider
By Marc Visnick
In May 1999 at the Pacific Rim Computer Law Institute in Vancouver, B.C. we made a presentation concerning recent developments in Computer Law; among the topics we discussed were Spam, Jurisdictional Issues, Taxation of Internet Commerce, Recent Legislation, Licensing Issues, Copyright Infringement of Software, Business Method Patents and the Microsoft Antitrust litigation. There have been many changes in the ensuing dozen years – the consumer shift from desktop PCs to ever – more powerful smart phones and tablet computers; the rise of Google; the incredible explosion of social media sites such as Facebook and Twitter; the somewhat circular move back to client/sever computing reflected by “Cloud Computing”; the rapidly increasing mingling of real-world economics with the virtual economies of massively multiplayer games such as World of Warcraft; and a host of other technological changes large and small.
As we observed in 1999, so we reiterate today: legislative bodies, lawyers and the courts are struggling to keep up with this incredible pace of technological change, and the past dozen years have seen a variety of efforts to address some of the issues we previously talked about, with varying degrees of success
The purpose of our presentation and these written materials is to highlight some of the most important legal and technological developments in the past year or so related to the development, commercialization and use of computing technology. This includes not only cases and enacted and proposed legislation, but also some recent technological changes and how we are adapting to changes. These technological changes will almost certainly give rise to future cases and legislation.
The World of Google
In 1999 Microsoft was in the troughs of an antitrust investigation; now Google finds itself in a similar position. In 1999 Google had outgrown its garage office and moved into its first office in Palo Alto and soon thereafter received a $25 million round of venture capital. Some commentators have suggested that Google is now suffering from the Microsoft Syndrome.
By creating a number of products that have altered how we interact with computers—and by extension the world at large – Google now faces a wide range of legal and political challenges. Google has been the subject of worldwide criticism concerning diminished privacy resulting from a number of its online ventures. Within a week of its release Google Buzz was the subject of a class action lawsuit by a Harvard Law student claiming that it severely compromised her and others’ privacy. Google+ is a relatively new venture into the social networking world intended to challenge Facebook but you need an invite to join the fun. Google Maps are widely used by many trying to find an unfamiliar address, but Google Street View has been the subject of controversy: it has been the subject of lawsuits concerning using the vehicles that were mapping the streets to collect personal user information of people in the area using Wi-Fi networks; Google was sued for trespassing when taking photos of homes; Google was fined 1000,000 Euros by France’s privacy watchdog agency CNIL; Police in India ordered Google to stop Street View; and “a Swiss court has ruled that Google is breaching citizens’ right to privacy with its Street View service and should take greater steps to obscure people caught by its cameras”.
In 2002 a group of Googlers started the Google Books project, a project to create a digital library of the world’s books. This project caused various book publishers and photographers to bring suit against Google for copyright infringement; a proposed settlement for this case was recently rejected by the Court.
Technological Changes and Societal Effects
While spam (unwanted email communications) remains a significant problem, the amount of actual spam has decreased in recent years. A few years ago Facebook obtained a $711 million dollar judgment against Sanford Wallace, known by many as the Spam King. The Spam King is now under a federal indictment for six counts of electronic mail fraud, three counts of intentional damage to a protected computer and two counts of criminal contempt. The high water mark for spam was reached in July 2010 when approximately 230 billion spam messages were in circulation each day, accounting for 90% of all email traffic. This has now declined to 39.2 billion messages per day, accounting for only 72.9% of all email.
However, that has not reduced the frequency or severity of the problems faced by computer users in the digital age. There has been a rise in phishing attempts, with the Anti-Phishing Work Group’s April 2011 reporting 67,677 phishing attempts in the second half of 2010, up from 48,244 in the first half of 2010, but down significantly from the 126,697 attacks recorded in the year-earlier period due to the Avalanche botnet. But a new Botnet, TDL-4 has been called practically indestructible and according to Kaspersky more than 4.5 million computers were infected with TDL-4 in the first three months of 2011 alone.
Social Media is defined as “forms of electronic communication (as Web sites for social networking and microblogging) through which users create online communities to share information, ideas, personal messages, and other content (as videos).” Social Media has been widely adopted with the advent and growth of Facebook, LinkedIn and Google+ among others. The reaction to the explosion of Social Media is remarkable but in many regards not really surprising. An Article entitled 8 Essential Rules for Social Media and Business indicates: “Social Media is a complex and evolving medium that many businesses struggle to figure out. Few find quantifiable success with it, many have failed, and most have yet to truly form a social media strategy.” Social Media monitoring services have emerged as a viable business model. They provide “brands with a wealth of information and insight about consumers, their behaviors, wants, needs, frustrations, etc.”
“Hacking” (as used in the pejorative sense) has also reached new heights. LulzSec began its fifty days of chaos in May 2011 with attacks on Fox News, FBI affiliated sites, CIA.gov, numerous companies including the Sony Pictures Website and even the State of Arizona. At the end of their reign of chaos they stated via twitter:
We are Lulz Security, and this is our final release, as today marks something meaningful to us. 50 days ago, we set sail with our humble ship on an uneasy and brutal ocean: the Internet. The hate machine, the love machine, the machine powered by many machines. We are all part of it, helping it grow, and helping it grow on us.
For the past 50 days we’ve been disrupting and exposing corporations, governments, often the general population itself, and quite possibly everything in between, just because we could. All to selflessly entertain others – vanity, fame, recognition, all of these things are shadowed by our desire for that which we all love. The raw, uninterrupted, chaotic thrill of entertainment and anarchy. It’s what we all crave, even the seemingly lifeless politicians and emotionless, middle-aged self-titled failures. You are not failures. You have not blown away. You can get what you want and you are worth having it, believe in yourself.
The motivation behind those actions and their 1,000 tweets was the LulzSec manifesto: “This is the Internet, where we screw each other over for a jolt of satisfaction.” A great deal of information about the group and its exploits can be found on Youtube including one video from the AlyonaShow.
Other hackers have concentrated there efforts on online theft. For example in late June 2011 Citigroup “confirmed that about $2.7 million was stolen from 3,400 customers in May following a major data breach.”
Another hacking group Anonymous engages in politically motivated web hacks, relying primarily on distributed denial-of-service attacks. Anonymous has invited viewers of a Youtube video it posted to “join the cause and kill Facebook for the sake of your own privacy.” The attacked is scheduled for November 5th, 2011. According to the video; “Everything you do on Facebook stays on Facebook regardless of your privacy settings, and deleting your account is impossible,” the speaker says “Even if you delete your account, all your information stays on Facebook and can be recovered at any time.” Facebook has indicated that it does not sell or share information.
In July 2010 “[a] security researcher on Wednesday released a file containing the names, profile addresses and unique identification numbers of more than 100 million Facebook users.”
There have been issues raised concerning the monetization of individual data profiles by Facebook. It has been suggested:
Now the Palo Alto company is looking to cash in on this mother lode of personal information by helping advertisers pinpoint exactly whom they want to reach. This is no idle boast. Facebook doesn’t have to guess who its users are or what they like. Facebook knows, because members volunteer this information freely — and frequently — in their profiles, status updates, wall posts, messages and “likes.” It’s now tracking this activity, shooting online ads to users based on their demographics, interests, even what they say to friends on the site — sometimes within minutes of them typing a key word or phrase.
The views of privacy watchdogs differ, they believe:
Facebook’s unique ability to mine data and sell advertising based on what its members voluntarily share amounts to electronic eavesdropping on personal updates, posts and messages that many users intended to share only with friends. “Facebook has perfected a stealth digital surveillance apparatus that tracks, analyzes and then acts on your information, including what you tell your friends,” said Jeffrey Chester, executive director of the Center for Digital Democracy. “Facebook users should be cautious about whether the social networking giant ultimately has their best interests at heart.”
“Facebook has repeatedly indicated it does not disclose information that would allow advertisers to identify individual users, but filters them based on geography, age or specific interests.”
The debate over internet privacy is beginning to emerge as a major issue in the European Union. “The European Union is debating whether its citizens have a “right to be forgotten” on the Internet.” Viviane Reding, the European commissioner for Justice, Fundamental Rights and Citizenship stated last year “Internet users must have effective control of what they put online, and be able to correct, withdraw or delete it at will.
In an article on June 29, 2011 entitled Myspace’s 50 Million User Profiles Now Belong to an Ad Targeting Firm the author idicated that “Myspace’s biggest asset is arguably its userbase of somewhere between 50 and 65 million people.” In March 2011 Myspace posted data sets on the data marketplace Infochimps with information on status updates, user activity, apps, photos and more, with prices ranging from $25 to $150. That data does not personally identify users. That data allows someone to track certain types of behavior at a bird’s eye level, but those records in these data sets are completely anonymous.
The acquisition by Specific Media of Myspace data in June 2011 was quite different. Specific Media “‘bought the profiles lock, stock and barrel. Now they will use them for their core business, ad targeting. Considering the going prices on Infochimps, Specific just got a great bargin, picking up between 50-65 million user profiles for about fifty cents a pop.” “Welcome to a world where your online identity, and a lot about your personal life, goes around and around to the highest bidder.”
We would be remiss if we failed to mention Google, arguably the biggest aggregator and harvester of personal data on the web today. The NY Times reported Seoul police raided Google’s office there in early May 2011 “on suspicion that its mobile advertising unit, AdMob, had illegally collected users’ location data without users’ consent, the police said. The raid represents the latest setback to the U.S. Internet search company’s South Korean operations.”
Political change is again being facilitated by new technologies. You may remember the Tiananmen Square protests of 1989 and role of the almost uncontrolled flow of information via fax machines, email and even cell phones. In recent months we have seen the utilization of cell phones, email, YouTube Videos, tweets, blogs and Social Networking to assist in the dissemination of information about political unrest in Egypt. “Technological tools are indeed being used by those pursuing more participatory governance in Egypt. And many have used them to great impact, perhaps most famously the April 6 Youth Movement and Wael Ghonim, the Google executive who was one of the creators of the ‘We Are All Khaled Said’ Facebook group and accompanying YouTube campaign.” Ramy Raoof – Online Media Officer in the Egyptian Initiative for Personal Rights in an Article on Egypt Revolution 2011 and Communications states:
The invitation to demonstration started online through Facebook events and Twitter using the hash-tag #Jan25, to demonstrate during the National Police Day 25 January 2011 mainly against corruption, unemployment and torture in Egypt. The invitation spread very widely among the Egyptian netizens and many political groups and parities adopted the invitation and it was spread offline.
According to ABC World News on February 15, 2011 Social Media fueled the protests in Iran, Bahrain and Yemen. The experience in Syria was similar:
That power, say many protestors, is thanks in part to digital technology. As the revolutions in Tunisia and Egypt began earlier this year, Syrians, too, witnessed the images, voices and messages broadcast around the world. They carried forward the rallying cry into Syria in March, using cell phones and amateur cameras to document their own protests and inspire an ever-growing number of Syrians to join the movement.” “The Facebook page, “The Syrian Revolution 2011,” has amassed more than 200,000 followers, creating a forum for protestors and their supporters around the world to share the latest news and encourage protestors to continue.
These are just a few examples of how new technologies continue to help to shape the modern world.
McAfee recently reported on Operation Shady RAT, a “series of cyber attacks on the networks of 72 organizations globally, including the United Nations, governments and corporations, over a five-year period.” “Jim Lewis, a cyber expert with the Center for Strategic and International Studies, said it was very likely China was behind the campaign because some of the targets had information that would be of particular interest to Beijing.” “Chinese officials this week dismissed the idea that the country was behind the recently uncovered “Shady RAT” cyber attacks, labeling the suggestion “irresponsible.”
WikiLeaks is another organization that throughout the last year has often been in the news. According to its website “WikiLeaks is a non-profit media organization dedicated to bringing important news and information to the public.” One of the controversial postings on WikiLeaks involved “700 leaked secret files on the Guantánamo detainees [which] lay bare the inner workings of America’s controversial prison camp in Cuba.” Julian Paul Assange, the editor in chief of WikiLeaks, is in the process of battling to avoid being extradited from England to Sweden in relation to an investigation of a sexual assault.
“Deep Packet Inspection (DPI) is a networking technology that Internet Service Providers (e.g. Rogers, Bell, Shaw, etc) use to monitor customers’ data traffic, mediate its speed, and improve network security.” DPI is the subject of significant controversy: “one theme that recurs throughout these debates is the potential for DPI to essentially eliminate online privacy as it exists today, absent pervasive use of encrypted communications.”
There are many other ways that evolving technologies influence our lives on a daily basis. Many businesses have implemented Employee Social Media Policies and other companies such as Intel have published Social Media Guidelines. At Intel “[i]f you’re an Intel employee or contractor creating or contributing to blogs, wikis, social networks, virtual worlds, or any other kind of social media both on and off intel.com -these guidelines are for you.”
In the employment context the law is not well settled at present but it has been suggested that “[e]mployees who turn to Facebook, Twitter and other media sites to air frustrations about their jobs and employers may want to think about the consequences before doing so.” The same blog post suggests that although employers are concerned about the consequences of terminating employees for profane tweets and churlish Facebook posts in recent cases involving employees terminated for those reasons employers have been given the upper hand. Whether or not employers can rightfully terminate an employee for their bad online behavior without serious consequences, “some employers are adding social media searches to the usual background checks when considering candidates for employment.” “Social Intelligence is one example of a start up company that is geared toward finding out information about potential employees for companies. Social Intelligence searches the Internet for everything prospective employees may have said or done online in the past seven years.” It is important to remember that social networking sites like Facebook are destined to become the permanent record you were warned about in your youth.
“Cloud computing is spreading through the IT world like wildfire, with innovative start-ups and established vendors alike clamoring for customer attention.” An interesting debate has begun to emerge on the regulation of the Cloud. “The IEEE has announced that it will launch a new initiative which will aim to put in place a global set of standards for cloud computing. According to the organisation, its Cloud Computing Initiative will be the first “broad-scope, forward-looking” scheme for cloud computing put forward by a standards development organisation (SDO).”
On August 2, 2011 the Commission on the Leadership Opportunity in U.S. Deployment of the Cloud (CLOUD2) released a report entitled Cloud First, Cloud Fast:
Recommendations for Innovation, Leadership and Job Creation. The Commission in the forward of the report indicates their desire “to help accelerate the deployment of cloud computing at companies and government agencies.” The report “focused on 14 specific recommendations, categorized into four thematic areas: Trust, Transnational Data Flows, Transparency, and Transformation.” In addition to issuing its report the Commission produced a Cloud Buyer’s Guide directed toward potential government buyers and providing “questions to ask and steps to take prior to purchasing a cloud computing solution”; the guide is available online at http://www.cloudbuyersguide.org/.
“Privacy has become and will continue to be a major concern on the Internet. The extraordinary growth of the Internet has created a number of privacy issues that society has never encountered before and therefore has been slow to address.”
On April 27, 2011 Bloomberg.com based on statements from the Cupertino, California-based company reported “Apple is not tracking the location of your iPhone,” … “Apple has never done so and has no plans to ever do so.” However, it appears that iPhones saved information on Wi-Fi hot spots and cellular towers near the device’s current location and accesses the data when needed by users. Apple has apparently fixed the software bug that let handsets store more of this information than necessary.
Privacy advocates disputed Apple’s contention that it isn’t tracking location data. “Hot-spot and cellular-tower information shows where a device is” said Marc Rotenberg, executive director of the Electronic Privacy Information Center, a group seeking more disclosure about the location data. ‘That’s exactly how they determine the location of the device,” … “They are keeping location data and the statement is a little misleading on that point.” Apple’s location issues are not limited to the United States “Apple has been investigated by French, German and Italian privacy regulators since analysts reported the company’s devices track and store data about the movements of iPhone and iPad users.”
Meanwhile in the United States our representatives in Congress are apparently aware that privacy issues exist which need to be addressed by legislation, but the House and Senate have been too concerned with other matters to enact or fully address the pending bills that concern us. The Bills presently pending include:
H.R. 654 – Do not Track Me Online Act, currently in the Subcommittee on Commerce, Manufacturing, and Trade of the House Energy and Commerce Committee, would require the Federal Trade Commission (FTC) to promulgate regulations to establish standards for the required use of an online opt-out mechanism to allow a consumer to prohibit the collection or use of any covered information and to require a covered entity to respect the choice of such consumer to opt-out of such collection or use.
S.799 – Commercial Privacy Bill of Rights Act of 2011 was cosponsored by Senators Kerry and McCain and referred to the Committee on Commerce, Science and Transportation – no hearings have been held. The Act directs the Federal Trade Commission (FTC) to initiate a rulemaking requiring security measures to be carried out by any person (defined in this Act as a “covered entity”) collecting, using, transferring, or storing certain personal information.
S.1223 – Location Privacy Protection Act of 2011 presently in the Senate Judiciary Committee. The purpose is to address voluntary location tracking of electronic communications devices, and for other purposes.
S.1011 – Electronic Communications Privacy Act Amendments Act of 2011 presently in the Senate Judiciary Committee. The Electronic Communications Privacy Act Amendments Act of 2011would amend numerous provisions of the Electronic Communications Privacy Act of 1986 (specifically, a chapter within such Act commonly referred to as the Stored Communications Act) to add geolocation information services to the category of electronic and remote computing service providers required, under specified circumstances, to disclose customer or subscriber information to a governmental entity
S.968 – PROTECT IP Act of 2011 presently in the Judiciary Committee and Hearings have been held and a Report Issued on July 22, 2011. The Conclusion of the Committee Report is that “the Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act will provide the Justice Department and rights holders with an important new mechanism for combating online copyright infringement and the sale of counterfeit goods.”
S.413 – Cybersecurity and Internet Freedom Act presently in the Committee on Homeland Security and Governmental Affairs and Hearings have been held. This Act hands Homeland Security the power to issue decrees to certain privately owned computer systems after the president declares a “national cyberemergency.” This bill has been referred to in the press as the Internet Kill Switch. As might be expected this bill has generated significant controversy. ACLU legislative counsel Michelle Richardson has stated “[i]t still gives the president incredible authority to interfere with Internet communications …” Jim Harper, director of information policy studies at the Cato Institute and a member of a Homeland Security advisory panel stated “[t]hey recognize that a total Internet kill switch is totally unacceptable …” 
H.R. 1249 – Leahy-Smith America Invents Act has been approved by the House of Representatives and apparently the Senate will take up the House version of this bipartisan patent reform bill just after the summer recess. This bill addresses several important aspects of the patent process and is expected to boost job creation. The bill addresses seven general areas concerning the patent law. They are PTO Fees & Funding, Substantive Patent Law, PTO Practice & Operations, Post-Grant PTO Proceedings, Litigation, Special Interest Legislation and Studies. Many of the proposed changes will significantly affect the patent process and enforcement. Among the most significant aspects of the bill is that it will change the patent system from a first to invent system to the first inventor to file system, a broadened scope of patent-defeating prior art, broad prior user rights provisions, significant changes to post grant PTO proceedings, Inter-partes reexamination would be abolished after 1 year with transitional provisions, changes to the Supplemental Examination process, and the venue for litigation against the USPTO is changed to the E.D. of Virginia.
Executive Branch Responses
The Executive Branch has been actively involved in the issues involving CyberSecurity and extremism. The Department of Homeland Security website contains a portion on the Stop.Think.Connect.Campaign. President Barack Obama is quoted on that page stating “Cybersecurity is not an end unto itself; it is instead an obligation that our governments and societies must take on willingly, to ensure that innovation continues to flourish, drive markets, and improve lives.” The Stop.Think.Connect. Campaign “is a national public awareness campaign aimed at increasing the understanding of cyber threats and empowering the American public to be safer and more secure online.” That website also provides information concerning a variety of topics including counterterrorism, border security, biometric identification and the EINSTEIN System.
EINSTEIN is a computer network intrusion detection system (IDS) used to help protect federal executive agency information technology (IT) enterprises. Pursuant to Section 208 of the E-Government Act of 2002 (Public Law 107-347, 44 U.S.C. § 3501, note), the Department of Homeland Security (DHS) must provide this publicly available PIA prior to initiating a new collection of information that uses information technology to collect, maintain or disseminate information that is in an identifiable form or collects identifiable information through the use of information technology.
The White House issued a report on August 4, 2011 entitled Empowering Local Partners to Prevent Violent Extremism in The United States. The report states in part [t]he strategy that follows outlines how the Federal Government will support and help empower American Communities and their local partners in their grassroots efforts to prevent violent extremism.” The report presents a community based approach with recognition of guiding principles which allow for prevention of violent extremism while promoting American ideals.
Recent Judicial Decisions
Software Piracy continues to be an issue which continues to result in litigation. LimeWire and the RIAA settled a File-Sharing Suit for $105 Million in May 2011. “LimeWire was a throwback to the early 2000s when a crop of peer-to-peer networks, including Kazaa, eDonkey, Grokster, and BearShare, challenged the music industry for the right to help people swap music with each other.”
On August 3, 2011 the Ninth Circuit Court of Appeals issued a decision in Perfect 10, Inc. v. Google, Inc. which the court described as “the latest installment in a legal saga of several years’ duration.” The case had previously been before the Ninth Circuit and on remand the District Court denied Perfect 10’s request for a preliminary injunction against Google, Inc. The Ninth Circuit affirmed the District Court “[b]ecause Perfect 10 has not demonstrated that it would likely suffer irreparable harm in the absence of a preliminary injunction ….”
Perfect 10 creates (and copyrights) photographic images of nude models for commercial distribution. For several years, it featured them in a now-defunct magazine, “PERFECT 10”; more recently, it began offering them for viewing on a passwordprotected, paid-subscription website, “perfect10.com.” Perfect 10’s subscription website generates revenue from subscribers who pay a monthly fee to view the copyrighted images in a “members’ area,” which members access through a unique username/password combination.
The opinion explains in detail some of the numerous web-based services provided by Google. For purposes of the decision of the court noted that the most important services involve their web crawler that images webpages and images for its search engine and its Blogger Service. As part of Google’s attempt to achieve DMCA compliance, Google provides a notification policy for its takedown policy which must include the URL of the infringing material. Google forwards the takedown notices and the URL for the materials to chillingeffects.org. Therefore even if Google takes down the images “a person can still find the URL for the allegedly infringing images on chillingeffects.org.”
The decision of the case turned upon the application of the test for obtaining an injunction.
A plaintiff seeking a preliminary injunction must establish [(1)] that he is likely to succeed on the merits, [(2)] that he is likely to suffer irreparable harm in the absence of preliminary relief, [(3)] that the balance of equities tips in his favor, and [(4)] that an injunction is in the public interest. Winter v.Natural Res. Def. Council, Inc., 129 S. Ct. 365, 374 (2008).
Perfect 10 relied on a line of cases starting with Apple Computer, Inc. v. Formula International, Inc., 725 F.2d 521 (9th Cir. 1984), in which the court “held that ‘[a] showing of a reasonable likelihood of success on the merits in a copyright infringement claim raises a presumption of irreparable harm’ for purposes of a preliminary injunction.” The court in Perfect 10 noted that the entire line of cases applying the presumption of irreparable harm all predated eBay Inc. v. MercExchange,L.L.C. In eBay the court held that the traditional four factor test for injunctions applied to disputes under the Patent Act. The court in eBay further held “[t]he use of presumptions or categorical rules in issuing injunctive relief would constitute “a major departure from the long tradition of equity practice,” and “should not be lightly implied.”
After carefully analyzing the case law the court stated:
In sum, we conclude that our longstanding rule that “[a] showing of a reasonable likelihood of success on the merits in a copyright infringement claim raises a presumption of irreparable harm,” Apple Computer, Inc., 725 F.2d at 525, “is clearly irreconcilable with the reasoning” of the Court’s decision in eBay and has therefore been “effectively overruled.” Miller v. Gammie, 335 F.3d 889, 893 (9th Cir. 2003) (en banc).
After reviewing the evidence presented at the preliminary injunction hearing the court concluded that in light of the effective overruling of Apple that “the district court did not abuse its discretion in concluding that Perfect 10 failed to establish that Google’s operations would cause it irreparable harm.”
Two recent Ninth Circuit Cases concerning Jurisdiction are worthy of note. CollegeSource, Inc. v. Academy One, Inc. involves claims that AcademyOne misappropriating materials from CollegeSource’s website. Mavrix Photo v. Brand Technologies involves a case copyright infringement by Marvix a company that buys and licenses and resells candid photos of celebrities. Marvix alleged that Brand Technologies reposted its copyrighted photos on celebrity-gossip.net in violation of Mavrix’s copyright. In both cases Judge Fletcher wrote the opinions for the court and held the defendants were not subject to general personal jurisdiction in California, but that their contacts with California were sufficiently related to the dispute in each case that the Defendants are subject to specific personal jurisdiction. The decisions provide a thorough discussion of what types of contacts in addition to an interactive web site are needed to establish General Personal Jurisdiction.
In Marvix after analyzing the alleged contacts of the Defendant with California the court stated:
To permit the exercise of general jurisdiction based on the accessibility in the forum of a non-resident interactive website would expose most large media entities to nationwide general jurisdiction. That result would be inconsistent with the constitutional requirement that “the continuous corporate operations within a state” be “so substantial and of such a nature as to justify suit against [the nonresident defendant] on causes of action arising from dealings entirely distinct from those activities.” 
In CollegeSource the court noted “[i]f the maintenance of an interactive website were sufficient to support general jurisdiction in every forum in which users interacted with the website, “the eventual demise of all restrictions on the personal jurisdiction of state courts” would be the inevitable result.”(citations omitted)
In the area of Trademark law the Ninth Circuit in Trafficschool.com, Inc. v. Edriver Inc. addressed the issues involved in granting exceptional case attorneys fees under the Lanham Act in a false advertising claim by a competitor. Chief Judge Kozinski writing for the court in his own inimitable style explained the background of the litigation as follows:
Defendants own and manage DMV.org, a for-profit website with a mission to save you “time, money and even a trip to the DMV!” DMV.org, Home Page, http://www.dmv.org (last visited Feb. 28, 2011). Consumers visit DMV.org for help renewing driver’s licenses, buying car insurance, viewing driving records, beating traffic tickets, registering vehicles, even finding DUI/DWI attorneys. The more eyeballs DMV.org attracts, the more money defendants earn from selling sponsored links and collecting fees for referring site visitors to vendors of traffic school courses, driver’s ed lessons and other driver-related services. This seems like a legitimate and useful business, except that some visitors mistakenly believe the site is run by their state’s department of motor vehicles (DMV).
Plaintiffs TrafficSchool.com, Inc. and Drivers Ed Direct, LLC market and sell traffic school and driver’s ed courses directly to consumers. They also compete with DMV.org for referral revenue. Plaintiffs claim that defendants violated federal and state unfair competition and false advertising laws by actively fostering the belief that DMV.org is an official state DMV website, or is affiliated or endorsed by a state DMV.
The district court found that defendants violated section 43(a) of the Lanham Act issued an injunction ordering a splash screen be displayed to every visitor and “Unhappily for plaintiffs, the court denied monetary relief and declined to award attorney’s fees.” The opinion as are most Kozinski opinions presents a clear analysis of the law and is worth reading. One of the issues involved in the appeal was the denial of exceptional case attorneys’ fees and the application of the doctrine of unclean hands as a basis for that denial. The court found that the district court’s finding that plaintiffs had unclean hands provided an independent basis for denying attorney’s fees was clearly erroneous and noted in a footnote that “[i]t’s not clear that the award of attorney’s fees is subject to equitable doctrines such as unclean hands. The provision of the Lanham Act authorizing attorney’s fees doesn’t use the word “equity.”
There is a recent line of Ninth Circuit cases involving Copyright issues. These cases include Vernor v. Autodesk, Inc., UMG Recordings, Inc. v. Augusto, and F.B.T. Productions, LLC v. Aftermath Records each involve whether the transaction at issue was a sale or a license grant. In MDY Industries, LLC v. Blizzard Entertainment, Inc. the court addressed the Anti circumvention provisions of section 1201 of the Copyright Act and the interplay between contracts and the Copyright Law in the context of the plaintiff‘s online game, World of Warcraft.
All of the Ninth Circuit Copyright cases referenced above were the subject of a presentation on June 16, 2011 by Professor Lydia Loren to the Oregon State Bar Computer and Internet Law Section. We recommend our readers review her materials from that program which include an excellent analysis of all of these cases.
New Top Level Domains
The Internet Corporation for Assigned Names and Numbers (ICANN) discussed the possibility of Top Level Domain (TLD) expansion for years. ICANN is the not-for-profit corporation that regulates and governs the Internet domain name space. In March 2011 “it concluded its most recent international public meeting in March by passing the “Process for Completion of the Applicant Guidebook for New gTLDs,” and created a timeline for finalizing and implementing the new gTLD rules. On May 30, 2011 ICAAN published an Applicant Guidebook for New gTLDs, which sets procedures that would allow private individuals and companies to register and operate their own top-level domains. ICANN has said between 300 and 1,000 new gTLDs could be created per year under the new program.
The cost for obtaining a new TLD will be expensive. 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