Category Archives: Internet Law

Why Garcia Matters: The Unraveling Of An Uneasy Bargain

It’s been a few days since Hon. Alex Kozinski, Chief Judge of the Ninth Circuit (Federal) Court of Appeals, issued his decision in Garcia v. Google et al, relating to whether or not an actress whose image and actions were used in an anti-Islam film polemic could insist that YouTube (owned by Google) take down the film. Hon. Kozinski decided that she could, finding, in an unusual procedural position (review of a denial of a motion for a preliminary injunction) that she likely has a cognizable copyright interest in her performance. The significance of her having a colorable copyright interest is that Google/YouTube is arguably liable for copyright infringement if it ignores her request to remove the infringing material. This exposure arises under the Digital Millenium Copyright Act, which provides a “safe-harbor” for companies hosting infringing materials, provided that they acted to remove the materials after notice. This is generally referred to as the DMCA takedown procedure.

So, to summarize, Google did not remove the video after her take-down requests (8 of them, in fact) because Google did not believe that she, as an actor in the film, had a protectible copyright interest. Hon. Kozinski found she did have such an interest. Thus, then, ergo, the film should be removed from Google’s service.

Many estimable scholars have written in the succeeding days about how wrong-headed this decision is, strictly on copyright grounds. I tend to agree. True, there is a mystifying (to me, at least) discussion about express and implied licenses which looks to be little more than a mechanism for allowing the Court to make the case that Ms. Garcia was taken advantage of, lied to, and is otherwise not at fault. I’ll leave that to scholars.

Under the facts set out by both the majority and minority decisions, Ms. Garcia has suffered a wrong. She was paid $500 for a part in a film that was never released. Instead her footage was repurposed into the objectionable work, and words she never spoke were overdubbed onto her performance. Because the film is ill-liked by certain interests, her participation resulted in death threats and other attacks that none of us sign up for.

What, then, was the wrong?

That’s the slippery problem here. Google harbored no demonstrable ill-will toward her: it was simply the platform by which the film was displayed. Ms. Garcia was duped by the people who filmed her and they carried out the ruse. She sued them. According to the 9th Circuit Opinion, they never answered. They have gone to ground. In common parlance, they are judgment proof, or at least aren’t willing to answer to Ms. Garcia in court. see footnote 1: ” Although Garcia’s suit also named the film’s producers, only Google,which owns YouTube, answered the complaint.”

Google answered. Google is unlikely to be legally responsible for bad things that happened to Ms. Garcia, because of section 230 of the Communications Decency Act which  says that “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider” (47 U.S.C. § 230). (emphasis supplied).

In other words, and to paint the strokes very broadly, Google can’t be responsible to Ms. Garcia for simply hosting the film on YouTube under theories of tort which she might have available for the doubtless personal anguish she has suffered. For example, she might have claims of misappropriation of her likeness, false light, libel (a stretch) or some other theory that would get at how she has suffered at the hands of the producers and filmmakers who put her in this position.

But not Google, thanks to section 230.

As the Electronic Frontier Foundation states:

 In other words, online intermediaries that host or republish speech are protected against a range of laws that might otherwise be used to hold them legally responsible for what others say and do. The protected intermediaries include not only regular Internet Service Providers (ISPs), but also a range of “interactive computer service providers,” including basically any online service that publishes third-party content. Though there are important exceptions for certain criminal and intellectual property-based claims, CDA 230 creates a broad protection that has allowed innovation and free speech online to flourish.

Can’t argue with that either… Section 230 has provided a means for all manner of hosted material, including some pretty heinous stuff (no, I refuse to link it) to be distributed without the hosts (YouTube, Twitter,  you name it) having legal exposure.

Except. Now look back at the EFF commentary above: “there are important exceptions for certain criminal and intellectual property-based claims”

Boom. Enter Hon. Kozinski, and Garcia’s counsel. It was necessary to carve out an identifiable copyright interest that Garcia could assert, so that Google would not enjoy the protections of Section 230.

Most would say that section 230 allowed the Modern Internet to grow, expand, and flourish. Back in the Internet Stone Age, there were cases litigated against Prodigy (look it up), Compuserve, and other hosts, and their flexibility in offering services was likely hindered by uncertainty of when and under what circumstances they could get tagged for allowing someone else to use their service to post, let’s say, libelous material. The story (allegedly) goes that the guy on whom Jonah Hill’s character was based in “Wolf of Wall Street” was incensed at a posting on Prodigy and sued Prodigy for libel in a third party post. Stratton Oakmont, Inc. et al. v. Prodigy Services Company, et al. 1995 N.Y. Misc. Lexis 229, (N.Y. Sup. Ct. Nassau Co., 1995) motion for renewal denied 1995 WL 805178 (Dec. 11, 1995).That was the environment before Section 230.

So, between section 230, and the DMCA copyright safe harbor, it seems there was an uneasy bargain struck (see the title of this post) to say, essentially, that people enabling internet services would not be responsible for “soft” injuries to persona, bad feelings, hurt feelings, harm to reputation, the kind of things that tort law covers. On the other hand, economic injuries, like copyright infringement, were fair game–but only if the DMCA safe harbor rules were ignored.

But, Hon. Kozinski has thrown a wrench into the works. Ms. Garcia’s harm is real, but is it economic? It is now, so long as Garcia stands. For years, the on-line world operated by the bargain struck above, but now a personal interest not to be duped or mis-presented has been characterized as an economic/copyright interest (“Garcia may assert a copyright interest only in the portion of “Innocence of Muslims” that represents her individual creativity“).

That’s what the fuss is about.

WHY IP? WHY THINK IP?

Why Intellectual Property? It’s a question I get a lot, from people who know that IP issues are on the top of my professional mind.

(Fortunately, that’s not all that’s on my mind, but the question of why The Infamous Stringdusters are not as lauded as Beyonce is a question for another day.)

Well, let’s start here: ” intellectual property accounts for 20% of U.S. GDP, and nearly 40% of economic growth. Furthermore, IP industries account for 74% of the county’s exports, amounting to $1 trillion.”  Think that one over. We don’t make things here, much, anymore. We develop ideas and neat, efficient implementations of ideas. Even where we would seem to be leaders in manufacturing, such as the automotive industry, not a car would be made without parts outsourced from Mexico, China, Japan , you name it. The Chevy Aero has 98% of its parts sourced outside the U.S. The Ford Expedition? 50/50.  That’s where we are going. So, that is “Why IP?”

I recently rebranded this blog and my Twitter feed to THINKINGIP for that very reason. The kinds of knowledge based solutions (and problems) that arise in everyday life, and most certainly in the life of an IP attorney such as me are mind-numbing. Yet, they must be attended to. There is a burgeoning industry of court actions by “trolls” (more benignly known as Non-Practicing Entities)  who seek damages for new implementations of existing exclusively-protected rights (whether patent or copyright). One might conclude that we are essentially eating our young, but that’s what happens when things are built elsewhere.

To review the kinds of things I’ve discussed, or Tweeted about over the last few weeks:

Chuck Shumer promotes fashion design copyright now that Sandy is not a problem. http://dld.bz/bSCbm 

North Face tries to stop trademark parodies. http://dld.bz/bSBZZ 

Audi doesn’t get http://Audicity.com . No bad faith. http://dld.bz/bSuFG 

IP protection for aboriginal cultures. http://dld.bz/bSuEV 

Some gruel, please, sir? Copyright Office wants to hear what you think about “the state of play of orphaned works” http://dld.bz/bSuE2 

Easter Egg in iOs6 privacy policy? http://dld.bz/bSuEv  

Copyright trumps state law claims. http://dld.bz/bSuEg  

When a customer list can be a trade secret. In Cali. http://dld.bz/bRXV4 

How to brand your baby, PTO-sssstyle. http://dld.bz/bRXUu  #THINKINGIP

Three words. Cloud. Security. Nightmares. http://dld.bz/bRKFQ 

Republicans Retreat On Copyright Reform? http://shar.es/G95RM  via@sharethis

Updated post on GOP’s pulling Copyright Report for lack of “balance”https://frawleylegal.wordpress.com/2012/11/18/copyright-reform-just-dont-tell-mickey/ …

Wow, who saw this coming? (everybody) digital borrowers of book also buy books, a lot. http://dld.bz/bRKFh 

Twinkies to fold. http://dld.bz/bRKMu  Lots of sweet IP http://dld.bz/bRKMC 

Cy pres award to advocacy groups disfavored in some class action settlements. http://dld.bz/bRKE2  Plaintiff’s counsel still eat well.

And on and on.  So, that’s WHY IP? Please follow me @#THINKINGIP on Twitter. There are no discernible prizes (yet), but you might get a chuckle.

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China Shakeup In Copyright Enforcement?

China is notoriously passive in protecting others’ third-party IP rights. I have spoken and written extensively on this in the past. One could argue that China’s expansion in a number of industries (auto, electronics, railways) has built upon its access to IP of collaborators that were later applied to Chinese ventures.

Now, we are told that “Chinese government, partnering with portal site Sina, is setting up a new firm to pull off toughest ever regulation over digital music copyrights.” Um, ok. I’ll believe when I see it. In the mean time, cut the cards. Or, maybe it is the case as with other industries, that China is willing cede its “most notorious outlaw” status to other countries, such as Vietnam.

The free-to-download bonanza has pushed Vietnam’s Zing.vn into the ranks of the globe’s top 550 websites.

FTC Endorsement Guidelines-For Real?

The FTC has declined to start an enforcement action against Hewlett-Packard Company and its public relations firm, Porter Novelli, Inc., violated Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45, in connection with providing gifts to bloggers who they expected would post blog content related to the HP Inkology campaign. This probably attributable to good, full-court press lawyering (I wasn’t part of it).

According to the letter, the agency decided not to initiate an enforcement action for several reasons. First, only “a relatively small number” of bloggers actually posted content about HP Inkology after they received the gift pack. And a few of those bloggers actually did adequately disclose their material connections. The agency cited one example of a blogger who kept both gift cards and called herself “a compensated brand ambassador” and another example of a blogger who described the “goodies” she received from HP.

The agency also abandoned enforcement action against HP and its PR firm because both companies revised their social media policies “to adequately address our concerns,” Engle wrote. Nevertheless, the agency made clear that it expected the companies to “take reasonable steps to monitor bloggers’ compliance with the obligation to disclose gifts they receive.”

Regardless of the agency’s enforcement choice, the uninitiated are reminded that in 2009, the FTC updated its Guides Concerning the Use of Endorsements and Testimonials in Advertising that are applicable to social media, word-of-mouth marketing, and other promotions and advertising in which consumers or celebrities are given inducements to provide endorsements of products and services.

An ounce of prevention is worth a pound of legal fees. No fees were received in connection with this blog post.

The Importance of IP Audits (Part 1)

Today’s “idea economy” makes it worthwhile for businesses to closely evaluate their intellectual property. IP rights take many shapes and forms including trademarks, copyrights, trade secrets, know-how and patents.

Each of these protects different interests, but should be reviewed collectively with an IP audit. The audit guides your business through the process of establishing preventative measures for protecting, enhancing and even discovering new IP assets. The litigation process is not the place to learn lessons about intellectual property protection, but an IP audit is a good place to start.

For years, business proprietors ignored or undervalued intellectual property. Even now, IP is not adequately appreciated; the possibility for further profit and value remains widely underestimated in many cases. As a business manager, you might be trained to appreciate physical assets like buildings, machinery and financial assets, but might be less familiar or comfortable with valuing intangible assets such as human capital, know-how, brands, designs and other output of a company’s creative capacity.

Traditional views are changing and company managers and owners see that, as a result of the digital revolution together with the growth of the service economy, particularly in the United States, intangible assets are equally – if not more – valuable as hard assets.

More recently, with pressure on corporate profitability, executives are trying to discover what one author referred to as “Rembrandts in The Attic,” namely, unidentified, undervalued or under-exploited IP assets. As a result, managers are increasingly digging for buried treasure among their IP assets. Indeed, some companies exist only to exploit existing IP assets, especially patents. These enterprises, unkindly and unfairly sometimes referred to as “patent vultures,” have upped the ante and shown a bright light on the growing importance of IP issues.

In an IP audit, your lawyer will wield the shovel and dig for hidden IP treasure. Leveraging IP requires a number of disciplines to carry it off successfully: technical, legal, business and economic expertise. To maximize the effectiveness of your IP audit, you should try to develop an integrated strategy with the help of legal counsel. Equally as important, your legal adviser must keep in mind that monetization of IP assets is not the only way to provide value to your business.

Part 1 of 2

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Murky Water For Employee Shenanigans Under Computer Fraud and Abuse Act

The United States Court of Appeals for the Fourth Circuit has sided with the Ninth Circuit recently holding that the Computer Fraud and Abuse Act prohibitions against unauthorized access to computers are not implicated when an employee used his valid access to employer’s computer network to download confidential business information that he later used while working for a competitor.

Prior to his departure from his former employer, the defendant downloaded proprietary information from the plaintiff’s network which he allegedly used to win a contract for business. The plaintiff filed a civil lawsuit against defendant, alleging, among other things, that he violated the CFAA when he downloaded its proprietary information. Specifically, the plaintiff alleged that its policy prohibited employees from downloading confidential and proprietary information to a personal computer.

The Fourth Circuit distinguished (for purposes of the CFAA) between the use of company information and accessing that information.  However, the court declined to adopt Seventh Circuit’s reading of the CFAA that an employee loses lawful authority to access an employer’s computer network if the access violates the employee’s fiduciary duty of loyalty to the employer. The Fifth and Eleventh Circuit have also found that the CFAA may be invoked whenever an employee exceeds authorized access.

Acknowledging that “two schools of thought exist”, the Court rather bluntly stated that the Seventh Circuit’s reading was a “non-sequitor” in the case before it held that “we adopt a narrow reading of the terms ‘without authorization’ and ‘exceeds authorized access’and hold that they apply only when an individual accesses a computer without permission or obtains or alters information on a computer beyond that which he is authorized to access.”

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That Pesky NDA. Why It is Necessary

The Seventh Circuit, in the form of Chief Judge Easterbrook and others was recently dismissive of a party’s claim of breach of confidentiality and unjust enrichment by a prospective business partner. In Fail-Safe, LLC v. A.O. Smith Corporation No. 11-11354 decided March 29, 2012 7th Circuit Court of Appeals, the Court that the plaintiff had done little or nothing to protect the trade secrets which it later claimed were misused by a former business partner.

The Court noted that FailSafe had taken no steps to protect any alleged trade secrets. FS’s failure was shown by the following circumstances:

  • None of the information provided by FS was marked confidential.
  • FS did not inform AOS that it expected the information to remain confidential.
  • FS signed AOS’s one-way NDA but did not obtain, or even request, a similar one-way or a two-way NDA protecting FS’s confidential information.

That third bullet is chilling, and probably was the finishing touch, according to the Court’s view. In short, NDA’s are pesky and introduce a level of formality into a relationship at a time when both parties are :”courting”, in a business sense. Nevertheless, get one on the table of your counterpart. It will help you down the line and show your prospective business partner that you know what you are doing.