Stanford Center for Internet and Society

Pro se plaintiff Jeffrey Hammer brought an action in the United States District Court for the Eastern District of New York against defendant Amazon.com (“Amazon”). Non-party Anthony Trendl (“Trendl”) posted negative reviews of plaintiff’s books on Amazon’s website, Amazon.com, and plaintiff wanted them removed from Amazon’s website. After Trendl was sued by plaintiff, Amazon.com provided Trendl with counsel. Moreover, after numerous complaints from plaintiff about Trendl’s reviews, Amazon removed plaintiff’s books from its website under the terms of the contract with plaintiff. After these actions, plaintiff sued Amazon, alleging myriad of claims, from defamation to conversion. The Court dismissed all of plaintiff’s claims with prejudice and enjoined plaintiff from initiating any future actions in federal court regarding reviews of his books posted on Amazon or Amazon’s refusal to do business with him.Among notable claims were those for defamation, and violation of copyright law and the first amendment. The defamation claims were dismissed because they were predicated only on opinion. The court reasoned that the “average person understands that such reviews are the reviewer’s interpretation and not ‘objectively verifiable’ false statements of fact.” Additionally, the copyright claims were dismissed because there was no allegation that anyone copied plaintiff’s work. The Court noted that Amazon’s use of the cover art of plaintiff’s books was authorized in the contract to sell the books. Moreover, the first amendment claims were dismissed because the first amendment does not regulate the conduct of private parties; absent a “state actor,” there was no first amendment violation.

Defendant LendingTree, Inc. (“LendingTree”) operates a web-based real estate referral service whereby consumers can input their location and receive information about real estate brokers in their community. LendingTree’s referral network consists of more than 2,500 real estate offices operated by approximately 650 broker member companies, about 40 percent of which operate a Century 21, Coldwell Banker or ERA franchise. In January 2003, counsel for these three companies (the plaintiffs) sent a letter to LendingTree demanding that it stop using their trademarks on its website. LendingTree then modified its website, but the plaintiffs were not satisfied with the changes and sued for trademark infringement. The companies alleged that LendingTree violated their trademarks by including on its website such items as a Coldwell Banker for-sale sign that was partially obscured by the word “sold,” and a statement that LendingTree gives consumers “access to a national network of brokers representing the country’s leading real estate companies, including Coldwell Banker, ERA and Century 21.”Despite additional changes to defendant’s website, the district court rejected LendingTree’s nominative fair use defense and entered a preliminary injunction prohibiting LendingTree from certain uses of the plaintiffs’ trademarks. On appeal, the Third Circuit created a new burden-shifting two-step approach to nominative fair use cases: first, the plaintiff must prove that the defendant’s use of its trademark creates a likelihood of confusion, and then the defendant bears the burden of showing the affirmative defense of fair use, based upon a three-prong test.

The U.S. District Court for the Northern District of Georgia granted a preliminary injunction to prevent Georgia election officials from enforcing a new law requiring in-person voters to present a government issued photo id or passport (“Photo ID requirement”). The Georgia legislature had passed the Photo ID requirement in 2005 as an amendment to a law which had previously allowed eight other forms of identification such as birth certificate, social security card, a copy of a current utility bill, or a payroll check. Although the amendment claimed to reduce opportunities for voter fraud, it did not address the more common problems of fraudulent voter registration and absentee voting. In fact, the bill loosened restrictions on absentee voting. Plaintiffs Clara Williams, Common Cause/Georgia, League of Women Voters of Georgia, and several other groups devoted to voters’ rights brought suit against the Secretary of State of Georgia and the Superintendents of Elections for the Board of Elections for Georgia counties claiming that the Photo ID requirement imposed an undue burden on the right to vote in violation of the First and Fourteenth Amendments, constituted a poll tax in violation of the Twenty-Fourth Amendment, violated the Georgia Constitution, and violated the Civil Rights Act of 1964 and the Voting Rights Act of 1965. The court applied the standard four part test for preliminary injunction and found that the Plaintiffs had a substantial likelihood of success on the merits of the first two claims, that the disenfranchisement likely to result from the Photo ID requirement would be irreparable harm, that the fundamental right to vote was so important as to outweigh the burden on the state, and that protecting the right to vote was in the public interest.Substantial Likelihood of Success on the Merits:

In an unpublished opinion on personal jurisdiction, the 10th Circuit Court of Appeals rejected plaintiff Angela Tomlinson’s claim that defendant H&R Block, at least in part through its website, had maintained the necessary “continuous and systematic contact” with the state of Oklahoma to confer personal jurisdiction under the state’s long arm statute. Tomlinson filed a class action lawsuit against H&R block for failing to protect personal information according to the company’s published privacy policy. She claimed that H&R Block used her social security number in educational seminars and tax preparation training courses in their “2002 Student Work book.” The district court granted H&R Block a motion to dismiss for lack of personal jurisdiction and Tomlinson appealed.H&R Block claimed that they were solely a holding company and did not conduct business or maintain a physical presence in Oklahoma. They argued that Oklahoma courts had no general or specific jurisdiction over them because the company had neither substantial, systematic and continuous contacts, nor minimum contacts with the state.

ACRA sued Lexmark alleging violations of California Business and Professions Code §17500 (unlawful to disseminate untrue or misleading statements) and §17200 (prohibiting unfair business practices). Section 17500 allows causes of action without proof of actual deception and requires only proof that consumers are likely to be misled. A false advertising violation of §17500 gives rise to a §17200 unfair business practices violation. ARCA claimed that Lexmark violated these statutes by falsely advertising to consumers that purchasers of Lexmark Prebate printer cartridges had a legal obligation to honor the terms of the Prebate program. ARCA alleged further false advertising in Lexmark’s claim that Prebate cartridges were cheaper than normal cartridges; ARCA claimed that Lexmark could not guarantee prices set by wholesalers selling the Prebate cartridges to consumers. ARCA’s final allegation of unfair business practices was Lexmark’s use of a lock-out chip to prevent other companies from remanufacturing Lexmark’s printer cartridges.The district court granted summary judgment to Lexmark. The district court concluded that Lexmark created an enforceable agreement regarding post-sale usage of its cartridges and that its advertising program was not deceptively false. The court also found that ARCA did not establish that the lock-out chip was an unfair business practice. The Ninth affirmed.

The Sixth Circuit Court of Appeals vacated a permanent injunction granted to Gibson Guitar Corp. preventing Paul Reed Smith Guitars (PRS) from manufacturing, selling, or distributing their “Singlecut” line of guitars. Gibson brought suit against PRS claiming that their Singlecut guitars infringed on the trademarked body shape of Gibson’s Les Paul guitar line. Although they conceded that no purchaser would be confused at the point of sale, Gibson argued that either the doctrine of initial-interest confusion or post-sale confusion, or a combination of the two, should be allowed to substitute for the point-of-sale confusion requirement.Initial-interest confusion involves the improper use of a trademark to create initial customer interest in a product and applies even if the customer realizes the product is not manufactured by the trademark holder prior to purchase. This doctrine has mainly been applied in the context of Internet domain names, but Gibson argued that it should apply here on the trademark of their guitar shape because a customer entering a guitar store might see PRS guitars on the far side of the room and approach them thinking they were Gibson guitars, thereby diverting potential Gibson customers to PRS. The court refused to apply the initial-interest confusion doctrine to product-shape trademarks, holding that because many consumer products would look alike if viewed at a sufficient distance, such an extension of the doctrine would have severe anti-competitive effects.

The opinion addresses whether an Internet service provider can be held liable for transmitting third party information through software it provides to customers. Associated Bank-Corp sued Earthlink in the US District Court for the Western District of Wisconsin after the Earthlink anti-phishing software ScamBlocker re-directed users trying to access the bank’s web page to a “potentially fraudulent web site alert” screen despite the fact that Associated Bank-Corp’s web site was and is a legitimate financial services site. A phishing site is one that mimics a legitimate business for the purpose of collecting credit card or other personal information.

Stephen Sotelo has brought a class action complaint alleging trespass to personal property, consumer fraud, unjust enrichment, negligence, and computer tampering against a cluster of spyware producers: DirectRevenue LLC, DirectRevenue Holdings, BetterInternet LLC (collectively known as “Direct Revenue”), Byron Udell & Associates Inc. doing business as AccuQuote, and aQuantitive Inc. The complaint alleges that spyware deceptively installs itself on users’ computers by being surreptitiously bundled with legitimate software, reports tracking data to defendants which causes users’ computers to be "bombarded" with pop-up advertisements, parasitically exhausts system resources, and is difficult for the user to remove.The court denied defendant Direct Revenue and AccuQuote’s motion to stay litigation in favor of arbitration because the End User License Agreement (EULA) containing the arbitration agreement was not displayed to the user before or upon installation of spyware. Direct Revenue claimed that users could not download software without viewing the EULA, but plaintiff alleged that he downloaded Direct Revenue’s software from a third-party distributor and was never presented with the EULA. This was adequate to survive a motion to dismiss. The court also rejects defendant’s claim that each advertisement sent to the plaintiff contains another fair opportunity to view the EULA because the opportunity consists of “a small button with a question mark in the corner of the pop-up advertisements” and “does not indicate that it links to information regarding the source of advertisements or to any kind of user agreement.”

In a case of first impression, the Arizona Court of Appeals, Division One, ruled that the term “call,” as used in the Telephone Consumer Protection Act (“TCPA,”) is broad enough to encompass emails sent to cellular phones via Short Message Service (“SMS”). SMS messages are text of up to 160 characters that are sent to cellular phones and pagers. Many cellular carriers allow emails sent to an address containing a phone number (such as 1234567890@phonecompany.com) to be transmitted to the cellular phone customer as an SMS message. In 2001, defendant Acacia Mortgage Corp. (“Acacia”) used its computers to randomly generate these types of email addresses and sent out solicitations about low mortgage rates. Plaintiff Rodney L. Joffe (“Joffe”) received Acacia’s SMS text messages on his cell phone and sued Acacia, alleging violation of the TCPA. The TCPA prohibits, in part, any person from making “any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system…to any telephone number assigned to…a cellular telephone service…or any other service for which the called party is charged for the call.” The lower court granted partial summary judgment in favor of Joffe, rejecting Acacia’s claim that it could not have violated the TCPA since it did not make a traditional voice call to Joffe’s cell phone. The Court of Appeals affirmed, addressing and rejecting three separate arguments by Acacia: (1) that emails sent via SMS to cellular phones are not “calls” made with an “automatic dialing system”; (2) that because the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM Act”) and implementing regulations against email solicitation govern SMS messages, the TCPA cannot be construed to apply to them; and (3) that the TCPA is an unconstitutional abridgement of Acacia’s First Amendment rights.

Philips filed a complaint with the International Trade Commission alleging that several CD manufacturers were importing into the United States certain CD’s that infringed Philip’s patents. In the course of the proceedings, the defendants raised patent misuse as an affirmative defense, alleging that Philips had improperly forced them, as a condition of licensing patents that were necessary to manufacture CD’s in accordance with the industry standard, to take licenses to other patents that were not necessary. The ITC affirmed the findings of an administrative judge that the package licensing constituted illegal tying arrangements under antitrust law and thus rendered the subject patents unenforceable. The ITC relied on the per se analysis and, as an alternative ground, on rule of reason analysis.Because Philip’s package licensing agreements do not compel the licensees to use any particular technology covered by any of the licensed patents (nor do they foreclose a licensee from licensing a competitor’s alternative technology), and because there was no evidence that the hypothetical licensee fee would have been lower if Philips had offered to license the patents on an individual basis or in smaller packages, the Federal Circuit held that the ITC was wrong as a matter of law in ruling that the package licensing agreements were per se illegal.