Packets: Vol. 1, No. 5

Highest EU Court Issues First Ruling Under Data Protection Directive
by Lauren Gelman, posted on November 18, 2003 - 4:13pm

EU Directive 95/46, the so-called Data Protection Directive, was promulgated by the European Union in 1995 to protect the privacy rights of its citizens by limiting unauthorized “processing” and transfer of personal data. The directive contains a number of exemptions, including one for “purely personal or household activity” and another for “journalistic purposes or . . . artistic or literary expression . . . [when] necessary to reconcile the right to privacy with the rules governing freedom of expression.”At the end of 1998, the defendant, a Swedish woman, created web pages at her home to provide information about her church parish. She included, without their consent, the first and/or last names of eighteen colleagues along with personal information regarding their jobs, hobbies, family circumstances, telephone numbers, and, in one case, a recent injury necessitating medical leave. After learning of displeasure at her posting of this personal information, the defendant took down the pages.

Federal District Court Dismisses Class Action Against Pharmatrak that Alleged Violation of Electronic Communications Privacy Act
by Lauren Gelman, posted on November 18, 2003 - 4:11pm

Plaintiffs, in a consolidated class action, sued Pharmatrak, Inc., an Internet marketing service company for the healthcare industry specializing in website traffic analysis and monitoring, and numerous pharmaceutical companies, alleging that they secretly intercepted and accessed Plaintiff’s personal information through the use of “cookies” and other devices, in violation of state and federal law. On August 13, 2002, the Court granted summary judgment in favor of defendants on all counts (see In re Pharmatrak, Inc. Privacy Litigation, 220 F.Supp. 2d 4). Plaintiffs’ sole claim on appeal was that Pharmatrak violated Title I of the Electronic Communications Privacy Act (“ECPA”) (18 U.S.C. §2511(1)(a)). On May 9, 2003, the U.S. Court of Appeals for the First Circuit reversed the summary judgment, finding that Pharmatrak had “intercepted” personal information, but remanded the case to determine whether or not defendants’ conduct was intentional within the meaning of the ECPA (see In re Pharmatrak, Inc. Privacy Litigation, 329 F.3d 9). On November 6, 2003, the District Court again granted summary judgment in favor of defendants.The pharmaceutical companies invited users to visit their websites to learn about their drugs and to obtain rebates. Pharmatrak supplied a service called "NETcompare" to the companies, which accessed information about the Internet users and collected certain information meant to permit them to do intra-industry comparisons of website traffic and usage. Most of the pharmaceutical companies did not want personal or identifying data collected and sought and received assurances from Pharmatrak that such data collection would not occur. As it turned out, some such personal data was found, using easily customized search programs, on Pharmatrak's computers.

FCC Approves “Broadcast Flag” DTV Content Protection Scheme
by Lauren Gelman, posted on November 18, 2003 - 4:07pm

On November 4, the Federal Communications Commission published a Report And Order And Further Notice Of Proposed Rulemaking approving the “broadcast flag” scheme for copy protection for broadcast digital television. The order requires that all DTV tuners, as well as devices that receive or manipulate DTV content in the home, incorporate certain content protection technologies that will protect broadcast programming from unauthorized copying. The range of devices affected by the new order is likely to include personal video recorders, DVD recorders, and personal computers used to display or manipulate DTV content.The new copy protection scheme is known as the “broadcast flag,” referring to a single-bit indicator (“flag”) that broadcasters may incorporate into an over-the-air DTV signal to indicate that a program requires copy protection. DTV tuners will be required to detect the flag at the point of demodulation (separation of the digital stream from the analog carrier wave). When the flag is detected, the tuner will be required to apply an approved form of copy protection to the digital stream before passing the content to another device (or sub-device) for recording, manipulation, or display. The FCC emphasized in its Order that the goal of the broadcast flag scheme is to prevent Internet redistribution of copyrighted works -- not to prevent reasonable consumer uses of broadcast television.

Eleventh Circuit Court of Appeals Overturns Interspousal Wiretapping Exception
by Lauren Gelman, posted on November 18, 2003 - 4:04pm

Defendant James Glazner filed for divorce from the plaintiff, Elisabeth Glazner. During the divorce proceedings, the defendant put a recording device on a telephone in the marital home and recorded conversations between the plaintiff and third parties without their knowledge. Upon discovering this device, the plaintiff sued the defendant for violating the wiretapping provisions of Title III of the Omnibus Crime Control and Safe Streets Acts of 1968, U.S.C. § § 2510-22, which prohibits non-consensual recordings of private conversations, with certain exceptions, and authorizes civil remedies. The district court granted summary judgment for the defendant, citing Simpson v. Simpson, 490 F.2d 803 (5th Cir. 1974), where the court found an implied interspousal exemption in Title III. On appeal, the 11th Circuit Court of Appeals, bound to follow Simpson until it was overruled by an en banc decision of the court or by the Supreme Court, affirmed the grant of summary judgment. The court then granted the plaintiff’s motion to rehear the petition en banc.The en banc court found that the plain language of the statute did not provide for an interspousal exemption. The statute provides that “any person” is subject to the wiretapping provisions and makes no distinction between married and unmarried persons. Citing the rule that a court may look beyond the plain language of a statute if adhering strictly to the language of Congress would lead to a truly absurd result, the court found that allowing Title III to govern interspousal behavior would not lead to an absurd result, and, therefore, there was no compelling reason to infer an interspousal exemption. The court also looked to the persuasive authority of other federal circuit and district courts and found that the majority of them have not inferred an interspousal exemption to Title III. Based on these factors, the court overturned the interspousal wiretapping exemption of Simpson.

Ninth Circuit Rules that Sampling of Jazz Composer’s Copyright is De Minimis Noninfringement
by Lauren Gelman, posted on November 18, 2003 - 4:03pm

In a decision regarding the prevalent practice of musicians “sampling” others’ sound recordings, the Ninth Circuit granted hip hop group Beastie Boys summary judgment, finding that their use of a musical composition was de minimis, or trivial copying, and thus not infringement of a jazz flutist James Newton’s composition, “Choir.” The court found that the Beastie Boys did not appropriate “the overall essence or structure” of the composition such that the average audience would recognize Newton’s work. Instead, the court held that the sequence constituted only a minimum percentage of the entire work of Choir and that the three-note sequence was “simple” and “generic,” – not unique. Because the Beastie Boys had already obtained a license in the sound recording of “Choir,” the Ninth Circuit only considered whether the composition was infringed.The three note, six-second sample comprised two percent of the approximately five minute song, “Choir.” The Beastie Boys “looped” this sample as a background element of its work “Pass the Mic,” so that the sample was heard repeatedly throughout.

ECJ Upholds Restriction on Online Sports Betting
by Lauren Gelman, posted on November 18, 2003 - 3:59pm

A large group of defendants, including Gambelli, was criminally prosecuted in Italy for organizing Internet sports betting operations in violation of Italian law, under which no license can be granted (with a few exceptions, not relevant here) for the taking of bets.However, Article 43 of the EC Treaty (the treaty establishing the European Community) prohibits restrictions on the freedom of establishment (i.e., the business activities) of nationals of a Member State in the territory of another Member State, and Article 49 EC prohibits restrictions on freedom to provide services within the Community in respect of nationals of Member States who are established in a State of the Community other than that of the person for whom the services are intended.

eBay Ruled Not Responsible for Retracted Bid

by Lauren Gelman, posted on November 18, 2003 - 3:53pm

E-Bay, Inc. was absolved of liability for fraud, common law fraud, breach of covenant of good faith and fair dealing, and breach of contract in New Jersey state court in a suit filed by one of its sellers. The seller had listed a vacation resort on E-Bay’s auction website with a low minimum bid and a reserve price of nearly $ 4 million. The seller received four bids for the property, the first three for approximately $2.5 million and the fourth for the reserve price. After learning of the reserve price, the high bidder withdrew his bid on the grounds that he had not read the auction listing carefully. No further bids were received once the reserve price became public.