Packets: Wednesday, March 11, 2009, Volume 6, No. 4

Packets is a production of the Stanford Center for Internet & Society (CIS). It is written by members of the Stanford Law and Technology Association (SLATA), and edited by CIS staff, fellows and volunteer attorneys. Our purpose is to provide the legal community with a concise description of recently decided cyberlaw-related cases, and where possible, to point to the original decisions. We urge you to forward Packets wherever you please, and to take from it any content you would like. The writers on the Packets Editorial Board are: Matt Kellogg, José Mauro, Robert Lopez, Stuart Loh, Allison Pedrazzi Helfrich, and Alex Harris. Packets are online at: http://cyberlaw.stanford.edu/packets

Court Allows Invasion of Privacy Claim Against Tax Service Provider for Throwing Away Tax Returns in Public Dumpster

Author: José Mauro

Vicki J. Pinero sued Jackson Hewitt Tax Service Inc. (“Jackson Hewitt”) for not complying with its own privacy policy and dumping her tax returns in a public dumpster, together with the returns of 100 other Jackson Hewitt customers. Pinero asserted seven causes of action against Jackson Hewitt, including fraud, breach of contract, negligence, invasion of privacy, as well as violation of Louisiana laws related to database security and unfair trade practices. A federal district court in Louisiana recently dismissed all of Pinero’s claims except invasion of privacy.

Google Immune from Liability Under § 230 of the CDA for AdWords Content Created by Third Parties

Author: Matt Kellogg

In the Northern District of California, the District Court granted Google’s motion to dismiss in a suit claiming that Google had been complicit in fraud perpetrated through its AdWords program. Because the plaintiff did not allege that Google had helped to develop the offending content, Google was immune under § 230 of the Communications Decency Act of 1996, which shields website operators from liability for hosting unlawful content created by third parties.

The Digital Millennium Copyright Act Imposes Liability for Circumventing Technological Measures That Protect a Choreographed Compilation of Copyrighted Works

Author: Robert Lopez

MDY filed a claim for declaratory judgment that its program, Glider, did not infringe rights owned by Blizzard. Blizzard Entertainment counterclaimed, alleging two violations of the Digital Millennium Copyright Act (DMCA). Blizzard also attempted to hold Michael Donnelly, the president of MDY, vicariously liable for tortuous interference and copyright infringement, previously decided at summary judgment. Glider is ‘bot’ software that can play Blizzard’s World of Warcraft (WoW) for users. Blizzard claimed that MDY violated §1201(a)(2) and §1201(b)(1) of the DMCA by trafficking in a technology designed to circumvent protective countermeasures in WoW’s code designed to protect copyrighted material. Previously at summary judgment the court held that this DMCA protection did not apply to the literal game code. The court extended this logic, holding that the protection also did not apply to non-literal elements of the game, like graphics and sound, because the user could freely access these elements. Instead the court noted that Glider circumvented a countermeasure protecting the dynamic game play experiences which even when merely ‘choreographed’ by the server, is protected by copyright.

 Some Requirements for Pleading Copyright Misuse Counterclaims

Author: Stuart Loh

Defendant Psystar Corporation (“Psystar”) makes and sells a line of computers which support the plaintiff Apple Inc.’s (“Apple”) operating system, MacOS. Apple sued Psystar asserting copyright and other claims related to Psystar’s use of MacOS. In these proceedings, Psystar filed for leave to amend its counterclaims against Apple, dropping its previous counterclaims and asserting new ones under the copyright misuse doctrine and California unfair competition laws. Apple unsuccessfully challenged the copyright misuse counterclaims, arguing that copyright misuse could only be employed as a defense and not a counterclaim, and that in any event Psystar had failed to allege sufficient facts to ground such a claim. The court found that, at this stage in the proceedings, the cases cited did not definitively support Apple’s arguments. However, the court denied Psystar’s unfair competition counterclaims because Psystar did not adequately plead any actual or incipient violation of antitrust laws, as required to make out a claim of unfair competition.

 Internet Service Provider Potentially Liable for Copyright Infringement of Hosted Websites

Author: Allison Pedrazzi Helfrich

Following an investigation and notification attempts, clothing distributor Louis Vuitton Malletier filed a complaint against several websites that it believed were selling goods that infringed on Vuitton’s copyrights and trademarks, alleging contributory trademark infringement; vicarious trademark infringement; contributory copyright infringement; and vicarious copyright infringement. The court denied the defendants’ motion for summary judgment on the contributory copyright and trademark infringement claims. With respect to the contributory trademark infringement claim, the court held that the proper inquiry in this context was how much control the defendant had over the means of infringement.

 FCC Can Ban Customer Retention Practices

Author: Alex Harris

The DC Circuit upheld a decision of the Federal Communications Commission (“FCC”) prohibiting Verizon from continuing some of the company’s practices in trying to retain customers switching from its phone service to a competitor’s VOIP service. When a customer decided to leave Verizon for a competitor, Verizon would get a notice because it had to transfer the customer’s phone number to the new service. Verizon would then offer the customer incentives to stay, such as discounts and gift cards. The FCC banned the practice and the court upheld the FCC’s decision, reasoning that the FCC’s action survived the weak standard of Chevron deference because the FCC had rationally interpreted the relevant statute.