If You Dislike SOPA, You'll Dislike This Case Too
from the more-censorship-madness dept
We recently blogged about a case where Chanel obtained surprisingly broad remedies against domain names associated with foreign "rogue" websites which allegedly sold counterfeit Chanel items. Much of the relief Chanel sought and obtained in that case overlapped with relief that the proposed SOPA law would provide to rightsowners.
True Religion, a company which manufactures jeans, brought a similar enforcement action against foreign "rogue" websites in the Southern District of New York. It first obtained a temporary restraining order, which the court converted into a preliminary injunction. The relief obtained by True Religion is similarly broad as, and presents the same due process concerns raised by, the Chanel case.
True Religion filed a lawsuit in the Southern District of New York. As in the Chanel case, it went after numerous domain names in a single lawsuit, and it presented declarations from its investigators that they bought counterfeit goods from those domain names. True Religion also presented evidence that defendants undertook efforts to conceal their true identities (primarily by supplying 'purposely-deceptive contact information' to registrars), and that if defendants were provided notice, they would "likely destroy, move, hide or otherwise make [the domain names, products in question, accounts, and records] inaccessible to the Court." True Religion filed its lawsuit on November 15, and the court issued an ex parte TRO three days later. The TRO broadly enjoined the conducts of defendants and third parties, authorized service via email, and set a hearing for November 30, 2011. Defendants were required to show cause on or before the hearing date as to why the court should not issue a preliminary injunction. True Religion filed two sealed declarations and an unsealed declaration. No defendant appeared or filed any pleadings. On December 2, 2011, the court issued the preliminary injunction.
The TRO:
The TRO finds that True Religion established a likelihood of succeeding on the merits of its claims that defendants sold products which infringed on True Religion's trademarks and copyrights and that defendants' conduct will cause irreparable injury to True Religion. The TRO also finds that defendants undertook efforts to conceal their identity and that if "True Religion were to proceed on notice to defendants," defendants would shift their operations. Pending the court's ruling on True Religion's request for an injunction, the court issues the TRO, which contains the following provisions:
- defendants and any third parties acting in concert with them, including ISPs, registrars or third party selling platforms are restrained from selling allegedly infringing items;
- True Religion is entitled to broad financial discovery and discovery from various service providers (MasterCard, Visa, PayPal, back-end service providers, web designers, third-party selling platforms, registrars, registries, ad-word providers, etc.);
- third party payment processors and financial institutions are ordered to freeze any of defendants' funds;
- domain name registries (VeriSign, Neustar, Public Interest Registry) and registrars are orderd to "temporarily disable" the domain names referenced in the TRO, "through a registry hold or otherwise";
- third party service providers are ordered to cease providing service to defendants.
The Preliminary Injunction:
The order largely tracks the TRO, but adds a approximately 24 new domain names. As with the TRO, the preliminary injunction broadly enjoins defendants from exploiting True Religion's copyrights and trademarks. In addition, it contains the following provisions:
- third party service providers who are provided notice are enjoined from providing services to defendants in conjunction with any of the acts which defendants are enjoined from doing;
- a broad asset freeze, directed at banks, payment processors, PayPal and other payment services providers;
- continuing right to conduct discovery for True Religion;
- domain name registries and registrars are directed to continue disabling and lock the domain names, including the new domain names;
- third party service providers, including ISPs, back-end service providers, affiliate program providers, web designers, sponsored search engine or ad-word providers are ordered to "disable service" to the defendant websites; and
- an authorization to serve process via "registered electronic mail" pursuant to rule 4.
__
This is a slightly different flavor from the Chanel orders, but it raises similar due process concerns. The initial order (the TRO) is issued on an ex parte basis without notice, and it contains extraordinary relief -- it's essentially a kill switch for the websites in question. There are a variety of reasons why this has the potential to run roughshod over the rights of defendants or third parties; among other things, there could be some mistake as to the underlying domain name or website. There's no assurance that the site as a whole (as opposed to one or two products) is infringing. Also, after bona fide adversarial proceedings, True Religion's copyrights or trademarks may not turn out to be as enforceable as they seem at first blush. But on the strength of True Religion's unchallenged assertions, the court orders various third parties, including registrars, registries, payment processors, ad-word providers and others, to cut off the defendants. (The court did require True Religion to post a bond of $10,000--a laughably nominal amount.)
Regardless of whether the court has the authority to issue an injunction binding third parties who are not before the court, and who may not even be subject to the court's jurisdiction, many service providers will just follow the court order anyway. They may have no interest in expending resources to fight for a third party's due process rights. Indeed, in its declaration filed after the TRO was issued, True Religion indicated that the registries (VeriSign, Affilias, Public Interest Registry, Nominet UK) disabled many of the domain names in question upon receiving notice of the court order. PayPal also froze the funds in 84 different PayPal accounts.
It's unclear how much business defendants conducted in the United States. If their business activities in the US were nominal, this looks like an extraterritorial enforcement by a US rightsowner in a US court. It's tough to tell, given that the process hasn't been adversarial or even designed to facilitate bona fide participation by the defendants.
I know there are some tweaks in pending SOPA/PIPA legislation that surely would be even more helpful to plaintiffs, but courts today seem willing to grant broad remedies to rightsholders without any legislative change at all. It seems that today, rightsowners are able to go to court and, quickly and at low cost, take down domain names and get an order directing third parties, including service providers, ad networks, and payment processors, not to provide services to various websites. That's a pretty good deal if you are a rightsholder. They may even prefer that to the ITC proceedings proposed in OPEN.
_______
Additional comments from Eric Goldman
This case raises so many unanswered questions for me:
1) Just how many rightsowner vs foreign rogue website lawsuits are already in the court system? Are the Chanel and True Religion cases unique, or are dozens or hundreds of similar cases percolating through the system?
2) Did so much of this case really need to be done under the cloak of secrecy, and even if the answer is yes, why is so much of the case history still sealed?
3) Just how far can rightsowners go in suing dozens or hundreds of unrelated defendants in a single lawsuit? We've seen some pushback against copyright trolls. Are trademark owners similarly overreaching?
4) Just how far can rightsowners go in forcing third party service providers, like domain name registrars, ad networks, payment service providers and others, to honor rulings where the service providers aren't litigants? We dealt with this issue a bit in the 47 USC 230 context in the Blockowicz case. In that case, the Seventh Circuit set some important limits on the reach of Rule 65. Without an adversarial process, were the Chanel and True Religion courts perhaps a little lax in their reading of Rule 65?
5) If rightsowners can already get in court so much of the remedies that SOPA would provide, then why are they pushing so hard for SOPA?
6) Then again, if rightsowners can already get SOPA-like remedies in court, why are we fighting so hard against SOPA? This reminds me a little of the public outcry against UCITA a decade ago--much of the angst was about the parts where UCITA merely restated then-current contract law. Similarly, perhaps SOPA is more of a mirror on present reality than a bona fide change in the law. At minimum, it suggests SOPA may be distracting us from other real problems. If we object to the remedies in SOPA, not only do we need to kill SOPA, but we need to proactively seek new statutes that prevent the outcomes Chanel and True Religion are getting in court.
I plan to continue my personal efforts against SOPA, but it's clear that killing SOPA isn't enough to end the fight. Perhaps OPEN would help by giving rightsowners an easier path to attacking illegitimate foreign websites and thereby alleviate the pressure that rightsowners are putting on doctrines not specifically designed to deal with that problem. That would be a good reason to support OPEN, but it's now 100% clear to me that OPEN also needs more immunities, safe harbors and other limitations on rightsowner powers. If rightsowners get a shiny new enforcement toy via OPEN, they should have to give up some of their overreaching elsewhere.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: copyright, due process, injunctions, retraining order, seizure, sopa, trademark, websites
Companies: true religion
Reader Comments
Subscribe: RSS
View by: Time | Thread
Operation In Our Sites (Judicial Edition)
All of the domain names that are subject of these cases are transferred to a federal court owned GoDaddy account regardless of what registrar they were originally held at. They point the domain names to servingnotice.com with HTTP 301 permanent redirects even though the orders are for temporary injunctions.
http://servingnotice.com/oft/index.html
http://servingnotice.com/liu/index.html
ht tp://servingnotice.com/lin/index.html
http://servingnotice.com/lin4/index.html
http://servingnotic e.com/li2/index.html
http://servingnotice.com/yan/index.html
http://servingnotice.com/gao/index.ht ml
http://servingnotice.com/zhiming/index.html
http://servingnotice.com/t-e-p/index.html
http://s ervingnotice.com/wu/index.html
http://servingnotice.com/wang/index.html
http://servingnotice.com/f eng/index.html
And more...
http://www.google.com/search?q=site%3Aservingnotice.com
The amount of coordination and parties involved speaks for itself. Checks and balances are dead.
[ link to this | view in chronology ]
Pork Felon
[ link to this | view in chronology ]
Unfortunately, who loses from all this is the consumers. and that's unacceptable.
[ link to this | view in chronology ]
No, and the only reason why they are being done in secrecy is because it's more difficult to openly make unpopular decisions. Our plutocratic legal system does not serve the republic, it only serves the interests of a few.
[ link to this | view in chronology ]
Re:
One slashdot comment I found insightful was the following.
"That's the beauty of software these days. You purchased the hardware, which you have in your possession. You didn't purchase the software. You purchased a "license" to the software. Sony is still providing you with software, albeit in updated form. They fixed a bunch of bugs, and added new "features." What's not to like?
This is the fundamental problem with software "sales" as they currently exist. They're a hybrid sale/license, such that the laws associated with sales and licenses don't really apply well. The software industry hops to the side that benefits them the most. Oh, you want to sell your copy of SuperMetalHaloBrothers ? Sorry, you *licensed* the software, and the license is non-transferrable. Oh, your kid munged your CD for SuperMetalHaloBrothers and, since it's licensed, you'd like to just get replacement media? Sorry, you *purchased* the item and you'll need to re-purchase it because the original item was destroyed."
http://linux.slashdot.org/comments.pl?sid=2572668&cid=38363364
Posted by Migraineman (632203)
Our laws always seem to be one-sided against the consumer.
and, in other news; Sony, Universal and Fox were allegedly caught infringing. By their own standards, perhaps this allegation should result in their domain being seized and their internet connection being cut off before an adversarial hearing and they should be sued into the ground. But, unlike everyone else, they get the high court treatment. Due process is only for those who can afford it.
[ link to this | view in chronology ]
http://www.techdirt.com/articles/20110425/01501514023/big-patent-holders-big-patent-law-fir ms-bring-judges-to-belgium-boondoggle.shtml
[ link to this | view in chronology ]
Once again, Justice Delayed = Justice Denied
Yes, due process is served when both sides are given the opportunity to be heard. But depending on the circumstances, that opportunity can be given before or after a TRO. In cases where the legitimate rights of a property holder are being infringed such that they suffer continuous harm as each day goes by, it makes sense to assess the claims of the claimant ex parte, adjudicate them as a preliminary matter and issue a TRO to prevent any further harm from occurring. That way, the status quo can be maintained until a hearing is had, and the rights of the property holder are not being prejudiced by the inaction of the adversary.
After a TRO is issued, the adversary (who now has an incentive to be heard as early as possible) is given the opportunity present its case for why the claimant should be denied relief. But when the adversary fails to defend itself, it should hardly seem fair to allow the plaintiff's rights to languish.
[ link to this | view in chronology ]
Re: Once again, Justice Delayed = Justice Denied
Failure to attend a court date or respond to an inquiry to negotiate court hearings is not what we are discussing here. We are discussing having a site taken down before the defendant has a chance to even respond to a takedown request or have the opportunity to negotiate or attend a court hearing. Building a strawman and shooting it down doesn't address the actual issues that we raise, it only makes you look foolish.
[ link to this | view in chronology ]
Re: Re: Once again, Justice Delayed = Justice Denied
The issue is continued harm - if LV is the rights holder, and this person is not licensed, they can easily show in court these facts, and a TRO will be issued because it's the right thing to do.
The alternate is allowing the harm to continue unabated until the case goes through all the processes.
Look at this one, which is a default judgement:
http://servingnotice.com/feng/index.html
Process starts on 4/14, ends on 7/25 - that means 3.5 months that the site would have been up and selling and continuing to harm the rights holder. The TRO is the right thing.
After all, if the website owner was upfront and honest, they would have a lawyer in court the very next morning making a motion to remove the TRO, and would likely get relief if their argument had merit in a very short period of time. Further, LV or others would likely face civil action for shutting down the wrong sites.
The defendants are engaged in activities which the sole rights holder has not permitted, the court really does have to come down on their site.
[ link to this | view in chronology ]
Re: Once again, Justice Delayed = Justice Denied
That's stupid. It does NOT make sense to do that for this reason. You want to talk about harm? How about shutting down a website's entire operation? That harm is WAY more irreperable than an infringement. Status quo? The status quo, by definition, is maintained by doing nothing.
However, they actually do have a legitimate reason to want to begin things ex parte - they are afraid that the foreign websites will transfer away all assets and make them unreachable. So.... maybe, if indeed it is shown that false information was given to the registrars and they are likely to hide the money, it makes sense to freeze the accounts first. But I don't see the need to shut down the domains before the adversarial hearings.
I do like that the judge allowed any of the defendants to get a hearing in 48 hours if they wanted to challenge the order. And once the websites failed to respond for the adversarial hearing (which was scheduled for only 15 days after the lawsuit was filed), I think it would THEN make sense to have the domains shut down.
[ link to this | view in chronology ]
Re: Once again, Justice Delayed = Justice Denied
[ link to this | view in chronology ]
All SOPA, all of the time
[ link to this | view in chronology ]
Yeah, like not being able to sell $0.02/yard denim for $200. Ha, designer jeans, right up there with bottled water.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Wow, really? Paying for privacy setting with your domain registrar or forgetting to update the info when you move is now enough to justify seizure?
[ link to this | view in chronology ]
Re:
I recently made a domain transaction with a Chinese guy. It was pretty funny, mostly because the information he gave me was completely, utterly, and totally bogus (pointed to an address in Hong Kong that does not exist, but used a cell phone number from Beijing area). The whois on the domain since purchase has changed twice already, and it is still not right or valid - and this is a guy who is relatively honest.
What most Chinese people do for domain registrations is provide the address of the local TV broadcast tower, or the local phone company, or even the "city hall" for their area. They rarely if ever put anything that resembles a real and full address on any domain registration.
Registrars sadly don't check these things, I once had a domain name that was registered to "bob smith", with an address of "third stall down, mens washroom, Kensington station, UK", even though I am not in the UK, and my office certainly isn't in the mens washroom of a tube station. Except for a few legal implications on trying to transfer the domain later, there is no issue - the registars don't check and don't know their customers.
[ link to this | view in chronology ]
Re: Re:
Guess why most people would provide false information to the public whois record? (hint: it's to do with privacy)
The registrar will still have correct billing information, etc., if a court requires it, but many people would not want to risk this information being made public. I don't see why this would be some kind of admission of guilt, nor why it would even be a factor - as you mentioned, even you had joke information on a domain. This shouldn't be taken as anything untoward or suspicious.
"the registars don't check and don't know their customers."
You do seem quite adamant about this kind of thing recently, even though it's irrelevant. Why do you want every company to magically verify the identity of everyone they do business with, even though it's irrelevant to their business?
They "know their customers" to the extent they need to in order to conduct business. Storing additional information is not only an invasion of privacy, it's a major security risk. My local supermarket doesn't need my address, even though I could be using a fake ID to buy beer. Why should this change just because I have an online relationship with the supplier in question?
[ link to this | view in chronology ]
Re: Re: Re:
Incorrect Paul, this is clearly something you don't deal with very often. Most registrars don't give a crap where the money comes from, they don't verify your information, they allow you to register domains with throw away email accounts, false address information, and the like - and they accept many forms of payment that are untracable or incredibly hard to trace, like pre-paid credit cards and such. Most mainland Chinese people don't have access to credit cards that work internationally, so for someone from the mainland to be working a domaining business suggests that they have many ways to move money.
Basically, there is no way to trace this guy down. I had to contact his registrar regarding issues, and the information he provided them wasn't any more real than the information he provided to me - and it didn't match the information he provided to the escrow company, and it didn't match the source for the wire transfer to them - and he wasn't trying to hide anything. You try to serve him papers on ANYTHING, good luck.
"Why do you want every company to magically verify the identity of everyone they do business with, even though it's irrelevant to their business?"
In the case of domain registration, it's the responsilbity of the registrars to assure that the information in the whois system is correct - either a valid "privacy" system that allows for legal notice contact, or valid customer information. It is a contractual requirement of the domain world. Godaddy is not suppose to register a domain for anyone without knowing who they are and assuring that the information is correct.
Your beer example is misleading, because nobody is going to attempt to sue you for buying beer. The store isn't representing you, they won't be getting the legal notices when you go off on a drunk driving bender. They don't need to know who you are, they need only to fulfil their legal requirement to check ID to the best of their ability.
Domain registrars are entering into a contractual relationship with you. Don't you think they should know who you are?
[ link to this | view in chronology ]
Re: Re: Re: Re:
Enlighten me, just how would you be "serving" someone in China from where you are anyway? Which steps, exactly, do you expect the registrar to take?
I've never had any problems with any domain transaction I've ever made. But, I don't tend to be dealing with dodgy suppliers on the other side of the world.
"Godaddy is not suppose to register a domain for anyone without knowing who they are and assuring that the information is correct."
So, again, how exactly do they go about this? Which magic form of ID exists in your mind that is foolproof, provides 100% real information and can be easily verified regardless of the customer's location? Because that doesn't exist in the real world.
"Domain registrars are entering into a contractual relationship with you. Don't you think they should know who you are?"
Not really. If there's a real problem with, for example, the domain being used for illegal purposes, they (should) have contracts that state that this is not allowed. They can then pull the domain without needing to know who I am. Not a problem, as long as there's a procedure in place for me to retain control if this was a mistake, and then it's my own fault if I lied.
[ link to this | view in chronology ]
Are you kidding me??
Let's put it this way, if you went to Starbucks (that happened to be a counterfeit Starbucks), and ordered your favorite coffee, and were handed a cup of dirty water, would you be upset? Would you want to return the dirty water and get your money back? What if they would not refund your money? Would this upset you, or would you think, "They have every right to sell their dirty water, and deceive people, and the real Starbucks, or the courts, shouldn't be able to shut them down."? That fact is, these people are criminals, performing illegal activities, period.
Counterfeiting and piracy cost legitimate businesses billions of dollars, are often linked to organized crime, and cost thousands of Americans their jobs.
[ link to this | view in chronology ]
Re: Are you kidding me??
So the Starbucks price is all about the water then? It certainly isn't to pay for talented baristas. They removed their tampers and expensive La Marzocca machines and replaced them with super-automated machines so that any idiot who can push a button can work there. When is the last time you saw latte art at Starbucks? You might as well get your espresso from a vending machine. Again, big brand name unjustifiably attached to a high quality image.
Stop worrying about brand names so much and let the products sell on their merits.
[ link to this | view in chronology ]
Re: Re: Are you kidding me??
You can find plenty of places in China that will sell you all the parts needed to build your own knockoff LV bag. The parts are probably all perfect too, right off the production line.
[ link to this | view in chronology ]
Stop SOPA
http://www.change.org/petitions/congress-do-not-pass-the-sopa-bill
[ link to this | view in chronology ]