Google Files Legal Challenge To Attorney General Jim Hood's Subpoenas

from the well,-well dept

This story sure escalated in a hurry. Following all the news of the MPAA's tight relationship with Mississippi Attorney General Jim Hood, Google has made a filing in a Mississippi federal court seeking seeking a temporary restraining order and an injunction against Hood's investigation. As the filing notes:

For the last eighteen months, the Mississippi Attorney General has threatened to prosecute, sue, or investigate Google unless it agrees to block from its search engine, YouTube video-sharing site, and advertising systems, third-party content (i.e., websites, videos, or ads not created by Google) that the Attorney General deems objectionable. When Google did not agree to his demands, the Attorney General retaliated, issuing an enormously burdensome subpoena and asserting that he now has “reasonable grounds to believe” that Google has engaged in “deceptive” or “unfair” trade practice under the Mississippi Consumer Protection Act (MCPA), which allows for both civil and criminal sanctions. The Attorney General did so despite having publicly acknowledged in a letter to Congressional leaders that “federal law prevents State and local law enforcement agencies from prosecuting” Internet platforms. The Attorney General took these actions following a sustained lobbying effort from the Motion Picture Association of America.

As Google explains, there is no legal basis for this investigation:

First, Section 230 of the Communications Decency Act (“CDA”) precludes state regulation of Google based upon the third-party content available on its services or the manner in which Google moderates that content. “Congress provided broad immunity under the CDA to Web-based service providers for all claims stemming from their publication of information created by third parties.” Doe v. MySpace, Inc., 528 F.3d 413, 418 (5th Cir. 2008).

Second, the First Amendment protects Google’s organization and display of third-party information (e.g., search results), prohibits retaliation for how it organizes and displays such content, and bars state action that limits public access to constitutionally-protected speech. As multiple courts have found, the state can no more tell a search engine what results to publish than it can tell a newspaper what editorials to run. See, e.g., Jian Zhang v. Baidu.com Inc., 10 F. Supp. 3d 433, 436, 438 (S.D.N.Y. 2014). Nor can the state “encourag[e] the suppression of speech in a manner which can reasonably be interpreted as intimating that some form of punishment or adverse regulatory action will follow the failure to accede to the official’s request.” Zieper v. Metzinger, 474 F.3d 60, 65-66 (2d Cir. 2007) (internal quotation marks omitted).

Third, the subpoena violates the Fourth Amendment by demanding information about conduct that is plainly lawful. “[I]nvestigations premised solely upon legal activity are the very type of ‘fishing expeditions’ that” the Supreme Court has held violate the Fourth Amendment and “do[] not pass muster under any standard.” Major League Baseball v. Crist, 331 F.3d 1177, 1187-88 (11th Cir. 2003) (citations omitted).

Fourth, much of the Attorney General’s subpoena is preempted by the Copyright Act or the Food, Drug and Cosmetics Act (“FDCA”). Many of the Attorney General’s inquiries concern copyright infringement—but copyright is exclusively a matter of federal law, which the Attorney General may not enforce and with which Google fully complies. See GlobeRanger Corp. v. Software AG, 691 F.3d 702, 705-06 (5th Cir. 2012). Similarly, the Subpoena seeks information about Google’s practices ten years ago with regard to advertisements relating to the importation of prescription drugs. But the FDCA regulates importation of prescription drugs and preempts enforcement actions not brought “by and in the name of the United States.” 21 U.S.C. § 337. omitted).

In short, Jim Hood is on a massive fishing expedition over things he doesn't understand, over which he has no jurisdiction, for issues where Google fully complies with the law. The filing further notes that, yes, there is bad content on the internet, but that Google actually is extraordinarily active in pushing it down in its search results and seeking to stop people from accessing that content. But, its voluntary efforts are very different from being required to change its search results via an order from a government official:

But if a state Attorney General can punish, irrespective of well-established federal law, any search engine or video-sharing platform whenever he finds third-party content he deems objectionable, search engines and video-sharing platforms cannot operate in their current form. They would instead have to pre-screen the trillions of websites and millions of videos on the Internet, blocking anything they had not yet reviewed from being publicly accessible so as to avoid the ire of even a single state or local regulator. This would “severely restrict the information available on the Internet,” Batzel v. Smith, 333 F.3d 1018, 1027-28 (9th Cir. 2003), precisely the opposite of the “unfettered” Internet the CDA and the First Amendment protect. The Attorney General may prefer a pre-filtered Internet—but the Constitution and Congress have denied him the authority to mandate it.

Google further lists out the various threats and statements Hood has made:

In several letters to Google, the Attorney General has falsely accused it of, among other things, “aiding and abetting” and even “encourag[ing] . . . illegal activity.” Id. Ex. 5 at 3. He has characterized Google as an “accessory before the fact” in criminal conduct, id. Ex. 2 at 1, asserted it has “no corporate conscience for the safety of its customers,” id. Ex. 17 at 1, and claimed that Google “facilitates and profits from numerous illegal online activities,” id. Ex. 17 at 2. See also id. Ex. 15 at 3 (page 1 of the draft letter). He has threatened to “take legal action to change [Google’s] behavior,” id. Ex. 2 at 3, outlining “[p]ossible [c]auses of [a]ction” against Google in a presentation to the National Association of Attorneys General (“NAAG”), id. Ex. 10 at 53-57, sending numerous requests for information, see, e.g., id. Exs. 1, 5, & 22, and a broad litigation hold notice, id. Ex. 8. The Attorney General has demanded in several meetings that Google pre-screen or block third-party content and search results that merely may involve illegal activity, even at the cost of burdening lawful, protected speech. See, e.g., id. Ex. 2 at 2; id. Ex. 22 at 2; id. Ex. 27 at 5:13-6:24, 7:16-8:14. He has even sought a “24-hour link through which attorneys general[]” can request that links to particular websites be removed from search results “within hours,” presumably without judicial review or an opportunity for operators of the target websites to be heard. Id. Ex. 5 at 3.

That last one is crazy. Hood is flat out demanding a tool for government officials to censor the internet, based solely on those officials' requests.

The Attorney General has cited no evidence at all of misconduct by Google to back up these inflammatory allegations. He has instead identified a handful of web pages among the trillions reflected in Google’s index, and a smattering of videos amongst the millions of hours watched every month on YouTube, and asserted that some of the content of those websites and videos (all created by third parties) is unlawful.... He has noted that advertising occasionally appears alongside the videos about which he complains.... And he has criticized some of Autocomplete’s algorithmically-generated predictions.

Whatever that says about the actions of those who created and developed the content about which the Attorney General complains, it in no way implies that Google has violated the law. Given the vast quantity of third-party content available on the Internet, it is no surprise that some small percentage of the information found via Search or posted on YouTube is inappropriate or unlawful. Statutes such as the CDA and DMCA accept the inevitability of problematic content online as the cost of a free and open Internet, and squarely immunize Google and other interactive service providers from liability arising from such third-party content.

Furthermore, Google debunks the notion that it has done nothing to deal with such sites:

Nevertheless, Google has worked to address the Attorney General’s concerns.... In response to his questions, Google provided over one-hundred pages of written answers detailing its policies and practices for voluntarily combating abuse across its services, and voluntary shared nearly 100,000 pages of supporting documents. YouTube engineers even created a custom reporting tool and trained the Attorney General’s office on how to use it so that they could report for expedited review and possible removal videos they deemed objectionable.... To date, over half a year later, the Attorney General has used this tool to report only seven videos.... Nor, to the best of Google’s knowledge, has the Attorney General filed any legal action against any of the actual creators of the specific underlying content to which he has objected. Google has also explained the applicability of CDA immunity and the DMCA safe-harbor provisions to services like Google, as well as the constitutional concerns raised by his demands

That part I bolded is the key. It shows the reality of the situation, which is that Hood isn't really trying to stop bad content online, no matter how many times he argues otherwise -- he's just attacking Google.

There's much more in the filing, including arguing that Hood is violating the First Amendment directly in his most recent subpoena to Google:

The Attorney General has made clear that he disagrees with how Google exercises editorial judgment in the composition of its search results and YouTube content, and wishes to force Google to adopt editorial judgments that he would prefer. For content he disfavors, he asks that Google censor from search results links to websites that are readily available on the Internet, regardless of whether any court has found them unlawful, and has even gone so far as to demand that certain search terms themselves be banned.... The Attorney General has also demanded that links to disfavored content be demoted in search rankings and marked with a warning to users.... Conversely, he has asked Google to promote favored content (e.g., Hollywoodapproved websites) by raising its standing in search results and indicating its favored status with an icon.... Such demands by a government official to displace a private party’s editorial judgment in order to favor certain speech or speakers over others strike at the heart of the First Amendment.

And, of course, just because some of the content targeted may not be protected, that doesn't relieve the First Amendment problems:

State enforcement actions targeting unprotected speech can violate the First Amendment by limiting the “public’s access to constitutionally protected matter.” Smith v. People of California, 361 U.S. 147, 153 (1959). A state may not penalize a bookseller for unknowingly offering obscene material because he would then “tend to restrict the books he sells to those he has inspected,” and the limits on his ability to inspect content would “tend to restrict the public’s access to [content] which the State could not constitutionally suppress directly.” .... Similarly, a state may not sanction a magazine for unknowingly publishing unlawful advertisements because “publishers cannot practicably be expected to investigate each of their advertisers,” and the risk of sanction could lead a publisher to reject advertisements that “could conceivably be deemed objectionable by the [government],” which would deprive the public of access to protected speech, and the potential advertisers an “avenue of access to the public.” MANual Enters., Inc. v. Day, 370 U.S. 478, 493 (1962).

There's a lot more in there, but those are some of the high points. Hood has been provoking Google (at the behest of the MPAA and others) for a long time. It appears that Google has hit back.

Filed Under: copyright, dmca, first amendment, fourth amendment, free speech, injunction, jim hood, secondary liability, section 230, subpoena, temporary restraining order
Companies: google, mpaa

Human Rights Groups Ask Senate To Reject Proposed Sex Trafficking Law That Strips Long-Held Protections For Website Owners

from the government-would-rather-create-new-crimes-than-stamp-out-the-old-ones dept

Various members of the US government are hoping to repeat the dubious success of shutting down Craiglist's adult ads by targeting Backpages.com. This has gone on for a few years at this point, with states' attorneys general and various legislators laying the blame for sex trafficking at the feet of the online classified ad service.

Rather than realize the service could be an ally in the fight against these criminals, law enforcement agencies -- along with like-minded government officials -- have spent a lot of time and money pursuing a total shutdown of the service.

Now, the Senate is considering the "SAVE Act" (Stop Advertising Victims of Exploitation Act)[pdf link], which was passed out of the House by a 392-19 vote earlier this year. The bill expands the definition of "trafficking" to include "advertising," amending the definition of this federal crime.

Worse, it strips away protections website owners who host third-party content have enjoyed for years. The summary provided by Congress.gov highlights proposed changes that will do damage to many more entities than its intended targets.

Shields from liability under such prohibition an Internet access service provider, browser provider, common carrier, telecommunications carrier, or other generic search or utility provider solely based on providing generic search or utility services.

Notably, website owners are excluded from these liability protections, basically eliminating Section 230 immunity for anything the government considers to be an "adult advertisement."

Requires anyone selling, commercially promoting, or placing an adult advertisement to: (1) verify the identity of each person purchasing advertisement space for, and each person depicted in, such advertisement; (2) verify that each person whose goods or services are advertised is not under age 18; (3) create and maintain individually identifiable records pertaining to each such person for at least seven years; and (4) affix to each adult advertisement a statement describing where such records may be located.

Not only will website owners now be held accountable for third-party content, they'll also be expected to police it to ensure nothing runs afoul of this broadly-worded law. Failure to do so could result in a five-year prison sentence.

The very obvious and extensive collateral damage of this legislation is pointed out in a letter to senators authored by a number of human rights organizations and trade associations. [pdf link]

We of course share the vital goal of ending human trafficking, of all kinds. Trafficking is an egregious crime. Congress should provide additional funding for desperately needed victims services, counseling, and community outreach as well as prosecutions under the strong federal law that already criminalizes the conduct of those who knowingly advertise such activity online.

However, the unfortunate fact is that this bill is overbroad, counterproductive, and would place unconstitutional burdens on the free speech and privacy rights of millions of Americans who have nothing to do with trafficking. S.2536 creates new and draconian federal criminal liability for websites and other online services that host content created by third parties, including both online and print publications, many of which are small businesses. Furthermore, not only does this raise serious free speech and privacy concerns, it will drive the truly bad actors – the traffickers – underground and overseas, while subjecting wholly innocent individuals to potential criminal liability for unknowingly running afoul of this sweeping law.

The letter also points out how the addition of new recordkeeping requirements will only serve to turn more law-abiding citizens into criminals -- and easy targets for cops and prosecutors who love easy "wins."

S.2536 does not require that the website operator, online service, or publication know or intend to host “adult advertising” content before imposing liability. If one of a site’s millions (or billions) of users were to upload a post or an image that fell under the bill’s broad definition and that site operator had not already collected a copy of the user’s driver’s license, the site operator would face a mandatory minimum penalty of $250,000 and up to 5 years in prison. The effects would be felt the hardest by smaller businesses, both online and print, for whom one single violation triggering the mandatory minimum penalty could very well mean bankruptcy, and would serve as a disincentive to new start-ups.

Thus, S.2536 would create obvious privacy concerns, as any reasonable operator would feel immense pressure to collect the government-issued photo ID of each of their users to guard against the potential that one of them might one day post lawful content covered by the bill.

The end result of this legislation won't be less trafficking, but rather, more criminals. Law enforcement resources will be diverted to investigate and prosecute site owners and third-party contributors, neither of which may be aware of the new regulations, much less what the government will decide is covered by the term "adult advertising" on any particular day, in any particular jurisdiction. Rather than contribute to the elimination of trafficking, this legislation will simply dump more people in prison and run more small companies out of business.

Will the Senate listen? Considering that opposing this bill puts you on the side of sex traffickers and child exploitation, the odds of this bill being rejected are very low. Hopefully, some sanity will be amended into the proposed bill before it goes up for a vote. But the previous margin of victory (392-19) suggests this will sail right through the Senate as well, possibly before anyone notices the numerous problems inherent in the legislation.

Filed Under: advertisers, liability, save act, secondary liability, section 230, trafficking

TRUSTe Pays Up $200k To Settle Charges Of 'Deceiving Consumers' Over Its Certification Of Sites

from the not-so-truste dept

TRUSTe, the organization whose seals of approval are used by many sites to prove that they're trustworthy, especially with regards to privacy practices, has just agreed to pay the FTC $200,000 and change its representations about how it goes about certifying various sites. In particular, the FTC claims that TRUSTe did not review sites frequently enough. Separately, there were some shenanigans over the fact that TRUSTe switched from being a non-profit to a for-profit operation in 2008, but let users of the seal still tell people that TRUSTe was some sort of non-profit (as many in the public have believed).

The FTC’s complaint alleges that from 2006 until January 2013, TRUSTe failed to conduct annual recertifications of companies holding TRUSTe privacy seals in over 1,000 incidences, despite providing information on its website that companies holding TRUSTe Certified Privacy Seals receive recertification every year.

In addition, the FTC’s complaint alleges that since TRUSTe became a for-profit corporation in 2008, the company has failed to require companies using TRUSTe seals to update references to the organization’s non-profit status. Before converting from a non-profit to a for-profit, TRUSTe provided clients model language describing TRUSTe as a non-profit for use in their privacy policies.

The proposed order announced today will help ensure that TRUSTe maintains a high standard of consumer protection going forward.  Under the terms of its settlement with the FTC, TRUSTe will be prohibited from making misrepresentations about its certification process or timeline, as well as being barred from misrepresenting its corporate status or whether an entity participates in its program. In addition, TRUSTe must not provide other companies or entities the means to make misrepresentations about these facts, such as through incorrect or inaccurate model language.

There is an interesting partial dissent from FTC Commissioner Maureen Ohlhausen, effectively challenging the issue with other websites still saying TRUSTe is a non-profit. While the issue is that TRUSTe was recertifying these websites, and thus should have said that they had to make the certification clear, Ohlhausen points out that it's wrong to blame TRUSTe for statements made by other sites and not by TRUSTe itself.

Unlike Shell and Magui Publishers, the statement that TRUSTe provided to its clients was indisputably truthful at the time. During the period in which TRUSTe required client privacy policies to state that TRUSTe was a non-profit, TRUSTe was, in fact, a non-profit. Once TRUSTe changed to for-profit status, it no longer required clients to state its non-profit status and actively encouraged clients to correct their privacy policies. TRUSTe did not pass to clients any false or misleading representations regarding its for-profit status. Nor was TRUSTe’s recertification of websites a misrepresentation of TRUSTe’s non-profit status to its clients; during recertification TRUSTe again clearly communicated its for-profit status to clients by requesting that its clients update their privacy policies. Because TRUSTe accurately represented its non-profit status to its clients, TRUSTe cannot be primarily liable for deceiving consumers under a means and instrumentalities theory.

This argument makes a lot of sense, and as someone concerned about secondary liability in a variety of places, it does seem wrong for the FTC to hold TRUSTe responsible for the conduct of third party sites, even as it was recertifying them. Either way, this settlement is a good reminder that just because there's a "trusted" certification on a site, it doesn't always mean the site is trustworthy...

Filed Under: certification, ftc, privacy policy, secondary liability
Companies: truste

Perfect 10 Loses Yet Another Copyright Lawsuit, Once Again Losing To Giganews

from the keep-setting-good-precedents dept

As we've noted in the past, Perfect 10 appears to be a company who's entire reason for being is to set good precedents in copyright law, by filing ridiculous lawsuits and losing. So many important copyright precedents have come out of Perfect 10 cases, including ones on fair use and secondary liability. Some have argued (with fairly detailed explanations) how Perfect 10 is not a porn publisher at all, but rather a pure copyright troll that makes a living off of suing. While it seems to always lose in court, the problem is that some companies just pay up rather than fight. Back in 2011, we noted that Perfect 10 had sued Usenet provider Giganews. Earlier this year, the court smacked down Perfect 10 on a number of issues. And now, the court has done so again, handing a complete and total victory to Giganews.

First up, the claims of direct copyright infringement. Since Giganews is an intermediary, no luck there. The judge, not surprisingly, relies heavily on the famous Netcom case, which said that a bulletin board/usenet system isn't liable for "incidental copies" made automatically by the computers as part of an effort done by a third party. Here, the court notes that nothing in what Giganews does makes it directly liable. Furthermore, the judge notes that, as is all too typical of Perfect 10, even though its arguments had been rejected earlier in court, the company just repeated the same wrong argument again this time. Not surprisingly, it didn't work. The company then tried a new theory, and it didn't work either, because it just turned into Perfect 10 repeating the same already rejected arguments:

Turning to the undisputed evidence before the Court, Defendants have met their burden to establish that Perfect 10 cannot prove causation for direct infringement as a matter of law. Indeed, on identical facts (then presented as allegations, now with evidence), Judge Matz and Judge Collins already so held....

[....]

Again, a claim for direct liability requires evidence that the Defendants directly or actively caused the infringement. Perfect 10’s continued insistence that Defendants allowed its subscribers to upload, download, and view infringing material is the stuff of indirect or secondary liability, not direct liability.

Four months after Judge Matz rejected each of the arguments Perfect 10 advances in opposition to this motion, Judge Collins reaffirmed that the evidence before the Court does not support a claim for direct infringement as a matter of law.... Faced with the same allegations discussed above and now set forth in the evidence before the Court, Judge Collins again held that such allegations were insufficient as a matter of law to support a finding of direct infringement because such facts fail to support a finding of direct causation.... However, Judge Collins permitted Perfect 10’s claim for direct infringement against Giganews to proceed solely on the newly alleged theory that Giganews “plac[ed] copies of copyrighted material from various internet locations onto its own servers, and not at the request of customers ... .” ...Judge Collins expressly rejected each of Perfect 10’s other theories of direct liability.

Although Perfect 10 repeats the arguments Judge Matz and Judge Collins already rejected, the record is devoid of any evidence to support the only theory of direct liability as to Giganews that survived the pleading stage. In the operative First Amended Complaint, Plaintiff alleged on information and belief that Giganews itself, by way of its employees, had uploaded infringing Perfect 10 images to the Usenet generally or Giganews’ servers specifically.... Though Judge Collins noted this was “not the strongest set of allegations,” Judge Collins held that it was at least sufficiently plausible to pass the pleading stage in light of the fact that another website, megaupload.com, had previously been found in criminal proceedings to have uploaded massive quantities of copyrighted materials to its own servers. ... After considerable discovery, there is simply no evidence to bear out that unlikely allegation.

Rather than point to any evidence that Giganews’ employees or agents themselves uploaded, downloaded, otherwise copied, displayed, or modified any work to which Perfect 10 holds a copyright, Perfect 10 rehashes arguments already considered and rejected. Namely, Perfect 10 once again argues that Giganews personally violated Perfect 10’s copyrights by allowing users to upload content to its servers and by obtaining and sending content to other Usenet servers through the peering process. But the conduct of third party Usenet subscribers does not support a claim of direct liability as to Giganews. The conduct of third parties is relevant, if at all, to a claim of secondary infringement (contributory or vicarious), not direct infringement. And Perfect 10 fails to articulate any meaningful difference between the evidence before the Court and its allegations that Giganews “program[s] [its] servers to distribute and download infringing conduct” and that Giganews “control[s] which materials are distributed to and copied from other third party servers,” which Judge Matz held insufficient as a matter of law to support a claim of direct infringement.

Okay, moving on to the question of indirect infringement. Once again, Perfect 10's argument is a complete and total flop. The court recognizes an important distinction that is almost always ignored by copyright maximalists looking to blame any platform that has some copyright infringement happening on its platforms: that you have to show that the platform is getting a benefit from that specific infringement, not from "people using the service in general for infringement." Perfect 10, not surprisingly, fails to persuade the court here:

Although the scope “draw” need not be substantial, Perfect 10 must still prove a direct causal link between the infringing activities at issue in this case and a direct financial benefit to Giganews. This action is a specific lawsuit by a specific plaintiff against a specific defendant about specific copyrighted images; it is not a lawsuit against copyright infringement in general on the Usenet. That is to say, the “direct financial benefit” requirement demands more than evidence that customers were “drawn” to Giganews to obtain access to infringing material in general. Perfect 10 must prove with competent evidence that at least some of Giganews’ customers were “drawn” to Giganews’ services, in part, to obtain access to infringing Perfect 10 material. Despite extensive discovery (which is now closed) the record lacks (and Perfect 10 does not identify) a single piece of evidence to that effect. Even if the scope of causation is expanded to the broader category of erotic images, there is no evidence that any customer was ever “drawn” to Giganews’ Usenet offerings to obtain access to erotic images. “There is no evidence that indicates that [Giganews’] customers either subscribed because of the available infringing [Perfect 10] material or canceled subscriptions because it was no longer available. While a causal relationship might exist between [Giganews’] profits from subscriptions and the infringing activity taking place on its USENET servers, [Perfect 10] has not offered enough evidence for a reasonable juror so to conclude.”

Instead, Perfect 10 points to evidence that there is a lot of copyrighted material on the Usenet and concludes that the availability of copyrighted material in general constitutes a draw. If anything, however, Perfect 10’s evidence that the Usenet is awash in copyrighted material only supports the conclusion no reasonable juror could find a direct causal connection between infringing Perfect 10 content and Giganews’ profits. For example, if as Perfect 10 asserts, “staggering amounts of copyrighted works owned by move producers and television networks are available” on Giganews’ servers ..., what evidence is there that any Giganews subscriber purchased Giganews’ services in part because of the relatively miniscule number of Perfect 10 images available on Giganews’ servers? In short, there is none. But if the universe of infringing material on the Usenet is as broad and diverse as Perfect 10 suggests, any conclusion that subscribers were “drawn” to Giganews’ services as a result of the availability of Perfect 10 content would be pure speculation. Speculation is not evidence of causation.

Also, here's a tip: don't misrepresent the rulings of other judges in your case. Courts don't fall for it, and they don't like it:

Perfect 10 also argues that Judge Matz and Judge Collins “have already ruled that the monthly fee charged by Giganews to its users to access allegedly infringing material constituted a direct financial benefit.” ... Neither Judge Matz nor Judge Collins so held. In his order on Defendants’ first motion to dismiss, Judge Matz emphasized the importance of the procedural posture of the in holding that Perfect 10 had adequately alleged a claim for vicarious infringement.... Indeed, Judge Matz distinguished the motion to dismiss from Ellison v. Robertson, supra, and Netcom, supra, both of which involved summary judgment after an ample opportunity for discovery.... In fact, Judge Matz correctly observed that the operative question is whether there is a “causal relationship” between Perfect 10’s infringing content and Giganews’ subscription revenues.... Judge Collins adopted Judge Matz’ analysis and found that the same allegations were sufficient to advance the action past the pleadings stage. However, after full discovery, the evidence does not bear out Perfect 10’s allegations that the availability of its copyrighted content is a draw for Giganews’ customers, and summary judgment in Giganews’ favor is consistent with Judge Matz’ and Judge Collins’ liberal assessment of the sufficiency of the pleadings.

The court also (as others have before) notes that Perfect 10 seems to prefer sending confusing and incomplete DMCA notices that are not valid under the law. In fact, they often appear to be designed on purpose to make it difficult to comply, thus giving the company a reason to file a lawsuit. In this case, this harms Perfect 10 because it takes away any claim of Giganews having actual knowledge of infringing files.

As Judge Collins already observed, however, Perfect 10’s practice of sending Giganews screenshots of a newsreader window along with instructions “to conduct searches of specific names within certain newsgroups” and instructing Giganews “that all of the messages yielded by those searches on a certain date contained infringing material” ... fails to substantially comply with the requirements for a DMCA takedown notice. In order to comply with the DMCA (and therefore confer actual knowledge on the recipient), a takedown notice must identify “the material that is claimed to be infringing or to be the subject of infringing activity and that is to be removed or access to which is to be disabled, and information reasonably sufficient to permit the service provider to locate the material.”.... (emphasis added). “The goal of this provision is to provide the service provider with adequate information to find and address the allegedly infringing material expeditiously.” ....

Perfect 10’s takedown notices, which “point[] to a list of search results, not to any material in particular,” ... obstruct this goal. As Judge Collins observed, “the material accessible through the Usenet is in a constant state of flux. As such, there is no certainty that any particular search will yield the exact same results at different times. Searches moments apart could yield different results.” .... But even if the results of such searches were consistent, Perfect 10’s search-screenshot takedown notices “requires a Usenet provider to compare its search results to Plaintiff’s search results in an onerous side-by-side, line-by-line manner” ... defeating the service provider’s ability to “find and address the allegedly infringing material expeditiously.” Viacom Int’l, Inc. v. YouTube, Inc., 940 F.Supp.2d at 115. This is particularly true where, as here, Perfect 10’s voluminous takedown notices would require a manual, line-by-line comparison of countless individual search results for each notice. And even Perfect 10’s evidence revealed that their own search-criteria method “yielded some messages that were non-infringing.” ... These aspects of Perfect 10’s takedown notices are particularly problematic because a takedown notice under the DMCA must also include “a statement that the complaining party has a good faith belief that the use of the material in the manner complaint of is not authorized by the copyright owner, its agent, or the law.”... But in the absence of any assurance that Giganews’ search results would yield results consistent with Perfect 10’s search, or that Perfect 10’s search results were limited to infringing material, it would be impossible to make that necessary representation in good faith.

In fact, the court highlights that Perfect 10's CEO Norman Zada more or less admits that he could provide Giganews with actual details of infringing content very easily, but has chosen not to.

In fact, Perfect 10’s CEO, Norma Zada recently declared under oath that, using the Message-ID extraction feature, he was able to extract the Message-IDs for 19 pages of search results.... Using that same method, Zada estimated it would take less than 15 minutes to extract the Message-ID’s for “more than 90% of the infringing Perfect 10 content that Perfect 10 is aware of on Defendant’s servers.” ... And in deposition, Zada testified it is “actually very easy for Perfect 10 to collect message IDs to put into a DMCA notice” and that Perfect 10 has now extracted Message IDs for “approximately 54,000 Perfect 10 messages,” but Perfect 10 refuses to submit a DMCA takedown notice using that information

Rather, the court notes that whenever Giganews does get Message IDs, it does, in fact, remove that content quickly, as is required. In fact, this becomes clear from Perfect 10's own evidence in the case.

So we get another Perfect 10 loss in court, and another good ruling for intermediaries not responsible for either direct or indirect infringement. I doubt it will get Perfect 10 to stop suing others, but hopefully others won't be so quick to settle when they see how frequently the company loses.

Filed Under: copyright, direct infringement, indirect infringement, nathan zada, secondary liability
Companies: giganews, perfect 10

Sending Liability Up The Stack: Domain Registrars Potentially Liable For Infringement By End Users

from the tertiary-liability dept

For quite some time now, we've been concerned about the continued expansion of "secondary liability" concepts, adding more and more liability for copyright infringement to parties who are often far removed from any actual infringement. There are two major concerns with this. First, putting liability on one party for the actions of another just seems generally problematic. But, perhaps more importantly, when you put potential liability on an unrelated party, the end result is almost always excessive policing in a manner that hinders or entirely blocks perfectly legitimate activity and speech.

That's why a recent court ruling in Germany is so problematic. It's the followup to an earlier ruling that found a domain registrar, Key-Systems, liable for actions done by the users of a torrent tracking site H33T. H33T just hosted the torrent (which, we should remind you, is not the actual infringing file), and some users used that tracker to torrent the album Blurred Lines. When H33T failed to respond to a takedown notice, Universal Music went after the registrar, and the court said it was Key-System's responsibility to stop the infringement. Of course, the only way for the registrar to do that is to yank the entire domain.

The case was appealed, but the appeals court upheld the lower court ruling. Even though the registrar pointed out (accurately) that it had no way of knowing if the torrent was actually infringing, the court said that the registrar was responsible for assuming it must be infringing once it had contacted the domain owners and not received a response. That's an interesting shifting of the burden of proof. The court also seems unconcerned that the only way the registrar can remedy the situation is to take everything down, saying that if the website didn't want this to happen it should have responded promptly to the takedown notices it had received.

Much of this seems to focus on assuming guilt unless one can prove innocence, and further believing that it's somehow "obvious" to recognize when someone is infringing on copyrights. As the Universal Music lawyer tells TorrentFreak in the link above, the company is quite excited about this new power, and will "have this in mind when looking at other domains."

Filed Under: copyright, germany, liability, registrars, secondary liability, tertiary liability
Companies: h33t, key systems

Megaupload Say US Gov't Is Trying To Steal Assets Based On Crimes That Are 'Figments Of The Gov't's Boundless Imagination'

from the civil-fofeiture dept

We've obviously been covering the Megaupload case for many years, noting how surprisingly weak the case against Megaupload and its execs was. The case has been based mostly on a non-existent belief in some form of secondary criminal liability for copyright law that doesn't exist (there is secondary liability in civil copyright law, but not in criminal copyright law -- and while there is "aiding and abetting" in criminal law it's very different and almost certainly doesn't apply here). While part of ACTA tried to create a secondary liability for criminal copyright law, ACTA has not gone into force, since most countries rejected it.

Separately, we've also been talking quite a bit about the government's widespread abuse of civil asset forfeiture, which is basically legalized theft by the US government, often done separately from any charges against people or businesses for crimes. These cases end up with funny names -- the US government vs. some sort of "thing" like the infamous United States v. Article Consisting of 50,000 Cardboard Boxes More or Less, Each Containing One Pair of Clacker Balls, which, yes, is real. Without getting too much into the legal weeds, there are really two separate processes: seizure and forfeiture. Seizure is basically when law enforcement grabs the stuff and hangs onto it for a while. Technically, after seizure, the government is supposed to either give the stuff back... or then file for forfeiture, which is when those crazily named lawsuits come into play.

In the Megaupload case, the government seized a bunch of stuff (all of which is still in New Zealand and Hong Kong), but over in the US, the government has made a move for civil asset forfeiture, leading to a separate civil asset forfeiture case named United States of America v. All Assets Listed In Attachment A, And All Interest, Benefits, And Assets Traceable Thereto. Catchy, right? But the reality is that it's the US government trying to claim "hey, we get to keep everything we took from Kim Dotcom and Megaupload, even though we haven't actually gone through and tried him or the company yet and there's no conclusive determination of guilt, we're saying that his property is guilty and we get to keep it and buy some toys with it."

Dotcom and Megaupload are now asking for that civil forfeiture process to be dismissed, or at the very least put on hold until after the criminal cases is resolved, for obvious reasons. The full filing (pdf) is worth reading -- and once you understand what we wrote above, it should mostly make sense. Basically, Dotcom and Megaupload are pointing out that the whole criminal case is based on a very questionable interpretation of the law, and then that the attempt at forfeiture is just an even more questionable attempt to not just pile on, but to get to keep everything the US government took from Dotcom/Megaupload based on those questionable theories.

Nearly three years ago, the United States Government effectively wiped out Megaupload Limited, a cloud storage provider, along with related businesses, based on novel theories of criminal copyright infringement that were offered by the Government ex parte and have yet to be subjected to adversarial testing. Thus, the Government has already seized the criminal defendants’ websites, destroyed their business, and frozen their assets around the world—all without benefit of an evidentiary hearing or any semblance of due process. Without even attempting to serve the corporate defendants per the Federal Rules of Criminal Procedure, the Government has exercised all its might in a concerted, calculated effort to foreclose any opportunity for the defendants to challenge the allegations against them and also to deprive them of the funds and other tools (including exculpatory evidence residing on servers, counsel of choice, and ability to appear) that would equip a robust defense in the criminal proceedings.

But all that, for the Government, was not enough. Now it seeks to pile on against ostensibly defenseless targets with a parallel civil action, seeking civil forfeiture, based on the same alleged copyright crimes that, when scrutinized, turn out to be figments of the Government’s boundless imagination. In fact, the crimes for which the Government seeks to punish the Megaupload defendants (now within the civil as well as the criminal realm) do not exist. Although there is no such crime as secondary criminal copyright infringement, that is the crime on which the Government’s Superseding Indictment and instant Complaint are predicated. That is the nonexistent crime for which Megaupload was destroyed and all of its innocent users were denied their rightful property. And that is the nonexistent crime for which the Government would now strip the criminal defendants, and their families, of all their assets.

Beyond the issues related to the basic secondary liability for criminal copyright infringement, the filing further points out that the government doesn't even show that any of the "criminal" infringement took place within the US -- and the Copyright Act only applies in the US.

Nearly three years ago, the United States Government effectively wiped out Megaupload Limited, a cloud storage provider, along with related businesses, based on novel theories of criminal copyright infringement that were offered by the Government ex parte and have yet to be subjected to adversarial testing. Thus, the Government has already seized the criminal defendants’ websites, destroyed their business, and frozen their assets around the world—all without benefit of an evidentiary hearing or any semblance of due process. Without even attempting to serve the corporate defendants per the Federal Rules of Criminal Procedure, the Government has exercised all its might in a concerted, calculated effort to foreclose any opportunity for the defendants to challenge the allegations against them and also to deprive them of the funds and other tools (including exculpatory evidence residing on servers, counsel of choice, and ability to appear) that would equip a robust defense in the criminal proceedings. But all that, for the Government, was not enough. Now it seeks to pile on against ostensibly defenseless targets with a parallel civil action, seeking civil forfeiture, based on the same alleged copyright crimes that, when scrutinized, turn out to be figments of the Government’s boundless imagination. In fact, the crimes for which the Government seeks to punish the Megaupload defendants (now within the civil as well as the criminal realm) do not exist. Although there is no such crime as secondary criminal copyright infringement, that is the crime on which the Government’s Superseding Indictment and instant Complaint are predicated. That is the nonexistent crime for which Megaupload was destroyed and all of its innocent users were denied their rightful property. And that is the nonexistent crime for which the Government would now strip the criminal defendants, and their families, of all their assets. Because the Government’s Complaint improperly grasps for assets derived from extraterritorial conduct, it falls outside the subject-matter jurisdiction of this Court.

“For the Copyright Act to apply, ‘at least one alleged infringement must be completed entirely within the United States.’” Elmo Shropshire v. Canning, 2011 WL 90136, at *3 (N.D. Cal. Jan. 11, 2011) (quoting Los Angeles News Serv. v. Reuters Television Int’l, Ltd., 149 F.3d 987, 990-91 (9th Cir. 1998)); see also Columbia Pictures Indus., Inc. v. Fung, 2009 WL 6355911, at *8 (C.D. Cal. Dec. 21, 2009) aff'd in part as modified, 710 F.3d 1020 (9th Cir. 2013) (plaintiffs must show “that United States users either uploaded or downloaded copyrighted works”). Tellingly, the Complaint and the Superseding Indictment together fail to identify a single instance in which an act of infringement—particularly an unauthorized upload or download—occurred entirely within the United States.

Instead, the Complaint plainly accuses foreign activities that fall outside the scope of the Copyright Act. The Government describes Megaupload as “an international criminal enterprise,”..., and “a worldwide criminal organization,”.... Other allegations reference foreign citizenships, foreign company registrations, foreign employees, foreign bank accounts, foreign assets, and computer servers located “around the world.” .... Indeed, the reality is that Megaupload’s activities—its users, its operations, its uploadings, and its downloadings—spanned the world at all relevant times. Yet the Complaint is seeking forfeiture without specifying the location of any infringement or confining itself to U.S. borders.

Then it gets deep into that attempt by the "boundless imagination" of the US government to create secondary criminal liability where it does not exist.

The Supreme Court has recognized that, in the civil context, secondary copyright infringement liability may obtain based on uncodified “common law” doctrines. See MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 930, 937 (2005). Federal crimes, in contrast, are “solely creatures of statute.” Liparota v. United States, 471 U.S. 419, 424 (1985)....

In fact, there is no such crime. Strikingly, the criminal copyright infringement statute, 17 U.S.C. § 506(a), says nothing whatsoever about secondary liability. See, e.g., Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 434 (1984) (“The Copyright Act does not expressly render anyone liable for infringement committed by another.”). The statute does not state that criminal liability can be predicated upon theories of secondary liability, nor does it contemplate that the reach of criminal liability is to be coextensive with civil liability. Because the Government’s proposed theory of secondary criminal copyright infringement is not codified, it is unknown to federal law—and it is no basis for this Court to assert jurisdiction.

Indeed, a theory of secondary criminal copyright infringement or any species thereof, including aiding and abetting through cloud storage case, would be unconstitutional under the void-for-vagueness doctrine. “A penal statute must define the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibited and in a manner that does not encourage arbitrary and discriminatory enforcement.” Connally v. General Construction Co., 269 U.S. 385, 391 (1926). If the Government’s theory takes hold, then ordinary people and legal scholars alike will be left guessing where civil secondary copyright infringement ends and criminality begins, particularly in an era when automated file transactions and “foot faults” faced by high-volume providers of online services are routine.

In a footnote, it also points out that Megaupload likely isn't even subject to civil secondary infringement claims, let alone criminal ones:

The Complaint’s allegations would not even satisfy the civil standards for secondary infringement, for cloud-storage technology is shielded from civil liability by the Sony doctrine, which forbids imputing liability in the context of dual-use technologies. See Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984). Likewise, online service providers deserve protection against civil liability that is based on theories of constructive notice. See Religious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F. Supp. 1361 (N.D. Cal. 1995).

Furthermore, the ruling points out that the DMCA did not codify secondary liability, but, rather, did the opposite: it sought to establish standards to protect service providers from secondary liability for copyright infringement.

Thus, Congress not only declined to codify secondary liability, but further expressed its intention to protect service providers against even “monetary relief” in the civil context: it follows a fortiori that Congress did not want secondary copyright infringement to serve as a trigger for criminal punishment. The Government’s secondary criminal theory finds no traction “without rewriting the statute: an act the Congress, but not this court, can undertake.”

As for the attempt to mix and match to pretend that this is "aiding and abetting" and that aiding and abetting is the equivalent of secondary liability for criminal copyright infringement, no dice:

But that is no conceivable basis for criminal prosecution, much less resulting forfeiture. Congress specifically removed from the Copyright Act language about aiding and abetting criminal infringement. See Irina D. Manta, The Puzzle of Criminal Sanctions for Intellectual Property Infringement, 24 Harv. J.L. & Tech. 469, 481 (2011) (“Several years later, countering what had been a trend of expansion in the area of criminal sanctions, the Copyright Act of 1976 eliminated the provisions for aiding and abetting . . .”) Judicial reinsertion of the deleted language, particularly in the criminal context, would chill innovation, creating the prospect of criminal sanctions despite, for instance, compliance with express DMCA safe harbors. Even assuming arguendo that such a criminal prosecution might ever be permitted, neither 18 U.S.C. § 2323 nor 18 U.S.C. § 981 authorizes civil asset forfeiture for proceeds traceable to aiding and abetting criminal conduct. There is, accordingly, no jurisdiction for entertaining a request for civil forfeiture as pleaded here.

The filing also points out that since the property is still in Hong Kong and New Zealand, the US can't use civil forfeiture procedures against it anyway as that's outside the jurisdiction for such "in rem" procedures.

The Fourth Circuit holds that a district court does not have in rem jurisdiction unless it has “exclusive custody or control” over the property at issue. R.M.S. Titanic, Inc. v. Haver, 171 F.3d 943, 964 (4th Cir. 1999) (“Only if the court has exclusive custody and control over the property does it have jurisdiction over the property”). Exclusive custody and control obviously do not exist over the foreign assets at issue here. Nor does this Court have constructive possession over the property. The “fiction” of constructive possession requires that the Court possess some part of Claimants’ assets. R.M.S. Titanic I, 171 F.3d at 964. Yet no portion of the assets sought by the Government resides in this district.

On top of everything else, the government doesn't even properly make a single claim of copyright infringement, with all of the necessary attributes of such a claim:

Missing from the Government’s pleadings are specifics about, e.g., (i) what works are at issue; (ii) whether those works are registered in the United States; (iii) whether those works were uploaded or downloaded and stored in the United States; (iv) which end users performed the infringing acts; (v) whether the end users acted with the intent to violate United States copyright law and (vi) when the alleged acts of infringement occurred (and whether they fell within the Copyright Act’s five-year statute of limitations). 17 U.S.C. § 507(a). The Complaint does not contain a single instance of infringement as to which all of the requisite facts have been pleaded.

The closest the Complaint comes to these specifics is mentioning that Dotcom distributed a link to an unnamed “musical recording” by “50 Cent.” ... The Complaint does not allege the name of the recording; its copyright registration number; the authorization status of link; whether Dotcom properly purchased the recording; who uploaded the file to create the link; who (if anyone) downloaded the file from the link; where any uploads or downloads occurred; or where Dotcom was geographically when he distributed the link. The Complaint does provide a date of distribution (December 3, 2006) but that date falls more than five years before the first Criminal Indictment, well outside the five-year statute of limitations set by 17 U.S.C. § 507(a).

And of course, for it to be criminal, it would have to be willful, and yet (once again) the US government fails to do anything to show how any of the infringement was willful. Specifically, as we've noted in other similar cases, the government would have to show that the users of Megaupload were both infringing willfully and for profit, and that the execs of Megaupload were actively aiding and abetting -- knowing that the end users were doing so willfully. Here the government is doing the same thing that's been done in other cases (without success) arguing that the users are infringing and the site is profiting, and thus it's both willful and for profit, but that's combining different people and different actions in a manner that the law does not accept.

On top of all of that the filing questions why the government is seeking to seize everything. Not only has it not shown a reason to seize any of the assets, it appears to be arguing that all of the proceeds from Megaupload were illegal and thus can be taken by the US government.

While this is a separate action from the other Megaupload situations we've covered -- regarding the criminal case in the US and the extradition attempt in New Zealand -- it certainly does a pretty good job laying out the significant weaknesses in the overall case.

Filed Under: aiding and abetting, asset forfeiture, civil asset forfeiture, copyright, criminal copyright, kim dotcom, secondary liability, seizure
Companies: megaupload

Judge Adjusts MP3Tunes Ruling, Blasts Everyone

from the some-good,-some-bad dept

We've been following Capitol Records' (EMI) lawsuit against MP3Tunes and Michael Robertson for a long time now, in part because the lawsuit has been going on forever, with lots of back and forth (and it's still at the district court level!). Back in March, the jury hit Robertson with a bill for over $40 million for his personal involvement with MP3Tunes. As we noted, there were plenty of issues with the ruling, especially with the idea that MP3Tunes was "willfully blind" in creating its music locker. Robertson challenged many of the jury's findings, and we noted that the most important one was the willful blindness.

The judge, William Pauley, has now ruled and it's a mixed bag of just about everything, including the judge berating both parties for their approach to this lawsuit. On the whole, Robertson still loses big time, but not quite as big as before. And, on the issue we found most important -- willful blindness -- the judge has overruled the jury, noting that under the standard in the Viacom v. YouTube case, MP3Tunes was not willfully blind (except for one track where they had been alerted to an infringing copy). That's big and very important, given the potential chilling effects the willful blindness ruling would have had on other startups in the digital locker space.

Red flag knowledge requires awareness of facts that would have made specific instances of infringement objectively obvious to a reasonable person.... General knowledge is insufficient. For example, knowledge that a high percentage of content on a domain is infringing does not establish actual or red flag knowledge of particular instances of infringement.... In this case, MP3tunes lacked even general knowledge. Even if MP3tunes tracked domains posting infringing files, a fact not in evidence..., MP3tunes would still need to investigate how much content the domain hosted before it could calculate what percentage was infringing.

To ascribe red flag knowledge to MP3tunes because it was possible for MP3tunes to research and identify other instances of infringing content hosted by these domains and sideloaded by users would "mandate an amorphous obligation to 'take commercially reasonable steps' in response to generalized awareness of infringement." ... But the DMCA imposes a duty on providers to track repeat infringement by users, not third parties....

The same reasoning disposes of the willful blindness argument. Imputing knowledge to MP3tunes would impose an obligation to affirmatively monitor content, which would contravene section 512(m)'s clear instruction that no such obligation exists.... Therefore, Robertson's motion for judgment as a matter of law is granted as to his liability for secondary infringement of tracks sideloaded by users from these domains.

This is the good news from the ruling. Robertson also more or less won on the issue of whether or not the cover art images that showed up in MP3Tunes were infringing. That was one of the many ridiculous side notes in the whole thing.

One other thing that turned out somewhat well was on the question of whether some of the penalties given to Robertson by the jury were unconstitutionally excessive. This is a claim that has previously been tried (unsuccessfully) in the famed Jamie Thomas Rasset and Joel Tenenbaum trials. But here, it actually worked somewhat. The court goes through the different factors to determine if a monetary award is excessive, given the actual harm, and concludes:

Viewed holistically, the punitive damages award violates due process.

Still, the judge argues there's plenty of reasons to punish Robertson, just not to the punitive damages tune of $7.5 million as the jury originally decided. The court reduces that to $750,000, but offers EMI the chance to hold yet another trial just over this issue (which would only add yet another chapter in this incredibly long saga). And of course, none of this even touches on the possibility of appeals (from both sides), which may still happen...

However, there's plenty of worrisome aspects to this new ruling as well. After the willful blindness issue, our biggest concern was the tertiary liability claims that EMI was making against Robertson. That is, we've now seen that secondary liability is a possible for copyright infringement (i.e., you can be guilty for someone else's infringement), even though that makes little sense. However, in this case, EMI advanced an even more tenuous argument: that Robertson was tertiarily liable for MP3Tunes' secondary liability of its users direct infringement. Unfortunately, the judge says this is fine, arguing that while the judge in the Napster case rejected such a theory, the judge in the Limewire case accepted it, and thus "tertiary liability" is a perfectly reasonable thing. That's going to have some serious chilling effects -- just wait and see.

The court also makes one interesting note concerning the Aereo ruling. EMI sought to use the Aereo ruling as evidence that MP3Tunes was guilty of "public performance" of the works as well, but the judge (thankfully) shut that down, noting that the Supreme Court in Aereo was clear that the ruling only applied narrowly to that specific case:

Plaintiffs also argue that the Supreme court's opinion in Aereo establishes that the third-party websites performed the work publicly. But the Supreme Court expressly excluded "novel issues not before the Court, as to which 'Congress has not plainly marked [the] course.'" ... Because the third-party domains here are not "substantially similar" to a community antenna television provider, they are beyond Aereo's reach.

Phew. Aereo bullet dodged there, for now.

Then we get around to the berating. The judge gets on the EMI execs' cases for how they treated the case, and their ongoing refusal to reveal the dates of the releases of various songs, despite being asked repeatedly. But the real slamming comes for Robertson, who apparently put on quite a show on the witness stand. While that may work in Hollywood movies, or made-for-CNN trials, it doesn't often work in real life, and it appears not to have worked here. The judge's own description of Robertson's appearance indicates that no one bought the performance at all:

This Court observed Robertson's demeanor on the witness stand. No transcript can capture his whole affect; you really had to be there.

The judge then reposts Robertson's somewhat lengthy and bizarre discussion of childhood abuse, which seemed to serve no purpose other than to (try to) tug at the heartstrings of the jury. The court (and the jury) were not impressed:

This seemingly rehearsed, five-minute fable-like narrative left the jury nonplussed and Plaintiffs' counsel shell-shocked. It was a dramatic presentation. Even if true, Robertson's decision to spin this yarn backfired on him. The jury saw it for what it was--a transparent attempt to tug at their heartstrings. Plainfiffs' counsel failed to appreciate what the jury grasped and reflexively moved for a mistrial claiming unfair prejudice. But Robertson's manipulative conduct only prejudiced him and that prejudice was not unfair. In denying Plaintiffs' motion, this Court observed "[j]urors see through performances, and the Oscars are over for this year." The jury's verdict demonstrated that this Court's observation was spot on.

Ouch.

Filed Under: copyright, michael robertson, red flag knowledge, secondary liability, tertiary liability, willful blindness
Companies: capitol records, emi, mp3tunes

'Dietary Supplement' Company Tries Suing PissedConsumer, Citing Buyer's Agreement To Never Say Anything Negative

from the good-thing-we-never-bought-anything-from-roca-labs dept

Roca Labs is a company that describes itself as a manufacturer of "dietary supplements" some of which they label with highly questionable claims that I imagine would not be supported by anything the FDA would consider to be credible evidence. In particular, they have something called "Gastric Bypass Alternative" which claims to help people lose weight -- though I would treat such claims skeptically without further proof. Indeed, it appears that many of Roca Labs' buyers are not happy about it. The Better Business Bureau gives Roca Labs an F grade due to the large number of complaints, many of which remain unresolved. Meanwhile the site PissedConsumer also has a bunch of complaints about Roca Labs and its products -- and it appears that the PissedConsumer page ranks rather highly on Google for searches on Roca Labs. Roca Labs is -- apparently -- not happy with that.

So it has now sued the parent company of PissedConsumer, Consumer Opinion Corp, trying to get the reviews taken down. The lawsuit is worth reading. It claims that PissedConsumer is engaged in "deceptive and unfair trade practices" and that part of this is... because customers of Roca Labs agree to never say anything negative about the company.

Roca sells its products directly to the public and in exchange a discounted price, Roca's customers agree under the terms and conditions of said purchase that regardless of their outcome, they will not speak, publish, print, biog or write negatively about Roca or its products in any forum.

Of course, any such agreement is of questionable legality. However, we've certainly been seeing a lot of these questionable "no negative reviews or you pay" agreements showing up lately.

But, you say, PissedConsumer isn't the issue here, right? After all, the company never agreed to those conditions, even if the buyers did agree to them (whether or not they're legally sound). Roca is trying to get around that by arguing that because it has this clause and because PissedConsumer urges angry consumers to complain, the company is "tortiously interfering" with Roca's business because it's encouraging people to break the agreement. I'm not joking.

Defendants deliberately and tortiously interfere with Roca Lab's customers by encouraging them to breach their customer agreement with Roca as Defendants author or co-author false, malicious and negative posts about Roca that are published on their subject website and Twecred to Twitter's 271 million users.

Where to start? First of all, no. Almost everything there is ridiculous. Presenting a platform for people to express their own opinions is not encouraging them to break any contract (which, again, is of dubious legality in the first place). Second, the site is not authoring or co-authoring the posts. Third, there's no evidence that anything being posted is "false." Fourth, what does Twitter's total user base have to do with anything? It appears that @PissedConsumer's account has a few thousand followers.

None of this matters anyway, because even if any of the other arguments made sense (and none of them seem to make much, if any, sense) PissedConsumer is clearly well protected by Section 230 of the CDA, which protects websites from the actions of their users. And, of course, PissedConsumer and its legal team are well aware of all this having hit back at previous bogus legal threats in the past. I don't expect Roca Labs will get very far with this complaint. However, if you'd like to see which complaints Roca Labs especially wants deleted, check page four of the complaint below, where the company conveniently lists out the statements it doesn't like. And, because they're so wrong on just about every other legal claim, it seems worth noting that many of them are clearly statements of opinion, rather than anything that would be clearly defamatory anyway (and if they were defamatory the company would need to go after those individuals who made them in the first place, rather than the company hosting the content).

Filed Under: dietary supplements, gastric bypass alternative, opinion, pissed consumer, reviews, secondary liability, section 230
Companies: consumer opinion corp., pissedconsumer, roca labs

Angry Lawyer Sues Wordpress Because Someone Set Up A Website Mocking Him

from the a-fool-for-a-client dept

What's that saying about a lawyer who represents himself? Yes, well, consider the case of lawyer Jeffrey Wilens, representing himself pro se, in a "trademark" lawsuit filed against Automattic, the company better known for WordPress, the content management system/hosting service that a large percentage of the internet now uses. Wilens appears to have someone who doesn't like him very much, who set up a bunch of websites using Wilens' name and the name of his legal practice, Lakeshore Law Center. Wilens is claiming that this is trademark infringement, based on a trademark on his name and the name of his law practice. Even if he were just going after whoever made the page, this would be a massive long shot. As we've covered for years, so-called "gripe sites" are not considered trademark infringement. There's no likelihood of confusion, they're almost never commercials, and shutting them down would often violate the First Amendment. But Wilens is pointing his legal guns not just at whoever made the site, but also at Automattic for allowing the site to be created and hosting it (he also sued Google, but recently dismissed the company from the case).

Automattic has sought to dismiss the case, which is scheduled to go to trial shortly, pointing out that there simply is no legitimate trademark claim against Automattic at all. The filing is worth reading as it lays out, quite clearly, why this case is a joke. There is no trademark infringement in the first place, and even if there was, it wouldn't be on Automattic. It cites numerous cases that have shown that gripes sites are not trademark infringement and that registrars are not liable if someone registers a trademarked name. It also highlights how there's clearly no direct trademark infringement, and Wilens doesn't allege secondary (contributory) trademark infringement, and even if he did, it still wouldn't be applicable.

Wilens hit back with a somewhat amusing reply, insisting that all of the caselaw that goes against him is "different" because he's pretty damn sure that whoever is making these sites is a competitor, and thus, it must be trademark infringement:

Defendants insist the offending websites are just criticism or “gripe” websites which are not covered by trademark law. But we don’t know that. It is quite possible that Doe No. 1 is a competitor of Plaintiff or acting on behalf of a competitor and not a former client. The FAC alleges Doe No. 1 created the websites to divert search engine traffic by clients and potential clients of Plaintiff from Plaintiff’s websites to the websites controlled by Doe No. 1.... Until Doe No. 1’s identity can be uncovered, and he is shown not to be a competitor, this allegations stands.

Of course, as we've discussed elsewhere, in many courts, the burden is quite the opposite. First you have to prove that a violation of the law occurred before you get to uncover the anonymous person. Even so, Wilens seems to be basing his claims on a whole bunch of hypotheticals and "maybe possiblys":

Defendants may argue the websites do not seem to contain any links to Doe’s own website, but it is possible that Doe reaches out to visitors by email or through the blogs’ message boards. There is a comments features to these websites. While public comments seem to be disabled that does not mean there have been no private communications. Before Plaintiff is allowed to conduct discovery, there is no way to know what communications have gone on between visitors and Doe No. 1, although Defendants may be in possession of that information.

However, as Automattic then notes in its reply, Wilens still seems to be totally misreading the case law -- and completely changing his story. While he now insists that it could be trademark infringement because it was done by a competitor, earlier in the lawsuit, he insisted that it was a former client:

Mr. Wilens has previously represented to this Court, under penalty of perjury, that he believes the websites to have been posted by the defendant in a lawsuit in which he was counsel for the plaintiff: “There are a few former defendants I suspect might be the anonymous poster on the website, course, but I am not going to name Doe without some supporting evidence. I have approached counsel for some of the suspects but none of their clients would come forward and admit they are the anonymous poster.” .... It is curious, to say the least, for Mr. Wilens to make a legal argument in a signed pleading based on the premise that Doe No. 1 might be a competitor, where he has sworn that he does not believe that to be the case.

Curious indeed.

Even worse, he seems to be switching the basis of his trademark infringement claim mid-stream. As noted above, in the original filing, Wilens only alleges direct trademark infringement. But in his response, he more or less admits that's not true here and now alleges secondary trademark infringement (even though Automattic's original response had already explained how that wasn't possible here):

Plaintiff appears to concede that the Amended Complaint does not adequately plead a claim for direct trademark infringement against Automattic. Opp. at 5-6. He argues now that the Amended Complaint contains facts that would support a claim for contributory trademark infringement. Id. The Amended Complaint does not mention any claim for contributory trademark infringement, but assuming that one is identified in the complaint, there can be no contributory trademark infringement claim against Automattic based on a user’s choice of a website name.

This really does seem like yet another case of "someone is doing something on the internet that I don't like, therefore it must be illegal!" Hopefully the court decides to explain that's not quite how the law works to Mr. Wilens by dismissing the case before it even needs to go to trial.

Filed Under: defamation, gripe sites, jeffrey wilens, pro se, secondary liability, trademark, wordpress
Companies: automattic

Max Mosley Continues His Quixotic And Misguided Quest: Sues Google For Still Finding Photos He Doesn't Like

from the not-him-again dept

Oh Max Mosley. The guy who's basically guaranteed that the press keeps writing about the "sex party" pictures involving him and five sex workers that were leaked to the press years ago. Mosley has basically dedicated his life to reminding the public about those pictures by fighting a ridiculous war to blame everyone for those pictures existing on the internet. He's actually won a few lawsuits against Google, in which the company has been told to do the impossible: make the photos of him disappear. Now he's decided to sue the company yet again, this time in the UK (he's already sued in France and Germany). Mosley's really big win over the original newspaper, News of the World, was mostly over the fact that they called it a "Nazi sex party" and he insists that the party wasn't Nazi-themed (an area of some sensitivity, as Max's father was friends with Hitler).

This case is not directly related to the recent "right to be forgotten" situation in the EU, but might be considered a close cousin of it. It's still based on the ridiculous assertion that the fact that some of these pictures are still online can be blamed on Google. Mosley, apparently, is not big on understanding how the internet works. And he's not above stretching the rulings in the courts:

His lawyers said the case concerned "the ability of individuals within the UK to enforce their rights against the large corporations that control access to the internet". The statement added: "It seeks to compel Google to stop gathering and publishing images that the English high court decided in 2008 were unlawful in the landmark privacy case Mosley v News Group Newspapers."

Except that Google is not the one "gathering and publishing" the images. And the images were not determined to be "unlawful" as a whole, just in the context of the situation in which they were published. But, still, Mosley has decided that Google is the clear enemy:

"Adherence to the rule of law is essential to any society. This must include compliance with the decisions of the courts. As the gateway to the internet, Google makes enormous profits and has great influence, so I have not taken this action lightly. But Google should operate within the law rather than according to rules it makes itself. It cannot be allowed to ignore judgments in our courts."

Except, of course, Google is not "ignoring" the law. It is doing what it does: searching the internet and helping people find what they're looking for that is on the internet. Still, Mosley has tons of money and appears to want to spend it all making sure that the sex party keeps popping up in the news over and over again. If he'd just let this story die, it basically would have disappeared years ago. But through his own actions he keeps making it news again and again and again. Even the BBC appears to be trying to explain to Mosley pretty directly how the Streisand Effect works...

Filed Under: max mosley, search engines, secondary liability, streisand effect, uk
Companies: google