Competitor that operates review website not protected by 230

Moving & Storage, Inc. v. Panayotov, No. 12–12262, 2014 WL 949830 (D. Mass. Mar. 12, 2014)

Here’s one of the §230 situations that fascinates me.  Defendants operate a moving company review website, MyMovingReviews.com … and their own moving company.  The plaintiffs provide moving services, and alleged that defendants deleted positive reviews of the plaintiffs and negative reviews of the defendant moving company in order to gain market share, while touting the website as neutral.  Plaintiffs also alleged copyright and trademark infringement from defendants’ use of content and logo designs from plaintiffs’ website.

Defendants moved to dismiss on §230 grounds. The court agreed that plaintiffs’ claims weren’t based on information provided by another information content provider—the third-party reviews. (Though there were also allegations of fake reviews created by defendants, not subject to §230 dismissal.)  “The plaintiffs’ claims do not arise from the content of the reviews, whether they be disparaging, laudatory, or neither, but instead, the defendants’ alleged ill-intentioned deletion of positive reviews of the plaintiffs’ moving companies and deletion of negative reviews of their own company, coupled with various representations—that the website offers ‘accurate’ data, that it is ‘serious about reviews quality,’ and that readers ‘see the most accurate and up to date rating information to base your decision on.’”  (Query: puffery?  I’m inclined to say no in this context, but I suspect that there’d at least be a fight.)  The court identified the liability-producing conduct as “[t]he manner in which the information is presented, or withheld, … as well as the allegedly misleading ratings which result from such alleged manipulations.”  Given that, the complaint alleged that defendants were the developers of the challenged misinformation, not just facilitators thereof. 

As for the §230(c)(2) filtering defense—a rare ruling!—that section provides immunity for “any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected.”  But plaintiffs alleged bad faith, so the issue would have to await factual development.

The false advertising and unfair competition claims under federal and state law were otherwise adequately pled. For tortious interference, plaintiffs failed to allege with specificity any “business relationship or contemplated contract of economic benefit.” Where the class of potential customers is not defined but could include anyone in need of moving services, it wasn’t reasonable to infer that the defendants knew of the potential business relationships at issue.

Defendants fared better on trademark infringement, as they should.  Plaintiffs Moving and Storage (d/b/a Neighbors Moving and Storage) and American Van Lines allege that the defendants infringed the marks “Neighbors Moving & Storage” and “American Van Lines” by using these marks without permission on their website and in metatags.  Likely confusion isn’t a theoretical possibility of confusion, and the allegations here failed to support any inference of likely confusion. The website “is very clearly a review website, and it is implausible that any reasonably prudent purchaser exercising ordinary care would be confused by the use of the plaintiffs’ marks.”  The plaintiffs alleged initial interest confusion from the defendants’ use of metatags to divert consumers searching for plaintiffs online to defendants’ site.  But even if the First Circuit had recognized this theory, which it hasn’t, mere diversion wouldn’t be enough.

The complaint’s allegations of consumer confusion were merely legal conclusions couched as factual allegations. At best the complaint supported the inference that consumers were misled into believing allegedly inaccurate ratings, not that they were misled about source, endorsement, or affiliation. As the First Circuit held in Swarovski Aktiengesellschaft v. Bldg. No. 19, Inc., 704 F.3d 44, 52 (1st Cir. 2013), “a trademark holder has no right to police ‘unnecessary’ use of its mark. Whether necessary or not, a defendant’s use of a mark must be confusing in the relevant statutory sense for a plaintiff to raise a viable infringement claim.”

Copyright infringement: Plaintiff Father & Son Moving and Storage alleged that defendants copied text from its website:

Father & Son means QUALITY LOW COST MOVING! We are a family-owned business, dedicated to providing professional and personal service. Father & Son specialized in local, statewide, long distance moving, Office relocation, truck rentals, small moves, self services movers, and more. All moves are performed by our quality trained professionals, who handle your moving needs from start to finish. [address and contact info]

The registration hadn’t been issued when the complaint was filed, but it had been now, so the complaint wouldn’t be dismissed. (Ugh, why not just do fair use as a matter of law?) 
Posted in 230, copyright, http://schemas.google.com/blogger/2008/kind#post, tortious interference, trademark | Leave a comment

House DMCA hearing part 2

This is the question period.  I note just how many people in this conversation assumed that the technology behind Content ID could magically and easily be rolled out (costlessly?) for every form of content and every site online.  Echoes of SOPA/PIPA: just tell the geeks what to do! 

Coble: O’Connor suggests changes to §512—should they be specific or broad?

O’Connor: Always nervous about getting too detailed; tech will change. First stage of proposal is voluntary stakeholder process, and only move on to legislation if that doesn’t work. PTO/Copyright Office are trying to work through this; Congress could change the statute to allow Copyright Office to regulate.

Coble for Doda: should there be numerical thresholds for requiring websites to take action?

Doda: we don’t think there should be limits on the number of notices, so long as the notices are issued in good faith.  (I think he misunderstood this softball question.)

Coble for Siemenski: doesn’t the provision for attorneys’ fees and damages suffice in §512(f)?

Siemenski: we don’t really know because there are too few cases, because of the great imbalance of power between those sending the notices and those receiving them—big corporations v. individual users.

Coble for Bridy: should Congress create incentives for voluntary systems to address infringement, and if so what?

Bridy: the market has created sufficient incentives, as evidenced by current voluntary agreements.  IP Enforcement Coordinator has encouraged them, such as the Copyright Alert system; voluntary Best Practices agreements with ad networks.  Payment processors have too. 

Coble for Schneider: are there things other than technical measures that Congress could do to reduce infringement?

Schneider: her 3 points are her ideas.  Lawyers might be better equipped.

Rep. Nadler for Oyama: we’ve heard a lot about the whack-a-mole problem.  Prof. O’Connor suggested notice and staydown. What’s your comment?

Oyama: all service providers are sensitive to this, because they haven’t done anything wrong and are working hard to rid our systems of them. Understands the appeal.  But you have to look across products. Congress didn’t impose prefiltering and monitoring requirements, so that Facebook, Twitter, Google can allow posts in real time without filtering every post and tweet. Think scale: 60 trillion URLs.

Nadler: But Ms. Schneider writes a song and sends you a notice. Someone else reposts the same song. Is there the tech so that, having received a takedown notice for that song, a repost can be automatically taken down again?

Oyama: Notice and takedown is the best for that, b/c copyright owners know what they own and they know where they’ve authorized it. 

Nadler: but you already know it’s unauthorized.  Is the tech available to automatically take down/prevent from going up? 

Oyama: depends on the platform. (I wish this were coming through more strongly; a takedown notice is not a digital fingerprint.) Not practical for ISPs. If someone says “not allowed,” that doesn’t account for fair use. Intermediaries don’t know who the rights owners are or where the content is allowed to be.  Great models in private sector on YouTube, because we host and we have copies of all files/reference files from rightsholders. Businesses can build on that. 

Nadler for O’Connor: Congress allowed for red flag obligations. At what point should repeat notices trigger red flags? 

O’Connor: the issue in red flags is that the way courts have addressed it with willful blindness, but that’s not in the statute. Congress should decide what willful blindness means and put it in the statute.  Identifying content: I had videos demonstrating copyright for songwriters, using my own guitar. Posted YT, and very quickly it was taken down. Fair use is a different category. Tech is strong enough to recognize “here is the entire song” and if it’s been already noticed it should stay down.

Goodlatte: How does one measure success? Is it number of notices sent? Amount of infringing content that stays down?  Some other measure?  (Um, the rise of innovative online services?)

O’Connor: Whether it’s balanced between the parties—whether artists can get takedown and staydown.

Bridy: numbers about the growth of internet and industries that distribute content online, and those are good news on both sides.

Goodlatte for Oyama: should ISPs be required to respond differently when it’s the 50th notice?

Oyama: There should be a consistent set of obligations. YT: over 100 hours/minute. We need to know each time whether the use is appropriate. Quantity wouldn’t be enough.

Doda: one size does not fit all; we agree with Google there. Where sufficient matching can occur, staydown is appropriate. Collaboration and coordination.

Goodlatte: are there appropriate penalties for abuse?

Siemenski: no, because of the volume of abusive notices.  Statutory damages!

Schneider: if we control improper uploading, and immediate removal, we don’t have to worry about punishing people. 

Oyama: incentivize transparency: Google’s Transparency Report has helped everyone figure out the best vendors and the bad actors, which improves the system.

Doda: has to be placed into context—the abuses/mistaken notices are rare.  Counternotification: if you counternotify, the content can (eventually) be put back up. We support a level playing field for abuse.

Bridy: current remedies aren’t enough—enhanced damages might be appropriate.

O’Connor: are enough.

Rep. Conyers: big corporations can take care of themselves. What about the individual artist?

Schneider: Shows the internet form for uploading content. Says nothing about accountability for uploader. When she has to send a DMCA notice, it’s in bigger print, showing many hoops to jump through to take down. (Her name, the location of the infringing material, what else?) YT’s takedown procedure is now so much better, but now it says “this video is no longer available due to a copyright claim by Maria Schneider,” plus a sadface; that’s designed to send animosity to me but uploader can use a username.  Upload controls need to be better.

Doda: we accept that onus is on rightsholder on the outset.  Individual creator burden is different—filtering process.  Would endorse contribution to a referential database. If the notice is sent and there are no counternotices, her work should stay down.  Stakeholders should debate the details like the sadface.

Conyers: are the smaller artists in a worse position?

O’Connor: yes.  Tools for staydown would avoid need for compliance staff of that magnitude.

Rep. from Ohio (sorry, bad eyes): Congrats to Google for Copyright ID as private sector move.  Only a collaborative effort between content, service providers, payment providers, and advertisers will work. Best solutions won’t come from gov’t but from free market collaboration.  YT couldn’t have launched as a startup if it had been required to start w/Content ID—but how has infringement affected other startups? 

Oyama: All providers face challenges here; we invest millions to root out bad actors. Overall picture is extremely positive because of the DMCA’s foundation of legal certainty. Incentive to innovate. Licenses from all major labels/studios on YT.  Rightsholders mostly choose to leave the content up and get the majority of the revenue.  Users, platforms, rightsholders benefit—incentivizing the collaboration to grow the pie together is the right way to go.

Q: Rogue sites ejected from your network—how many were from outside the US?

Oyama: a large number are internationally based, but it’s a mixture.

Q for Schneider: what would you like to say to college students who think you’re driving a limo?

Schneider: my 3-time Grammy winning album should long ago have paid for itself if it wasn’t pirated; I’m still paying off $100,000.  We are diluted by being splashed over the internet, and musicians are coming to the conclusion that this exposure isn’t resulting in money, but just diluting us—if they see a dozen different performances on YT, they won’t buy our music. Young musicians are very scared. 

Rep. Chu: Editorial in the Hill today: system isn’t working for small creators who are victims of theft.  Safe harbor isn’t a loophole: could do things today to make notice and takedown work better for small creators. MPAA did a study showing that search engines are the main means by which people get pirated content.  Google changed its algorithm in 2012 to take into account notices received. Should’ve resulted in lower search results for pirate sites/quality sources. But several months later, studies show that sites for which Google received 100s of thousands of notices are still top of the list.  I tried to watch 12 Years a Slave for free—I only got to “watch 12” before I got an autosuggest to “watch 12 Years a Slave for free.”  Same with Frozen: When I type in “watch Frozen online for free” I get an offer to watch it for free. Why isn’t this fixed? (Um, because you searched “watch Frozen for free”?)

Oyama: there’s been improvement.  Users search for movie titles, song names, etc.  You can type in terms and see relatively how popular queries are. 12 Years a Slave is a popular query and the results are clean. Trailers, info, links to purchase. You can also add “free” but you should be very clear that there are still conversations about queries that end in free/download/stream—this is a very technical issue, and requires working with retailers to make sure that they have those words too. But if you look for what people actually search for, they are clean. You are talking about a relatively small set of queries. And for those, we need something legit to surface. If the movie is not online, it’s hard for us to return results for that query.

Chu: I didn’t type in free.  (But she seems to have used autocomplete to get it.)

You say that takedowns must exceed 5% of the content on a site before changing an algorithm.  But then 20,000 notices may not qualify a site. That’s a lot.

Oyama: there’s no minimum threshold for the algorithm.  Smaller set of queries is still an issue, but if we’re talking about truly bad actors, we should target them at their source—follow the money, don’t tell us to screw with our algorithm.  (I am paraphrasing more than usual.)

Q from another Rep. Farenthold: How easy is it for me to get a license to put music under my cat video? How many hoops?

Schneider: all you have to do is ask me for permission, and that’s up to me to give it.

Q: so I have to find you the songwriter, and then the performer.

Schneider: I’m at mariaschneider.com.

Q: Isn’t there an opportunity to make it easier for innovators/creators of derivative works to license your content legally?

Schneider: it violates my copyright to use my music without my permission.

Q: I want to respect that, but I also want music on my cat video.

Schneider: public domain.

Q for Oyama: search engines enabling infringement—when Congress was threatening to regulate movie content, MPAA voluntarily created ratings system. (Not what I’d call a great model.) Shouldn’t you be better corporate citizens on this whackamole?  I can get Shazam to identify a song in a large room. You ought to have the tech to do that, voluntarily.  (Yes, for music/video they have fingerprinted, if they’re the hosts.)

Oyama: we are working on that. Using automation to help rightsholders.  We process millions of notices per month. We try to direct users to one-click purchases of legit content.

Q: expecting something from Google is different from a small website owner or from a small ISP. If I have a bulletin board, I don’t have the resources to screen every photo.

Rep. Deutsch: Keep in mind independent artists.  DMCA enabled growth of digital services; need to ensure current balance continues to work for both sides. DMCA designed to protect good faith, not people benefiting financially from pirated content.  This has been obscured.  Google has intervened as a friend of court to press the view that DMCA is available for those who are actively inducing copyright infringement.

Oyama: Not aware of briefs that say that.  Critical purpose of DMCA is legal certainty, and we see tremendous boost to creative industries from these platforms. Case law distinguishes bad actors like IsoHunt from legit services like YT and Google; we’ve had lawsuits targeting us too.  There are bad sites that don’t operate within the DMCA.

Deutch: if purpose of site is to induce copyright infringement, there should be no safe harbor whether they technically comply with it or not.

Oyama: while that sounds reasonable, amicus briefs have many issues.

O’Connor: there are legitimate licensing mechanisms. We shouldn’t use safe harbor to shield people who put up clearly infringing material.

Rep. Marino (PA): Creators have horror stories.  For Sieminski: how do you interact with some user who’s received hundreds of notices?

Sieminski: yes, as required by the law, we have a repeat infringer policy, and if a user does receive over a certain number of notices, their account is suspended permanently.

Marino for Oyama: Can you implement a voluntary system moving authorized legit results to the top of the page? Red light/green light system.

Oyama: we always want authorized legit results to appear. We’ve worked with rightsholders to make sure vast majority of queries relating to media are legit.  DMCA applies to all 68,000 service providers.

Marino: I like states’ rights/no fed gov’t, but here we need more to be done.  (Side note: pretty sure that’s what many people say about their own particular issue that he doesn’t want the feds involved in.)  Can we not return results when someone types in “Frozen free”?

Oyama: striking “free” from search results would be a bad idea. There is a lot of legit content available for free.  Surface legit content: increase the availability of legit content.

Marino: there’s got to be a way to flag “free” searches.

Oyama: if you want legit results, your legit pages should use the word “free.”

Marino: mobile apps?

Oyama: Google Play: we really hope that will grow opportunities for independent artists/big companies alike. We have notice and takedown for mobile apps too, and kicked out 25,000 under notice and takedown.

Rep. Richmond: Sometimes we’re forced to act even though we aren’t the best to act on tech issues. Suggests stakeholders get together and figure it out.  Can you manipulate/manage autocomplete so that it doesn’t suggest “free”? You’re pushing them to that space even if they didn’t want to go there.

Oyama: you can see what real users are actually typing in. You can see it’s the movies and the artists, and the results there are clear. Our policy on autocomplete is that we accept (I think she means “for removal”) terms associated with piracy—but there are many legitimate uses for “free.” The conversation with rights owners remains ongoing.

Richmond: what advice would you give small artists about protecting their copyrights?

Oyama: the advice I get from other small creators: use new distribution models. Five years ago, people in the industry were very focused on takedown, but now we see tremendous opportunities when users get excited about music; artists can monetize that.  Stay focused on enforcement, but also think about other ways of enabling internet enforcement. This morning, read an op-ed from a country artist: how the internet saved my career—she used user analytics to figure out where she was popular and add those places to her tour.  Run advertising around content.

Richmond: but how would you advise them to protect their copyright and make sure other people aren’t making money from it? Look at it from the other person’s side.

Rep. Smith (MO): What should voluntary agreements look like?

Doda: Can be cumbersome.  User-upload sites aren’t really well-controlled by the system.

Oyama: any system has to recognize how startups work.  They start small.  Google added over 50,000 hours of engineering to YT after acquisition. This resulted in a fingerprint system scanning more than 15 million fingerprints, which then resulted in over $1 billion to music industry; new artists can make over six figures on their YT channels.

Rep. DeBiene (sp?) (WA): what is going on internationally?

Oyama: when we know sites are based in foreign countries, sometimes we do have good diplomatic relations—coordinating diplomatic pressure would be a good place. Follow the money to dry up US ties/incentives is also good.  Fair use and safe harbors: we rely on them to exist, and if we see them threatened in foreign countries we can’t deliver them there, which takes revenue away from American companies. So we should press DMCA/safe harbors in our international agreements.

Schneider: We should set the bar/be an example to the world of protecting artists.  A company making billions on its patents and artists’ IP versus my community, which is hemorrhaging on its IP. There has to be something that makes it sustainable. Finding one person on YT who makes money is like going into a poor neighborhood and finding one person who won the lottery.  (Of course, making music was a reliably lucrative career for most people who wanted to be musicians before the internet, right?)

O’Connor: we need artists to have space/tools—if we don’t make it hard to infringe, sites will have to copy the sites that make it easy to infringe.  (I feel we have strayed from the international question.)

Bridy: remember to think about startups that don’t have money to invest in huge burdens felt disproportionately by small companies.

Rep. Collins: Google was once a small startup; now it’s big.

Oyama: Making this process as simple and automated and low-cost as possible can be a big piece. There is a thriving vendor market—specialized in sending notices. Many different people can use those services.  Specialists are getting smarter and faster about it; bring them into the conversation.

Rep. Jeffries: Ultimate aim of copyright law is to stimulate artistic creativity for the general good.

Bridy: absolutely. DMCA has helped that balance.

On red-flag knowledge, we’re going to get some guidance from Viacom v. YouTube: most of the courts have said that red flag knowledge is knowledge of facts or circumstances from which specific infringing activity is apparent, not just generalized knowledge that infringement is occuring on the system.

Jeffries: has the definition been sufficient?

O’Connor: No.  It’s too limited to actual knowledge of a particular work, even if you have a sense that lots of infringement is going on. Congress should set a policy: if you’re aware that infringement is going on, you have an obligation to do something.  (What?  Get the geeks on that.)

Jeffries: constructive knowledge. But is there an argument that the internet is different? The DMCA did not impose an inquiry requirement.

Oyama: the internet context makes the specificity requirement more important because of the diversity of the ecosystem and the different ways artists are engaging.  Artists have very different stances on what they do/use.  We need them to tell us which uses are okay.  Don’t destroy innovation by making it more risky for providers to build new services/filters.  No one understands a vague standard and that’s a deterrent.

Rep. Poe: I don’t like stealing. What we’re dealing with is internet thievery/piracy.  (Sigh.) Trying to solve it through the private sector, not the police.  (Why?  If this analogy is correct, prosecuting crimes is literally the only thing the nightwatchman state should be doing (and crimes against property are the core crimes in the libertarian vision of crimes).  I’m not saying I like the dominant “liberal” position here either, but I dislike special pleading too.)

I found streams of House of Cards on the first page (or maybe he thinks he can; not clear). Isn’t there a way to get rid of bad results through your algorithms?

Oyama: notice and takedown is well suited to that. As soon as we’re alerted that links are bad, we take it down (6 hours).

If you google House of Cards it will be legit results. 

Poe: can’t we stop those results from appearing in the first place?

Oyama: go after the people posting the pirate content.

Poe: 73,000 takedowns in ad system, 200 million in past two years—how much does that cost?

Oyama: it’s a huge burden, tens of millions of dollars; hundreds of people working on it—can’t estimate totals.  Because of engineering effort and bulk submission tools for use by trusted rightsholders, we now have a good system, but we still have engineers and lawyers working on policies.  We are building licensed models like Google Play; we share revenue if creators are getting revenue. No one makes money if someone clicks on a pirate site.

Poe: I hope you can solve this without gov’t involvement because sometimes gov’t makes things worse and not better.

Rep. Colline: Safe harbors often require an actor to try something in good faith.  Why not require good faith/reasonable effort to prevent infringement? We wanted to protect certainty/growth of internet, for good reasons, but now we see this reposting problem making notice and takedown a bit of a mockery.  If it can be instantly reposted, the DMCA isn’t having the intended effect.  Could require ISP to remove/disable access and prevent its reposting.  It would be better for industry to figure this out itself, but if the tech exists when notice is provided we ought to have the ability to have it taken down and to prevent it from recurring.  Don’t put all the burden on the victim of the crime. Once you ID and notify, honor request by not requiring it to be redone.

Schneider: educate the uploader.  How? That has to be worked out. Streamlined takedowns are good, but Content ID needs to stop it before it goes up across the internet.  Imagine if Content ID worked for everybody. 

Dota: uploaders are often repeat infringers, so stronger repeat infringer policies would help. Clearer parameters around tracking them and keeping them out.  (How do you know?)

O’Connor: education could be done by directing people to the CCC, Harry Fox, other licensing mechanisms.  Many mechanisms to do this legally.  (Don’t anybody tell the judge in the Georgia State case about the ease of using the CCC … oh, wait.)

Oyama: education is something we work on in YT Copyright School.  We have strong repeat infringer policies.  While preventing reposting sounds attractive, we don’t know when a post is authorized.  Links, comments, tweets, would all have to be screened before posting.  That would chill these services and they’re driving content sales. Be careful for innovation.

Rep. Lofgren: Without safe harbors, there wouldn’t be an internet. First do no harm.

Oyama: note we can’t match content for a filter on search. We have text, not embedded video etc.

Lofgren: could an uploader encrypt and defeat the ban on reuploading?

Oyama: Yes, which is why we need more cooperation.

Lofgren: SOPA, one lesson: don’t suggest things that are impossible or that would break the internet.

How would you scrutinize each site on the web the way YT scrutinizes video?

Sieminski: YT did great work developing Content ID with its $50 million investment, which is many times bigger than our company, and we’re bigger than many.  Tech also can’t answer the question of whether use is authorized or fair.

Lofgren: ISP doesn’t have incentive to stand up for speech. Should there be financial disincentive for DMCA abuse?

Sieminski: Yes: statutory damages exist for infringement. It’s not the majority of notices, but even a little censorship is not ok. We don’t see millions of notices because we’re not a filesharing platform; we do see abuses.

Rep. Issa: How is this different from teachers sharing Xeroxes in classrooms? 

O’Connor: interesting questions of fair use/classroom use—he was never handed most of a book.

Issa: but today, if the equivalent is occurring the copyright owner can now find it in the open?

Oyama: Vibrant market now exists for vendors.

Issa for Schneider: 3-4 decades ago, you wouldn’t have known about people copying on 8-tracks, which were good enough to listen to—isn’t it easier to track today?  Takedowns involve trial and conviction by accuser.

Schneider: cassettes weren’t very good quality, and tracking is no good because so much of my music is out there.  Vast majority of artists now pay for their own records.

Oyama: we are seeing increased takedowns because the internet is expanding, but time to takedown is going down because of automation.

Rep. Lee (TX): Affirmative duty to monitor: how would that work?

O’Connor: content can be quickly reproduced. For entire work reposted, use Content ID.  (I’m sure the photographers will be reassured to hear that Content ID can identify all their works.)

Lee: who would be liable?

O’Connor: people posting, plus we’d target a culture of copyright contempt where startups decide to turn a blind eye.

Oyama: the sky is the limit on monetizing globally as markets expand. The question is how do you direct legitimate content to users? By increasing the availability of legit offerings. Spotify’s rollout decreases piracy 25% in an area. Think broadly about stimulating licensed services. The DMCA is critical to that. Countries without internet safe harbros don’t have our internet industry.

Lee for Sieminski: how many counternotices did you receive last month?

Sieminski: 4 out of 825. Counternotice system has many problems—procedures are tough for average users; there’s a 10-day period of silencing.

Lee: §512(f) does have a fee provision. Can courts craft damages?

O’Connor: we should make sure we can deal with abuses.

Schneider: Monetization won’t help me: the money is so small per view.  (RT: Of course, all those people would have paid full freight without YouTube, right?)

Content is being used to draw eyeballs for ads. The solution is more robust staydown and Content ID for every company so everything is filtered.  (RT: This, by contrast, is not more paraphrased than usual.)
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House DMCA hearing part 1

House Judiciary DMCA Hearing. (Links on names go to testimony.)
Rep. Goodlatte: Unanticipated: volume of notices plus reappearance of content. Adequacy of notice is an issue. Fraudulent notices with little risk of penalty are also a problem, though a low percent. §512 was balanced among interests. Keep consensus model in mind.

Rep. Conyers: In 1998, there were few blogs; social media like Facebook and Twitter didn’t exist.  (RT: why I call the DMCA the Digital Fifteen Minutes Copyright Act.)  Some courts interpreting §512 have done so in ways more restrictive than we intended, imposing significant burdens on copyright owners to monitor the internet and specifically identify millions of infringing files.  Narrowly interpreted circumstances under which providers will be deemed to have red flag knowledge of infringement to take material down. Has also generated lots of litigation with new technologies like cyberlockers and P2P filesharing, which have facilitated infringement in a manner we in Congress didn’t fully envision when we enacted §512. Statute is therefore largely ineffective in combating massive amounts of infringement that occur using these technologies. We must decrease infringement.  Sites providing access to infringing copies continue to increase.  We must improve the process for identifying/handling repeat infringers.  Copies of the same works are reuploaded.  Result: whack-a-mole.  Should consider whether search engines can somehow prioritize results that don’t contain infringing material.  They’ve demoted search results in other contexts.  Resistance to doing that for copyright owners. The voluntary agreement among ISPs and large copyright owners is a good model, targeting P2P infringement of those big copyright owners’ works.

Sean O’Connor, University of Washington School of Law

§ 512 is at the intersection of artists, copyright owners, and internet providers.  Represents rhizome.org and a site that allows people to make multimedia collages to express themselves.  They were started by artists who respect copyright, but who also want to make content widely available.  One point: we’re often trying to divide the tech world from the content world, and with smaller artists and startups there’s often much overlap.  §512 was a solution in the 1990s.  But over time it’s had unintended consequences, accidentally fostering a culture of copyright contempt. 

Why? Because of the kind of advice given to clients—they should not be monitoring content for potential infringement. There’s no upside.  §512 allows it, but they get the safe harbor regardless. But there are downsides to monitoring—they might find red flags/actual knowledge of infringement, or awareness. Then they have to proactively takedown the content. Why should they look?  Not the intention, but unintended consequence. Lack of monitoring has led to the current situation; millions of takedowns is clearly unsustainable. 

Taking care of relentless repostings of clearly infringing works, not remixes/transformative uses.  That’s a large chunk that we could try to reduce.  Since people are told not to look, that’s emboldened bad actors to just repost.  Getting the volume down—won’t eradicate it, but if we could take care of whack-a-mole for nontransformative works we could help startups/artists.

Common carrier doctrine: we wanted access to the internet in the 1990s.  Those companies rightly were concerned that they’d be liable for things sent through their system.  Proposals: (1) there should be notice and staydown.  Voluntary among stakeholders to stop repostings and make tools available to smaller OSPs.  Google has good tools, Google Analytics (RT: I didn’t realize that analyzed infringement.)  Make Google give its tools to them?  If no agreement reached in reasonable times, amend DMCA to create duty to remove repostings, just as there’s a duty to terminate repeat infringements.  (2) Set congressional policy around willful blindness. 
 
(RT: From the perspective of a small ISP, this is a proposal designed to put us out of operation.  We can’t staff this, since we’re all volunteer and keeping busier than a one-armed paperhanger just keeping the site up most of the time; we can’t scan the site with humans, and we can’t buy the tech.  Of course suppressing new/small sites is not a sad thing for some large copyright owners, but I think that’s a bad idea for the rest of us. I’m quite confused by why O’Connor believes that increasing duties for ISPs will help out small ISPs that, he correctly says, don’t have the resources/staff to invest in significant proactive compliance efforts.  He wants it to be easier to find “red flag” knowledge based on what ISP employees encounter as they go about their days–but who is to train them about how to recognize an infringement?  And without a takedown from a copyright owner, there’s no counternotification, so the user who thinks she’s got a valid fair use claim can’t even counternotify, as many people who’ve run afoul of Content ID have discovered.)

Annemarie Bridy, University of Idaho College of Law: §512 has proven resilient in the face of internet evolution. No one doubts that there’s a lot of infringement, and that dedicated infringers can evade enforcement. But perfect enforcement is a chimera.  Fair and workable enforcement should be the goal, and §512 is doing that. Copyright owners and ISPs have automated systems; many ISPs hosting UGC provide simple to fill out forms for smaller copyright owners, which should be expanded.  P2P is more of a challenge, but that’s declining with legal alternatives growing.

§512 puts costs on both parties; enforcement must be collaborative if it is to be effective.  Music industry stumbled in the transition, but is now returning to secure footing.

Paul Doda, Global Litigation Counsel, Elsevier Inc.: Elsevier has large portfolio; can’t possibly search for all our content all over the internet, so focus on sites with the most Elsevier content. We face growing volume, need to repeat notices for same infringing works, and reuploads at fast speeds.  We had zero counternotifications because we take our DMCA obligations seriously: human verifies that full copy is uploaded. This makes it difficult to keep pace.  Sites that comply with takedowns continue to have hundreds of thousands of infringements per month.  4shared: 570 reuploads of one book. Uploaded: also hundreds of reuploads.  7-9 days until takedown takes effect; millions of users are able to download.  Elsevier also publishes confidential exams for nursing students. Sometimes stolen from schools and uploaded; have issued takedowns to little effect because some sites don’t honor takedowns or punish repeat infringers. This undermines the academic process/quality of nursing care. The system is breaking down.

What to do without stifling creativity?  Filtering.  Collaboration with UGC sites = success. Scribd is a good example of targeted filtering in good faith: fingerprinting containing unique characteristics of books; uploads are checked.  Only captures matches, and users are notified so they can dispute rejection. We need more collaboration in the publishing industry.  Urge Congress to bring together stakeholders; without oversight, not enough incentives for collaboration. Notwithstanding voluntary measures, some sites will drag their feet. If they refuse to consider measures adopted by peer companies, remedies from Congress may be necessary. 

Katherine Oyama, Senior Copyright Policy Counsel, Google Inc.: Never a better time for creativity online.  (1) Tech sector has been the engine of US economic growth and job creation—new markets and billions for the content industry, and this has only been possible because of the DMCA foundation.  (2) DMCA strikes the right balance in promoting innovation and protecting rights owners.  Internet providers not being held liable for every post by users is an essential feature on which the entire internet relies.  More than 1 million YouTube creators earn revenue; Google has sent $1 billion to the music industry in the past few years. This is just the beginning for the market for digital entertainment.  DMCA helped enable this economic success by creating legal certainty, allowing investment in new services. Only copyright owners know what they own and where they want their works to appear.  Cooperation allows for innovation and encourages investment.  FB, Twitter, Pinterest are enabled by this.  Google has made takedown easier and faster than any other online platform, and despite increase in volume of notices our average turnaround time is less than 6 hours for search results. Even now, notices are far less than 1% of what we index.

There are abuses. Attempts to censor criticism, attack competitor, gain political advantage are rare but problematic.  DMCA allows new systems to generate revenue: Content ID allows rightsholders to choose in advance what to do with UGC, and all the major record labels/studios use it; most choose to monetize instead of take down. We are also working on highlighting more legal content—prominent links to buying a show/movie instantly or buy movie tickets when you google it.

Most effective way to combat rogue sites is to attack their sources of revenue. We’ve expelled 76,000 sites, mostly through our own detection, over the past few years.

We should encourage other countries to adopt DMCA systems via our trade agreements.  (Heh.)

Maria Schneider, Composer and Member of the Recording Academy’s New York Chapter Board: Personal experiences with notice and takedown—an independent musician.  Grateful for fanbase and critical acclaim, but livelihood threatened by illegal distribution. DMCA is upside down because uploads happen in matter of seconds, but takedowns take hours, mostly unsuccessful. Burden isn’t on those breaking the law; no consequences for big data businesses that profit from unauthorized content, but big losses for artists.  Loves internet distribution/fan funding, but struggles against internet sites offering music illegally: album available on numerous filesharing sites.  $200,000 of savings/years of work needed for releasing album. Takedowns are frustrating/depressing.  Her responsibility to police the internet on a daily basis. Whack-a-mole.  Need fix. (1) Creators should be able to prevent unauthorized uploading before infringement. It’s technically possible, as YouTube already does it. Every artist should be entitled to register their music, just like the Do Not Call list. Filtering can be used to monetize or protect content. (2) Takedown should be more balanced. Most fans probably don’t intend harm, but just need to click box. She needs to prepare a notice, spending hours learning unique rules. Should be more streamlined process. ISPs should be required to educate users to help them understand what can be uploaded. If they had to be instructed, system would be more efficient.  (Yes, I’m sure it would be tons more efficient for Google to walk me through the law before each blog post I make goes live.  Or maybe she only wants that to happen with AV works.  Also, let’s (not) hope that we can get our allies to adopt the same rules …)  (3) Takedown should mean staydown. Most of her time is now spent fighting infringement, not making music. Disincentive to create. Simple changes would make great strides in fixing broken system.

Paul Sieminski, General Counsel, Automattic Inc.: Small company, big impact. WordPress: anyone can create and publish in minutes. Powers large media properties, small sites, law firm homepages, family blogs—more than 48 million sites, 13 billion pageviews/month.  230 employees, one lawyer.

DMCA provides important protections to us, and works reasonably well. Troubling rise in misuse of process. Egregious: fraudulently misrepresent content ownership to get rid of disagreements.  Articles trying to remove content critical of a business’s products.  Etc.  We do our best to review notices, which takes resources away from other important pieces of our business. Suppresses legitimate free expression and erodes trust in our copyright system. Piracy is a real issue, but we see abuses by those who submit as well. Powerful and easy to use weapon: notice that must be honored at risk of liability; safest thing to do is comply with no questions asked. Puts full burden on users, who are often small independent musicians and amateur publishers. Often lack sophistication/resources to fight back. And there are no real deterrents to misuse, unlike statutory damages. Thus most abuses result in successful takedowns with no repercussions.  Only §512(f) is a remedy; we’ve joined with users to bring suits that are expensive, time-consuming, and unlikely to result in significant monetary redress.

Internet has many fabulous affordances.  Innovative tools allow anyone to publish, or even organize a democratic grassroots overthrow of an oppressive regime.  For the most part, the law has worked, but we should be mindful of how it can be used to suppress the freedom of expression it’s supposed to foster.  Keep us and our communities of creators in mind as you think about reform.
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Transformative work of the day: SVU edition

Carmen Maria Machado, Especially Heinous: 272 Views of Law & Order SVU: A sf/meta novella based on SVU. Though it’s not in the style of the average piece of fan fiction, I will note that certain popular pairings do appear.

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Transformative work of the day, Frozen edition

What happens when you run the lyrics of “Let It Go” through several Google Translate languages, then back to English?  (My favorite part is the singer visibly preventing herself from singing the signature line correctly.)

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NYT on finessing FDA label requirements

Oreo’s “Cookie Dough” Oreo has neither chocolate chips nor cookie dough.  “Compliance” with FDA labeling requirements is achieved (says Oreo) by the use of “flavor creme” in smaller type on the packaging, plus “chocolatey” chips since the chips don’t meet the definition of chocolate.  (Yum!)  As for marketing, Oreo is relying on “permission”: if consumers receive some visual/olfactory signals that a food is what they expect, they’ll apparently spot the manufacturer the rest.

H/T Zahr Said.

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unjust enrichment claim preempted once patent claim fails

Medisim Ltd. v. BestMed LLC, 959 F. Supp. 2d 396 (S.D.N.Y. 2013)

Previous opinions in this case between thermometer competitors, mostly addressing trademark issues now out of the case (I skipped the patent parts).  After a jury trial, the jury awarded Medisim $1.2 million for willful patent infringement, $2.29 million for unjust enrichment, and found that BestMed infringed the copyright in Medisim’s instructions for use. The court invalidated the patent for anticipation, and also reversed the unjust enrichment award, but granted equitable relief on the copyright claim.

Unjust enrichment: this claim survived originally because the Lanham Act didn’t preempt state law claims of unjust enrichment, but the claim was “vaguely pleaded, and fell in the interstices of its claims for patent infringement, copyright infringement, unfair competition (state and federal), false advertising (state and federal), and Deceptive Acts and Practices.”  Most of these other claims were dismissed on summary judgment, and the claim for copyright damages was dismissed before the case was submitted to the jury.  The jury was charged with deciding whether “BestMed has been unjustly enriched by obtaining profits from the sale of its thermometers”; it found against Medisim on the state unfair competition claim, which overlapped significantly with the unjust enrichment claim.

Given all this, there wasn’t record evidence to support the award of damages, especially since some of BestMed’s sales occurred during an agreement between the parties, waiving a claim for unjust enrichment.  In light of the patent’s invalidity and the verdict of no unfair competition, an unjust enrichment claim couldn’t arise out of sales of the accused products after the parties’ agreement expired. “Now that Medisim’s attempt to gain a monopoly through the patent law has proved unavailing, it cannot argue that it should nevertheless receive the same protection through the state law of unjust enrichment. A quasi-contract granting Medisim patent-like protection over its invalidated patent would usurp the federal patent law, and for this reason, the jury’s verdict on unjust enrichment must be overturned.”

Plus, even if the patent were valid, the damages would have to go, “because there was no evidence to support a finding that BestMed received an incremental benefit over that compensable by the patent laws.”  Medisim didn’t present evidence of a difference, but argued that BestMed obtained an incremental benefit by misappropriating goodwill and confidential knowhow, but it didn’t have any evidence of that post-agreement.

However, Medisim was entitled to an injunction for disposal of BestMed’s copyright-infringing indstructions.  Under 17 USC § 503(b), a court may order destruction or disposition of infringing copies. Since Medisim lacked a legal remedy for its copyright claim, equitable relief was its sole remedy; BestMed didn’t contest Medisim’s right to equitable relief. 
Posted in http://schemas.google.com/blogger/2008/kind#post, patent, preemption, unfairness | Leave a comment

Getty Images test

//embed.gettyimages.com/embed/160639386?et=GXqXs6gz-Uu7Yf7jO2VckA&sig=10emSGT2-mLNVs0uBXKn_5dCIMrPTpuXYw6vbX_v98c=
This is a test of the Getty embed code.  I expect to check periodically to see whether ads have been run across it, as provided for/threatened in the Terms of Service.  This BusinessWeek article raises some significant questions about the scope of the “noncommercial” limitation; Creative Commons has the same issue (and a lot of disagreement about what “noncommercial” means).  It remains to be seen whether having a single enforcer will make any difference in the definition of noncommercial.

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state can regulate health referral provider’s speech about potential benefits

1-800-411-Pain Referral Service, LLC v. Otto, 2014 WL 904190, No. 13-1167, — F.3d —- (8th Cir. Mar. 10, 2014)

My discussion of the opinion below.  411-Pain advertises extensively and connects callers to health care providers or attorneys in their areas.  It contends that its “extensive—and very costly—advertising” benefits providers in its referral network who might not otherwise choose to advertise on their own. Defendants are the members of the Minnesota Board of Chiropractors whose enforcement of Minnesota’s No-Fault Act Amendments allegedly unconstitutionally chilled 411-Pain’s speech.  The Act requires insurers to provide basic economic loss benefits to their insureds, regardless of fault, and also regulates ads to curtail potentially unethical practices by “licensed health care provider[s].” The 2012 amendments to this law require solicitations or ads for medical treatment or referral for medical treatment of an injury eligible under the No-Fault Act must:

1. be undertaken only by or at the direction of a health care provider;

2. prominently display or reference the legal name of the health care provider;

3. display or reference the license type of the health care provider … ;

4. not contain any false, deceptive, or misleading information, or misrepresent the services to be provided;

5. not include any reference to the dollar amounts of the potential benefits under [the No-Fault Act]; and

6. not imply endorsement by any law enforcement personnel or agency.

 411-Pain argued that several elements of this suppressed its speech protected by the First Amendment.  Its radio ads, for example, tell car accident victims to call the company immediately after an accident and inform accident victims that they “may be entitled to up to forty thousand dollars in injury and lost wage benefits,” without disclosing the legal names or license types of the health care providers in 411-Pain’s referral network.  Sample ad excerpt:

… Car accidents happen … What you plan to do next can make all the difference … Car accident … Remember after 911 … Call 411 … 1-800-411-pain … 1-800-411-pain knows about car accidents … It’s what they do … Call 1-800-411-pain 24 hours a day 7 days a week from home, hospital or accident scene … Call 1-800-411-pain and let them explain the up to $40,000 in injury and lost wage benefits you may be entitled to … Plan now … Program 1-800-411-pain into your phone number under “accident” … Car accident, remember, after 911 call 411. 1-800-411-pain.

TV ads “feature a vehicle crash and then an actor appearing as a police officer or EMT with an ambulance conveying to viewers that if they call the phone number associated with 800-411-PAIN or go to411Pain.com, then they can get help after being injured in an accident.”  411-Pain claimed that the ads had conspicuous and prominent disclaimers stating that the person appearing in the ad was a “PAID ACTOR.”

The district court denied preliminary injunctive relief, finding that the challenged aspects were inherently misleading commercial speech and thus unprotected.  The ads failed to inform victims that 411-Pain was a referral service, and the reference to up to $40,000 in benefits was inherently misleading because accident victims may receive nothing, or may receive benefits far in excess of $40,000 from many different sources.  The use of law enforcement personnel “extend[ed] a misleading aura of authorized approval” to the company, despite the disclaimer. The ban on advertising not done “by or at the direction of a health care provider,” was a “valid prohibition on speech concerning unlawful activity,” since if the advertising was not done at the direction of licensed health care providers, then 411-Pain’s business relationships with chiropractors may implicate anti-kickback statutes. In the alternative, a referral business inherently advertises “at the direction of” its providers, and contracts could further clarify this.  The disclosure requirements were also okay under Zauderer.

In order to make it hard to get a preliminary injunction (the standard comes from an abortion case), when a “validly enacted statute” is at issue, there’s an elevated standard for success, designed “to ensure that preliminary injunctions that thwart a state’s presumptively reasonable democratic processes are pronounced only after an appropriately deferential analysis.”  (I don’t know why the court doesn’t just talk about eBay—it seems to suggest that a challenge to a non-legislative action isn’t governed by the likely success on the merits standard but by something lower.)

The court then tried to understand what Sorrell meant, determining that the Court had “devised a new two-part test for assessing restrictions on commercial speech.”  First, ask whether a restriction is content- or speaker-based, or both.  If it’s either, it’s subject to “heightened scrutiny,” though we don’t know what that means, since after determining that the regulation in Sorrell was indeed subject to heightened scrutiny, the court proceeded to use Central Hudson, saying that the state lost even under that standard.  So, when commercial speech restrictions are content- or speaker-based, their constitutionality depends on Central Hudson.  (Why is this new?  Why aren’t all commercial speech regulations “content-based” in the sense that they only cover commercial speech, and not noncommercial speech?  Your guess is as good as mine.)

So, the court of appeals turned to the first challenged provision, the ban on “any reference to the dollar amounts of the potential benefits under [the No-Fault Act].” This was a content- and speaker-based restriction, because it only applied to “licensed health care providers” and related people.  Whether it governed inherently misleading speech was a question of law, which could be determined by examining the “particular content or method of the advertising” as well as from “experience [that] has proved that in fact such advertising is subject to abuse.”  (Why isn’t that a fact question, not a question of law?  Your guess is as good as mine.)  Inherently misleading speech may be banned outright.

The court of appeals agreed that the reference in 411-Pain’s radio ads to a possible entitlement of “up to $40,000 in injury and lost wage benefits” was inherently misleading, because it implied that consumers would receive a floor of benefits “up to” $40,000, while many would receive nothing; it also implied that there was a ceiling that didn’t exist.  “While an attorney or insurance agent qualified to advise clients about coverage could convey this information, 411-Pain’s advertisements of ‘up to’ $40,000 in economic loss benefits misleadingly limit the universe of information.”  The ads could prompt some consumers to unnecessarily seek benefits and keep other consumers from obtaining more benefits. 

The ads were also inherently misleading by omission: they didn’t explain that an accident victim wouldn’t receive $40,000, or any amount of money, as a simple cash transfer.  The reference to “benefits” was insufficient, because “the effect of the invocation of money without reference to the Act or a description of the way the benefits are obtained misleadingly implies that 411-Pain will acquire cash and pass along a portion of it to the car accident victim.”  In fact, 411-Pain would just refer consumers to providers, and the potential benefits would be paid to providers in the form of reimbursements for services.  “By selectively omitting important pieces of information from its radio ads, 411-Pain’s speech is thus “inherently misleading” due to its failure to provide meaningful context as to the origin and source of potential benefits available under the No-Fault Act.” (Compare the misleading use of “fees” when ordinary laypeople wouldn’t know the difference between “costs” and “fees” in Zauderer.)

Next, on to the ban on implying endorsement “by any law enforcement personnel or agency.” This is content-based, but not unconstitutional, since implied endorsement by law enforcement is inherently misleading.  Plaintiffs didn’t submit their video ads for review, relying instead on an affidavit.  On this record, the ads were inherently misleading.  An affiant’s statement that a disclaimer is “conspicuous and prominent,” standing alone, is “hopelessly subjective: a disclaimer’s ‘conspicuousness’ and ‘prominence’ are, inevitably, in the eyes of its beholder.”  But regardless, the disclaimer, no matter how large, didn’t fix the problem: it didn’t “disclaim implied endorsement by the type of official the actor portrays.”  (Compare the result in Allen v. National Video: “Moreover, the disclaimer says only that a celebrity double is being used, which does not in and of itself necessarily dispel the impression that plaintiff is somehow involved with National’s products or services.”)  The net effect was misleading. 

This ban was distinguishable from invalid categorical bans on mere depiction of judges in attorney advertising, since portrayals of judges aren’t inherently misleading.  The statute here didn’t ban all depiction of law enforcement, but rather endorsement.  The court noted that 411-Pain’s ad didn’t show law enforcement performing normal functions, but rather “an officer or EMT who speaks directly to the audience and tells viewers to call 411-Pain immediately after a car accident. The actor-officer’s support for 411-Pain imbues the company with a faux-sense of official legitimacy that ‘inherently mislead[s]’ viewers.”

Next, the ban on ads that aren’t undertaken by or at the direction of a health care provider: This is a speaker-based restriction.  But it too shouldn’t be preliminarily enjoined, since it targeted potentially unlawful activity, specificially violation of anti-kickback statutes.  The authorization to advertise under providers’ direction, instead of burdening speech, allowed arrangements that otherwise might be illegal under governing state law.  It’s simple for a provider to direct a third party, by paying it for advertising services.  If 411-Pain is still nervous, it can draft contractual language warranting that it’s advertising at providers’ direction for purposes of the law.

Next, the requirement that ads “prominently display or reference the legal name of the health care provider” and the associated license type.  411-Pain argued that this amounted to a complete ban because it was so unduly burdensome. Given the number of providers in 411-Pain’s network, 411-Pain argued that it couldn’t possibly identify all of them and their license information on each ad.  Also, it contended, without actual proof of deception, the appropriate standard was Sorrelland not Zauderer.

First, the court rejected a facial challenge: the provisions aren’t so unduly burdensome and unjustified that in no conceivable instance would such provisions ever be constitutional. Applied to a single provider, there’s no undue burden.

On the as-applied challenge, the court of appeals didn’t find an unconstitutional burden.  The Supreme Court has said that when laws “impose a disclosure requirement rather than an affirmative limitation on speech, … the less exacting scrutiny described in Zauderer governs” a court’s review of the disclosure rules, something the DC Circuit has called “akin to rational-basis review.”  The state has a substantial interest in protecting the public from misleading and false advertising aimed at persons injured in automobile accidents.

But 411-Pain argued that the government hadn’t shown that the ads are actually misleading, and that Ibaneztherefore controlled instead since the ads were only “potentially” misleading.  However, Zaudererand Milavetz didn’t require proof of actual deception.  The court of appeals followed Zauderer and Milavetz, inferring the inherently misleading character of the speech at issue from its content.  “The ads fail to inform consumers of the nature of 411-Pain’s business as a referral service, and they omit the fact that the No-Fault Act is only one of many sources of recovery an accident victim may pursue. Indeed, the ads never mention the No-Fault Act at all.” No survey was required to determine that the ads had a tendency to mislead.

Under Zauderer, the question was whether the disclosure requirements were reasonably related to the state’s interest in preventing deception, and whether they were “unjustified or unduly burdensome.”  Yes and no, respectively.  The display of network providers’ legal names and license types was reasonably related to the state’s interest because “absent such disclosures, consumers know nothing about the type of care they may receive if they call 411-Pain.”  If they’re calling immediately from the scene of an accident, as the ads encourage them to do, 411-Pain sometimes (if not always) puts them in touch with chiropractors, not physicians.  “The disclosures thus serve an essential purpose by informing victims about the nature of the services offered by the providers with whom 411-Pain does business.” 411-Pain has a minimal interest in not providing any particular factual information in its ads.

Plus, there was no justification for finding an undue burden when the record had no evidence of the number of providers in 411-Pain’s network.  411-Pain’s affiant stated that the company intends to “establish and build” its referral network, and its business would be threatened “if as its network grows, each and every provider’s name and license type must be included in every advertisement.” Maybe, but this wasn’t enough for a preliminary injunction. “To decide whether the disclosure requirements are ‘unduly burdensome’ when applied to 411-Pain, the record must contain more than allegations; it must contain facts demonstrating the undue burden such requirements have on the company’s ability to advertise.”  This is kicking the can down the road, and not very far: the question to be answered is what business models/forms of organization will be disallowed, in practice?  When put that way, though, the post-Lochnersettlement provides a ready answer: any forms the state has a rational basis to prohibit, regardless of whether that’s efficient.
Posted in advertising, commercial speech, disclosures, first amendment, http://schemas.google.com/blogger/2008/kind#post | Leave a comment

IP in the UK

Sir Robin Jacob, Daniel Alexander QC, and Matthew Fisher, Guidebook to Intellectual Property (6th ed.): With dry humor, this book surveys British IP law for nonlawyers/business student types.  I’m not in a position to comment too much on substance.  In any event, the book repeatedly takes the position that when IP rights are at issue it’s often better to settle/go away than to fight even if the claimed right is of dubious validity, which is a position to which I am constitutionally opposed although I understand its practicalities (until you find out that there are no names left available for your business, anyway …).  According to the authors, limits on damages in UK law somewhat mitigate this risk, but this conclusion on patents is typical: “The great majority of patents go through their lives in peace, with nobody really convinced they are valid, but nobody prepared to take the risk of infringing them. Commercially they are just as useful as if they had been valid. Thus, even an invalid patent is often valuable enough to make it worthwhile keeping on bluffing until the bitter end. And there is a lot of truth in the old adage ‘a weak patent in strong hands is worth more than a strong patent in weak hands.’”  Gotta love a good chiasmus.

I appreciated the grace notes of the writing.  “Almost unbelievably, there are now two sorts of unregistered design right …. Unbelievably (again!) there are two sorts of registered design ….”  As for the moral right of paternity, “it may be thought that this is a physiologically and psychologically implausible term, as well as being sexist. Indeed, this is so.”  The following trenchant observations aren’t specific to UK/EU law: “as is coming to be more usual in IP legislation, the draftsman has been careful not to use words that mean anything very definite, either to a lawyer or to anyone else.”  And as for private drafters, “[i]t should in particular be assumed that any agreement drawn up by business people will prove difficult for lawyers (including judges) to sort out; for lawyers and business people have quite different ideas both as to the way they use language and as to the sort of things that agreements ought to provide for.”  Truer words indeed.
Posted in copyright, http://schemas.google.com/blogger/2008/kind#post, patent, reading list, trade secrets, trademark | Leave a comment