In Doe v. Harris, Case No. 13-15263 (U.S. Court of Appeals, Ninth Circuit, order entered November 18, 2014), the U.S. Court of Appeals for the Ninth Circuit affirmed a district court’s order preliminarily enjoining provisions of the Californians Against Sexual Exploitation Act (“Act”). The Act seeks, inter alia, to update reporting obligations of registered sex offenders by requiring they provide a list of all Internet identifiers they have established and of all Internet service providers they use. The Ninth Circuit agreed with the district court that the Act imposes a substantial burden on offenders’ ability to engage in legitimate online speech, including anonymous speech, as protected by the First Amendment. It concluded that the Act unnecessarily chills protected speech by not making clear what offenders are required to report, providing insufficient safeguards to prevent the public release of reported information, and because the 24-hour reporting requirement is onerous and overbroad. The Ninth Circuit concluded that appellees were likely to succeed on the merits of their First Amendment challenge and that the district court did not abuse its discretion in finding that the elements for obtaining a preliminary injunction had been satisfied.
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United Airlines, Orbitz Sue Entrepreneur Over Site on How to Land Cheap Flights
In United Airlines Inc. et al. v. Zaman, Case No. 1:14-cv-09214 (N.D. Ill., E. Div., complaint filed November 17, 2014), United Airlines and Orbitz sued to prevent Aktarer Zaman and his Web site skiplagged.com from helping flyers find “hidden city” tickets that the companies claim undermine their profits. Hidden city ticketing involves booking a layover and purposely missing the second flight, a practice that can save travelers money but is forbidden by many airlines, including United. Among the stated concerns is United’s resulting inability to count passengers, which affects fuel calculations and causes delays. The complaint alleges that Zaman “intentionally and maliciously” interfered with industry relationships by “promoting prohibited forms of travel.” It includes claims for unfair competition under Lanham Act, 15 U.S.C. Section 1125(a), tortious interference with contract, breach of contract, and misappropriation. Zaman argues the site merely organizes publicly available information and that skiplagged.com receives no compensation for tickets purchased.
Information in Email Body May Overcome Otherwise Actionable Header, Subject Line
In Rosolowski et al. v. Guthy-Renker LLC, Case No. B250951 (Cal. Ct. App., 2nd Dist., Div. 3, order entered October 29, 2014), a California court of appeals held that a header in a commercial email does not misrepresent the sender’s identity simply because it fails to identify the name of the entity that sent it, or because it fails to identify an entity with a traceable domain name, as long as the sender’s identity is readily ascertainable from the email body. California Business & Professions Code section 17529.5 prohibits email ads with falsified, misrepresented, or forged header information, or that contain a subject line likely to mislead a recipient about a material fact regarding the contents or subject matter of the message. In this case, defendant’s emails were ads for its consumer brands and the emails provided a link to its Web site, an unsubscribe notice, and physical address. The bodies also clarified that the free gift mentioned in the “subject” line was contingent on a purchase, although the subject line did not refer to the purchase agreement.
Federal Trade Commission Claims AT&T Has Misled Consumers with “Unlimited” Data Plans
On October 28, 2014, the Federal Trade Commission (“FTC”) filed a complaint against AT&T in the U.S. District Court for the Northern District of California, alleging it sold consumers unlimited smartphone data plans without telling them it would slow Internet speeds once consumers reached a certain amount of data in a particular billing cycle. The FTC alleges this practice of data “throttling” reduced Internet speeds by up to 90% in some instances. It also alleges that AT&T violated the FTC Act by changing the terms of consumers’ unlimited data plans during contract periods, and by failing to fully disclose the specifics of the practice of throttling to consumers renewing unlimited data plans. Finally, the FTC alleges that when customers cancelled contracts due to slowed Internet speeds, AT&T charged high early termination fees.
Summary Judgment Precluded by Dispute Over Alleged Material Misrepresentation in Unsolicited Commercial Email
In Wagner v. Digital Publishing Corporation et al., Case No. C 13-04952 (U.S. District Court, N.D. California, order entered October 10, 2014), the U.S. District Court for the Northern District of California held that a triable issue over whether the “From” lines, domain names, and subject lines of unsolicited commercial emails contained material misrepresentations defeats partial summary judgment on plaintiff’s state law claims. The court held there were genuine issues of material fact about whether the companies listed as the registrants of the domain names from which the emails were sent were valid entities when the emails were sent. It also held there was no evidence that the defendants used privately registered domain names to conceal their identities as part of the emails, and that a reasonable juror could find that the subject lines were too good to be true and thus unlikely to mislead a recipient.
Parents May Be Liable for Not Requiring Child to Cancel Fake Facebook Account
In Boston et al. v. Athearn et al., Case No. A14A0971 (Ga. Ct. App., order entered October 10, 2014), the Georgia Court of Appeals reversed a trial court’s grant of summary judgment and ruled that a couple may be held liable for not requiring their minor child to cancel a fake Facebook account after they learned about it. Their child had created an account using a classmate’s name, which included an altered photo and sexual, racist, and otherwise offensive postings. He then invited his classmate’s teachers, family members, and other students to “friend” the account. The victim’s parents sued the child and child’s parents for libel and intentional infliction of emotional distress, claiming the parents breached a duty to supervise their child’s use of a computer and Internet account. The appellate court ruled that the parents may be held directly liable for their own negligence in failing to supervise or control their child in a matter involving conduct that posed an unreasonable risk of harm to others.
Magistrate Judge Recommends First-Ever Damages Award for Fraudulent DMCA Takedown Notices
On October 6, 2014, a magistrate judge for the U.S. District Court for the Northern District of California recommended a first-ever award of damages to a blogger and the operator of the WordPress blogging platform – Automattic, Inc. – based on lost work and time spent dealing with false Digital Millenium Copyright Act (“DMCA”) takedown notices. The DMCA provides for damages, costs, and attorneys’ fees against abusers of the takedown provision. Such remedies against abusers are available to the alleged infringer, the copyright owner, and the Internet Service Provider for taking the material down and restoring it.
Generic Use of “Google” As a Verb Does Not Invalidate Trademark
In Elliott et al. v. Google Inc., Case No. CV-12-1072 (U.S. District Court, D. Arizona, order entered September 10, 2014), the U.S. District Court for the District of Arizona held that the primary significance of the term “Google” to a majority of the Internet-searching public was to refer to the Google search engine specifically, rather than as a descriptive term for search engines generally. This was so even if “google” is widely used as a generic verb, regardless of whether Google’s search engine is being used. The court opined that “a trademark performs its statutory function so long as it distinguishes a product or service from those of others and indicates the product’s or service’s source.” The court concluded that plaintiff had failed to present conclusive evidence that the primary meaning of “google” was as a generic verb rather than as an indicator of the origin of the services at issue.
Non-Disparagement Clauses in Consumer Contracts Banned in California
On September 9, 2014, California Governor Jerry Brown signed Assembly Bill 2365, which prevents consumer contracts for goods and services from containing provisions that require consumers to waive their rights to make disparaging comments about those goods or services. It also forbids threatening or penalizing consumers for making disparaging comments. The law takes effect on January 1, 2015, and will be enforceable by consumers and public prosecutors.
Ninth Circuit Rejects Merchants’ Claims of Extortion, Unfair Competition by Yelp
In Levitt v. Yelp! Inc., Case No. 11-17676 (U.S. Court of Appeals, Ninth Circuit, order entered September 2, 2014), the U.S. Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal of a class action lawsuit filed by business owners who alleged Yelp Inc. had extorted or attempted to extort payments for advertising by altering user reviews and writing false and defamatory reviews in violation of California’s Unfair Competition Law (“UCL”). In a ruling that arguably suggests that Yelp can manipulate its ratings for money, the court held that the business owners failed to state a claim for extortion for purposes of the UCL. It also held that the business owners failed to allege sufficient facts to support their claim that Yelp wrote disparaging reviews of their businesses.