When Copyright Infringement Pays

Yesterday, Google turned years of arguable copyright infringement on its part into the biggest book deal in history. How did it happen? Basically, Google started digitally scanning books a few years ago without the permission of authors and publishers. The publishing industry trade group took exception and filed suit on behalf of authors and publishers. The parties reached a deal yesterday that, in my opinion, is the deal of the century for Google. Read here for further details on the settlement. Think of the enormous revenue stream possibilities Google can spin off from an unlimited virtual, digital library.

Many wonder if this foreshadows a similar deal in the Viacom v. Youtube infringement case. Who knows but it perhaps illuminates Google's corporate strategy for growing their business opportunities.

New Federal Online Pharmacy Law

A new federal law will set wide ranging standards governing internet pharmacies that sell illegal controlled substances. Sites selling human growth hormone and steroids will be hardest hit. Internet lawyers have noticed that internet service providers now feel empowered to shut down such internet pharmacies hosted on their servers. Internet hosting companies such as GoDaddy and Register.com are already kicking such online pharmacies off their servers, even though the law was just signed by President Bush and will not go into effect for many months.

The law also requires online pharmacies to register with the DEA, a requirement previously only leveled against brick and mortar pharmacies. As a practical matter, consumers now will need a doctor's prescription in order to purchase drugs online. Also, a person caught violating the new law is subject to 10 years in prison - double the previous penalty for unlawful distribution.

What will the net effect of this be? Like many internet industries that come under regulation of some form, I suspect this law will force most online pharmacies to set up shop abroad, making enforcement impractical and expensive. The better policy from a law enforcement perspective may be to penalize the purchasers of unlawful controlled substances. Internet pharmacies definitely need to retain an experienced internet law firm for guidance on this new statute.

McCain Not Happy With the DMCA

We know that DMCA takedown notices walk a fine line between benefit and burden. On the one hand, DMCA takedown notices allow intellectual property owners an easy, cost effective way to protect their intellectual property in this rapid cut and paste internet world. Also, it insulates internet service providers from vicarious copyright infringement claims - as long as they follow the proper statutory procedures. And that means innovation can happen much quicker online.

But experienced internet attorneys also understand the dark side of DMCA takedown notices. That is, overreaching, improper and often perjerous DMCA takedown notices. I've blogged here on multiple occasions regarding the frequent and flagrant abuse of the DMCA takedown procedure and the need for reform. The result of such internet law impropriety is the removal of non-infringing content or fair use content from websites such as Youtube.

It looks like John McCain notices and he doesn't want to play by ordinary may be feeling the sting of abusive and over-zealous DMCA takedownDMCA rules. McCain wants an exception to the normal statutory time frame isp's are afforded for review of alleged copyright infringement. McCain staffers have complained that pro-McCain material, promoting McCain's campaign is being improperly removed from Youtube. McCain contends the normal 10 day time frame shouldn't apply to him because of the time sensitive and urgent nature of a presidential campaign. Sorry John, no exceptions for you. Maybe now McCain will give some attention to DMCA revision when he goes back to work in the Senate in a few weeks.

Intellectual Property Basics for Web Entrepreneurs

Internet attorneys are often asked by internet entrepreneurs about basic intellectual property issues. One common intellectual property concept that is often confusing for non-lawyers is trademark law and what it means and what it protects.

Trademarks are distinctive words or symbols used by individuals and businesses to identify the source of goods and services in the marketplace. Examples are "Coca-Cola" or "Pepsi". These are made up words created to identify the manufacturer of various soda products. Another common way to think of trademarks is that they identify brands of goods and services. Trademarks may be accompanied by symbols such as "TM". This puts the public on notice that the owner of the accompanying words and symbols claims proprietary and exclusive rights in such words and symbols to identify their goods and services. Trademarks can consist of words, symbols or a combination of both. The strength of a trademark depends upon its uniqueness and non-descriptive quality. Thus, made up words like "Pepsi" and "Coca-Cola" compel the strongest trademark protection.

For website owners, registration of their trademarks is crucial. Registration is accomplished through the U.S. Trademark Office. While trademarks are not created upon registration - that occurs upon their actual use in commerce - registration provides the trademark owner with numerous rights including the ability to protect their trademark from infringement. For example, the owner of a registered trademark may sue for infringement in federal court and obtain attorneys fees. This enforcement ability is not available without registration.

For website owners with a trademark appearing in their domain name, they can prevent other businesses and individuals from obtaining and owning similar or confusingly similar domain names. In some cases, a website owner may compel the competing or infringing domain to be transferred to them in a UDRP action, administered through ICANN and various arbitration companies.

At the very least, this quick summation illustrates the importance of registering trademarks for internet based e-commerce businesses.

Are Websites Responsible for Defamation Posted by Their Users?

As a lawyer operating an internet law firm, I am often asked whether or not websites are responsible for the content posted by their users. This frequently arises in the context of defamation. A business or individual is horribly defamed on a site like Ripoffreport or Citysearch or Yelp and the defamatory post achieves a high rank in Google natural search results for that particular business or individual. As a result, said business or individual experiences horrible fallout in the form of public shame and loss of business.

The defamed party obviously has claims against the poster/author of the defamatory content. However, many defamed parties wish to also sue the website that provided the forum for the wrongdoer and broadcast the harmful defamation to the world.

The bad news is that the Communications Decency Act (CDA), signed by Bill Clinton in 1996, provides broad immunity to websites for content posted by their users in addition to other torts. Of course, this law was passed well before the web 2.0 revolution which birthed a bevy of websites granting users the ability to post content and collaborate in ways never previously contemplated. Bottom line is that in most situations, websites are not liable for the bad acts of their users, including defamation.

Recently, the Ninth Circuit has given victims of defamation a little hope and perhaps signaled a shift toward further website responsibility in policing its users. In Fair Housing Council of San Fernando Valley , et. al., v. Roommate.com, LLC, the Ninth Circuit held that the CDA would not provide immunity to Roommate.com for violations of the Fair Housing Act and other state laws. The reason the Court gave was that Roommate.com participated in the bad conduct of its users by providing drop down menus for its users to complete - these drop down menus were used by Roommate.com to commit discriminatory housing acts.

So, there is finally some caselaw on the books - applicable at least in the west coast states comprising the Ninth Circuit - which suggests that websites may be held liable for the defamatory comments of users if the website editorializes or embellishes or legitimizes its users' comments in any way. I believe a number of these business ratings websites, identified above, may be held liable for defamation committed by their users because most, if not all, legitimize their users' posts in the form of stars or smiley faces or other avatars and/or icons.

If you have questions regarding internet defamation and the Communications Decency Act, contact an experienced internet defamation attorney.