2010 Intellectual Property Counseling: From StartUp to IPO Hot Topics

A presentation where I discuss hot topics in Internet Intellectual Property and Privacy focusing on anonymity, privacy, social media, eavesdropping and unauthorized access, and Section 230 Immunity

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Intellectual Property Counseling:
From Start-Up to Initial Public Offering
Illinois State Bar Association
April 28, 2010

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Hot Topics in Internet IP and Privacy
•Anonymity Online and Unwanted Content
•Privacy
•Social Media
•Eavesdropping and Unauthorized Access
•Section 230 Immunity

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Anonymity Online
Anonymous Speech is Protected….
….and Protected online…..
…..by the Constitution

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Anonymity Online
But:
Defamation not protected
Privacy Violations not protected
Breach of Contract not protected
IP violations not protected

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Anonymity Online
Begin with policies…
What can employees do and
what can they not do?

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Anonymity Online
Policies to Consider
Non Compete
Non Disclosure
Employment Agreements
Computer Use Policies

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Anonymity Online
By policies,
proactive defense

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Anonymity Online
But, what if content found online by
anonymous speakers
what to do…….

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Anonymity Online
Defamation -
Unless severe, best to avoid
Backlash
Difficult Standard

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Anonymity Online
Originally, the standards began very minimalist
Motion to Dismiss
Columbia Ins. Co. v. Seescandy.com
185 F.R.D. 573, 578 (N.D. Cal.1999)
Elements quite straightforward….

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Anonymity Online
–Identify defendant with sufficient particularity
–Show previous efforts to locate the defendant
–Demonstrate Could Survive Motion to Dismiss
–Justify Request and Identify Those with
Information

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Anonymity Online
Standards became more stringent
Dendrite Int’l, Inc. v. John Doe No. 3
775 A.2d 756, 760-761 (N.J. App. 2001)
–Notification
–Specify Exact Statements
–Prima Facie Cause of Action
–Produce Sufficient Evidence to Support Each Element
–Balance Strength of Prima Facie Case against Necessity for
Disclosure

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Anonymity Online
Doe v. Cahill, 884 A.2d 451 (Del. 2005)
Notice
Summary Judgment

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Anonymity Online
Mobilisa, Inc. v. John Doe 1, et al.,
170 P.3d 712 (November 27, 2007)
Cahill plus Balancing

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Anonymity Online
For Employers,
the game is up
defamation no more…

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Anonymity Online
Where more accepted…
Confidentiality
IP
Breach of Contract (be careful)

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Anonymity Online
Be careful
Be prepared to meet MSJ standard
Courts aware and savvy

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Privacy
Video Surveillance
Robbins v. Lower Merion School District
(E.D. Pa.)
(school uses laptop cameras)
Arlen Spector introduced legislation
Surreptitious Video Surveillance Act of 2010

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Privacy
Cloud Computing

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Privacy (cont’d)
Facebook
Changes privacy policies again
Information owned by Facebook
Call for Legislation

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Social Media Concerns
Guiding Employers on Monitoring Social
Media
Proactive Approach Means Developing
Policies and Being Reasonable

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Social Media Concerns (cont’d)
Why be concerned?
Hostile environment/harassment issues
Defamation Claims
Improper Disclosure
Child Pornography Reporting (Illinois)
FTC Guidelines on Product Affiliation
Malware and Security Issues

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Social Media Concerns (cont’d)
Developing Policies
Reflect Philosophy of Organization
Prohibit Clear Conduct
Be Reasonable and Practical

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Social Media Concerns (cont’d)
Be cautious of privacy
Intrusion Upon Seclusion
Eavesdropping Statutes
NLR Act

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Eavesdropping and Unauthorized Access
•Federal Statutes
–Computer Fraud and Abuse Act
–Electronic Communications Privacy Act
–Stored Communications Act
•State Statutes

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Eavesdropping and Unauthorized Access
Computer Fraud and Abuse Act (CFAA)
(18 U.S.C. §1030)
Variety Contexts
-National Security
-Financial Information
-Information from Government
-Protected Computer

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Eavesdropping and Unauthorized Access
CFAA (cont’d)
Protected Computer
Financial Institution or related
Interstate or Foreign Commerce
18 U.S.C. §1030(e)(2)

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Eavesdropping and Unauthorized Access
(a)(4) knowingly and with intent to defraud, accesses
a protected computer without authorization, or
exceeds authorized access, and by means of such
conduct furthers the intended fraud and obtains
anything of value, unless the object of the fraud
and the thing obtained consists only of the use of
the computer and the value of such use is not
more than $5,000 in any 1-year period

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Eavesdropping and Unauthorized Access
CFAA (cont’d)
Protected Computer and Causes Damage
Google Example

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Eavesdropping and Unauthorized Access
CFAA (cont’d)
Civil Remedy provision
18 U.S.C. §1030(g)
Anyone harmed BUT….

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Eavesdropping and Unauthorized Access
One of five types of damage (18 U.S.C. §1030(c)(4)(A)(i)
Most Common
(I) loss to 1 or more persons during any 1-year period (and, for
purposes of an investigation, prosecution, or other proceeding brought
by the United States only, loss resulting from a related course of
conduct affecting 1 or more other protected computers) aggregating at
least $5,000 in value;
Also:
affecting medical examination, diagnosis, treatment, or care
physical injury to any person;
a threat to public health or safety;
damage affecting a computer used by or for an entity of US

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Eavesdropping and Unauthorized Access
Must be
Unauthorized Access
Exceeding Authorized Access
Key Question….

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Eavesdropping and Unauthorized Access
Snap-on Business Solutions Inc. v. O'Neil & Assocs., Inc.
(N.D. Ohio April 16, 2010)
(Examined Agreements, question of fact denied MSJ)
LVRC Holdings LLC v. Brekka, 581 F.3d 1127 (9th Cir. 2009)
(access not automatically unauthorized if disloyal)
International Airport Centers, LLC v. Citrin, 440 F.3d 418
(7th Cir. 2006)
(employee who violates duty of loyalty, no authorization)

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Eavesdropping and Unauthorized Access
CFAA (cont’d)
US v. Drew, (259 F.R.D. 449 (C.D. Cal. 2009)
(violation of TOS not enough)

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Eavesdropping and Unauthorized Access
Electronic Communications and Privacy Act
18 U.S.C. §2510, et seq.
Particularly §2511, criminalizes
Intentional interception of oral, wire or electronic
communication
Discloses
Uses

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Eavesdropping and Unauthorized Access
ECPA (cont’d)
Question: What is interception

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Eavesdropping and Unauthorized Access
ECPA (cont’d)
Civil Remedies
generally any person whose wire, oral, or
electronic communication is intercepted,
disclosed, or intentionally used

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Eavesdropping and Unauthorized Access
Relief
–Preliminary, declaratory and other equitable
–reasonable attorney’s fee and costs
–Damages, either (a) actual plus profits OR (b)
statutory ($100/day or $10,000)
18 U.S.C. §2520

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Eavesdropping and Unauthorized Access
ECPA (cont’d)
Question: What is electronic communication?
United States v. Councilman, 418 F.3d 67 (1st Cir. Mass. 2005)
United States v. Szymuszkiewicz, 2009 U.S. Dist. LEXIS 60755
(E.D. Wis. June 30, 2009)

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Eavesdropping and Unauthorized Access
Stored Communications Act (18 U.S.C. §2701)
whoever--
(1)intentionally accesses without authorization a
facility through which an electronic
communication service is provided; or
(2) intentionally exceeds an authorization to access
that facility;
AND…..

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Eavesdropping and Unauthorized Access
SCA (cont’d)
thereby obtains, alters, or prevents
authorized access to a wire or electronic
communication while it is in electronic
storage in such system shall be
punished . . .

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Eavesdropping and Unauthorized Access
SCA (cont’d)
Civil Remedy
Very similar to ECPA except minimum statutory of
$1,000
Punitive if willful determination
18 U.S.C. §2707

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Eavesdropping and Unauthorized Access
SCA (cont’d)
18 U.S.C. §2702
Providers generally cannot disclose
contents of communications except in
certain instances

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Eavesdropping and Unauthorized Access
SCA (cont’d)
City of Ontario, California v. Quon, et al.
United States Supreme Court
April 19, 2010 Oral Arguments
Quon v. Arch Wireless Operating Co., Inc.,
529 F.3d 892 (9th Cir. Cal. 2008)

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Eavesdropping and Unauthorized Access
SCA (cont’d)
Quon
Privacy rights of employees and
texting

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Eavesdropping and Unauthorized Access
SCA (cont’d)
Quon SCA Question:
In storing texts, was Arch Wireless acting as a
“remote computing service” or an “electronic
communication service”?
If remote computing service, it could disclose, as
subscriber was the City employer.

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Eavesdropping and Unauthorized Access
SCA (cont’d)
Quon SCA Question:
If electronic communication service, it could not
disclose because the City was not an “originator or
an addressee or intended recipient of such
communication.”
This is what Ninth Circuit concluded.

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Eavesdropping and Unauthorized Access
SCA (cont’d)
Impact of Quon on Use of Employer
Devices by Employees

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Eavesdropping and Unauthorized Access
Illinois Eavesdropping Statute
720 ILCS 5/14-1 et seq.
IP Section proposed legislation to include
electronic communications
SB 2987

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CDA §230
OSP Safe Harbor for Content
No provider or user of an interactive computer
service shall be treated as the publisher or speaker of
any information provided by another information
content provider.
47 U.S.C. §230(c)(1)

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CDA §230 (cont’d)
OSP Safe Harbor for Voluntary Efforts (47 U.S.C. §230(c)(2))
No provider or user of an interactive computer service shall be
held liable on account of
(A) 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;
OR

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CDA §230 (cont’d)
OSP Safe Harbor for Voluntary Efforts (47 U.S.C. §230(c)(2))
No provider or user of an interactive computer service shall be
held liable on account of
(B) any action taken to enable or make available to information
content providers or others the technical means to restrict
access to material described in paragraph (1).

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CDA §230 (cont’d)
§230 Does Not Affect:
Criminal Law
Intellectual Property (see DMCA)
ECPA
47 U.S.C. §230(e)

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CDA §230 (cont’d)
Additional Provisions:
State law can expand, but not be inconsistent
(47 U.S.C. §230(e)(3))
Requires Interactive Service Provider to
provide notice of availability parental control
devices
(47 U.S.C. §230(d))

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CDA §230 (cont’d)
As always, definitions critical:
Interactive Service Provider
Information Content Provider

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CDA §230 (cont’d)
Interactive Computer Service
means any information service, system, or access
software provider that provides or enables computer
access by multiple users to a computer server,
including specifically a service or system that
provides access to the Internet and such systems
operated or services offered by libraries or
educational institutions.
47 U.S.C. §230 (f)(3)

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CDA §230 (cont’d)
Information Content Provider
means any person or entity that is
responsible, in whole or in part, for the
creation or development of information
provided through the Internet or any other
interactive computer service.
47 U.S.C. §230 (f)(3)

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CDA §230 (cont’d)
Broad Protection
Past Cases
Craigslist
Roommates.com

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CDA §230 (cont’d)
Craigslist
Chicago Lawyers Cmte. v. Craigslist,
519 F.3d 666 (7th Cir. 2008)
March 14, 2008
(no liability, did not cause to be posted)

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CDA §230 (cont’d)
Roommates.com
Fair Hous. Council v. Roommates.com, LLC,
521 F.3d 1157 (9th Cir. Cal. 2008)
Liability -created discriminatory questions

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CDA §230 (cont’d)
Recent Cases
Nemet Chevrolet, Ltd. v. Consumeraffairs.com, 591 F.3d 250 (4th
Cir. Va. 2009)
(No liability)
FTC v. Accusearch, Inc.,
570 F.3d 1187 (10th Cir. Wyo. 2009)
(liability -engaged in illegal conduct)
Zango, Inc. v. Kaspersky Lab, Inc., 568 F.3d 1169 (9th Cir. Wash.
2009)
(no liability)

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Jurisdiction in Cyberspace
7th Circuit
Tamburo v. Dworkin, et al.

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EFF’s 2010 Items
Attack on Cryptography
Will 2010 be the Print version of RIAA?
Global Internet Censorship
Hardware Hacking
Location Tracking

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EFF’s 2010 Items
Net Neutrality
Online Video (TV Everywhere, Selectable
Output Control)
Congress (Patriot Act, Cybersecurity Act)
Social Networking Privacy

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EFF’s 2010 Items
Fair Use of Trademarks
Web Browser Privacy

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Charles Lee Mudd Jr.
Mudd Law Offices
3114 West Irving Park Road
Chicago, Illinois 60618
773.588.5410 Telephone
773.588.5440 Facsimile
[email protected]