E-Commerce Law Week, Issue 389

Maybe Bush Was Right in Referring to the "Internets"
President Bush inspired some snickers among the technorati when, in a 2004 presidential debate with Senator Kerry, he referred to the "Internets," as though there were more than one.  But maybe he was on to something (whether he knew it or not). For "the Internet" as we know it is under attack from multiple angles. Voice over Internet Protocol will continue to make extraordinary strides this year, making the Internet a major pathway for telephone calls. The music industry has already made peace with the paradigm shift to an Internet business model, and legal downloading of songs is booming. And the recent advent of both hardware like the video iPod and services like "Google Video" signal the beginning of a serious shift of the movie and television industry to Internet-based delivery. So all signs seem to point to the convergence of different media onto one transit path -- the Internet. At the same time, however, other forces have been bubbling just beneath the surface that could threaten this seeming "Harmonic Convergence" and lead to a fracturing of the "Internet" as we know it into multiple pathways. Some of these forces include potential discrimination by broadband providers (such as charging content providers more to deliver certain content, or blocking or charging more for content from their competitors); the international fight over control of the domain name system; dissatisfaction in some quarters with the dominance of English as the language of preference; and concerns over security for high-value communications and critical infrastructure operations that depend on the Internet.

The point is not that fragmentation is a good idea, or that divergence is the inevitable future of the Internet. It is simply to point out that convergence of all media delivery onto the Internet is not necessarily an immutable law of nature, and that the development of the Internet doesn't necessarily flow only in one direction toward a single destination. If companies want to preserve an unfragmented Internet akin to what exists now, they might want to try to find common ground on some of the issues that are generating rumblings of discontent.

Mutant Species Invades New Jersey; Federal Judge Fights It Off ... For Now
If we can have Teenage Mutant Ninja Turtles on television, what's the matter with having a "mutant" species of intellectual property law in the courtroom? Well, apparently that would just be too scary, at least according to a recent decision by the US District Court for New Jersey. In IQ Group, Ltd., v. Wiesner Publishing, LLC, the court ruled that treating a corporate logo and hyperlink at the bottom of an email advertisement as "copyright management information" under section 1202(c) of the Digital Millennium Copyright Act (DMCA) would inappropriately permit trademark owners "to invoke DMCA provisions meant to protect copyrights" -- thus transforming the DMCA into a "species of mutant trademark/copyright law." Moreover, the court concluded, the logo and hyperlink did not constitute "copyright management information" -- despite seeming to fit the statutory definition -- because they did not function as a "component of an automated copyright protection or management system." The ruling marks the first time a court has interpreted the statutory definition of "copyright management information." But given glaring problems with the court's rationale, we seriously doubt this is the last word on the subject.

Who's the Lead Agency for Cybersecurity?  DHS?  Guess Again.
For three years, we've been waiting for the Department of Homeland Security (DHS) to give us a sense of how it plans to fulfill the cybersecurity responsibilities assigned to it by Congress and the President, including tasks such as promoting public awareness and outreach and improving public/private information sharing. But while DHS continues to dither and dawdle, the Federal Trade Commission (FTC) has quietly but effectively made itself into a cybersecurity powerhouse. The FTC's enforcement actions against companies that it deems to have "inadequate" information security have begun to create a de facto standard for industry, which in turn is influencing legislation in Congress and in state capitals. On January 10, the FTC unveiled a new element in its cybersecurity campaign: a comprehensive website, dubbed "OnGuard Online," that provides "practical tips" on how to "guard against Internet fraud, secure your computer, and protect your personal information." This is a joint endeavor by the FTC with several other agencies and private sector entities. It's not the substance of the site that we find noteworthy. Rather, it is the fact that, with this effort, the FTC has established itself as a key player in the cliché-ridden but still important realm of "public-private partnerships" and simultaneously as a focal point for interagency cybersecurity efforts. In Washington, DC, those two roles give the FTC a legitimate claim on a leadership role, and make it the player to watch in 2006.

Two State Courts Find Forum Selection Clauses "Unenforceable"
In two recent cases, state courts refused to enforce a forum selection clause in an Internet service provider's "clickwrap" terms-of-service agreement. A New York State trial court held, in Scarcella v. America Online, Inc., that the forum selection clause in AOL’s membership agreement was "unreasonable" in light of the "costs and inconvenience" of litigating the claim in Virginia, as the contract stipulated. Meanwhile, in Aral v. Earthlink, Inc., a California state appellate court found "unconscionable" a contract forbidding class action lawsuits and requiring California customers with minor monetary claims to arbitrate in Georgia. Although both cases involved ISP defendants, their relevance may be much wider, since the use of such "contracts of adhesion" is by no means limited to ISPs. The two rulings suggest that some state courts may be more sympathetic to the "little guy" when it comes to enforcing forum selection clauses and mandatory arbitration agreements, at least in the case of small claims.

Chattels Roam From Illinois to California
Never doubt the power of old-fashioned tort claims with funny names. Yet another federal court has allowed a class action lawsuit against a spyware distributor to proceed based on a "trespass to chattels" claim. In Kerrins v. Intermix Media, Inc., the US District Court for the Central District of California denied a defendant’s motion to dismiss a class action suit alleging trespass to chattels against a distributor of adware programs that the plaintiff had downloaded and installed onto his computer, i.e., his "chattels." Although this 19th century tort recently has been a popular cause of action used by Internet service providers (ISPs) against spammers, it was the Northern District of Illinois' decision last August in Sotelo v. DirectRevenue that first opened the door for individuals to use trespass to chattels claims against malware companies. In reaching its decision, the court in Kerrins cited Sotelo with approval, bolstering the notion that common law may already contain remedies for computer security and privacy breaches. With courts' showing a willingness to certify class actions in such cases, common law security and privacy suits will become more economically attractive to plaintiffs' lawyers.

Questions and comments acout E-Commerce Law Week are always welcome.  Please send your feedback to Sally Albertazzie.