E-Commerce Law Week, Issue 370

No Trespassing . . . on My Cyber Chattels
Who needs new laws to combat spyware, when old-fashioned tort claims with funny names will do just fine? Once thought confined to the dustbin of 19th Century legal history, “trespass to chattels” -- or trespass to personal property -- has been resurrected in recent years as a cause of action against Internet spammers and spyware companies. The latest such case is Sotelo v. DirectRevenue, LLC, in which the U.S. District Court for the Northern District of Illinois, Eastern Division, on August 29, allowed a class-action suit against several spyware distributors to proceed based on a claim of damages flowing from an alleged trespass to chattels -- i.e., the plaintiff's computer. In reinvigorating an obscure and largely dormant cause of action, the court demonstrated that the common law may well already contain remedies for computer security and privacy breaches that have until recently been seen as unsusceptible to tort suits for one reason or another. And by allowing the case to proceed as a class action, the decision could make such claims more economically attractive to plaintiffs' lawyers. After all, one of the spyware defendants in this case claims access to over 12 million computers in the U.S. through its software, creating a potentially large class of annoyed litigants. So a legal tool that was first used by Internet service providers against spammers may now become a favored tool for individual computer users, as long as there's a deep pocket on the other end.

District Court Lifts  NSL "Gag Order" in Library Case
The American Civil Liberties Union ("ACLU") achieved at least a partial -- albeit perhaps temporary -- victory on September 9 in its drive to get the National Security Letter (NSL) provisions of the Electronic Communications Privacy Act (18 U.S.C. § 2709) declared unconstitutional. Early this month, the ACLU filed a constitutional challenge on behalf of an unnamed Connecticut organization (referred to as "John Doe" in the lawsuit) that had received an NSL request for records concerning library patrons. On September 9, in Doe, et al., v. Gonzales, the U.S. District Court for the District of Connecticut granted, on First Amendment grounds, the unnamed plaintiffs' motion for a preliminary injunction lifting section 2709’s prohibition on disclosing its identity. The court held that the government failed to show a “compelling state interest that is served by gagging the plaintiffs with regard to Doe’s identity,” and that even if it did have such an interest, the gag order was not narrowly tailored to serve that interest. Since the plaintiffs established a “substantial likelihood” of success on the merits, as well as irreparable harm, the court granted their motion to enjoin enforcement of section 2709(c) -- the so-called “gag provision.” But the court did acquiesce to the government’s request for a “brief stay" of enforcement of the preliminary injunction until September 20, to allow the government time to file an expedited appeal with the US Court of Appeals for the Second Circuit. And the Second Circuit took quick action, deciding on September 20 to stay the District Court's ruling further, giving the government more time to prepare its appeal.

Are Children the Future of European Internet Regulation?
The need to protect children has been a major theme underlying Internet regulation in the United States, from the Children's Online Privacy Protection Act of 1998 to the prominence of the National Center for Missing and Exploited Children in Internet policy debates. In Europe, notwithstanding the significantly more aggressive nature of Internet regulation, this has been much less the case. The reason appears to be that European regulators have focused on broad cross-sectoral issues, while U.S. regulation has been more targeted, addressing issues of particular concern (like protection of children). But recent indications are that the European dynamic may be changing.  On September 7, the European Parliament conducted a "first reading" of a proposed Recommendation on the Protection of Minors and Human Dignity and the Right of Reply in Relation to the Competitiveness of the European Audiovisual and Information Services Industry (the "Recommendation").  Although the Recommendation would not be legally binding, it proposes a rather extensive set of measures for both EU Member States and industry participants and any such recommendations that are adopted would likely have significant influence over time.  And, on the Member State level, the government of Finland announced that it will introduce a nationwide voluntary content filtering system for child pornography, a system similar to those already in place in the UK, Norway, and Sweden.

Goliath and Goliath Fight to a Draw in Trademark Dispute
Search engines like Google generate an enormous amount of their profits by allowing advertisers to buy ads that are triggered by the search terms people enter. The ads are then typically listed off to the side, apart from the main list of websites responsive to the search terms. Although lucrative, this business model has led to several trademark infringement lawsuits against the search engine behemoth. And while each case may be slightly different, the trademark actions against Google revolve around a fundamental question:  can a trademark owner collect damages from a search engine for featuring ads from rivals that use its trademarked name, and if so, under what circumstances?  Well, the answer is still: “who the heck knows?”

In the most recent case, Google settled its long-running trademark dispute with insurance giant Geico. The settlement comes on the heels of an August 8 preliminary decision by a judge in the US District Court for the Eastern District of Virginia.  In that ruling, the judge declined to prevent Google from allowing advertisers to use Geico's name as a keyword search term but left the door open for Geico to collect damages from Google for featuring ads from rivals that used Geico's name in the heading above the weblinks or in the subtext. The decision also gave the two companies 30 days to settle the dispute out of court, which the companies apparently accomplished at the last minute. But since the disagreement was settled before a judge could rule definitively on the issues, confusion will continue to reign for the foreseeable future as to the limits imposed by trademark law on search engine advertising.

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