E-Commerce Law Week, Issue 436

Aussies and Yanks Agree: Linker Beware

"Caveat emptor" (or "buyer beware") has long been a guiding principle for consumers. But as more business -- and copyrighted content -- moves online, mavens of e-commerce might want to formulate an additional maxim: "caveat linker." As recent decisions in the United States and Australia demonstrate, webmasters -- and, in some cases, the Internet service providers that host their sites -- have several reasons to link with care. In Live Nation Motor Sports, Inc. v. Davis, a federal court in Texas held that by including links to live audio webcasts owned by Live Nation on his website, the defendant had likely infringed upon the plaintiff’s copyright. And in Cooper v. Universal Music Australia Pty Ltd., the Federal Court of Australia upheld a judge’s ruling, on which we reported earlier, that a website operator and his ISP had "authorized" copyright infringement by linking to third-party sites that hosted pirated music files. These two decisions suggest that webmasters and ISPs should be wary when linking to content, particularly if they suspect that it may be copyrighted.

Court Makes It Easier to Bring CAN-SPAM Suits

The Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act of 2003 bars false or misleading "from" lines and deceptive "subject" lines in emails, and requires methods for recipients to "opt out" of future emails. It also provides a private right of action for recipients of spam. In Gordon v. Virtumundo, Inc., a federal court in Washington State found that a bare allegation that a subject line is "materially misleading" does not constitute an averment of fraud, and therefore need not be pled "with particularity." This means that plaintiffs can make out a CAN-SPAM claim simply by alleging that they received emails with "materially misleading" header information, and do not [need to] allege and prove that the emails were sent with "intent to deceive" or with "knowledge of ... falsity." Fortified by the court's ruling, more plaintiffs may seek CAN-SPAM relief. While this may not cheer commercial emailers, ISPs and other entities that must bear the cost of contending with daily waves of spam will likely appreciate the ease of pleading a CAN-SPAM violation, which could make spammers think twice before hitting "send".

Court Turns Back Antitrust Claims Against VeriSign and ICANN

Currently, if a company wishes to register a .com or .net domain, the registrar who secures the domain on the company’s behalf must file a registration request with VeriSign, Inc., the registry operator that the Internet Corporation for Assigned Names and Numbers (ICANN) has granted sole rights to those domains. So when VeriSign secured -- without competitive bidding -- a five-year extension to its control over .com domains which permitted price increases for domain registrations, a coalition of Internet domain registrars, registrants and back order service providers known as the Coalition For ICANN Transparency Inc. (CFIT) filed suit against VeriSign and ICANN in federal court in California. The suit alleged that VeriSign had monopolized the markets for the registration of both new and expiring .com and .net domains and that VeriSign had conspired with ICANN to monopolize and restrain trade in these markets. Late last year, the court dismissed these claims, finding that no monopolizable separate market existed for expired domain names, and that CFIT had not shown that an antitrust injury had occurred.

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