E-Commerce Law Week, Issue 473

Court Gags on National Security Letters, But Its Purple Prose May Cause Heartburn on Appeal

On September 6, a federal court in New York ruled, in Doe v. Gonzales,  that "gag" orders prohibiting electronic communications service providers from disclosing that they received National Security Letters for customer information violate the First Amendment.  Moreover, because it found that the gag order subsection cannot be severed from the rest of the NSL section of the Electronic Communications Privacy Act , the court invalidated the entire NSL provision.  The court also found that the limitations on judicial review of nondisclosure orders violate the First Amendment and the separation of powers.  The court stayed its ruling pending appeal (or for 90 days in the unlikely event that no appeal is filed), meaning that the FBI can continue to serve NSLs on telecoms and email providers.  While the court's lengthy defense of judicial prerogatives and its soaring flights of rhetoric may stir the souls of civil libertarians, a narrower and more carefully calibrated opinion might have stood a better chance of withstanding appeal.

Settlement Closes the Blinds on Trademark Fight with Google, Papering Over Legal Issues

Another suit over Google's sale of trademarked search terms has ended without a trial, this one between Google and American Blind & Wallpaper Factory (AB).  AB had alleged that, by selling online advertising triggered by a search for AB's trademarks but displaying ads belonging to AB's competitors, Google had used AB's marks in commerce in a way that was likely to confuse users as to the origin of the ads.  In May, a federal court in California largely rejected Google's motion for summary judgment, finding that Google had used AB's marks in commerce and that AB had presented sufficient evidence of initial interest confusion to survive Google's motion for summary judgment.  But the court also ruled that several of AB's marks were too generic to support a trademark case, and subsequently ordered AB to pay Google $15,000 for mismanaging the discovery process.  Late last month, the parties agreed to settle.  Neither party admitted any wrongdoing, each agreed to bear its own attorneys' fees and costs, and AB agreed not to bring additional challenges to Google's trademarked search term policy barring a "material change in [the] policy that adversely affects AB."  Most tellingly, the settlement specified that Google did not "agree[] to make any change to its trademark policies" and made no payment to AB.

"Should I Stay or Should I Go?" Is A Great Song But A Lousy Legal Strategy

"If I go there will be trouble, an' if I stay it will be double."  The Clash's ode to indecision may have been on the mind of UK-based Spamhaus when it decided to raise, drop, and then raise again a personal jurisdiction defense to a tort suit in federal court in Illinois.  Ultimately Spamhaus' indecision led to a default judgment against it, which the Seventh Circuit recently affirmed.  Although the appeals court remanded for reconsideration of the district court's award of damages and injunctive relief, the affirmance of the default judgment underscores the importance of carefully considering whether and how to respond to a suit in a foreign country rather than just assuming  that country's laws don't apply.

Steptoe & Johnson LLP Webinar:  "Product Recalls:  Effectively Managing the Process"

With high-profile recalls in the news and concerns about the safety of imported products being voiced by politicians and the public, on September 28, at 1:00 p.m., Steptoe partners Tom Barba, Jennifer Quinn-Barabanov, and Gwen Prothro will lead a discussion on what steps a company should take to determine if it has a substantial product hazard that must be reported and how to negotiate a corrective action plan with the Consumer Product Safety Commission.  There's no charge to participate, but registration is on a first-come, first-served basis.

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