E-Commerce Law Week, Issue 489

A Trademarked Search Term May Walk and Quack Like A Duck But Still Not Be Infringing

A federal court in Massachusetts has ruled that a Boston-based amphibious tour company used a competitor's "duck tours" mark in commerce when it purchased a "sponsored link" on Google that was triggered by the phrase " Boston duck tours."  In Boston Duck Tours, LP, v. Super Duck Tours, LLC, the plaintiff had obtained a preliminary injunction barring the defendant from further infringing use of the phrase "duck tours."  The defendant subsequently changed its name to "Super Duck Excursions," but still used "duck tours" to trigger its Google ad, in alleged violation of the injunction.  The court found that the plaintiff had shown trademark "use" -- the first hurdle for establishing infringement under the Lanham Act -- since "sponsored linking necessarily entails the 'use' of the plaintiff’s mark as part of a mechanism of advertising."  However, it found no infringement, since the content of the triggered ad "serve[d] to distinguish the defendant from the plaintiff," and therefore "likely diminished rather than increased" consumer confusion.  As the court noted, its conclusion that sponsored linking constitutes use in commerce runs counter to several other judicial decisions.  With the courts far from consensus and plaintiffs continuing to test the waters, the Supreme Court may eventually have to wade in.

FBI Often Fails To Pay Its Wiretap Bills On Time, IG Finds

A public summary of a classified Justice Department Inspector General (IG) report has revealed that the FBI has occasionally lost access to information collected from court-ordered wiretaps due to its failure to pay telecommunication surveillance bills on time.  The IG found that, of 990 payments made by five field divisions, over half were not made on time.  In several cases, these untimely payments prompted telecom carriers to disconnect the phone lines that were used to deliver surveillance information to the FBI -- including one case where the intercept had been authorized under the Foreign Intelligence Surveillance Act.  Apparently the carriers kept the wiretaps going, but just didn't deliver the information to the FBI until they received payment for establishing and maintaining service necessary to deliver the wiretap information -- which carriers charge separately from the cost of activating the wiretaps.  According to the IG, the FBI's payment problems stem from its "antiquated" financial management system, the high volume of surveillance order invoices it processes, and its lack of consistent procedures for tracking surveillance bills.

California Amends Breach Notification Law to Include Health Information

California has again taken the lead in data security legislation, expanding its landmark data breach notification law to cover unauthorized acquisitions of medical and health insurance information.  Under California's breach notification law, any company that does business in California and "reasonably believe[s]" that an "unauthorized person" has acquired the unencrypted personal information of a California resident from the company's "computerized data" must notify the resident of the breach.  Assembly Bill No. 1298, which entered into force on January 1, 2008, extends the definition of "personal information" to cover medical and health insurance information when either is combined with the individual's name.  With concern about the privacy of medical data on the rise, other states could amend their breach notification statutes to similarly include medical and health insurance information in the definition of "personal information."  Alternatively, Congress could finally get around to passing a more general federal breach notification bill and include health information in its coverage.  But given how long federal breach notification bills have been on life support on Capitol Hill, we wouldn't hold our breath.

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