E-Commerce Law Week, Issue 510

House Passes Bill Mandating Breach Notification for Federal Agencies

Congress has shaken off its months-long slumber and moved a small step closer to a national breach notification requirement.  Last week, the House passed the "Federal Agency Data Protection Act" (H.R. 4791), which would require the Director of the Office of Management and Budget (OMB) to establish policies requiring all federal agencies to provide notice to individuals whose personally identifiable information could be compromised as a result of a breach of the agencies' data security.  The bill includes a risk of harm threshold for notification.  The bill also would require the establishment of substantive security requirements for agencies and their contractors.  Although this bill does not create national breach notification standards for private companies beyond government contractors, its passage could signal a renewed focus by Congress on data security issues. If passed, the bill would build on an existing law requiring the Department of Veterans Affairs to notify affected veterans if it suffers a breach.  And with its extension to government contractors, the bill would inch the government ever closer to a national breach notification standard.  Nine bills are still pending that would impose such a standard.

Court Adds to the Confusion Over Initial Interest Confusion

The Seventh, Ninth, Tenth, and Eleventh circuits have held that the use of a competitor's trademarks in metatags can create a likelihood of confusion capable of supporting a trademark infringement action. But, in Designer Skin, LLC v. S & L Vitamins, Inc., a federal court in Arizona recently ruled that a distributor's unauthorized use of a manufacturer's trademarks in metatags and search-engine key words did not cause sufficient initial interest confusion to support a trademark infringement claim where the distributor actually sold the manufacturer's goods, though without authorization.  The court reasoned that the distributor's use of the marks accurately described the websites' contents and that there was no evidence the websites had ever appeared "near the top" of search results for the trademarks.

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