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Updates on Developments in Global Privacy & Data Security

Supreme Court Agrees to Hear Aereo

Posted in Broadcasting & Cable

Today, the U.S. Supreme Court agreed to hear litigation between broadcasters and Aereo, a streaming service that retransmits broadcast programming without consent or payment.  Broadcasters argue that Aereo infringes their exclusive right to publicly perform copyrighted works.  Aereo contends that its system uses one antenna per subscriber to provide each user a separate copy of the programs streamed and thus it is not “publicly” performing the works.  The Court will likely issue a decision by the end of June.

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Virginia Court Scales Back Right to Online Anonymity

Posted in Privacy & Data Security

The Virginia Court of Appeals held this week that Internet users who may have posted fake reviews of companies do not have a right to remain anonymous. 

Hadeed Carpet Cleaning in Alexandria, Va., filed a defamation lawsuit against seven Yelp users who wrote critical reviews about Hadeed and a related business.  Hadeed claims that it could not locate any records that suggest that any of the seven reviewers were Hadeed customers.

After filing the suit, Hadeed subpoenaed Yelp for information that would identify the seven reviewers.  Yelp opposed the subpoena, arguing, among other things, that it did not comply with Virginia law and the First Amendment.

On Tuesday, the Virginia Court of Appeals in a 2-1 decision affirmed the state trial court’s decision to enforce the subpoena.  A Virginia statute requires a subpoena for the identity of an anonymous Internet users’ identity to identify communications “that are or may be tortious or illegal.” The appellate court acknowledged that in general, a Yelp review “is entitled to First Amendment protection because it is a person’s opinion about a business that they patronized.”  But the court held that this protection only applies if the reviewer is an actual customer whose review is based on personal experience with the business.   If the reviewer never actually patronized the business, the court held, the review is a false statement of fact that is not entitled to First Amendment protection.

Also notable is the court’s decision to base its decision exclusively on a Virginia statute that outlines procedural rules for the issuance of such subpoenas.  State and federal courts in other states have long relied on First Amendment tests developed by courts in New Jersey and Delaware, and which are generally seen as providing strong protections for anonymous online speech.  But the Virginia court rejected these tests, concluding that by adopting the statute, “the General Assembly considered persuasive authority from other states and made the policy decision to include or exclude factors that other states use in their unmasking standards.”  The Virginia ruling is the latest in a string of recent decisions, which we have covered here, that refuses to apply the New Jersey and Delaware First Amendment tests.

Judge James W. Haley dissented in part, writing that a “business subject to critical commentary, commentary here not even claimed to be false in substance, should not be permitted to force the disclosure of the identity of anonymous commentators simply by alleging that those commentators may not be customers because they cannot identify them in their database.”

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Courts Diverge on the Tests for Anonymous Online Speech

Posted in Privacy & Data Security

For more than a decade, a New Jersey appellate court’s opinion guided courts nationwide as they determined whether to enforce subpoenas for the identities of anonymous online speakers.

But in 2013, courts increasingly moved away from the New Jersey court’s test, leading to further divergence in the methods that courts use to determine whether a request for an anonymous Internet user’s identity violates the First Amendment or discovery rules.

In Dendrite International v. Doe No. 3, the New Jersey Superior Court Appellate Division held in 2001 that before enforcing a subpoena for the identity of an online speaker, the issuer of the subpoena must: (1) notify the anonymous speaker of the subpoena and provide the speaker a reasonable opportunity to respond; (2) specifically identify the speech at issue; (3) allege a prima facie cause of action; (4) present sufficient evidence in support of each element of the claim. If the issuer has satisfied these procedural requirements, the trial court must balance the anonymous speaker’s First Amendment rights against the strength of the plaintiff’s prima facie case and the necessity of disclosure. Publishers and web sites generally support the use of Dendrite because the test shifts the burden from the site to the commenter and enables the commenter to decide whether to fight the subpoena.

Although the Dendrite ruling came from a New Jersey intermediate appeals court, state and federal courts nationwide relied on the ruling over the next decade. Among the courts to rely on Dendrite are the Maryland Court of Appeals, the New Hampshire Supreme Court, and the U.S. District Court for the District of Connecticut.

Over the past year, however, some courts have moved away from Dendrite. Most notably, last April, the New Jersey Superior Court Appellate Division reversed a trial judge’s decision to quash a subpoena for the identity of individuals who allegedly hacked a hospital’s intranet to circulate defamatory messages about hospital employees. In Warren Hospital v. Does 1-10, the appellate court held that Dendrite did not apply because the defendants’ actions were “no different than if they had broken into the hospital and spray painted their messages on the hospital’s walls.”

Also in April, the Court of Appeals of Michigan reversed a trial court’s application of Dendrite to a subpoena issued by a law school, seeking the identity of an individual that allegedly defamed the school anonymously online. In Thomas M. Cooley Law School v. Doe, the appellate court held that “Michigan rules of civil procedure adequately protect Doe 1′s constitutional interests.”

Similarly, in June, the U.S. District Court for the Southern District of New York rejected the application of Dendrite to a lawsuit against defendants who anonymously published blogs that infringe trademarks owned by Bloomberg, L.P. Instead, the court relied on a less stringent standard that courts have used in online copyright infringement cases.

And in July, the U.S. District Court for the District of Colorado denied a blog administrator’s motion to quash subpoenas for the identities of 10 John Doe defendants who had allegedly defamed the plaintiff company on the blog. The blog administrator relied largely on Independent Newspapers, Inc. v. Brodie, a 2009 Maryland Court of Appeals opinion that had adopted the Dendrite test. The Colorado federal court held that Brodie is not binding. Acknowledging that “I cannot be certain that each IP address corresponds to an offensive comment,” Judge Ellen L. Hollander wrote that “absolute certainty is not required.”

The recent decisions demonstrate that courts have yet to settle on a uniform First Amendment test for the right to anonymous online speech, and increase the likelihood that federal appellate courts or the U.S. Supreme Court will have to confront the issue.


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Safeway Settles ADA Accessibility Lawsuit, Makes Grocery Website Accessible to Visually Impaired

Posted in Uncategorized

Safeway agreed in settlement of a lawsuit brought by visually-impaired customers in California and Washington State to ensure that its website, which allows people to order groceries online and have them delivered to their homes, is accessible to persons with disabilities.  Safeway has already made significant enhancements to its online shopping website to meet the agreed-to standard and will continue to do so over the next year pursuant to the settlement.

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All Internet Service Providers Can be Required to Block Access to ‘Pirate’ Websites, Says European Court Advocate General

Posted in Intellectual Property

In his Opinion of 26 November 2013 (not yet available in English) Advocate General Cruz Villalón has taken the position that the Internet Service Provider (“ISP”) of the user of a website infringing copyright should be considered to be an “intermediary” under Directive 2001/29 and, as such, can be ordered to block access to the website for its clients.

The Austrian Supreme Court referred questions regarding the legality of orders to block access in the context of a dispute between two film production companies on the one hand, Constantin Film Verleih and Wega Filmproduktionsgesellschaft, and UPC Telekabel Wien, a major Internet provider in Austria, on the other.  The website kino.to allowed users to stream or download films for which Constantin Film and Wega hold the rights, without their consent.  The two companies sought an injunction prohibiting UPC Telekabel from allowing its customers to access kino.to.  The injunction was granted but without setting out specific measures to be taken by the ISP. Continue Reading

Germany Closes Price Parity Investigation But Antitrust Scrutiny on Online Platforms Continues in Europe

Posted in Transactions

On 26 November 2013, the German Federal Cartel Office (FCO) announced that it ended the probe into Amazon’s price parity policy (the “Policy”).  The Policy required that the price of an item offered by a retailer on Amazon’s online marketplace platform, Amazon Marketplace, should not be higher than the retailer’s lowest offer for that item elsewhere, including other online shops or the retailer’s own website.

In August 2013 Amazon decided not to implement the Policy in the EU.  As a result, the UK competition authority (OFT) stated that it was minded to close its probe without reaching a view on infringement, and the FCO announced that it would assess whether the measures taken by Amazon were sufficient for it to close its investigation (see our previous posts here and here).  The FCO wanted to ensure that Amazon removes price parity terms and conditions for all dealers in a legally binding manner, and that it clearly informs dealers about the changed terms and conditions.  According to its press statement of 26 November 2013, the FCO has determined that these requirements have been met, noting that dealers have confirmed implementation of these measures.

While the probe into Amazon’s price parity policy has come to an end, competition authorities in Europe have been closely watching price relationship agreements in the context of online platforms, especially in the e-books (see our previous post here) and online hotel booking sectors.

*The authors would like to thank Monika Kuschewsky for helpful comments.

Ireland Proposes Amendments to Copyright Law

Posted in Intellectual Property

Written by Ezra Steinhardt and Colin Warriner

On 29 October 2013, the Republic of Ireland’s Department of Jobs, Enterprise and Innovation (DJEI) published a report containing proposed amendments to its copyright laws, named “Modernising Copyright” (“the Report”).  Taking account of submissions received during a public consultation that ran between February and May 2012, the DJEI’s Copyright Review Committee (CRC) uses the Report to recommend a series of amendments to the Irish Copyright and Related Rights Act, 2000 (CRRA).

Some of the Report’s key findings and recommendations are outlined below.

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FCC Seeks Comment on Petitions to Forbear or Clarify New TCPA Rules

Posted in Telecommunications

Earlier today, the FCC placed on public notice two petitions requesting that the agency clarify or forbear from enforcing certain aspects of its new TCPA regulations that went into effect on October 16, 2013.  Those regulations, which we summarized here, created, among other things, a new “prior express written consent” requirement for the transmission of automated “telemarketing” or “advertisement” text messages or prerecorded calls to mobile phones.  Both of the petitions for which comment is being sought take issue with the implementation of the “prior express written consent” requirement, though each in its own way.  You can read our summary of each petition and access copies here.

Based on the FCC’s public notice, comments on the petitions are due by December 2, with reply comments due by December 17.

European Court Issues Ruling on Jurisdiction in Cross-EU Copyright Infringement Case

Posted in Intellectual Property

Written by Ezra Steinhardt and Colin Warriner

On 3 October 2013, in the case of Peter Pinckney vs. KDG Mediatech AG, the Court of Justice of the European Union (CJEU) confirmed that, with certain qualifications, when a copyrighted work is reproduced in one Member State, and offered for sale online by companies established in another, the author of the work can bring an action for copyright infringement in the courts of their own home Member State if infringing copies are accessible from that State – even if that State is not among the States where the work was reproduced and/or made available online. Continue Reading

Standard Essential Patents and FRAND Licensing: An Update from Europe

Posted in Intellectual Property

This post highlights material recent developments in Europe concerning standard essential patents (SEPs) and FRAND licensing, including Samsung’s commitments proposed in the context of the ongoing antitrust probe of the European Commission (see our previous post).

Samsung’s Commitments Proposal  

In its commitments proposal, Samsung offered not to seek injunctions based on its patents essential to smartphone and tablet technology standards (“Smart Mobile SEPs” as defined in its commitments proposal) against a potential licensee who agrees to Samsung’s particular licensing framework.  The proposed commitments are limited to the European Economic Area and would only apply for a period of five years.

According to the Commission’s press statement, the FRAND licensing framework proposed by Samsung consists of several steps:  (i) a potential licensee of Smart Mobile SEPs must agree to follow the framework as the exclusive means for determining FRAND terms for a license to Smart Mobile SEPs;  (ii) negotiations must take place between Samsung and the potential licensee for 6 to 12 months before they can be considered to have failed;  (iii) if the negotiation fails, the parties will resort to a third party determination of FRAND terms by either a court or an arbitration tribunal, as agreed by the parties;  (iv) if the parties cannot agree on (iii), the issues will be submitted to arbitration.

The Commission now invites comments from interested parties on Samsung’s commitments.  If the feedback from the market consultation is positive, the Commission will take a decision making the commitments legally binding.  This means that the Commission will not take a position on whether Samsung infringed Article 102 TFEU.

Towards Increased Clarity on the Issue?

Vice President Joaquín Almunia observed that “if we can reach a good solution in this case, it will bring clarity to the industry.”  But in addition to the Samsung case, there are also other cases on foot at the European Union level.  For example, the Commission’s investigation of whether the circumstances in which Google (MMI) sought an injunction on the basis of SEPs was anti-competitive is still on foot.  The  closed-door hearing in that case took place at the end of September.

The EU Courts are also considering the issue, as a result of questions referred by the Düsseldorf District Court in Germany (Case C-170/13 Huawei v. ZTE).  Samsung’s commitments proposal expressly notes that the Commission will take “full account” of the Huawei case or any other relevant judgment.  In this context it is worth bearing in mind that, even if a settlement is reached, the Commission may reopen proceedings in any case in light of the judgment, either on its own initiative or at the request of Samsung.

The European Parliament is also very interested in FRAND licensing of SEPs.  It recently released a study that it commissioned, “The Contribution of Competition Policy to Growth and the EU 2020 Strategy”, which calls for the Commission to provide explicit guidance on FRAND licensing of SEPs, and observes that clarity regarding the determination of FRAND licensing rates would be of value.