Today, the Supreme Court issued its opinion in Gonzalez v. Google LLC, a case about whether Section 230 of the Communications Decency Act (47 U.S.C. § 230) protected YouTube’s recommendation algorithms from a claim of secondary liability under the Anti-Terrorism Act (ATA). In a short, three-page per curiam opinion, the Court avoided addressing the
AI Update: What Happens When a Computer Denies Your Insurance Coverage Claim?
Artificial intelligence is your new insurance claims agent. For years, insurance companies have used “InsurTech” AI to underwrite risk. But until recently, the use of AI in claims handling was only theoretical. No longer. The advent of AI claims handling creates new risks for policyholders, but it also creates new opportunities for resourceful policyholders to uncover bad faith and encourage insurers to live up to their side of the insurance contract.
Most readers are familiar with Lemonade, the InsurTech start-up that boasts a three-second AI claims review process. However, as noted in a Law360 article last year, Lemonade deferred any potential claim denials for human review, so the prospect of AI bad faith is still untested. Now it is only a matter of time before insurers face pressure to use the available technology to deny claims as well.
So what happens when a claim is denied?…
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FCC Confirms That Sellers Can Be Liable for Telemarketer TCPA Violations
A seller who authorizes a third-party telemarketer to market the seller’s goods or services may be held vicariously liable if the telemarketer violates the Telephone Consumer Protection Act (TCPA), the Federal Communications Commission held in a May 9 declaratory ruling.
The FCC’s ruling interprets two subsections of the TCPA. The first subsection — 47 U.S.C. § 227(b) — includes several restrictions, including a general prohibition on making calls to landline or mobile telephones using a prerecorded message without the recipient’s prior express consent. Section 227(b)(3) allows individuals or companies to bring private lawsuits “based on a violation of this subsection” or the FCC’s implementing regulations.
A separate portion of the TCPA — 47 U.S.C. § 227(c) — authorizes the FCC to set up a national Do Not Call registry, which the FCC did in coordination with the Federal Trade Commission several years ago. Section 227(c)(5) authorizes private lawsuits by individuals who receive “more than one telephone call within any 12-month period by or on behalf of the same entity” in violation of the Do Not Call rules.
Last week’s declaratory ruling came in response to questions referred to the FCC by two federal courts in two separate TCPA-based lawsuits.
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Michigan Court Rejects First Amendment Balancing Test for Online Anonymous Speech
A Michigan appellate court ruled last week that state discovery rules provide adequate safeguards for anonymous online speech. The opinion is a significant deviation from the rulings of other state courts, which have applied a First Amendment balancing test to determine whether to grant discovery requests for the identities of anonymous online speakers.
Thomas M. Cooley Law School sued several defendants for allegedly defaming the school online and issued subpoenas for their identities. Defendant John Doe 1, who operated a website about the law school, sought a protective order and moved to quash the subpoena to his Internet service provider. The trial court applied a First Amendment balancing test, first articulated by state appellate courts in New Jersey and Delaware, that considers factors including (1) whether the defendant is a person or entity who could be sued, (2) whether the plaintiff made a good-faith effort to serve the defendant with process, (3), whether the lawsuit could withstand a motion to dismiss, and (4) whether there is a reasonable likelihood that discovery would uncover information that would allow service of process. Under this analysis, the state trial court denied the motion to quash and denied the protective order.…
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Supreme Court Clarifies Broad Geographic Reach of Copyright’s First-Sale Doctrine
On Tuesday, the Supreme Court issued its opinion in Kirtsaeng v. John Wiley & Sons, Inc., resolving a long-simmering debate by holding that copyright’s first-sale doctrine applies to copyrighted works lawfully made anywhere in the world. The upshot is that someone who buys an authorized, foreign-made copy (Kirtsaeng involved a foreign version of a textbook) is free to resell that copy in the U.S. without the copyright owner’s permission.
As we explained in a previous post, the crux of the issue is the interplay between the Copyright Act’s “importation” provision (section 602(a)(1)) and its “first-sale” provision (section 109(a)). Generally, a copyright owner has the exclusive right to distribute copies of the copyrighted work. The first-sale provision, however, creates an exception to that right: it provides that someone who owns a particular copy “lawfully made under this title” (i.e., lawfully made under the Copyright Act) has the right to sell that copy without permission from the copyright owner. Finally, the importation provision says that if you acquire a copy outside the U.S., importing that copy into the U.S. without the copyright owner’s permission infringes upon the owner’s exclusive right to distribute copies.
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English Court Upholds a Copyright Sub-licence Despite the Termination of the Head Licence
By Morag Peberdy and Jacqueline Clover
In a departure from the normal approach, the English High Court has found that in certain circumstances a copyright sub-licence may survive termination of the head licence. This was the Court’s holding in VLM Holdings Limited v Ravensworth Digital Services Limited  EWHC 228 (Ch). Because of the specific facts of the case, termination of the head licence did not automatically terminate the sub-licence. Consequently, when the licensor subsequently exclusively licensed the same subject matter to another party, the licensor inadvertently put itself in instant breach of the exclusive licence. The case therefore illustrates some of the potential pitfalls for a licensor who does not fully understand what exactly it has permitted the licensee to do.
VLM Holdings does not hand down a rule of thumb that a sub-licence will survive termination of the head licence. The Court was very clear to confine its conclusion to the facts of the case. Notably, the head licensor was the parent of the sub-licensor and the sub-licensee was ignorant of the head licence. Nonetheless, it highlights the care which needs to be taken when drafting or interpreting licences of any kind.
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SHIELD Act Seeks to Shift Litigation Costs in Patent Suits Brought by Non-Practicing Entities
A bill has been introduced in Congress that would permit prevailing defendants in patent infringement suits to recover litigation costs and attorneys’ fees.
The Saving High-Tech Innovators from Egregious Legal Disputes (“SHIELD”) Act was introduced on February 27 by Congressmen Peter DeFazio (D-OR) and Jason Chaffetz (R-UT). The bill would provide for the award of full litigation costs to a prevailing party asserting invalidity or noninfringement in a patent action. In order to recover fees, the party asserting invalidity or noninfringement would first have to obtain a judgment that the party alleging infringement was not (1) the original inventor, (2) exploiting the patent, or (3) a university or technology transfer organization.
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Second Circuit Upholds Ruling in Favor of Ralph Lauren in Trademark Dispute
The United States Court of Appeals for the Second Circuit ruled recently that the United States Polo Association (USPA) cannot use its “Double Horsemen” logo on men’s fragrances, affirming the district court’s finding of trademark infringement and entry of a permanent injunction in favor of PRL USA Holdings, Inc. (PRL). PRL is the owner and licensor of Polo Ralph Lauren Corporation’s trademarks, including the POLO and Polo Player Logo marks, registered in connection with fragrances. The USPA, the governing body for the sport of polo in the United States, and Ralph Lauren have been at odds over USPA’s use of a mounted polo player design mark, including its Double Horsemen logo, for nearly 30 years.
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Federal Courts Increasingly Receptive to IP Geolocation Data; Copyright, Other Lawsuits Affected
A series of recent decisions suggests that federal courts increasingly are accepting evidence derived from Internet Protocol (IP) geolocation databases, which make it possible to look up the geographic location of a computer or other similarly-equipped electronic device. This development may be particularly significant in the area of copyright litigation, where alleged online infringers can resist enforcement suits on the ground that their activities are outside the court’s territorial jurisdiction.
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Online Retailer Newegg Wins Major Victory in “Shopping Cart” Suit
The Federal Circuit issued a ruling last week vacating a Texas jury’s $2.5 million verdict against Newegg, Inc., and invalidating three “shopping cart” patents purportedly owned by Soverain Software, LLC.
Soverain filed claims against major online and brick-and-mortar retailers for infringement of patents it holds based an e-commerce software system called “Transact,” which allows online…