U.S. Court Upholds Man's Criticisms of Wal-Mart

A U.S. District Court has recently upheld a man's right to criticize Wal-Mart, the U.S.-based discount department store company, through the use of the websites, www.walocaust.com and www.walqaeda.com, as well as parody-related merchandise. In 2005, Charles Smith began selling t-shirts bearing satirical statements about Wal-Mart through CafePress, an online retailer of user-customized products. At the request of Wal-Mart, CafePress removed such merchandise from its online store. In response, Smith sued Wal-Mart seeking a ruling that would allow him to continue marketing his merchandise. Wal-Mart countersued Smith, alleging trademark infringement, arguing that the logos used on Smith's merchandise tarnished Wal-Mart's trademarks and reputation. Wal-Mart also challenged Smith's use of the domain names. In deciding for Smith, the judge observed that Smith's websites effectively disassociated themselves from Wal-Mart stores through the use of disclaimers and links to the real Wal-Mart website. The judge further noted that the terms "Walocaust" and "Wal-Quaeda" were unlikely to be confused with Wal-Mart's trademarks since they were merely successful parodies of the widely recognized marks. Wal-Mart is considering its appeal options.

This entry first appeared in the April 3, 2008 edition of lawsof.com. For additional information, click here.

CIRA Allows Complaint Over ecars.ca

In a dispute over the domain names “ecars.ca” and “ecar.ca”, the Canadian Internet Registration Authority (CIRA) transferred ownership of the domain names from the registrant, an Ontario-based website designer and developer, to Enterprise Rent-A-Car (“ Enterprise”), a large US-based car-rental company. In making its decision, CIRA accepted that Enterprise had registered the marks “ECARS” and “ECAR” with the Canadian Intellectual Property Office in 1995 and 2001, respectively. The registrant was found to have registered the domain names “ecars.ca” and “ecar.ca” on February 1, 2001 and January 24, 2002, respectively.

Pursuant to CIRA’s Domain Name Dispute Resolution Policy, Enterprise succeeded in its dispute against the registrant by proving, on a balance of probabilities, that: (a) “ecars.ca” and “ecar.ca” were both confusingly similar to the trade-marks in which Enterprise had rights prior to the domain name registration dates, and to which such rights still exist; (b) the domain names were registered in bad faith, since the associated web pages linked to the websites of Enterprise’s competitors, indicating the registrant intended to disrupt Enterprise’s business; and (c) there was evidence the registrant had no legitimate interest in the domain names. The registrant had submitted that the use of the pre-fix “e” was a “universal prefix of the Internet age” and using it in each of the domain names made the resulting words clearly descriptive or generic in nature, which was grounds for claiming a legitimate interest. CIRA, however, rejected the registrant’s argument since it did not consider the prefix to be descriptive in itself, and therefore such a prefix could not make words clearly descriptive or generic by association.

This entry first appeared in the February 7, 2008 edition of lawsof.com. For a copy of the CIRA decision, click here.

Vonage Settles Patent Dispute with Nortel

Vonage Holdings Corp., a U.S.-based provider of broadband telephone services, recently announced it has settled its patent dispute with Nortel Networks, a Canada-based communications technology provider. The dispute originated from a lawsuit filed by Digital Packet Licensing Inc. (“DPL”) against Nortel in 2004, which claimed an infringement of patents relating to “911” and “411” telephone numbers, as well as to click-to-call technology. Vonage, however, purchased DPL and became subject to a related counterclaim by Nortel in 2007. The two companies agreed to settle pursuant to a limited cross-licence involving three of Nortel’s patents and three of Vonage’s patents, without any payment of damages. This settlement follows settlements with AT&T, Verizon Communications and Sprint Nextel in 2007.

This entry first appeared in the January 24, 2008 edition of lawsof.com. For additional information, click here.

CIRA Allows Complaint Over niagararegion.ca

In a dispute over the domain name “niagararegion.ca”, the Canadian Internet Registration Authority (CIRA) transferred ownership of the domain name from an individual registrant to the complainant, the Regional Municipality of Niagara. In making its decision, CIRA accepted that since 2001 the complainant had registered various domain names incorporating the name “Niagara” and the word “region” and owns the official mark “Niagara Region”. CIRA further observed that the disputed domain name, registered in November, 2000, was being used by the registrant to redirect traffic to a website that describes a real estate and brokerage business that is not in the Niagara region.

Pursuant to CIRA’s Domain Name Dispute Resolution Policy, the complainant succeeded in its dispute against the registrant by proving, on a balance of probabilities, that: (a) “niagararegion.ca” would be confusingly similar to several trade-marks in which the complainant had rights prior to the domain name registration date, and to which such rights still exist; (b) the domain name was registered in bad faith since the registrant had previously registered domain names irrelevant to his business, but which contained third party trade-marks, preventing the owners of such marks from registering the appropriate domain names; and (c) there was evidence the registrant had no legitimate interest in “niagararegion.ca” since the registrant was using the domain name simply to redirect Internet users to his commercial website, and the domain name was not descriptive of any of his commercial wares or services.

This entry first appeared in the December 6, 2007 edition of lawsof.com. For a copy of the decision, click here.

YouTube Served with Court Order from India

The Delhi High Court in India recently issued an order prohibiting YouTube’s Indian website from disseminating the copyrighted content of Super Cassettes Industries Ltd. (“SCIL”), one of India’s biggest record and video labels. SCIL’s suit, the first such legal action by an Indian company against YouTube, claimed that YouTube was carrying videos of songs and films belonging to SCIL. SCIL argued that YouTube’s business model allows, encourages and profits from the use of such copyrighted material and fails to effectively obtain the proper license or permission from the rightful copyright owners.

Some observe that while YouTube does not actively control the content posted by its users, the website includes community guidelines telling users that they must own or have permission from copyright holders in order to upload any video content. The website further sets out a process for copyright holders to request removal of infringing content. Copyright holders must provide certain materials to YouTube, who will review such materials and promptly remove infringing content if the copyright holder’s request is validated.

This entry first appeared in the November 22, 2007 edition of lawsof.com. For additional information, click here.

The 2006-2007 Annual Report on Canada's Privacy Act Calls for Reform

The Privacy Commissioner of Canada, Jennifer Stoddart, recently completed her 2006-2007 Annual Report to Parliament on Canada’s Privacy Act (the “Act”), one of two federal privacy laws (the other being the Personal Information Protection and Electronics Documents Act). Since 1983, the Act has sought to protect the personal information of individuals collected by government institutions, ensuring that Canadians can access and challenge the accuracy of information collected about them. According to the Report, there is an urgent need to reform the Act since it appears ill-equipped to deal with privacy problems in connection with technological advancements that were never considered when the original legislation was framed, such as the Internet, GPS and RFIDs.

The Report further recommends specific attention to “Fair Information Principles” which will seek to protect private information held by online government systems. Another concern raised was transborder data flows to offshore locations whereby data leaving Canada may become subject to the laws of a foreign country, including search and seizure. The Report, therefore, concluded that the Act should be amended to balance the government’s need for transborder disclosure of information with the demands of Canadians that their information be protected according to national standards.

This entry first appeared in the November 8, 2007 edition of lawsof.com. For additional information, click here.

Website T & C Enforceable with Sufficient Notice

A Texas District Court recently ruled, in a summary judgment, that the terms of a “browsewrap” license agreement are enforceable against a user of the website if sufficient notice is provided. In the federal case of Southwest Airlines Co. v. BoardFirst, L.L.C., Southwest, a Dallas-based domestic airline carrier, sought and obtained injunctive relief against BoardFirst, a company whose sole purpose was to secure certain Southwest boarding passes for customers that would entitle them to board their flight first. Southwest customers seeking such boarding passes would pay BoardFirst a fee and in return, BoardFirst would log on to the Southwest website and check in the customers at the appropriate time, allowing the customers access to the desired boarding passes.

In granting a permanent injunction in favour of Southwest, the court found that BoardFirst had violated the airline’s online terms and conditions of use, which stated that the website was only to be used for personal, non-commercial purposes. Evidence also indicated that sufficient notice of such terms was provided to BoardFirst, if not as a hyperlink at the bottom of the Southwest website, then when BoardFirst received a cease-and-desist letter from Southwest. As the court observed, “the validity of a browsewrap license turns on whether a website user has actual or constructive knowledge of a site’s terms and conditions prior to using the site.” BoardFirst, however, continued using the Southwest website following such notice, and was therefore bound by, and found to have violated, its online contractual obligations.

This entry first appeared in the October 25, 2007 edition of lawsof.com. For a copy of the decision, click here.

Man Faces 20-Year Imprisonment for False Threats Over Domain Names

David Scali, a Las Vegas resident, faces a potential U.S. federal prison term of 20-years after agreeing to plead guilty to wire fraud. The FBI alleges that Mr. Scali impersonated an intellectual property lawyer and threatened to file $100,000 trade-mark infringement lawsuits against owners of typo-based Internet domain names unless they forfeited their domain name registrations within two days.

Typo-based domain names contain nomenclatures similar to popular websites and can, for example, result in profitable web traffic for their owners by virtue of people mistyping domain names, finding themselves on typo-based websites, and clicking on revenue generating ads found on such sites. In Mr. Scali’s situation, the wire fraud charge is based on a registrant who surrendered a typo-based domain name similar to the domain name, citysearch.com. While a plea agreement could substantially reduce Mr. Scali’s sentence from 20-years, his fate will ultimately rest with the sentencing judge.

This entry first appeared in the September 27, 2007 edition of lawsof.com. For additional information, click here.

L'Oréal Sues eBay Over Counterfeit Sales

The L'Oréal Group, a global cosmetics and beauty company headquartered in Clichy, France, has recently taken legal action against eBay Inc., a popular online auction website, in several countries including France, Germany, Britain, Spain and Belgium. The lawsuits allege that eBay does not effectively combat the sale of counterfeit L'Oréal products on its website and that such failure has resulted in several million euros worth of damage, including harm to L'Oréal’s selective distribution network and the reputation of its trade-marks. Meanwhile, as L'Oréal observes, eBay receives a percentage of each transaction and advertisement on its website regardless of whether it is derived from legitimate or counterfeit items.

L'Oréal claims that it has generally been facing an increase in illicit trade in counterfeit fragrances and cosmetic products on various online auction websites, reflecting similar problems faced by companies like Christian Dior and Tiffany & Co., which have launched similar lawsuits against eBay.

This entry first appeared in the September 13, 2007 edition of lawsof.com. For additional information, click here.

Criminalizing Bootlegging is Constitutional

The U.S. Second Circuit Court of Appeals recently ruled that Congress, pursuant to the U.S. federal anti-bootlegging statute (18 U.S.C. § 2319A) (the "Act"), has the power to outlaw "bootlegging", a term used to describe the act of illegally selling goods. This decision overturned an earlier trial court decision that held that the Act violated Article 1, Section 8, Clause 8 of the U.S. Constitution (otherwise referred to as the "Copyright Clause") since it appeared to provide for an indeterminate term of copyright protection over live performances. The Copyright Clause requires that authors' exclusive rights to their works be secured for only a limited time (currently 70 years from the date of an author's death under the U.S. Copyright Act). The Court of Appeals, however, upheld the Act under Article 1, Section 8, Clause 3 of the U.S. Constitution which gives Congress the power to regulate commerce among the states. While the Court of Appeals' decision reopens the possibility of charges being laid under the Act, the statute may be open to further challenges, including whether it violates the constitutional right to Freedom of Expression.

This entry first appeared in the June 28, 2007 edition of lawsof.com. For additional information, click here. For a copy of the anti-bootlegging statute, click here.

CIRA Disallows Complaint Over yellowpage.ca

In a dispute over the domain name yellowpage.ca, a panel appointed under the Canadian Internet Registration Authority's Domain Name Dispute Resolution Policy dismissed the complaint of Yellow Pages Group Co. ("Yellow Pages"), a Canadian-based directory publisher, against Coolfred Co. ("Coolfred"), an Ontario-based sole proprietorship. In making its decision, the panel accepted that Yellow Pages has been the owner of the YELLOW PAGES and YELLOWPAGES.CA trade-marks since 1980 and 2003, respectively.

Pursuant to the Domain Name Dispute Resolution Policy, Yellow Pages proved that the disputed domain name is confusingly similar to a mark in which it had rights prior to the date of registration of the domain name, and to which such rights still exist. Specifically, the panel found yellowpage.ca to be confusingly similar to Yellow Pages' trade-mark since "the average Internet user, based on first impression and imperfect recollection," is likely to mistake YELLOWPAGE for YELLOW PAGES. Second, there was evidence Coolfred had no legitimate interest in the domain name. Although Coolfred had a business plan involving the domain name, no related commercial activity was carried out and therefore 'use' constituting a legitimate interest was not found. The domain name was also not a legal name of Coolfred or a geographical name. Notwithstanding the foregoing, Coolfred was found not to have registered the domain name in bad faith. Even though it planned to offer domain names for sale, this was not adequate evidence of an offer to specifically sell yellowpage.ca. Also, registering yellowpage.ca did not prevent Yellow Pages from registering its trade-marks. Since bad faith was not shown, the panel declined to transfer the domain name to Yellow Pages.

On a related point, Coolfred sought compensation of $5,000.00 from Yellow Pages, which can be awarded by the panel if the complaint was commenced "for the purpose of attempting, unfairly and without colour of right, to cancel or obtain a transfer of the disputed domain name". However, since Yellow Pages established rights in its trade-marks and yellowpage.ca was confusingly similar to such marks, the request for compensation was dismissed.

This entry first appeared in the June 14, 2007 edition of lawsof.com. For a copy of the CIRA decision, click here.

CIRA Allows Complaint Over godaddy.ca

In a dispute over the domain name godaddy.ca, the Canadian Internet Registration Authority (“CIRA”) settled matters by transferring ownership of the domain name from the registrant to the complainant, GoDaddy.com, Inc., a US-based domain name registrar. In making its decision, CIRA accepted that since 1999 the complainant has been the owner of the domain name godaddy.com and the trade-mark GO DADDY. CIRA further observed that the disputed domain name was registered in December, 2001, and was being used by the registrant to redirect traffic to one of the complainant’s competitor’s websites.

Pursuant to CIRA’s Domain Name Dispute Resolution Policy (the “Policy”), the complainant succeeded in its dispute against the registrant by proving, on a balance of probabilities, that: (a) the disputed domain name is confusingly similar to a mark in which the complainant had rights prior to the date of registration of the domain name, and to which such rights still exist; (b) the domain name was registered in bad faith; and (c) there is evidence the registrant had no legitimate interest in the domain name. First, the disputed domain name, godaddy.ca, was found to be confusingly similar to the complainant’s trade-mark, GO DADDY, since the domain name and trade-mark are identical, except for the .ca suffix which is ignored by CIRA in its assessment of a domain name. Second, the domain name was found to have been registered in bad faith since it was found to redirect users to a competing business offering similar services, resulting in the potential disruption of the complainant’s business. Third, the registrant was found to have no legitimate interest in the domain name since, for example, the registrant neither used the domain name as a mark nor did the domain name represent the legal name or other identifier belonging to the registrant.

This entry first appeared in the May 31, 2007 edition of lawsof.com. For a copy of the CIRA decision, click here.

MailChannels Fights Spam by Delay

MailChannels Corporation, a Vancouver-based developer of next generation email infrastructure protection solutions, has developed a software product called Traffic Control in an effort to fight spam (unsolicited email). Spammers rely on sending large volumes of email in order to realize profits. The more emails sent in a shorter period of time, the greater the chance that an email recipient will open the unsolicited message and buy the advertised product. Traffic Control discourages spammers by allowing email administrators to delay an email server’s response time in accepting incoming messages, from several seconds to a couple of minutes. Most spammers, unlike legitimate email senders, cannot afford to wait during this delay and therefore will likely move on. MailChannels touts a growing customer base for Traffic Control, including government institutions and universities. Experts, however, argue that the more widely used Traffic Control is, the less effective it will become since spammers will eventually be forced to wait on, and send spam to, a majority of servers using such technology.

This entry first appeared in the April 19, 2007 edition of lawsof.com. For the status of the case, click here.

Copyright Versus Grey Marketing

Earlier this year, the Supreme Court of Canada heard oral arguments in the case of Euro Excellence Inc. v Kraft Canada Inc. in which Kraft Canada Inc. ("Kraft"), a large food and beverage company and exclusive Canadian distributor for the TOBLERONE brand of chocolate bars, sought to stop Euro Excellence ("Euro"), a Quebec-based importer and distributor of fine confectionery, from selling its foreign-sourced TOBLERONE bars in Canada. While such a practice, also referred to as "grey marketing", is not illegal per se, it ignores the use of authorized distribution channels and is therefore carried out at the expense of local rights-holders, presenting health and safety risks, as well as risks to their reputation.

Generally, trade-mark law has been used in attempts to block parallel importing in Canada. However, there are difficulties in relying on trade-mark law for such purposes in Canada. In the current case, Kraft argued that since it controlled the Canadian copyright to the logos appearing on the TOBLERONE packaging, Euro had committed secondary infringement under Section 27(2) of the Copyright Act (Canada). Kraft's arguments were successful both at the Federal Court and the Federal Court of Appeal. Consequently, the Supreme Court of Canada must now decide whether Canadian copyright law can, or should, be used as a tool against the practice of parallel importing.

This entry first appeared in the April 5, 2007 edition of lawsof.com. For the status of the case, click here.

eBay Cooperates with ATO Audits

The Australian Tax Office (ATO) has asked for the personal and financial details of Australian eBay sellers who have annual sales of more than $50,000.00 (AUS) in an effort to determine whether such sellers are avoiding Australia’s goods and services tax (GST). In compliance with its privacy policy, eBay, a global auction and shopping website, provided the ATO with members’ contact names, user names, phone numbers, duration of membership, and monthly sales turnover for the period of July 1, 2003 to June 30, 2006. The ATO audit could potentially affect up to 1,000 Australian eBay sellers who may not be claiming GST on their sales in order to undercut competitors. At least one seller has gone into liquidation as a result of the audits.

eBay Australia is operated by eBay International, based in Bern, Switzerland, and is therefore not required to register for GST. Consequently, there is no GST on invoices sent by eBay Australia to its sellers for using related services. Some eBay sellers, however, may have falsely assumed that such invoices included GST, and may have made claims to the ATO to recoup such amounts. While representatives at eBay maintain that sellers are responsible for their own accounting practices, representatives at the Professional eBay Sellers Association have suggested that eBay register its local operation in Australia and obtain an Australian business number for GST purposes.

This entry first appeared in the March 22, 2007 edition of lawsof.com. For additional information, click here.

U.S. Patent System Harms Innovation

One objective of a modern patent system is to encourage the introduction of new ideas, goods, services, and practices for the benefit of society. Despite this well-accepted directive, innovation can be harmed by chronic imbalances in patent systems. This article provides a birds-eye view of the U.S. patent regime and how it stacks up to its Canadian counterpart. The article highlights differences in approach, recent case-law, and the possibility of change amidst a confluence of factors, including the highly anticipated U.S. Supreme Court decision in Teleflex Inc. v. KSR Int’l Co.

This article first appeared in the March 9, 2007 issue of The Lawyers Weekly. To download and read the full article, click here (Adobe Reader required).

Wireless Spammer Pays

Verizon Wireless (“Verizon”), a large US-based wireless data provider, recently obtained a permanent injunction and default judgment against Specialized Programming and Marketing LLC (“Specialized”) and its owner, Charles Henderson. Specialized and Charles Henderson were ordered to pay over $200,000.00 in damages based on claims that they sent almost 100,000 unsolicited text messages to Verizon customers offering them a prize vacation. The lawsuit against Specialized and Charles Henderson was initially filed in October 2005 against Passport Holidays, a Florida-based wholesale distributor of travel packages. However, in February 2006, Passport Holidays reached a settlement with Verizon and named Specialized and Charles Henderson as those directly responsible for sending the spam messages.

Individuals and corporations sending spam to US wireless phone customers using “auto-dialing” equipment and deceptive means to mask the source of such messages can be found in violation of the Federal Telephone Consumer Protection Act.

This entry first appeared in the March 8, 2007 edition of lawsof.com. For additional information, click here.

First Sale Doctrine & Audiobooks

The U.S. Sixth Circuit Court of Appeals recently ruled that while U.S. copyright's "first sale doctrine" applies to sound recordings of musical works, it does not apply to sound recordings of literary works, otherwise known as "audiobooks" or "books on tape". The first sale doctrine holds that a copyright owner controls the right to the underlying work, but the owner of the work itself can dispose of it in any manner chosen. In support of its claims for copyright and trademark infringement, Brilliance Audio, Inc. ("Brilliance"), a company in the business of producing and selling audiobooks in both retail and library editions, alleged that Haights Cross Communications, Inc. ("Haights"), a direct competitor, repackaged and relabelled Brilliance's retail editions as library editions, marketing the repackaged products as Brilliance's library editions and distributing them using Brilliance's trademarks for commercial gain.

On the allegation of copyright infringement, Haights argued that its actions were protected under the first sale doctrine thus no infringement occurred. In response, Brilliance argued that 17 U.S.C. § 109(b)(1)(A) of the Record Rental Amendment of 1984 provided for a limited exception to the first sale doctrine that extended to sound recordings of literary works. The Circuit Court of Appeals, however, determined that the record rental exception only applies to sound recordings of musical works for several reasons: (i) the exception was adopted by Congress in 1984 when the exclusive focus of the testimony and legislators was on protecting the music industry; (ii) there was no evidence that Congress ever considered audio recordings of literary works when drafting the exception, with at least one committee report making clear such recordings were not covered by the exception; (iii) Congress had a history of expressly exempting particular works, including computer software, where extension of the copyright monopoly was warranted; and (iv) construing the exception broadly to cover sound recordings of literary works would upset the traditional bargain between the rights of copyright owners and the personal property rights of individuals who own a particular copy. Consequently, the Circuit Court of Appeals affirmed the district court's initial dismissal of Brilliance's copyright claims against Haights.

The Circuit Court of Appeals, however, reversed the district court's dismissal of Brilliance's trademark claims. In the context of trademark infringement, the court identified two situations in which the resale of a product is not protected by the first sale doctrine: (i) when the notice that the item has been repackaged is inadequate; and (ii) when an alleged infringer sells trademarked goods that are 'materially different' than those sold by the trademark owner. In each case, there is a danger of consumer confusion and trademark dilution. Based on these criteria, the Circuit Court of Appeals could not conclude there were insufficient facts to permit granting relief to Brilliance. The case was, therefore, remanded for proceedings accordingly.

This entry first appeared in the February 8, 2007 edition of lawsof.com. For a copy of the decision, click here.

RIAA Wins By Default

A U.S. federal judge recently ordered 20-year old Michelle Santangelo, the daughter of the well-known music-downloading defendant, Patricia Santangelo, to pay a default judgment of $30,750.00. The judgment followed Michelle Santangelo’s failure to formally respond to claims made by the U.S. recording industry that she had illegally downloaded 41 copyrighted songs. In 2005, five record companies unsuccessfully sued Patricia Santangelo, who argued that she had never downloaded music, and that file-sharing programs were to blame if any illegal downloading had occurred among her five children. The record companies eventually dropped their case against Patricia, but vowed to continue their legal crusade against Michelle Santangelo and Patricia’s 16 year-old son, Robert Santangelo. No default judgment has been filed against Robert. This case is one of the more than 18,000 piracy lawsuits that have been filed in U.S. federal courts, many of which have been settled against minors.

This entry first appeared in the January 25, 2007 edition of lawsof.com. For additional information, click here.

UK's New E-Communication Rules

The United Kingdom has recently introduced new communication requirements under the Companies Act 2006 (the "Act"), a law governing company registration matters in the UK. The changes reflect the ever-increasing use of information technology and electronic communications among businesses. Specifically, under the Act and accompanying regulations the registrar of companies, whose main function is to incorporate and dissolve limited companies, examine and store company information, and disclose such information to the public, must: (i) allow companies to electronically file all "basic documents" (defined in Article 2 of the First Council Directive 68/151/EEC); (ii) allow for the electronic inspection of such documents; (iii) offer electronic copies of such documents to those inspecting the register; and (iv) keep all such documents in electronic form, whether submitted electronically or in paper form. EU member states will further be allowed to use an electronic alternative to the publication of documents in UK's national gazette. The Act also requires that a company's emails, online order forms, and websites include: (i) its name, place of registration and registration number; (ii) the address of its registered office; and (iii) whether it is an "investment" company or "limited" company, if either. Companies face possible fines if they are found to be in breach of provisions of the Act.

This entry first appeared in the January 11, 2007 edition of lawsof.com. For a copy of the UK Department of Trade and Industry's briefing on the changes, click here. For a copy of the First Council Directive 68/151/EEC, click here.

NY Firm Settles "Scareware" Suit

Secure Computer, a New York-based sales and marketing firm, has settled a lawsuit filed by Washington State’s Attorney General. The lawsuit alleged that Secure Computer used links on Google, pop-up ads, spam email, and a Microsoft Windows feature to falsely warn people that their computers were infected with spyware, software capable of logging keystrokes and recording web-users’ activities, among other things. Computer users were then offered Spyware Cleaner, a software program that claimed to remove the spyware. As a result, the lawsuit claimed that Secure Computer violated Washington’s 2005 Computer Spyware Act, federal and state spam laws, and the state Consumer Protection Act. In settling the lawsuit, Secure Computer agreed to pay $200,000 in civil penalties, $75,000 in restitution to consumers, and $725,000 in legal fees and costs. Secure Computer must also email the estimated 1,145 Washington residents who purchased Spyware Cleaner, offering a refund. The company, however, is not required to admit any wrongdoing. This was the first lawsuit under the 2005 Computer Spyware Act.

This entry first appeared in the December 14, 2006 edition of lawsof.com. For a copy of the related article, click here.

Website Accused of Discrimination

Zillow.com, a website that provides free online valuations of residential properties in the United States, has been accused of undervaluing homes located primarily in low-income or minority-populated neighbourhoods. The National Community Reinvestment Coalition (the “Coalition”), an umbrella group that organizes local communities against financial institutions believed to be using discriminatory practices, argued that the undervaluation of such homes placed its residents at risk of discriminatory and predatory lending practices. For example, a real estate or lending industry professional may use the estimates provided on Zillow.com to improperly appraise the value of a home, thereby causing the homeowner to borrow more money than necessary. Zillow representatives, however, argued that the accuracy of home valuations vary based on the amount of applicable market data available, and that such data does not include demographic information. They further observed that computers are used to calculate the value of homes, and that the resulting estimates are intended for use by consumers, not industry professionals. The Coalition has sent a complaint letter to the U.S. Federal Trade Commission requesting an investigation into the matter and that Zillow.com be stopped from providing home valuations.

This entry first appeared in the November 30, 2006 edition of lawsof.com. For a copy of the related article, click here.

Corporate Pretexting Personal Info

Pretexting is an investigative technique used primarily by data brokers and independent contractors to obtain various types of personal information, phone records being a prime target. This article discusses issues surrounding the investigative technique, citing real-life ramifications from the Hewlett-Packard board-room scandal and highlighting the evolving state of the law in Canada and the United States as it pertains to protecting personal information from being the target of corporate pretexters.

This article first appeared in the November 17, 2006 issue of The Lawyers Weekly. To download and read the full article, click here (Adobe Reader required).

"Free" File-sharing Case Dismissed

A Spanish court has dismissed a case against a man accused of downloading music from the Internet and then offering the music to others via email and chat rooms, thereby violating Spain’s copyright laws. While the state prosecutor’s office and two music distribution associations in Spain had argued for a two-year prison sentence, the judge in the case observed that there was no profit-motive behind such acts and therefore a penal sanction was not warranted. Specifically, the judge characterized music file-sharing as a socially accepted and widely practiced behaviour, and was concerned that a guilty verdict would imply that music file-sharing for private, non-profit purposes was a crime. The case is likely to be appealed.

This entry first appeared in the November 16, 2006 edition of lawsof.com. For a copy of the related article, click here.

Quebec Ends E-Voting

Quebec’s chief electoral officer has suspended the use of e-voting machines in future municipal elections in the province. A report analyzing the use of the machines in last year’s municipal elections described several related problems: failure to fully test the machines; machines that misread ballots; conflicting vote counts; inadequately trained election staff; delayed results; and a 25 per cent higher cost than traditional voting methods. A representative of a firm that supplied the e-voting machines observed that the problems were partly due to the fact that all of Quebec’s municipal elections were being held on the same day for the first time, and to the popularity of e-voting. Overall, voter confidence was damaged, with many questioning the accuracy of last year’s Quebec election results.

This entry first appeared in the November 2, 2006 edition of lawsof.com. For a copy of the related article, click here.

Comfort-inn.ca Complaint Allowed

The Canadian Internet Registration Authority (“CIRA”) allowed a complaint over the disputed domain name comfort-inn.ca. In making its decision, CIRA’s three-member panel accepted that the complainant, a global lodging company, is the owner of the registered trade marks COMFORT INN, since 1983, and COMFORT INN & design, since 1991. The panel further observed that the disputed domain name, comfort-inn.ca, was only registered on March 30, 2006, that the domain name remained inactive since its registration, that the online registrant information invited offers to be made on the domain name, and that the registrant had offered to sell the domain name to the complainant for $30,000.00.

Pursuant to paragraph 4.1 of CIRA’s Domain Name Dispute Resolution Policy (the “Policy”), a complainant will only succeed where it proves, on a balance of probabilities, that (1) the disputed domain name is confusingly similar to a mark in which the complainant had rights prior to the date of registration of the domain name, and to which such rights still exist; (2) the domain name was registered in bad faith; and (3) there is evidence the registrant had no legitimate interest in the domain name.

The complainant satisfied the CIRA on all three bases. First, the domain name, comfort-inn.ca, was found to be confusingly similar to the complainant’s trade mark COMFORT INN. The .ca is to be ignored in assessing a domain name. The presence of a “dash” was not considered a sufficient differentiating factor. Second, pursuant to paragraph 3.7 of the Policy, the domain name was considered to be registered in bad faith since the registration was primarily for the purpose of selling the domain name to the complainant in excess of the actual cost of registration. Third, pursuant to paragraph 3.6 of the Policy, the registrant was found to have no legitimate interest in the domain name. Specifically, the domain name was not a mark used by the registrant, nor a mark to which the registrant had rights in; it was not used in good faith in association with any wares, services or business, or in association with a non-commercial activity; it did not represent the legal name or other identifier belonging to the registrant; and it was not a geographical name of a location of the registrant’s non-commercial activity or place of business. Consequently, the panel ordered that the disputed domain name, comfort-inn.ca, be transferred from the registrant to the complainant.

This entry first appeared in the October 19, 2006 edition of lawsof.com. For a copy of the CIRA decision, click here.

Forsale.ca Complaint Dismissed

The Canadian Internet Registration Authority (“CIRA”) dismissed a complaint over the disputed domain name forsale.ca. In making its decision, CIRA’s three-member panel accepted that the complainant, owner of the domain name for-sale.ca, had registered its domain name in April 2003, applied for a trade-mark in that name on April 7, 2003, and obtained a formal trade-mark registration in January 2005. The panel further acknowledged that the disputed domain name, forsale.ca, was first registered on October 20, 2000.

Pursuant to paragraph 4.1 of CIRA’s Domain Name Dispute Resolution Policy, a complainant will only succeed where it proves, on a balance of probabilities, that the disputed domain name is confusingly similar to a mark in which the complainant had rights prior to the date of registration of the domain name, and to which such rights still exist; the domain name was registered in bad faith; and there is evidence the registrant had no legitimate interest in the domain name. CIRA dismissed the complaint solely on the basis that the complainant’s rights in the mark, for-sale.ca, existed as early as April, 2003, but did not exist prior to October 20, 2000, the date the disputed domain name, forsale.ca, was registered. The panel did not find it necessary to address the issues of bad faith or legitimate interest.

This entry first appeared in the October 5, 2006 edition of lawsof.com. For a copy of the CIRA decision, click here.

IMDB.ca Complaint Allowed

The Canadian Internet Registration Authority (“CIRA”) ordered the transfer of the disputed domain name IMDB.CA to the complainant, Internet Movie Database Inc., a provider of movie reviews, information and searching services. CIRA found that the complainant successfully established all of the elements required for a successful ruling. Of particular interest, the complainant was able to establish that although IMDB only became a registered trade-mark in 2004, four years after the domain name was registered, the complainant had the requisite level of rights in the mark by virtue of its common law rights through use of the mark since 1996. Also, the complainant established that the domain name was registered in bad faith by showing that the registrant exhibited a pattern of registering domain names of well-known marks and famous entertainment, sport related or personality names in order to prevent rightful owners from registering them. Although the registrant did not intend to provide the exact same services as those offered by the complainant, the complainant established that the primary purpose of the registration was to disrupt the business of the complainant by establishing that the registrant was nonetheless competing for the Internet traffic intended for the complainant. Although the registrant claimed to have been working on the IMDB.CA website for five years, CIRA held that a present, not future, offering of an activity was required for the registrant to establish that it had the requisite legitimate interest in the domain name.

This entry first appeared in the January 12, 2006 edition of lawsof.com. For a copy of the CIRA decision, click here.

Skype Banned by French Gov't

The French government has banned the use of Skype at research institutes and universities in France. Skype is a popular voice-over-Internet protocol (VoIP) that allows users on its network to speak to each other over the Internet for free. Skype can also be used to make and receive calls through standard phone lines for a fee, and to receive voicemail messages. French authorities have cited concerns over Skype’s “network security” as the main reason for the ban. Critics, however, contend that communications through Skype are sufficiently protected with the use of encryption technology. They argue that one reason for banning Skype may be the loss of revenue suffered by French competitors in the VoIP market.

This entry first appeared in the November 3, 2005 edition of lawsof.com. For a copy of the related article, click here.