Category: Alerts

On October 28, 2014, the Supreme Court of Argentina ruled that search engines are not liable for unlawful third-party content appearing in search results. This groundbreaking ruling will have a significant impact on the question of intermediary liability in Latin America.

Maria Belen Rodriguez, a singer and model, sued Google, Inc. and Yahoo alleging that the search engines linked her name and image to sites containing porn and sexually explicit material. Ms. Rodriguez asked the trial court to order the Defendants (1) to remove all search results associating her name to websites of a sexual, pornographic, erotic or similar nature; (2) to remove all thumbnails depicting her image from the search results; and (3) to pay damages in the amount of AR$ 300,000 plus interests, as a result of the association of her name and personal image to sites of an offensive nature. The lower courts ruled that the search engines were not liable for third-party violations until a court ordered them to remove the illegal content.

On appeal, the Supreme Court held that search engines may be found liable for third party content if they have actual knowledge of its infringing nature and fail to take corrective steps thereafter. The Supreme Court further stated the type of notice that must be served on the search engines should establish actual knowledge. The Court of Appeals previously ruled that the Defendants weren’t negligent in reacting to the takedown order and thus, the Supreme Court found the search engines were not liable to Ms. Rodriguez.

On October 7, 2014, My Retirement Account Services, LLC sued the United States Treasury Department for trademark infringement.

My Retirement Account Services, LLC, located in Murray, KY, is the owner of the federally registered trademark GETMYRA.COM, for individual retirement account services. The plaintiff claims to have used the common law mark MYRA to identify and distinguish its services since at least as early as 2009. They have also applied to register it with the United States Patent and Trademark Office. On January 28, 2014, President Obama gave his State of Union Address, during which he announced his plan to create a new retirement savings program to be called “myRA.” After the State of the Union Address, the plaintiff alleges that it saw a substantial increase in visitors. The Complaint states that, “At 8:00 p.m. on January 28, 2014, the site experienced a 1400% increase in sessions, as compared to the hour before.” The site continued to receive a significant number of visitors following the speech.

Notably, on January 30, 2014, the United States Department of Treasury filed an application to register “myRA” for retirement savings program services. The United States Patent and Trademark Office rejected the application and cited the GETMYRA.COM registration as confusingly similar to the “myRA” mark.

In the Complaint, the plaintiff claims that the “myRA” mark is confusingly similar to its own marks. The plaintiff claims that this is reverse confusion. Specifically, the plaintiff is concerned that consumers are likely to believe that the plaintiff is the infringer and thus, it has suffered damage to its reputation and goodwill.

On September 17, 2014, the Judiciary Committee of the U.S. House of Representatives approved the Trade Secrets Protection Act. The bill, sponsored by George Holding (R-NC), is a companion bill to the previously reported Defend Trade Secrets Act of 2014, currently before the Senate Judiciary Committee.

Both bills would create a private right of action for trade secrets theft and include provisions allowing ex parte seizure orders to preserve evidence. There is concern that these seizure provisions could be used for anti-competitive purposes. Specifically, there is fear that start-up companies would be subject to abusive litigation by larger competitors.

Supporters of the bill contend that the seizure provisions will be used for extreme situations and there are protections in place to prevent abuse. The seizure provisions include the same high threshold as other ex parte seizures by federal courts. For example, the bill requires that the movant show “an immediate and irreparable injury” and that the party is “likely to succeed in showing that the person against whom seizure would be ordered misappropriated the trade secret and is in possession of the trade secret.” Parties subject to an unlawful seizure are entitled to attorney’s fees and damages.

Both bills have bipartisan co-sponsors and continue to gain support from several major companies, including Microsoft Corp., General Electric Co. and DuPont Co.

TVEyes provides a service that records all content broadcast by over 1,400 television and radio stations. It then compiles the content in a searchable database for subscribers including the United States Army, the White House, members of Congress and police departments across the country. TVEyes is a for-profit company with revenue over $8 million. TVEyes is only available to businesses, not the general public. It has approximately 2,200 subscribers who pay $500 per month. Subscribers are required to sign a contract limiting the use of downloaded clips to internal purposes. Before each download, TVEyes’ website states that content may be used only for internal review, analysis or research.

Fox News Network, LLC sued TVEyes, Inc. for copyright infringement, misappropriation and unfair competition.  In its decision the court provided the following example of the service TVEyes performs. If one performed an internet search for a recent amber alert for a missing child, it would not yield the same results as would a TVEyes search result. The internet search would provide only the segments of content that the television networks made available. TVEyes will index, organize and present the content on each of the 1,400 stations. Judge Hellerstein stated, “Without TVEyes, the police department could not monitor the coverage of the event in order to ensure the news coverage is factually correct and that the public is correctly informed.” Fox News filed the lawsuit because it was concerned that TVEyes will divert viewers from its news programs, commentary programs and websites. Fox News publishes about 16% of its television broadcast content online.

To assess fair use, the court addressed the following factors: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.

The Court focused on the first factor stating, “[TVEyes] creates a database of otherwise unavailable content…The Internet does not and cannot house the entirety of this content because Fox News, for example, does not provide all of its content online. Thus, without TVEyes, this information cannot otherwise be gathered and searched. That, in and of itself, makes TVEyes’ purpose transformative…”

The court found that TVEyes’ copying of Fox News’ broadcast content for indexing and clipping services constitutes fair use; however, it did not decide the issue of fair use for the full extent of TVEyes’ service, due to insufficient evidence. The court also found that the misappropriation claims were preempted by the copyright claim.

On August 29, 2014, the Ninth Circuit held that Amazon.com, Inc. (Amazon) could not be held vicariously liable for the conduct of certain participants in its affiliate-marketing program.

The plaintiff, Sandy Routt, an artist and designer of jewelry, apparel and collectibles, alleged that certain participants of Amazon’s affiliate marketing program used her copyrighted photographs on their websites without her consent. She sued Amazon for vicarious copyright infringement and for false designation of origin.

In order to successfully sue for vicarious copyright infringement, Routt had to allege that Amazon had (1) the right and ability to supervise the infringing content; and (2) a direct financial interest in the financial activity. Routt alleged that Amazon’s operating agreement with its affiliates prohibits copyright infringement and gives Amazon the power to monitor participants’ websites and terminate noncompliant participants. She further argued that this operating agreement gave Amazon the ability to affect the conduct of the participants so Amazon should be vicariously liable for the participant’s conduct.

The Court held that, even if Amazon may terminate the account of any participant who has infringed on another copyright, that termination would not put an end to the participants’ infringement. The plaintiff failed to show that Amazon exercises any direct control over the participants’ activities.

Similarly, Amazon does not have joint ownership or control over the participants’ infringing websites and the operating agreement expressly disclaims the existence of any partnership or agency. Therefore, the plaintiff failed to state a claim for vicarious liability under the Lanham Act.

The Ninth Circuit affirmed the district court’s dismissal of the first Amended Complaint against Amazon.

On April 29, 2014, Senators Christopher Coons (D-Del) and Orrin Hatch (R-Utah) introduced a bipartisan bill (S.2267), entitled the Defend Trade Secrets Act of 2014 (“DTSA”).  If enacted, the DTSA will allow companies to protect their trade secrets in federal court.

The DTSA authorizes a trade secret owner to bring a civil cause of action in federal court for either a violation of the Economic Espionage Act; or a “misappropriation of a trade secret that is related to a product or service used in, or intended for use in, interstate or foreign commerce.” The DTSA would provide trade secret owners with federal rights and remedies, including injunctions and treble damages for willful and malicious misappropriation.  It would also allow a trade secret owner to obtain ex parte relief to preserve and seize evidence of trade theft.  The statute of limitations for a claim is 5 years.

Unlike other types of intellectual property (i.e., patents, copyrights and trademarks), there is currently no federal civil cause of action for trade secret misappropriation.   While the Economic Espionage Act addresses trade secret theft, it is a criminal statute and creates no private civil cause of action for injured parties. Currently, trade secrets may only be protected by  one of the state law forms of the Uniform Trade Secrets Act (UTSA), other state statutory law and/or common law.  The DTSA will not preempt state law causes of action.

New York State Senators Joseph A. Griffo (R) and Martin J. Golden (R) introduced a bill empowering courts to order seized counterfeit products to be donated to a not-for-profit corporation rather than destroyed.  The bill passed in the New York State Legislature in June.

If the court determines that the counterfeit products should be donated, then notice must be given to the lawful mark owner of the counterfeit products. The trademark owner has 30 days to object, in writing, to the donation.  Failure to respond within that time frame constitutes consent to having the products donated.

The bill states that counterfeit products may only be donated to a “not-for-profit corporation that has an established history of providing goods and services to indigent individuals.”  The judge determines if an organization qualifies to receive counterfeit products.

The selected organization must have the products’ tags removed or have the products “marked, altered, imprinted, or indelibly stamped so as to prevent their resale or any confusion with the actual products of the lawful mark owner.”  The organization may not sell the counterfeit products.  Similarly, any person or organization in possession of these counterfeit products may not sell these products.  The only type of counterfeit product that currently qualifies for donation is clothing.