California Bar Cyberspace Committee presentation on the essentials of cyberspace law focusing on user generated content, privacy and online advertising. President by Committee Co-Chair Bennet Kelley, Vice Chair Robert Hawn and Committee member Nicole Ozer.

1. Business Law Essentials Series
Essentials of Cyberspace Law
User Generated Content, Privacy, and Advertising
California Bar Cyberspace Committee
January 27, 2010

2. A Presentation of the Cyberspace Law Committee
Essentials of Business Law Series
January 27, 2010

3. Where Used
Websites
SaaS
Services
Skype
Delivery
Research
Other
Social Networking

4. Legal Issues
Enforceability
Modification
Provisions

5. Enforceability
Best Practices
Notice is Key
Require Consent
“I agree” buttons
Required scrolling
Does Use Indicate Consent?

6. Enforceability
Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir.
2002) (lack of notice vitiates consent)
Register.com Inc. v. Verio Inc. 126 F.Supp.2d 238 (S.D.N.Y. 2000),
aff’d 356 F.3d 393 (2nd Cir. 2004) (post-download notice on
(post-
repeated downloads constitutes notice)
Southwest Airlines Co. v. BoardFirst LLC (N.D. Tex 2007) (home
page legend provides sufficient notice for binding contract)
Ticketmaster LLC v. RMG Techs. Inc. (C.D. Cal. 2007) (in
preliminary injunction matter, terms of use enforceable where court
believed that defendants would be shown to have been notified of
and assented to terms)

7. Modification
Douglas v. U.S. District Court for the Central District of
California 495 F.3d 1062 (9th Cir. 2007) (customer was
not bound to revised contract terms because the
customer had not received notice of, or assented to, the
changes)
Harris v. Blockbuster Inc. 622 F. Supp. 2d 396 (N.D. Tex
2009) (unlimited unilateral ability to modify or terminate
renders contract illusory, citing Morrison v. Amway Corp.
517 F.3d 248 (5th Cir. 2008) and distinguishing In re
Halliburton 80 S.W.3d 566 (Tex. 2002)

8. Modification
Notice is Key
Best Practices
Establish Modification Right Initially and Clearly
Highlight all Material Changes
Collect and Retain Evidence of Assent
Create An Opportunity for Rejections
Use Common Sense

9. Provisions
Contract Language
Situational
General
Entire Agreement
Privacy Policies
(A.V. v. iParadigms 544F.Supp.2d 473 (E.D. Va. 2008)(browse wrap terms unenforceable
when not incorporated into click through license)
Modification Process
Social Networking Specific Provisions
Copyright Infringement Notices (DMCA)
Content Limitations
Redistribution Rights
Indemnification
Right to Remove Posting and Terminate Account

10. ALI Principles
ALI Principles of the Law of Software Contracts,
May 19, 2009
Modification requires consents after notice of the
modification and termination requires reasonable
notice
Disclaimable implied IP infringement
indemnification obligation
Nondisclaimable warranty of no hidden material
defects

12. ECPA and the Impact of
Outdated Privacy Law
Essentials of Cyberspace Law
January 27, 2010
Nicole A. Ozer
Technology and Civil Liberties
Policy Director
ACLU of Northern California
www.aclunc.org/tech
nozer@aclunc.org

13. The 4th Amendment clearly
protects your data…
• At home or on a device in your possession
– Judicial search warrant (probable cause)
– Notice at time of search
• BUT much weaker if in another’s hands
– Couch (accountant)
– Miller (bank)
– Smith (telephone company)

14. Congress tried in ECPA (1986)
For the person or business whose records are
involved, the privacy or proprietary interest in that
information should not change. Nevertheless,
because it is subject to control by a third party
computer operator, the information may be
subject to no constitutional privacy protection .
Thus, the information may be open to possible
wrongful use and public disclosure by law
enforcement authorities as well as unauthorized
private parties.
- Senate Judiciary Committee (1986)

15. Federal communications
privacy laws
• Wiretap Act or “Title III” (part of ECPA)
– interception = getting content of communications in real
time (in transit)
• Pen register and trap-and-trace statute
– addressing data of communications in real time
• Stored Communications Act (SCA) (also ECPA)
– access to stored communications, records of
communications, subscriber data

16. Always complex
and getting worse
• “famous (if not infamous) for its lack of clarity”
– Steve Jackson Games v. U.S. Secret Service
(5th Cir. 1994)
• “fraught with trip wires”
– Forsyth v. Barr (5th Cir. 1994)
• “a fog of inclusions and exclusions”
– Briggs v. American Air Filter (5th Cir. 1980)

17. Just a few things have changed
since 1986:
Cloud computing
2006: Google docs launched
Rise of social networking
2004: Facebook launched
Internet search
1998: Google founded
1994: Yahoo & Amazon founded
The beginning of everything
1990: World Wide Web created
Cell phones … VOiP … Online book search …

18. ECPA challenges today
• It’s confusing and outdated
– ECPA defines service providers in language that does
not make sense in today’s technological world.
– Different levels of protection can apply to the same
piece of communication over it’s lifetime.
– It clearly applies to public providers, like hotmail. But
what about a nonpublic provider like a university?
• New technologies are left behind
– It’s not clear if or how it applies to modern digital
services, like cloud computing, social networking, or
Internet search history.

19. Lifecycle of an email
Unopened < 180 days Warrant
> 180 days
Opened Subpoena
or 2703(d)
with notice
Header info
Subpoena
Basic subscriber or 2703(d)
info (name, address, NO notice req’d
connection records, etc)

20. That’s confusing. And email was
one of the specific technologies
that existed in 1986 and that
ECPA was intended to protect.
What about newer services
that didn’t exist in 1986? How
does ECPA protect them?

21. Search
Location-based services
Cloud Computing

22. A campaign to educate
and activate the public,
businesses, and policy
makers to upgrade privacy
laws and keep pace with
our modern online world.

23. Updates…
www.aclunc.org/tech
www.aclunc.org/techblog
www.dotRights.org
nozer@aclunc.org

24. 24

25. 25

26. 26

27. TM Use Limited to Search Term
27

28. TM Use Limited to Search Term
28
J.G. Wentworth SSC Ltd v. Settlement Funding LLC, 2007 WL 30115 (E.D. Pa. Jan. 4, 2007) (granting motion to dismiss).

29. TM Use Limited to Search Term
29
Morningware, Inc. v. Hearthware Home Products, Inc., 2009 WL 3878251 (N.D. Ill. Nov. 16, 2009)

30. 30

31. Initial Interest Confusion
31
Use of another
trademark “in a manner
calculated to capture
initial consumer
attention, even though
no actual sale is finally
completed as a result of
the confusion.”
Brookfield Communications Inc. v. West
Coast Entertainment Corp., 174 F.3d 1036
(9th Cir. 1999).
B Tal

32. Rationale
32
• Improperly Benefits From Goodwill
of Trademark
• False Detour From Information
Super-highway
– Analogy to false detour sign directing
consumers to take wrong exit. “Unable to
locate West Coast, but seeing the Blockbuster
store right by the highway entrance, they may
simply rent there.” Brookfield Communications,
Inc. v. West Coast Entertainment Corp., 174 F.3d
1036, 1062 (9th Cir. 1999).
• Bait and Switch
– “Initial interest confusion can be viewed as a
variation on the practice of ‘bait and switch.’”
3 J. Thomas McCarthy, McCarthy on Trademarks & Unfair
Competition § 23:26 (4th ed. 2003).

33. Initial Interest Confusion Territory
33

34. Counterpoint
34
Not a Detour, Merely a Lane Change
Web surfers are accustomed to false starts
and are unlikely to be dissuaded when they
end up at the wrong site. Chatam Int'l v.
Bodum, Inc., 157 F.Supp.2d 549, 559 (E.D.
PA 2001).
No different than supermarket placing
products.
store brand next to branded products
FragranceNet.com, Inc. v. FragranceX.com,
493 F. Supp. 2d)(E.D.N.Y 2007)
Legally Significant Confusion?
“The [District] court’s refusal to enter the
‘initial interest confusion’ thicket is well
taken given the unlikelihood of ‘legally
significant’ confusion.” Hasbro Inc. v. Clue
Computing, Inc., 232 F.3d 1, 2 (1st Cir.
2000).

35. 35

36. Cyber Squatting Remedies
36
ICANN’s Uniform Domain Name Dispute
Resolution Policy
Establishes arbitration process for bad
faith domain registration
2329 cases filed in 2008
Only remedy is transfer of domain
Anti-Cyber Squatting Consumer Protection Act
(15 U.S.C. § 1125(d))
Lanham Act remedies for bad faith registration of
domain name

37. 37

38. Dealing with Gripe Sites
38
Trademark Claims
Absent commercial use
no TM violation or
cyber squatting
Copyright
Fair use defense
Defamation
First Amendment and
SLAPP protection
Third-Party postings
Website immune under
Communications
Decency Act

39. Dealing with Gripe Sites
39
Trademark Claims
Absent commercial use
no TM violation or
cyber squatting
Copyright
Fair use defense
Defamation
First Amendment and
SLAPP protection
Third-Party postings
Website immune under
Communications
Decency Act

40. 40

41. CAN-SPAM Act of 2003
41
CAN-
CAN-SPAM IS . . . CAN-
CAN-SPAM DOES NOT . . .
anti-
An anti-fraud and disclosure “Can Spam” – except for
statute wireless spam
Applies to an email where Include a “Do Not Email
the “primary purpose” is Registry”
commercial advertisement or
promotion of a product or
service Impose an “ADV” labeling
requirement
Non profits are not exempt
No volume requirement Create a general private right
of action

42. CAN-SPAM Principal Requirements
42
From line must
identify initiator
Subject line must not be deceptive.
Adult Messages must provide notice.
UCE must be
identified
as
“advertisement”
Requires Working Opt-Out
Mechanism for Advertiser Postal Address for Advertiser

43. CAN-SPAM Plaintiffs
43
FTC
State AGs
Internet Access Service
Provider (IASP)
Adversely Effected by
Violation
Cannot be faux-IASP
No Consumer Private
Right of Action

44. Preemption of State Law
44
CAN-
CAN-SPAM PREEMPTS ALL
STATE REGULATION OF EMAIL
EXCEPT STATE LAWS:
Regulating falsity or deception in
email
Not specific to email, including State
trespass, contract, or tort law; or
Other State laws to the extent that
those laws relate to acts of fraud or
computer crime

45. 45

46. FTC Disclosure Guidelines
46

47. The Offer
47
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48. Landing Page
48

49. Transaction Page
49
ALSO NO REFERENCE TO
CHARGE ON FIRST PAGE

50. Transaction Page (con’t)
50

51. FTC Complaint
51
FTC v. Infusion Media, Inc., Civil Action No. 09-CV-01112 (D. Nev. 2009)

52. FTC Advertising Guidelines
52
Advertising Dot Com Comparative Advertising
Disclosures: Information Statement of Policy Regarding
About Online Advertising Comparative Advertising
[PDF]
Deception FTC Policy Statement
Advertising and Marketing on on Deception
the Internet: The Rules of the
Road
Deceptive Pricing FTC Guides
Frequently Asked Advertising Against Deceptive Pricing
Questions: A Guide for Small
Business Dietary Supplements Dietary
Joint FTC/FCC guides on Long Supplements: An Advertising
Distance Advertising [PDF] Guide for Industry
Advertising Substantiation FTC Staff Comment on Draft
FTC Policy Statement Report of the Commission on
Regarding Advertising Dietary Supplement Labels
Substantiation FTC Staff Comment on FDA
Bait Advertising FTC Guides Proposed Rule on Statements
Against Bait Advertising Made for Dietary Supplements

53. FTC Advertising Guidelines (con’t)
53
Endorsements and Testimonials Food Advertising Enforcement
FTC Guide Concerning the Use Policy Statement on Food
of Endorsements and Advertising
Testimonials
Jewelry Guides for the Jewelry,
Precious Metals, and Pewter
Environment FTC Guides for the Industries
Use of Environmental Market
Claims (Green Guides) Unfairness FTC Policy Statement on
Unfairness
Eye-
Eye-Care Surgery FDA/FTC Joint
Letter on PRK Vocational and Distance Education
Schools Guides for Private
FTC Staff Guides on Refractive Vocational and Distance Education
Eye Surgery Schools [PDF]
Use of the Word "Free" FTC Weight-
Weight-Loss Products Red Flag:
Guide Concerning the Use of Bogus Weight Loss Claims Web Site
the Word "Free" Red Flag: Bogus Weight Loss Claims
Brochure

54. About the Internet Law Center
54
The Internet Law Center is dedicated to helping businesses navigate
the evolving legal standards for today’s digital economy, while also
contributing to the development of the policies of tomorrow. The
firm serves a diverse client base that includes startups and public
companies both online and offline across North America and Asia.
The professionals of the Internet Law Center possess years of
practical experience as lawyers and entrepreneurs with internet
companies and have played a leading role in shaping Internet law
and policy. This unprecedented combination of business, legal and
policy experience makes the Internet Law Center uniquely qualified
to provide the professional advice needed to address emerging
issues of internet law in an uncertain economy.
Sign up for the Cyber Report – our award winning newsletter which
was named one of the Top 100 Internet Law Resources. It is also
available on our blog (along with other materials) at
www.ilccyberreport.wordpress.com. .

55. About Bennet Kelley
55
Bennet is one of the nation’s leading Internet attorneys
and founder of the Internet Law Center. He is Co-Chair
of the California Bar Cyberspace Committee and a
frequent speaker on the latest developments in Internet
law at conferences throughout North America. Bennet
also is a regular guest on Webmaster Radio’s “InBoxed”.
Bennet has played a leading role in shaping Internet
law and policy having testified and lobbied on Internet
issues in Washington and Sacramento, winning praise
from a key Congressional committee for his
contributions to federal spyware legislation.
In addition, the Internet Law Center’s newsletter, Cyber
Report, was named one of the top 100 Internet law
resources and recognized by the LA Press Club.

56. 56 Contact
Bennet Kelley
Internet Law Center
100 Wilshire Blvd, Suite 950, Santa Monica, CA 90401
(310) 452-0401
bkelley@internetlawcenter.net
www.internetlawcenter.net
Twitter: InternetLawCent / SlideShare: InternetLawCenter

57. Business Law Essentials Series
Essentials of Cyberspace Law
User Generated Content, Privacy, and Advertising
California Bar Cyberspace Committee
January 27, 2010