Scott Technology Attorneys

In a blog post on August 10th, Google announced that it will add a new ranking parameter, or “signal,” to its ever evolving search ranking algorithm: the number of valid copyright removal notices it receives for a given site. Google says that websites with high numbers of “valid copyright removal notices” may result in a lower ranking within search results. Google specifically refers to copyright owners such as NPR, Hulu, and Spotify, when it claims that the new results should benefit legitimate media companies by raising their potential ranking in search results.

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Speaking before the U.S. Senate Committee on Commerce, Science and Transportation on March 16, Department of Commerce Assistant Secretary for Communications and Information Lawrence Strickling reiterated the need for Congress to enact a "Privacy Bill of Rights." Stricking's prepared remarks called for key elements of the legislation to include implementation of a Code of Conduct for online businesses and to empower the FTC to enforce the legislation. "This administration continues to make it clear that online privacy is one of its top concerns to be addressed this year," says Andrew Martin, an attorney with the technology law firm Scott & Scott, LLP. "The high priority given to addressing online privacy is overdue-innumerable people are now living their lives online, but in many ways, the current state of online living resembles the lawlessness of the Wild West." For more information, please contact Mr. Martin at 800-596-6176 or amartin@scottandscottllp.com.

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On Tuesday, March 15, the FTC announced the settlement of a complaint against online marketing firm Chitika stemming from allegations that the company deceived consumers by structuring its opt-out mechanism to be effective for a short, ten-day period. In the settlement, the FTC requires Chitika's privacy policy to be revised to allow consumers to opt-out for a minimum of 5 years and also requires the company to destroy all consumer data received during the period that the "defective" ten-day policy was in effect. "This settlement, coming on the heels of the Do Not Track Me Online Act introduced by Jackie Speier last month, may indicate how the proposed legislation will be revised as it moves through the legislature," says Andrew Martin, an attorney with technology law firm Scott & Scott, LLP. "As it stands, Congresswoman Speier's legislation endorses no limits on opt-outs-that is, once a consumer opts-out, they are opted-out until they change their mind. Although the FTC's settlement with Chitika is a step in the right direction for consumer privacy online, it ultimately could serve to weaken the Do Not Track Me Online Act." For more information, please contact Mr. Martin at 800-596-6176 or amartin@scottandscottllp.com.

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The Federal Trade Commission (FTC) announced on March 21st a 30-day public comment period regarding the proposed settlement agreement with Legacy Learning Systems, Inc. and Lester Gabriel Smith for violations of the FTC's "Guides Concerning the Use of Endorsements and Testimonials in Advertisement." The settlement includes the first ever monetary component for a violation of the blogger endorsement rules-a payment of $250,000. "The original complaint alleged that Smith posted reviews for the instructional videos offered for sale by Legacy while failing to mention that Smith, as the endorser, receives financial compensation for the sale of Legacy products," says Andrew Martin, an attorney with the technology law firm Scott & Scott, LLP. "This settlement makes clear that failure to stay abreast of, and invoke the necessary internal controls to comply with, changing online marketing and privacy regulations is a risky strategy for any company doing business online." For more information, please contact Mr. Martin at 800-596-6176 or amartin@scottandscottllp.com.

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The U.S. District Court for the District of South Carolina entered judgment on March 14 against a search engine optimization firm based on the company's role in helping to create and host a website used to market counterfeit golf clubs. The plaintiff in the case, Roger Cleveland Golf Company, had alleged that the defendant, Bright Builders, knew or should have known that it was hosting and otherwise helping to market a site (under the not-so-subtle domain copycatclubs.com) that was being used illegally to infringe the plaintiff's trademarks, and that Bright Builders should be held liable for damages even without having received actual notice of infringement. "SEO companies and web hosts need to pay close attention to the outcome in this case," says Christopher Barnett, an attorney with Scott & Scott, LLP. "There is no equivalent under U.S. trademark law to the safe harbor provisions of the DMCA in the copyright arena, which means that aggrieved trademark owners do not have to make ISPs aware of trademark infringements before filing suit. The disparate damages awards in this case ($770,750 against Bright Builders, compared to $28,250 against the site owner) should serve as strong incentive for ISPs to maintain a reasonable level of awareness regarding how their services are being used." For more information, please contact Mr. Barnett at 800-596-6176, or cbarnett@scottandscottllp.com.

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Twitter reached a settlement on March 14 with the Federal Trade Commission regarding data security breaches that exposed users' information to hackers. The FTC had accused Twitter of failing to safeguard user privacy and of misleading its users about its security practices. The settlement does not include monetary damages. However, it does ban Twitter from misleading its users about security and privacy policies, and it also requires the microblogging site to establish and maintain an information-security program that is to be independently audited every two years. "The FTC's settlement with Twitter sends a clear message to online social networking sites about neglecting to secure users' data and implementing inadequate security practices," says Keli Johnson, an attorney with Scott & Scott, LLP. "However, it is equally important for users to be circumspect about sharing personal information online." For more information, please contact Ms. Johnson at 800-596-6176 or KJohnson@scottandscottllp.com.

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The House Commerce Subcommittee on Communications and Technology voted on March 9 to overturn the FCC's network neutrality rules adopted in December. The net neutrality rules require broadband service providers to allow their users to access all online content, including content from direct competitors. This vote follows an attempt in February by House Republicans to attach an amendment to a spending bill that would bar government funding of the FCC net neutrality program. "The net neutrality rules are disfavored by service providers and communications companies, which have argued that the FCC is exceeding its power to enact such requirements," says Keli Johnson, an attorney with Scott & Scott, LLP. "In addition, MetroPCS and Verizon have filed suit in a federal court to challenge the rules. It will be interesting to see how the pending litigation and legislative attacks on the rules affect their implementation." For more information, please contact Ms. Johnson at 800-596-6176 or KJohnson@scottandscottllp.com.

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On March 10, Senators John McCain and John Kerry introduced legislation that would create an "online bill of rights." As it is currently drafted, this law would become the first comprehensive federal privacy law not governing a specific industry, and it is structured as a series of opt-in or opt-out requirements for data collection, storage, and transfer. "This interest from the federal government in online privacy issues is driven in no small part by the rise of social networking sites like Facebook and Twitter," says Andrew Martin, an attorney with Scott & Scott, LLP. "Although young people may have lived their entire lives online, it has taken older generations joining these social media sites in order for lawmakers to take notice of the potential exposure of personal information online." For more information, please contact Mr. Martin at 800-596-6176 or amartin@scottandscottllp.com.

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On March 3, Courtney Love finalized a settlement agreement with designer Dawn Simorangkir, who had filed a defamation lawsuit against the singer based on a series messages Love had posted to Twitter. Love reportedly agreed to pay Simorangkir $430,000 to settle the case, and many legal watchers are disappointed that this case will not go to trial. "The Love defamation case is the first major celebrity defamation case to be brought based a series of Twitter posts," says Andrew Martin, technology and new media attorney with Scott & Scott, LLP. "The case might have produced guidance on tantalizing legal questions regarding disparaging comments broadcast by influential celebrities on Twitter and how those comments are treated under traditional defamation law. The amount of the settlement seems to speak to uncertainty that both parties felt with respect to the strength of their legal arguments, so it appears these social media questions will remain unanswered for the time being." For more information, contact Mr. Martin at 800-596-6176 or amartin@scottandscottllp.com.

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Facebook recently relaxed their requirements for running promotions on the social networking site. Companies that previously were effectively priced out of the Facebook promotions market are now taking advantage of the new policy to run their own sweepstakes or giveaways. However, the following legal issues must be addressed in order to run a successful Facebook promotion:

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In a speech at George Washington University on February 14, Secretary of State Hillary Clinton laid out a new policy on Internet freedom intended to prevent autocratic governments from using Internet technology to repress dissent. In order to help ensure the broadest protection, the policy will back several different technologies representing multiple tools to fight repressive governments. "The State Department's announcement of this new policy has been construed by some to be at odds with their position on other Internet-based 'freedom initiatives,' such as Wikileaks," says Andrew Martin, a technology and new media attorney with Scott & Scott, LLP. "But the real question is how to reconcile this new policy with the so-called Kill Switch Bill which aims to defend U.S. infrastructure from a cyber-terrorist attack."  For more information, please contact Mr. Martin at 800-596-6176 or amartin@scottandscottllp.com.

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The Maryland Department of Public Safety and Correction Services announced on February 22 that it is suspending its a policy of asking potential employees to reveal their social media site user credentials during the application process. Through a spokesperson, the Department stated that its reason for asking for this information was to screen applicants for gang affiliation. "There is no doubt that the Department can claim a legitimate interest in screening its potential employees for gang affiliation, but a social media policy that asks for applicants' credentials is not a good way to pursue that interest," says Andrew Martin, a technology and new media attorney with Scott & Scott, LLP. "No matter the intentions, a social media policy that is overbroad or overreaching can get employers into trouble-as was evidenced recently in well publicized Facebook firing law suit. Companies cannot ignore social media use in the workplace, but they should consult with experienced counsel when addressing it in a policy for all to see." For more information, please contact Mr. Martin at 800-596-6176 or amartin@scottandscottllp.com.

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The House of Representatives voted on February 17 in favor of an amendment to a spending bill that prohibits the Federal Communications Commission (FCC) from accessing government money to implement its new "net neutrality" rules, which are intended to ensure fair play among Internet service providers and to guarantee that consumers can access Internet content at prices and speeds that are comparable to those now available. Among other things, the new rules require broadband service providers to allow users access to all online content, including content from direct competitors. "The FCC has been on the receiving end of tough criticism over its claim of authority to implement the new net neutrality rules," says Keli Johnson, an attorney with Scott & Scott, LLP. "The House's proposed amendment, if passed in the final bill, likely will add a new wrinkle to that debate and may affect the course of litigation that already has been filed over the issue." For more information, please contact Ms. Johnson at 800-596-6176 or KJohnson@scottandscottllp.com.

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In a report released February 1, Search Engine Land’s Danny Sullivan broke a story about a “sting operation” run by Google against Microsoft in an attempt to prove that Microsoft’s Bing search engine copies Google’s search results. Google engineers apparently injected illogical entries in Google search results and found that the same bad data found its way into Bing’s results some time later. Microsoft has denied that it copied Google’s search algorithm. However, it has admitted to culling search data from users who install the Bing toolbar, opting-in to send use data to Microsoft servers. “While I expect an ongoing media battle to be waged by both sides over this issue, I do not expect to see Google file a lawsuit over the alleged copying,” says Andrew Martin, a technology and new media attorney with Scott & Scott, LLP. “Unless Google somehow managed to copy Google’s search algorithm, U.S. copyright laws probably provide no remedy for this kind of activity.” For more information, please contact Mr. Martin at 800-596-6176 or amartin@scottandscottllp.com.

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All five FCC Commissioners have been asked to testify on February 16 before the House Communications & Internet Subcommittee regarding the Internet neutrality rules approved by the FCC on December 21. Those “net neutrality” rules require Internet service providers to grant all users equal access to their networks and to certain web sites. The rules were met by almost immediate legal challenges from Verizon and MetroPCS disputing the FCC’s authority to regulate broadband Internet and arguing that the FCC had overstepped its authority. However, despite the legal challenges to the net neutrality rules, the FCC now is turning its attention to extending broadband to rural areas. “The House sub-committee hearing will likely include pointed questioning regarding the FCC’s authority to issue the net neutrality rules,” says Keli Johnson, an attorney with Scott & Scott, LLP. For more information, please contact Ms. Johnson at 800-596-6176 or KJohnson@scottandscottllp.com.

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A possibly precedent-setting employment and new media law case settled out of court on Monday, February 7th, a day before it was set for trial. The suit was brought by the NLRB after an ambulance company employee was fired due to postings she made to her Facebook account criticizing her employer. “A decision by the Board could have given us insight into their take on the social media question as it pertains to employment law—specifically, how much of what is posted to Facebook or Twitter should be considered protected activity,” says Andrew Martin, a technology and new media attorney with Scott & Scott, LLP. “Even though there is some disappointment that a ruling likely will not be forthcoming, the facts in this case were muddied by the circumstances surrounding the firing, and it is likely that the Board could have avoided the thorny social media issues in favor of a ruling on a different point of law. However, a case was filed on February 4th against Student Transportation of America that involves a simpler set of facts, that that case might give the Board a better opportunity to present its take on social media policies.” For more information, please contact Mr. Martin at 800-596-6176 or amartin@scottandscottllp.com.

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In February, Sony posted a notice on its official PlayStation blog threatening to permanently ban users from the company’s online PlayStation services if those users deploy circumvention devices or software to “jailbreak” their PlayStation consoles, thereby enabling those consoles to play pirated or otherwise unauthorized game software. Sony considers such activities to be a violation of the PlayStation software license agreement and a breach of the anti-circumvention provisions of the Digital Millennium Copyright Act (DMCA). The announcement represents the latest in a series of anti-PlayStation-jailbreaking actions by Sony, which previously sought a temporary restraining order against hackers who published a how-to guide for PS3 jailbreaking.

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As Egypt’s government seized control and cut off that nation’s access to the Internet last week, U.S. Senator Joseph Lieberman reintroduced the “Protecting Cyberspace as a National Asset Act of 2010” legislation, commonly referred to as the Internet Kill Switch Bill.  Although the timing unintentionally coincided with the events in Egypt, sponsors of the bill have no intention to abandon the legislation.

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 On January 4, the Software & Information Industry Association (SIIA) announced its fifth annual forum on the adoption of cloud-based technologies by public sector organizations. Formerly known as SaaSGOV, SIIA has rebranded its forum to capitalize on the recently announced federal "cloud-first" policy. "SIIA's annual forum is re-invigorated this year, as the federal government officially adopted a pro-cloud position in the midst of the frenzy of cloud computing interest that erupted in 2010," says Andrew Martin, technology attorney with Scott & Scott, LLP. "Hopefully, many conversations will occur between private and public-sector cloud experts at this conference to drive cloud computing standards for years to come." For more information, please contact Mr. Martin at 800-596-6176 or amartin@scottandscottllp.com.

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Microsoft confirmed that its Business Productivity Online Suite cloud offering, the precursor to the upcoming Office365 Google App killer, experienced a data breach on December 22. The breach of users' Offline Address book data occurred due to a configuration error across data centers in North America, Europe and Asia. "Though relatively minor in scope, Microsoft's breach highlights the kinds of questions businesses and individuals should be asking when making a decision to place critical data in the cloud," says Andrew Martin, technology attorney with Scott & Scott, LLP. "Though governments are taking steps to establish baseline rights for cloud users, at this point, the only way to address privacy and security issues is through the contract with the cloud service provider." For more information, please contact Mr. Martin at 214-999-00880, or amartin@scottandscottllp.com.</</body>

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A federal judge ruled on Wednesday against a motion to dismiss a cause of action for contributory cybersquatting brought by Microsoft against several defendants accused of establishing domain names constituting infringements of the software giant's trademarks. The Court held that contributory cybersquatting is a valid cause of action, though it noted that the claim requires a showing of bad faith by the defendants. "In order to establish a cause of action for cybersquatting under the Anti-Cybersquatting Consumer Protection Act, a plaintiff must prove (1) that the defendant registered, trafficked in, or used a domain name; (2) that the domain name is identical or confusingly similar to a protected mark owned by the plaintiff, and (3) that the defendant acted in bad faith," says Keli Johnson, an attorney at Scott & Scott, LLP. "This ruling may have wide-ranging implications for web sites designed to imitate more well-known sites in order to divert Internet traffic." For more information, please contact Ms. Johnson at 800-596-6176 or KJohnson@scottandscottllp.com.

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Clothing designer Dawn Simonrangkir filed a defamation suit against rock musician Courtney Love based on a series of posts the celebrity made to her Twitter account. The suit, originally filed 2 years ago, will be heard by Los Angeles court on January 18, as the parties were apparently unable to reach a settlement. "The outcome of this case will turn on how the court views posts to social media sites by high-profile individuals as compared to traditional news media. If the court decides that celebrities should be held to the same standard as a news outlet when it comes to false or damaging statements of fact, then Love's case will take a considerable hit. She likely will be forced to fall back on her long-shot 'Twitter made me do it' defense," says Andrew Martin, media and technology attorney with Scott & Scott, LLP. For more information, please contact Mr. Martin at 800-596-6176 or amartin@scottandscottllp.com.

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Google recently amended its terms of service to require reciprocity to import contacts into another application, effectively banning Facebook from accessing its Contact API. Although Facebook entered into reciprocity agreements with Yahoo and Hotmail for the same data sharing features, Facebook does not allow reciprocity for sharing e-mail addresses and contact information with Google. "The social networking site has come under fire in the past for failing to provide sufficient security to protect its user's privacy," according to Keli Johnson, an attorney with Scott & Scott, LLP. "However, because Facebook currently engages in similar agreements with Yahoo and Hotmail, it willbe difficult for the social networking site to cite privacy concerns for failing to provide reciprocity. Ultimately, Google may determine there is value in exchanging data with Facebook and its many users." For more information, please contact Ms. Johnson. at 817.722.3962 or KJohnson@scottandscottllp.

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A new product offering called Office 365 is Microsoft's latest cloud computing offering. Office 365 is a cloud productivity platform incorporating elements of Microsoft Office, SharePoint, Exchange, and Lync. Office 365 is marketed as a comprehensive productivity and communication cloud application targeting both small-to-medium and enterprise markets. While Office 365 will not officially be released until sometime next year, beta testing is proceeding with "a few thousand organizations in 13 countries and regions," according to Microsoft's press release. "The Terms and Conditions posted to the beta sign-up website are brief, but they do indicate that Microsoft is avoiding the issues with data storage and transfer present in the European Union by representing that no European Union country will host any data stored to the Office 365 cloud," says Andrew Martin, an attorney with Scott and Scott, LLP. For more information, contact Mr. Martin at 214.999.2918 or amartin@scottandscottllp.com.

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 On November 3, a federal jury determined that Jammie Thomas-Rasset, of Brainerd, Minnesota, should pay $1,488,000.00 in copyright damages to the Recording Industry Association of America (RIAA). This latest award follows two previous damages awards - one for $222,000.00 and a second for $1.92 million - both of which were subsequently abandoned. Ms. Thomas-Rasset has maintained her innocence from the beginning of the legal saga, and has stated that she cannot pay any amount to settle the matter. Her attorneys have indicated that they would appeal the verdict as being unconstitutional. According to Christopher Barnett, an attorney at Scott & Scott, LLP: "Both parties to this lawsuit probably wish at this stage that the matter would just go away, but neither can afford to concede - the RIAA cannot let a person who is, from their perspective, an unrepentant copyright violator escape punishment, and the defendant cannot pay a statutory damages award for copyright infringement. It is understandable that the RIAA has stopped asserting these types of claims against individuals who download music over the Internet." For more information, contact Mr. Barnett at 800.596.6176 or cbarnett@scottandscottllp.com.

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On October 18, US Represenatives Edward Markey and Joe Barton sent a letter to Facebook co-founder and CEO Mark Zuckererg demanding that Facebook answer 18 questions regarding its privacy practices. A recent Wall Street Journal article reported that a number of Facebook apps inadventently transmitted tens of millions of users' personal information. The congressmen stated that, "given the number of current users, the rate at which that number grows worldwide, and the age range of Facebook users, combined with the amount and nature of information these users place in Facebook's trust, this series of breaches of consumer privacy is a cause for concern." According to Ilan Jenkins, an attorney at Scott & Scott, LLP, "the legislators' inquiry is one of many directed toward Facebook and is representative of the dangers that face software developers and online media companies." For more information, contact Ms. Machal-Fulks at 800.596.6176 or jfulks@scottandscottllp.com.

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