Trade Secrets Receive Federal Protection
This post discusses the civil and criminal protections for trade secrets available since May 12, 2016 under the federal Defend Trade Secrets Act (DTSA).
Relevant definitions in the DTSA roughly follow – with numerous modest differences – those in the Uniform Trade Secrets Act , which has been adopted, with various modifications, by almost all states. (more…)
Apple-FBI “Backdoor” Blog on Quora
I am fascinated by the Apple-FBI dispute concerning opening a “backdoor” to an iPhone used by one of the San Bernardino killers. As a result, I recently created the Apple-FBI “Backdoor” Blog on Quora.
The blog’s first two posts list:
- Significant court filings and orders for that case.
- Quora questions and answers that help explain the nature and details of the Apple-FBI dispute.
I intend to update those posts over time, and to add new posts when it is appropriate to do so.
Photo credit: Apple vs. the FBI: A Closer Look – Late Night with Seth Meyers
Dana H. Shultz, Attorney at Law +1 510-547-0545 dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.
Yes, a Stranger Can Cancel Your LLC!
This post discusses how (amazingly!) an unauthorized stranger can cancel your LLC (limited liability company) or corporation. It is based on a Quora question that I answered. See What prevents someone from filing a restated certificate of incorporation for a Delaware corporation in which they are not authorized to do so?
Unfortunately, the ease with which entity-formation documents can be filed in the U.S. – while facilitating business startups – does allow unauthorized filing of such documents. This means that, whether accidentally or intentionally, a stranger can cancel your LLC (or corporation). (more…)
Attorney-Client Confidentiality vs. Attorney-Client Privilege
“Attorney-client confidentiality” and “attorney-client privilege” are terms that non-lawyers frequently mistake for one another or misuse. This post explains the difference between those terms.
While this post cites California law, similar considerations are likely to apply in other states.
Attorney-Client Confidentiality
An attorney’s obligation to maintain client information in confidence is set forth in Business and Professions Code Section 6068(e) . (more…)
Hyperlink in Email Can Create Binding Terms
In Online Terms can be Binding, even if You don’t have to Click!, I discussed enforceability of a website’s “browsewrap” terms of service. This post discusses how an email hyperlink can create binding contractual terms.
Lawsuit Brought in New York
Elizabeth Starkey filed suit in the U.S. District Court for the Southern District of New York against travel company G Adventures, Inc. The suit alleged that a G Adventures employee sexually assaulted Starkey during a vacation trip. (more…)
“Happy Birthday” May Be in the Public Domain, After All
You probably have sung “Happy Birthday [to You]” countless times. This post is about a company that has been collecting royalties from that song and the possibility that those royalties soon may stop.
In 1893, sisters Mildred Jane Hill and Patty Smith Hill published a collection of children’s songs. One of the songs – with the tune that we now know for “Happy Birthday to You” – was “Good Morning to All”.
Good morning to you,
Good morning to you,
Good morning, dear children,
Good morning to all.
While no one knows for sure who wrote the “Happy Birthday” lyrics, their first known publication was in 1912. (more…)
Fraudulent Takedown Notice Leads to $25,000 Judgment
Earlier this month, the U.S. District Court for the Northern District of California ordered the author of a fraudulent takedown notice under the Digital Millennium Copyright Act to pay more than $25,000.
U.K. Student Journalist Oliver Hotham has a blog on WordPress.com, which is operated by San Francisco-based Automattic Inc. (more…)
Ridiculous Yelp Lawsuit Alleges Reviewers are Employees
Do you wonder why lawyers often have a bad reputation? If so, consider the ridiculous Yelp lawsuit alleging that Yelp’s reviewers are employees of the company.
Yelp is an online review site and local business search service. Consumers are encouraged to write reviews of, and rate their satisfaction with, various products and services.
Historically, controversies have concerned whether Yelp punishes businesses for not advertising on the site (which Yelp denies). More recently, business owners have complained about Yelp’s automated tools for removing false or inappropriate (e.g., paid) reviews based on unpublished criteria.
The First Sale Doctrine: If I Own It, I Can Sell It
Copyright and trademark owners typically like to exercise their legal rights as broadly as possible. There is however, a well-known limit to those rights called the “first sale doctrine“.
Actually, they are two separate but similar doctrines. One pertains to copyrights, the other to trademarks:
- Copyrights – 17 USC Section 109(a) states, with certain exceptions, that the owner of a lawfully-made copy of a work may sell or dispose of the work. Consent of the copyright owner is not required. So, for example, if you legitimately possess a book or a CD, you may sell it or give it to someone else or throw it into a trash bin.
- Trademarks – The trademark first sale doctrine is a product of case law rather than statute. In Sebastian International, Inc. v. Longs Drug Stores Corporation, the United States Court of Appeals for the Ninth Circuit wrote: “[W]ith certain well-defined exceptions, the right of a producer to control distribution of its trademarked product does not extend beyond the first sale of the product. Resale by the first purchaser of the original article under the producer’s trademark is neither trademark infringement nor unfair competition.” The exceptions include, for example, stolen or counterfeit goods or goods that have avoided the producer’s quality control systems.
Chubby Checker Files Ridiculous Trademark Infringement Suit
Chubby Checker (real name Ernest Evans) – the singer famous for The Twist dance craze in the 1960s – and certain corporations that he controls have filed a lawsuit against Hewlett-Packard Company and Palm, Inc. The suit concerns a no-longer-available app named “The Chubby Checker”.
The app purported to allow women to calculate the size of a man’s penis based on his shoe size. According to webOS Nation, the app was downloaded only 84 times before it was removed in September 2012. Yet press reports state that the plaintiffs are seeking damages of $500 million for trademark infringement and unfair competition!
“Doing Business” Requires More than an Employee and an Office
In Doing Business in CA? Be Sure to Register, I wrote that an out-of-state corporation that “enter[s] into repeated and successive transactions of its business in [California] other than interstate or foreign commerce” must register with the Secretary of State as a foreign corporation, and that a penalty for failing to do so is being precluded from maintaining actions in California courts. A recent case in the US District Court for the Northern District of California (Jarzab v. KM Enterprises) provides an example of what does not constitute “repeated and successive transactions”.
Corporate Officers in California Need to Be More Careful than Directors
In California, the so-called Business Judgment Rule (“BJR“) protects corporate directors. They are not responsible for honest mistakes of business judgment. A recent case revealed that the BJR does not protect corporate officers in California.
During 2007, Indymac Bank bought more than $10 billion in risky residential loans. These loans ultimately generating losses of more than $600 million. Indymac closed. The Federal Deposit Insurance Corporation was appointed receiver.
Here’s an Arbitration Provision I Like!
I’m not a big fan of mandatory arbitration clauses in contracts: Although arbitration is likely to proceed more quickly than litigation (other than small-claims cases), it is not necessarily less expensive. However, I recently saw an arbitration clause that I like quite a bit.
Linden Research, Inc., developer of the Second Life multi-user online service, includes the following in its Terms of Service (emphasis added):
Copyright Infringement Explained
I recently realized that I have referred to copyright infringement in quite a few posts. However, I neglected to define that term. It is time to correct that oversight.
Copyright Infringement Defined
Generally, infringement occurs when a copyrighted work is reproduced, distributed, performed, publicly displayed, or made into a derivative work without the permission of the copyright owner. I.e., copyright infringement is a violation of the copyright owner’s exclusive rights. (See Copyright Protection in One Easy Lesson.) (more…)
How to Defeat a Cybersquatter, Part 2: Going to Court
In How the UDRP can Defeat a Cybersquatter, I wrote about ICANN’s Uniform Domain Name Dispute Resolution Policy. The UDRP provides a quick, inexpensive way to recover a domain name from a cybersquatter (someone who has obtained a domain name that is the same as, or confusingly similar to, a trademark or service mark that you own). However, if you want to recover money, you will have to go to court.
Before proceeding further, let me be clear: I think lawsuits should be avoided whenever possible. As a trial lawyer told me many years ago, “Litigation is a terrible way to run a business.” Unfortunately, litigation sometimes is necessary.
Handbook Defeats Employee Claim of Attorney-Client Confidentiality
In “Inspection of Employee Text Messages ? Be Careful“, I described provisions concerning company-provided technology that every employer should include in its employee handbook. A recent California Court of Appeal case, Holmes v. Petrovich Development Co., shows that such provisions are strong enough to defeat a claim of attorney-client confidentiality!
Gina Holmes brought suit against her former employer, alleging sexual harassment, wrongful termination and other causes of action. The employer presented as evidence e-mails between Holmes and her attorney – e-mails sent from her employer’s computer – that supported the employer’s case.
International Contracts: Choice of Law when the Parties Disagree
This post concerning international contracts is based on an OnStartups.com question (edited here) that I answered a few minutes ago. Q. I am drafting a website-development agreement with a firm in India. I am in Australia. I prefer that the agreement be governed by Australian law, but the developer prefers Indian law. What is normally done in similar circumstances?
A. Several thoughts based on my experience international contracts: (more…)
Recover Your Domain Name, and Perhaps Some Money, Too
From defendant Nahum’s website at the hijacked domain
Just over a year ago (Who is the Master of Your Domain? [or, How to Prevent Domain Name Hijacking]), I wrote about recovering a client’s domain name from a disgruntled former employee via ICANN’s Uniform Domain-Name Dispute-Resolution Policy. A recent case from the U.S. Court of Appeals for the Ninth Circuit (DSPT International v. Nahum) shows that under federal trademark law, an aggrieved domain name owner may be able to recover monetary damages, too.
Defendant Lucky Nahum worked for plaintiff DSPT International and worked with an outside supplier to set up DSPT’s website. Without telling DSPT’s owner, Nahum registered the website’s domain name in his own name.
Open Source Developer Wins Big – But Can He Collect?
BusyBox Logo
Erik Anderson developed certain software that he contributed to BusyBox, a compact set of embedded Linux utilities licensed under the GNU General Public License, Version 2 (the “GPL”). In October 2008, Anderson registered a copyright on the code that he contributed.
On September 2, 2009, Anderson’s counsel notified Westinghouse that it was infringing Anderson’s copyright because it was distributing BusyBox – both integrated into Westinghouse televisions and separately with other software – on terms that are more restrictive than the GPL. Westinghouse continued infringing Anderson’s copyright.
Anderson and the Software Freedom Conservancy brought suit against Westinghouse and 13 other defendants on December 14, 2009. Westinghouse initially mounted a defense, but stopped participating in the suit when it filed for bankruptcy.
Trade Secret Protection of Software has Limits
Developers of proprietary software typically rely copyright and trade secret protection of their works. A recent California case (Silvaco Data Systems v. Intel Corporation) illustrates how far trade secret protection does, and does not, go.
Silvaco develops and markets electronic circuit design software. Silvaco won a suit against Circuit Semantics, Inc., claiming that CSI, with the help of two former Silvaco employees, misappropriated Silvaco trade secrets, in the form of source code, by incorporating them into CSI’s software. Silvaco obtained an injunction against continued use of the technology incorporating its trade secrets.
Foreign Parent + U.S. Sub = Legal Firewall
I have helped dozens of foreign companies establish subsidiaries here. Sometimes, the foreign company asks, “Do we really need to form a separate company in the U.S.? Can’t we just hire some people in the U.S. to work for our existing overseas entity?”
In responding, I make the following points: (more…)
Where to File Your Patent Case? Probably NOT Where You Think
Stanford Law School Professor Mark A. Lemley has published a draft paper, Where to File Your Patent Case.
Lemley started with the assumption that plaintiffs frequently look for forums that favor patentees, where cases go to trial (summary judgments strongly tending to favor defendants), and that move cases along quickly. Defendants are likely to want the opposite, a forum that is unlikely to send cases to jury trial, that regularly rules for defendants, and that takes a long time to do both.
Court Says Tech Startups Special re Works Made for Hire
In a recently-decided case (JustMed v. Byce), the U.S. Court of Appeals for the Ninth Circuit decided that a software developer was an employee, rather than an independent contractor, even though the parties had completed almost no employment-related paperwork.
Byce took over development of JustMed’s software from an employee who had moved out of state. Byce’s compensation – the same as his predecessor’s – was 15,000 shares of JustMed stock (valued at $0.50 per share) per month.
If You Lose a Judgment and Don’t Pay, Your Domain Names Can be Seized
Office Depot won a judgment against John Zuccarini under the Anticybersquatting Consumer Protection Act of 1999 (15 U.S.C. Section 1125(d)) based on Zuccarini’s bad-faith registration of the domain name <offic-depot.com>, which was confusingly similar to <officedepot.com>.
Office Depot was unable to collect on its monetary judgment against Zuccarini, so it assigned that judgment to DS Holdings (“DSH”). DSH sought to levy against 190 <.com> domain names owned by Zuccarini and for which VeriSign controls the registry (a receiver having been assigned to auction off the domain names). Zuccarini (representing himself!) argued that DSH should be required to levy upon the domain names where their respective registrars are located, rather than at VeriSign’s single location. (more…)
Postal Service Stamp Infringes Copyright – Not Fair Use
Korean War Veterans Memorial
Several months ago, I wrote that the “fair use” defense to copyright infringement often is poorly understood. The U.S. Postal Service illustrates this point. A recent court decision held that a postage stamp infringed the copyrights in certain sculptures and was not fair use thereof.
Frank Gaylord created, and registered the copyrights for, soldier sculptures in formation constituting part of the Korean War Veterans Memorial.
John Alli took a photo of the Memorial. The Postal Service paid Alli $1,500 for the right to use that photo for a 37-cent stamp commemorating the 50th anniversary of the armistice of the Korean War. Alli told the Postal Service that it would need permission from the owner of the copyright in the sculptures; the Postal Service did not seek such permission. (more…)
Failure to Encrypt Passwords Leads to Class Action Lawsuit
On December 28, 2009, RockYou, Inc., a developer of applications for Facebook and other social networks, was sued in the U.S. District Court for the Northern District of California. The class action complaint alleges failure to encrypt users’ e-mail addresses and passwords and was filed shortly after a hacker copied that information for 32 million RockYou users. (more…)
Louis Vuitton Wins $10.8 Million from ISPs
On August 28, a federal court jury awarded Louis Vuitton Malletier, S.A. $32.4 million in a suit against two Internet Service Providers and their owner. The suit alleged trademark and copyright infringement.
Louis Vuitton Wins at Trial
The jury concluded that:
- The ISPs knew, or should have known, that their customers were selling, online, counterfeit goods that infringed LV trademarks and copyrights.
- The ISPs willful contributed to sales of the counterfeit goods.
- The ISPs were not entitled to the “safe harbor” protections of the Digital Millennium Copyright Act (see How Websites Can Avoid Liability for User-provided Content).
How Websites can Avoid Liability for User-provided Content
Two U.S. District Court cases – Io Group, Inc. v. Veoh Networks, Inc. (8/27/2008) and UMG Recordings, Inc. v. Veoh Networks, Inc. (9/11/2009) – offer a recipe by which Internet-based service providers can avoid liability for user-provided content.
Update: UMG v. Veoh was affirmed by the Court of Appeals for the Ninth Circuit on December 20, 2011.
The cases are similar. Veoh operates an Internet-based service that allows users to share videos with others free of charge. Io and UMG (Universal Music Group) brought separate suits, each alleging that Veoh engaged in various forms of copyright infringement because it allowed users to upload videos that infringed the plaintiffs’ copyrights.
In each case, Veoh obtained a summary judgment in its favor based on compliance with the “safe harbor” provision of the Digital Millennium Copyright Act (DMCA), codified at 17 U.S.C. Section 512 (Limitations on liability relating to material online).
You May Be a Content Pirate and Not Even Know It
Last month I posted You May Be a Software Pirate and Not Even Know It. The issues raised there now apply to equally content.
The Software & Information Industry Association is pursuing unlicensed use of content as aggressively as unlicensed use of software. For example, as recently reported in InfoWorld and elsewhere, Knowledge Networks agreed to pay SIIA $300,000 to settle a complaint that it distributed news articles to its employees without permission of the copyright owners. Similarly, in a media release earlier this year, SIIA announced that it was aggressively fighting graphics content piracy by filing lawsuits against individuals and companies that copied and distributed clip art without appropriate licenses. In another media release, SIIA touted the use of paid whistleblowers to help SIIA find infringers.
The implications are clear: Whether the subject is software, content or any other works of authorship, use and distribute the products only to the extent that you are authorized to do so by the terms of the applicable licenses.
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.
Small Claims Court: Litigation without Litigators
I am not a litigator (trial attorney), so I normally do not write about litigation. Recently, however, I have discussed several matters where small claims court seems appropriate. I will share some basic information about small claims cases in California.
The CA Courts’ Small Claims Self-Help Center provide extensive, detailed information. The most important point is that small claims court judgments are limited to ordering the payment of money. You cannot, for example, ask a small claims court to order that the defendant stop infringing a patent or trademark.
