1) Regulatory paradigms for electronic commerce
a) Federalism and internationalism- forums for regulation pg 30
i) State level- may violate CC
ii) Federal level- provides uniform regulation,
iii) International level encouraging national legislatures
b) Commerce Clause Limitations on State Power to Regulate Online Activites
i) CASE American Libraries Association v. Pataki (1997) 37
(1) State law made it illegal to send porn to minor
(2) Law violates CC
(3) Dormant CC
(a) Restricts discrimination against interstate commerce and
(b) Bars regulations that, although facially nondiscriminatory, unduly burden interstate commerce
(4) State regulation of aspects of commerce that demand cohesive national treatment usually not ok
(5) This act burdens interstate commerce and burden not outweighed by local benefit.
(a) Pike balancing test- two part inquiry:
(i) Is goal legit- not discrimination
(ii) Weigh burden on interstate commerce against local benefit
ii) CASE State v. Heckel
(1) State law required accurate subject lines in emails. Law upheld, not volatile of CC.
(2) Act not facially discriminatory as it applies evenhandedly to in and out of staters
(3) Local benefits surpass burden on interstate commerce
(a) Spam is major problem
(b) Only burden in truthfulness, focus on burden created by compliance.
2) Jurisdiction Over Disputes in Internet Commerce
a) Court must have subject-matter jurisdiction over matter in controversy and personal jurisdiction over the parties
b) Personal jurisdiction
i) Power of crt to exercise authority over a particular defendant
ii) Rule 4 of FRCP and due process clauses define personal j.
(1) State long arm statutes, even in fed crt state long arm statute usually defines limits of personal jurisdiction
iii) General and specific jurisdiction
(a) Some act by which def purposely avails itself of privilege of conducting activites within forum state
(b) COA must arise of of or relate to def’s contacts w/ forum state
(c) Assertion of jurisdiction must be reasonable, comporting with fair play and substantial justice
(a) Continuous and systematic contacts
(b) May assert jurisdiction in any COA
c) CASE Zippo v. Zippo Dot Com (1997)
i) Sliding scale for exercising personal jurisdiction over online defendants
(1) One end- def clearly does business over internet entering into contracts with residents. Jurisdiction is proper
(2) At opposite end- def simply posted info on site accessible to users in foreign jurisdictions, a passive site- not grounds for exercise of personal j.
(3) Middle ground- interactive website user exchanged info w/ host. Jurisdiction determined by examining level of interactivity and commercial nature of exchange of info that occurs on site.
ii) Jurisdiction proper here b/c of 3000 contracts with residents and 7 K’s w/ local ISP’s.
d) CASE Cybersell v. Cybersell (1997).
i) FL website infringed trademark of AZ company.
ii) Cannot bring suit in AZ, unfair to def, no personal j
iii) Purposeful availment element
(1) Def conducted no commercial activity over internet in AZ, sought no business, did nothing to encourage AZ residents to access site, merely posted passive home page.
(2) Contacts insufficient to establish purposeful availment
e) Middle ground interactive sites usually require actual contacts or transactions w/ forum resident to exercise jurisdiction
f) Effects Test- personal jurisdiction may be predicated on
i) Intentional actions
ii) Expressly aimed at forum state
iii) Causing harm, brunt of which is suffered and which def knows is likely to be suffered in forum state
g) CASE Panavision v. Toeppen (1998)
i) Def registered panavisions trademarks as domain names as part of scheme to extort money from panavision. Acts were aimed at CA corp and caused corp injury in CA, jurisdiction is proper
ii) Purposeful availment element- requires only that def’s actions be purposefully directed toward forum residents
iii) Effects doctrine applied and jurisdiction is proper
iv) Simply registering some else’s domain name and establishing site not enough, but there is more here
h) CASE Revell v. Lidov
i) Def posted defamatory article on bulletin board of school website.
ii) Interactive site
iii) Post to bulletin board not directed at forum, effects test not satisfied, def did not even know plaintiff was resident of forum, knowledge of forum where harm will be realized is essential to effects test
i) Most courts have held that effects test satisfied only if conduct expressly aim at forum, forseeability not enough
3) Protecting Commercial Identity Online: Trademarks
a) Trademark Basics
i) Trademark- word, symbol, device, other designation that is distinctive of a person’s goods or services and is used in manner that id’s goods and distinguishes them from go
n its own site thus relecting negatively on plaintiff’s product. Def used “home of niton (plaintiff)” in its meta data
b) Infringement Resulting from Initial Interest Confusion
i) CASE Brookfield Communications v. West Coast
(1) Plaintiff owned mark “moviebuff” marketing an info database. Def launched moviebuff.com w/ similar database.
(2) Domain name infringes plaintiff’s trademark
(3) Def’s use of Moviebuff in metatags will create initial interest confusion b/c mark is used to divert people from owner’s site
(4) Initial interest confusion- to capture initial consumer attention even though no actual sale is finally completed as a result of the confusion, may still be an infringement.
ii) CASE Playboy v. Netscape
(1) Def search links banner ads to list of key terms, including plaintiff’s marks playboy, when playboy typed in, competitor sites ads popped up in banners
(2) Infringement issue-
(a) Only issue is likelihood of confusion, def’s clearly used mark in commerce and mark is clearly owned by plaintiff
(i) Initial interest confusion- def could create initial interest confusion with ads, use of 8 factor test to determine likelihood of confusion used
iii) CASE GEICO v. Google pg 93
(1) Google sold ad-lingage based on Geico trademark
(2) To prove infringement plaintiff must show:
(a) It possesses a mark
(b) Def used the mark
(c) Use occurred “in commerce”
(d) Used the mark in connection with sale of goods or services
(e) Def used mark in manner likely to cause confusion
(3) This could be use in commerce, complaint addresses more than def’s use of mark in internal computing, mark used to sell advertising, advertisers bid on marks and google links ads to them. Use of mark in this manner may imply that def’s have owner’s permission to do so. Advertisers could directly purchase rights in the mark.
iv) Case Gihari v. Gross
Interior designor was plaintiff, def was angry customer who set up gripe