Man Enjoined from Facebook for Creating Numerous Fake Accounts and Related Misconduct

On January 8, 2015, the U.S. District Court for the Northern District of California entered a default judgment and a permanent injunction against an individual accused of creating more than seventy accounts after Facebook sent cease and desist letters to him. Facebook, Inc. v. Grunin, 2015 BL 3625, N.D. Cal., No. 3:14-cv-02323-WHA, 1/8/15.

The Court found that defendant:

(1) “breached Facebook’s Terms [of Use] by placing ads containing sexually provocative content, running deceptive ads, transferring accounts without Facebook’s permission, providing false information to Facebook, continuing to access Facebook after revocation, and failing to pay for advertisements” (Id. at *5);

(2) fraudulently “provided Facebook false information so that he could obtain advertising accounts” causing “Facebook to provide at least $340,000 in unpaid ads” (Id. at *6); and

(3) violated the Computer Fraud and Abuse Act, Act, 18 U.S.C. 1030, et seq. and the California Comprehensive Computer Data Access and Fraud Act, California Penal Code Section 502, by intentionally circumventing Facebook’s technical measures to disable his access “by impersonating others to obtain Facebook accounts to run ads” (Id. at *8).

The defendant was enjoined from accessing or using any Facebook website or service. The Court ordered further briefing on claimed damages and fees, and that a copy of its order be forwarded to the United States Attorney for possible investigation.

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    Snapchat Settles Federal Trade Commission Charges

    On December 23, 2014, the Federal Trade Commission (“FTC”) approved a final order settling charges against Snapchat that it misled consumers in telling them messages sent over the service would disappear. The FTC’s initial complaint, first announced in May of 2014, further alleged that Snapchat misrepresented the extent of its data collection practices and did not adequately protect consumers’ data. As part of the settlement, Snapchat is required to implement a privacy program that will be monitored for the next 20 years.

     

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      Defamation Statute’s ‘Retraction Demand’ Provision Does Not Apply to Online Yelp Review

      In Pham v. Lee et al., Case No. 1-12-CV-228332 (Cal. Ct. App., 6th Dist., order entered December 11, 2014), the California Court of Appeal held that the retraction demand provision of California’s defamation statute did not apply to an online review. Cal. Civ. Code section 48a states: “[i]n any action for damages for the publication of a libel in a newspaper, or of a slander by radio broadcast, plaintiff shall recover no more than special damages unless a correction be demanded and be not published or broadcast…” The court held this language expressly limited the provision to libel published in newspapers or slander by radio broadcast. The case involved an ophthalmologist, Dr. Randal Pham, who filed a defamation action against Jenny and Alvin Lee (“Lees”) for reviews they published about him online. The Lees moved to strike the suit under California’s anti-SLAPP statute, and the trial court denied the motion. On appeal, the Lees contended that Dr. Pham’s action must be stricken because he failed to demand a retraction under Cal. Civ. Code section 48a. The appeal court found this argument meritless, citing the provision’s limiting language and the fact it provides no grounds for a motion to strike. The appeal court affirmed the trial court’s judgment, concluding Dr. Pham had shown a probability of prevailing on the merits, and that the trial court didn’t err in denying the motion to strike.

       

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        Ninth Circuit Blocks California Law Requiring Sex Offenders Report Online Activities

        In Doe v. Harris, Case No. 13-15263 (U.S. Court of Appeals, Ninth Circuit, order entered November 18, 2014), the U.S. Court of Appeals for the Ninth Circuit affirmed a district court’s order preliminarily enjoining provisions of the Californians Against Sexual Exploitation Act (“Act”). The Act seeks, inter alia, to update reporting obligations of registered sex offenders by requiring they provide a list of all Internet identifiers they have established and of all Internet service providers they use. The Ninth Circuit agreed with the district court that the Act imposes a substantial burden on offenders’ ability to engage in legitimate online speech, including anonymous speech, as protected by the First Amendment. It concluded that the Act unnecessarily chills protected speech by not making clear what offenders are required to report, providing insufficient safeguards to prevent the public release of reported information, and because the 24-hour reporting requirement is onerous and overbroad. The Ninth Circuit concluded that appellees were likely to succeed on the merits of their First Amendment challenge and that the district court did not abuse its discretion in finding that the elements for obtaining a preliminary injunction had been satisfied.

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          United Airlines, Orbitz Sue Entrepreneur Over Site on How to Land Cheap Flights

          In United Airlines Inc. et al. v. Zaman, Case No. 1:14-cv-09214 (N.D. Ill., E. Div., complaint filed November 17, 2014), United Airlines and Orbitz sued to prevent Aktarer Zaman and his Web site skiplagged.com from helping flyers find “hidden city” tickets that the companies claim undermine their profits. Hidden city ticketing involves booking a layover and purposely missing the second flight, a practice that can save travelers money but is forbidden by many airlines, including United. Among the stated concerns is United’s resulting inability to count passengers, which affects fuel calculations and causes delays. The complaint alleges that Zaman “intentionally and maliciously” interfered with industry relationships by “promoting prohibited forms of travel.” It includes claims for unfair competition under Lanham Act, 15 U.S.C. Section 1125(a), tortious interference with contract, breach of contract, and misappropriation. Zaman argues the site merely organizes publicly available information and that skiplagged.com receives no compensation for tickets purchased.

           

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            Information in Email Body May Overcome Otherwise Actionable Header, Subject Line

            In Rosolowski et al. v. Guthy-Renker LLC, Case No. B250951 (Cal. Ct. App., 2nd Dist., Div. 3, order entered October 29, 2014), a California court of appeals held that a header in a commercial email does not misrepresent the sender’s identity simply because it fails to identify the name of the entity that sent it, or because it fails to identify an entity with a traceable domain name, as long as the sender’s identity is readily ascertainable from the email body. California Business & Professions Code section 17529.5 prohibits email ads with falsified, misrepresented, or forged header information, or that contain a subject line likely to mislead a recipient about a material fact regarding the contents or subject matter of the message. In this case, defendant’s emails were ads for its consumer brands and the emails provided a link to its Web site, an unsubscribe notice, and physical address. The bodies also clarified that the free gift mentioned in the “subject” line was contingent on a purchase, although the subject line did not refer to the purchase agreement.

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              Federal Trade Commission Claims AT&T Has Misled Consumers with “Unlimited” Data Plans

              On October 28, 2014, the Federal Trade Commission (“FTC”) filed a complaint against AT&T in the U.S. District Court for the Northern District of California, alleging it sold consumers unlimited smartphone data plans without telling them it would slow Internet speeds once consumers reached a certain amount of data in a particular billing cycle. The FTC alleges this practice of data “throttling” reduced Internet speeds by up to 90% in some instances. It also alleges that AT&T violated the FTC Act by changing the terms of consumers’ unlimited data plans during contract periods, and by failing to fully disclose the specifics of the practice of throttling to consumers renewing unlimited data plans. Finally, the FTC alleges that when customers cancelled contracts due to slowed Internet speeds, AT&T charged high early termination fees.

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                Summary Judgment Precluded by Dispute Over Alleged Material Misrepresentation in Unsolicited Commercial Email

                In Wagner v. Digital Publishing Corporation et al., Case No. C 13-04952 (U.S. District Court, N.D. California, order entered October 10, 2014), the U.S. District Court for the Northern District of California held that a triable issue over whether the “From” lines, domain names, and subject lines of unsolicited commercial emails contained material misrepresentations defeats partial summary judgment on plaintiff’s state law claims. The court held there were genuine issues of material fact about whether the companies listed as the registrants of the domain names from which the emails were sent were valid entities when the emails were sent. It also held there was no evidence that the defendants used privately registered domain names to conceal their identities as part of the emails, and that a reasonable juror could find that the subject lines were too good to be true and thus unlikely to mislead a recipient.

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                  Parents May Be Liable for Not Requiring Child to Cancel Fake Facebook Account

                  In Boston et al. v. Athearn et al., Case No. A14A0971 (Ga. Ct. App., order entered October 10, 2014), the Georgia Court of Appeals reversed a trial court’s grant of summary judgment and ruled that a couple may be held liable for not requiring their minor child to cancel a fake Facebook account after they learned about it. Their child had created an account using a classmate’s name, which included an altered photo and sexual, racist, and otherwise offensive postings. He then invited his classmate’s teachers, family members, and other students to “friend” the account. The victim’s parents sued the child and child’s parents for libel and intentional infliction of emotional distress, claiming the parents breached a duty to supervise their child’s use of a computer and Internet account. The appellate court ruled that the parents may be held directly liable for their own negligence in failing to supervise or control their child in a matter involving conduct that posed an unreasonable risk of harm to others.

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                    Generic Use of “Google” As a Verb Does Not Invalidate Trademark

                    In Elliott et al. v. Google Inc., Case No. CV-12-1072 (U.S. District Court, D. Arizona, order entered September 10, 2014), the U.S. District Court for the District of Arizona held that the primary significance of the term “Google” to a majority of the Internet-searching public was to refer to the Google search engine specifically, rather than as a descriptive term for search engines generally. This was so even if “google” is widely used as a generic verb, regardless of whether Google’s search engine is being used. The court opined that “a trademark performs its statutory function so long as it distinguishes a product or service from those of others and indicates the product’s or service’s source.” The court concluded that plaintiff had failed to present conclusive evidence that the primary meaning of “google” was as a generic verb rather than as an indicator of the origin of the services at issue.

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