On September 14, 2012, the State Bar of California Intellectual Property Section presented its 2012 IP and the Internet Conference. The conference featured high level experts from companies such as Twitter, Yahoo!, Warner Bros. Entertainment, Salseforce.com, True Religion Brand Jeans, and Autodesk, who covered emerging issues and hot topics in intellectual property and Internet law. Below are a few highlights from yesterday’s speakers:
1. Hot Topics in Internet Law
Santa Clara University Professor Eric Goldman was the first speaker and addressed the hottest issues and latest cases in Internet law. Eric discussed the recent keyword advertising lawsuits against Google (Jurin, Rosetta Stone, Cyber Sitter, and Home Decor), and noted that issues regarding these innocuous advertising practices should have died years ago. Eric also highlighted the remarkable decision in the recent anti-counterfeiting case Tre Milano v. Amazon, which found that “Amazon could ignore Tre Milano’s unverified takedown notices because Amazon is a ‘transactional intermediary,’ not the actual seller of counterfeit goods.” Finally, Eric discussed failed SOPA legislation and how the online anti-piracy battlegrounds have shifted towards DOJ criminal prosecutions (i.e. Megaupload), ICE domain name seizures (i.e. Dajaz1 and Rojadirecta), International trade agreements (i.e. ACTA and TPP), and ex parte TRO’s against non-litigants. Professor Goldman has an excellent blog which it closely followed in the IP community.
2. Privacy Design Basics
Lara Kehoe Hoffman, Security Counsel of Autodesk, discussed the “Privacy by Design” concept, which embeds ways to address privacy and data protection concerns into the design of technology itself. Lara recommends using high-level principles as a baseline for developing “privacy principles” and stressed two keys: (1) adopting principles articulated in a way that makes sense to employees and (2) implementing Privacy by Design in a practical way (e.g. reasonable procedures). As a practical note, Lara emphasized the importance of making sure leadership is on board with this conceptual approach.
3. Dealing with Data Breaches
Nicholas Cramer, Director of Data Breach Response for AllClear ID, and William L. Stern from Morrison & Foerster, explained how companies can prepare for and deal with data breaches. Nicholas and William noted that the government, military, and education sectors lead in data breaches, while only about 8% of breaches occurred in banking. In particular, William stated that there were 419 substantial data breaches reported in 2011, involving more than 22 million records. They explained that dealing with these breaches is important for companies because 75% of customers remember the breached brand and 68% feel that the company could have done more. They described how to respond to a breach, which includes a cyber forensic investigation, notifying affected consumers, having call center support, and ID monitoring/protection.
4. Social Models and Innovation Ecosystems
Peter Coffee, VP and Head of Platform Research for Salesforce.com gave a highly entertaining and very informative lunchtime talk. He suggested that companies should “think social” and not simply rely on social media. He explained that customers will describe their bad experiences online and may tell the entire world when they’re not happy. Companies can benefit, however, by fostering positive social behavior. For example, he described Coca-Cola’s new Freestyle vending machines, which allow customers to create their own soft drink recipes and share those recipes using QR codes through social media. The customer’s friends can then take those QR codes to a Freestyle machine and try out their friend’s recipe. On the other hand, companies that have a Facebook page but never respond to their customers’ inquiries or complaints, simply have an echo chamber for negative reviews of their company.
5. Practical Strategies for Dealing with Impersonation and Reputational Harm on the Internet
Timothy Yip, in-house counsel for Twitter, and Charles J. Harder from Wolf Rifkin, discussed the legal issues and practical insights into the problems associated with online imposters, defamers, and infringers. They recommended that companies who are dealing with reputational harm on the Internet, such as in Yelp or Amazon reviews, should familiarize themselves with the features, practices, and policies of these sites. If there is something a company does not like, it should preserve it immediately (e.g. screenshots) in case they want to bring further action. Companies should not expect that the harmful or disparaging information will remain online indefinitely. Additionally, companies should be careful who preserves this information. If the matter goes to litigation, you do not want your CEO or trial lawyer becoming a witness merely for the purpose of authenticating the screenshot or printout. It is recommended to have someone such as a permanent paralegal to preserve and later authenticate the document.
Timothy also discussed the emerging issues in social media ownership, such as when a company has a summer intern create a Twitter account under the company’s name, the intern leaves, and the company discovers that the former intern is now posting Twitter messages under the company’s account. Timothy recommends having ownership agreements when employees create social media accounts, using social media policies, and registering the company’s email account with the account (not the employee’s Gmail or other personal email account).
6. Tech Agreements in the Online World
David W. Tollen from Adeli &Tollen LLP discussed the impact of online business models on technology contracts. He authored the go-to manual for IT agreements – “The Tech Contracts Handbook.” David addressed several issues of concern in cloud/SaaS contracts. In particular, he stressed that these contracts should grant promise of service or a subscription – not a software or copyright license. He also warned against using non-disclosure agreements in these types of contracts because they are more suited for trade secrets and sensitive business information; instead, he recommends using clauses that effectively and comprehensively address data control, management, and security.
He also cautioned against using choice-of-law provisions that have no connection or relationship to the parties or the services to which they are contracting. He described how contracting parties may not want to designate Delaware as the governing law, when neither party is in Delaware nor will any services be performed in Delaware. Delaware is favored for corporate law, but not legal issues arising out of these tech agreements. David mentioned that you could find several form contracts and clauses at his website – http://www.techcontracts.com.
7. Tips and Strategies to Address Infringement on the Internet
The final session was a presentation by Deborah Greaves, Secretary & General Counsel for True Religion Brand Jeans, Christian Dowell, Legal Director of Global Brand & IP Litigation at Yahoo, and David Kaplan, Senior VP and IP Counsel for Warner Bros. Entertainment. Deborah described a new innovative strategy that companies are using in their fight against counterfeit goods – civil litigation. The strategy involves identifying a large number of websites that are selling the counterfeit goods (sometimes a single infringer will have numerous websites), gathering evidence that the site is in fact selling counterfeit goods (sometimes even purchasing goods from the site for physical evidence of infringement), naming those websites as defendants in a lawsuit, seeking an ex parte TRO, seizing the goods or financial assets, then seeking a permanent injunction. She noted that courts will allow companies to serve the alleged counterfeit sellers by email because they often fail to provide accurate contact information in their domain registration. These companies usually fail to respond to the Complaint and the company obtains a default judgment. The infringing sites are subsequently transferred to the company as the true owner.
This strategy was first established in the landmark case The North Face Apparel Corp., et al. v. Fujian Sharing Import & Export Ltd. Co., et al., No. 10 Civ. 1630. (AKH) (S.D.N.Y., Sept. 13, 2010) and is being increasingly used to combat counterfeit sellers. An advantage to the default judgment is that company’s can amend the same order to add new infringing (but related) websites without having to initiate a new lawsuit.
It was great conference and I highly recommend future Bar programs. Additional information about the talks can be found on Twitter by searching the hashtag #CAIPSection.