Laws of .com

Volume II, Issue 23: December 2, 2004

Federal Court of Appeal Interprets PIPEDA in Englander v. Telus Communications Inc.

U.S. Federal Court Finds Website Listing Properties for Sale does not Require Broker's Licence

U.S. Court Finds Use of Keystroke Logger does not Violate Wiretap Act

Law Firm Sued for Copyright Infringement over Website Content

Administrative Charges for Requests for Personal Information Contravention of PIPEDA

Google Sues for Click Fraud and Gets Sued for Copyright Infringement over "Image Search"

SnapNames Sues ICANN for Tortuous Interference over Delayed Wait List Service

Federal Court of Appeal Interprets PIPEDA in Englander v. Telus Communications Inc.

In its recent decision in Englander v. Telus Communications Inc., the Federal Court of Appeal has made some important findings about the interpretation and application of the Personal Information Protection and Electronic Documents Act (PIPEDA).

The main issue in the case was whether Telus had obtained appropriate consent for the disclosure of personal information of first-time customers. By virtue of the regulation specifying publicly available information under PIPEDA, information appearing in a telephone directory can be collected, used and disclosed without consent. The issue in this case was what form of consent was required before the information appeared in the telephone directory in the first place. At the time they signed up for the telephone service, Telus asked customers how they would like their information to appear in the directories but did not advise them of the option to have a non-listed number or of the number and type of directories involved (white pages, directory assistance, internet "People Finder" with reverse look-up and services for independent directory publishers). Telus later supplied information about the availability of the non-listed service and the various directories.

The Court of Appeal held that this was not sufficient. While providing information later satisfies the openness principle in PIPEDA, it does not meet the requirements of knowledgeable consent. The uses of information, and the option of the non-listed service, should have been made clear to customers before they signed up.

In addition to its findings on consent, the Court also commented on issues of interpretation and procedure.

The Court of Appeal described PIPEDA as a "compromise both as to substance as to form" consisting of an industry code which was turned into a statute. The Court concluded that interpretation should not be rigorous and must be guided by "flexibility, common sense and pragmatism". In interpreting PIPEDA, a court must strike a balance between the competing interests of individual privacy and the need for commercial access to, and use of, personal information.

The Court of Appeal concluded that no deference should be given to a report of the Commissioner. The application to court is not an appeal but a proceeding de novo. The report of the Commissioner, if put in evidence, can be challenged or contradicted like any other document adduced in evidence.

The decision also includes some interesting comments on the scope of the jurisdiction of the CRTC on matters involving privacy.

For a copy of the decision, visit:
http://decisions.fca-caf.gc.ca/fca/2004/2004fca387.shtml

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U.S. Federal Court Finds Website Listing Properties for Sale does not Require Broker's Licence

A federal court judge in Sacramento has recently ruled that a California law requiring websites to obtain a real estate broker's licence in order to publish real estate advertising and information violates the First Amendment of the U.S. Constitution.

The plaintiff in the case was New-York based ForSaleByOwner.com, an online service that charges a flat fee to property owners who want to advertise their properties for sale on the website. The website also provides real estate information on inspections, insurance and other typical property transfer details and offers a database of vendors that provide related real estate services such as appraisers, mortgage companies and title insurance companies. However, outside of the posting of a listing, ForSaleByOwner.com does not facilitate the purchase and sale of real estate in any manner.

The legislation in California requires anyone who charges an advance fee for listing a property for sale to be licensed as a real estate broker. Newspapers are expressly exempted from the licensing requirement even where they operate an online website that provides services similar to those provided by ForSaleByOwner.com.

In finding that the California law violated the First Amendment, the court stated that "[T]here appears to be no justification whatsoever for any distinction between the two mediums", referring to newspapers and the Internet service offered by ForSaleByOwner.com.

For additional information, visit:
http://www.ij.org/media/first_amendment/real_estate/index.html
http://inman.com/inf/realmatrix/story.asp?ID=43758

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U.S. Court Finds Use of Keystroke Logger does not Violate Wiretap Act

On October 8, 2004, District Judge Gary Fess dismissed a federal wiretapping indictment against Larry Lee Ropp for using a device known as a keystroke logger to spy on his former employer. This device is attached to a computer keyboard cable to record all keys pressed on the keyboard.

Mr. Ropp was indicted by a federal grand jury on March 23 for installing a keystroke logger allegedly in violation of the federal wiretap statute (18 U.S.C. § 2510 et seq.), which prohibits the covert interception of electronic communications over a system affecting interstate or foreign commerce. The defendant admitted installing the keystroke logger on the personal computer of the secretary of the vice-president of Bristol West Insurance Group.

The indictment was dismissed on a technicality. While noting that Mr. Ropp had "engaged in a gross violation of privacy", Judge Fess held that the Wiretap Act had not been violated. 18 U.S.C. § 2510(12) defines an "electronic communication" as data of any nature transmitted in whole or in part by a system that affects interstate or foreign commerce. It was held that the "system" affected by the keystroke logger was solely the secretary's PC, and that such system did not affect interstate commerce. "The network connection is irrelevant to the transmissions, which could have been made on a stand-alone computer that had no link at all to the internet or any other external network" wrote Judge Fess.

The indictment had been trumpeted by the U.S. Attorney as the first case in which a defendant had been charged with illegally using a keystroke logger.

For more information, visit:
http://hermes.circ.gwu.edu/cgi-bin/wa?A2=ind0411&L=cybercrime&F=&S=&P=73
http://www.securityfocus.com/news/9978

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Law Firm Sued for Copyright Infringement over Website Content

A recent press release indicates that Brayton Purcell, a plaintiff law firm with offices in California, Oregon, and Utah recently filed a lawsuit against Recordan & Recordan, a San Diego law firm, based on the copying of large portions of one of Brayton Purcell's web sites. The web site provides information on issues related to abuses suffered by the elderly. The claim alleges copyright infringement, false advertising and unfair competition. Brayton Purcell is seeking damages as well as removal of the material from the offending web site.

For more information, visit:
http://www.emediawire.com/releases/2004/11/emw182573.htm

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Administrative Charges for Requests for Personal Information Contravention of PIPEDA

A bank's practice of charging individuals a flat fee for personal information requests was found to contradict the spirit of the Personal Information Protection and Electronic Documents Act ("PIPEDA"). Principle 4.9.4 of the PIPEDA requires an entity to respond to a request for personal information within a reasonable time and at minimal or no costs. The Assistant Commissioner found that an organization should only consider charging fees for processing a request when it is exceptional, and then only at minimal cost and with the individual's consent.

For a copy of the decision, visit:
http://www.privcom.gc.ca/cf-dc/2004/cf-dc_041021_02_e.asp

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Google Sues for Click Fraud and Gets Sued for Copyright Infringement over "Image Search"

Internet search giant Google is involved in two recent lawsuits (as a plaintiff in one and as a defendant in the other) involving novel claims.

In the first lawsuit, Google seeks compensatory and punitive damages from Auctions Expert International, a Texas-based Internet business, for click fraud. Google alleges that Auctions Expert International created its web site and signed up to display Google's targeted text advertising for the sole purpose of fraudulently clicking on advertisements to generate profit through Google's pay-per-click system. Click fraud - inflating traffic to Internet advertisements or websites to generate revenue from pay-per-click advertising services - has occurred for as long as businesses have been advertising on the Internet, but Google's action is one of the first civil cases claiming damages for such activity. Although Google's actions are meant, at least in part, to assure advertisers about the integrity and security of its advertising system, some commentators suggest that the circumstances of this case demonstrate that Google's advertising system is not as secure as Google would like advertisers to believe.

The second lawsuit is an action against Google by Perfect 10, the publisher of an adult web site and magazine. Perfect 10 alleges that Google has infringed its copyright and trade-marks in various ways, including by creating unauthorized copies of images through its "image search" function and providing links through its search results to other web sites that contain unauthorized copies of images. Perfect 10 holds Google responsible for the activities of these other sites because Google receives advertising revenues from them. The lawsuit also contains the potentially controversial claim that Google has the right and ability to supervise and control the infringing conduct of these third-party websites but has refused or failed to do so.

Both of these lawsuits involve interesting novel Internet-related claims and, if they continue through to judgment, will contribute to the continuing evolution of Internet law.

For additional information, visit:
http://cyber.law.harvard.edu/blogs/gems/palfrey/Perfect10ComplaintPDFCropped.pdf
http://news.com.com/2100-1024_3-5463243.html

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SnapNames Sues ICANN for Tortuous Interference over Delayed Wait List Service

SnapNames.com Inc. has filed suit against Internet Corporation for Assigned Names and Numbers (ICANN) in the Superior Court of California alleging ICANN has tortuously interfered with SnapNames' actual and proposed business relations with VeriSign Inc. concerning a proposed wait listing service (WLS). WLS provides a mechanism whereby a party may subscribe to register an existing registered domain name in the event that current registration is not renewed.

WLS-type services are currently available from a number of registrars and other service providers. These existing services periodically invoke VeriSign's currently available domain name registry system in the hope that a particular domain name was not renewed. The services compete to be the first in the front door to re-register the domain name. The proposed WLS is described as a back door approach configured to pre-empt the existing services to register the lapsing domain name from inside VeriSign's system before it appears publicly available.

VeriSign contracted with SnapNames to license certain SnapNames technology to implement WLS in 2001. The suit alleges that though ICANN has approved WLS, ICANN has delayed the steps necessary to submit the service for Department of Commerce approval and failed to engage in a process to move WLS forward. SnapNames alleges, on information and belief, a conspiracy between ICANN and certain WLS competitors including Pool.com, Inc. of Ottawa. Pool.com had earlier filed a suit against ICANN to block WLS.

For a copy of the SnapNames court submission, see:
http://blog.lextext.com/_attachments/187126/complain.pdf

For more information on Pool.com's suit, visit:
http://www.pool.com/Press/07102003.aspx
http://www.heydary.com/internet-laws/20030724.html

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