Your Legal Questions About IM -Round 2

Oh, I had another interesting one from back in the day which has recently become of interest again. I also realize international law is probably not your focus. Note I am an Australian citizen currently living in the states.

Sensis is the Australian phone data services company. They held copyright of the phone book data as IP since forever. Here is a case where they defended it back in 2002

Desktop Marketing Systems Pty Ltd v Telstra Corporation Limited [2002] FCAFC 112 (15 May 2002)

However this year they lost a case Telstra Corporation Limited v Phone Directories Company Pty Ltd [2010] FCA 44 (8 February 2010) which now deems the phone book (white and yellow pages) are not IP. In the past the concept of offering a reverse lookup service has been squashed by the data copyright since it gave legal grounds for Sensis to go after anyone publishing their data. Sensis may appeal, however eventually they are going to well and truly lose their copyright for good. The privacy aspect has never been pursued in either of the court cases, and both companies did infact offer reverse lookups in their product. What precautions would you suggest be taken to offer data services or reverse lookups in the future? Taking into account I'm in the states, would it be best to do it under a US corp?
 


Insomniac said:
Oh, I had another interesting one from back in the day which has recently become of interest again. I also realize international law is probably not your focus. Note I am an Australian citizen currently living in the states.

Sensis is the Australian phone data services company. They held copyright of the phone book data as IP since forever. Here is a case where they defended it back in 2002

Desktop Marketing Systems Pty Ltd v Telstra Corporation Limited [2002] FCAFC 112 (15 May 2002)

However this year they lost a case Telstra Corporation Limited v Phone Directories Company Pty Ltd [2010] FCA 44 (8 February 2010) which now deems the phone book (white and yellow pages) are not IP. In the past the concept of offering a reverse lookup service has been squashed by the data copyright since it gave legal grounds for Sensis to go after anyone publishing their data. Sensis may appeal, however eventually they are going to well and truly lose their copyright for good. The privacy aspect has never been pursued in either of the court cases, and both companies did infact offer reverse lookups in their product. What precautions would you suggest be taken to offer data services or reverse lookups in the future? Taking into account I'm in the states, would it be best to do it under a US corp?
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In my experience, data services like that are usually pretty safe, I wouldn't be too concerned about offering reverse lookups, thats a hard thing for another company to claim much of an IP right to, as Sensis is now finding out. Since you are not a US citizen, getting the US corporation set up is a little tricky, but it would offer some additional protection just in case (though you might be best having at minimum a "minority" partner that is a US citizen, just to add that extra layer of complexity)
 
mont7071 said:
Ya, I saw it the first time ;)

Ok, so assuming you have already read and understood what I had to say here about most IMers having a link to the US that makes them still susceptible to US laws, lets talk a bit about non-extradition countries for fun.

Basically, some countries don't have a "give us our criminals back, we'll give you yours back" agreement with the U.S., typically referred to as an extradition treaty. Extradition is typically used for serious crimes, e.g. someone murders their spouse in the U.S. then flees back to their home country, etc. Extradition issues aren't much of an issue in the world of IM or any civil legal theory in general, (its mostly criminal issues), but there is still some application here.

If you are a U.S. citizen, and feel like moving somewhere that won't turn you back over to the U.S. if you do something really wrong, the problem that arises is your basically looking at countries that don't have a relationship with the U.S. Venezuela and Cuba come to mind, which have a gov't that might be viewed by many as being "hostile" to Americans. Basically, you might end up someplace that probably isn't very "American friendly",which has its own drawbacks. Panama I would have to look up, but I think they are pretty friendly with the US and its jursidiction, especially given these two countries' history.

As far as "computer/online" issues, there are many countries that don't recognize such allegations as crimes, or even worthy of civil suits. CAN-SPAM rules for example are viewed this way by a lot of civilized countries. As far as "bringing anyone back to justice" this stuff is all viewed as pretty low-priority, although hackers are finding that the damage they cause is making it harder to hide in foreign jurisdictions. You can live lots of places, even ones that have a good relationship with the U.S., and probably nobody is going to cuff you and ship you back to the U.S. because you left out disclaimers on your acai ads. It doesn't mean, however, that your questionable activities can't be cut off where they are vulnerable (i.e. ad buys, American CPA networks, US-based servers, etc).

Like anything else, you have to weigh what you give up vs. what you gain. You might not be risking jail time since you're outside the long arm of U.S. jurisdiction, but you are likely going to get your ads shut down, your favorite CPA networks will shun you, and you are probably going to be giving up alot of the potential money you could make if you could still market/operate in the U.S.

Just my two cents, I've never handled an extradition case, though I have tried to sue internationally based individuals, and its very difficult to do anything to them civilly.
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Thanks for the info on this.
 
Thought of a new one:

Does CAN-SPAM apply on all mediums besides email? Specifically, is it illegal to send Private Message solicitations on discussion forums in your niche?

The Act seems to only mention email.

And if it is illegal, and you're using proxies, how can you get busted? Maybe a "friend" is doing the spamming for you and you never requested...

What recourse does the owner of the message board have?

Thanks again Mont!
 
Berto said:
Thought of a new one:

Does CAN-SPAM apply on all mediums besides email? Specifically, is it illegal to send Private Message solicitations on discussion forums in your niche?

The Act seems to only mention email.

And if it is illegal, and you're using proxies, how can you get busted? Maybe a "friend" is doing the spamming for you and you never requested...

What recourse does the owner of the message board have?

Thanks again Mont!
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Yes, CAN-SPAM only applies to unsolicited commercial email, PMs wouldn't be covered under it. Cases don't usually get taken very far in the legal system in your scenario of PMs, because the board owners are typically able to simply disable the offending account early, greatly limiting the harm someone could cause via a private message system (unlike spam email)

If someone kept doing it via PM (i.e. kept signing up for new accounts) and the board owner decided to go the legal route, there are plenty of state statutes that may apply, or if they wanted to sue in federal court the Computer Fraud and Abuse Act (18 U.S.C 1030) would be the most likely law they would file under.

Since so much of the control of a board's PM system is in the hands of the board owner, the easier route is going to be for them to just disable that user, limit PM availability of brand new signups (I believe WF does this), or IP blocking known PM spammers from signing up.

Good Q.
 
About a year or so back I was listening to a talk given by a webmaster who ended up spending a year or two in federal prison. Seems he had used someone's login to scrape membership info from a state medical association membership site to feed into some directory/review site. Problem was he was caught, prosecuted, and found guilty of some federal anti-cracking statute.

The talk was about how he was now making money educating other 'white collar' felons about to enter the pokey on what to expect.

I had to rack my brain to remember what his new gig was, why I was listening to his talk. What stayed with me was how draconian the punishment seemed for something many WF members would consider 'all in a day's work.'

What did this guy run afoul of, can you tell?

Are there any other laws that come to mind that we WF members would likely be shocked by the seriousness of the repercussions -- that we might think of doing in the course of our webmastering/marketing efforts?
 
marfarma said:
About a year or so back I was listening to a talk given by a webmaster who ended up spending a year or two in federal prison. Seems he had used someone's login to scrape membership info from a state medical association membership site to feed into some directory/review site. Problem was he was caught, prosecuted, and found guilty of some federal anti-cracking statute.

The talk was about how he was now making money educating other 'white collar' felons about to enter the pokey on what to expect.

I had to rack my brain to remember what his new gig was, why I was listening to his talk. What stayed with me was how draconian the punishment seemed for something many WF members would consider 'all in a day's work.'

What did this guy run afoul of, can you tell?

Are there any other laws that come to mind that we WF members would likely be shocked by the seriousness of the repercussions -- that we might think of doing in the course of our webmastering/marketing efforts?
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I'm not familiar with the specific case you are referring to, but he was probably prosecuted under 18 U.S.C. 1030 (Computer Fraud and Abuse Act), which I mentioned briefly in an earlier post. Basically, if you access a computer system without permission and cause "damage" (and some courts have considered almost any trace of the access that needs to be cleaned up/examined as being "damage") then you can be held liable. There are even more serious penalties in place if you access a state/federal governmental computer system.

If you want to learn more about the potential liability issues of accessing computers in such a way, there is a pretty good article, with some familar names, written by another attorney that you can find here: Warning: Attorneys write in a very long, boring style, I'm the exception ;)

http://www.gdhm.com/pdf/wrw-hack_article.pdf

I agree with you that a lot of what people might consider "all in a day's work" around here could run afoul of a strict interpretation of this law. As a practical matter, Facebook or such probably wouldn't pursue a federal lawsuit because you signed up 50 accounts, and started auto-friending people to promote your dating offer to, but this law WOULD allow the possible pursuit of such a case. Usually just violating the TOS (which probably the majority of WF members have done at some point) isn't going to be enough to trigger liability, but there is still a risk. Once your actions cost them money or slows down/damages their system, that is where the danger lies.

If you can find the guy's name or case number, post it and I'll take a crack at the facts of the case and why he was punished so hard, (probably he was just made an example of or it cost alot to fix what he did).
 
In a previous job at a PPC company I often heard the term 'click fraud' being thrown around as though it was a criminal act. Personally I always figured it's a very difficult thing to actually accuse anyone of because a PPC system is permission based, e.g the publisher is there by invitation, and despite how questionable the publisher's business model may be, it's ultimately at a network's discretion.

From the point of view advertiser, no performance guarantees are made so they are free to make up their mind on the value to them of the traffic that was being provided.

So I'm curious, is "click fraud" something that could be pursued in either a criminal or civil case?

I actually used to caution colleagues against using the term as it could potentially be considered libelous, a very dangerous thing to be accused of here in the UK (I was working for US owned multi-national).
 
Mikesev said:
In a previous job at a PPC company I often heard the term 'click fraud' being thrown around as though it was a criminal act. Personally I always figured it's a very difficult thing to actually accuse anyone of because a PPC system is permission based, e.g the publisher is there by invitation, and despite how questionable the publisher's business model may be, it's ultimately at a network's discretion.

From the point of view advertiser, no performance guarantees are made so they are free to make up their mind on the value to them of the traffic that was being provided.

So I'm curious, is "click fraud" something that could be pursued in either a criminal or civil case?

I actually used to caution colleagues against using the term as it could potentially be considered libelous, a very dangerous thing to be accused of here in the UK (I was working for US owned multi-national).
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Yes, I agree with you, click "fraud" is a misnomer, the word "fraud" has a very specific legal meaning, and its not really applicable in most of the cases of what our industry casually refers to as "click fraud" (which is more accurately "low quality", not "fraud").

Clicking on an ad in order to drive up a competitor's costs, however, could be considered fraud, it is grounds for a case under the Lanham Act (anti-competitive biz practices) or a "Tortous Interference with Business" suit, although the difficulty of proving that is rather high. Somebody clicking away on ads or using bots that doesn't have a financial interest in doing so is pretty unlikely to be lawsuit-worthy.

Now, if you've ever advertised on, for example, Yahoo Publisher Network and been the victim of their so-called "Search Partner" traffic (or as we called them, overseas one-page sites with clickbots installed), I think a case could be made that this is truly fraud, since the owners of certain shady "partner Sites" have a financial incentive to fraudulently click these ads in order to be paid revenue from you, through the PPC search engine. The description of "click fraud" should probably only be appropriately used for similar scenarios, poor click quality does not equal "click fraud" the way our industry uses the term.
 
Berto said:
And if it is illegal, and you're using proxies, how can you get busted? Maybe a "friend" is doing the spamming for you and you never requested...
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One thing all spamming has in common, at its root, is an affiliate link, which can be followed to the network, and after a subpoena, all your info revealed. So, you could have Aunt Jane sign up, or your best buddy, but after subpoenas start flying, it's going to come back to you. There are creative ways (e.g. offshore companies without traces to you, etc) that can be done to circumvent this, I'll leave it to the Legal Maestro to expound upon if he so desires.
 
I have a question. I am in the military and my home state is NJ, but I live in GA. My question is what state can I form my LLC?
 
phillian said:
NEVER NEVER NEVER use Legal Zoom.

FOR ANYTHING!

Especially Intellectual Property related matters.

They take your money, don't file your application- or do file your application (patent or trademark) and don't notify you of the necessary follow-up actions, like Notices to File Missing Parts, Office Action Responses, etc.

In the case that Bofu2U was referring to, MadHat/ Bacon Explosion Aaron registered a trademark... or thought he did... and had receipts from LegalZoom to prove it. When I conducted a very basic USPTO.gov search for the mark a few months later at a conference I pointed out to him that there was ZERO record of it at the USPTO. He had had the mark in use in commerce for several months at that point.

If some competitor wanted to, they could have completely stolen the rug out from underneath him on that mark- filed a TM application before him (though he thought he had one)- and he would be up a creek without a paddle. He may have been able to get the mark back, but not until after thousands of dollars and months and months of IP litigation.

And he is not the only one.

LegalZoom Sued in Class Action for Unauthorized Law Practice | IPWatchdog.com | Patents & Patent Law
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The goverment is extremely slllooooow at processing shit. Heres the email I got from teas at uspto.gov when I used LegalZoom to get my trademark

We have received your application and assigned serial number '8500XXXX' to your submission. The summary of the application data, bottom below, serves as your official filing receipt. In approximately 3 months, an assigned examining attorney will review your application. Currently, your mark is not registered, but rather is considered a "pending" application. The overall process, from the time of initial filing to final registration, can take 13-18 months or even longer, depending on many factors; e.g., the correctness of the original filing and the type of application filed.

Are you sure you waited long enough before checking?
 
Alright, seems like we have a pretty good cross-section of the types of legal questions IMers have. Alot of copyright/FTC/incorporation/liability questions, which is good, because those are kind of the areas I've seen the most mistakes being made by those in the IM World.

I'm going to shut it down for any new questions for now, thanks for all the great posts, there were some really solid inquiries here. If you want to contribute, I'm strongly considering putting together some sort of of informational product on "Legal 101 for the IM world", feel free to post any generic "Chapters" you would want to see in it. Or, if you have a better idea of how I should go about putting together something worthwhile to our industry (while getting paid, of course) let me know your thoughts.

Cheers.
Mont -Legal Adviser to the (IM) Stars.
 
If you can find the guy's name or case number, post it and I'll take a crack at the facts of the case and why he was punished so hard, (probably he was just made an example of or it cost a lot to fix what he did).
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I was mistaken about the length of sentence. Here the short version:

The barest facts are as follows: On July 21, 2005, my home was raided by 7 FBI agents at 6am. All of my computers and other storage devices were seized, among other items. In June, 2006, I was indicted for 11 counts of "intentionally accessing and attempting to access a protected computer without authorization and obtaining information for purpose of commercial advantage and private gain." (18 U.S.C. §1030(a)(2)(C),(b) and(c)(2)(B)) Specifically, I copied a directory of physicians from a member association website using a handful of member logins I had acquired. Maximum possible sentence was 55 years and $2,250,000 fine (yikes!). On October 13, 2006, I entered a guilty plea for one count in the indictment, making me a federal felon. On February 13, 2007, I received my sentence.
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And here's the post on his blog that I got it from: The Rabbit Hole: Introduction and Background

Of course, between the time I saw you ask for the reference, and the time I posted this response, you've closed the thread down to new questions. Figure I'd post anyway, as it's not actually a NEW question.
 
marfarma said:
I was mistaken about the length of sentence. Here the short version:



And here's the post on his blog that I got it from: The Rabbit Hole: Introduction and Background

Of course, between the time I saw you ask for the reference, and the time I posted this response, you've closed the thread down to new questions. Figure I'd post anyway, as it's not actually a NEW question.
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Yep, this is an 18 USC 1030 case, which is what they usually use to put hackers in jail for accessing and damaging computer systems. In this guy's case, obviously his motivation was just profit, and this sentence of only 3 months is actually the result of a plea deal, meaning he was never "found" guilty after a trial, he decided to play it safe and plead out to just one count, rather than risk having a much worse sentence (probably a wise move in his case).

This guy took things alot further than what most WFers probably do, and the amount of money he was "reselling" private information for, plus the fact that he'd already been involved in a previous lawsuit of the same nature (basically 2 strikes against him) is a lot of why he ended up in prison. This guy should serve as a cautionary tale to anyone who keeps crossing that line, its pretty hard to "accidentally" end up in prison, usually by the time you get to that stage, you should have seen the writing on the wall and had some advance warning.
 
mont7071 said:
Just my two cents, I've never handled an extradition case, though I have tried to sue internationally based individuals, and its very difficult to do anything to them civilly.
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When you are suing someone internationally, all you have to do are:

1. Find a lawyer in that respective country
2. Have him to file a lawsuit and represent you

Is this correct?
 
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