Virginia Business Litigation Lawyer Blog

"Grandma Got Run Over by a Reindeer" is one of the most popular holiday songs around and is played on radio stations across the country every Christmas season. It is also now the subject of contentious copyright litigation after a federal judge ruled recently that litigation over an allegedly unauthorized YouTube video containing audio of the song can continue despite the absence of a co-owner of the copyright.

Elmo Shropshire owns the copyright to the song along with Patsy Trigg d/b/a Kris Publishing. The copyright was registered with the U.S. Copyright Office on December 27, 1979. The defendant posted a video on YouTube--which has since been removed due to the pending litigation--which combined Christmas-related pictures with audio of a Canadian musical group, "The Irish Rovers," singing the Grandma song. Shropshire contacted the poster and requested that he either pay the licensing fee or immediately remove the video. The poster refused.

Shropshire filed a copyright infringement suit in federal court, but his first (amended) complaint was dismissed because, among other reasons, Shropshire did not name Trigg or Kris Publishing in the lawsuit. The court gave him permission to amend, however, and the second time around, Shropshire named Kris Publishing as a defendant, but Kris Published settled out and was promptly dismissed. The defendant then filed a motion to dismiss, claiming that Patsy Trigg d/b/a Kris Publishing was a necessary and indispensable party and thus the suit could not go forward without her. The Court disagreed.

In order to determine whether a party is "necessary" to the case under Federal Rule of Civil Procedure 19, the court held, courts must follow a three-pronged analysis. "First, the Court must determine whether an absent nonparty should be 'required to be joined if feasible' under Rule 19(a). . . .The Court 'must determine whether the absent party has a legally protected interest in the suit,' and if so, whether 'that interest will be impaired or impeded by the suit.'" Next, the Court has to make a determination about the feasibility of joining the absent party. The third and final step occurs only if joining the party is not feasible. In that case, the court must determine "whether in equity and good conscience, the action should proceed among the existing parties or should be dismissed."

The court ultimately found that Kris Publishing was not an "indispensable party" and allowed the suit to continue in its absence. The purpose of the joinder rule had already been satisfied by joining it to the case, despite the fact that it was later dismissed upon settlement.

Does an employer have any sort of ownership interest in its employees' tweets or Twitter following? This very current social-media question may be tested in a lawsuit originally filed last July in federal court in California by PhoneDog, a South Carolina-based company that reviews mobile phones and services online, against former employee Noah Kravitz. An amended complaint in the case, filed on November 29, 2011, has attracted considerable media attention.

When Kravitz worked for PhoneDog as a product reviewer and video blogger from 2006 to 2010, he tweeted under the handle @PhoneDog_Noah and attracted some 17,000 followers for his comments and opinions on Twitter. When he left the company, he continued tweeting under the name @NoahKravitz. But he didn't create a new account with that name; instead, he kept the account (with all its followers) and just changed the Twitter handle to @NoahKravitz. Eight months later, PhoneDog sued Kravitz, alleging that his continued use of the account and his tweeting to his followers constitute a misappropriation of PhoneDog's trade secrets, intentional interference with prospective economic relationships, and conversion. Phone Dog said that it had suffered loss of advertising revenue as a result and that Kravitz "was unjustly enriched by obtaining the business of PhoneDog's Followers."

PhoneDog essentially claims ownership rights due to the fact that it directs its employees to maintain Twitter accounts and instructs them to tweet links to PhoneDog's website, thus increasing PhoneDog's page views and generating advertising revenue for PhoneDog. PhoneDog said in the complaint that since Kravitz now works for TechnoBuffalo, a competitor of PhoneDog, he is exploiting PhoneDog's confidential information on behalf of a competitor. PhoneDog is seeking $340,000 in damages -- $2.50 per month per Twitter follower for eight months. Although PhoneDog said in the complaint that "industry standards" peg the value of a Twitter follower at $2.50 per month, the company did not give a source for that estimate. Nor did PhoneDog attempt to distinguish between people who followed Kravitz because of his connection to PhoneDog and those followers who are merely friends of his or enjoy his commentary.

In my view, this would be a solid case if Kravitz was bound by a non-competition or non-solicitation agreement. The allegations are essentially that Kravitz took a list of 17,000 PhoneDog followers and is now soliciting business from them on behalf of a new company. Such conduct would normally violate a standard non-solicitation agreement. In the absence of a noncompete, the case is weaker but raises some interesting issues. It's not quite the same as the typical case involving theft of customer lists because, unlike in most of those cases, Twitter followers' identities are not private. Kravitz didn't need to assume control over the Twitter account in order to solicit business from those followers; doing so just made things easier for him. At a minimum, I think the intentional interference claim will stick. Kravitz should have started a new Twitter account and invited people to follow him there, not simply changed the name on the account. That's risky business.

Chanel, Inc., which like many other luxury-goods companies has been constantly plagued by counterfeiters, has taken its legal fight against unauthorized knock-offs to a whole new level. On November 14, 2011, acting at Chanel's request, U.S. District Judge Kent Dawson of the District of Nevada signed an order that not only prohibits hundreds of alleged trademark infringers from manufacturing or selling fake Chanel handbags, wallets, shoes, and the like - but also orders the defendants' domain names seized and transferred to the Web hosting company GoDaddy, which would direct them to a page describing the seizure. The temporary restraining order also orders that the counterfeiters' domain names be "de-indexed" by Google, Bing, Yahoo, and all social media websites, specifically mentioning Facebook, Twitter, and Google+.

Chanel, Inc. had filed suit against several websites for selling counterfeit versions of its merchandise. Chanel hired an investigative firm to purchase several items from three of the websites named as defendants in the lawsuit. The investigators then sent those items to a Chanel consultant who determined that the merchandise was not genuine Chanel. The consultant also examined other merchandise offered for sale on these websites and determined that none of the items offered were authentic Chanel products. The defendant websites were not authorized dealers of Chanel products and therefore were in direct violation of Chanel's trademark rights.

Chanel's trademark lawyers obtained this injunctive relief by, among other things, pointing out that counterfeiters use search engine optimization (SEO) just as legitimate companies do, and that it was necessary for the court to shut down their ability to use the Web to compete unfairly with Chanel. "Chanel does contend that it has the right to fairly compete for such search engine results space unfettered by unfair competition stemming from an illegal use of Chanel's trademarks," Chanel's lawyers wrote in the underlying motion.

But did the court even have the authority to cast such a wide net with its ruling? Facebook and Twitter, for example, have been ordered to de-index the infringing sites, but they were not even parties to the lawsuit. As the Ars Technica tech blog argues: "Missing from the ruling is any discussion of the Internet's global nature; the judge shows no awareness that the domains in question might not even be registered in this country, for instance, and his ban on search engine and social media indexing apparently extends to the entire world."

The court came down hard on the copycats and resorted to the extreme measure of attempting to have their existence scrubbed from the World Wide Web. The question now becomes whether it is the responsibility of the search engines and the social media sites to ensure that the offending websites do not show up as search results.

If a blog is successful and gains name recognition among the public, with whom is the brand associated in the minds of readers, the publisher or the primary author of the blog? Apparently not a lot of thought has gone into this interesting question, as the New York Times did not apply for a trademark for its popular "Motherlode" parenting blog until its primary author, Lisa Belkin, left the Times to create "Parentlode" at The Huffington Post. Now it will be up to the courts to determine whether the Times has exclusive trademark rights to the "Motherlode" name and similar-sounding derivatives.

The New York Times Co. sued the Huffington Post and AOL, its parent company, on November 4, 2011, in U.S. District Court in Manhattan, seeking both injunctive relief and damages. NYT's trademark lawyers argue in the complaint that the mark "Parentlode" is "clearly derived" from the Times' established "Motherlode" trademark and that it was "intended to create an association with Ms. Belkin's prior work" at the Times. According to the complaint, there is evidence that confusion already exists in readers' minds between the "Motherlode" blog, which the Times is continuing to publish, and the new "Parentlode" blog at the Huffington Post. On Twitter, for example, someone wrote (incorrectly, the Times argues) that "The NYT's Motherlode becomes HuffPo's Parentlode."

In her first "Parentlode" blog entry, Belkin referred to "Parentlode" as a "new name" that in a nonsexist manner includes fathers as well as mothers. The Times seized upon this statement and wrote that Belkin "clearly intended to create an association in the minds of readers between the two competing blogs, and further, [Belkin's] reference to the 'new name' was a deliberate attempt to mislead readers into mistakenly believing it was the same blog, albeit with a slightly different name and location."

Clearly, the Times has a strong argument that "motherlode" is a real word that has come to be associated with the widely read parenting blog published on its website. "Parentlode" does not exist in the English language and certainly seems to have been selected as a play on the Motherlode name. But if there is a trademark in the Motherlode name, who owns it? Trademark law is designed to permit consumers to identify the source of goods or services. The source of most of the articles on Motherlode was Ms. Belkin, and consumers may associate the name more with Ms. Belkin than the NYT. Still, the blog was published on the NYT's website and NYT alleges it came up with the Motherlode name and paid Ms. Belkin to write the content. From where I'm sitting, it appears the Times has a legitimate complaint.

Timelines, Inc., a small Chicago-based Internet company, has lost the first round of its legal efforts to obtain a court finding that Facebook infringed on its "Timelines" trademark when it announced its much-ballyhooed new feature, "Timeline."

On Sept. 22, 2011, Facebook announced the "Timeline" feature, which will allow users to store and share their life events in chronological order on the site. Timelines, Inc., quickly filed a trademark infringement suit against Facebook, noting that it already has a registered trademark for the term "Timelines." This mark refers, among other things, to a website that allows users to record and share events and contribute descriptions, photos, videos, geographic locations, and links related to events and people.

Arguing that there was a significant likelihood of confusion between its existing online product and the one just announced by Facebook, Timelines filed its lawsuit in order to avoid, in the words of the complaint, "being rolled over and quite possibly eliminated by the unlawful action of the world's largest and most powerful social media company."

Timelines sought a temporary restraining order against Facebook's use of the term "Timelines," but on September 30, 2011, U.S. District Judge Edmond E. Chang denied the request. "Even assuming that Timelines has some likelihood of success, based on the present state of the record,...that likelihood is modest, and the other factors warrant denying the motion," Judge Chang wrote. "One question on the likelihood of success is the strength of the Timelines mark."

The judge ruled that even though Timelines had indeed been granted a federal trademark, that trademark is likely a "descriptive" one, since it simply "describes the service provided by Timelines' website, that is the creation on a website of a timeline for an event." Such "descriptive" trademarks are generally considered weak and do not enjoy the same protection as arbitrary or "fanciful" trademarks. The judge noted that if Timelines were to succeed in the litigation, it "would have to show that the term 'Timelines' has acquired a secondary meaning to customers such that they uniquely associate the term with the Plaintiff. On the current record, it is not at all clear that Timelines can make that showing."

Timelines may still be able to prove infringement, however, by focusing on the similarity between Timelines' website and Facebook's Timeline service. Consumers may be confused if the two services have the same name and do essentially the same thing.

United States District Judge John A. Gibney, Jr., sitting in Richmond, Virginia thought so little of the well-publicized shakedown tactics of the new wave of "copyright troll" lawyers--in this case practiced by Richmond lawyer Wayne O'Bryan--that he took it upon himself (without any Defendant asking for it) to issue a show-cause order against the lawyer demanding that he explain why his conduct should not be punished with Rule 11 sanctions.

The subject of the lawsuit at issue is Gangbang Virgins, a pornographic film allegedly downloaded by 85 unnamed "John Doe" defendants using popular peer-to-peer network BitTorrent. The Court initially granted the plaintiff permission to issue subpoenas to Internet Service Providers to learn the identities of the people behind the accused I.P. addresses. Later, however, Judge Gibney was apparently moved by some of the letters he received from the John Doe defendants. Several of the defendants, for example, notified the Court that the plaintiff made harassing telephone calls to them as soon as their identities were revealed, asking for a payment of $2,900 to end the litigation.

What the Court found particularly troubling was the lawyer's behavior after certain defendants filed motions challenging their inclusion in the case. Rather than proceed to argue the merits of the motions in court, he routinely dismissed them, apparently to ensure the Court did not actually rule on any of the motions so that he could continue to threaten others. That, the Court found, amounted to nothing more than a "shake down" and an abuse of the Court's resources.

"The plaintiffs have used the offices of the Court as a means to gain the Doe defendants' personal information and coerce payment from them," the judge wrote. "The plaintiffs seemingly have no interest in actually litigating the cases, but rather simply have used the Court and its subpoena powers to obtain sufficient information to shake down the John Does."

Accordingly, the judge issued an order asking the plaintiffs' lawyer to show cause why his behavior did not violate Rule 11 of the Federal Rules of Civil Procedure, which specifies that anyone filing a complaint in federal court certifies that the complaint "is not being presented for any improper purpose, such as to harass."

Judge Gibney also rejected the plaintiff's attempt to join 85 unrelated defendants to a single piece of litigation. Rule 20 of the Federal Rules of Civil Procedure permits a plaintiff to sue multiple defendants in a single proceeding if their behavior arises out of the same transaction, occurrence, or series of transactions or occurrences. Here, the only thing that the 85 had in common was that they all had allegedly downloaded the same movie using the same peer-to-peer network and the same protocol. Accordingly, Judge Gibney ordered that only the first defendant remain in this case, while all others be severed.

"The mere allegation that the defendants have used the same peer-to-peer network to copy and reproduce the Work - which occurred on different days and times over a span of three months - is insufficient to meet the standards of joinder set forth in Rule 20," the judge found.

Is Facebook violating New York privacy laws when it permits children to press the "like" button on the site to endorse advertisements without first receiving approval from their parents? That's the question posed by a lawsuit filed on May 3, 2011, in federal court in Brooklyn, N.Y., by the father of a teenager there who is a member of the hugely popular social networking site. The case was brought as a class action on behalf of "all minors in New York whose names or likenesses were used by Facebook, Inc., for commercial purposes without the consent of the parents or guardians of said minors." Anyone over the age of 12 can sign up for a Facebook account.

When any Facebook user, including a teenager, "likes" an advertisement, that preference appears on the Facebook page for that ad, the lawsuit says. This in turn is considered a "click" on that ad and generates revenue for Facebook, since it receives revenue from advertisers based on the number of users that "like" the advertisement. Facebook's privacy settings don't permit any users to prevent their names and pictures from appearing on advertising pages that they have "liked." They can at any time withdraw their "like," but as long as it is in effect, it will be considered a "click" and thus a "commercial use," according to the complaint.

In order to sign up for Facebook, users, including those under age, agree to the following statement: "You can use your privacy settings to limit how your name and profile picture may be associated with commercial, sponsored or related content (such as a brand you like) served or enhanced by us. You give us permission to use your name and profile picture in connection with that content, subject to the limits you place." According to the complaint, however, "at no time does Facebook seek or obtain the consent of any parent or guardian of its minor users to use or sell the name and likeness of the child for commercial use by Facebook or third-party advertisers."

Thus, according to the complaint, Facebook is using minors' names and likenesses for "commercial and marketing purposes" without the consent of their parents or legal guardians. This, according to the complaint, violates New York Civil Rights Law Sections 50 and 51, which provide civil and criminal penalties for using minors' names or likenesses without such consent.

Creative lawyering, for sure. Who could have predicted that a kid expressing his fondness for a product could give rise to a class action? A Facebook spokesman has been quoted as saying, "We believe this suit is completely without merit and we will fight it vigorously."

On May 4, 2011, United States District Judge Claude M. Hilton of the Eastern District of Virginia issued an opinion rejecting a claim that LogMeIn Inc., a Boston-area computer-access company, had infringed a patent owned by Canadian competitor 01 Communique Laboratory Inc. Judge Hilton granted summary judgment of noninfringement for LogMeIn, finding that LogMeIn's devices that permit a communication session between a personal computer and a remote computer cannot, as a matter of law, be construed to infringe 01's patent, due to differences in the technology used by the competing devices.

In evaluating the patent claim, Judge Hilton reviewed the patent prosecution history and examined the way in which the Patent and Trademark Office and the inventor had previously described and understood the reach of the patent, including its limitations. The court found that LogMeIn's product was dissimilar enough from 01's intellectual property as to avoid any finding that infringement had occurred. Specifically, Judge Hilton found that 01's patent, by its own admission, was to be limited to a system in which only a single device perform the multiple duties of the so-called "location facility," including creating communication sessions, receiving a request for communication with the personal computer from the remote computer, locating the personal computer, and creating a communication channel between the remote computer and the personal computer. If several devices together performed those functions, the judge found, the patent's claims were not implicated.

"The accused LogMeIn products do not have any 'location facility' that locates a personal computer and 'itself' creates a communication channel between a remote computer and the personal computer," Judge Hilton wrote. "In briefing the Motion for Preliminary Injunction, 01 admitted that LogMeIn's products function in precisely the manner that 01 told the PTO the '479 Patent does not cover - that is, by distributing the functions of the 'location facility' among different devices," the judge added. No one component of the LogMeIn system itself performs all the needed functions of the "location facility" under the Court's construction of the term, the judge noted.

LogMeIn has about an 18 percent share of the market for products that permit a personal computer to obtain access to a remote computer over the Internet.

What kind of expense amounts to a "loss" under the Computer Fraud and Abuse Act (CFAA), and did a Virginia litigation-support company incur the required minimum of $5,000 in losses when it investigated an alleged breach of its computer systems, retaining the services of both an attorney and a computer forensics company to aid with the investigation? That was the issue recently before Judge T.S. Ellis III of the Eastern District of Virginia, who held that the investigative activities could support a CFAA claim, even if the expenses were not paid in cash.

The issue was particularly important to the plaintiff, Animators at Law, a graphics and technology litigation support company, because of the 13 claims it brought against two former employees and a competitor, all but the CFAA claim were based on state law, meaning that without it, there would be no basis for federal-court jurisdiction.

The CFAA provides for a civil action against anyone who intentionally gains access to a computer without authorization and obtains information from it. The CFAA has a minimum jurisdictional requirement of $5,000 in losses. Animators at Law claimed that its former employees conspired with a competitor to leave Animators' employment and join the competitor, taking with them confidential and proprietary information about Animators' services, projects, and clients.

When Ken Lopez, the president of Animators at Law, suspected that one of his company's laptops had been accessed without authorization, he brought in an outside company to engage in a forensic analysis of the laptop. Evidence produced during the litigation showed that Animators received services valued at $19,501.41 or more in connection with investigating the unauthorized access. However, Animators did not actually pay the contractor for its services, prompting the defendants to move for summary judgment on the basis that the $5,000 jurisdictional threshold had not been met. Animators countered that it provided services to the contractor in exchange for its forensic services, as a form of barter.

The court found that it "would be passing strange" if the contractor had spent over 60 hours analyzing Animators' data without any expectation of payment in some form. At a minimum, the court ruled, there was a triable issue of fact as to whether the services were provided on credit or in trade, given that there was an existing business relationship between Animators and the contractor. Because the CFAA does not require losses to be paid for in cash, this was sufficient to survive summary judgment.

Consumer review sites continue to grow in popularity. Sites like Angie's List, Avvo, and Yelp (to name but a few) allow people to post their experiences with lawyers, doctors, hairdressers, restaurants, roofers, and just about anyone else, and assign a rating to the service provider they used. When used honestly, these sites can provide a benefit to consumers. But they can also provide a mechanism for bogus reviews intended to maliciously destroy a business's reputation. Here in Virginia, negative reviews are often the subject of defamation lawsuits.

In general, the First Amendment protects expressions of opinions on these sites. All legitimate reviews, both positive and negative, can help consumers come to well-informed conclusions. Negative reviews, however, cross the line if they include false statements of fact. Consumers are free to express unfavorable opinions regarding their experiences with a service provider, but the First Amendment does not allow them to defame the service provider by posting false information.

A Texas lawyer recently filed a defamation action, claiming that a negative review that he received on Citysearch.com was not only derogatory but false and was the result of a conspiracy to defame him, evidently in retaliation for his decision to fire a paralegal at his law firm. Attorney Michael Weston sued his former paralegal and the man believed to be her husband.

Weston says in his complaint that he fired the paralegal for insubordination on November 6, 2010, after she had been on the job less than a month. A couple of weeks later, he claims, the paralegal and/or her husband wrote a review on Citysearch.com, claiming to be former clients of the firm and stating that they had "found him to be condescending to my situation and cold in demeanor," adding that "if you are looking for a factory that turns out debt settlements then this attorney is for you."

Weston claims in his lawsuit that the statements were false in that neither his paralegal nor husband had ever been clients of his law firm. He contends that he lost business because of the review, and he is seeking lost profits of $250,000 and reputational damages of $1 million.

Did an Associated Press reporter commit a foul against an NBA referee earlier this year by defaming him on Twitter during a league game? On March 14, 2011, National Basketball Association official Bill Spooner filed a federal defamation case against Associated Press sports beat reporter Jon Krawczynski for a brief item that Krawczynski wrote on his Twitter account that suggested Spooner was officiating a game dishonestly. During an NBA game between the Minnesota Timberwolves and the Houston Rockets on January 24, 2011, Krawczynski tweeted (twote?) that Spooner told Minnesota coach Kurt Rambis after an allegedly bad call against a Minnesota player that Rambis would "get it back," and that Spooner went on to compensate for the incorrect call with a "make-up" call against Houston.

Spooner says that although he had a brief verbal exchange with Rambis about the foul call, he said nothing to the coach about giving anything back to the Timberwolves. His lawsuit, filed in the U.S. District Court for the District of Minnesota, says Krawczynski defamed him by telling Krawczynski's Twitter followers in effect that Spooner had engaged in a "form of game fixing." Spooner discusses in his complaint that the NBA was recently caught up in a controversy involving former ref Tim Donaghy, who pleaded guilty in federal court in 2007 after being accused of betting on games that he officiated.

The NBA itself discouraged the lawsuit, although it doesn't believe Spooner actually cheated either. According to a league spokesman, "We investigated the content of the tweet when it appeared, found it to be without substance, and informed Mr. Spooner that we considered the matter closed. We subsequently advised Mr. Spooner's lawyer that we did not think suing a journalist over an incorrect tweet would be productive."

The lawsuit raises plenty of interesting questions. First, is Spooner a "public figure" for libel purposes, or, alternatively, did Krawczynski's tweet implicate a matter of "public concern"? Spooner's defamation lawyers clearly don't want him to be treated as a public figure, cognizant of the higher hurdles public-figure plaintiffs must overcome in defamation actions. They make a point of stating in the complaint that Spooner "does not grant media interviews" and that he "eschews contact with the public." If the court treats Spooner as a public figure, the First Amendment would protect Krawczynski's statement unless it was made with knowledge that it was false, or with reckless disregard for its truth or falsity.

Did Spooner suffer any harm from the tweet? The NBA says it disregarded the statement. Moreover, Twitter is an ephemeral medium, and Krawczynski had only about 2,000 followers at the time. Was there any measurable damage to Spooner's reputation? Some say the lawsuit is ill-advised due to the lack of harm. But you know what? If what Spooner alleges is true, this is a solid case. Defamation law does not require him to prove actual damage to his reputation. In circumstances such as this, where an allegedly false statement relates directly to a plaintiff's fitness to perform the duties of his job, harm to reputation is presumed and requires no proof.

It's not only basketball fans who will be watching to see how this one turns out.

Kids these days. The use of fake IDs by teens is nothing new, but when that ID contains the name of a real person, and the imposter goes on to do naughty things while posing as someone else, the law of defamation can come into play. And if you're inclined to post a YouTube video of that identity thief engaged in acts of questionable moral character, you'd better conduct some due diligence to ensure you don't destroy someone's reputation. That's a lesson that Joe Francis, the entrepreneur behind the risqué "Girls Gone Wild" videos, may have just learned as a result of a $3 million default judgment entered against him earlier this month in New Jersey federal court.

In a complicated scenario typical of the Internet age, in 2008 Francis wanted to take advantage of that year's scandal involving New York Gov. Eliot Spitzer and a prostitute named Ashley Alexandra Dupre. He offered Dupre $1 million to appear in a magazine spread and participate in a promotional tour for "Girls Gone Wild," but withdrew his offer when he found that he already had useful footage of Dupre from five years before, when she was 17 years old.

After Francis used the footage, Dupre sued him, claiming that she was underage and did not understand the release she had signed. However, Francis was able to come up with a video of Dupre providing consent to appear in "Girls Gone Wild," stating that she was 18, and showing the driver's license of another woman who was of legal age. Dupre then dropped her suit against Francis.

But Francis's legal troubles weren't over. The other woman whose driver's license was held aloft by Dupre was Amber Arpaio, who was in no way involved in "Girls Gone Wild." Arpaio sued Francis, Dupre, and the companies that produce the DVDs for defamation, invasion of privacy, misappropriation of her name, and conspiracy.

The judge wrote that a person is liable for defamation if he makes a statement regarding a private person (as opposed to a public figure) with knowledge that the statement is false, reckless disregard of its truth or falsity, or negligence by failing to determine the truth or falsity of the statement. He noted that Arpaio had alleged that the defendants produced a video in which Dupre represents herself as Arpaio, and thus by implication states that Arpaio is affiliated with the "Girls Gone Wild" franchise, a false statement. Arpaio also alleged that the defendants knew the statement was false or acted in reckless disregard of whether it was true or false. The court therefore found it appropriate to enter a default judgment.

As for arriving at the $3 million figure, the judge referred to Arpaio's "distress from being mistaken as somehow affiliated with Dupre or 'Girls Gone Wild' " as well as her fear that she might lose job opportunities because a prospective employer would search for her name on the Internet and find her ID being brandished by Dupre. He also noted that if she were to have children, they too might suffer emotional damage from being exposed to the material. "Given the unique nature of the Internet," the plaintiff's Internet expert wrote, "this branding is for life."

Lawyers around the country have come to learn of the Eastern District of Virginia's legendary "rocket docket." With divisions located in Alexandria, Norfolk, Richmond, and Newport News, Virginia's federal court is known as the most efficient in the country for handling intellectual property cases and complex business litigation. Also known for being friendly to business, trademark owners around the country often look for ways to establish venue in Virginia instead of a location closer to home where cases move at a slower pace. In the context of protecting trademark rights, one such opportunity can be found in the Anticybersquatting Consumer Protection Act.

The ACPA provides for a cause of action against those who register or use a domain name confusingly similar to, or dilutive of, the trademark of another. Enacted in 1999, the ACPA was designed to address the practice of "cybersquatting," which generally involves the practice of registering a domain name containing somebody else's name or trademark with the intention of either profiting from the resulting confusion or of selling the domain name to the less-Internet-savvy trademark owner. You could sue the individual in the jurisdiction of his residence, but what if that person lives in the District of Minnesota, one of the slowest federal courts in the country? Or what if the registrant took steps to shield his identity when registering the domain name and you can't determine whom to sue?

One option available to you is to sue the domain name itself. And because VeriSign--the world's largest registry and operator of the .com and .net top-level domains--is located in Dulles, Virginia, which falls within the jurisdiction of the Eastern District of Virginia, there is a good chance you can bring that action in the Rocket Docket, regardless of where the actual registrant resides.

MetroPark, a fashion clothing store incorporated in Delaware and based in Los Angeles, successfully utilized this procedure in recent weeks and obtained a judgment against metropark.net in Virginia's highly efficient federal court. MetroPark's online store is located at metroparkusa.com. On October 2, 2009, a registrant registered metropark.net and, shortly thereafter, put up a website at that domain advertising clothing and accessories substantially identical to and in direct competition with the goods and services offered by MetroPark.

MetroPark identified the individual as someone with a history of cybersquatting, and who is the current registrant of multiple domain names that mimic famous trademarks of third-parties, such as bankofamericaa.com, dicksportinggood.com, abcnewschicago.com, and officedeppotcom.com. Rather than sue the individual directly, MetroPark sued the domain name itself. The court recognized the validity of this procedure, writing "Pursuant to the Lanham Act, '[t]he owner of a mark may file an in rem civil action against a domain name in the judicial district in which the domain name registrar, domain name registry, or other domain name authority that registered or assigned the domain name is located'" provided that the domain name is violative of the trademark provisions of the Lanham Act.

The Court found that metropark.net was being used in a way likely to cause confusion or mistake, as Internet users looking for MetroPark's site might come across metropark.net and, if they did, would likely to be deceived into believing that the site is affiliated with MetroPark. The ACPA is designed to remedy this very situation. Therefore, the magistrate judge recommended (and the district judge ordered) that VeriSign, the operator of the registry of the metropark.net domain name, transfer the domain name from the current registrar, Moniker Online Services, to a domain registrar of MetroPark's choosing, and that such registrar thereafter register the domain name in MetroPark's name.

Too often, disgruntled departing employees will abuse their employer's computer system on their way out, snooping into coworkers' email accounts, erasing important files, downloading trade secrets or other confidential commercial information, or intentionally infecting computers with viruses. In recent years, the Computer Fraud and Abuse Act (CFAA) has become an important weapon in an employer's arsenal for combating such computer crimes. Civil remedies are available under the CFAA for damage to any "protected computer," which includes any "computer used in interstate or foreign commerce or communication." However, a Virginia court recently clarified that the CFAA will not provide a remedy absent an actual "loss" as defined by the statute.

In Global Policy Partners, LLC, v. Yessin, a plaintiff brought claims against her husband and business partner under the CFAA and the Stored Communications Act (SCA), claiming that he had accessed her work email account in order to review her confidential communications with her divorce lawyer. The court rejected the husband's initial attempts to dismiss the case on the ground that his access to his wife's email was authorized in that he was a co-manager of the couple's business. The court reasoned that because there was no legitimate business reason for the snooping, the access was unauthorized. At the summary judgment stage, however, the court granted summary judgment in his favor because the wife did not introduce sufficient evidence to show she had incurred a $5,000 "loss."

To prevail on a claim brought under the CFAA, a plaintiff must demonstrate that the alleged violation "caused ... loss ... aggregating at least $5,000 in value." 18 U.S.C. Section 1030(c)(4)(A)(i). The CFAA specifically defines four categories of potential loss: "[i] the cost of responding to an offense, [ii] [costs of] conducting a damage assessment, and [iii] [costs of] restoring the data, program, system, or information to its condition prior to the offense, and [iv] any revenue lost, cost incurred, or other consequential damages incurred because of the interruption of service." 18 U.S.C. § 1030(e)(11). According to the Fourth Circuit Court of Appeals, this list "plainly contemplates ... costs incurred as part of the response to a CFAA violation, including the investigation of an offense." A.V. ex rel. Vanderhye v. iParadigms, LLC, 562 F.3d 630, 646 (4th Cir. 2009).

Just because an unauthorized person reads an e-mail, however, does not necessarily mean that he is liable under the CFAA. In order to recover damages under the CFAA, a plaintiff must establish three main facts: (1) A violation of the plaintiff's computer system; (2) costs incurred by the plaintiff due to the violation, and (3) those costs must aggregate to $5,000 or more. 18 U.S.C. § 1030. The court indicated that it would view critically a plaintiff's post hoc claims that a violation "caused" costs to be incurred simply because money was spent subsequent to the violations. Furthermore, 18 U.S.C. § 1030(e)(11) only compensates for "reasonable" costs, so a plaintiff must establish, not only that the defendant's violation caused the plaintiff to suffer costs but that those costs were a reasonably foreseeable result of the violation. The court held that even if a defendant breaks into a plaintiff's computer system and reads email without authority, that would not give the plaintiff a blank check to perform system updates that were not reasonably necessary to restore and re-secure the system.

If a victim of computer fraud can establish a loss, however, the CFAA offers a potentially powerful deterrent in the form of a federal cause of action.

The discovery process, the primary fact-finding tool available to litigants, has always been contentious. Parties are loathe to hand over potentially embarrassing or incriminating documents, and the costs involved can be staggering. The information age has only served to make things more complicated. As the Northern District of Illinois observed in the 2002 case of Byers v. Illinois State Police, "[m]any informal messages that were previously relayed by telephone or at the water cooler are now sent via e-mail." Now that so many casual conversations are documented in e-mail and are, therefore, potentially subject to discovery, the discovery costs in the typical case have skyrocketed . Two recent United States District Court Cases, one out of Minnesota, Kay Beer Distributing, Inc. v. Energy Brands, Inc., and the other out of Florida, Kilpatrick v. Breg, Inc., provide a window into just how daunting electronic discovery can be, how judges are adapting traditional discovery rules to deal with these new problems, and how parties can do their part to avoid potential problems.

Information is generally discoverable if it is non-privileged and either directly relevant to a party's claim or reasonably calculated to lead to the discovery of evidence that is directly relevant. In the Kay Beer case, Kay alleged that an oral contract gave it the exclusive right of distribution for Energy Brands' products. Energy Brands claimed that by its understanding of the agreement, Kay's distribution rights were limited. This was essentially a run-of-the-mill contract dispute. What made the case unique, however, was the plaintiff's demand that the defendant hand over five DVDs containing nearly 13 gigabytes (between 650,000 and 975,000 pages) of e-mails and other documents. Each of the documents had been identified as referencing "Kay Beer", "Kay Distributing", or simply "Kay" by a keyword search of Energy Brands' archives. Kay Beer argued that the documents might contain discoverable evidence showing that Energy Brands originally shared Kay's understanding of their agreement.

The court's approach to the discovery contest was to weigh Kay Beer's interest in obtaining the documents against the burden Energy Brands would experience in turning them over. The court found that just because a document references a party does not support the conclusion that it contains relevant evidence. It further reasoned that in contract litigation, the only relevant statements are those made between the representatives of the companies involved; statements made by lower-level employees not empowered to speak for the company are not relevant to the official understanding of the contract. The court concluded that Kay Beer's interest in the documents was relatively minor.

Turning to an examination of Energy Brands' burden, the court noted that before the documents could be produced, Energy Brands would have to review each one for privilege and relevancy. The company estimated that the time involved in examining 650,000 to 975,000 would cost $120,000. The court found the cost unduly burdensome, and after weighing this burden against the slim possibility that relevant evidence might be discovered, held that Kay was not entitled to the requested discovery.

Kilpatrick differed slightly in fact but was consistent in outcome. Kilpatrick, the plaintiff, claimed that the pain pump manufactured by the defendant, Breg, and used in his October, 2004 shoulder surgery gave him a condition called chondrolysis. Kilpatrick's suit alleged that Breg knew of the risk of chondrolysis but marketed the product regardless of the dangers and without warning. Just weeks before trial, Kilpatrick demanded the production of nearly 6 years' worth of Breg's archived, intra-office e-mails. In depositions, several Breg employees testified inaccurately that they learned of the risk of chondrolysis in March of 2006, when documents obtained by Kilpatrick indicated clearly that the risk was known as early as December of 2005. Kilpatrick theorized the misstatements were part of a cover-up and sought extensive discovery to substantiate the theory.

Performing a balancing test similar to that in Kay Beer, the court first looked to the likelihood that relevant evidence would be discovered in the requested e-mails. The court acknowledged that the inaccurate testimony did raise some suspicions, but noted there was no evidence in the record indicated Breg knew of the chondrolysis risk prior to December 2005. The court found the misstatements were likely honest mistakes, reasoning that the depositions occurred nearly three years after the events in question and that the deponents were only off by about three months in their statements.

The court then took into account the significant burden such extensive, last-minute discovery would place on Breg. It denied the requested discovery in light of this burden, but granted Kilpatrick a limited right to further explore the Breg employees' misstatements by allowing discovery into a sampling of the archived e-mails, at Kilpatrick's expense.

This balanced approach to electronic discovery shows that seemingly antiquated discovery rules are still applicable in this new age. While some flexibility is required, a little common sense can make a complicated scenario a little more manageable. That being understood, a party, when making discovery requests, would be wise to be mindful of the opposing party's position and attempt to curb any burden the request might impose. Such a measured approach can help tip the balancing test in your favor.