Monthly Archives: February 2015

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Yelp – Live And Die By The Sword

Review site Yelp has been the topic of a number of lawsuits. Many of the suits relate to Yelp’s program of selling placement and advertising and the practice of improving a business’ ranking if the business is a paying Yelp ‘subscriber.’ There have also been suits were businesses have gone after Yelp reviewers and Yelp has fought to defend the identity of the people behind reviews for a number of reasons.

In general Yelp defends along the lines that it is an entertainment site and the business reviewed do not own or have a legitimate interest in the reviews.

In the 9th Circuit opinion of Levitt v. Yelp (2014) there was a long discussion by the court on the rights and duties of Yelp.  In sum, the court found Yelp could do what it wanted, delete reviews it wanted to delete, good or bad, and claims of extortion were really just “hard bargaining.”

We begin with Chan, who alleges that Yelp extorted her by removing positive reviews from her Yelp page. Chan asserts that she was deprived of the benefit of the positive reviews Yelp users posted to Yelp’s website . . . But Chan had no pre-existing right to have positive reviews appear on Yelp’s website. She alleges no contractual right pursuant to which Yelp must publish positive reviews, nor does any law require Yelp to publish them. By withholding the benefit of these positive reviews, Yelp is withholding a benefit that Yelp makes possible and maintains. It has no obligation to do so, however.

* * *

Levitt and Mercurio similarly allege that Yelp attempted to extort them by removing positive user reviews. … Here, too, however, [Levitt] and Mercurio have no claim that it is independently wrongful for Yelp to post and arrange actual user reviews on its website as it sees fit. The business owners may deem the posting or order of user reviews as a threat of economic harm, but it is not unlawful for Yelp to post and sequence the reviews. As Yelp has the right to charge for legitimate advertising services, the threat of economic harm that Yelp leveraged is, at most, hard bargaining.

But now, with the shoe on the other foot, Yelp has gone to court seeking to prevent others from posting reviews on its site. In Yelp v. Yelpdirector et al, the company seeks to shut down third party sites that promise to post positive reviews. Yelp claims:

Yelp’s online reviews are a trusted resource for consumers to learn about local businesses, unfortunately some try to game the system and undermine that trust, by building businesses based on fraudulent reviews, invasive spam, and conduct that otherwise violates the law as well as Yelp’s Terms of Service …

 * * *

Yelp was founded in 2004 to provide consumers with authentic reviews…reviews are genuine and unbiased.

 * * *

Yelp vigilantly protects the legitimacy and authenticity of the reviews on the Yelp Site. To that end, Yelp commits substantial resources to prevent fake, altered, or otherwise fraudulent reviews

So while business complain that Yelp demands money to allow good reviews to be posted and the courts agree that Yelp is free to adjust, re-order or even delete reviews as it wishes, Yelp cries foul when anyone else plays Yelp’s game.

Yelp is of course free to defend itself against others that improperly exploit and injure its platform.  But Yelp cannot go into one court and claim the purity and unbiased sanctity of its review system is being harmed, yet go into another court and claim the right to freely alter, delete and re-order reviews in the name of “hard bargaining” to get businesses to pay to be a part of a site that is as much entertainment as anything.

Yelp will soon need to decide if they are going to be a advotainment for profit site, or a legitimate unbiased review site.

Relevant documents –

Yelp’s Complaint in: Yelp v. Yelpdirector et al. (ND Cal., 2015)

The Opinion of the 9th Circuit: Levitt v. Yelp (9th Cir., 11-17676, 2014)

Trademark Liability For BitTorrent Download

In a first of its kind opinion, an order has issued enforcing Oregon state trademark law against a defendant who used BitTorrent to pirate a film.

According to the order, the defendant used BitTorrent to pirate the motion picture The Company You Keep. In addition to a conventional claim for copyright infringement, Voltage sought to enforce its rights in its trademark to enjoin against future infringement of not only the specific movie, but to protect against future infringement of the entire Voltage branded catalog.

As per the order:

Under ORS § 647.095, a person may not use a copy of a mark in connection with distribution of goods if it is likely to cause confusion or mistake or deceive as to the origin of the goods… plaintiffs have submitted evidence of the distribution of the motion picture involves a down sampled resolution reducing the quality of the product. Accordingly, a consumer could be confused into believing an inferior copy of the product is authorized by plaintiff Voltage Pictures because of the use of its trademark displayed with the inferior product.

Under ORS § 647.105(1) (a) the court may enjoin future use of a counterfeit or imitation of a registered mark. The court may also order all counterfeits or imitations destroyed. ORS § 647.105(1) (c) Accordingly, defendant is enjoined from further unauthorized use of plaintiff Voltage Pictures’ trademark and defendant shall destroy all unauthorized copies of plaintiffs’ motion pictures.

With this, the Federal Court has paved the way for BitTorrent piracy enforcement at the state level.

The case is: Voltage et al v. Smith, USDC OR 14-cv-1193-AA

 

Relevant Order: Voltage et al v. Smith 14-cv-1193-AA Dkt. 22

 

 

MISGUIDED BITTORRENT DEFENSES / OHIO AND OREGON MISFIRES

A standard defense in BitTorrent cases is that the defendant is the victim of abuse by the copyright holder and the whole process is nothing more than a shakedown scheme and a fraud on the courts with plaintiffs filing cases and settling for money. But there is a problem with this, and that is that our entire litigation system is based on reasonable people settling most cases and this overlooks the fundamental facts of the case: a copyright claim is premised on the defendant being the bad actor – for the case to exist the defendant must have first stolen from the plaintiff.

This trend of defenses that try to paint the plaintiff as the bad guy in an effort to divert attention from their own copyright theft sounds good to someone looking for an easy way out, but it does not hold up to scrutiny and the courts are shutting this defense down with painful results for some defendants. Thousands of dollars are being spent on these arguments and in the end, the defendants who might have been able to settle their clams for $5,000, have to pay not only their own attorneys thousands more, but as per the copyright law, also have to pay more to the rights holders that brought the case. A bad defense quickly turns a $5,000 case into a $50,000 case, and that is starting to sound like abuse, but for defendants who run up the legal bills, it is self-inflicted.

Two recent cases point this out. One in Ohio and a second in Oregon.

In Malibu v Doe, S.D. Ohio, 14-cv-00821, the defendant tried to assert counterclaims, arguing the copyright holder (Malibu) had committed bad acts and therefore could not enforce its claims and that the claims of Malibu were abusive and brought in bad faith.

As per the opinion –

[Defendant] alleges that Malibu brought the claim to humiliate him and extract money from him. … [but] even if Malibu brought the lawsuit with the intention of settling the case short of litigating it to conclusion, that purpose is not an ulterior motive because many claims are settled. A successful copyright lawsuit would result in money damages, so seeking a settlement by filing a complaint does not qualify as an ulterior motive…[the defendant] does not identify any act committed during the process that was improper …

 In other words, the defendant argued that Malibu was a bad person and that Malibu’s methodology of filing suit and demanding settlements for money was somehow improper. As the court correctly points out, there is not only nothing improper about Malibu’s conduct, but this is exactly how things should work when someone commits copyright theft.

In another recent case, Voltage v. Revitch, Oregon, 14-cv-00301, the defendant argued essentially the same type of thing, but brought in a lot of additional accusations claiming copyright misuse and unfair business practices, raised the “IP address is not a person defense,” and making several accusations related to the investigators and other parties working with Voltage. One of the key elements in the counterclaims of the defendant was an argument that Voltage had an improper claim that the defendant, by paying for Internet service was liable for providing the Internet access to another person who might be the actual infringer.

As per the opinion –

Defendant’s claim seeks to resolve the “continuing threat posed . . . by plaintiffs’ theory that their copyright registration imposes on [defendant] a “duty to police” the internet access he obtains as an Oregon consumer.” As noted above, plaintiffs’ allegations seek to hold defendant liable for alleged willful copying and distribution and do not assert some sort of strict liability. To the extent defendant asserts that plaintiffs have engaged in such conduct with others and that conduct bars enforcement of the copyright against him, the claim stretches the theory of copyright misuse beyond its contours.

. . .

This is not to say the issue of whether defendant is in fact liable for copyright violations engaged in by others may not be litigated, only that defendant may not properly allege a counterclaim for copyright misuse. Accordingly, defendant’s counterclaim for copyright misuse is dismissed.

Both cases support plaintiff’s right to legitimately enforce their copyrights and discard the copyright misuse defense. And in an interesting turn of events, the “IP address is not a person” defense has now been discarded so thoroughly that the courts are recognizing that someone that pays for Internet service may be “liable for copyright violations engaged in by others.”

Relevant court orders:

Malibu v Doe, S.D. Ohio, 14-cv-00821, Feb. 4, 2015

Voltage v. Revitch, Oregon, 14-cv-00301, Jan. 23, 2015

 

A Fatwa Against Piracy In Turkey

Recognizing that piracy is theft and against the teaching of The Prophet Muhammad, the Turkish Directorate of Religious Affairs (a/k/a “Diyanet”*) has issued a position statement that downloading movies, software and the like without license is “haram” or a sin.

“It is not permissible to download unauthorized work or other programs from the virtual world.”

“Wrongful acts [such as piracy] not only usurp the individuals’ rights, but also discourages people who work to create such things from creating new products, turning the matter into a public rights violation in a broader sense. Therefore, anything that has been downloaded through the Internet, software, and products such as books and music is not permitted without the permission of those who created it. ”

 

* The Diyanet is Turkey’s constitutional director of religious standards.

For official commentary from Diyanet: http://www.diyanet.tv/diyanet-ten-internet-fetvasi-/

For the CNN Turkey page on this story: http://www.cnnturk.com/haber/turkiye/diyanet-telif-odemeden-internetten-muzik-ve-program-indirmek-haram.