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Internet Law and Practice in California

The only resource on Internet law and practice designed especially for California lawyers, this guide will help you advise your clients doing business online.

The only resource on Internet law and practice designed especially for California lawyers, this guide will help you advise your clients doing business online.

  • Intellectual property rights in cyberspace
  • Launching and operating a website
  • Electronic contracting; privacy issues
  • Licenses and development agreements
  • Advertising on the Internet
  • Cybersecurity
  • Tort and criminal liability, First Amendment issues
  • Jurisdiction; litigation issues; e-discovery
  • Sample attorney-drafted forms to save you time
Print BU33580

Package includes single user online access, 2 looseleaf print volumes (approx. 1000 pages), and Forms CD, updated July 2021

$ 550.00

The only resource on Internet law and practice designed especially for California lawyers, this guide will help you advise your clients doing business online.

  • Intellectual property rights in cyberspace
  • Launching and operating a website
  • Electronic contracting; privacy issues
  • Licenses and development agreements
  • Advertising on the Internet
  • Cybersecurity
  • Tort and criminal liability, First Amendment issues
  • Jurisdiction; litigation issues; e-discovery
  • Sample attorney-drafted forms to save you time

1

Copyright and the DMCA

  • I.  COPYRIGHTS
    • A.  Introduction  1.1
    • B.  Subject Matter of Copyright Law
      • 1.  Generally  1.2
      • 2.  Special Subject Matter: Compilations  1.2A
      • 3.  Special Subject Matter: Music  1.3
      • 4.  Special Subject Matter: Characters  1.4
      • 5.  Special Subject Matter: Websites  1.4A
      • 6.  Special Subject Matter: Databases  1.4B
      • 7.  Special Subject Matter: Output of Computer Programs  1.4C
      • 8.  Special Subject Matter: Governmental Works  1.4D
    • C.  Creation and Term of Copyright  1.5
    • D.  Ownership of Copyrighted Work, Joint Works, and Works Made for Hire
      • 1.  Joint Works  1.6
      • 2.  Works Made for Hire  1.7
    • E.  Rights of Copyright Holder  1.8
      • 1.  Reproduction Rights  1.9
      • 2.  Distribution Rights  1.10
      • 3.  Performance Rights  1.11
        • a.  Who “Performs” the Work?  1.11A
        • b.  Pre-1972 Sound Recordings  1.11B
      • 4.  Display Rights  1.12
    • F.  Copyright Notice  1.13
    • G.  FBI Anti-Piracy Warning Seal  1.14
    • H.  Copyright Registration
      • 1.  Advantages of Registration  1.15
      • 2.  Registration Procedures; Standing to Sue  1.16
      • 3.  When to Register  1.17
    • I.  Preregistration  1.18
    • J.  Transfer of Copyrights
      • 1.  Generally  1.19
      • 2.  Form: Copyright Assignment  1.20
      • 3.  Form: U.S. Copyright Office Form DCS (Document Cover Sheet)  1.21
    • K.  Infringement
      • 1.  Generally  1.22
      • 2.  Direct, Contributory, and Vicarious Liability
        • a.  Generally  1.23
        • b.  Direct Infringement; Volitional Act Requirement  1.24
        • c.  Contributory Infringement  1.25
          • (1)  Inducement  1.26
          • (2)  Material Contribution  1.27
            • (a)  Online Service Providers  1.27A
            • (b)  Payment Processors  1.27B
          • (3)  Site and Facilities Test  1.28
        • d.  Vicarious Infringement  1.29
      • 3.  Bootlegging  1.29A
      • 4.  Selected Defenses
        • a.  Statute of Limitations  1.30
        • b.  Laches  1.31
        • c.  Express License  1.31A
        • d.  Implied License  1.32
        • e.  Estoppel  1.33
        • f.  De Minimis Use  1.33A
        • g.  Fraud on the Copyright Office  1.33B
        • h.  Abandonment  1.33C
      • 5.  Safe Harbor for Certain Copies of Computer Programs  1.34
      • 6.  Remedies  1.35
      • 7.  Copyright Small Claims  1.35A
      • 8.  Sovereign Immunity  1.36
      • 9.  Compulsory Licenses
        • a.  Broadcast Television  1.37
        • b.  Sound Recordings; Digital Music Rights  1.38
    • L.  Fair Use
      • 1.  Introduction  1.39
      • 2.  Purpose and Character of Use  1.40
        • a.  Transformative Use  1.41
          • (1)  Human-Made Uses
            • (a)  Parody/Satire   1.42
            • (b)  Appropriation Art  1.43
            • (c)  Digital Music Sampling  1.44
            • (d)  News Reporting  1.45
            • (e)  Reaction Videos  1.45A
            • (f)  Thumbnails to Sell Legal Copies  1.45B
            • (g)  Memes  1.45C
            • (h)  Video Games  1.45D
            • (i)  Video Re-Edits  1.45E
          • (2)  Technological Fair Use
            • (a)  Time- and Space-Shifting  1.46
            • (b)  Search Engines  1.47
            • (c)  Conversion of Text for Data Mining  1.48
            • (d)  Reverse Engineering  1.49
            • (e)  Software User Interfaces  1.49A
        • b.  Commercial Use  1.50
      • 3.  Nature of Copyrighted Work  1.51
        • a.  Informational or Creative Inquiry  1.52
        • b.   Published or Unpublished  1.53
      • 4.  Amount and Substantiality of Portion of Work Used  1.54
      • 5.  Effect of Use on Market  1.55
      • 6.  Fair Use as a Bar to Foreign Judgments  1.55A
    • M.  First Sale  1.56
    • N.  Family Entertainment and Copyright Act  1.56A
  • II.  DIGITAL MILLENNIUM COPYRIGHT ACT
    • A.  Introduction  1.57
    • B.  Status of Pre-1972 Sound Recordings  1.58
    • C.  Anti-Circumvention of Technological Protection Measures
      • 1.  Anti-Circumvention Prohibitions (17 USC §1201)  1.59
      • 2.  Copyright Management Information (17 USC §1202)  1.60
      • 3.  Exceptions to Anti-Circumvention Prohibitions  1.61
      • 4.  Remedies  1.62
    • D.  Limitations of Liability for Online Service Providers—Infringement Safe Harbors  1.63
      • 1.  General Conditions for Safe Harbors
        • a.  Service Provider  1.64
        • b.  Repeat Infringer Policy  1.65
          • (1)  Adoption of Policy  1.66
          • (2)  Informing Users of Policy  1.67
          • (3)  Reasonably Implement the Policy  1.68
        • c.  Interference With Standard Technical Measures  1.69
        • d.  Designating Agent to Receive Notifications  1.70
        • e.  No Duty to Police or Monitor  1.71
      • 2.  Transitory Digital Network Communications Safe Harbor (17 USC §512(a))  1.72
      • 3.  System Caching Safe Harbor (17 USC §512(b))  1.73
      • 4.  Safe Harbor for Information Residing on Systems or Networks at Direction of Users (17 USC §512(c))
        • a.  Generally  1.74
        • b.  Storage at Direction of User  1.75
        • c.  Lack of Knowledge (17 USC §512(c)(1)(A))  1.76
          • (1)  Actual Knowledge  1.77
          • (2)  “Red Flag” Knowledge  1.78
          • (3)  Willful Blindness  1.79
        • d.  Right and Ability to Control (17 USC §512(c)(1)(B))
          • (1)  Right and Ability to Control  1.80
          • (2)  Direct Financial Benefit  1.81
        • e.  Expeditious Removal or Disabling Access to Infringing Material (17 USC §512(c)(1)(C))  1.82
        • f.  Notification of Claimed Infringement (17 USC §512(c)(3))
          • (1)  Requirements for Notifications; “Good Faith Belief”  1.83
          • (2)  Safeguards Against Fraudulent Infringement Claims  1.83A
        • g.  Counter-Notification by Subscriber; Restoration of Material  1.84
        • h.  Checklist: Notice and Take-Down Checklist  1.85
      • 5.  Information Location Tools Safe Harbor (17 USC §512(d))  1.86
    • E.  Subpoena Power (17 USC §512(h))  1.87
    • F.  Impact on Internet Service Providers  1.88
    • G.  Checklist: Company DMCA Compliance Policy  1.89

2

Patents and Trade Secrets

  • I.  PATENTS
    • A.  Introduction  2.1
    • B.  What Is a Patent?  2.2
    • C.  What Is Patentable; Types of Patents  2.3
    • D.  Term of Patents  2.4
    • E.  Additional Requirements for Patentability
      • 1.  Overview  2.5
      • 2.  Origination  2.6
      • 3.  Utility  2.7
      • 4.  Novelty  2.8
      • 5.  Nonobviousness  2.9
    • F.  Patent Applications
      • 1.  Overview of Patent Application Procedures  2.10
      • 2.  Specification; Enablement; Best Mode  2.11
      • 3.  Claims  2.12
      • 4.  Statutory Time Bars  2.13
    • G.  “First-to-File” Versus “First-to-Invent”; Other International Issues  2.14
    • H.  Transferring Patents
      • 1.  Introduction  2.15
      • 2.  Form: Patent Assignment  2.16
    • I.  Litigation Issues  2.16A
    • J.  Alternatives to Litigation  2.17
    • K.  Special Topics for Internet Businesses
      • 1.  Business Method Patents
        • a.  Business Methods  2.18
        • b.  Business Method Patents in the Courts   2.18A
        • c.  USPTO Examiner Instructions re Business Method Patent Applications  2.18B
        • d.  Practical Guidance  2.18C
      • 2.  Software Patents  2.19
      • 3.  The Internet of Things   2.19A
  • II.  TRADE SECRETS
    • A.  Introduction  2.20
    • B.  Definition of Trade Secret
      • 1.  Statutory Definition  2.21
      • 2.  Examples of Trade Secrets  2.22
      • 3.  Computer Source and Object Code  2.22A
      • 4.  Recipes, Manufacturing Processes  2.22B
      • 5.  Customer Lists  2.23
    • C.  Loss of Trade Secret Protection  2.24
    • D.  Protection of Trade Secrets  2.25
      • 1.  Departing Employees  2.26
      • 2.  Practical Safeguards
        • a.  Firewalls and Encryption  2.27
        • b.  Physical Security  2.28
        • c.  Managing Documents and Files  2.29
    • E.  Sample Company Policy on Trade Secret Protection
      • 1.  Introduction  2.30
      • 2.  Form: Company Policy on Trade Secret Protection  2.31
    • F.  Confidentiality Agreement
      • 1.  Introduction  2.32
      • 2.  Form: Confidentiality Agreement  2.33
    • G.  Misappropriation of Trade Secrets
      • 1.  Asserting Claim of Misappropriation Under UTSA  2.34
      • 2.  Defenses  2.35
      • 3.  Damages  2.36
      • 4.  Privilege and Disclosures Due to Litigation  2.37
      • 5.  Economic Espionage Act of 1996  2.38
      • 6.  Defend Trade Secrets Act of 2016  2.39

3

Domain Names and Trademark Issues

  • I.  DOMAIN NAMES
    • A.  Introduction  3.1
    • B.  Selecting Domain Name and Suffix
      • 1.  Domain Name  3.2
      • 2.  Suffix (Top-Level Domain Name)  3.3
      • 3.  ICANN gTLD Trademark Clearinghouse  3.3A
    • C.  Due Diligence
      • 1.  Domain Name as Trademark  3.4
      • 2.  Where to Look? Registered and Unregistered Trademark Searches  3.5
    • D.  Registration of Domain Name
      • 1.  Registration Procedures  3.6
      • 2.  Purchasing Registered Domain Name
        • a.  How to Purchase Registered Domain Name  3.7
        • b.  Form: Domain Name Purchase Agreement  3.8
    • E.  Maintaining and Preventing Loss of Domain Name  3.9
    • F.  Transferring Ownership of Domain Names  3.10
    • G.  Infringing Domain Names
      • 1.  Bringing Claim of Infringement  3.11
      • 2.  Uniform Domain Name Dispute Resolution Policy (UDRP)  3.12
        • a.  Elements of UDRP Claim  3.13
        • b.  Selection of Arbitrators  3.14
        • c.  Procedure Under UDRP  3.15
        • d.  Damages and Fees  3.16
        • e.  Model Form of UDRP Complaint
          • (1)  Introduction  3.17
          • (2)  Form: UDRP Complaint  3.18
        • f.  Model Form of UDRP Response
          • (1)  Introduction  3.19
          • (2)  Form: UDRP Response  3.20
        • g.  Appeals  3.21
      • 3.  Anticybersquatting Consumer Protection Act  3.22
        • a.  Elements of Cause of Action  3.23
        • b.  ACPA Remedies  3.24
      • 4.  Whether to Proceed Under UDRP or ACPA?  3.25
  • II.  TRADEMARKS, SERVICE MARKS, AND TRADE NAMES
    • A.  Introduction  3.26
    • B.  Definitions of Trademarks, Service Marks, Collective Marks, Certification Marks, Trade Dress, and Trade Names  3.27
    • C.  Characterization of Marks  3.28
    • D.  Priority and Limitations to Priority  3.29
    • E.  Registration Procedure
      • 1.  Why Federal Registration?  3.30
      • 2.  Common Law and State Trademark Rights  3.31
      • 3.  Unregistrable Trademarks  3.32
      • 4.  Trademark Searches  3.33
      • 5.  Principal and Supplemental Registers  3.34
      • 6.  Intent-to-Use Applications  3.35
      • 7.  Form of Application  3.36
      • 8.  Application Procedure  3.37
      • 9.  Contents of Application  3.38
        • a.  Applicant Information  3.39
        • b.  Verification  3.40
        • c.  Identification and Classification of Goods and Services; Filing Fees  3.41
        • d.  Bases for Filing  3.42
        • e.  Drawing Requirement  3.43
        • f.  Description of Mark  3.44
      • 10.  Registration of Domain Names as Trademarks
        • a.  Requirements  3.45
        • b.  Reasons for Refusal of Registration of Domain Names  3.46
        • c.  Hashtags  3.46A
      • 11.  Trade Names  3.47
    • F.  Madrid Protocol  3.48
    • G.  Grant or Denial of Registration
      • 1.  Opposition, Cancellation, or Registration  3.49
      • 2.  Appeals From Denials of Registration  3.50
    • H.  Use of Trademark Symbol  3.51
    • I.  Duration and Renewal  3.52
    • J.  Preservation of Trademark Rights  3.53
    • K.  Trademark Licensing  3.54
      • 1.  Form: Trademark Guidelines  3.55
      • 2.  Form: Trademark License Agreement  3.56
    • L.  Assignments of Trademarks
      • 1.  Generally  3.57
      • 2.  Form: Trademark Assignment  3.58
      • 3.  Form: U.S. Patent and Trademark Office Cover Sheet (Trademarks Only)  3.59
    • M.  Violations of Trademark Rights
      • 1.  Trademark Infringement  3.60
      • 2.  Contributory Trademark Infringement  3.60A
      • 3.  False Designation or Description  3.61
      • 4.  ACPA  3.62
      • 5.  Remedies for Trademark Infringement  3.63
      • 6.  Defenses to Trademark Infringement  3.64
      • 7.  Dilution of Famous Mark  3.65
        • a.  Factors Bearing on Whether Mark Is Famous  3.66
        • b.  Cybersquatting and Dilution  3.67
      • 8.  Remedies and Defenses to Anti-Dilution Claims  3.68
      • 9.  Sample Cease and Desist Letter
        • a.  Introduction  3.69
        • b.  Form: Sample Cease and Desist Letter  3.70
  • III.  METATAGS AND SEARCH TERMS
    • A.  Introduction  3.71
    • B.  Nominative Fair Use  3.72
    • C.  Initial Interest Confusion Test  3.73
    • D.  Protection of Fanciful Marks  3.74
    • E.  Misspellings of Trademarks and Direct Competitors  3.75
    • F.  “English Words”  3.76
  • IV.  TRADE DRESS
    • A.  Introduction  3.77
    • B.  Website User Interfaces  3.78
    • C.  Trade Dress Infringement  3.79
      • 1.  Nonfunctionality
        • a.  Overview of the Doctrine  3.80
        • b.  Functionality and Nonfunctionality in the Courts
          • (1)  Outside the Ninth Circuit  3.80A
          • (2)  Ninth Circuit  3.81
        • c.  Doctrine of Aesthetic Functionality  3.82
        • d.  Functionality and Website User Interfaces  3.83
      • 2.  Inherent Distinctiveness or Secondary Meaning
        • a.  Inherent Distinctiveness Test  3.84
        • b.  Product Designs and Product Packaging  3.85
        • c.  Website User Interfaces: Product Design or Product Packaging?  3.86
      • 3.  Likelihood of Confusion in Trade Dress  3.87

4

Human Resources

  • I.  EMPLOYEES AND EMPLOYMENT ISSUES
    • A.  Introduction  4.1
    • B.  Ethical Considerations  4.2
    • C.  “At Will” Employment  4.3
    • D.  Offer Letter to Prospective Employee
      • 1.  Introduction  4.4
      • 2.  Form: Offer Letter to Prospective Employee  4.5
    • E.  Confidentiality and Invention Assignment Agreements
      • 1.  Employee Confidentiality Agreements  4.6
      • 2.  Employee Inventions  4.7
        • a.  Federal “Work for Hire” Doctrine  4.8
        • b.  Employer Ownership of Employee Inventions Under State Law  4.9
      • 3.  Invention Assignment Agreements  4.10
      • 4.  Form: Confidentiality and Invention Assignment Agreement  4.11
    • F.  Employee Overtime—Special Rules for Computer Programmers  4.12
  • II.  INDEPENDENT CONTRACTORS
    • A.  Overview of Independent Contractor Issues  4.13
    • B.  Classification of Independent Contractors
      • 1.  Exempt Versus Nonexempt Employees  4.14
      • 2.  Dynamex and Statutory Enactments: The ABC Test  4.14A
      • 3.  Borello Right-to-Control Test  4.15
      • 4.  Dynamex ABC Test  4.16
      • 5.  Independent Contractor Classification Analysis; Penalties for Violation  4.17
    • C.  Intellectual Property Issues in Independent Contractor Relationships  4.18
    • D.  Form: Independent Contractor Consulting Agreement  4.19
    • E.  Independent Contractor Nondisclosure Agreement
      • 1.  Introduction  4.20
      • 2.  Form: Nondisclosure Agreement  4.21
  • III.  ADVISORY BOARDS
    • A.  Introduction  4.22
    • B.  Form: Advisory Board Letter Agreement  4.23

5

Website and App Development; Disability Accommodation Issues

  • I.  ACQUISITION OF INTELLECTUAL PROPERTY
    • A.  Introduction  5.1
    • B.  Assignment of Intellectual Property by Company Founder  5.2
    • C.  Form: Agreement for Transfer and Assignment of Intellectual Property  5.3
  • II.  WEBSITE AND MOBILE APP DEVELOPMENT AGREEMENTS
    • A.  Introduction  5.4
    • B.  Ethical Considerations  5.5
    • C.  Preparing for Negotiations  5.6
    • D.  Types of Website and App Developers  5.7
      • 1.  Freelancers  5.8
      • 2.  Website and Mobile App Development Specialists  5.9
      • 3.  General Technology Companies  5.10
    • E.  Understanding Issues of Ownership
      • 1.  Conflicting Ownership Interests  5.11
      • 2.  Why a Website or App Probably Is Not a “Work Made for Hire”  5.12
      • 3.  Domain Name Registration and Ownership  5.13
    • F.  Drafting Website and Mobile App Development Agreement  5.14
      • 1.  Responsibilities of Parties  5.15
      • 2.  Deliverables and Timelines for Delivery  5.16
      • 3.  Ownership and License Grants  5.17
        • a.  Ownership  5.18
        • b.  License Rights  5.19
        • c.  Confidentiality  5.20
      • 4.  Representations and Warranties of Developer  5.21
      • 5.  Ongoing Obligations of Developer  5.22
    • G.  Website and Mobile App Development Agreements
      • 1.  Independent Contractor Agreements  5.23
      • 2.  Form of Website Development Agreement
        • a.  Introduction  5.24
        • b.  Form: Website Development Agreement  5.25
  • III.  WEBSITE AND MOBILE APP UPGRADES  5.26
  • IV.  DISABILITY ACCOMMODATION ISSUES
    • A.  Federal and California Statutes  5.27
    • B.  Website Accessibility Case Law  5.28
    • C.  DOJ Rulemaking and Enforcement Efforts  5.29
    • D.  Web Content Accessibility Guidelines (WCAG)  5.30
  • V.  PRIVACY LAW REQUIREMENTS  5.31

6

Hosting and Related Services; Cloud Computing

  • I.  HOSTING AGREEMENTS
    • A.  Introduction  6.1
    • B.  Negotiating Hosting Agreement  6.2
    • C.  Key Hosting Agreement Terms
      • 1.  Responsibilities of Host  6.3
        • a.  Website Hosting  6.4
        • b.  Monitoring  6.5
        • c.  Access to Software  6.6
        • d.  Content Uploading and Maintenance  6.7
        • e.  Data Collection and Reporting  6.8
      • 2.  Responsibilities of Customer  6.9
    • D.  Warranties  6.10
    • E.  Form of Hosting Services Agreement
      • 1.  Introduction  6.11
      • 2.  Form: Hosting Services Agreement  6.12
  • II.  CO-LOCATION AGREEMENTS
    • A.  Introduction  6.13
    • B.  Decision to Co-Locate  6.14
    • C.  Co-Location Services and Customer Responsibilities
      • 1.  Overview  6.15
      • 2.  Customer Responsibilities  6.16
      • 3.  Provider Warranties  6.17
    • D.  Form of Co-Location Agreement
      • 1.  Introduction  6.18
      • 2.  Form: Co-Location Agreement  6.19
    • E.  Equipment Considerations  6.20
  • III.  SERVICE LEVEL AGREEMENTS
    • A.  Introduction  6.21
    • B.  Use of Service Level Agreements Generally
      • 1.  Content  6.22
      • 2.  When to Request Service Level Agreement  6.23
      • 3.  Monitoring and Enforcement of Service Level Agreement Terms  6.24
    • C.  Standard Service Level Agreement Terms
      • 1.  Availability; Uptime  6.25
      • 2.  Service Levels  6.26
        • a.  Low-Priority Requests  6.27
        • b.  Medium-Priority Requests  6.28
        • c.  High-Priority Requests  6.29
      • 3.  Response Times and Response Actions  6.30
      • 4.  Service Credits and Chronic Problems  6.31
      • 5.  Additional Terms  6.32
        • a.  Customer Support  6.33
        • b.  Performance Measurement  6.34
        • c.  Reporting  6.35
    • D.  Service Level Agreement Forms
      • 1.  Sample Short Form Service Level Agreement
        • a.  Introduction  6.36
        • b.  Form: Short Form Service Level Agreement  6.37
      • 2.  Sample Website Hosting Service Level Agreement
        • a.  Introduction  6.38
        • b.  Form: Website Hosting Service Level Agreement  6.39
  • IV.  TECHNICAL SUPPORT
    • A.  Introduction  6.40
    • B.  Obtaining Technical Support from Vendors  6.41
    • C.  Key Issues in Obtaining Support From Vendors
      • 1.  Upgrades and New Versions  6.42
      • 2.  Support Services  6.43
      • 3.  Training and Help Desk Support  6.44
    • D.  Technical Support and Maintenance Agreement
      • 1.  Introduction  6.45
      • 2.  Form: Technical Support and Maintenance Agreement  6.46
    • E.  Providing Technical Support to Customers  6.47
    • F.  Basic Technical Support Exhibit
      • 1.  Introduction  6.48
      • 2.  Form: Basic Technical Support Exhibit  6.49
  • V.  Cloud Computing
    • A.  Introduction  6.50
    • B.  Statutory Limitations  6.51
    • C.  Data Security, Privacy, and Confidentiality
      • 1.  Overview  6.52
      • 2.  Access to Data  6.53
      • 3.  Voluntary or Compelled Disclosure
        • a.  General Considerations  6.54
        • b.  National Security Letters  6.55
      • 4.  Data Security  6.56
      • 5.  Duty of Confidentiality  6.57
    • D.  Service Levels  6.58
    • E.  Indemnification, Warranty, and Liability  6.59
    • F.  Data Portability and Deletion  6.60
    • G.  Guidance for Specific Industries  6.61
    • H.  Variations on Cloud Computing  6.62
    • I.  Sample Cloud Services Agreement  6.63
    • J.  Security Addendum  6.64
    • K.  Form: Security Addendum  6.65

7

Electronic Contracting

  • I.  INTRODUCTION  7.1
  • II.  ENFORCEABILITY OF SHRINK-WRAP, CLICK-WRAP, AND BROWSE-WRAP AGREEMENTS
    • A.  Shrink-Wrap Software Licenses  7.2
    • B.  Click-Wrap Agreements  7.3
    • C.  Browse-Wrap Agreements  7.4
    • D.  Embedded Links  7.4A
  • III.  E-SIGN
    • A.  Introduction  7.5
    • B.  Electronic Signatures  7.6
    • C.  Consumer Protection Features  7.7
    • D.  Electronic Record Retention  7.8
  • IV.  UNIFORM ELECTRONIC TRANSACTIONS ACT (UETA)
    • A.  Overview; Federal Preemption Issue  7.9
    • B.  Consent to Conduct Transactions Electronically Required  7.10
    • C.  Authentication of Electronic Signatures  7.10A
  • V.  UNIFORM COMPUTER INFORMATION TRANSACTIONS ACT (UCITA)  7.11
  • VI.  ALI SOFTWARE CONTRACT PRINCIPLES  7.12
  • VII.  EUROPEAN UNION DIRECTIVES  7.13
  • VIII.  CREATING ENFORCEABLE ELECTRONIC AGREEMENTS
    • A.  Six Basic Principles  7.14
    • B.  Additional Practical Considerations  7.15
    • C.  Amendments  7.16

8

Terms of Use; Online Agreements; Linking; Downloading; Social Networking

  • I.  INTRODUCTION  8.1
  • II.  TERMS OF USE
    • A.  Drafting Considerations  8.2
    • B.  Form: Website Terms of Use  8.3
  • III.  ONLINE SOFTWARE LICENSE AGREEMENTS
    • A.  Introduction  8.4
    • B.  Form: Online End-User Software License Agreement  8.5
    • C.  Online Beta User Evaluation Agreement
      • 1.  Introduction  8.6
      • 2.  Form: Online Beta User Evaluation Agreement  8.7
    • D.  Open Source Licensing
      • 1.  Introduction  8.8
      • 2.  Form: Open Source Software License Agreement  8.9
    • E.  Software Evaluation License Agreement
      • 1.  Introduction  8.10
      • 2.  Form: Evaluation License Agreement  8.11
    • F.  Online Software Developer Toolkit License Agreement
      • 1.  Introduction  8.12
      • 2.  Form: Online Software Developer Toolkit License Agreement  8.13
  • IV.  LINKING ARRANGEMENTS
    • A.  Introduction  8.14
    • B.  Linking and Framing
      • 1.  Generally  8.15
      • 2.  Copyright Infringement Issues  8.16
      • 3.  Potential Liability for Trespass to Chattels  8.17
    • C.  Form: Linking Agreement  8.18
  • V.  DOWNLOADING AND UPLOADING CONTENT
    • A.  Generally  8.19
    • B.  Copyright Infringement Issues  8.20
    • C.  Music on the Internet
      • 1.  Introduction  8.21
      • 2.  Technologies  8.22
      • 3.  Federal Statutes  8.23
        • a.  Audio Home Recording Act of 1992 (AHRA)  8.24
        • b.  Digital Performance Right in Sound Recordings Act of 1995 (DPRA)  8.25
        • c.  No Electronic Theft Law  8.26
        • d.  Internet Piracy (Pen C §653aa)  8.26A
        • e.  The Family Entertainment and Copyright Act  8.26B
      • 4.  Case Law  8.27
      • 5.  RIAA Litigation Strategy  8.28
  • VI.  SOCIAL NETWORKING
    • A.  Overview  8.29
    • B.  Social Networking and the Law  8.30
    • C.  Copyright Issues
      • 1.  Infringement; Fair Use  8.31
      • 2.  Practice Guidelines  8.31A
    • D.  Privacy Issues
      • 1.  Generally  8.32
      • 2.  FTC Actions Concerning Privacy of User Information on Social Networks  8.32A
      • 3.  California Privacy Laws Protecting Social Media Users’ Privacy  8.32B
    • E.  Need for Valid End-User License Agreements (EULAs)  8.33
    • F.  Social Media in the Workplace  8.34
    • G.  Violation of Nonsolicitation Agreements  8.35

9

Privacy Law and Privacy Policies

  • I.  INTRODUCTION  9.1
  • II.  PRIVACY LAWS AFFECTING ONLINE BUSINESS  9.2
    • A.  How Businesses Obtain Consumer Information Online
      • 1.  Direct and Indirect Disclosure  9.3
      • 2.  Cookies  9.4
      • 3.  Pixels  9.5
      • 4.  Other Tracking Technologies  9.6
      • 5.  Adware  9.6A
      • 6.  Spyware  9.6B
      • 7.  Phishing  9.6C
    • B.  Federal Privacy Laws
      • 1.  United States Constitution  9.7
      • 2.  Federal Legislation  9.8
        • a.  Federal Trade Commission Initiatives  9.8A
          • (1)  FTC Actions Concerning Privacy Policies  9.9
          • (2)  FTC Actions Concerning Data Security  9.9A
          • (3)  The FTC’s “Red Flags Rule”  9.9B
          • (4)  FTC Actions Concerning Unwanted Adware  9.9C
          • (5)  The Internet of Things  9.9D
          • (6)   FTC Guidelines  9.9E
        • b.  Health Insurance Portability and Accountability Act (HIPAA)
          • (1)  Privacy Aspects of HIPAA and Supporting Regulations  9.10
          • (2)  Protected Health Information, Contract Requirements  9.11
        • c.  Gramm-Leach-Bliley Act  9.12
        • d.  Right to Financial Privacy Act  9.13
        • e.  Computer Fraud and Abuse Act  9.14
        • f.  Electronic Communications Privacy Act  9.15
        • g.  Video Privacy Protection Act  9.15A
        • h.  Fair Credit Reporting Act  9.15B
        • i.  Consumer Privacy Bill of Rights   9.15C
    • C.  California Privacy Laws
      • 1.  California Constitution
        • a.  Constitutional Right of Privacy  9.16
        • b.  Standing Issue in Privacy Litigation  9.16A
      • 2.  Common Law Right of Privacy  9.17
      • 3.  California Legislation  9.18
        • a.  California Consumer Privacy Act (CCPA) (CC §§1798.100–1798.199.100)  9.18A
        • b.  Proposition 24: California Privacy Rights Act (CPRA)   9.18B
        • c.  Online Privacy Protection Act (OPPA) (Bus & P C §§22575–22579)
          • (1)  Privacy Policy Posting Requirement  9.19
          • (2)  Required Contents of Privacy Policy  9.20
          • (3)  Failure to Comply With Act  9.21
        • d.  California Attorney General’s Recommended Best Practices for Mobile App Developers  9.21A
        • e.  “Anti-Paparazzi” Statute  9.21B
        • f.  California Financial Information Privacy Act  9.22
        • g.  California Right to Financial Privacy Act (Govt C §§7460–7493)  9.23
        • h.  Song-Beverly Credit Card Act  9.23A
        • i.  Required Notice of Security Breaches
          • (1)  Civil Code Provisions  9.24
          • (2)  Potential Safe Harbor  9.25
          • (3)  Obligation to Maintain Security  9.25A
        • j.  Civil Code §1798.83  9.26
        • k.  Consumer Protection Against Computer Spyware Act (Bus & P C §§22947–22947.6)  9.26A
        • l.  California Electronic Communications Privacy Act  9.26B
        • m.  Student Online Personal Information Protection Act  9.26C
        • n.  Unfair Competition Law  9.27
        • o.  “Revenge Porn”  9.27A
    • D.  Other States’ Data Protection Programs  9.27B
    • E.  Special Legal Protections for Children  9.28
      • 1.  Children’s Online Privacy Protection Act (COPPA)  9.29
        • a.  Application of COPPA  9.30
        • b.  Requirements for Online Collection of Information From Children  9.31
        • c.  Parental Consent  9.32
        • d.  FTC Enforcement Actions Under COPPA  9.33
        • e.  State Enforcement Actions Under COPPA  9.33A
        • f.  Safe Harbor Under COPPA  9.34
      • 2.   Final FTC Children’s Online Protection Act Rule  9.34A
      • 3.  Dot-Kids Act [Deleted]  9.35
      • 4.  FTC’s Children’s Privacy Website  9.36
      • 5.  California Legislation  9.36A
        • a.  Prohibition on Certain Advertising to Minors (Bus & P C §22580)  9.36B
        • b.  “Eraser Button” Law  9.36C
    • F.  European Union Rules and Regulation
      • 1.  EU Data Protection Directive [Deleted]  9.37
      • 2.  EU General Data Protection Regulation (GDPR)  9.37A
      • 3.  Data Transfers  9.38
  • III.  WEBSITE PRIVACY POLICIES
    • A.  Need for Privacy Policies  9.39
    • B.  Content of Privacy Policies  9.40
    • C.  Enforceability of Privacy Policies  9.41
    • D.  Additional Resources  9.42
    • E.  Privacy Policy
      • 1.  Introduction  9.43
      • 2.  Form: Privacy Policy  9.44
  • IV.  PRIVACY AND WEBSITE DESIGN  9.45

10

E-Commerce Transactions; Tax and Insurance Issues

  • I.  E-COMMERCE TRANSACTIONS
    • A.  Introduction  10.1
    • B.  Electronic Contracting  10.2
    • C.  Electronic Payment Services
      • 1.  Credit Cards  10.3
      • 2.  Debit Cards  10.4
      • 3.  Internet Checks  10.5
      • 4.  Virtual Currency  10.5A
      • 5.  Blockchain Technology  10.5B
      • 6.  Non-Fungible Tokens (NFTs)  10.5C
      • 7.  Initial Coin Offerings and the SEC  10.5D
      • 8.  Other Electronic Payment Services  10.6
    • D.  Additional Payment and Security Issues  10.7
      • 1.  Secure Transaction Processing Software  10.8
      • 2.  Fraud Prevention Tools  10.9
      • 3.  Phone and Fax Orders  10.10
      • 4.  Security Certificates  10.11
      • 5.   Purchases by Children  10.11A
    • E.  Shopping Cart Services
      • 1.  Overview  10.12
      • 2.  Evaluating Shopping Cart Services  10.13
    • F.  Sample Website or App End User Payment Terms
      • 1.  Introduction  10.14
      • 2.  Form: Sample Clauses re Payment of Subscription Fees  10.15
    • G.  FTC’s Mail, Internet, or Telephone Order Merchandise Rule  10.16
    • H.  Restore Online Shoppers’ Confidence Act  10.16A
    • I.  Subscription Offers: Business and Professions Code §17602  10.16B
    • J.  Online Distributors and Products Liability  10.16C
  • II.  TAX ISSUES
    • A.  Formulation of E-Commerce Tax Policy  10.17
      • 1.  International Tax Policy  10.18
      • 2.  United States Federal Tax Policy
        • a.  Role of Treasury Department  10.19
        • b.  The Internet Tax Freedom Act  10.20
        • c.  The Streamlined Sales and Use Tax Agreement  10.20A
      • 3.  California Sales and Use Tax Policy  10.21
    • B.  Sales and Use Taxes
      • 1.  General Principles  10.22
      • 2.  Constitutional Restrictions; South Dakota v Wayfair, Inc.  10.23
      • 3.  Sales by California E-Businesses to Out-of-State Residents  10.23A
      • 4.  California Sales and Use Taxes: General Rules  10.24
      • 5.  The “Amazon Tax”: Out-of-State Retailers With In-State Agents  10.24A
      • 6.  Post-Wayfair Sales and Use Tax Obligations of Out-of-State Retailers  10.25
      • 7.  California Sales and Use Tax Treatment of Software Sales and Related Services  10.26
  • III.  INSURANCE ISSUES FOR ONLINE BUSINESSES
    • A.  Introduction  10.27
    • B.  Commercial Form General Liability Insurance  10.28
      • 1.  Loss of Tangible Property: Is Computer Data “Tangible Property?”  10.29
      • 2.  Loss of Tangible Property: Has There Been a “Loss”?  10.30
      • 3.  “Physical Loss or Damage”  10.31
      • 4.  Intellectual Property Infringement  10.32
    • C.  Business Interruption Coverage  10.33
    • D.  Industry Response  10.34
    • E.  Cyberinsurance  10.35
    • F.  Practical Advice  10.36

11

Strategic Alliances

  • I.  INTRODUCTION  11.1
  • II.  TYPES OF ALLIANCES  11.2
  • III.  FORM: SAMPLE LETTER OF INTENT RE STRATEGIC ALLIANCE  11.3
  • IV.  SAMPLE STRATEGIC ALLIANCE AGREEMENT
    • A.  Introduction  11.4
    • B.  Form: Strategic Alliance Agreement  11.5
  • V.  SAMPLE CO-BRANDING AGREEMENT
    • A.  Introduction  11.6
    • B.  Form: Co-Branding Agreement  11.7

12

Software License Agreements

  • I.  INTRODUCTION  12.1
  • II.  KEY ISSUES IN SOFTWARE LICENSING
    • A.  Exclusive Licenses  12.2
    • B.  Nonexclusive Licenses  12.3
    • C.  Scope of License
      • 1.  Scope of Rights Granted  12.4
      • 2.  Number of End Users  12.4A
    • D.  Payment Structures  12.5
  • III.  SAMPLE SOFTWARE LICENSE AGREEMENT
    • A.  Introduction  12.6
    • B.  Form: Software License Agreement  12.7
  • IV.  DRAFTING EXCLUSIVE LICENSES
    • A.  General Considerations
      • 1.  Restrictions on Scope or Field of Use  12.8
      • 2.  Performance Milestones; Minimum Royalties  12.9
    • B.  Form: Exclusivity Clause  12.10
  • V.  BANKRUPTCY CONSIDERATIONS
    • A.  Introduction  12.11
    • B.  Executory Contracts and Bankruptcy Code §365(n)  12.12
    • C.  Drafting Considerations  12.13

13

Software Development Agreements

  • I.  INTRODUCTION  13.1
  • II.  OWNERSHIP ISSUES  13.2
  • III.  FORM: SOFTWARE DEVELOPMENT AGREEMENT  13.3
  • IV.  SOFTWARE EVALUATION
    • A.  Introduction  13.4
    • B.  Form: Software Test and Evaluation Agreement  13.5

14

Content Clearances, Licensing, and Fair Use

  • I.  INTRODUCTION  14.1
  • II.  STEP 1: IDENTIFY THIRD PARTY ELEMENTS  14.2
  • III.  STEP 2: DETERMINE IF THIRD PARTY ELEMENTS ARE PROTECTED BY COPYRIGHT OR OTHER INTELLECTUAL PROPERTY LAWS  14.3
  • IV.  STEP 3: FOR PROTECTED ELEMENTS, DETERMINE WHICH OF OWNER’S EXCLUSIVE RIGHTS ARE IMPLICATED  14.4
  • V.  STEP 4: DETERMINE IF USE IS EXEMPT FROM INFRINGEMENT LIABILITY
    • A.  Public Domain  14.5
    • B.  Fair Use  14.6
  • VI.  STEP 5: IDENTIFY OWNERS OF WORK  14.7
  • VII.  STEP 6: OBTAIN RIGHTS NECESSARY TO USE WORK  14.8
    • A.  Individual Release (Videotape of Testimonial)
      • 1.  Introduction  14.9
      • 2.  Form: Endorsement Agreement  14.10
    • B.  Still Photograph License
      • 1.  Introduction  14.11
      • 2.  Form: Still Photograph License  14.12
    • C.  Reprint Rights License
      • 1.  Introduction  14.13
      • 2.  Form: Digital Reprint Rights License  14.14
    • D.  Streaming Video License
      • 1.  Introduction  14.15
      • 2.  Form: Streaming Video License  14.16
    • E.  Special Issues in Music Licensing  14.17
    • F.  Creative Commons and Other Innovative Licensing Solutions  14.18

15

Source Code Escrows

  • I.  INTRODUCTION  15.1
  • II.  FORM: SOURCE CODE ESCROW AGREEMENT  15.2

16

Financing an Online Business

  • I.  EARLY-STAGE EQUITY FINANCING
    • A.  Introduction  16.1
    • B.  Equity Versus Debt
      • 1.  Equity  16.2
      • 2.  Debt  16.3
    • C.  Sources of Equity Funding  16.4
      • 1.  Founders, Friends, and Family  16.5
      • 2.  “Angel” Investors  16.6
      • 3.  Venture Capital and Other Institutional Investors  16.7
    • D.  Structure of Venture Capital Financings  16.8
    • E.  Venture Capital Financing Term Sheet
      • 1.  Introduction  16.9
      • 2.  Form: Term Sheet for Preferred Stock Financing  16.10
  • II.  DEBT FINANCING
    • A.  Introduction  16.11
    • B.  Types of Debt Financing  16.12
      • 1.  Working Capital Loans  16.13
      • 2.  Term Loans  16.14
      • 3.  SBA Loans  16.15
      • 4.  Lease Financings  16.16
      • 5.  Corporate Credit Cards  16.17
      • 6.  Convertible Debt  16.18
      • 7.  Customer Advances  16.19
    • C.  Qualifying for Loan  16.20
    • D.  Elements of Simple Loan Transaction
      • 1.  Overview  16.21
      • 2.  Usury Issues for Non-Bank Lenders  16.22
    • E.  Loan Agreement and Promissory Note  16.23
      • 1.  Form: Loan Agreement  16.24
      • 2.  Form: Promissory Note  16.25
    • F.  Security Interests in Intellectual Property Collateral
      • 1.  Generally  16.26
      • 2.  Security Interests in Copyrights  16.27
      • 3.  Security Interests in Patents  16.28
      • 4.  Security Interests in Trademarks  16.29
      • 5.  Security Interests in Domain Names  16.30
      • 6.  Security Interests in Trade Secrets  16.31
      • 7.  Form of Security Agreement (Intellectual Property)
        • a.  Introduction  16.32
        • b.  Form: Security Agreement (Intellectual Property)  16.33
    • G.  Convertible Promissory Notes
      • 1.  Generally  16.34
      • 2.  Form: Convertible Promissory Note  16.35

17

Advertising on the Internet

  • I.  INTERNET ADVERTISING REGULATION
    • A.  Introduction  17.1
    • B.  Overview of Applicable Laws  17.2
      • 1.  Lanham Act  17.3
      • 2.  Federal Trade Commission Act  17.4
        • a.  FTC’s Dot Com Disclosure Guidelines  17.5
        • b.  Liability for Deceptive Advertising; FTC Enforcement Actions  17.6
        • c.  Examples of FTC Enforcement Actions  17.7
        • d.  Endorsements and Testimonials  17.7A
        • e.  Native Advertising  17.7B
      • 3.  Restore Online Shoppers’ Confidence Act  17.7C
      • 4.  State Laws  17.8
        • a.  Laws Prohibiting False or Misleading Advertising Generally  17.9
        • b.  Laws Regulating Telephone, Internet, and Catalog Sales  17.10
        • c.  Laws Regulating Online Advertising to Minors  17.10A
        • d.  Laws Regulating Use of Bots  17.10B
    • C.  Attorney Internet Advertising
      • 1.  Overview  17.10C
      • 2.  California Rules of Professional Conduct  17.10D
      • 3.  ABA Model Rules of Professional Conduct  17.10E
    • D.  Unsolicited E-Mail (“Spam”)  17.11
      • 1.  Federal Legislation: CAN-SPAM Act
        • a.  Generally  17.12
        • b.  E-Mail Subject to CAN-SPAM Act  17.13
        • c.  CAN-SPAM Act: Basic Requirements for Commercial E-Mail Messages  17.14
          • (1)  Identification as Advertisement  17.15
          • (2)  Notice and Opt-Out Mechanism  17.16
          • (3)  Postal Address  17.17
          • (4)  Affirmative Consent  17.18
          • (5)  Forwarding Commercial E-Mails  17.18A
        • d.  Deceptive E-Mail Practices  17.19
        • e.  Sexually Oriented Materials  17.20
        • f.  Attribution Rules  17.21
        • g.  Enforcement of CAN-SPAM  17.22
        • h.  National “Do Not E-Mail” Registry  17.23
        • i.  Commercial E-Mails Sent to Wireless Devices  17.23A
        • j.  Criminal Liability Under CAN-SPAM  17.23B
      • 2.  State Anti-Spam Laws
        • a.  Generally  17.24
        • b.  California Anti-Spam Laws  17.25
        • c.  Scope of Preemption of California Law by CAN-SPAM Act  17.26
        • d.  Penal Code §502(c)  17.27
      • 3.  Anti-Spam Litigation  17.28
      • 4.  Practical Methods of Blocking Spam E-Mail  17.29
    • E.  Unsolicited Texts and Phone Calls  17.29A
    • F.  Search Engine Optimization
      • 1.  Overview  17.29B
      • 2.  Optimization Tools and Techniques  17.29C
    • G.  Behavioral Advertising  17.29D
  • II.  INTERNET ADVERTISING AGREEMENTS
    • A.  Overview  17.30
    • B.  Banner Advertising  17.31
    • C.  Form: Banner Advertising Agreement  17.32
    • D.  Internet Service Directories or Referral Sites  17.33
    • E.  Form: Internet Advertising Agreement  17.34
    • F.  Portal Agreements  17.35
    • G.  Form: Interactive Marketing Agreement  17.36
    • H.  Social Media Influencer Marketing  17.37
    • I.  Form: Social Media Influencer Independent Contractor Agreement  17.38

18

Cybersecurity

  • I.  RISK OF CYBERATTACKS
    • A.  Overview, Scope of Chapter  18.1
    • B.  Major Types of Threats  18.2
  • II.  CYBERATTACK RISK MANAGEMENT
    • A.  Online Resources  18.3
    • B.  California Risk Management Requirements
      • 1.  Obligation to Maintain Security (CC §1798.81.5)  18.4
      • 2.  Obligation to Report Data Breaches  18.5
      • 3.  Internet of Things (CC §§1798.91.04–1798.91.06)  18.6
      • 4.  Ethical Obligations of Attorneys  18.6A
    • C.  General Cybersecurity Guidance for Companies
      • 1.  NIST Cybersecurity Framework  18.7
      • 2.  NIST Internet of Things  18.8
      • 3.  NYSE Guidance for Directors and Officers  18.9
      • 4.  Checklist for Cybersecurity Preparedness  18.10
  • III.  RESPONSES TO CYBERATTACKS
    • A.  California Requirements  18.11
      • 1.  California “Shine the Light” Law (CC §§1798.80–1798.84)  18.12
      • 2.  California Consumer Privacy Act (CC §§1798.100–1798.199.100)  18.13
    • B.  Other Responses to a Cyberattack
      • 1.  General Considerations  18.14
      • 2.  Checklist for Response to Cyberattack  18.15
  • IV.  AVAILABLE LEGAL REMEDIES  18.16
    • A.  Federal Legislation
      • 1.  Computer Fraud and Abuse Act
        • a.  Overview  18.17
        • b.  As Applied to Conduct Exceeding Terms of Use  18.18
          • (1)  Violations of Terms of Use  18.19
          • (2)  Sharing Passwords  18.20
          • (3)  Access After Cease and Desist Letter  18.21
        • c.  As Applied to Tracking Software  18.22
        • d.  As Applied to Improper Use of E-Mail  18.23
        • e.  As Applied to Spam  18.24
        • f.  As Applied to Wireless Networks  18.25
      • 2.  Electronic Communications Privacy Act
        • a.  Overview of Title I and Title II  18.26
        • b.  Title I, Wiretap Act  18.27
          • (1)  As Applied to Cookies  18.28
          • (2)  As Applied to Tracking Software  18.29
          • (3)  As Applied to Unauthorized Wireless Access  18.30
        • c.  Title II, Stored Communications Act  18.31
          • (1)  Authorized Versus Unauthorized Access  18.32
          • (2)  E-Mails and “Electronic Storage”  18.33
      • 3.  USA Patriot Act  18.34
      • 4.  Digital Millennium Copyright Act  18.35
      • 5.  Other Federal Statutes  18.36
    • B.  State Legislation
      • 1.  Penal Code §502: Computer Crimes  18.37
      • 2.  Ransomware  18.38
      • 3.  Wireless Devices  18.39
    • C.  Trespass to Chattels
      • 1.  Elements of Claim  18.40
      • 2.  Case Law Developments
        • a.  Interference With Computer System Operations  18.41
        • b.  No Interference With Computer System Operations
          • (1)  WhatsApp Inc. v NSO Grp. Techs. Ltd.  18.41A
          • (2)  Intel Corp. v Hamidi  18.42
          • (3)  Ticketmaster Corp. v Tickets.com, Inc.  18.43
        • c.  Computer Hacking  18.44

19

Jurisdiction; Conflicts of Law

  • I.  INTERNET JURISDICTION
    • A.  Introduction  19.1
    • B.  Personal Jurisdiction  19.2
      • 1.  State Long-Arm Statutes  19.3
      • 2.  Federal Rules of Civil Procedure  19.4
      • 3.  Constitutional Limits on Personal Jurisdiction
        • a.  Due Process Clause  19.5
        • b.  Minimum Contacts Test  19.6
        • c.  Reasonableness  19.7
      • 4.  General and Specific Personal Jurisdiction
        • a.  General Personal Jurisdiction  19.8
        • b.  Specific Personal Jurisdiction  19.9
        • c.  Specific Jurisdiction in Cyberspace  19.10
    • C.  In Rem Jurisdiction; Anticybersquatting Consumer Protection Act  19.11
    • D.  Choice-of-Forum Clauses
      • 1.  Enforceability  19.12
      • 2.  Form: Choice-of-Forum Clause  19.13
  • II.  CONFLICTS OF LAW; CHOICE-OF-LAW CLAUSES
    • A.  Conflicts of Law
      • 1.  Generally  19.14
      • 2.  Constitutional Analysis  19.15
      • 3.  Is There a Choice-of-Law Clause?  19.16
      • 4.  Governmental Interest Analysis  19.17
      • 5.  Conflicts of Law on Internet  19.18
    • B.  Choice-of-Law Clauses
      • 1.  Enforceability
        • a.  California Statutes  19.19
        • b.  Nedlloyd Lines, B.V. v Superior Court and Later Cases  19.20
      • 2.  Drafting Considerations  19.21
      • 3.  Form: Choice-of-Law Clause  19.22

20

Liability Related to Speech and the First Amendment

  • I.  INTRODUCTION
    • A.  Scope of Chapter  20.1
    • B.  Speech-Related Liability Covered in Other Chapters  20.2
    • C.  Internet Jurisdiction  20.3
  • II.  FREEDOM OF SPEECH
    • A.  Introduction  20.4
    • B.  First Amendment
      • 1.  Protection of Speech in Cyberspace  20.5
      • 2.  Prior Restraint  20.6
      • 3.  Commercial Speech  20.7
      • 4.  “Fighting Words” Doctrine  20.8
      • 5.  True Threats of Force; Speech Integral to Criminal Conduct  20.9
      • 6.  Obscenity  20.10
        • a.  Miller Test for Obscenity  20.11
        • b.  Reliance on Community Standards Problematic in Cyberspace  20.12
        • c.  Transportation via “Interactive Computer Service”  20.13
        • d.  Federal Criminal Laws Regulating Obscenity  20.14
        • e.  Child Pornography  20.15
        • f.  Children’s Internet Protection Act  20.16
      • 7.  Filtering Software and First Amendment  20.17
      • 8.  Free Speech Rights in Anonymous Communications  20.18
      • 9.  Spam  20.19
      • 10.  Public versus Private Forums, Social Media, and Deplatforming  20.19A
      • 11.  Unconstitutional State Action Based on Content or Viewpoint  20.19B
      • 12.  First Amendment Defense to Wiretapping Liability  20.19C
  • III.  TORT LIABILITY  20.20
    • A.  Defamation
      • 1.  Overview  20.21
      • 2.  Libel and Slander Distinguished  20.22
      • 3.  Elements of Defamation  20.23
        • a.  Trade Libel Distinguished  20.24
        • b.  Pleading Requirement: Identifying Alleged Defamatory Statement  20.25
        • c.   “Publication” Requirement  20.26
        • d.  “Of And Concerning” Requirement; “Group Libel”  20.27
        • e.  “Falsity” Requirement  20.28
          • (1)  Fact Versus Opinion  20.29
          • (2)  Burden of Proof  20.30
      • 4.  Public Officials, Public Figures, Limited-Purpose Public Figures, Private Figures, and Matters of Public Concern  20.31
      • 5.  Substantial Truth Defense  20.32
      • 6.  Defamatory Meaning Requirement  20.33
      • 7.  “Mental State” Requirement  20.34
        • a.  Private Figures: Negligence  20.35
        • b.  Public Officials, Public Figures, Limited-Purpose Public Figures, Matters of Public Concern: Actual Malice  20.36
      • 8.  Damages  20.37
      • 9.  Privilege  20.38
    • B.  Invasion of Privacy Torts  20.39
      • 1.  False Light  20.40
      • 2.  Public Disclosure of Private Facts  20.41
      • 3.  Right of Publicity; Misappropriation of Name and Likeness
        • a.  Overview  20.42
        • b.  Right of Publicity Survives Death  20.43
        • c.  Misappropriation Elements  20.44
        • d.  Right of Publicity; Elements  20.45
        • e.  Defenses
          • (1)  Use in Certain News Accounts or Political Campaigns  20.46
          • (2)  Transformative Use  20.47
          • (3)  First Amendment and Public Interest  20.48
          • (4)  Federal Copyright Law Preemption  20.49
          • (5)  Use of Deceased Individual in Copyrighted Work  20.50
        • f.  Statutory Remedies  20.51
      • 4.  Intrusion Upon Seclusion  20.52
        • a.   Intrusion Element  20.53
        • b.   Offensiveness Element  20.54
        • c.  Case Law Examples   20.54A
    • C.  Fraud  20.55
      • 1.  Affirmative Misrepresentation  20.56
        • a.  Misrepresentation Element  20.57
        • b.   “Intent” Requirement  20.58
        • c.   “Reliance” Requirement  20.59
      • 2.  Fraudulent Concealment  20.60
      • 3.  Negligent Misrepresentation  20.61
    • D.  Conversion  20.62
    • E.  Products Liability  20.62A
  • IV.  PRIVILEGES  20.63
    • A.  Official Governmental Duty Privilege  20.64
    • B.  Litigation Privilege  20.65
    • C.  Common Interest Privilege  20.66
    • D.  Fair and True Report Privilege  20.67
  • V.  STATUTES OF LIMITATIONS
    • A.  Generally  20.68
    • B.  Delayed Discovery Rule  20.69
    • C.  Single Publication Rule  20.70
    • D.  Specific Statutes of Limitation
      • 1.  Defamation  20.71
      • 2.  Invasion of Privacy (False Light, Public Disclosure of Private Facts, Misappropriation, Right of Publicity, and Intrusion Upon Seclusion)  20.72
      • 3.  Intentional Fraud (Affirmative Misrepresentation and Fraudulent Concealment)  20.73
      • 4.  Negligent Misrepresentation  20.74
  • VI.  CALIFORNIA’S ANTI-SLAPP STATUTE
    • A.  Overview  20.75
    • B.  Legislative Intent  20.76
    • C.  Procedural Considerations  20.77
    • D.  Two-Pronged Procedure  20.78
      • 1.  Prong One: Defendant’s Burden To Show Cause of Action Arises From Protected Activity
        • a.  Four Categories of Protected Activity  20.79
        • b.  Protected Activity Defined by Statute Only  20.80
        • c.  No Additional Requirements  20.81
        • d.  Causes of Action Subject to Anti-SLAPP Statute  20.82
        • e.  Merits Not Analyzed in Prong One  20.83
        • f.  Exception for Criminal Conduct  20.84
        • g.  “Arises From” Requirement  20.85
        • h.  Written or Oral Statements Made in Governmental Proceedings (CCP §425.16(e)(1))  20.86
        • i.  Written or Oral Statements Made in Connection With Governmental Proceedings (CCP §425.16(e)(2))  20.87
        • j.  Written or Oral Statements Made in Public Forums in Connection With Matters of Public Interest (CCP §425.16(e)(3)  20.88
        • k.  Any Conduct in Furtherance of Right to Petition or Free Speech in Connection With Matter of Public Concern or Public Interest (CCP §425.16(e)(4))  20.89
      • 2.  Prong Two: Plaintiff’s Burden to Show Probability of Prevailing  20.90
        • a.  Legal Standard in State Court  20.91
        • b.  Legal Standards in Federal Court  20.92
        • c.  Anti-SLAPP Motions in Libel Actions  20.93
        • d.  Anti-SLAPP Motions in Cases Involving Confidentiality Agreements  20.93A
    • E.  Exemptions to Anti-SLAPP Statute  20.94
      • 1.  Commercial Speech Exemption  20.95
      • 2.  Public Interest Exemption  20.96
    • F.  Exceptions to Exemptions  20.97
      • 1.  Media Defendants, Book Publishers, and Authors  20.98
      • 2.  Purveyors of Copyrighted Works  20.99
      • 3.  Nonprofit Organizations  20.100
    • G.  Attorney Fees
      • 1.  Prevailing Defendant’s Right to Attorney Fees  20.101
      • 2.  Plaintiff Entitled to Fees Only if Motion Was Frivolous  20.102
      • 3.  Amount of Fees  20.103
  • VII.  COMMUNICATIONS DECENCY ACT §230 IMMUNITY
    • A.  Immunity for Internet Intermediaries  20.104
    • B.  Interactive Computer Service (ICS)  20.105
    • C.  Information Content Provider (ICP)  20.106
    • D.  Preemption; Relation to State Laws  20.107
    • E.  Nature of Immunity  20.108
    • F.  Exceptions to Immunity  20.109
      • 1.  Criminal Activity and Obscene Material  20.110
      • 2.  Intellectual Property  20.111
      • 3.  Sex Trafficking  20.112
    • G.  No Publisher or Speaker Liability  20.113
      • 1.  Common Law Publisher–Distributor Distinction for Defamation Irrelevant  20.114
      • 2.  Traditional and Nontraditional Publisher Functions  20.115
      • 3.  Applies to “Providers” and “Users” of ICSs  20.116
      • 4.  Name of Claim Not Dispositive  20.117
      • 5.  Limits Injunctive Relief  20.118
      • 6.  Defendant “Directly Involved” in Soliciting Unlawful Speech Ineligible for Immunity  20.119
      • 7.  Nature and Structure of Website May Be Sufficient to Show Direct Involvement in Unlawful Speech  20.120
      • 8.  Merely Providing Tools to Create Web Content Insufficient to Strip Immunity  20.121
      • 9.  Use of Nonemployee Moderators  20.122
      • 10.  Advertising Content  20.123
      • 11.  “Fake News” Websites  20.124
      • 12.  Cases Upholding CDA Immunity  20.125
      • 13.  Cases Holding No CDA Immunity  20.126
    • H.  The “Good Samaritan” Exemption
      • 1.  Two-Part Exemption  20.127
      • 2.  Allegedly Improper Blocking  20.128
      • 3.  Alleged Interference With Third Party Downloadable Programs  20.129
      • 4.  Good Faith Finding Not Required When Classified as Editorial Function  20.130
  • VIII.  INTERNET COMPLAINT SITES
    • A.  Overview  20.131
    • B.  Potential Causes of Action  20.132
      • 1.  Defamation  20.133
      • 2.  Trademark Infringement and Dilution  20.134
      • 3.  Cybersquatting: Federal and State Law
        • a.  UDRP  20.135
        • b.  Anticybersquatting Consumer Protection Act  20.136
        • c.  California’s Anticybersquatting Statute  20.137
    • C.  Practical Solutions  20.138
  • IX.  CRIMINAL LIABILITY
    • A.  Generally  20.139
    • B.  Child Pornography
      • 1.  Child Pornography Prevention Act  20.140
      • 2.  Child Online Protection Act  20.141
    • C.  California Penal Code  20.142
  • X.  CALIFORNIA EDUCATION CODE PENALTIES FOR BULLYING  20.143

20A

Discovery of Electronically Stored Information

Alexander H. Lubarsky, LL.M., Esq.

  • I.  INTRODUCTION  20A.1
  • II.  MANAGING ELECTRONICALLY STORED INFORMATION BEFORE LITIGATION
    • A.  Retention of ESI
      • 1.  Regulatory Obligations  20A.2
      • 2.  In Absence of Statute or Regulation  20A.3
    • B.  Document Retention Policies  20A.4
    • C.  Special Problems Concerning E-Mail  20A.5
    • D.  The CLOUD Act: Electronic Information Stored on Foreign Servers  20A.5A
  • III.  FEDERAL RULES ON ELECTRONIC DISCOVERY  20A.6
    • A.  Rule 16: Scheduling Orders; Case Management  20A.7
    • B.  Rule 26: General Discovery Provisions; Duty of Disclosure
      • 1.  Initial Voluntary Disclosure  20A.8
      • 2.  “Clawback” of Privileged Material  20A.9
      • 3.  Meet-and-Confer Requirements  20A.10
      • 4.  Safe Harbor if ESI Not Reasonably Accessible  20A.11
    • C.  Rule 33: Interrogatory Responses  20A.12
    • D.  Rule 34: Production of Documents and Things
      • 1.  Rule 34(a): Inspection, Copying, Testing, and Sampling  20A.13
      • 2.  Rule 34(b): Specifying Format for Production  20A.14
    • E.  Rule 37: Duty to Comply With Court Order; Safe Harbor for Routine Deletion  20A.15
    • F.  Rule 45: Response to Subpoenas  20A.16
    • G.  Federal NIT Warrants  20A.16A
  • IV.  CALIFORNIA LAW
    • A.  Rules of Court  20A.17
    • B.  Electronic Discovery Act  20A.18
      • 1.  ESI From Sources Not Reasonably Accessible  20A.18A
      • 2.  Safe Harbor for Lost Information  20A.18B
      • 3.  Disclosure of Privileged Information  20A.18C
      • 4.  Form of Production  20A.18D
      • 5.  Court-Imposed Limits on Production  20A.18E
  • V.  ADVANCE PREPARATION FOR DISCOVERY OF ESI
    • A.  ESI Survey and Retention Policy  20A.19
    • B.  Identifying Key Personnel  20A.20
  • VI.  RETENTION OF ESI WHEN LITIGATION IS PENDING
    • A.  Notice of Litigation  20A.21
    • B.  Duty to Preserve Evidence  20A.22
    • C.  Legal Hold Letter to Client
      • 1.  Legal Holds  20A.23
      • 2.  Form: Legal Hold Letter to Client  20A.24
    • D.  Litigation Hold Letter to Opponent
      • 1.  Litigation Holds  20A.25
      • 2.  Form: Litigation Hold Letter to Opponent  20A.26
    • E.  Manner of Preservation  20A.27
    • F.  Sanctions for Failure to Preserve  20A.28
  • VII.  DISCOVERY OF ESI
    • A.  Identifying Data for Discovery
      • 1.  Need to Understand ESI Infrastructure  20A.29
      • 2.  Drafting a Request for Production  20A.30
    • B.  Collecting Data
      • 1.  Defensible Collection Strategies  20A.31
      • 2.  Paper-Based Versus Electronic Production  20A.32
      • 3.  Forensic Data Professionals  20A.33
      • 4.  Electronic Data Collection Software  20A.34
      • 5.  Risks in ESI Collection  20A.35
      • 6.  Metadata  20A.36
      • 7.  ESI Seized by Law Enforcement Through Search Warrants   20A.36A
      • 8.  Forensic or Mirror Images  20A.37
      • 9.  Right to On-Site Inspection  20A.38
    • C.  Form of Production  20A.39
      • 1.  Production in Native Format  20A.40
      • 2.  Production of Image Files  20A.41
        • a.  Copying Electronic Files  20A.42
        • b.  Handling Metadata  20A.43
    • D.  Privileged Information  20A.44
    • E.  Federal Rule of Evidence 502  20A.44A
    • F.  Data Processing, Storage, and Review
      • 1.  De-Duplication and Near De-Duplication  20A.45
      • 2.  Litigation Support Platforms  20A.46
      • 3.  Hosting  20A.47
      • 4.  Data Security  20A.48
    • G.  Costs of E-Discovery  20A.49

21

International Issues

  • I.  INTERNATIONAL E-BUSINESS ISSUES
    • A.  Introduction  21.1
    • B.  Hague Conference on Private International Law  21.2
    • C.  Applicable Law in International Disputes  21.3
    • D.  Jurisdiction of Foreign Courts  21.4
    • E.  Comity: Enforcing Foreign Judgments Against U.S. Companies  21.5
    • F.  Content Filtering by Foreign Governments  21.6
    • G.  How to Target or Avoid Certain Countries  21.7
    • H.  International Electronic Contracting  21.8
    • I.  International Intellectual Property Protection  21.9
    • J.  European Union Directives
      • 1.  Introduction  21.10
      • 2.  EU Data Protection Directive and Related Developments
        • a.  EU Data Protection Directive  21.11
        • b.  General Data Protection Regulation (GDPR)  21.11A
        • c.  Right to Be Forgotten  21.11B
        • d.  Prior Framework (EU-U.S. Privacy Shield); “Schrems II” Decision  21.11C
        • e.  Compliance With EU General Data Protection Regulation
          • (1)  Self-Certifying Under the Privacy Shield Framework   21.12
          • (2)  Consequences of Noncompliance [Deleted]  21.12A
          • (3)  Case-by-Case Compliance; Standard Contract Clauses (SCCs)  21.13
      • 3.  Other EU Directives
        • a.  Distance Selling  21.14
        • b.  E-Commerce Directives  21.15
        • c.  VAT Directive  21.16
        • d.  Specific Industry Directives  21.17
        • e.  EU Data Retention Directive  21.18
        • f.  EU Cybersecurity Directive  21.18A
        • g.  EU Database Directive  21.18B
    • K.  Self-Regulation
      • 1.  Trustmarks  21.19
      • 2.  International ADR  21.20
  • II.  CYBERSECURITY LAW OF THE PEOPLE’S REPUBLIC OF CHINA AND OTHER COUNTRIES  21.20A
  • III.  EXPORT AND IMPORT CONTROLS
    • A.  U.S. Export Controls  21.21
      • 1.  Export Administrative Regulations (EAR)  21.22
      • 2.  Scope of EAR; Commerce Control List (CCL)  21.23
      • 3.  Definition of “Export”  21.24
    • B.  Compliance Challenges  21.25
    • C.  Export Control Compliance Programs  21.26
    • D.  Violations   21.27
    • E.  Export Controls of Other Nations  21.28
    • F.  Import Controls  21.29
    • G.  Form: Export Control Compliance Clause  21.30

22

Acquisitions and Sales of Internet-Based Businesses

  • I.  INTRODUCTION  22.1
  • II.  PRELIMINARY ISSUES  22.2
  • III.  INTELLECTUAL PROPERTY DUE DILIGENCE
    • A.  Introduction  22.3
    • B.  Due Diligence Procedures
      • 1.  Confidentiality Agreement  22.4
      • 2.  Due Diligence Checklist  22.5
      • 3.  Seller’s Internal Response Team  22.6
      • 4.  Responding to Request  22.7
      • 5.  Advance Preparation by Seller  22.8
      • 6.  Buyer’s Due Diligence Report  22.9
      • 7.  Analyzing Information  22.10
      • 8.  Disposition of Information  22.11
    • C.  Sample Due Diligence Checklist
      • 1.  Introduction  22.12
      • 2.  Checklist: Due Diligence Information Request  22.13
    • D.  “Open Source” Software
      • 1.  Introduction  22.13A
      • 2.  Checklist: Acquiring Open Source Software  22.13B
    • E.  Sample Due Diligence Report
      • 1.  Introduction  22.14
      • 2.  Form: Due Diligence Report re Intellectual Property Matters  22.15
  • IV.  REPRESENTATIONS AND WARRANTIES RE INTELLECTUAL PROPERTY RIGHTS
    • A.  Introduction  22.16
    • B.  Form: Representations and Warranties re Intellectual Property  22.17
  • V.  CHANGING OWNERSHIP OF DOMAIN NAMES
    • A.  Introduction  22.18
    • B.  Form: Internet Domain Name Assignment Agreement  22.19

INTERNET LAW AND PRACTICE IN CALIFORNIA

(1st Edition)

July 2021

TABLE OF CONTENTS

 

File Name

Book Section

Title

CH01

Chapter 1

Copyright and the DMCA

01-020

§1.20

Copyright Assignment

01-085

§1.85

Checklist: Notice and Take-Down Checklist

01-089

§1.89

Checklist: Company DMCA Compliance Policy

CH02

Chapter 2

Patents and Trade Secrets

02-016

§2.16

Patent Assignment

02-031

§2.31

Company Policy on Trade Secret Protection

02-033

§2.33

Confidentiality Agreement

CH03

Chapter 3

Domain Names and Trademark Issues

03-008

§3.8

Domain Name Purchase Agreement

03-018

§3.18

UDRP Complaint

03-020

§3.20

UDRP Response

03-055

§3.55

Trademark Guidelines

03-056

§3.56

Trademark License Agreement

03-058

§3.58

Trademark Assignment

03-070

§3.70

Sample Cease and Desist Letter

CH04

Chapter 4

Human Resources

04-005

§4.5

Offer Letter to Prospective Employee

04-011

§4.11

Confidentiality and Invention Assignment Agreement

04-019

§4.19

Independent Contractor Consulting Agreement

04-021

§4.21

Nondisclosure Agreement

04-023

§4.23

Advisory Board Letter Agreement

CH05

Chapter 5

Website and App Development; Disability Accommodation Issues

05-003

§5.3

Agreement for Transfer and Assignment of Intellectual Property

05-025

§5.25

Website Development Agreement

CH06

Chapter 6

Hosting and Related Services; Cloud Computing

06-012

§6.12

Hosting Services Agreement

06-019

§6.19

Co-Location Agreement

06-037

§6.37

Short Form Service Level Agreement

06-039

§6.39

Website Hosting Service Level Agreement

06-046

§6.46

Technical Support and Maintenance Agreement

06-049

§6.49

Basic Technical Support Exhibit

06-063

§6.63

Sample Cloud Services Agreement

06-065

§6.65

Security Addendum

CH08

Chapter 8

Terms of Use; Online Agreements; Linking; Downloading; Social Networking

08-003

§8.3

Website Terms of Use

08-005

§8.5

Online End-User Software License Agreement

08-007

§8.7

Online Beta User Evaluation Agreement

08-009

§8.9

Open Source Software License Agreement

08-011

§8.11

Evaluation License Agreement

08-013

§8.13

Online Software Developer Toolkit License Agreement

08-018

§8.18

Linking Agreement

CH09

Chapter 9

Privacy Law and Privacy Policies

09-044

§9.44

Privacy Policy

CH10

Chapter 10

E-Commerce Transactions; Tax and Insurance Issues

10-015

§10.15

Sample Clauses re Payment of Subscription Fees

CH11

Chapter 11

Strategic Alliances

11-003

§11.3

Form: Sample Letter of Intent Re Strategic Alliance

11-005

§11.5

Strategic Alliance Agreement

11-007

§11.7

Co-Branding Agreement

CH12

Chapter 12

Software License Agreements

12-007

§12.7

Software License Agreement

12-010

§12.10

Exclusivity Clause

CH13

Chapter 13

Software Development Agreements

13-003

§13.3

Form: Software Development Agreement

13-005

§13.5

Software Test and Evaluation Agreement

CH14

Chapter 14

Content Clearances, Licensing, and Fair Use

14-010

§14.10

Endorsement Agreement

14-012

§14.12

Still Photograph License

14-014

§14.14

Digital Reprint Rights License

14-016

§14.16

Streaming Video License

CH15

Chapter 15

Source Code Escrows

15-002

§15.2

Form: Source Code Escrow Agreement

CH16

Chapter 16

Financing an Online Business

16-010

§16.10

Term Sheet for Preferred Stock Financing

16-024

§16.24

Loan Agreement

16-025

§16.25

Promissory Note

16-033

§16.33

Security Agreement (Intellectual Property)

16-035

§16.35

Convertible Promissory Note

CH17

Chapter 17

Advertising on the Internet

17-032

§17.32

Banner Advertising Agreement

17-034

§17.34

Internet Advertising Agreement

17-036

§17.36

Interactive Marketing Agreement

17-038

§17.38

Social Media Influencer Independent Contractor Agreement

CH18

Chapter 18

Cybersecurity

18-015

§18.15

Checklist for Response to Cyberattack

CH19

Chapter 19

Jurisdiction; Conflicts of Law

19-013

§19.13

Choice-of-Forum Clause

19-022

§19.22

Choice-of-Law Clause

CH20A

Chapter 20A

Discovery of Electronically Stored Information

20A-024

§20A.24

Legal Hold Letter to Client

20A-026

§20A.26

Litigation Hold Letter to Opponent

CH21

Chapter 21

International Issues

21-030

§21.30

Export Control Compliance Clause

CH22

Chapter 22

Acquisitions and Sales of Internet-Based Businesses

22-013

§22.13

Checklist: Due Diligence Information Request

22-013B

§22.13B

Checklist: Acquiring Open Source Software

22-015

§22.15

Due Diligence Report re Intellectual Property Matters

22-017

§22.17

Representations and Warranties re Intellectual Property

22-019

§22.19

Internet Domain Name Assignment Agreement

 

Selected Developments

July 2021 Update

Copyright

Even when a work is comprised of unprotectable elements, copyright protection may still exist for a work based on the original selection and arrangement of unprotected elements. Skidmore v Led Zeppelin (9th Cir 2020) 952 F3d 1051, 1074; Apple Computer, Inc. v Microsoft Corp. (9th Cir 1994) 35 F3d 1435, 1446. To qualify, the work must contain numerous original selections and arrangements of unprotected elements. Skidmore, 952 F3d at 1074. The copyright protection, however, only protects the particular way the unprotected elements are selected and arranged. See §1.2.

Short phrases are not entitled to copyright protection. Corbello v Valli (9th Cir 2020) 974 F3d 965, 977 (phrase “social movement” was not subject to copyright protection); Grosso v Miramax Film Corp. (9th Cir 2004) 383 F3d 965, 967 (poker jargon not subject to copyright protection); Narell v Freeman (9th Cir 1989) 872 F2d 907, 911. In addition, names, titles, and slogans are not copyrightable subject matter. BeyondBlond Prods. v Heldman (CD Cal, Aug. 17, 2020, No. CV 20-5581 DSF (GSJx)) 2020 US Dist Lexis 150556; 37 CFR §202.1(a). But tweets could contain sufficient original expression by the author to be subject to copyright protection. Kaseberg v Conaco, LLC (SD Cal 2017) 260 F Supp 2d 1229. See §1.2.

If a work presents certain information as facts (including dialogue) and the author subsequently claims the facts or dialogue are fictionalized, courts will treat the fictionalized facts as unprotectable expression. Previously, this legal theory was called copyright estoppel, but the Ninth Circuit rebranded it as the “asserted truths doctrine.” The asserted truths doctrine will apply irrespective of whether the work is disseminated to the public. Corbello, 974 F2d at 978. See §1.2.

An interesting issue arises when a person creates an unauthorized recording of a live performance. Examples include bootleg recordings of live concerts and unauthorized recordings of live performances. Under the Copyright Act, such recordings are not entitled to copyright protection because the recordings are not fixed by or under the authority of the author (i.e., the performers). Performers of bootlegged musical performance have a cause of action against bootleggers, despite not having ownership. Kihn v Bill Graham Archives, LLC (CD Cal 2020) 445 F Supp 3d 234, 256. See §1.2.

Literary and graphic characters are subject to copyright protection when they “constitute the story being told in a work.” Daniels v Walt Disney Co. (9th Cir 2020) 958 F3d 767, 773. The Ninth Circuit described this as “a high bar, since few characters so dominate the story such that it becomes essentially a character study”; ancillary characters that are “only the chessman in the game of telling the story” are not entitled to copyright protection. 958 F3d at 773. See §1.4.

The U.S. Supreme Court has created the “government edicts doctrine,” which applies to state and local governments as well as to the federal government (see 17 USC §105). Georgia v Public.Resource.Org, Inc. (2020) ___ US ___, 140 S Ct 1498, 1506. The doctrine applies to works created by judges and legislators in the course of their judicial or legislative capacities (e.g., judicial opinions, statutes, and legislative histories). The doctrine can also apply to works created by private entities through a work made for hire agreement with the legislature and when the work serves a legislative function, such as annotations to statutes. 140 S Ct at 1508. In contrast, the government edicts doctrine does not extend to parts of a court reporter created by a private party and not subject to a work made for hire agreement, like headnotes, summaries, syllabi, and tables of contents. 140 S Ct at 1507. See §1.4D.

It is well settled that the voluntary, unauthorized downloading, copying, and uploading of copyrighted works violates the reproduction right. See Oracle Am., Inc. v Hewlett Packard Enter. Co. (9th Cir 2020) 971 F3d 1042, 1050. See §1.9.

A licensee of an exclusive copyright has standing to sue for copyright infringement if the infringement occurred during the term of the license and the infringement implicated the specific right held by the licensee. Tresona Multimedia, LLC v Burbank High Sch. Vocal Music Assoc. (9th Cir 2020) 953 F3d 638, 645. If, however, less than all co-owners of a copyright attempt to independently grant an exclusive license, the licensee does not have standing to sue. This result dovetails with the principle that the holder of a nonexclusive license does not have standing to use. 953 F3d at 646. See §1.16.

To show substantial similarity, the Ninth Circuit employs a two-part test: An objective, extrinsic test and a subjective, intrinsic test. The extrinsic test has three parts: First, the plaintiff must identify similarities between the copyrighted work and the accused work. Second, the court must determine which similarities constitute protectable material and which are unprotectable material or material the use of which has been authorized. Finally, after disregarding the unprotectable and authorized-use material, the court must determine the scope of protection for the work as a whole. Corbello v Valli (9th Cir 2020) 974 F3d 965, 974. See §1.22.

Contributory infringement has a threshold requirement of direct infringement by third parties. Vicarious infringement has a threshold requirement of direct infringement by third parties. Oracle Am., Inc. v Hewlett Packard Enter. Co. (9th Cir 2020) 971 F3d 1042, 1050. See §1.25.

Bootlegging is the unauthorized fixation of a live performance. Because the copy is not made by or under the authority of the author (i.e., the performers), bootleg copies of live performances are not entitled to copyright protection. Kihn v Bill Graham Archives, LLC (CD Cal 2020) 445 F Supp 2d 234, 256. Congress has created a cause of action for music performers who are victims of bootlegging. See 17 USC §1101. Under §1101, bootlegging only applies to the unauthorized recording, public performance, or distribution of musical peformances. If the plaintiff has standing under §1101, the plaintiff has the same remedies as provided in 17 USC §§502 and 505. See §1.29A.

The 3-year statute of limitations starts running when the plaintiff has constructive knowledge of the claim, not actual knowledge. Oracle Am., Inc. v Hewlett Packard Enter. Co. (9th Cir 2020) 971 F3d 1042, 1047. Constructive knowledge is defined as enough information to warrant an investigation which, if reasonably diligent, would lead to the discovery of the claim. 971 F3d at 1047. Whether the plaintiff conducted an investigation is irrelevant. See §1.30.

In interpreting the scope of a copyright license, courts will employ state law canons of contract construction, but only to the extent those rules of interpretation do not interfere with federal copyright law or policy, chief among them the policy to protect authors’ rights. Oracle Am., 971 F3d at 1051. Interpreting a license is a question of law. Great Minds v Office Depot, Inc. (9th Cir 2019) 945 F3d 1106, 1110. See §1.31.

The Copyright Act grants courts discretion to award costs and “reasonable attorney’s fee[s]” to the prevailing party. 17 USC §505. Not all claims involving copyrights are subject to §505; rather, only claims involving the validity of a copyright and copyright infringement (including declaratory relief actions) are subject to that section. Doc’s Dream, LLC v Dolores Press, Inc. (9th Cir 2020) 959 F3d 357, 359. Claims and defenses that do not require making legal determinations under the Copyright Act, such as an accounting or failure to pay royalties under a license, are not subject to §505. 959 F3d at 361. See §1.35.

On December 27, 2020, the Copyright Alternative in Small-Claims Enforcement Act of 2020 (the CASE Act) (17 USC §§1501–1511) was enacted as part of the Consolidated Appropriations Act, 2021 (116 Pub L 260, 134 Stat 1182). The CASE Act establishes a Copyright Claims Board (CCB) in the Copyright Office to hear copyright infringement matters. The CASE Act (1) caps damages at $30,000 total (including statutory damages of $15,000 per work, and $7500 per work for which an application was not filed in accordance with 17 USC §412 timelines); (2) provides an opt-out alternative for the respondent; (3) includes streamlined procedures that limit discovery and rely mostly on written materials; (4) allows claims by both copyright owners and users for infringement and exceptions and limitations, respectively; and (5) includes additional fees for bad faith claimants and bars those who repeatedly abuse the system. See §1.35A.

Congress attempted to abrogate sovereign immunity for copyright infringement lawsuits by enacting 17 USC §511(a). However, the Supreme Court held that US Const Art I, §8, cl 8 (the Intellectual Property clause) and §5 of the Fourteenth Amendment are insufficient for Congress to abrogate sovereign immunity. Allen v Cooper (2020) ___ US ___, 140 S Ct 994. See §1.36.

Whether a specific use constitutes a “fair use” or an infringement is not subject to a bright-line analysis, and requires a case-by-case approach. Dr. Seuss Enters., L.P. v ComicMix LLC (9th Cir 2020) 983 F3d 443, 451. See §1.39.

In Google LLC v Oracle Am., Inc. (2021) 593 US ___, 141 S Ct 1183, Google had copied a limited part of the so-called declaring code portion of the Sun Java SE program—that portion of the program called an Application Programming Interface (API). The Supreme Court held, as a matter of law, that Google’s copying of part of the Sun Java API was a fair use. Google’s copying involved only those lines of code necessary to allow software developers to put their skills to work creating a brand new and transformative program (the so-called implementing code) for Google’s new Android smartphone platform. See §§1.40, 1.41, 1.49A, 1.50, 1.54, 1.55.

The unauthorized use of intellectual property within video games is becoming a heavily litigated issue. In Solid Oak Sketches, LLC v 2K Games, Inc. (SD NY 2020) 449 F Supp 3d 333, a tattoo artist sued the publisher of the National Basketball Association (NBA) video game series for depicting Solid Oak’s tattoo designs on certain digitized versions of NBA players in the video game. The district court held that the depiction of player tattoos in the video game was transformative because the original purpose was for the players to express themselves through body art, while the tattoos in the video game were used to help identify the players themselves and the particulars of the tattoos were not observable. 449 F Supp 3d at 347. See §1.45D.

An issue arises with e-commerce websites that allow third parties to sell products on the website, such as Amazon and eBay. Courts have found that when the website is not actively involved in the listing, bidding, sale, and delivery of the infringing content, there is no right and ability to control. See Hendrickson v eBay, Inc. (CD Cal 2001) 165 F Supp 2d 1082, 1094; Hendrickson v Amazon.com, Inc. (CD Cal 2003) 298 F Supp 2d 914, 918. However, print on demand websites that allow users to submit images to be printed on a wide variety of products do have the right and ability to control infringement. See Sid Avery & Assocs. v Pixels.com, LLC (CD Cal, Feb. 24, 2021, No. CV 18-10232-CJC (JEMx)) 2021 US Dist Lexis 35620. See §1.80.

Automated takedown notices (also known as robo-notices) are particularly problematic under the subjective good faith belief requirement, because automated processes cannot make determinations on fair use or whether the party had a license. A key takeaway is that although automated processes can identify potential infringement, it is good practice to have an individual review the use and make a fair use/license determination prior to issuing the notice. See Enttech Media Grp. LLC v Okularity, Inc. (CD Cal. Oct. 2, 2020, No. 2:20-cv-06298 RGK (Ex)) 2020 US Dist Lexis 222489. See §1.83.

Patents

There is a fine line between how comprehensive a response to an examiner’s rejection should be and how cursory a response can be to achieve allowance. If a response is comprehensive, the applicant increases the likelihood that statements made in the response can be used against the applicant during litigation. If the response is too cursory, the applicant runs the risk of forfeiting an issue on appeal. See, e.g., In re Google Tech. Holdings LLC (Fed Cir 2020) 980 F3d 858, 863 (“we decline to hear Google’s new arguments…. Google has not provided any reasonable explanation as to why it never argued to the examiner during the iterative examination process or later to the Board”). See §2.10.

The venue where a corporate defendant can be sued is becoming more limited. Under the patent venue statute, 28 USC §1400(b), a patent infringement suit can be brought against a defendant “in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.” With respect to the residency requirement, the Supreme Court has held “a domestic corporation ‘resides’ only in its State of incorporation for purposes of the patent venue statute.” TC Heartland v Kraft Foods Group Brands (2017) ___ US ___, 137 S Ct 1514, 1517. With respect to the requirement of a regular and established place of business, the Federal Circuit has held “(1) there must be a physical place in the district; (2) it must be a regular and established place of business; and (3) it must be the place of the defendant.” In re Cray, Inc. (Fed Cir 2017) 871 F3d 1355, 1360. See §2.16A.

An inter partes review (IPR) is available for patents regardless of the effective filing date; however, for applications filed on or after March 16, 2013, an IPR cannot be filed until 9 months after the patent is granted or, if a PGR was filed, after termination of the PGR, whichever is later. Grounds for initiating an IPR are limited to anticipation and obviousness based only on patents and printed publications. 35 USC §311(b). See also Samsung Electronics America v Prisua Engineering (Fed Cir 2020) 948 F3d 1342, 1350. Note, however, that once the IPR is instituted, any substitute claim can be reviewed for compliance with other patentability requirements, such as whether the substitute claim meets the patent eligibility standard of 35 USC §101, even though patent eligibility is not a grounds to initiate the IPR. See UNILOC 2017 LLC v HULU, LLC (Fed Cir 2020) 966 F3d 1295, 1304. See §2.17.

It is important to keep in mind that the two-step patent eligibility test is applied to the claims. Therefore, when relying on a feature of the invention to demonstrate patent-eligible subject matter, that feature should be expressly recited in the claims and not left as an inference based on the written description. In Ericsson v TCL Communication Technol. Holdings (Fed Cir 2020) 955 F3d 1317, Ericsson argued that the inventive concept that transforms the claims into patent-eligible subject matter was in a particular layered software architecture, which was described in the written description. 955 F3d at 1328. The Federal Circuit rejected Ericsson’s arguments because the features relied on were not expressly claimed: “Ericsson misstates the role of the specification, which ‘cannot be used to import details from the specification if those details are not claimed.’” 955 F3d at 1328 (citation omitted). See §2.18A.

In Simio, LLC v Flexsim Software Products, Inc. (Fed Cir 2020) 983 F3d 1353, however, the Federal Circuit continued to carve out a distinction between improving a computer’s functionality (which could be patent-eligible subject matter) versus improving a user’s experience (which is considered an abstract idea) with a new program or software. The court held that a computer-based system that utilizes graphics instead of writing programming code to create object-oriented simulations was directed to an abstract idea because it did not improve computer functionality, but rather, the user experience. Similarly, in Customedia Technol., LLC v Dish Network Corp. (Fed Cir 2020) 951 F3d 1359, the Federal Circuit found a data delivery system for providing automatic delivery of multimedia data products from one or more multimedia data product providers, although possibly improving the abstract concept of targeted advertising, did not improve the actual functioning of the computer itself because the computer was merely being used as a tool in a system for advertising. 951 F3d at 1365. See §2.19.

Trademarks

A generic second-level domain (SLD) combined with a top-level domain suffix such as “.com” or “.biz” (TLD) can create a descriptive mark that is eligible for protection on proof that it has acquired distinctiveness or secondary meaning. See United States Patent and Trademark Office v Booking.com BV (2020) ___ US ___, 140 S Ct 2298. In Booking.com, the U.S. Supreme Court rejected the USPTO’s sweeping rule that a trademark consisting of a generic word plus “.com” is generic as a matter of law. The Court found that “[a] compound of generic elements is generic if the combination yields no additional meaning to consumers capable of distinguishing the goods or services.” 140 S Ct at 2306 (emphasis in original). Finally, the Court held that “[w]hether any given ‘generic.com’ term is generic … depends on whether consumers in fact perceive that term as the name of a class or, instead, as a term capable of distinguishing among members of the class.” 140 S Ct at 2307. See §3.45.

In Starbucks Corp. v Wolfe’s Borough Coffee, Inc. (2d Cir 2009) 588 F3d 97, 110, the Court of Appeals for the Second Circuit rejected Starbucks’ claim that Wolfe’s Borough Coffee’s use of the CHARBUCKS mark for coffee resulted in tarnishment because the Charbucks line of coffee was marketed as a product of very high quality. See §3.65.

“[A] famous mark is one that has become a ‘household name.’” Blumenthal Distrib., Inc. v Herman Miller, Inc. (9th Cir 2020) 963 F3d 859, 870 (quoting Thane Int’l, Inc. v Trek Bicycle Corp. (9th Cir 2002) 305 F3d 894, 908). Other examples of trademarks that have been found to be famous include NIKE (Nike, Inc. v Nikepal Int’l, Inc. (ED Cal Sep. 7, 2007, No. 2:05-cv-1468- GEB-JFM) 2007 US Dist Lexis 66686); STARBUCKS (Starbucks Corp. v Wolfe’s Borough Coffee, Inc. (2d Cir 2009) 588 F3d 97, 105); and the trade dress of Apple’s iPhone (Apple, Inc. v Samsung Electronics Co., Ltd. (ND Cal 2013) 920 F Supp 2d 1079, 1097). See §3.66.

Independent Contractors

In Vazquez v Jan-Pro Franchising Int’l, Inc. (2021) 10 C5th 944, the California Supreme Court held that Dynamex Operations W., Inc. v Superior Court (2018) 4 C5th 903 applies retroactively to all nonfinal cases that predate the effective date of the Dynamex decision. See §4.13.

The ABC test in the Dynamex decision was first codified by the California state legislature in 2019 with the enactment of AB 5 (Stats 2019, ch 296). Assembly Bill 5 specifically codified the presumption of employee status in Dynamex but added a number of exceptions. The legislature amended the provisions of AB 5 in 2020, by enacting AB 2257 (Stats 2020, ch 38) and AB 323 (Stats 2020, ch 31). The California statutes now applicable to independent contractor classification are Lab C §§2775–2787 and the statutes enacted by Proposition 22 (Bus & P C §§7448–7467 and Rev & T C §17037). See §4.13.

Labor Code §§2775–2787 apply generally for purposes of the Labor Code and the Unemployment Insurance Code, and for purposes of wage orders issued by the Industrial Welfare Commission. See Lab C §2775(b)(1). They do not distinguish between exempt and nonexempt employees, except those listed in Lab C §§2776–2784, subject to specified conditions. See §4.14.

The ABC test in the Dynamex decision was first codified by the California state legislature in 2019 with the enactment of AB 5 (Stats 2019, ch 296). The legislature amended the provisions of AB 5 in 2020 by enacting AB 2257 (Stats 2020, ch 38) and AB 323 (Stats 2020, ch 31). The statutes enacted by the legislature that are now applicable to independent contractor classification are Lab C §§2775–2787. The ABC test for employee status in Dynamex is specifically codified in Lab C §2775(b)(1). See §4.14A.

Labor Code §§2776–2784 contain an extensive list of occupations and relationships that are excepted from the ABC test, subject to certain conditions specified in the statutes. The exceptions include, without limitation, professional service providers including graphic designers, fine artists, photographers, photojournalists, freelance writers, editors, and content contributors; recording artists, songwriters, and musicians; construction industry contractors and subcontractors; certain licensed professionals including insurance brokers, real estate brokers, physicians, dentists, other health care professionals, lawyers, architects, engineers, accountants, private investigators, securities brokers, and investment advisers; direct sales salespersons; and commercial fishermen. The conditions specified for each exception are detailed and must be reviewed carefully. Workers who do not satisfy the conditions of the ABC test and are not expressly excepted in the statutes are evaluated in accordance with the California Supreme Court’s prior decision in Borello. See Lab C §§2775(b)(3), 2785(d). See §4.14A.

In November 2020, California voters approved Proposition 22 (Bus & P C §§7448–7467 and Rev & T C §17037), a measure sponsored by Uber, Lyft, and DoorDash, which allows app-based ride-hailing and delivery companies (called “network companies” under the measure, see Bus & P C §7463) to continue treating their workers as independent contractors provided that the companies offer certain benefits to those workers. In effect, Proposition 22 creates an additional exception to Lab C §2775(b)(1). See §4.14A.

Cloud Computing

In 2020, the State Bar’s Standing Committee on Professional Responsibility and Conduct issued California State Bar Formal Opinion No. 2020–203, available at https://www.calbar.ca.gov/Portals/0/documents/ethics/Opinions/Formal-Opinion-No-2020-203-Data-Breaches.pdf, to address lawyers’ obligations in the face of data breaches, i.e., situations where unauthorized third parties have obtained access to electronically stored confidential client information in a lawyer’s possession. The opinion provides that lawyers who use electronic devices containing confidential client information must assess the risks of keeping such data on electronic devices and computers, and take reasonable steps to secure their electronic systems to minimize risk of unauthorized access. In event of a breach, lawyers have an obligation to conduct a reasonable inquiry to determine the extent and consequences of the breach and to notify any client whose interests have a reasonable possibility of being negatively impacted by the breach. See §6.57.

Electronic Contracting

As evidenced by the court’s remarks in Wilson v HUUUGE, Inc. (9th Cir 2019) 944 F3d 1212, courts are becoming weary of parties seeking to enforce arbitration agreements buried in such a way that meaningful notice is not provided. HUUUGE provides a casino gaming app and, after downloading the app and playing it for over a year, the plaintiff sued HUUUGE on behalf of a putative class for alleged violations of Washington State gambling and consumer protection laws. 944 F3d at 1214. HUUUGE moved to compel arbitration based on the app’s terms of use. Users could review the terms before downloading the app, but only after scrolling through multiple screens of text and copying and pasting a URL, or during game play, but then only by clicking through screens in the app’s settings menu. The court stated that “the user would need Sherlock Holmes’s instincts” to discover the app’s terms, and concluded that the app did not give reasonably prudent users constructive notice of the arbitration provision. 944 F3d at 1214. The court rejected HUUUGE’s argument that repeated use of the app put the user on constructive notice, observing that “[o]nly curiosity or dumb luck might bring a user to discover the Terms” since “there is no reason to assume users will click on the settings menu simply because it exists.” 944 F3d at 1221. See also Stover v Experian Holdings, Inc. (9th Cir 2020) 978 F3d 1082, 1086. See §7.4.

Privacy

Cookie technology has become very complex since cookies were first introduced. Businesses incorporate first party cookies (i.e., cookies created and stored by the website the user is visiting) and third party cookies (i.e., cookies created and placed by third parties on another website) within their websites, advertisements, and e-mails for a variety of purposes, including to match individuals across browsers and devices, and create complex profiles. Cookies are often used to sync information with pixels and other tracking technologies. These practices have led to significant privacy concerns around the use of cookies, especially when consumers do not have adequate notice or choice with respect to that usage. See §9.4.

Companies that use facial recognition technologies or that process biometric information likely need to obtain affirmative express consent from consumers prior to data collection or processing, but should always process data consistent with their privacy policies and other affirmative consumer-facing representations. See In re Everalbum, Inc. (January 11, 2021) FTC File No. 1923172 (see https://www.ftc.gov/enforcement/cases-proceedings/1923172/everalbum-inc-matter). In its administrative complaint, the FTC alleged that a California company, Everalbum, Inc., misrepresented the manner in which it applied facial recognition technology to photos and videos that consumers uploaded through the “Ever” mobile application, browser application, and social media accounts for storage on Everalbum’s cloud-based storage service. See §9.9.

In IMDb.com, Inc. v Becerra (9th Cir 2020) 962 F3d 1111, the court ruled that CC §1798.83.5 was unconstitutional for violating a website’s First Amendment speech rights. Civil Code §1798.83.5 was passed with the intention of prohibiting commercial online entertainment employment service providers from publishing or sharing a subscriber’s date of birth or age information in online profiles; however, it was subsequently found to restrict noncommercial speech in violation of the First Amendment and invalidated. See §9.18.

In November 2020, California voters approved Proposition 24, called the California Privacy Rights Act of 2020 (CPRA). See https://vig.cdn.sos.ca.gov/2020/general/pdf/topl-prop24.pdf. As described in §9.18B, when it becomes effective, the CPRA will make significant changes to the California Consumer Privacy Act of 2018 (CCPA) (CC §§1798.100–1798.199.100). The CPRA amends the original CCPA in several significant ways, including the establishment of a new law enforcement agency, a new definition of “sensitive data” with further limits on use and sharing, and expanded liability for data breaches. The CPRA grants consumers the right to opt out of a business’s sharing of personal information and requires that business implement certain methods to allow consumers to exercise that right. A business engaged in sharing must provide a link on the homepage of the business’s website titled “Do Not Sell or Share My Personal Information.” CC §1798.135(a). The CPRA broadens the scope of the original CCPA’s small business exemption by raising the threshold for applicability to businesses that process for commercial purposes personal information of from 50,000 to 100,000 consumers or households. See CC §1798.140(d)(1)(A). In general, the CPRA takes effect on January 1, 2023. Many of the obligations found in the original CCPA remain in effect in the CPRA, but the CPRA includes additional obligations. Businesses should start preparing now for the CPRA because it has a “look back” provision to January 1, 2022. See §§9.18A–9.18B.

In 2020, mobile app developer Hyperbeard settled FTC charges that it violated the Children’s Online Privacy Protection Act of 1998 (COPPA) (15 USC §§6501–6506) by allowing third-party ad networks to collect personal information from children playing the company’s child-directed games, without notifying parents or obtaining verifiable parental consent as required by COPPA. The settlement highlights an operator’s strict liability under COPPA for data collected by third parties through its service. Here, Hyperbeard had not notified the third-party ad networks embedded within its apps that the apps were directed to children. In the settlement, Hyperbeard agreed to pay a $4 million civil penalty, suspended on payment of $150,000. See https://www.ftc.gov/news-events/press-releases/2020/06/developer-apps-popular-children-agrees-settle-ftc-allegations-it. See §9.33.

From 2016 to 2020, many U.S. data importers relied on the Privacy Shield Framework agreed to by the EU Commission and the U.S. for data transfers and enforced by the U.S. Department of Commerce and the FTC through cooperation with EU data protection authorities. However, in July 2020, the Court of Justice of the European Union (CJEU) invalidated the Privacy Shield as a transfer mechanism in the Schrems II case. See Data Protection Commissioner v Facebook Ireland Ltd & Maximillian Schrems, Case C-311/18 (July 16, 2020). Data transfers reliant on Privacy Shield are no longer lawful, and U.S. data importers that relied on Privacy Shield must update their policies and practices, as well as turn to an alternative transfer mechanism. See §9.38.

Most U.S. data importers rely on Standard Contractual Clauses (SCCs), which are agreements executed by data exporters and data importers to ensure appropriate safeguards for the transfer of personal data. SCCs are not without risk, however, because the CJEU indicated in its July 2020 ruling that data transfers to the U.S. may be inherently problematic due to government surveillance issues and may require supplemental measures by data exporters and data importers to protect personal data. In addition, in November 2020, the EU Commission published revised draft SCCs that, if approved, would replace the current SCCs. Businesses that export or receive personal data from the EU should pay close attention to developments around the SCCs. See §9.38.

California’s enactment of the California Consumer Privacy Act (CCPA) (CC §§1798.100–1798.199.100) fundamentally changed the requirements of a privacy policy for any business operating within the state (whether based in California or not). The CCPA expanded both the requirements for a privacy policy under the California Online Privacy Protection Act of 2003 (OPPA) (Bus & P C §§22575–22579) and the applicability of OPPA, requiring more specific disclosures and information regarding consumer rights and how to exercise them. The form of privacy policy in §9.44 has been revised to conform with the CCPA and OPPA. See §§9.43–9.44.

Advertising on the Internet

An attorney is not responsible for the content of an attorney’s profile on a professional online directory and rating website created and maintained by a third party. However, if the attorney chooses to exercise control over the profile’s content by “adopting” the profile on the directory itself or otherwise using the profile to market the attorney’s practice, the attorney becomes responsible for its content. State Bar Formal Opinion No. 2019–199. See §17.10D.

Cybersecurity

As part of the Notification and Federal Employee Anti-discrimination and Retaliation Act of 2002 (No FEAR Act) (Pub L 107–174, 116 Stat 566), the federal government creates and disseminates resources for individuals to protect themselves and recover from cyberattacks. These resources are available at this website, which is continually updated: https://www.ready.gov/cybersecurity. See §18.3.

The State Bar of California’s Standing Committee on Professional Responsibility and Conduct (COPRAC) Formal Opinion No. 2020–203 provides that attorneys who use electronic devices that contain confidential client information must assess the risks of keeping such data on electronic devices and computers, and take reasonable steps to secure their electronic systems to minimize the risk of unauthorized access. In the event of a breach, lawyers have an obligation to conduct a reasonable inquiry to determine the extent and consequences of the breach and to notify any client whose interests have a reasonable possibility of being negatively impacted by the breach. See §18.6A.

In United States v Peterson (9th Cir 2019) 776 Fed Appx 533, 534 n.3, the court identified “refrigerators with Internet connectivity, Fitbit™ watches, etc.” as likely falling within the definition of “computer” in the Computer Fraud and Abuse Act (CFAA) (18 USC §1030). See §18.17.

On November 30, 2020, the Supreme Court heard oral argument in Van Buren v United States (11th Cir 2019) 940 F3d 1192, cert. granted (2020) ___ US ___, 140 S Ct 2667. The certified question presented was whether a person who is authorized to access information on a computer for certain purposes violates 47 USC §1030(a)(2) if that person accesses the same information for an unauthorized purpose. In other words, can a defendant be criminally liable for exceeding authorized access? The case should resolve a Circuit split between the First, Fifth, Seventh, and Eleventh Circuits (which have answered “yes”) and the Second, Fourth, Sixth, and Ninth Circuits (which have answered “no”). See §18.19.

The Ninth Circuit, in In re Facebook Inc. Internet Tracking Litig. (9th Cir 2020) 956 F3d 589, addressed whether Facebook’s placement of a persistent cookie on a Facebook user’s computer, and the transmission of URL and other information by that cookie, violated the prohibition in the Electronic Communications Privacy Act of 1986 (ECPA) (Pub L 99–508, 100 Stat 1848) on the interception of electronic communications. Based on the technical nature of the transmission of information to Facebook, the court concluded that Facebook was not a party to the intercepted communication. As a result, the party exception to the ECPA and Facebook could, in theory, be subject to liability under the ECPA. The Ninth Circuit reversed the dismissal of that claim, and remanded to the district court. See §18.28.

The Federal Bureau of Investigation (FBI) provides a mechanism for filing complaints regarding ransomware attacks: https://www.ic3.gov/Home/Ransomware and has issued a Public Service Announcement, available at https://www.ic3.gov/Media/Y2019/PSA191002, warning that ransomware attacks are becoming more targeted, sophisticated, and costly. Ransomware attacks constituted 81 percent of financial-based cyberattacks in 2020. https://atlasvpn.com/blog/ransomware-accounts-for-81-of-all-financially-motivated-cyberattacks-in-2020. See §18.38.

In In re Facebook, Inc. Internet Tracking Litig. (9th Cir 2020) 956 F3d 589, the district court had dismissed a trespass to chattels claim based on its conclusion that the plaintiffs had failed to demonstrate that an actual injury occurred through the transmission of plaintiffs’ browsing history to Facebook. See generally Intel Corp. v Hamidi (2003) 30 C4th 1342, 1351. The Ninth Circuit reversed, finding that plaintiffs’ allegation that Facebook was unjustly enriched was sufficient to confer standing in federal court. 956 F3d at 599. See §18.41.

The defendant in WhatsApp Inc. v NSO Grp. Techs. Ltd. (ND Cal. 2020) 472 F Supp 3d 649, was alleged to be an agent of the Israeli government that manufactured, distributed, and operated surveillance technology designed to intercept and extract information and communications from mobile phones, in particular through the WhatsApp app. Among other claims, WhatsApp Inc. asserted trespass to chattels. The plaintiff did not assert that the actions of the defendant, sending “approximately 1,400 messages out of the 1.5 billion people in 180 countries who use the WhatsApp service … impaired the physical functioning of WhatsApp’s servers.” 472 F Supp 3d at 684. Instead, WhatsApp asserted it had suffered “consequential economic damages, such as the expenditure of resources responding to the breach, and the loss of goodwill in WhatsApp’s business due to a perceived weakness in WhatsApp’s encryption or its services.” 472 F Supp 3d at 685. The court found that WhatsApp had not sufficiently alleged any actual harm arising from the defendant’s actions, and dismissed the complaint with leave to amend. See §18.41A.

Jurisdiction

In AMA Multimedia, LLC v Wanat (9th Cir 2020) 970 F3d 1201, the court held that the defendant was not subject to personal jurisdiction because he did not purposefully direct his activities at the United States, the U.S. was not the focal point of the website or the harm suffered by the plaintiff; the website lacked a forum-specific focus and the volume of U.S.-generated content did not show that the site was expressly aimed at the U.S. market. See §19.8.

Making a substantial number of sales of goods or services to California residents via one’s own website is sufficient to establish personal jurisdiction. However, sales must be substantial, not random, isolated, or fortuitous. Thurston v Fairfield Collectibles of Georgia, LLC (2020) 53 CA5th 1231, 1240 (company made 8 to 10 percent of its sales to California residents, totaling $320,000 to $375,000 a year; court found that this was “the equivalent of having a brick-and-mortar store in California—a ‘virtual store’”). See §19.9.

First Amendment and Other Speech-Related Liability

The First and Fourteenth Amendments prohibit content-based restrictions on speech. Reed v Town of Gilbert (2015) 576 US 155, 135 S Ct 2218. A content-based restriction is one that “by its very terms, singles out particular content for differential treatment.” IMDb.com Inc. v Becerra (9th Cir 2020) 962 F3d 1111, 1120. Content-based restrictions are “presumptively invalid.” 962 F3d at 1120, quoting R.A.V. v City of St. Paul (1992) 505 US 377, 382, 112 S Ct 2538, 2542. Content-based restrictions are subject to strict scrutiny (i.e., the government must show a compelling state interest for the action and that it was narrowly tailored to achieve that interest). Reed, 576 US at 164, 135 S Ct at 2227. See §20.19B.

If an anti-SLAPP motion is granted, the plaintiff cannot seek leave to amend the dismissed causes of action, even when those actions are based on completely different conduct. See Medical Marijuana, Inc. v ProjectCBD.com (2020) 46 CA5th 869, 900; Simmons v Allstate Ins. Co. (2001) 92 CA4th 1068, 1073. The policy consideration is that allowing leave to amend would effectively circumvent the purpose of the anti-SLAPP statute by allowing protracted and costly litigation. See §20.77.

If federal claims are brought in state court, they may be subject of an anti-SLAPP statute. Patel v Chavez (2020) 48 CA5th 484, 487; Vergos v McNeal (2007) 146 CA4th 1387, 1402. The anti-SLAPP statute will apply to federal claims in state court unless (1) the federal statute provides otherwise, or (2) the anti-SLAPP statute affects plaintiffs’ substantive federal rights and is, therefore, preempted. To date, the federal claims brought in state court that have involved the anti-SLAPP statute have been civil rights claims under 42 USC §1983. Those cases have uniformly held that the anti-SLAPP statute applies to those claims. See Patel, 48 CA5th at 488; Vergos, 146 CA4th at 1392 n4; Bradbury v Supreme Ct. (1996) 49 CA4th 1108, 1118. However, if a federal claim is brought in federal court, the claim is not subject to an anti-SLAPP motion. See §20.77.

In Balla v Hall (2021) 59 CA5th 652, the court of appeal held that anti-SLAPP motions do not have to be denied entirely if the claims are actionable in part because an anti-SLAPP motion can reach separate claims within a single pleaded cause of action. See §20.78.

Reviews posted to an Internet website are protected activity under CCP §425.16(e)(3). Abir Cohen Treyzon Salo, LLP v Lahiji (2019) 40 CA5th 882, 887 (negative Yelp! review for law firm); Wilbanks v Wolk (2004) 121 CA4th 883, 895 (negative review posted on defendant’s own website). The website constitutes a public forum and the consumer protection information is a matter of public interest. Chaker v Mateo (2012) 209 CA4th 1138, 1144. See §20.88.

Speech that might ordinarily be lawful under ordinary circumstances can constitute a breach of contract if a confidentiality agreement is in place. In Monster Energy Co. v Schechter (2019) 7 C5th 781, the California Supreme Court held that, when a settlement agreement contains terms binding the attorney and the attorney signs, the attorney is bound to the agreement, even when the signature block states “approved as to form and content.” 7 C5th at 791. When the agreement does not contain provisions demonstrating the attorney is to be bound, an attorney’s signature under a signature block with the phrase “approved as to form and content” merely signifies that counsel has read the document, the document embodies the parties’ agreement, and counsel sees no issue with the client signing the document. 7 C5th at 792. See §20.93A.

In Murphy v Twitter, Inc. (2021) 60 CA5th 12, 25, the court held that Twitter exercised traditional publisher functions in removing a user’s tweets and suspending his account, thus the lawsuit was barred by 47 USC §230. See §20.125.

In Bolger v Amazon.com, LLC (2020) 53 CA5th 431, 465, the court held that 47 USC §230 did not apply because the plaintiff’s products liability claim was based on the role of Amazon.com in the chain of production and distribution of a defective product, not the contents of the product listing. See §20.126.

International

On January 21, 2019, the French Data Protection Authority (CNIL) imposed a financial penalty of €50 million against Google, LLC under the GDPR, for lack of transparency, inadequate information, and lack of valid consent to process data for targeted advertising purposes. Google appealed, and on June 19, 2020, the French Administrative Supreme Court (Conseil d’Etat) dismissed Google LLC’s appeal and upheld the fines. This decision represents a landmark in GDPR enforcement, levying the highest fine issued to date under the GDPR in the European Union. See https://www.cnil.fr/en/cnils-restricted-committee-imposes-financial-penalty-50-million-euros-against-google-llc. See §21.11A.

On July 16, 2020, the Court of Justice of the European Union (CJEU) in Data Protection Commissioner v Facebook Ireland Limited and Maximillian Schrems (Schrems II) (Case C-311/18) invalidated the EU-U.S. Privacy Shield as an adequate safeguard when transferring personal data from the EU to the United States. This decision was made primarily due to potential unrestricted U.S. government access. The court stated: “Furthermore, national security, public interest and law enforcement requirements of the United States prevail over the safe harbour scheme, so that United States undertakings are bound to disregard, without limitation, the protective rules laid down by that scheme where they conflict with such requirements. The United States safe harbour scheme thus enables interference, by United States public authorities, with the fundamental rights of persons,” For a summary of the ruling, see: https://curia.europa.eu/jcms/upload/docs/application/pdf/2015-10/cp150117en.pdf. See §21.11C.

The Schrems II case did uphold the use of EU Commission standard contractual clauses (SCCs) for data transfers outside the EU. Note that additional supplementary contractual provisions may be required to be imposed by the data controller to ensure compliance beyond the SCCs depending on the circumstances, in accordance with the European Data Protection Board’s guidance. See Recommendations 01/2020 on measures that supplement transfer tools to ensure compliance with the EU level of protection of personal data at https://edpb.europa.eu/our-work-tools/public-consultations-art-704/2020/recommendations-012020-measures-supplement-transfer_en. Therefore, all data transfers from the EU to other countries now must be assessed on a case-by-case basis to determine whether additional clauses, in addition to those afforded under the SCCs are required. See §21.11C.

Before the Schrems II decision, organizations had been able to self-certify with the International Trade Administration (ITA), which was administering the so-called EU-U.S. Privacy Shield Framework within the U.S. Department of Commerce, through this link: https://www.privacyshield.gov/Program-Overview. As a result of Schrems II (and a parallel decision of a Swiss commission), the ITA’s website now states that the Privacy Shield Framework is no longer a valid mechanism to comply with EU or Swiss data protection requirements when transferring personal data from the European Union or Switzerland to the United States. However, the ITA also states that participants are not relieved of their obligations under the EU-U.S. Privacy Shield Framework, and that the U.S. Department of Commerce will continue to administer the EU-U.S. Privacy Shield program, including processing submissions for self-certification and re-certification to the Privacy Shield Framework and maintaining the Privacy Shield list. See §20.12.

About the Authors

CLARA RUYAN MARTIN received her B.A. degree from the University of California, Berkeley, in 1985 and her J.D. degree from the University of Michigan Law School in 1989. She was a founding partner of the Los Angeles law firm Cadence Law Group LLP. She specializes in structuring, drafting, negotiation, and implementation of complex corporate and technology transactions. Her corporate work includes mergers and acquisitions, joint ventures, corporate finance, and venture representation. Her technology practice is broad, ranging from software licensing and development to strategic alliances and e-commerce. Ms. Martin is an adjunct professor at the University of Southern California School of Law. She has served on the Cyberlaw Committee of the State Bar of California and is a frequent lecturer on topics such as software licensing agreements, Internet-related agreements, complex joint ventures, venture finance, and mergers and acquisitions.

DAVID B. OSHINSKY received his B.A. degree from Yale University in 1991 and his J.D. degree from Columbia Law School in 1996, where he was a member of the Columbia Law Review. He is a founding partner of the Los Angeles law firm Cadence Law Group LLP. Mr. Oshinsky works with many start-up and early-stage companies, for which he provides counsel regarding their early operational, financing, and intellectual property requirements. He regularly assists clients with venture capital financing; technology transactions; and mergers, acquisitions, and related corporate transactions. In particular, his practice involves the structuring, drafting, and negotiating of technology licenses, website policies and agreements, software development agreements, and strategic alliances. Mr. Oshinsky has written and lectured on a broad range of technology topics, including website development agreements, strategic alliances, intellectual property issues in mergers and acquisitions, and Internet law in California.

About the 2021 Update Authors

ROM BAR-NISSIM is an associate at the Law Offices of Lincoln Bandlow, P.C. where his practice focuses on the digital, media, and entertainment industries with an emphasis on copyright and First Amendment litigation. Previously, Mr. Bar-Nissim was an associate at a national law firm with a similar practice. Mr. Bar-Nissim has litigated copyright cases throughout the country, including before the Ninth Circuit. He has litigated First Amendment and speech-related cases before the Supreme Court of California and the California Court of Appeal, and at the trial court level. He has coauthored several articles, public comments, and amicus briefs concerning copyright and digital issues. In 2014, he coauthored, with Professor Jack Lerner, a chapter on law enforcement practices for the American Bar Association publication Whistleblowers, Leaks and the Media: National Security and the First Amendment. Mr. Bar-Nissim received his B.F.A. in theater from Florida Atlantic University in 2002 and his J.D. from the University of Southern California Gould School of Law in 2013, where he won the Norma Zarky Award for Excellence in Entertainment Law. Mr. Bar-Nissim is Co-Executive Editor of this update, a 2021 update coauthor of chapters 1 and 14, and the 2021 update author of chapter 20.

KIMBERLY CULP is a director at Carr McClellan P.C., Burlingame (in Silicon Valley), where she works with digital media, video game, and consumer products companies to help them resolve their intellectual property and advertising issues. Ms. Culp has authored numerous articles on advertising issues, including New Media Affords New Ways to Deliver Advertising and Branded Content—and New Challenges, 31 CEB Cal Bus L Prac 92 (Summer 2016). She also regularly presents at industry conferences on these legal issues. Ms. Culp has been a “Super Lawyers Rising Star” every year since 2012. She received her undergraduate degree from the University of California, Davis, and her law degree from the University of California, Hastings College of the Law. Ms. Culp is the 2021 update author of chapter 17.

DANIEL M. GOLDBERG is counsel to Frankfurt Kurnit Klein & Selz P.C., Los Angeles, where he represents top brands, agencies, and technology providers in complex negotiations involving the collection, use, and monetization of data. He helps clients develop privacy and data security programs and policies, conduct due diligence for fundraising and acquisitions, and respond to data incidents and inquiries. He has spent the past 2 years helping clients address GDPR compliance, and is now actively working with clients to prepare for the CCPA, effective January 1, 2020. Mr. Goldberg is a writer and frequent public speaker on privacy, ad tech, and emerging technology, and has spoken at programs sponsored by ABA, NAD, CARU, and ESRB, among others. He co-chairs the Los Angeles chapter of IAPP, and is certified CIPP/US. Mr. Goldberg is a 2021 update coauthor of chapter 9.

AMY LAWRENCE is an associate with Frankfurt Kurnit Klein & Selz P.C., Los Angeles, where she advises clients across industries in privacy and data security matters. She represents multinational and emerging companies on all facets of data protection, processing, and monetization. Ms. Lawrence works with clients to develop privacy and data security programs and policies, respond to regulatory inquiries, and conduct privacy due diligence. She is certified as an Information Privacy Professional (CIPP/US). Ms. Lawrence received her undergraduate degree from the University of Pittsburgh, and her law degree from Fordham University School of Law. She is admitted to practice in both California and New York. Ms. Lawrence is a 2021 update coauthor of chapter 9.

JACK LERNER is Clinical Professor of Law at the University of California, Irvine, School of Law, and Director of the UCI Intellectual Property, Arts, and Technology Clinic. Professor Lerner received his B.A., with distinction, in English from the University of Kansas and his J.D. from Harvard Law School. He clerked for Judge Fred I. Parker on the U.S. Court of Appeals for the Second Circuit and Judge G. Thomas Van Bebber in the U.S. District Court for the District of Kansas. He practiced intellectual property law with the Palo Alto law firm Wilson Sonsini Goodrich & Rosati, P.C., and has taught at the University of California, Berkeley, School of Law and the University of Southern California Gould School of Law. In 2016, Professor Lerner was awarded the California Lawyer Attorney of the Year award for his work obtaining exemptions to the copyright laws that affect documentary filmmakers and authors nationwide. Professor Lerner is Co-Executive Editor of this update and a 2021 update coauthor of chapters 1 and 14.

ALEXANDER H. LUBARSKY received his B.A. from Lewis and Clark College and his J.D. and LL.M. from Golden Gate University School of Law. Mr. Lubarsky is a practicing litigator, electronic discovery consultant, and author. He has litigated hundreds of cases involving electronic discovery and has received numerous awards in the industry, including the TechnoLawyer @ Award. Mr. Lubarsky has been elected to the Executive Committee of the Law Practice Management and Technology Section of the State Bar of California and is on the editorial boards of several technology publications. He has consulted for numerous companies that provide electronic discovery support services, including Summation Legal Technologies, Inc.; Fios, Inc.; Guidance Software, Inc.; Daticon, LLC; and Zantaz, Inc. Mr. Lubarsky regularly consults with large law firms and Fortune 500 corporations in the area of ESI retention, e-discovery best practices, and litigation holds. Mr. Lubarsky is the author and 2021 update author of chapter 20A.

CLARA RUYAN MARTIN received her B.A. from the University of California, Berkeley, in 1985 and her J.D. from the University of Michigan Law School in 1989. She specializes in the structuring, drafting, negotiation, and implementation of complex corporate and technology transactions. Her corporate work includes mergers and acquisitions, joint ventures, corporate finance, and venture representation. Her technology practice is broad, ranging from software licensing and development to strategic alliances and e-commerce. Ms. Martin is an adjunct professor at the University of Southern California Gould School of Law. She has served on the Cyberlaw Committee of the State Bar of California and is a frequent lecturer on topics such as software licensing agreements, Internet-related agreements, complex joint ventures, venture finance, and mergers and acquisitions. Ms. Martin is the author and 2021 update author of chapters 6–8.

C. WOOK PAK is a partner with Cislo & Thomas LLP, Los Angeles, where he practices all aspects of intellectual property procurement and enforcement, including preparing and filing U.S. and international patent applications in a variety of technological fields, such as mechanical, pharmaceutical, energy, and business methods. He has publications in law and science, including a commentary published in the Berkeley Technology Law Journal, and has had a number of speaking engagements regarding patent law. Dr. Pak is a litigator and registered patent attorney. He received his B.S. in biophysics and biochemistry from Oregon State University, his Ph.D. in neuroscience from the University of California, Riverside, and his law degree from Loyola Law School in Los Angeles. Dr. Pak is the 2021 update author of chapter 2.

JEFFREY G. SHELDON received his J.D., summa cum laude, from Loyola Law School, Los Angeles; his B.S. in chemical engineering from the Carnegie Institute of Technology; and his M.S. in biomedical engineering from the University of Strathclyde, Glasgow, Scotland. His studies in Scotland followed his receipt of a Marshall Scholarship. Mr. Sheldon is a partner in Cislo & Thomas LLP, Los Angeles, and was the founding partner of Sheldon Mak & Anderson PC, Pasadena. He is past president of the intellectual property section of the State Bar of California, past president of the Los Angeles Intellectual Property Law Association, and past committee chairman for the AIPLA and IP section of the ABA. Mr. Sheldon served as a consultant in 2021 for chapter 2.

KENNETH L. WILTON is a partner in the Intellectual Property Practice Group of Seyfarth Shaw LLP, Los Angeles, and chair of the firm’s national trademark practice. Mr. Wilton’s practice focuses primarily on false advertising, trademark, copyright, and patent litigation in the U.S. federal courts and on counseling and prosecution in the areas of trademark and copyright law. He has extensive experience litigating trademark disputes before the Trademark Trial and Appeals Board of the United States Patent and Trademark Office. Mr. Wilton has taught trademark law in practice and Internet law at the University of Southern California Gould School of Law. He is consistently listed in the World Trademark Review’s Top 1000 trademark practitioners worldwide, the International Who’s Who of Trademark Lawyers, and Managing Intellectual Property’s “IP Stars.” In 2019, Mr. Wilton was selected as one of 30 trademark attorneys recognized nationally in Expert Guides’ 2019 edition of Best of the Best USA. Mr. Wilton received his B.A. in history from the University of California, Los Angeles, and his J.D. from the University of California, Hastings College of the Law, where he was editor-in-chief of the Hastings Journal of Communications and Entertainment Law. Mr. Wilton is the 2021 update author of chapter 18.

RAFFI V. ZEROUNIAN is a partner with Hanson Bridgett LLP, Los Angeles, where he has a 360-degree trademark and copyright practice, handling all facets of counseling, clearance, prosecution, enforcement, and litigation domestically and internationally. His practice also includes domain name disputes through the Uniform Domain Name Resolution Policy and lawsuits involving the Anticybersquatting Consumer Protection Act. In addition, Mr. Zerounian has broad experience with litigation involving counterfeit and gray market goods. He serves as a Senior Editor for the International Trademark Association’s Trademark Reporter® and is listed as a top trademark practitioner in the World Trademark Review’s WTR1000 rankings. Mr. Zerounian is the 2021 update author of chapter 3.

Products specifications
PRACTICE AREA Law Practice Skills
PRODUCT GROUP Publication
PRACTICE AREA Business Law
Products specifications
PRACTICE AREA Law Practice Skills
PRODUCT GROUP Publication
PRACTICE AREA Business Law