Social media sites are transforming not only the daily lives of consumers, but also how companies interact with consumers. Here at Morrison Foerster, across all of our practice groups, we are seeing complex, cutting-edge legal issues arising out of social media. As with the Internet boom during the mid-to-late 1990s, social media is generating new legal questions at a far faster pace than the law’s ability to provide answers to such questions. In an effort to stay on top of these emerging issues, and to keep our clients and friends informed of new developments, Morrison Foerster publishes this blog devoted to the law and business of social media.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.Aaron’s practice focuses on advising both established and emerging companies in a variety of data- and technology-intensive sectors, including software, SaaS, cloud-based technology, digital media (social media, AR/VR, gaming, streaming media, AdTech), AI, healthcare, consumer electronics, e-commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on branding and marketing, trademark licensing, and content-related transactions, as well as the intellectual property aspects of mergers, acquisitions, asset spin-offs, and private equity investments.He has represented clients such as Autodesk, Meta, OpenAI, Splunk, Konami, Kaiser Permanente, SoftBank, Visa, and Yahoo, among others.Aaron has been recognized by numerous publications for his work on market-defining technology transactions. He is currently ranked by Chambers USA for “Technology Transactions.”Aaron also serves as co-editor of Socially Aware, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics. Aaron is also a sought-after speaker on new and emerging areas of law, and is a frequent presenter and panelist at conferences and legal services programs. In addition to his active practice, Aaron regularly provides pro bono assistance to various nonprofit and charitable organizations such as Common Sense Media and the Starlight Children’s Foundation. He is a member of the board of directors of California Lawyers for the Arts.While in law school at the University of California, Berkeley, Boalt Hall School of Law, Aaron served as executive editor of the California Law Review and was elected to the Order of the Coif. Following law school, Aaron served as law clerk to the Honorable William H. Orrick and the Honorable Martin J. Jenkins, both United States District Judges for the Northern District of California.

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Aaron is the chair of our Technology Transactions Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals. Aaron’s practice focuses on advising both established and emerging companies in a variety of data– and technology–intensive sectors, including software, SaaS, cloud computing, AR/VR, AI, gaming, healthcare, consumer electronics, social media, e–commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on the intellectual property aspects of mergers, acquisitions, asset spin–offs, and private equity investments.

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Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.Lawrence focuses his practice on technology transactions and licensing matters. His diverse experience includes advising on SaaS agreements, cross-licensing agreements, research and collaboration agreements, development agreements, and distribution agreements. He counsels a broad range of companies across the software, hardware, life sciences, biotech and FinTech spaces, as well as other entities including universities.He advises clients in connection with general corporate matters including contract negotiations, and leasing and technology placement agreements.Lawrence also serves as co-editor of <a href="https://www.sociallyawareblog.com/" target="_blank">Socially Aware</a>, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics.Prior to joining the firm, Lawrence was counsel at another major law firm. Before earning his law degree, Lawrence was a web consultant, project manager, and web developer in Portland, Oregon, where he managed and consulted on projects using industry methodologies and performed custom development and integration of content management systems.Lawrence was named a Super Lawyers “Rising Star” in 2015 and 2018–2022, and is licensed in both California and New York. Lawrence earned his J.D. from the University at Buffalo School of Law, where he was the electronic systems editor for the Buffalo Law Review and awarded the ABA-BNA Award for Excellence in the Study of Intellectual Property Law.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster.Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions. His clients include technology, digital media and content for television and music, financial services, and communications companies with diverse intellectual property assets and issues.His practice focuses on the legal aspects of developing, licensing, and commercializing technology and intellectual property, as well as negotiating general commercial contracts, including outsourcing transactions, as well as content and data licenses. He regularly assists clients with legal issues relating to licensing and commercialization of digital media and content, digital content that is distributed over the Internet or streamed, mobile applications and social media, as well as the licensing of recorded music for distribution via digital platforms. Anthony is also experienced with issues relating to open-source software, software development, artificial intelligence and machine learning, cloud-based technology, and protection of proprietary information.Anthony has extensive experience working on matters involving disruptive technologies, such as blockchain. He has helped fintech clients with general intellectual property issues in connection with terms of service for online financial products and services.Anthony is an integral part of the outside pro bono legal team for nonprofit organizations based in New York, including advising clients on legal issues regarding entertainment, social media, privacy rights, and the negotiation of outsourcing and service agreements. Anthony received his J.D. from the University of Michigan Law School in 2009. He received his B.S. from Cornell University in 2004.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. He advises clients on general commercial and transactional matters. His clients include technology, media, and communications companies with considerable intellectual property assets. His practice focuses on the legal aspects of licensing and commercializing technology and intellectual property, as well as negotiating general commercial contracts. He also regularly assists clients with legal issues relating to mobile applications and social media.

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Over the past year, a number of courts across the country have decided cases involving contributory infringement and the application of the <a href="http://www.law.cornell.edu/uscode/text/17/512">Digital Millennium Copyright Act’s § 512(c) safe harbor</a> in the social media context. Unfortunately for those who favor a uniform approach to the law, the precedent being developed is in many ways inconsistent. On one side of the country, the Ninth Circuit solidified § 512(c)’s protections for social media sites in <a href="http://caselaw.findlaw.com/us-9th-circuit/1589029.html">UMG Recordings, Inc. v. Shelter Capital Partners LLC</a> by holding that social media sites are not liable for infringing user-posted material subject to compliance with the DMCA’s notice and takedown procedures.  Several months later on the other side of the country, the Second Circuit addressed similar questions in Viacom Int’l, Inc. v. YouTube, Inc. Judge Cabranes’s opinion introduced the possibility that a social media site-owner’s “willful blindness” to infringing activity may trigger liability, thus raising the specter of (very) expensive litigation. The Seventh Circuit has now held in <a href="http://www.scribd.com/doc/102162833/Flava-Works-Inc-v-Gunter-Opinion-7th-Cir-Aug-2-2012">Flava Works, Inc. v. Gunter</a> that online service providers are protected from contributory infringement liability—and therefore need not depend on the DMCA’s safe harbors at all—where they do not actually host allegedly infringing material or encourage copyright infringement but merely link to such material.In an opinion written by one of <a href="http://abovethelaw.com/2012/07/benchslap-of-the-day-justice-scalia-pulls-rank-on-judge-posner/">the country’s preeminent circuit judges</a> and <a href="http://www.youtube.com/user/mugumogu?feature=results_main">cat</a> fanciers, <a href="http://www.newyorker.com/archive/2001/12/10/011210fa_fact_macfarquhar">Richard Posner</a>, the court addressed whether to uphold a preliminary injunction against <a href="http://en.wikipedia.org/wiki/Social_bookmarking">social bookmarking</a> site myVidster for <a href="http://www.copyright.gov/docs/regstat072204.html">contributory copyright infringement</a>. myVidster allows users to “bookmark” videos they find on the Internet, such as videos from <a href="http://www.youtube.com/user/mugumogu?feature=results_main">YouTube</a> or <a href="http://www.vimeo.com/">Vimeo</a>. myVidster automatically retrieves the “embed code”—code that permits the video to be viewed in a browser window separate from the original website (for example, when you link to a YouTube video on your Facebook page, the site automatically embeds the video so that your friends can view the video on Facebook rather than having to go to YouTube). myVidster then creates a new page for the embedded video, replete with advertisements.Plaintiff Flava Works is an entertainment company that produces and streams adult videos through various websites. Flava allows its customers to download its content solely for personal use. Users are not permitted to upload Flava’s videos to other sites or to create any additional copies of the content. Thus, in Judge Posner’s view, a user who copies Flava’s videos by downloading them and then uploading the copyright-protected video to a third-party website is a direct infringer of Flava’s copyright. Because myVidster didn’t upload the infringing videos, the court found that myVidster did not directly infringe Flava’s copyright.The court next considered whether myVidster should be held liable for contributory infringement based on such copying by Flava’s users. Posner disregarded the oft-cited <a href="http://scholar.google.com/scholar_case?case=13919786496570065695">Gershwin Publishing Corp. v. Columbia Artists Management, Inc.</a> definition of contributory infringement in favor of a more succinct standard from <a href="http://scholar.google.com/scholar_case?case=13557798298967650893">Matthew Bender & Co. v. West Publishing Co.</a>: contributory infringement is “personal conduct that encourages or assists [direct] infringement.” The court ultimately held that myVidster was not liable for contributory infringement for two reasons.First, myVidster does not make any copies of Flava’s videos—whether on its own initiative or at its users’ direction—but instead links to videos on servers controlled by third parties. In bookmarking offending videos, myVidster’s users were not copying such videos. And by embedding those videos on its site, myVidster was not furthering any copying. Rather, the court found that myVidster effectively acts as an exchange, connecting the server hosting the video and myVidster’s users. Posner wrote:[The user’s] bypassing Flava’s <a href="http://en.wikipedia.org/wiki/Pay_wall">pay wall</a> by viewing the uploaded copy is equivalent to stealing a copyrighted book from a bookstore and reading it. That is a bad thing to do (in either case) but it is not copyright infringement. The infringer is the customer of Flava who copied Flava’s copyrighted video by uploading it to the Internet.Second, the court found that myVidster had done nothing to encourage uploaders to upload Flava’s videos. Therefore, myVidster did not “encourag[e]” infringement and was not a contributory infringer. As a result, myVidster had no need to resort to the § 512(c) safe harbors.One of the most interesting aspects of the Flava Works opinion is its discussion of the various flavors (flavas?) of contributory infringement. Google and Facebook submitted an <a href="http://www.scribd.com/doc/74734810/Flava-Works-vs-Myvidster-Marques-Rondale-Gunter-Salsa-Indy-LLC-Filed-Non-Party-Motion-for-Leave-to-File-Brief-of-Amici-Curiae-Google-Inc-and-Fa">amicus curiae brief</a>  in which they argued that the connections between myVidster’s (and other social bookmarking sites’) activities and any copyright infringement by users are simply too attenuated to constitute either direct or contributory infringement. They argued that myVidster was, at most, “contributing to contributory infringement.” Thus, myVidster’s potential infringement was not “secondary,” but rather, tertiary: the direct infringers are those who uploaded Flava’s copyrighted material, those who bookmarked the videos are arguably “secondary” infringers, while myVidster might be a “tertiary” infringer. Posner dismissed this argument, finding that common law notions of remoteness were sufficient to deal with this “contributing to contributory infringement” situation: “<a href="http://scholar.google.com/scholar_case?case=10670839327799086762">An injury will sometimes have a cascading effect that no potential injurer could calculate in deciding how carefully to act. The effect is clear in hindsight—but only in hindsight</a>.” For Judge Posner, even in social media situations, there’s no need for the direct-secondary-tertiary “layer cake” model; there is simply infringement, contributory infringement, and non-infringement. And regardless of the theoretical “level” of removal of myVidster from the underlying direct infringement, myVidster was not “materially contributing” to that infringing activity—that is, myVidster’s actions were too remote from the uploader’s infringement—and was therefore not liable for contributory infringement by copying.Judge Posner also addressed whether myVidster might be liable for contributory infringement based on public performance of Flava’s videos. The <a href="http://www.law.cornell.edu/uscode/text/17/106">Copyright Act</a> makes it unlawful “to transmit or otherwise communicate a performance . . . of the work . . . to the public . . . whether the members of the public capable of receiving the performance . . . receive it in the same place or in separate places and at the same time or at different times.” Posner identified two ways in which myVidster might infringe Flava’s performance right: “performance by uploading” and “performance by receiving.” On the “uploading” interpretation, “uploading plus bookmarking a video is a public performance because it enables a visitor to the website to receive (watch) the performance at will[.]” On the “receiving” interpretation, the performance occurs (or is, in other words, finalized) when the user clicks on and plays the video.Posner dismissed the “uploading” view, arguing that myVidster is simply “giving web surfers addresses where they can find entertainment[,]” much like <a href="http://www.timeout.com/san-francisco/">TimeOut</a> and the <a href="http://www.newyorker.com/archive/2001/12/10/011210fa_fact_macfarquhar">New Yorker </a> list the details of various social events happening in the real world. According to Posner, the only infringer on the “uploading” view is the uploader himself. myVidster does not interfere with the data streaming directly from the host to the viewer, so myVidster did not contribute to the uploader’s infringement of Flava’s public performance right.On the “receiving view,” the infringing act occurs when the myVidster users click “play” on Flava’s videos. Flava argued that, by providing an exchange that makes Flava’s videos available to myVidster’s users, myVidster provides “‘support services’ without which ‘it would [have been] difficult for the infringing activity to take place in the massive quantities alleged.’” Posner, however, was not persuaded by the “receiving” argument either. First, myVidster was not selling the allegedly infringing videos and thus had no direct pecuniary motive for pushing visitors to view Flava content bookmarked by the site’s users. Second, there was no substantial evidence that the videos were being accessed via myVidster rather than other websites. Thus, in Posner’s view, there was no basis to hold that myVidster was “abet[ting] others’ infringements” of Flava’s public performance right.Judge Posner left open the possibility that myVidster had invited users to post infringing material, in which case it could be liable for <a href="http://scholar.google.com/scholar_case?case=8647956476676426155">inducing infringement</a>. Similarly, he stated that myVidster’s now-discontinued <a href="http://en.wikipedia.org/wiki/Sideloading">sideloading</a> service constituted direct—not secondary—infringement. Sideloading typically involves the transfer of data between two local devices. myVidster’s service allowed premium members to back up bookmarked videos on myVidster’s servers. As at least one <a href="http://blog.ericgoldman.org/archives/2012/08/video_embedding_1.htm">commentator</a> has noted, this raises interesting issues for sites like <a href="http://www.pinterest.com/">Pinterest</a> and other social networks that periodically sideload copyrighted material posted by users on the presumption that such sideloading is authorized by, and therefore done at the direction of, the user. If such actions constitute direct infringement, the §512(c) safe harbors may not be available.

Judge Posner Kicks that Flava in Ya Ear: New Guidance on Contributory Infringement from the Seventh Circuit

Over the past year, a number of courts across the country have decided cases involving contributory infringement and the application of the Digital Millennium C

Judge Posner Kicks that Flava in Ya Ear: New Guidance on Contributory Infringement from the Seventh Circuit

In today’s information economy, content owners are faced with a challenging decision regarding digital content. On the one hand, the viral nature of social media can mean unprecedented exposure as digital content is shared. On the other, that opportunity can come with significant legal risk if companies take an insufficiently careful approach to intellectual property clearance issues. One luxury clothing brand, Burberry Ltd., recently discovered just how substantial that legal risk can be.Burberry approached social media with an innovative concept: “historical timelines” on its various social media pages, including <a href="http://www.facebook.com/burberry">Facebook</a>, <a href="http://www.twitter.com/Burberry">Twitter</a>, and Instagram. These timelines featured photos of celebrities wearing Burberry’s iconic trench coats, scarves, and other products. Among Burberry’s chosen photos was a shot of Humphrey Bogart from the final scene of <a href="http://www.imdb.com/title/tt0034583/">Casablanca</a>, in which Bogart’s Rick, clad in a timeless Burberry trench, sends Ingrid Bergman’s Ilsa off to Brazzaville. While Burberry acquired permission to use the photo from photo agency <a href="http://www.corbisimages.com/">Corbis</a>, which manages the rights to various stock photos from Casablanca, Burberry failed to clear its use with Bogart LLC, which owns the actor’s publicity rights. <a href="http://www.law.cornell.edu/uscode/text/15/1125">Applicable law</a> allows a celebrity to object to use of his or her name or likeness in a commercial context, particularly if the use is likely to cause members of the intended market to believe that the celebrity endorses the product. Bogart LLC <a href="http://www.scribd.com/doc/92146247/Burberry-v-Bogart">alleged</a> that Burberry’s use of the photo falsely implied that Bogart had endorsed the brand, thereby violating Bogart LLC’s publicity rights. Burberry countered, arguing that its timelines constituted “a historical positioning of the image within an educational project along with numerous other photographs of people wearing Burberry apparel over the last century.”Although Burberry and Bogart LLC settled their pending state and federal cases for an undisclosed amount, this case provides a good example of the unexpected issues that can arise when brand managers fail to consider the full spectrum of rights that may be implicated by the use of photographs and other content. While the content industries have spent the last decade educating the public on copyright law’s effects in the digital media world, less attention has been paid to other areas of potential liability, such as trademark infringement and privacy and publicity rights violations, and their respective effects on the social media experience.For example, in 2007, Virgin Mobile Australia (VMA) launched an advertising campaign using amateur photography culled from the social photo-sharing site, <a href="http://www.flickr.com/">Flickr</a>. The photos used by VMA were licensed under a Creative Commons “<a href="http://creativecommons.org/licenses/by/2.0/">Attribution</a>” license, which requires only that the original creator—that is, the copyright holder—be given credit. VMA chose for its campaign a photo of then-15-year-old Alison Chang, taken by her church youth counselor and uploaded by him to Flickr. Although VMA had appropriate copyright clearance to use the counselor’s picture under the Creative Commons license, Chang’s parents <a href="http://www.smh.com.au/news/technology/virgin-sued-for-using-teens-photo/2007/09/21/1189881735928.html">sued</a> VMA for failing to get permission from Chang or her parents to use Chang’s name or likeness. Although the case was <a href="http://www.citmedialaw.org/sites/citmedialaw.org/files/2009-01-16-%20Dismissal%20Opinion%20%28Chang%29.pdf">dismissed</a> on procedural grounds, the incident illustrates how easily (and often) clearance procedures are overlooked when it comes to Internet-based content.Similar cases have raised complex issues relating to federal preemption of state law claims. For example, in <a href="http://scholar.google.com/scholar_case?case=16156934007444564709">Laws v. Sony Music Entertainment, Inc.</a>, the plaintiff sued Jennifer Lopez and LL Cool J, alleging misappropriation of her name and voice through use of a sound recording on which the plaintiff’s voice was featured. The defendants had obtained a license to use the sound recording on which the plaintiff’s voice was featured, but had not obtained from the plaintiff the right to use her voice. Nonetheless, the Ninth Circuit held that, on this set of facts, the federal Copyright Act preempted the plaintiff’s state law right-of-publicity claim. Thus, her permission was not required for the defendants to use the validly licensed sound recording. By contrast, a different Ninth Circuit panel in <a href="http://scholar.google.com/scholar_case?case=13816450651302557386">Downing v. Abercrombie & Fitch, Inc.</a>, held that the Copyright Act did not preempt the plaintiffs’ state law publicity claims based on Abercrombie’s advertising use of a photo of the plaintiffs taken after the 1965 Makaha International Surf Championship in Hawaii. Thus, Abercrombie should have sought the plaintiffs’ permission in the first instance. The preemption inquiry is fact-bound—the Copyright Act preempts state law publicity claims in some circumstances, but not others.While the details of these preemption cases exceed the scope of this article, suffice it to say that a company’s social media marketing personnel may not have the expertise to wade through such complex clearance issues. A clearance system that focuses narrowly on copyright issues and doesn’t consider other forms of intellectual property may therefore result in unexpected claims. It is also worth noting that the safe harbors provided by the <a href="http://scholar.google.com/scholar_case?case=13644579048975596329">Digital Millennium Copyright Act</a> apply only to copyright claims, not other types of claims such as those mentioned above, and in any event, provide protection only with respect to <a href="http://www.youtube.com/user/mugumogu?feature=watch">user-generated content</a>, not content posted by a company’s own employees. Therefore, companies should not assume that the DMCA will shield them from all liability for content posted on their social media pages.Social media is an exciting new channel for reaching both current and prospective customers. But from a rights-clearance perspective, the old rules largely remain in force. Accordingly, companies’ review procedures for company-driven social media content should, to the extent possible, mirror the process they undertake for print ads and other traditional media. And where that may not be feasible (given the speed and flexibility often required on social media platforms), companies should institute rigorous policies and train marketing associates on how to avoid potential liability.

The Potential Perils of Posting Pictures (on Social Media)

In today’s information economy, content owners are faced with a challenging decision regarding digital content. On the one hand, the viral nature of social medi

The Potential Perils of Posting Pictures (on Social Media)

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Key Moments in Social Media Law

Key Moments in Social Media Law

Online “virtual worlds,” such as <a href="http://secondlife.com/">Second Life</a>, have their own cultures, customs and economies.  This presents new challenges for applying existing intellectual property laws to user-created content in such virtual worlds, as illustrated by a recent case in the Northern District of California, <a href="https://casetext.com/case/amaretto-ranch-breedables-v-ozimals-inc">Amaretto Ranch Breedables, LLC v. Ozimals, Inc.</a>.Second Life places users, or “residents,” into a virtual world where they participate in a virtual economy, trading virtual goods and services with each other.  Residents also have the ability to create new content using a programming language built into Second Life.  Under Second Life’s <a href="http://secondlife.com/corporate/tos.php?lang=en-US#tos7">Terms of Service</a>, residents retain ownership of the copyright in any content they create.  Second Life is thus a breeding ground for digital rights disputes, as residents spend virtual “Linden Dollars”—which can be exchanged for “real world” currency—for virtual goods created by other residents, implicating legally protected rights that have dollar value in the “real” economy.  In other words, as one blog describes it, “[w]hile it may be a virtual world, it still has to deal with real-life intellectual property shenanigans.”The dispute in Amaretto Ranch concerned the sale of “breedable” virtual animals created and sold to users within Second Life.  Ozimals accused Amaretto Ranch of selling “virtual horses” that used the same code used to create Ozimals’ “virtual bunnies,” thereby infringing Ozimals’ copyrights.  Ozimals sent a <a href="http://www.copyright.gov/title17/92chap5.html#512">Digital Millennium Copyright Act (“DMCA”) takedown notice</a> to Linden Labs, the operator of Second Life, demanding the removal of Amaretto Ranch’s virtual horses, sparking a public war of words between Ozimals and Amaretto Ranch.Amaretto Ranch responded by suing Ozimals for violation of Section 512(f) of the DMCA, which provides a cause of action (including recovery of attorneys’ fees) for sending a takedown notice containing material misrepresentations.  Amaretto Ranch also asserted a state law cause of action for tortious interference with contract based on Ozimals’ takedown notice.  Amaretto sought and obtained a temporary restraining order and a preliminary injunction requiring Ozimals to withdraw the DMCA notice.  Therefore, Linden Labs did not remove any of the allegedly infringing materials from Second Life.On a first motion to dismiss, the court disposed of Amaretto Ranch’s Section 512(f) claim fairly easily, dismissing the claim because Linden Labs had never actually removed the allegedly infringing material.  Removal of the allegedly infringing material is a requirement to state a claim under the statute.  The court also dismissed without prejudice Amaretto Ranch’s claim for tortious interference with contract because it was not “plausibly pleaded.”Amaretto then amended its complaint, and Ozimals filed another motion to dismiss.  The amended complaint asserted additional state law claims — defamation, trade libel, intentional interference with contract and interference with prospective business advantage — based on Ozimals’ takedown notice.  In contrast to the state law claim in the first complaint, which the court dismissed because Amaretto had not pleaded sufficient facts, the amended complaint required the court to consider tougher questions regarding federal preemption of state law claims stemming from a DMCA takedown notice.Perhaps unsurprisingly, the court followed two previous cases from the Northern District of California holding that Section 512(f) preempts state law claims based on DMCA takedown notices, Online Policy Group v. Diebold, Inc. and <a href="http://scholar.google.com/scholar_case?case=2209471029398314909&hl=en&as_sdt=2&as_vis=1&oi=scholarr">Lenz v. Universal Music Corp.</a> According to the court, Diebold and Lenz stand for the proposition that a DMCA takedown notification is “a creature of a federal statutory regime, and . . . that regime preempts any state law claim based on an allegedly improper” takedown notice.Amaretto Ranch tried to distinguish Diebold and Lenz by pointing out that, in those cases, an actual takedown occurred, while in this case Linden Labs never actually removed the allegedly infringing materials.  Therefore, argued Amaretto Ranch, the court should follow Rock River Comm., Inc. v. Universal Music Group, Inc., a case we have reported on previously).  In Rock River, a Central District of California court held that the DMCA did not apply to the cease and desist letter at issue and, therefore, the DMCA did not preempt a state law tortious interference claim based on the letter.  The Amaretto Ranch court, however, did not find this argument persuasive.  According to the court, Rock River was distinguishable because, in that case, there was no takedown notice under the DMCA in the first place, whereas Amaretto Ranch had plainly alleged that Ozimals takedown notice was “within the ambit of the DMCA.”Based on this analysis, the court held that Amaretto Ranch’s state law claims were preempted by the DMCA.  Of course, as noted, the court had also dismissed Amaretto Ranch’s DMCA claim, leaving Amaretto Ranch without any remedy at all.  This outcome reveals how thin the protections against misuse of DMCA takedown notices can be where no removal of the allegedly infringing materials has occurred.  As other commentators have <a href="http://digital.law.washington.edu/dspace-law/bitstream/handle/1773.1/379/vol2_no4_art15.pdf?sequence=1">noted</a>, the DMCA sometimes does not provide for efficient resolution of copyright disputes.  No matter what harm results from the issuance of a DMCA takedown notice, and even if the notice contains flagrant misrepresentations and false accusations of copyright infringement, the Amaretto Ranch approach denies the accused party any remedy unless the service provider actually removes the allegedly infringing content.  At the very least, Amaretto Ranch highlights an important strategic consideration:  When a competitor sends out a groundless DMCA notice, should the accused infringer immediately seek judicial intervention or is it better to wait for the service provider to remove the accused materials?  If the accused infringer gets an injunction to prevent takedown of the accused material, that success could ultimately preclude any recovery for harm resulting from the notice.

Northern District of California Court Addresses the Law of the (Virtual) Horse (and Bunny)

Northern District of California Court Addresses the Law of the (Virtual) Horse (and Bunny)