Louis Vuitton Wins Again

Or, eBay Loses Again in France.  Last week the Paris District Court held eBay liable for using LVM’s trademarks as AdWords to, according to an eBay spokesperson, “direct buyers’ listings for authentic goods from eBay sellers.”  The court ordered eBay to pay 230,000 € for damages and LVM’s legal fees and 1,000 € for every future violation.  LVM and eBay have duked it out before; in June 2008 LVM won a suit against eBay over auctions of counterfeit Louis Vuitton handbags, the court holding that eBay did not employ adequate measures to prevent the sale of fake goods.  Last year the Paris District Court fined eBay for continuing violations of the 2008 order.

Other luxury retailers have sued eBay for similar claims on both sides of the Atlantic.  In August 2008 a Belgian court ruled for eBay in a suit over the sale of counterfeit Lancome perfumes.  The court held “that eBay is a passive provider of ‘host’ services, as that term is defined in a European Community policy directive, and that it’s therefore entitled to more legal leeway than a brick-and-mortor auctioneer would receive if counterfeit goods were being sold on his premises,” reasoning that echoes what one would expect to be the outcome of the same claim under U.S. law.  In July 2008 (eBay had a busy summer) Tiffany and Company lost a suit in federal court in New York City for trademark claims arising from eBay auctions of counterfeit trademarked goods.  That court held “to the extent that eBay may have possessed general knowledge of infringement and dilution by sellers on its Web site, eBay did not possess knowledge or a reason to know of specific instances of trademark infringement or dilution as required under the law”–a clear expression of the difference between U.S. and French law on website liability.

Spammers and Scammers and Trolls, Oh My

I have not used eBay often, and have not even visited it in years.  I am always interested whenan  iconic Internet presence loses its wheels, so Bruce Schneier’s brief account of his difficulties selling a laptop on eBay captured my attention.  He linked to a longer saga of seller’s woe prosaically titled “It’s Now Completely Impossible to Sell a Laptop on eBay.” Its recommendation: “try CraigsList or a flyer in your neighborhood. EBay is broken.”

Call me Mr. Glass Half Empty.  There is a thesis here, about the de-evolution of popular websites and degradation of human interaction online.

eBay 2, Luxury Retailers 1

The Wall Street Journal Law Blog relays news of a Belgian legal ruling that eBay is not liable for sale of counterfeit Lancome perfumes, holding “that eBay is a passive provider of ‘host’ services, as that term is defined in a European Community policy directive, and that it’s therefore entitled to more legal leeway than a brick-and-mortor auctioneer would receive if counterfeit goods were being sold on his premises.” This is the third ruling in the past month in cases brought against eBay over sales of counterfeit luxury goods. A French court ruled against eBay in one of the cases; eBay won the Belgian case and another decided in the U.S. As the Journal says, “circuit splits are nice, but country splits are even better.”

eBay Wins One

A few weeks ago a French court ordered eBay to pay about $60 million in damages to Louis Vuitton and other manufacturers of luxury bags, finding that eBay failed to take adequate steps to prevent sales of counterfeit merchandise on its site.  This week a U.S. court handed eBay a victory in a similar lawsuit brought by Tiffany and Company, holding under U.S. law that eBay had no obligation to prevent sale of counterfeit trademarked goods.  The court said “to the extent that eBay may have possessed general knowledge of infringement and dilution by sellers on its Web site, eBay did not possess knowledge or a reason to know of specific instances of trademark infringement or dilution as required under the law.”

The contrary results under European and U.S. law reflect the profound changes in Internet law over the past decade.  When I started to teach Internet law in 2001 the popular wisdom held the Internet was beyond the reach of national law, that it existed in some extra-legal dimension subject to its own unique forces.   No more.  Internet businesses must, like trans-national brick-and-mortar companies before them, decide how to structure operations to meet the unique legal environment of each country in which it operates.

eBay Liable for Counterfeits

A French court ordered eBay to pay Louis Vuitton and other makers of luxury bags €38.6 (variously reported as $60.8 and $63.2 million) in damages for sales of counterfeit handbags on the website, the largest damage award eBay has incurred in connection with its quality-assurance practices.  The court ruled eBay did not employ adequate measures to prevent the sale of fake bags.  eBay announced it will appeal the decision.  The New York Times reports that the decision “is unlikely to have a drastic effect on the way eBay conducts business because it has already made changes to police its site for counterfeit goods.”  eBay noted that it employs over 2,000 people to deal with sales of counterfeit goods and that it cuts of 95% of fraudulent sales before they occur.  Of course with millions of ongoing active sales at any moment, there remains considerable potential for fraud.

Don’t Go to Law School

I’ve posted before that prospective law students must honestly consider their prospects for success in law school because, unless they attend one of the very top-ranked schools, their job opportunities will be limited if they are not ranked at the top of their classes. The Wall Street Journal Law Blog recently interviewed “law school naysayer” Kirsten Wolf, a 32-year old BU law graduate. Wolf went to law school a few years out of college believing that she would obtain a marketable skill that would justify the cost of borrowing to pay tuition. In the fall of her second year, when she realized her B+ average was not good enough to land her a summer associate position with a large firm, she began to question her decision. Already $45,000 in debt she stayed, graduated in 2002, passed the Massachusetts bar, and found no law jobs waiting. She went back to the company she worked for before law school and then eventually moved to New York where she landed a job she enjoys, as an office manager for a literary agency. She is paying her $87,000 student loan debt over 30 years–which means she’ll still be paying for law school as she approaches her 60th birthday. In Wolf’s words:

I’m on a one-woman mission to talk people out of law school. Lots of people go to law school as a default. They don’t know what else to do, like I did. It seems like a good idea. People say a law degree will always be worth something even if you don’t practice. But they don’t consider what that debt is going to look like after law school. It affects my life in every way. And the jobs that you think are going to be there won’t necessarily be there at all. Most people I know that are practicing attorneys don’t make the kind of money they think lawyers make. They’re making $40,000 a year, not $160,000. Plus, you’re going to be struggling to do something you might not even enjoy. A few people have a calling to be a lawyer, but most don’t.

Legal Blog Watch Alert picked up Wolf’s story and also reported about a lawyer who auctioned his law school diploma on eBay. The post notes the lack of discussion on academic law blogs about whether to attend law school.

For years I have advised students that exceptional performance in law school is more important than where you go. Wolf’s story bears this out. She must have been a good student and gotten good LSAT scores–BU law would not have admitted her otherwise–but that doesn’t put you at the top of your class. Even at BU, which is always ranked as one of the top 25 or 30 law schools in the country, a B+, top-half of the class performance will not open the most lucrative doors. I’m seeing this again with a friend who is currently in her second year at BU. She is quite smart, works exceptionally hard, is one of the most personable and engaging people I know, and yet has been unable to crack into the Big Law summer associate track. And if you aren’t on that track after your second year of law school, your earnings horizon changes dramatically. Yet had Wolf gone to a lower-ranked school and finished at the top of her class–say in the top 10 or 15 places, or top 3.00%–odds are that she could have obtained a high-paying job. Finishing in the top 3% of one’s law school class does not happen without brains and lots of hard work. That’s why those at the top of their class will still merit a look from the most selective employers, because the employers know what it takes to get there.

I’ve always taken a laissez-faire approach with prospective law students. I’ll be honest about the risks and pitfalls of a legal career and then support the student’s decision to attend law school notwithstanding my warnings. I’m now rethinking my approach. Should I recommend a student who has not shown the academic ability to finish in the top five percent of his or her law school class?

Rumplestilts-berg

Maybe Mark Zuckerberg’s youth–he’s 23–explains Facebook’s ham-fisted schemes to weave its users’ personal information into skeins of gold. I don’t believe his purposes are nefarious. As Facebook Beacon and Facebook Social Ads show, he does have a knack for letting dollar signs get ahead of his judgment. He is developing a skill for reversing field when what looked like a great idea around the boardroom table runs into the buzzsaw of user opinion.

First a recap. A few weeks ago Facebook announced Facebook Beacon, “a new way to socially distribute information on Facebook.”

The websites participating in Beacon can determine the most relevant and appropriate set of actions from their sites that users can distribute on Facebook. These actions can include posting an item for sale, completing a purchase, scoring a high score in an online game or viewing of video. When users who are logged into Facebook visit a participating site, they receive a prompt asking whether to they want to share those activities with their friends on Facebook. If they do, those friends can now view those actions through News Feed or Mini-Feed stories.

In other words, if a Facebook user lists items for sale on eBay or buys a movie ticket on Fandango, a pop-up asks whether the user wants to share this news–and on Facebook this is considered news–with their Facebook friends. The breathtaking narcissism of such newsy updates aside, Facebook Beacon takes a giant step towards a future when we will all be defined by the commercial value of our online data trail. Facebook stated “[i]n keeping with Facebook’s philosophy of user control, Facebook Beacon provides advanced privacy controls so Facebook users can decide whether to distribute specific actions from participating sites with their friends.” However, those “advanced privacy controls” are less assuring than promised. Yesterday a student and I read through Facebook’s user agreement and privacy policies to see whether one could elect not to participate in Facebook Beacon, other than by not using Facebook. Users can elect not to distribute to friends news of specific transactions, but to date there is no one-stop mechanism to opt-out entirely.

Facebook Social Ads are another part of the story. They “leverage the power of Facebook News Feed by serving relevant stories about friends engaging with your business.” Here’s how Facebook pitches them to businesses:

Reach the right people.

Instead of creating an advertisement and hoping that it reaches the right customers, you can create a Facebook Social Ad and target it precisely to the audience you choose. The ads can also be shown to users whose friends have recently engaged with your Facebook Page or engaged with your website through Facebook Beacon. Social Ads are more likely to influence users when they appear next to a story about a friend’s interaction with your business.

The concept is brilliant–every Facebook user can, through association with purchases, downloads, ratings, and other digital flotsam, become his or her own brand. Facebook “friends” (which should always be in quotes in this context) could follow my data trail and decide “my father is sort of like Professor Randall, so maybe he’d like a pound of Malabar Gold Espresso, No Country for Old Men (the book, not the movie–he’s old school, remember), and Lindsay Mac’s Small Revolution for his birthday.” Or, back in the real world, cool hunters will track young fashionistas to decrease the lag between cutting edge and The Gap. Clickstream data, just laying around waiting to be turned into skeins of gold.

Brilliant. Except for the backlash.

Facebook: What Would Google Do?: There is something astoundingly tone deaf about how Facebook has handled its recent advertising initiatives. Mr. Zuckerberg is right: there are lots of people who would find it cool to tell the world what movies they just rented and even what color socks they just bought. But they’ve got to know that others would find this intrusive. And they couldn’t have picked a worse way to implement the Beacon system first: automatically telling your friends everything you did on participating sites unless you found and pushed a button to cancel the disclosure. (This timeline shows how hard it was at first to figure out what was going on.)

Are Facebook’s Social Ads Illegal?: There is at least one problem with this idea: It may be illegal under a 100-year-old New York privacy law. The statute says that “any person whose name, portrait, picture, or voice is used within this state for advertising purposes or for the purposes of trade without the written consent first obtained” can sue for damages. Moreover, such a use is also a criminal misdemeanor.

MoveOn Launches Privacy Campaign Against Facebook Social Ads: Calling Facebook’s new Social Ads strategy an invasion of privacy, MoveOn.org is asking Facebook members to sign a petition against the social network’s new ad plan.

Facebook’s “Fan-sumers:” Do Social Ads Violate Users’ Privacy?: [Law professor and privacy expert Daniel Solove] noted on his blog, “Facebook . . . assumes that if people rate products highly or write good things about a product then they consent to being used in an advertisement for it. Facebook doesn’t understand that privacy amounts to much more than keeping secrets — it involves controlling accessibility to personal data.”

Zuckerberg isn’t stupid, just surrounded by true believers who can’t view Facebook from outside the bubble. After ten thousand slaps upside the head Facebook has made Social Ads opt-in rather than opt-out. Under Pressure, Facebook Modifies Social Ads Program: “As of late Thursday, Facebook users must now proactively consent to alert friends whenever they take various actions, such as renting a DVD or purchasing a pair of sneakers . . . Now, as part of the changes enacted on Nov. 29, consumers who make such purchases will receive notices that Facebook intends to inform others about their actions—but only if they approve by clicking an “OK” button.” Problem handled, until the next wrong-footed product roll-out.

E-Commerce Top Ten

The Software Information and Industry Association (SIIA) announced the Ten Most Significant eCommerce Developments of the Past Decade. They are:

  1. Google (Sept. 1998)
  2. Broadband Penetration of US Internet Users Reaches 50% (June 2004)
  3. eBay Auctions (Launched Sept. 1997)
  4. Amazon.com (IPO May 1997)
  5. Google Ad Words (2000)
  6. Open Standards (HTML 4.0 released – 1997)
  7. Wi-Fi (802.11 launched – 1997)
  8. User-Generated Content (YouTube 2005)
  9. iTunes (2001)
  10. BlackBerry (1999)

I’ve used, utilized, or relied on all in the past month, so I can’t argue much with the list. (At first glance I omitted Blackberry from this statement until I remembered that Randy did Google searches on his Blackberry to settle disputes during the bike trip.) What I’d like to see at #11: standardized spelling for eCommerce e-Commerce E-Commerce.

Internet and Crime

Three articles I read today about Internet crime created an interesting juxtaposition. A c|net article discussed the affordability of tools for sale to facilitate online criminal activity, a Washington Post article discussed how unsecured WiFi connections enable anonymous, roaming access for criminal activity, and a Wall Street Journal article (subscription required) discussed the prosecutorial trend of filing criminal charges in venues that are physically remote from the persons charged.

According to c|net RSA, which monitors transactions on websites and ICQ channels between providers and consumers of hacking tools, reported at a recent conference that the tools are becoming more sophisticated while their prices are falling. Vendors are offering bulk discounts: 1-10 purloined eBay accounts cost $5.00/each, but the price drops to $4.50/each for 10-50 accounts, and to $3.50 for another 50 accounts. The Washington Post article begins with the tale of police, armed with a warrant, closing in on a suspected pedophile who traded child pornography online. Their target location was inhabited by an elderly woman who had nothing to do with the crime, other than being the owner of the wireless router beaming broadband access throughout her apartment building. Apparently one of her neighbors–police could not trace who it was–gained access through her router. There are more than 46,000 public wireless access points around the country, making it easy to log in, do harm, log out, and move on. The Post quoted a law enforcement official: “It’s frustrating for officers . . . If a suspect is going from coffee shop to coffee shop and using free signals to commit crimes, the police probably aren’t going to catch him. That’s the reality.”

The Journal balances the bad-guys-are-winning theme. In the short history of Internet law one thing is axiomatic: the Internet is everywhere. Usually we discuss how the Internet’s ubiquity frustrates regulation. It also enables prosecutors to charge crimes against remote defendants. If a police investigator downloads child porn to a computer in Buffalo, New York from a man residing in Massachusetts, it does not matter that the defendant has never set foot in Buffalo: he can face prosecution there because the crime was committed there. A concern exists that prosecutors will chose venues that will be hostile–or at least inconvenient to–the defendant but, as one attorney notes in this article, “inconvenience isn’t a defense.”

Dictionary Detour

In yesterday’s Internet Law class we discussed trespass to chattels, a centuries-old tort claim that courts have applied to cases involving unauthorized access to another’s computer system. (See, e.g., eBay v Bidder’s Edge; Intel v Hamidi) I mentioned that last spring’s class had a spirited debate about the correct pronunciation of “chattel.” Many class members wanted to pronounce it “sha-TELL.” I insisted that it rhymes with “rattle” and found support from the audio pronunciation feature of the Visual Thesaurus website. I said yesterday that using the word chattel is, like using the word estoppel, a dead give way that the user is a lawyer. (Those who complete crossword puzzles regularly know both words but, like most knowledge acquired through familiarity with crossword puzzles, are not likely to use them in normal conversation.) That led to a question about the origin of chattel which I turned back on the class. (“Like stepping on a garden rake,” see My Name is Earl, “Larceny of the Kitty Cat”)

Someone stepped up. The etymology of chattel and estop, courtesy of Jesse Rodgers:

Chattel, circa 1225, from the Old French “chatel” meaning ‘property or goods’. See “cattle”, which is the Norman-Picard form of the same word. Cattle, circa 1250, from the Anglo-French “catel” meaning property. From Modern Latin “captale” meaning property or stock. Also “capitalis” meaning principal, or chief (from caput, “head”). Original sense of the word was of moveable property, especially livestock but not limited to “cows” until 1555.
Estop: 1531, from the Anglo-French “estopper” to stop, bar or hinder (especially in a legal sense, by one’s declaration or prior act), from Old French “estoupe”, and then from Latin “stuppa” meaning a ‘tow’ used as a plug (stopping a flow of something?)
From the Online Etymology Dictionary www.etymonline.com

Thanks Jesse.