If your kids use Facebook, are they bound by the online terms?

This question was recently reviewed in a US decision in which certain minor children, resident in Illinois, were users of facebook.com. They alleged that Facebook’s practice of misappropriating their names and likenesses for “commercial endorsements” without their consent was a violation of their privacy rights. Facebook resisted by invoking the “forum-selection” clause in its Terms of Service (TOS). That clause effectively punts all disputes into California, Facebook’s home turf. The Illinois court had to decide whether the case could proceed in Illinois, or whether the forum-selection clause dictated that the case must proceed in California.

In E.K.D. v. Facebook, Inc., 3:12-cv-01216-JCS (S.D. Ill. March 8, 2012), the Court concluded that the minors could not avoid the forum-selection clause in Facebook’s TOS. A mandatory forum-selection clause is, under US law, valid on its face, and should be enforced “unless enforcement is shown by the resisting party to be ‘unreasonable’ under the circumstances.” Canadian law is similar. However, the courts look at a number of factors in determining what they consider “reasonable”, and online vendors or licensors must take care if they want to ensure the clause will be upheld.

Calgary - 07:00 MDT

It’s been an interesting week for Canadian copyright. In case you don’t follow the lawyers and politicians…(and why would you)…. the debate over copyright has turned a bit snippy here in Canada. Parliament is debating the current version of the copyright reform bill (Bill C-11), and various lobby and interest groups are fighting to get air time on this topic before the final version of the bill is sent to final reading in the House. So witness the sparring between the following players:

• Last year the Canadian Bar Association (CBA) committee made a submission to Parliament entitled simply Bill C-32 — Copyright Modernization Act Amendments (Bill C-11 is the Bill Formerly Known as Bill C-32);
• Professor Michael Geist posted a December blog entry entitled Clearing Up the Copyright Confusion: Fair Dealing and Bill C-32;
• Then came the January Response to Professor Michael Geist’s Clearing Up the Copyright Confusion;
• Next we saw interesting allegations by a group of Canadian IP lawyers that the CBA committee was a secretive cabal guilty of plagiarism;
• It didn’t take long for the counter-point by the CBA and Professor Geist that no plagiarism occurred: Counterpoint: Music lobby smears CBA paper;
• And finally a response by Dan Glover to Professor Geist’s response.

For Canadian copyright law, it doesn’t get much more exciting. With the possible exception of the isohunt case, a Canadian bit-torrent lawsuit. After all this, the Parliamentary committee has finalized its review of Bill C-11, without making any major changes and the bill will proceed to Third Reading. Stay tuned.
Calgary - 07:00 MDT

Richard Stobbe was interviewed in the March 9th edition of The Lawyers Weekly  on the subject of new gTLDs. Note: The gTLD application period closes April 12, 2012.

Related Reading:The New gTLDs: Who, What and When

Calgary - 07:00 MST

Patent infringement damage awards often run into the billions. Not to be outdone, a copyright infringement case between Oracle and SAP resulted in a jury award in excess of $1 billion, based on a “hypothetical license“.

In 2007, Oracle sued SAP for copying thousands of documents and programs from Oracle’s “Customer Connection” website. After years of litigation, the remaining issue for decision by the jury was the amount of the damages. In November, 2011, the jury returned a verdict in favour of Oracle for $1.3 billion. SAP challenged this award as “unduly speculative” and sought a new trial or a lower damage award. Oracle had the choice of accepting a lower damage award of $272 million or going into a new trial; it opted for a new trial which has now been set for June, 2012.

In Canada, the Copyright Act (under Section 35) allows for damages and part of the profits that the infringer made from the infringement or an election of “statutory damages” under Section 38.1. The concept of a reasonable royalty (a rate that the infringer would have paid to the owner in a hypothetical license negotiation) is a concept that has been considered in patent cases in Canada - for example, in Jay-Lor International Inc. v. Penta Farm Systems Ltd., 2007 FC 358 (CanLII), the court calculated damages after analysis of a “hypothetical negotiation”.  The court in Oracle vs. SAP has shown that such a calculation must be grounded in objective evidence, and where possible, actual benchmarks to prove market value. Subjective or speculative evidence should not be used for such calculations.

Calgary - 07:00 MST

Snake oil? There’s an app for that. App developers who make baseless health-related claims about their apps may face FTC charges in the US.

In this case, the mobile apps “AcneApp” and “Acne Pwner”, sold in Apple’s iTunes Store and Google’s Android Marketplace, made false health-related claims without scientific evidence. Advertising for the apps claimed to treat acne with colored lights emitted from the phone (“Kill ACNE with this simple, yet powerful tool!”). According to the FTC complaint, almost 15,000 people downloaded the apps. In the FTC settlement, the app developers were fined and were barred from making further unsubstantiated health claims.

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