January 20, 2007© 2007 The Prinz Law Office.1 HOTTEST TOPICS IN CYBERSPACE: CYBERINSURANCE, BLOGS, AND ON-LINE ADVERTISING By Kristie D. Prinz, Founder The Prinz Law Office

January 20, 2007© 2007 The Prinz Law Office.2 Hottest Topic #1: Cyberinsurance The case for Cyberinsurance: -Prevalence of Data Theft Incidents (ChoicePoint, Lexis-Nexis, Visa MasterCard) -California’s Security Breach Information Act (SB-1386), effective July 1, Gap in coverage with traditional policies (CGL, Errors and Omissions)

January 20, 2007© 2007 The Prinz Law Office.3 Hottest Topic #1: Cyberinsurance Types of Coverage Offered -First Party Business Interruption -First Party Electronic Data Damage -First Party Extortion -Third Party Network Security Liability -Third Party (Downstream) Network Liability -Third Party Media Liability

January 20, 2007© 2007 The Prinz Law Office.4 Hottest Topic #2: Blogs Common Legal Principles Relevant to Business Blogs -Copyright Ownership of the Content -Trademark and Copyright Infringement -Trademark Dilution Issues -Potential Disclosure of Trade Secrets -Employment Law -Liability Defenses; Vicarious Liability

January 20, 2007© 2007 The Prinz Law Office.5 Hottest Topic #2: Blogs Barrett v. Rosenthal, No. S (Cal. Sup. Ct. Nov. 20, 2006). - California Supreme Court recognized broad immunity for defamatory republications on Internet -Facts of case involved operator of Internet discussion group, which distributed defamatory statements -Case viewed as protecting the free speech of bloggers; also viewed as a victory for online companies such as Google and AOL

January 20, 2007© 2007 The Prinz Law Office.6 Hottest Topic #2: Blogs O’Grady v. Superior Court, 139 Cal. App. 4 th 1423, 2006 WL (Cal. App., 6 th Dist., May 26, 2006). -Decision prevented Apple Computer from forcing the disclosure of unnamed individuals who allegedly leaked information about new Apple products to online news sites -Viewed as a victory for bloggers in that it protected their status as journalists

January 20, 2007© 2007 The Prinz Law Office.7 Hottest Topic #2: Blogs Lawyer Blog Controversy -States of Kentucky and New York contemplated amending ethics rules to regulate lawyer blogs as lawyers advertising in State of California has not as of yet taken any steps to regulate lawyer blogs but is contemplating changes to lawyer advertising rules -Should lawyer blogs be protected by the First Amendment?

January 20, 2007© 2007 The Prinz Law Office.8 Hottest Topic #3: On-line Advertising Click Fraud Class Action Suits - Involves Pay-Per-Click Advertising: Someone clicks repeatedly on an advertisement until the company advertising budget for the campaign runs out, with no intention of buying from the advertiser -Some estimates suggest that as much as half of an advertiser’s budget is eaten up by click fraud

January 20, 2007© 2007 The Prinz Law Office.9 Hottest Topic #3: On-line Advertising Lane's Gifts and Collectibles LLC v. Yahoo! Inc., Case No. CV (Ark. Cir. Ct. complaint filed Feb. 17, 2005). - Class Action Suit Against Defendants, including but not limited to Yahoo!, Google, Walt Disney Co., Lycos, Inc., and LookSmart, Ltd. -Crux of Argument: Industry is not doing enough to prevent Click Fraud and is overcharging advertisers -Settlement reached with Google for $90 million in March, 2006: plaintiff’s counsel received $30 million and $60 million will go to pay for credits for future Google services to advertisers in the class

January 20, 2007© 2007 The Prinz Law Office.10 Hottest Topic #3: Online-Advertising Checkmate Strategic Group v. Yahoo!, Inc., Case No.: 2:05-CV CAS-FMO (C.D. Cal. preliminary settlement approved June 26, 2006). -Settlement reached for $4.95 million, which will cover cash payments to plaintiff’s counsel -No cap on advertiser refunds where evidence of click fraud is found (will include evidence as far back as January, 2004) -Yahoo! Institutes Five Steps to Combat Click Fraud

January 20, 2007© 2007 The Prinz Law Office.11 Hottest Topics in Cyberspace: Cyberinsurance, Blogs, and On-line Advertising CONTACT INFORMATION Kristie D. Prinz, Founder The Prinz Law Office P.O. Box 1594 Los Gatos, CA Phone: Fax: