1. Trade Secret Cases & Torts, pt. 1
Fall, 2018
Day 16
© 2013, 2014, 2015, 2017, 2018 Ed Lamoureux/Steve Baron

2. Non-Competition Agreements
Fifield v. Premier Dealer Services, Inc., 2013 WL (Ill. App. 1st June 24, 2013)
court refused to enforce two-year non-solicitation and noncompetition provisions in employment agreement because employee’s employment, which lasted for three months before he decided to resign, was deemed to be inadequate consideration.
Implications: employers may need to offer additional consideration at time employee is asked to agree to non-competition clause

3. Pepsi Co. v. Redmond 54 F.3d 1262 (7th Cir. 1995)
Redmond was high-ranking executive with Pepsi.
Had access to confidential information about Pepsi’s sports-drink division.
Strategic Plan
Annual Operating Plan
Attack Plans for Specific Markets
New Delivery System
Agreed not to disclose confidential business information of Pepsi.
Left Pepsi to work for Quaker Oats – maker of Gatorade.

4. Pepsi Co. v. Redmond
Pepsi sues Redmond and Quaker Oats for misappropriation of trade secrets – based on mere threat of misappropriation
District Court enjoins Redmond from assuming his new position for six months and from ever using Pepsi’s trade secrets
Court of Appeals affirms the ruling.

5. Pepsi Co. v. Redmond
“[W]hen we couple the demonstrated inevitability that Redmond would rely on PCNA trade secrets in his new job at Quaker with the district court's reluctance to believe that Redmond would refrain from disclosing these secrets in his new position (or that Quaker would ensure Redmond did not disclose them), we conclude that the district court correctly decided that PepsiCo demonstrated a likelihood of success on its statutory claim of trade secret misappropriation.”

6. Pepsi Co. v. Redmond Implications
Where you gain access to confidential and trade secret information while employed by Company 1, you may be prevented (at least for a period of time) from working with a competing Company 2 if you would inevitably disclose the information you learned while employed by Company 1.
No need for Company 1 to prove that you took the information.

7. PhoneDog v. Kravitz, (N.D. Cal. Nov. 8, 2011)
PhoneDog reviews and rates mobile products and services.
Noah Kravitz works as reviewer at PhoneDog.
PhoneDog provides Twitter
Kravits tweets reviews
Gains 17,000 Twitter followers

8. PhoneDog v. Kravitz Kravitz leaves PhoneDog
PhoneDog askes Kravitz to relinquish Twitter account
Kravitz changes handle and continues to use account
PhoneDog sues for misappropriation of trade secrets - account followers and password

9. PhoneDog v. Kravitz Kravitz asks court to dismiss claims.
Court refuses to dismiss the trade secret claim.
Court suggests that it will be necessary to hear evidence about whether Twitter followers and account passwords are trade secrets.
Case settles – terms confidential but Kravitz still

10. PhoneDog v. Kravitz Implications:
Companies seek to protect social media accounts more vigorously now via contracts with employees.

11. EF Cultural Travel BV v. Explorica, Inc. 274 F.3d 577 (1st Cir. 2001)
EF offers global teen tours
Explorica competes with EF
Several former EF employees work for Explorica
Explorica's Internet consultant designs computer program called a "scraper" to glean all of the necessary information from EF's website.

12. EF Cultural Travel BV v. Explorica, Inc.
Zefer utilized tour codes whose significance was not readily understandable to the public.
With tour codes, scraper accessed EF's website repeatedly and easily obtained pricing information for those specific tours.
Scraper sent more than 30,000 inquiries to EF's website and recorded the pricing information into a spreadsheet

13. EF Cultural BV v. Explorica, Inc.
EF sues under the Computer Fraud and Abuse Act
[Whoever] knowingly and with intent to defraud, accesses a protected computer without authorization, or exceeds authorized access, and by means of such conduct furthers the intended fraud and obtains anything of value ... shall be punished.
Why CFAA?
Federal jurisdiction

14. EF Cultural BV v. Explorica, Inc.
District Court finds that act of scraping EF’s website using tour codes was violation of CFAA. Enters preliminary injunction.
Appellate Court agrees and affirms.
Implications
There’s good scraping (e.g. Google, Yahoo!)
There’s bad scraping (e.g. using confidential information in conjunction with bots)

15. Rights of Publicity Rights of Privacy Defamation
Intellectual Property “Torts” (civil infringements that lead to liability)
Rights of Publicity
Rights of Privacy
Defamation

16. No single law on any of the three areas of interest
Amendments to the constitution (1st, 4th, 5th, 14th) are often invoked.
Over half the states have laws, but they sometimes organize the three differently.

17. Warren and Brandeis, 1890
Samuel D. Warren and future Supreme Court Justice Louis D. Brandeis wrote a Harvard Law Review article in which they argued that the Constitution, though never stating so directly, offers a “right to be left alone.”
This and related ideas turned into the “right to privacy,” the “right to retreat from the world”
and in those days, the right to escape the excesses of yellow journalism.
That may have an analog in today’s ubiquitous data collection practices in new media.

18. Common Law Claims (that are then broken out among the three areas)
Intrusion upon seclusion
Public disclosure of private facts
False light in the public eye
Appropriation of name/likeness/etc.

19. Intrusion Upon Seclusion
Unauthorized intrusion or prying into plaintiff’s seclusion;
Intrusion offensive or objectionable to a reasonable person;
Matter upon which intrusion occurs must be private;
Intrusion causes anguish or suffering.

20. As Privacy
The privacy right of the persona responds to protections against unreasonable intrusion, unreasonable public disclosure of private facts, and others representing one’s person in false light.
Considerations about privacy violations often involve matters of consent: Was consent given for the collection, use, and distribution of the information?
In new media, this often takes us back to examinations of terms of service, privacy policies, and end-user license agreements
Courts, generally, still treat wrap agreements as law
Over time, one has to think that this will change/evolve.

21. For example: “Google Street View Litigation Mania--Seven Class Action Lawsuits and Counting”
Google to pay $7 million for privacy violation
Chris Isidore  March 13, 2013: 9:11 AM ET
Google still faces a private lawsuit brought by several different parties over the privacy violation.
Court Says Privacy Case Can Proceed vs. Google
Google Rebuffed by U.S. High Court on Privacy Lawsuit
It also faces other challenges to its privacy policies, most notably in the EU.

22. Constitutional bases and troubles
Aspects of the First, Fourth, and Fifth Amendments to the Constitution often apply to privacy of the persona.
Many authors/analysts note that the Patriot Act and other post-911 aspects have largely cancelled-out constitutional protections of privacy.
The nature of our uses for digital media also contribute here too: we post a lot, our mobile phones aren’t used “as in private,” etc.
A lot of constitutional protections are pinned to “expectations of privacy.” When we act like we don’t expect any, the law doesn’t protect us.
Constitutional protections (generally) only apply to what the government can do. These don’t apply (much or at all) to commercial/private data collection.

23. Public Disclosure of Private Fact
“A” is liable to “B” for giving publicity to a matter concerning the private life of “B,” if the matter publicized is the kind that:
Would be highly offensive to a reasonable person, and
Is not of legitimate concern to the public

24. For example: “IMDB’s Disclosure of Actress’s Age Will Go To Trial – Hoang v. Amazon
Hoang v. Amazon.com, Inc. et al. (initially filed as Doe v. Amazon.com, Inc. et al.) is a lawsuit brought by actress Junie Hoang in October 2011 against IMDb.com and its parent company Amazon.com for revealing her true date of birth, which she said opened her up to age discrimination. In March 2013, all of her claims against Amazon and all but one of her claims against IMDb were dismissed, and in April 2013, a jury found that IMDb was not liable for the remaining claim for breach of contract. She appealed February 2015; the 9th Circuit affirmed for IMDb

25. False Light in the Public Eye
Publication of false fact to the public;
Highly offensive to reasonable person;
Causes damage to plaintiff.
Usually represented in defamation cases

26. For example: “Courtney Love Digs Herself a Hole
Over Social Media Rants
Courtney Love has once again been sued for defamation for her rants on
social media. This is the third time Love’s overactive mouth has been the
subject of a defamation lawsuit.
Three years ago, fashion designer Dawn Simorangkir, aka “The Boudoir Queen,” accused Love of making false statements about her on Twitter
and MySpace. The gist of the posts was that Simorangkir was a drug-pushing prostitute with a criminal history who had lost custody of her own child. Love settled that case in 2011 for $430,000.
Soon after, Love tweeted that her lawyer, Rhonda Holmes, was “bought off.” Holmes then sued Love for defamation; that case is set for trial in January. Now, in a fresh lawsuit Simorangkir claims that Love has
posted more lies about her, this time on Pinterest, and on the Howard Stern show

27. Right of Publicity Defined
“[T]he inherent right of every human being to control the commercial use of his or her identity.”
McCarthy, Right of Publicity, 2nd Ed., 2005, Vol. 1, §1:3
Note that this right adheres regardless of the status of the person. However, since celebrities can usually leverage their personae for value, fussing over this right usually involves famous people.

28. Right of Publicity Defined PROTECTED ASPECTS OF PERSONA
Name
Likeness
Distinctive Voice
Style
Role – If synonymous with actor
Nicknames
“Crazy-Legs Hirsch”
“Here’s Johnny Porta-potties”
So how far will the courts go in protecting aspects of celebrity personna? Traditionally, name and likeness were protected but we’ve seen an evolution of protection from name and likeness to voice, to style, to character role. In New York you have some certainty because the statute lays out what is protected and everything that might derive protection from the common law is preempted by the New York statute.
But in other states the legislation is intended to supplement not supplant the common law. So how far will the common law go? The answer seems to be that virtually anything that serves to identify the celebrity will at least have the potential for protection. Here are some examples why I say that:

29. For example:
Keller v. Electronic Arts Inc., USCA, Ninth Circuit, July 31, 2013
Click here to download a PDF of the full decision.
Ninth Circuit affirms district court order denying motion to strike, under California’s anti-SLAPP statute, right-of-publicity claims asserted by former college football player, rejecting video game developer EA’s contention that use of the player’s physical characteristics and jersey numbers was, as a matter of law, transformative use protected by First Amendment.
Electronic Arts Settles Athletes’ Suit, Cancels Game
By Cliff Edwards & Karen Gullo - Sep 27, :33 PM CT
Electronic Arts Inc. (EA) agreed to pay $40 million to settle a lawsuit by former college athletes over use of their images in video games, after it canceled its college football title for next year because of legal issues.

30. Appropriation of Name or Likeness
Name or likeness of plaintiff;
Appropriated by defendant;
For some advantage, usually commercial.

31. By Samuel Maull, Associated Press NEW YORK — 50 Cent has sued Taco Bell, claiming the fast-food restaurant chain is using his name without permission in advertising that asks him to call himself 99 Cent. The rapper says in a federal lawsuit filed Wednesday that the Mexican-themed chain features him in a print ad asking him to change his name to 79 Cent, 89 Cent or 99 Cent. His real name is Curtis Jackson. The rapper's court papers say the ad is part of Taco Bell's "Why Pay More?" campaign, which promotes items for under a dollar, including Cinnamon Twists for 79 cents, Crunchy Tacos for 89 cents and Bean Burritos for 99 cents. The papers say the Irvine, Calif.-based company sent a bogus letter requesting the name change to the news media but not to the rapper.
The rapper's lawyer, Peter D. Raymond, said his client didn't learn about the letter or that he was featured in the ad campaign until he saw a news report about it. Raymond said his client is seeking $4 million in damages.
Taco Bell Corp. spokesman Rob Poetsch issued a statement saying: "We made a good faith, charitable offer to 50 Cent to change his name to either 79, 89 or 99 Cent for one day by rapping his order at a Taco Bell, and we would have been very pleased to make the $10,000 donation to the charity of his choice."

32. Exceptions
News, commentary, satire, critique, and some other forms of speech are protected when the information can be interpreted to be within the public’s right to know. News and information of public interest, even when about public figures with a lot at risk, is generally treated as outside the realm of protection under rights of publicity.
Images of public buildings
Images of people at news events
Sometimes (and in some jurisdictions) “parodies” and/or “artistic renderings” of otherwise protected personae.

33. Illinois Right of Publicity Act
765 ILCS 1075/1
Effective as of
Protects the right to control and to chose whether and how to use one’s individual identity for commercial purposes
Requires written consent to use an individual’s identity for commercial purposes
Continues for 50 years after death

34. Illinois Right of Publicity Act
EXCEPTIONS:
Portray, describe or impersonate individual in live performance or other literary or artistic manner;
Note that this one allows impersonations that are protected in other jurisdictions.
Non-commercial use (news, public affairs, sports broadcast, political campaign);
Identifying individual truthfully as author of work or program or performer;
Promotional materials for the above-referenced;
Professional photographers who display work at their shops (unless otherwise notified of objection).

35. Note that when you get a pix done by a photographer, they control the copyright and can display the work virtually anywhere, without additional permission. You are, in effect, their model with the equivalent of a signed release, unless you constrain them with paperwork. Paying them does not make their work a work for hire and thereby give you the copyright. If you want to limit publication/re-use, you must constrain them by specific contractual language/agreements.

36. Tort Liability in New Media

37. Content is King – But it can get you in trouble.
New media allows users and publishers to interact and share content.
But, who is legally responsible and for what content?

38. Where Can You Find User Generated Content (UGC)?
UGC has been around for a long time.
Examples: Pillsbury Bake-Off contests, op-ed page of newspaper, etc.
But, new media UGC is widely disseminated in various media outlets and does not typically receive editorial review.

39. What Tort Liabilities Can Publishers Face With User Generated Content?
Defamation
Obscenity
Right of Publicity/Right of Privacy
Infliction of Emotional Distress
Civil Rights (e.g., Fair Housing Laws)

40. What Protections Exist to Shield Internet Publishers From Tort Liability?
Section 230 of the Communications Decency Act (CDA)
“No provider or user of an interactive computer service (ICS) shall be treated as the publisher or speaker of any information provided by another information content provider.” U.S.C. § 230(c)(1).

41. What Protections Exist to Shield Publishers From Liability? (cont’d)
Section 230 encourages (but does not require) websites to filter or review submissions. “No provider or user of an interactive computer service shall be held liable on account of any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected…” 47 U.S.C. § 230 (c)(2).

42. Often, charges are dismissed due to protections afforded publishers, (see below), but sometimes, costly litigation has preceded application of the protection. For example:
Website Initially Denied 230 Dismissal But Gets It on Appeal--Shiamili v. Real Estate Group”
Here a “rouge” district judge finds for plaintiff, then the circuit appeal overrules on 230 grounds.

43. What Protections Exist to Shield Publishers From Liability? (cont’d)
Exceptions/When Liability May Apply:
No immunity for violation of federal criminal laws,
Intellectual property violations,
Right of publicity claims (in some jurisdictions), and
Applicability of the Electronic Communications Privacy Act of 1986 or similar state laws.

44. Potential exceptions to CDA 230 Immunity
Jane Doe v. Friendfinder Network
Federal District Court ruled that the immunity provisions in Section 230 of the CDA do not bar a state law claim for a violation of certain intellectual property rights set out within the state law of the jurisdictional state, including (and specifically in this case) a person’s “right of publicity.”
This ruling opens the door to right of publicity claims based on state laws that might not be overruled by Section 230 of the CDA