THE FIRST CAN-SPAM SUIT FILED

On March 4th, Hypertouch, a California ISP, filed what it says is the first lawsuit filed under the CAN-SPAM Act of 2003 against BVWebTies, the company that owns and operates BobVila.com. The suit was filed in the U.S. District Court for the Northern District of California. Hypertouch alleges that the defendants sent the ISP and its customers unsolicited e-mail advertising a newsletter distributed by the BobVila.com website. The complaint states that BobVila.com sent 41 different e-mail messages bearing "materially false or misleading" headers, or subject lines, to trick people into reading the correspondence. Hypertouch alleges that the spam sent by the defendants could be linked to no physical address and that the parties sent the communications to randomly generated and harvested e-mail accounts, as well as to accounts that had submitted requests to opt out through links of other messages. The complaint in Hypertouch, Inc. v. BVWebTies LLC et al may be found at http://www.hypertouch.com/legal/bobvila/bobvila-complaint.html

On March 23rd, Utah’s governor signed into law a bill to regulate spyware and other advertising software. Similar bills are pending in Iowa and California. The Utah law arose from a problem reported by a local contact lens direct marketer, which discovered that some of its customers were seeing pop-up ads when visiting the company's Web site. Those ads were the result of advertising software on the customers' computers rather than the contact lens Web site, and the company contacted the legislature. The act bars companies from installing software that reports users' online actions, sends any personal data to other companies, or pops up advertisements without permission. Advertisements served by ordinary HTML or JavaScript are exempted, as are the ordinary "cookies" often used to help personalize Web pages. The act also bars "context based" tools from triggering unrelated advertisements based on visiting Web sites on a certain topic, as happened to the contact lens company. The text of the act may be found at http://www.freedom-to-tinker.com/doc/2004/utah_9mar.pdf

On February 27th, Senators Barbara Boxer, Conrad Burns and Ron Wyden introduced the "Spy Block Act," which would require a computer user’s consent before software is installed, and ensure that software programs could be easily removed. The new bill, dubbed the "Software Principles Yielding Better Levels of Consumer Knowledge," is viewed by some on Capitol Hill as a logical successor to the antispam legislation passed last year. The Center for Democracy and Technology, one prominent group that has recently taken a lead in the fight against spyware, says that it would rather see a larger bill addressing privacy issues more broadly but it recognizes that a narrower bill may be more likely to pass this year. The bill would require consent for software installations and require strict disclosure if a program collects information about a user and sends it elsewhere over the Net, creates advertising pop-up boxes, uses the computer for any purpose other than the stated purpose of the software, or modifies a computer's settings. The text of the Act may be found by entering the bill number (S. 2145) at http://thomas.loc.gov/

On March 5th, it was reported that the U.S. Patent and Trademark Office (USPTO) had invalidated a patent claim for Web browser technology central to a case against Microsoft, which may allow Microsoft to avoid paying more than half a billion dollars in damages. Last year, an Illinois jury delivered a $521 million verdict against Microsoft for infringing on technology developed by a privately held firm, Eolas Technologies, and the University of California. An appellate court upheld the verdict. Eolas has 60 days to appeal the agency’s decision. The USPTO’s preliminary decision, if upheld, also means that Microsoft will not be required to make changes to its Internet Explorer Web browser that would have crippled the program's ability to work with other programs, such as the QuickTime and Flash media players. Martin Lueck, the lawyer who represented Eolas, said it was not uncommon for the patent office to invalidate a claim as the first step of a review process, but said he was confident that the patent office would ultimately uphold Eolas' claim on the Web technology. The USPTO has only invalidated 151 patents out of nearly 4 million patents awarded since 1988. Further information may be found at http://www.theregister.co.uk/content/6/36065.html

On March 10th, Yahoo, EarthLink, America Online and Microsoft joined forces to announce that they were filing lawsuits against six of the most prolific spam operations in the U.S. This represents the first major initiative under the new CAN SPAM Act. Most of the lawsuits were filed against "John Does" because the spammers’ identities are unknown. The ISPs say that by following the money, they will discover the real identities of the people who are pushing millions of unwanted spam messages through their e-mail servers. Yahoo filed its suit against Eric Matthew and Barry Head, who allegedly send over 100 million spam messages a month to Yahoo users. Yahoo researchers said they discovered that Matthew and Head were using their unsubscribe option to collect e-mail addresses, which they then sold to other spammers. The complaints filed in these cases may be found at http://news.findlaw.com/legalnews/documents/index.html#spam

On March 9th, the European Parliament passed controversial legislation aimed at cracking down on copyright pirates, ranging from DVD counterfeiters to illicit Viagra sellers online. The bill targets major commercial counterfeiting operations but has sparked controversy by civil liberties groups concerned that the tough provisions could be applied to ordinary Net surfers, such as individual music swappers. Last minutes lobbying resulted in an amendment that focuses the proposed regulations on commercial pirates. Criminal penalties are not a part of the bill, but it does include stiff civil penalties, such as the power to freeze product counterfeiters' assets after a court verdict, as well as stronger enforcement measures that would allow subpoenas of Internet Service Providers' records. The legislation is expected to be approved by EU ministers shortly. The European Union's member states then would have two years to adopt the provisions as national law. The text of the directive may be found at http://www.ipjustice.org/CODE/021604.html

It was reported on March 10th that Helen Remsburg, whose daughter Amy Boyer was shot to death by a former high school classmate, had settled her suit against Docusearch, Inc. Amy was shot by Liam Youens, who chronicled his obsession with Amy and his plot to kill her on a Web site and had paid Docusearch roughly $150 to get her Social Security number and other personal information, including her work address. Remsburg sued the Ashburn, Virginia company in U.S. District Court four years ago, though Docusearch claimed none of the information it had provided was private. Remsburg had alleged that Docusearch invaded her daughter’s privacy and violated other laws when it provided information to Youens. The Remsburgs said they decided to settle for $85,000 out of frustration with the court system. Further information may be found at http://www.1590.com/Stories/0,1413,222~23678~2026123,00.html

On March 10th, the Federal Communications Commission (FCC) released guidelines that it proposes to use to decide what rules will govern companies providing Internet telephone services. The guidelines are primarily a list of questions on which the FCC is seeking public comments, which are due on May 10th. The FCC has already ruled that phone calls that never touch the public switched telephone network, so-called pure voice over Internet Protocol (VoIP), should not be regulated. The agency will use the public comments to determine whether calls that travel over the Internet and the traditional phone network should be regulated, a key Internet phone regulatory issue. The guidelines may be found at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-04-28A1.pdf

On March 12th, U.S. District Judge James Ware ruled against Microsoft in its bid to move an antitrust lawsuit brought against it by RealNetworks from California to Washington state. Despite the fact that Microsoft, of Redmond, Washington, and RealNetworks, of Seattle, are both Washington corporations, the judge ruled it appropriate for the case to remain in California, writing "RealNetworks has satisfied this Court that important and considerable evidence on this issue is concentrated in the Northern District of California." In the suit, RealNetworks asserted that Microsoft has illegally used its monopoly powers to control the digital media market. RealNetworks is seeking damages that could exceed $1 billion. In its move to have the case transferred, Microsoft said a trial in Washington would be "considerably less burdensome" to the employees of both companies as well as "less disruptive of their businesses." RealNetworks countered that numerous third party witnesses it intends to call are based in California, justifying the location of the trial. Further information regarding the case may be found at http://www.microsoft.com/presspass/legalnews.asp

On March 11th, the Federal Trade Commission (FTC) asked consumers to comment on the CAN SPAM Act of 2003 and to assist in planning a Do Not Spam registry. The FTC has opened a public comment period on the Act, which took effect on January 1st. Consumers have until April 12th to comment on its regulations. The FTC is seeking consumer opinions to help it judge which of its regulations to alter and whether additional rules are needed. Consumers may fill out a web-based form to make comments at http://www.regulations.gov and searching on "Spam" in the keyword field.

If you would like to read Shakespeare’s will, you can now do so online. The document is among more than 1 million wills, spanning five centuries, which Britain's National Archives has posted on the Internet for public access. One hundred of the wills, dated from 1384 to 1858, have been collated in a special section dedicated to their famous authors, including Jane Austen, Captain James Cook and Napoleon Bonaparte. Shakespeare's will is free to download and the others cost $6.40 each. The wills may be found at http://www.documentsonline.pro.gov.uk/

On March 11th, the Federal Communications Commission (FCC) took its first step toward combating spam that targets mobile phones and other wireless devices. The FCC is asking the public to submit comments on the best ways to prevent the growth of mobile phone spam, a problem that is still uncommon in the United States though experts agree that it will only get worse with time. The commission is required to develop the rules under the CAN SPAM Act of 2003. There are more than 150 million mobile phone users in the United States, as well as about 100 million wireless devices such as personal digital assistants and other handheld devices, according to the Cellular Telecommunications and Internet Association (CTIA). The law gives the FCC less than a year to draft rules allowing consumers to prevent spammers from contacting them on their wireless devices. The commission also is seeking public comment on whether commercial messages should be clearly labeled and whether mobile phone service providers have to get authorization from their customers before sending them commercial messages. Comments may be submitted by the public at http://gullfoss2.fcc.gov/ecfs/Upload/

On March 15th, U.S. District Judge Royce Lamberth once again ordered the Interior Department to pull the plug on most of its Internet connections, finding that the department still hasn't fixed computer security problems that could jeopardize millions of dollars in royalties for American Indians. This is the third time that U.S. District Judge Royce Lamberth has ordered the systems to be disconnected to protect oil, gas, timber and grazing royalties held in trust for the Indians. Previous Internet shutdowns have left the public unable to access information about popular national parks and monuments and made it difficult for Interior agencies to communicate with one another. Lamberth said the move was necessary because the department refuses to work with Special Master Alan Balaran to fix holes in the computer security, even though it admitted to the White House budget office and congressional auditors that it suffered from Internet security problems. The decision came in a suit filed on behalf of more than 300,000 American Indian landowners. The department was assigned in 1887 to manage royalties from lands held in trust for the Indians. But over time, the lands were poorly managed and money was squandered, stolen or never collected. The Indians sued in 1996, demanding an accounting that had been ordered by Congress two years earlier. In 1999, Lamberth said the department must account for the money and repair its management flaws. Lamberth first disconnected the systems in 2001, after Balaran determined that even a novice hacker could penetrate the security and access data for the Indian revenues. To prove his point, Balaran, working with the court, repeatedly penetrated the system's security and set up a bogus account in his name. The judge ordered a second, limited shutdown last June, after the department first resisted Balaran's oversight. On March 24th, the U.S. Court of Appeals for the District of Columbia Circuit blocked the trial court’s ruling, after the government claimed that the judge had overstepped his authority and was making it difficult for the department to function. Further information may be found at http://www.usatoday.com/tech/news/computersecurity/2004-03-16-interior-comp-sec- again_x.htm

The Business Software Alliance (BSA), a vendor group that targets software piracy, announced on March 16th that Red Bull North America, Inc. has paid the BSA $105,000 to settle claims that it had more copies of Adobe, Microsoft and Symantec software programs on its computers than it had licenses to support them. California-based Red Bull voluntarily conducted a self-audit after being contacted by the BSA. Red Bull also agreed to ensure current and future compliance. Further information may be found at http://www.bsa.org/usa/press/newsreleases/Red-Bull-Pays-105000-to-Software-Watch dog.cfm

On March 15th, open source software manufacturer Lindows announced that it had asked a U.S. District Court to block Microsoft from filing additional trademark lawsuits against the company in foreign countries. Lindows filed the measure in the District Court of the state of Washington hoping to bar Microsoft from bringing new legal complaints overseas. The filing represents the latest move in Lindows' wide-ranging dispute with Microsoft regarding trademark rights to the Windows name. At the heart of the dispute is Microsoft’s contention that Lindows' name violates its trademarks for the word "windows." A Microsoft spokesman responded to the filing by stating that the company believes that Lindows is infringing on its Windows trademark in a number of different countries and that it will take steps to defend its holdings internationally. While the battle has thus far resulted in rulings in Lindows' favor, it lost one round in Dutch courts. In January, a judge there issued a preliminary injunction, barring the company from selling or advertising any products under the Lindows name in the Netherlands, Belgium and Luxembourg. Courts in Finland and Sweden have issued similar injunctions. As a result of those rulings, Lindows said it would market itself in the Benelux countries under the name "Lin---s." Lindows has said that it received papers from Microsoft, asking the Dutch court to fine Lindows $123,000 (100,000 euros) per day for not blocking visitors to its regular Web site from those three countries. Lindows claims that Microsoft is delaying the U.S. case in order to saddle Lindows with legal fees from the overseas lawsuits. Further information may be found at http://www.lindows.com/lindows_news_pressreleases_archives.php?id=115

On March 9th, the Internet Corporation for Assigned Names and Numbers (ICANN) approved VeriSign’s proposal to conduct a twelve-month trial of its "Wait Listing Service." ICANN’s approval must be ratified by the U.S. Department of Commerce before becoming official. The service would allow users to put their names on a "wait list" if they were interested in buying domain names ending in .com and .net once they expire. ICANN and VeriSign had been in negotiations over the list since March 2002. VeriSign finally sued ICANN on February 26th, 2003, alleging that it was delaying and impeding innovation. No ruling has been issued in the case. Under the new system, domain name registrars could make reservations for expiring .com and .net domains on behalf of their customers. Only one reservation would be accepted for each domain name, on a first-come, first-served basis. The existing domain name holder would always have the option to renew it. VeriSign, which has a government contract to run the master database for .com and .net, has claimed that the Wait Listing Service would bring some structure to the way that expiring domain names are handled. Critics, including domain name registrars which have filed their own lawsuit against both ICANN and VeriSign, allege that the planned service will hurt their businesses by permitting VeriSign to leverage its government-granted monopoly over two of the Internet's most popular top level domains. The complaint filed by the domain name registrars may be found at http://fightwls.com/pdf/registersitevicanncomplaint.pdf

On March 19th, the Nebraska Supreme Court revived a class action lawsuit alleging that Microsoft violated the state’s consumer protection laws by engaging in monopolistic behavior. A divided court ruled 4-3 in favor of two Nebraskans who sued Microsoft in 2001, claiming that Microsoft used its monopoly power to overcharge people for its Windows 98 software. The decision in Arthur et al v. Microsoft may be found at http://court.nol.org/opinions/2004/march/mar19/s01-1325.htm

On March 24th, the European Union issued a landmark decision finding that Microsoft had abused a monopoly position, ordering the company to pay a $613 million fine and alter the way it sells its Windows operating system. The decision found that Microsoft broke European Union competition law by using its Windows monopoly to muscle into markets for server operating systems and media players. Microsoft has 90 days to offer European computer manufacturers a version of its operating system with its digital media player stripped out. The EU also ordered the company to turn over software code to rivals within 120 days to allow their competing server software to work smoothly with Windows. Microsoft General Counsel Brad Smith said the company would appeal the decision within 70 days, seeking to suspend the sanctions. Microsoft criticized the decision as a violation of its copyrights in Europe and of European Union intellectual property obligations under the World Trade Organization. The $613 million fine, the largest the Commission has ever imposed on a company, represents 1.62 percent of Microsoft's annual worldwide sales. Further information may be found at http://www.microsoft.com/presspass/legalnews.asp

On March 25th, a three-judge panel of the 4th U.S. Circuit Court of Appeals found that a Virginia law limiting the online display of sexually explicit material to minors violates the U.S. Constitution. The panel agreed with a lower court that the law, while seeking to restrict juveniles' access to indecent material on the Internet, imposes an unconstitutional burden on protected adult speech. "In order to avoid being too burdensome on protected speech, the statute cannot ... protect Virginia's juveniles from foreign or out-of-state Internet materials, regulate non-commercial Internet materials, or regulate materials posted on bulletin boards or in chat rooms," according to the ruling. A spokeswoman for Virginia Attorney General Jerry W. Kilgore said no decision has been made on appealing the ruling. The decision in PSINet v. Chapman may be found at http://caselaw.findlaw.com/data2/circs/4th/012352pv2.pdf

On March 23rd, the Recording Industry Association of America (RIAA) announced it had sued another 532 people, including 89 on university campuses, in its latest wave of lawsuits against alleged file swappers. Since September, the RIAA has sued 1,977 people in various parts of the country for allegedly trading music illegally on file-sharing networks. Most of the suits are pending. This time, the RIAA made a point of targeting people who trade on university campuses, who are most likely students. "This is a group that does not appreciate as much as the general population that it is illegal to share copyright music on a peer-to-peer network," said Jonathan Lamy, a spokesman for the Recording Industry Association of America. "More education is necessary. One form of education is lawsuits." The suits are all John Doe lawsuits and will be followed up with subpoenas to universities and ISPs to uncover the identities of the file swappers. Further information may be found at http://www.riaa.com.

On March 22nd, the Department of Justice (DOJ) and the Federal Trade Commission (FTC) jointly announced that they had shut down an identity theft scam in which a man tricked Internet users into providing their credit card and bank account numbers. Zachary Keith Hill, 19, of Houston, pleaded guilty to having and using credit instruments that did not belong to him. He will be sentenced May 17th and faces up to 15 years in prison, federal prosecutors said. The government said Hill got hundreds of people to provide information by sending e-mails that appeared to come from America Online or Paypal. The e-mails requested updated personal information and said the account would be suspended if the information wasn't provided, according to a Department of Justice criminal complaint. The Federal Trade Commission also named Hill in a civil action. The FTC said Hill used the information he collected to open new credit card accounts and made purchases using existing accounts. Further information may be found at http://www.ftc.gov/opa/2004/03/phishinghilljoint.htm

On March 24th, the World Trade Organization (WTO), in its first decision on an Internet-related dispute, ignited a political, cultural and legal firestorm by ruling that the United States policy prohibiting online gambling violates international trade law. The ruling received a warm reception from operators of online casinos based overseas as a major victory that could force America to liberalize laws outlawing their business. The Bush administration has said it will appeal the decision, and several members of Congress said they would rather have an international trade war or withdraw from future rounds of the WTO than have American social policy dictated from abroad. The decision stems from a case brought to the WTO in June 2003 by Antigua and Barbuda, which license 19 companies that offer sports betting and casino games like blackjack over the Internet. They argued that United States trade policy does not prohibit cross-border gambling operations. It is not clear precisely why the dispute panel of the trade body ruled in favor of Antigua and Barbuda because the specifics of its decision remain confidential. The ruling covers only online casinos based on the islands, which are near Puerto Rico. Other nations could seek similar rulings. Under federal law, it is illegal to offer sports bets over the Internet or to operate other gambling operations not otherwise allowed by individual states. State laws vary widely, with some allowing specific forms of gambling within their borders. Some states criminalize the placing of a bet, but others, like New York, do not make it a crime to bet online. Further information may be found at http://seattlepi.nwsource.com/business/166397_gambing26.html

The Electronic Frontier Foundation (EFF) has issued a proposal to deal with music file sharing issues. The proposal calls for the creation of a voluntary license scheme that would allow users to pay a monthly fee in return for legalized music downloading. The fee would be voluntary and could be levied by the user’s ISP, a software client, or a college. The fees would go directly to the artists. A copy of the report may be found at http://www.eff.org/share/collective_lic_wp.php

On March 3rd, a second federal court, the U.S. District Court for the Southern District of New York, barred software company 321 Studios from distributing its popular DVD-copying software. The company has already removed the DVD "ripping" component of its software, but has promised to appeal the earlier San Francisco ruling. The decision in Paramount v. 321 Studios may be found at http://news.findlaw.com/hdocs/docs/cyberlaw/pp32130304opn.pdf

On March 11th, the U.S. Copyright Office released details on how webcasters will pay royalties to record labels. The rules say that digital music services must compile and submit information such as the artist name, album title, and how many times the recording was transmitted to listeners. The rules may be found at http://www.copyright.gov/fedreg/2004/69fr11515.pdf