Special Seminar Event in NYC

Legal Strategies of Highly Successful App Development Companies

Here's your opportunity to learn the secrets of the most successful app development companies in the country--a perspective not seen, or taught, by any business school or law school in the country.

Whether your business is a spin-off, a start-up or an experienced app development company, it faces tough legal issues that need to be perfectly handled, or your company—and its software projects—will ultimately fail.

In this seminar, we will explore the legal challenges faced by every software and app development company, regardless of the company’s age, size, structure or industry served by the company’s software products. 

Topics will include:

● Privacy & Data Security: Learn what you need to know to ensure that your company’s data collection processes comply with FTC rules and regulations.

● Marketing / Branding Strategies: Learn what you need to know to register and protect your valuable intellectual property.

● Drafting Concepts: Learn to negotiate and draft the most effective and comprehensive development deals possible, utilizing up-to-date legal concepts and strategies used by some of the biggest software companies in the industry.

● Profitable Licensing: Discover the secret to effective licensing strategies used by profitable software companies throughout the United States.

● Offshore? Near-shore? Domestic? Learn the pros and cons of the various app development options available to your company. Learn how to protect your IP, even when it’s developed outside of the United States. 

● Asset Protection: Learn how to structure your company to keep your intellectual property away from would-be creditors and plaintiffs—including patent trolls.

Cost: $400 (includes lunch)

Date: May 9, 2012

Time:  10:30 AM – 2:30 PM

Location: NYC (exact location to be announced)

Limited seating!!  RSVP today!

The seminar will be led by Bradley Gross, Esq., managing partner of the boutique IP law firm, Law Office of Bradley Gross, PA., which focuses on specialized areas of intellectual property and technology law.  The firm represents digital and new media companies and software development companies throughout the world, and is general counsel to some of the largest digital agencies and production companies in the United States.  Brad has twice been named a Superlawyer (www.superlawyer.com), and has been listed three times as being in the top 2% of all intellectual property lawyers in the State of Florida.  He is the editor of two newsletters: the Business Technology Law Update, and the FTC & Digital Media Law Update.

RSVP today by clicking the logo below.

Viacom's "Victory" Over YouTube Isn't A Victory At All

The latest decision in the Viacom v. YouTube saga was handed down on April 5 by a federal appeals court. The decision re-instated a previosuly dismissed case against YouTube, in which Viacom sued YouTube for failing to remove Viacom's videos from YouTube's online database. And this is mostly good news for YouTube.

Wait, did you read that correctly? Did I write it correctly? Answer: Yes, to both.

It is good news for YouTube that the case against it was reinstated--not because YouTube has to defend itself again, but because the decision makes it clear that the Safe Harbor provisions of the Digital Millennium Copyright Act (or "DMCA") are alive and well, and fully enforceable. And that's good news for YouTube.

You're all familiar with the ongoing litigation involving Viacom and YouTube, right? Here's the summary:

• Thousands of Viacom-owned videos were being posted on YouTube.
• Viacom sent YouTube so-called "take down" letters, which are notices issued under the DMCA in which Viacom alerted YouTube to the existence of the videos, and demanded that the videos be removed from YouTube's site.
• YouTube took down the videos that were specified by Viacom; however, when one video was removed, someone, somewhere, simply re-posted it. Also, Viacom claimed that the same video was saved under multiple YouTube users' names, in multiple locations, so even if one copy was taken down, several other copies were still available.
• In addition, there were thousands of other Viacom-owned videos posted on YouTube which were not specified in Viacom's takedown notices.
• Viacom said, "Listen YouTube, we shouldn't have to keep telling you to take down the same type of video, such as video clips of the "Daily Show" or other shows produced and owned by Viacom. You should know that any Viacom-owned television show should not be permitted to be posted on YouTube. Now go and remove all of them--even if they are not specifically mentioned in a takedown notice, and even if every copy of the same clip is not specifically referenced in a takedown notice.."
• YouTube said, "Uh, no. The DMCA only requires us to take down only those videos about which we have specific knowledge. A general 'idea' that unauthorized videos exist on YouTube does not trigger any responsibility on YouTube's part to seek out all Viacom videos and remove them from our database. If you specifically tell us about them, we'll remove them. Otherwise, have a nice day." (Ok, I took some artistic license with the dialogue--but you get the point.

The lower court initially agreed with YouTube, and dismissed the case against YouTube stating that YouTube was entitled to "safe harbor" under the DMCA because it removed those videos about which it had knowledge. On April 5, however, an appellate court revived the case, and sent it back to the lower court for re-consideration.

So why is this good news for YouTube?

Because in its decision, the court completely eviscerated Viacom's position that YouTube should be responsible for those videos about which YouTube had only general, and not specific, knowledge. In other words, the court said that YouTube is protected from liability except where it actually knew of (or was purposely blind to) specific instances of unauthorized postings of Viacom videos. The court also emphasized the fact that YouTube did not have any duty to affirmatively monitor its users' activities.

Now the only remaining issues in the case revolve around whether YouTube exerted "substantial influence" on its users by encouraging them to engage in the unauthorized posting of Viacom videos. (And the odds of the lower court making that kind of finding are very slim. To make that kind of determination, the lower court will have to find that YouTube encouraged its users to post Viacom videos. A similar argument was attempted, but failed, in a case in California last December.)

The bottom line is this: the remaining claims and causes of action against YouTube have been gutted, and the court's decision makes it clear that YouTube's business model will be able to continue in the future. And that's good news for all of us.

Sometimes You Can Use Someone Else's Trademarks

Here’s a case of “first impression”--that’s a fancy way of saying, “a matter that hasn’t been decided by a court before.” It comes to us from a federal court in Texas, and it reminds us that commercial printers may be allowed to display the trademarks of others if the trademarks are displayed as part of the company’s printing business. The case may have significant implications for production companies and producers of online content—so let’s take a look and see went on.

The case of National Business Forms & Printing, Inc. v. Ford Motor Company, involved a small commercial printing company, National Business Forms & Printing, Inc. (which I will mercifully abbreviate as “NBFP”). NBFP made custom signs, stickers, banners, decals, and other advertising materials for its clientele. Among the various materials it would make were signs and banners displaying various car logos, including the famous “Ford in a Circle” logo, owned by Ford Motor Company.

NBSF’s websites declared that NBFP was “not affiliated with, licensed by, or endorsed by any company," and that the product logos previewed on the websites were "trademarks of their respective companies, and are provided for accurate identification and reproduction for authorized users."

Ford, however, wasn’t too fond of NBFP’s use of Ford’s famous trademark and didn’t care much about NBSF’s attempt to disclaim an affiliation with Ford. Through its attorneys, Ford demanded that NBFP stop using Ford's trademarks on all of NBFP’s websites.

NBFP sued Ford, and asked the court to declare that NBFP’s online printing operations did not infringe Ford's trademark rights. Ford countersued NBFP and raised counterclaims of trademark infringement, among other sundry things. The battle was on.

While I’d enjoy offering you a cinematic description of the strengths and weaknesses of each party’s position, I’ll skip right to the chase. After all, that’s why you read this blog, right?

The court held that NBFP did NOT violate Ford’s trademark rights. Why? Because NBFP only displayed Ford’s trademark to demonstrate the types of signs and banners that NBFP could make, and for no other purpose. NBFP did not try to induce people into thinking that NBFP was affiliated with Ford, and the court found that no reasonable person could believe that the printing company was related to Ford Motor Company.

See, it all comes down to customer confusion. If there’s no likelihood of customer confusion, then trademark infringement cannot occur.

Now listen up digital content producers: although the case involved the use of trademarks on a physical product (such as a banner), there’s no reason why the same logic can’t be applied to online, digital products and services. What’s the difference between a physical banner and a virtual banner? Not much--in fact, I'd argue that there is no difference at all, at least not from a legal perspective.

If your company is in the business of producing commercial banners (or similar items) online, then under certain circumstances you may be able to use the trademarks of others without risking a trademark infringement lawsuit. But DON’T VENTURE INTO THIS AREA ALONE.

Call counsel before using other companies’ intellectual property. If you do it correctly, it can be quite lucrative. If you don’t do it correctly, it can put you out of business.

EA Sued Over Use of Helicopters In A Video Game?

Electronic Arts is one of the biggest and best producers of realistic video games. So it should come as no surprise that in EA's popular video game, Battlefield 3, users have the option of flying around in simulated U.S. military aircraft like the AH-1Z Viper, the UH-1Y Venom and the V-22 Osprey.

But enter Bell Helicopter Textron and Textron Innovations, Inc--the companies that make those helicopters for the military in real-life. (I'll call them "Bell" for short.) Bell thinks that EA's use of its helicopters (virtual or otherwise) violates Bell's intellectual property rights.

To bring the issue to a head, EA filed a lawsuit against Bell, asking a federal court to declare that EA's use of Bell's helicopters in Battlefield 3 does not violate Bell's intellectual property rights. Not to be outdone, Bell filed its own lawsuit, asking a court to find that EA's video game violates Bell's intellectual property rights in the design, and naming, of its military aircraft. (Wow--this is just like Battlefield 3, but with even more terrifying weapons: lawyers. Can't wait for that to come out on the Wii.)

The lawsuits are pending, but I think Bell is wrong. Way wrong. Here's why.

We begin with the U.S. Supreme Court decision last June in the case of State of California v. Entertainment Merchants Association. You can read that decision here--but don't. At least, not yet. I'm going to tell you everything you need to know about that case right now....

Video games are a form of expression, and are entitled to First Amendment protection. Justice Scalia put it this way: "Like the protected books, plays, and movies that preceded them, video games communicate ideas—and even social messages—through many familiar literary devices (such as characters, dialogue, plot, and music) and through features distinctive to the medium (such as the player's interaction with the virtual world). That suffices to confer First Amendment protection."

(That's everything you need to know about the Entertainment Merchants case. Let's move on....)

Under the First Amendment, EA can use simulated video versions of the helicopters for expressive purposes without violating any of Bell's ownership rights in the design or appearance of the helicopters. Understand that? Perhaps not...so let me put that another way, but in the form of a question: Could EA ever make a realistic war game involving U.S. military forces without simulating the equipment and vehicles that are actually used by the military? Of course not. There would be no way to do it without referencing the actual equipment and aircraft used by the military.

So, since there is no other way to do it, does that mean that video game makers cannot create realistic war games without running afoul of intellectual property laws? Of course not. Trademark laws give trademark owners many rights, but the law does not give a complete and unfettered monopoly to trademark owners to prevent others from telling a story--virtual or otherwise.

Remember, EA is not trying to peddle helicopters or compete with Bell to make helicopters for the military. EA is only expressing its idea of a realistic wartime game through the use of virtual simulations That's not IP infringement, that's expression--the same type of expression that we have protected under the First Amendment since 1791.

Which brings me to my second point: in order to succeed in a claim of trademark (or trade dress) infringement, a plaintiff needs to show likelihood of customer confusion. In this case Bell would have to show that people would be confused into thinking that EA produced, manufactured or distributed military aircraft. And not just any "people" would have to be confused--the "people" would have to be the type of people to whom the trademark / trade dress is meant to apply, i.e., those that are normally involved in the purchase or acquisition of military aircraft.

Does anyone think that EA's game will lead purchasers of military equipment to believe that EA actually makes or distributes military helicopters? Oy vey. If anyone in the government is led to believe that EA is in the business of producing military aircraft based on Battlefield 3, then we have much bigger problems than trademark infringement.

I will continue to watch these cases, but I'm extremely confident that EA will succeed, and Bell will fail. By the way--as of the date of this post, neither of the parties' complaints in the case are easily found online--but I have them. Email me if you want a copy.

In the meantime, I'm going to ask my kids how to play the game. (IP issues aside, these games are really tough to play. I think I'm officially the slowest moving target in the game....)

FTC Issues Final Report on Consumer Privacy

Today, the Federal Trade Commission issued a final report setting forth best practices for companies to protect the privacy of American consumers, and to give American consumers greater control over the collection and use of their personal data.

The report, which you can access HERE, expands on a preliminary staff report the FTC issued in December 2010. The final report calls on companies handling consumer data to implement recommendations for protecting privacy, including:

Privacy by Design - companies should build in consumers' privacy protections at every stage in developing their products. These include reasonable security for consumer data, limited collection and retention of such data, and reasonable procedures to promote data accuracy;

Simplified Choice for Businesses and Consumers - companies should give consumers the option to decide what information is shared about them, and with whom. This should include a Do-Not-Track mechanism that would provide a simple, easy way for consumers to control the tracking of their online activities; and,

Greater Transparency - companies should disclose details about their collection and use of consumers' information, and provide consumers access to the data collected about them.
We will have more analysis of the final report, and how it impacts your company's data collection practices, in the next few days. For the most up-to-date analysis on this topic and other FTC and Digital Media Law-related topics, subscribe to the FTC & Digital Media Law Update.

You can check out the most recent Update (March 26) HERE and the March 21 Update HERE.

FTC Releases Its List of Top Consumer Complaints

Last month, the FTC released the Consumer Sentinel Network Data Book for January - December 2011.

For those of you not familiar with the Consumer Sentinel Network (or "CSN"), the CSN is an online database of millions of consumer complaints, which are available only to law enforcement and prosecutorial agencies. The database covers complaints filed with certain state agencies (such as state Divisions of Consumer Affairs), as well as federal agencies (such as the U.S. Postal Inspection Service, the FBI's Internet Crime Complaint Center, and others).

You can read the book in its entirety here.

According to the book, the CSN received over 1.8 million complaints in 2011. Some interesting facts: Colorado led all other states in reported fraud incidents, followed by Delaware and Maryland. Most fraud incidents were initiated with an email (43%), while only 13% were initiated by an Internet website.

Not to be outdone, Florida stepped up and took the lead over all other states (Hooray, I think?) with the highest per capita rate of reported identity theft (Oh, never mind.) Coming in a close second and third, respectively, were Georgia and California.

Here's the "top ten" of complaint categories (from most to least):

Identity Theft: 15%
Debt Collection: 10%
Prizes, Sweepstakes & Lotteries: 6%
Shop-at-Home & Catalog Sales: 5%
Bankers and Lenders: 5%
Internet Services: 4%
Auto-related Complaints: 4%
Imposter Scams: 4%
Telephone and Mobile Services: 4%
Advance-Fee Loans and Credit Protection/Repair: 3%

I Tried, But I Can't Dislike the Cybersecurity Act of 2012

I wanted to find a reason to dislike the recently proposed “Cybersecurity
Act of 2012”--but I couldn’t find one. (You can download and read the bill HERE).

Before reading the bill, I thought it was going to be another watered-down law that doesn’t address the problem of cyber-security at a national level, and doesn’t require (or facilitate) government agencies to talk to one another about their cyber-weaknesses. I was wrong.

The bill is a pretty good start for a long-term solution to remedying our nation’s cyber-security deficiencies, and here’s why:

1. The bill requires all federal agencies that maintain so-called “critical infrastructures” to conduct a comprehensive review of their cyber-weaknesses. (That’s a good thing, since everyone always thinks they have secure systems, until those systems are actually put to the test.) My suggestion: make sure that the self-assessments include all facets of security, including document retention and destruction policies, data migration policies and encryption policies. Security holes are sometimes found in garbage cans and dumpsters, and not just online.

2. The bills sets specific dates for compliance, using a phased-in approach. (Phased-in dates are always preferable to single-date deadlines that are usually randomly selected and have no relationship to real-life implementation activities).

3. The bill requires the government to speak to the private sector when setting performance and security standards. (I’m a big believer that the private sector knows best.)

4. The bill purports to be technology agnostic, and doesn’t require the use of any particular technology or software product by a federal agency. That’s an important point, since no single software or hardware solution can provide the solution sought by the government, and the ultimate security solution will likely rely upon a mixture of various hardware and software components.

But let’s remember: disparate systems need to be able to work together. The degree of interoperability between security solutions MUST be considered, or we will end up with systems that don’t communicate with each other, which will result in security gaps and deficiencies. And that’s exactly what we’re trying to avoid, right?