Lawsuits

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Twitter Sued for Allegedly Providing Material Support to ISIS

BY: JOE FERRARI    January 17, 2016

On January 13, 2016 a lawsuit was filed against Twitter in the Northern District of California, alleging that Twitter has knowingly permitted the terrorist group ISIS to use its platform as a tool for spreading extremist propaganda, raising funds and attracting new recruits. The suit was filed on behalf of the estate of Lloyd Fields Jr., a defense contractor from Florida who was killed by a Jordanian police officer whom he was training. ISIS later took credit for the attack.

The lawsuit alleges that Twitter has served an instrumental role in the rise of ISIS and has enabled it to carry out numerous terrorist attacks. More specifically, the complaint alleges that ISIS uses Twitter to: (1) recruit new terrorists, mainly through Twitter’s Direct Messaging capabilities; (2) fund terrorism, namely through ISIS’ tweets that call for donation; and (3) spread propaganda by distributing graphic photos and videos of its terrorist feats.

The issue is whether Twitter provided “material support” to ISIS under 18 U.S.C. § 2333(a), which provides in relevant part:

Whoever knowingly provides material support or resources to a foreign terrorist organization, or attempts or conspires to do so, shall be fined under this title or imprisoned not more than 20 years, or both, and, if the death of any person results, shall be imprisoned for any term of years or for life. To violate this paragraph, a person must have knowledge that the organization is a designated terrorist organization . . . that the organization has engaged or engages in terrorist activity . . . or that the organization has engaged or engages in terrorism . . . .

In Holder v. Humanitarian Law Project, the Supreme Court defined “material support” as any “property, tangible or intangible, or service, including currency or monetary instruments or financial securities, financial services, lodging, training, expert advice or assistance, safehouses, false documentation or identification, communications equipment, facilities, weapons, lethal substances, explosives, personnel (1 or more individuals who may be or include oneself), and transportation, except medicine or religious materials.” The argument will be that Twitter provides “communication equipment.”

In My Opinion, Twitter has a strong affirmative defense under Section 230 of the Communications Decency Act (“CDA”). In June 2014, Eric Goldman, professor of law at Santa Clara University, wrote an article explaining how Facebook used Section 230 as an affirmative defense in Klayman v. Facebook. In that case, a Facebook user posted an anti-Semitic page entitled “Third Palestinian Intifada.” Facebook eventually took the page down, but Klayman felt wronged by Facebook’s delayed response. The district court dismissed Klayman’s complaint and the DC Circuit affirmed.

The court held that Section 230 of the CDA mandates dismissal if: (1) Facebook is a provider or user of an “interactive computer service”; (2) the information for which Klayman seeks to hold Facebook liable was “information provided by another information content provider”; and (3) the complaint seeks to hold Facebook liable as the “publisher or speaker of that information.” The court found that all three prongs were met. Applied to this lawsuit, the same result should be found for the reasons discussed below.

First, Twitter qualifies as an “interactive computer service” because it is a service that provides information to multiple users by giving them access to Twitter-owned servers. When Twitter users browse the content that other individuals post, they do so by gaining access to information stored on Twitter’s servers. Under Klayman, this is sufficient to be deemed an interactive computer service.

Second, the content that the plaintiff complains of is “information provided by another information content provider,” namely the ISIS accounts. As explained above, ISIS uses Twitter to contact new recruits, solicit donations, and post pictures and videos of ISIS propaganda. This content all originates from the ISIS accounts—not from Twitter—thus satisfying the second prong.

The third prong—whether Twitter is the “publisher or speaker of that information” is tricky because the complaint does not attack Twitter for its failure to remove the content, as was the argument in Klayman. Instead, Twitter is being accused of providing a platform for ISIS communication, not for its refusal or delay to delete the content posted by ISIS. However, the complaint alleges that Twitter “knowingly” permitted ISIS to use Twitter. Implicit in that argument is that Twitter knew ISIS used its platform and could have shut down those accounts. That argument would imply that Twitter is the publisher of the ISIS-related content because it had the ability to delete the content. This would satisfy the third prong.  

Other issues in this case that Twitter is likely to raise involve policy considerations such as internet censorship, the impracticality of monitoring and disabling user accounts, and the difficulty in squeezing out ISIS-related accounts considering that a single user can create and manage multiple accounts simultaneously.

Plaintiffs are represented by Bursor & Fisher, P.A.. No counsel for Twitter yet, but Cooley, Wilson Sonsini, Perkins Coie, and Quinn Emanuel have all been retained by Twitter for Silicon Valley based litigation.

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Spotify Slapped with Copyright Class Action Lawsuit, But Its Not for $150 Million

BY: JOE FERRARI    January 4, 2016

On December 28, 2015, a lawsuit was filed against Spotify alleging that it knowingly distributes and reproduces copyrighted music.

Plaintiff is musician David Lowery, the guitarist and vocalist of alternative rock band Cracker. The complaint alleges that Spotify routinely distributes plaintiff’s (and others) music without a license or authorization to do so and fails to locate or identify the owners of those compositions for payment.

The complaint, filed in the Central Division of the U.S. District Court of California, proposes the below class of plaintiffs:

All owners of mechanical distribution and reproduction rights in musical compositions registered under United States federal law, which compositions were reproduced or distributed by Spotify without license or authorization since December 28, 2012.

The specific songs that plaintiff alleged to have been illegally reproduced and/or distributed by Spotify include (but are not limited to) “Almond Grove” (copyright registration No. PAu003764032); “Get On Down the Road” (No. PAu003745342); “King of Bakersfield” (No. PAu003745341); and “Tonight I Cross the Border” (No. PAu003745338), according to the complaint.

A lot of coverage (e.g., here, here, and here) claims that Spotify is facing $150 million in damages. That is misleading, at least in this stage of the litigation.  

Under the Copyright Act, copyright violations run between $750 and $30,000 per infringement, and up to $150,000 where the infringement is deemed willful, or done with knowledge (as is alleged in this case). The complaint in the instant case specifically recognizes that damages, or how much Lowery and the class members seek to recover, “have yet to be fully ascertained.”  In the very next sentence, plaintiff lobs out a baseless figure of “no less than $150,000,000” based on “information and belief,” which is standard boilerplate in complaints. In My Opinion, a great move by plaintiff’s attorney to grab some national headlines, but completely unfounded at these preliminary stages of the litigation. The Prayer for Relief, wherein a plaintiff states the type of damages/relief it seeks in a case, states that Lowery seeks damages “in an amount to be ascertained at trial” – no mention of $150 million.  

Lowery is represented by the Irvine, San Francisco, and Los Angeles offices of Michelman & Robinson, LLP. Spotify’s counsel has yet to make an appearance, but Spotify has retained Davis Wright and Wilson Sonsini in prior civil litigation in California. 

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Google Defeats Waze Maps Copyright Lawsuit

BY: JOE FERRARI    December 23, 2015

Earlier this year, Google was hit with a lawsuit by Pittsburgh-based PhantomALERT, alleging that Waze Maps—acquired by Google in 2013 for over $1 billion—utilizes traffic data curated by PhantomALERT in violation of copyright law. On December 14, 2015, the Northern District of California granted Google’s motion to dismiss the lawsuit. 

PhantomALERT provides audible and visual warnings to GPS devices and SmartPhones as drivers approach traffic enforcement zones, such as railroad crossings, dangerous intersections, dangerous curves, speed bumps, speed traps, speed cameras, red light cameras, school zones, and DUI checkpoints (“Traffic Data”). PhantomALERT alleged that Google was tapping into and using PhantomALERT’s database, arguing that fake Traffic Data points planted in PhantomALERT’s database were subsequently appearing in Google’s Waze platform.

Generally, facts are not copyrightable. However, factual compilations (or the way you organize or present those facts) may be copyrightable. In the instant case, the court held that the data underlying PhantomALERT’s software are “inherently factual, involving factual conditions, speed restrictions, and police-monitors,” which are objective facts that can be discovered and reported. Although the court recognized that the creativity associated with the selection and arrangement of a set of facts may be protectable, the court reasoned that PhantomALERT failed to creatively arrange or categorize its data.

Moreover, the court reasoned that there is no copyright violation where a defendant (Google) merely incorporates the raw data of a competitor (PhantomALERT) along with other data already contained in the defendant’s database. Eric Goldman—a professor of law at Santa Clara University—opined that such reasoning implies that even if Waze took 100% of PhantomALERT’s traffic data, there is no copyright infringement so long as Waze incorporated its own data.

The court allowed PhantomALERT to amend its complaint. PhantomALERT is represented by San Francisco-based Kronensberger Rosenfeld LLP; Google by all-start IP boutique Durie Tangri.

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Antitrust Troubles Continue for Bay Area Sports Teams: 49ers, Ticketmaster Sued   

BY: JOE FERRARI    August 25, 2015

Lawsuits against bay area sports teams and Ticketmaster for alleged attempts to control the secondary ticket market continue with the recent lawsuit filed against the San Francisco 49ers and Ticketmaster.

49ers season ticket holder Amir Kazemzadeh alleges that the 49ers are limiting the release of any season ticket until 72 hours prior to kickoff. In effect, this prevents season ticket holders from printing their tickets and selling them on secondary sites (e.g., StubHub) until 72 hours before kickoff. Kazemzadeh alleges that he found a buyer for a particular 49ers game on a secondary ticket website, but when he attempted to print and upload the ticket an account representative informed Kazemzadeh that the 49ers were not releasing tickets until 72 hours prior to the game. This leaves season ticket holders with only one option: to enter into secondary ticket sales using the NFL Ticket Exchange, powered by defendant Ticketmaster. Using the NFL Ticket Exchange – and no other system – season ticket holders can print their tickets right away and enter into secondary sales.

The crux of any antitrust case is conduct that limits competition and harms consumers. The complaint plainly alleges that competition is restricted because the amount of 49ers tickets listed on other secondary websites has declined. As for consumer harm, the complaint alleges that the NFL Ticket Exchange imposes a 30% transaction fee for buyers and 25% for sellers. Alternatively, StubHub charges buyers 10% and sellers 15%.

The complaint also illogically argues that season ticket holders are precluded from making face-to-face sales, transfers or gifts, arguing that ticket holders cannot “give or sell tickets to a friend or neighbor in advance of a game.” In My Opinion, under that argument, consumer harm is weak because no money is changing hands and it is unlikely that season ticket holders whom plan on giving their tickets away for free are harmed or inconvenienced by the 72 hour limitation.

Last April, I wrote about StubHub’s lawsuit against TicketMaster and the Golden State Warriors (see StubHub Sues Golden State Warriors & Ticketmaster Over Alleged Ticket Resale Restrictions below). While both complaints hinge upon professional teams’ attempt to control the secondary ticket market, the conduct here is distinguished from the Warriors action in that Ticketmaster expressly prohibits Warriors’ season ticket holders from using any secondary market platform but Ticketmaster’s. Here, 49er season ticket holders can still use other secondary ticket platforms, it’s just a matter of when the sale can close.

We will keep an eye on further developments in this lawsuit. In My Opinion, while the antitrust violation is debatable, one thing remains clear: attempts by professional sports teams or ticket providers to control or benefit from the secondary ticket market is inviting antitrust litigation.

The complaint can be read below. Plaintiffs are represented by Abbas Kazerounian of Kazerouni Law Group, APC (Costa Mesa, CA) and Joshua Swigart of Hyde & Swigart (San Diego, CA). Defense counsel will be updated upon initial appearances.

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StubHub Sues Golden State Warriors & Ticketmaster Over Alleged Ticket Resale Restrictions

BY: JOE FERRARI    April 9, 2015

On March 29, 2015, StubHub filed a lawsuit against the Golden State Warriors and Ticketmaster alleging both Federal and California state antitrust violations.

The complaint describes an anti-competitive scheme to manipulate the Golden State Warrior’s Secondary Ticket transactions. The complaint hinges upon an apparent restriction imposed on Golden State Warriors’ season ticket holders, requiring them to resell their tickets exclusively through Ticketmaster’s Secondary Ticket Platform.

Tickets for sporting events are usually sold via one of two platforms: (1) Primary Ticket Platforms, where the consumer purchases the ticket directly from the team; or (2) Secondary Ticket Platforms, where the consumer purchases the ticket from another person or entity.

Primary Ticket Platform providers, such as Ticketmaster, contract with teams to provide distribution of said team’s tickets. In return for the right to sell tickets, the Primary Ticket Platform provider shares with the team a portion of the Primary Ticket Platform fees that it collects on the sale of the ticket.

Secondary Ticket Platforms, such as StubHub, Ticketmaster, SeatGeak, and FanSnap, provide support services for ticket resales made by a person or entity that has already purchased the ticket. The price of the resale ticket is based on the reseller’s listing price, plus any service fees that the Secondary Ticket Platform charges. Thus, the team hosting the event typically receives no revenue from Secondary Ticket sales. However, according to the complaint, since 2012 the Warriors and Ticketmaster have had an exclusive arrangement where the Warriors share in the service fees generated on Ticketmaster’s Secondary Ticket platform.

However, according to the Complaint, the Warriors limit their fan’s choices of Secondary-Ticket platforms to just one: Ticketmaster.

As alleged in the complaint, the Warriors have begun to contractually require that any resale of Warriors’ season tickets be done exclusively through the Secondary Ticket Platform operated by Ticketmaster, allegedly threatening to cancel ticket holders’ season tickets for sales occurring outside of Ticketmaster’s Platform. 

According to the complaint, the season ticket holder’s Agreement allegedly states:

“Sale or resale of any [Warriors] tickets by unauthorized means is prohibited . . . Authorized resale of your tickets via online means is limited to [Ticketmaster’s] NBAtickets.com.”

The complaint further alleges that a fan asked for confirmation as to what “unauthorized means” entails, to which the Warriors allegedly responded: “Any tickets being resold outside of Ticketmaster.”

The complaint is embedded below. StubHub is represented by Constantine Cannon PC and the San Francisco office of Orrick Herrington & Sutcliffe. Defense counsel for Ticketmaster is Arnold Porter and Latham and Watkins for the Warriors. 

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49ers and CEO Jed York Sued for Age Discrimination

BY: JOE FERRARI    JANUARY 12, 2015 

On January 2, 2015 Anthony Lozano and Keith Yanagi filed a lawsuit against the San Francisco 49ers and its CEO Jed York. The complaint alleges that York, in a move to rebrand the 49ers as a “technology startup” within the NFL, engaged in a scheme to hire younger technology employees from Silicon Valley technology companies and to weed out the older employees of the 49ers.

The complaint includes a couple of damaging statements allegedly from York. For example, when asked why he wanted to hire younger tech employees, York allegedly responded:

“Because they made a lot of money, they did a lot of cool things before they turned 40 years old, and they don’t want to play golf six days a week.”

Moreover, when York faced a hiring decision between two qualified employees, he was asked to choose which employee to hire and allegedly responded:

“Let’s go with the younger one.”

When Lozano and Yanagi asked why they were being fired, all they were told was that the 49ers wanted to head in a new direction.

The above actions, according to Lozano and Yanagi, evidence a “campaign to terminate older workers” orchestrated by York.

In My Opinion, this matter will probably head to alternative dispute resolution (a type of out-of-court settlement arena), where a competent arbitrator should be able to settle this without issue. A settlement would be in the 49ers interest in order to avoid depositions or other discovery matters which might provide even more ammo (as if the media doesn’t have enough already) of a completely dysfunctional 49ers front office.

Plaintiffs are being represented by David Poore and Scott Brown of Brown Poore LLP (Walnut Creek, California), and James Mills of the Law Offices of James Mills (Oakland, California). The complaint is embedded below and is only 14 pages, with pages 1-8 providing the relevant background information. 

 

UPDATE: Tesla Settles Trademark Lawsuit 

By: JOE FERRARI    August 10, 2014 

Updating the below story, Bloomberg reports that Tesla has solved its trademark dispute with Zhan Baosheng. Chinese authorities will cancel the existing Tesla marks in China and return to Tesla all web site names registered by Mr. Baoshenk.

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Tesla Faces Trademark Lawsuit In China

By: JOE FERRARI    July 16, 2014 

Zhan Baoshenk is suing Silicon Valley based electric car company Tesla for Trademark Infringement.

Baoshenk is a Chinese entrepreneur and the alleged owner of the “Tesla” trademark in China. Baoshenk registered the trademark in both English and Chinese in 2006 in the southern province of Guangdong, Zhan.

Baoshenk recently brought suit against Tesla, demanding that Tesla stop all sales and marketing activities in China, shut down showrooms and supercharging facilities, and pay Baoshenk 23.9 million yuan ($3.85 million) in compensation.

Baoshenk is no stranger to Tesla. Two years ago, Baoshenk and Tesla entered into negotiations over the Tesla trademark. The negotiations eventually fell apart.

Baoshenk proceeded with his lawsuit despite the Chinese judicial system already ruling against him. In July 2013, the State Administration of Industry and Commerce revoked Baoshenk’s 2006 Trademark. Baoshenk has since appealed that decision. This procedural posture led to Tesla classifying the lawsuit as an attempt to “steal its property without merit.”

This lawsuit illuminates the continuing struggle of Silicon Valley companies hoping to expand into the Chinese market. In 2012, Apple paid Chinese computer-maker Shenzhen Proview Technology $60 million to settle a long-running dispute over the “iPad” name. Burberry Group Plc also faced similar branding rights difficulties.

Given Tesla’s recent announcement to not prosecute companies that could be infringing on its patents, a move viewed as Musk’s attempt to spur development in the electronic automobile industry, I’m rooting for Tesla in this one.

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Tinder Slammed with Sexual Harassment Allegations

By: JOE FERRARI    July 2, 2014 

Whitney Wolfe, Tinder’s former VP of Marketing, recently filed a lawsuit against Tinder for sexual harassment and sexual discrimination. Wolfe alleges that she experienced the harassment in connection with being allegedly forced out of the company and stripped of her co-founder status.

Wolfe is described in the complaint as a key player on the team that produced the popular Tinder app. Wolfe’s efforts in pitching Tinder to various colleges in its earlier days resulted in raising the user base from 500 to over 1500. During this time, all was well at the Tinder headquarters. 

Enter Justin Mateen, who becomes Tinder’s Chief Marketing Officer and Wolfe’s supervisor. Within months, Mateen and Wolfe began dating. And, within months, their relationship turned ugly.

The complaint goes into painstaking detail of the harassment, of which I’ve provided some snapshots below:

“When [Wolfe] asked why only her name of the five founders was absent, [Tinder founders] would tell her “you’re a girl” [which] “makes the company look like it was an accident.”

“Mateen told Wolfe that the reason she could no longer hold herself out as a co-founder was that she was a 24 year old ‘girl’ with little experience [which] ‘makes the company look like a joke’ and ‘devalues the company.’”

“Mateen told Ms. Wolfe in front of the other employees that Wolfe was a ‘desperate loser’ who ‘jumps from relationship to relationship’ and referred to her as a ‘joke.’”

When the Creative Director of a popular fashion and lifestyle blog offered to do a piece on Wolfe as a young female co-founder of Tinder, Mateen “said that the Creative Director wanted to have sex with Ms. Wolfe because of her cofounder title . . . he threatened to ‘fuck’ the Creative Director’s wife, and said that he would ‘be a handyman for my backyard and will be on a leash.”

When Wolfe asked Mateen what was wrong, he responded “you’re a whore . . . a gold digger . . . a disease . . . disgusting.”

It is important to keep in perspective that these are purely allegations made by one party against another. However, as reported by the Wall Street Journal, the allegations set forth in this matter could be the next chapter in what appears to be a story of harassment and discrimination against female executives in the Silicon Valley.

For example a former female partner at Kleiner Perkins Caufield & Byers accused her employer of gender harassment and discrimination. A female employee of Github, a San Francisco based startup, also accused her employer of serious gender harassment. And most recently, the CEO of Snapchat apologized for demeaning emails he sent as an undergrad.

This is not to say that all Silicon Valley tech companies engage in this type of behavior, but these stories of gender discrimination are beginning to become popular. Coupled with the recent diversity realizations, (e.g., 2% of employees at Google are African American), the Silicon Valley may be forced to undergo a major cultural shift.

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SpaceX’s Musk Files Lawsuit to Contest $70 Billion Rocket Launch Contract

By: JOE FERRARI    May 31, 2014 

As it stands, United Launch Alliance (“ULA”) – a joint venture between Lockheed Matin and Boeing Co. – is currently the only company authorized to launch military satellites.

SpaceX announced “it filed a lawsuit to protest the U.S. Airforce’s award of a multi-billion dollar, non compete contract for 36 rocket launches to a partnership of the two biggest U.S. weapons makers.” 

In a press conference, Musk argued that the contract “essentially blocks companies like SpaceX from competing for national security launches.” Musk also points out that the United Launch Alliance’s Atlas 5 rocket is made from Russian engine components, and states “[i]n light of the Ukraine crisis, this seems like the wrong time to send hundreds of millions of dollars to the Kremlin.”

Musk also argues that the current ULA costs taxpayers billions of dollars for no reason. Musk’s rockets could complete the same satellite launches for 50% less the cost of ULA’s.

The articles on this blog are those of the author individually. Nothing on this blog is to be construed as legal advice and is not meant to be so. If you have legal problems, please hire an attorney and consult with him/her. Do not rely on anything written in this blog for legal advice. Everything written here is my own opinion. 

 

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