Archive for July, 2008
Somebody, pinch me, please!Read Full Post | Make a Comment ( Comments Off )
This week’s Daily Record column is entitled “Tiffany Fights Losing Battle Against Inevitable Change.”
Tiffany Fights Losing Battle Against Inevitable Change
“Ahh… Do I detect a look of disapproval in your eye? Tough beans buddy, ‘cause that’s the way it’s gonna be.”
—Holly Golightly in “Breakfast at Tiffany’s”
Like many large, traditional companies, the jeweler Tiffany & Co. made the puzzling choice to engage in a protracted and expensive legal battle rather than simply accepting and adapting to the technological changes in the worldwide marketplace.
Four years ago, Tiffany filed a lawsuit against eBay, the online auction giant, in the U.S. District Court for the Southern District of New York. Tiffany alleged its trademark was violated when eBay permitted sellers to list potentially counterfeit Tiffany items for sale.
Last week, following a non-jury trial, Judge Richard J. Sullivan issued a ruling in favor of eBay, concluding “[i]t is the trademark owner’s burden to police its mark and companies like eBay cannot be held liable for trademark infringement based solely on their generalized knowledge that trademark infringement might be occurring on their Web sites.”
Judge Sullivan’s decision, hailed as an important victory for online retailers, was in keeping with the vast majority of U.S. decisions on this issue.
Not surprisingly, instead of accepting defeat gracefully and vowing to find ways to make innovative platforms such as eBay work to their advantage, representatives of Tiffany indicated the company would most likely appeal the decision to the U.S. Court of Appeals for the Second Circuit.
In other words, rather than allocating resources so the company can adapt to the ever-changing online marketplace, Tiffany is planning to expend more money battling the inevitable —change.
Judge Sullivan noted Tiffany’s strategy of avoiding, rather than acknowledging technological change, in his decision: “Notwithstanding the significance of the online counterfeiting problem, it is clear that Tiffany invested relatively modest resources to combat the problem. In fiscal year 2003, Tiffany budgeted approximately $763,000 to the issue, representing less than 0.05 percent of its net sales for that year. …
Tiffany’s CEO, Michael Kowalski, testified that over the past five years, Tiffany has budgeted $14 million to anti-counterfeiting efforts —of which approximately $3 to 5 million was spent in litigating the instant action.”
Tiffany is not alone in its reluctance to adapt its business practices to embrace and complement emerging technologies. Trademark and copyright infringements claims against online giants such as TouTube, Google and eBay abound as industries with foundations planted firmly in the 20th century struggle to stay afloat when confronted with 21st century innovations.
The recording industry has yet to find a way to maintain profitability in the face of online file sharing and other emerging technologies. Likewise, conventional retailers, television and print media continue to struggle with these issues as consumers increasingly obtain information, products and services online, rather than through traditional venues.
The online marketplace is expanding exponentially. Pioneering business entrepreneurs are creating increasingly inventive online platforms through which products are advertised, bartered, exchanged and sold. Online commerce is becoming commonplace.
Like Tiffany, some companies steadfastly refuse to acknowledge the profound changes in the marketplace and, instead, expend precious time, energy and resources in the futile attempt to turn back the clock and prevent change.
Conversely, other innovative businesses, such as eBay, wisely accept the fact that change is inevitable and reap the financial benefits as they creatively and innovatively tackle the digital frontier.Read Full Post | Make a Comment ( Comments Off )
This week’s Daily Record column is entitled “When Private Concern Becomes Public Domain.”
When private concern becomes public domain
Federal judge Louis L. Stanton caused an uproar among privacy advocates last week when he issued an order in Viacom v. YouTube Inc., 07 Civ. 2103, a closely watched case pending in the U.S. District Court for the Southern District of New York.
The lawsuit, in which Viacom is seeking $1 billion from YouTube and Google for copyright infringement, is
now in the discovery phase. The order related to Viacom’s demand for, among other things, YouTube’s source code and user records.
Using the data demanded, Viacom seeks to establish that YouTube unlawfully profited from the unauthorized viewing of Viacom’s copyrighted works by reviewing the frequency with which its copyrighted videos were viewed compared to other video content on YouTube.
Judge Stanton denied the request for YouTube’s proprietary source code, but ordered the production of “all data from the logging database concerning each time a YouTube video has been viewed on the YouTube Web site or through embedding on a third-party Web site,” despite the fact Viacom
could just as easily make its case in the absence of specific user data.
In other words, the court required the production of 12 terabytes of data containing, for every video ever watched on YouTube, the unique login ID of the YouTube user, the time the individual began to watch a video, the IP address of the person’s computer and identification of the particular video being viewed.
Judge Stanton rejected YouTube’s privacy concerns, grounded in the protections set forth in the Video Protection Privacy Act (VPPA), stating that “their privacy concerns are speculative.”
The “[d]efendants do not refute that the ‘login ID is an anonymous pseudonym that users create for themselves when they sign up with YouTube’ which without more ‘cannot identify specific individuals’ (Pls.’ Reply 44), and Google has elsewhere stated: ‘We… are strong supporters of the idea that data protection laws should apply to any data that could identify you. The reality is though that in most cases, an IP address without additional information cannot,’” the judge wrote.
In doing so, the court arguably ignored the protections provided by the VPPA, concluding it was inapplicable despite the fact that the Act specifically prevents the production of “personally identifiable information” by providers of “prerecorded video cassette tapes or similar audio visual materials.”
Pursuant to the VPPA, “personally identifiable information” includes “information indentif[ying] a person as having requested or obtained specific video material or services.”
The VPPA prevents the disclosure of such information: “[I]n a civil proceeding [except] upon a showing of compelling need for the information that cannot be accommodated by any other means, if —(i) the consumer is given reasonable notice, by the person seeking the disclosure, of the court proceeding relevant to the issuance of the court order; and (ii) the consumer is afforded the opportunity to
appear and contest the claim of the person seeking the disclosure.”
Many legal experts have speculated that by ignoring privacy concerns and the arguably applicable protections of the VPPA and ordering the disclosure of the viewing records of more than 4.1 billion videos, the court effectively set legal precedent allowing access to the vast amounts of data on
user activity contained within the servers of Internet giants such as Google.
This is particularly alarming in light of the extremely personal and private nature of the information people seek online, much of which has little to do with prurient interests and includes issues related to mental health, physical health and substance abuse.
Other revealing information obtained online includes people’s use of online dating, job search or debt relief services. People purchase potentially embarrassing products online, including prescription
medications, personal care items and contraceptives.
Judge Stanton’s order is unnecessarily broad, ignores existing laws enacted with privacy concerns in mind and opens the door to more expansive and invasive discovery requests in future lawsuits.
Internet use continues to increase exponentially and is drastically changing the ways in which the world operates. In light of rapid technological advancements, judges must appreciate the potentially broad effects of their rulings in a single case; their failure to do so will be to the detriment of the millions upon millions of Internet users throughout this nation.Read Full Post | Make a Comment ( 1 so far )