Perkins Coie Partner Dax Hansen was quoted this week in an article published by Internet Retailer, "Changing Their Stripes." The article discusses initiatives recently launched by Visa and MasterCard Worldwide in response to an increase in e-commerce and the rise of online competitors like PayPal and Facebook Credits.

Perkins Coie Partner Barry Reingold was quoted this week in an article published by BNA entitled, "'Cloud' Customers Facing Contracts With Huge Liability Risks, Attorneys Say."

On August 26, 2010, the FTC announced a consent decree with Reverb Communications, a public relations firm whose clients included developers of video games, including mobile gaming apps. http://www.ftc.gov/opa/2010/08/reverb.shtm.  This represents the first enforcement action under the agency's revised Guidelines Concerning the Use of Endorsements and Testimonials in Advertising. http://ftc.gov/os/2009/10/091005revisedendorsementguides.pdf

Reverb, which was typically paid a percentage of its clients' sales on advertised games, in 2008 and 2009 posted on the iTunes store reviews of those games. Typical reviews consisted of "Amazing new game," "One of the best apps just got better," and [Reverb's client] does it again!" Although the reviews seemed to come from disinterested consumers, they were actually posted by Reverb's employees, a fact never disclosed.

The type of conduct challenged (endorsements by an advertiser's employees) represents a classic violation of the guidellines.  What's interesting about the case is that none of Reverb's clients were included as co-defendants. If they were unaware that Reverb was using its own employees to generate positive reviews, this represents the rare case where "ignorance was bliss."

The Ninth Circuit affirmed a federal district court decision ordering the disclosure of the identities of three anonymous online speakers who made allegedly defamatory statements as part of a company's online "smear campaign" against a competitor. In Re: Anonymous Online Speakers, No. 09-71265 (9th Cir. July 12, 2010). The alleged victim of the "smear campaign" sought the identities of the three anonymous speakers as part of the civil discovery process. The anonymous speakers objected to the disclosure of their identities on First Amendment grounds, arguing that their right to anonymous speech outweighed the need for discovery of their identities. The district court disagreed and ordered disclosure of the speakers' identities. 

Perkins Coie Of Counsel Susan Lyon was quoted this month in an article on smart grid technology published in SmartHome magazine entitled, "Smart Grid: Plug In Or Jump Off?"

In last week's Wall Street Journal article, "Stalkers Exploit Cellphone GPS," Perkins Coie Partner Albert Gidari explained the challenges cellphone carriers face when police request location-tracking data.

The Federal Trade Commission’s Congressional testimony of July 22, 2010 provides an excellent overview of the Commission’s views on consumer privacy enforcement past, present, and future and should be of interest to consumers, industry stakeholders and privacy professionals alike.

Perkins Coie Partner Albert Gidari was quoted in an Associated Press article this week on a proposed change to federal law that would allow the FBI to obtain electronic records from Internet service providers - without a court order.

A federal court in the Northern District of California dismissed Computer Fraud and Abuse Act (“CFAA”), California Penal Code Section 502, and trespass to chattel claims against Apple Computer, Inc. arising out of its transmission of a software update that caused iPhones, which had been unlocked so they could be used with other service providers, to become unusable.  In re Apple & ATTM Antitrust Litig. No. 07-05152 (N.D. Cal. July 8, 2010).  This complete disabling of the iPhone has been termed “bricking.”

While Apple scored a victory in getting these three claims dismissed, the Plaintiffs scored a larger victory as the court granted class certification for the remaining claims as to “[a]ll persons who purchased or acquired an iPhone in the United States and entered into a two-year agreement with Defendant AT&T Mobility, LLC for iPhone voice and data service any time from June 29, 2007, to the present."

The Direct Marketing Association, a trade association with over 3000 members, has filed a complaint against the Executive Director of the Colorado Department of Revenue (“Department”) in her official capacity challenging Colorado’s tax notification and sales reporting requirements for out-of-state retailers in federal court.  See The Direct Marketing Association v. Huber, No. 10-cv-1546 (D. Colo. June 30, 2010).

YouTube received a resounding win in a recent decision in the long-running Viacom v. YouTube case (Viacom Internationa, Inc. v. YouTube, Inc., 2010 WL 2532404 (SDNY June 23, 2010)).  YouTube moved for summary judgment based on the safe harbor provisions of the Digital Millennium Copyright Act (DMCA), and despite Viacom's argument that the safe harbor was not applicable to YouTube on a wide variety of grounds, the court granted summary judgment on all direct and secondary copyright infringement claims.   Although this is only a lower court decision, this is an important victory for social media sites, as they rely on the DMCA safe harbor to provide protection from copyright infringement claims for content posted by third parties.

Lost in the shuffle surrounding the Senate Banking Committee's deliberations about the financial reform legislation (H.R. 4173) was its decision on June 22, 2010 to reject U.S. House of Representatives-authored language that would have broadened the FTC's enforcement powers. The vote represents a rare legislative setback for the agency, whose jurisdiction Congress has broadened over time, sometime (as in case of the CAN-SPAM Act) in the face of the agency's initial opposition to expansion!

The French data protection authority (i.e., Commission nationale de l’informatique et des libertés, or “CNIL”) has authorized music copyright holders to begin collecting Internet protocol (“IP”) addresses on illegal downloaders using P2P sites in order to identify them to authorities.

Today, the Supreme Court in City of Ontario v. Quon, et al., decided not to address whether a city police officer had a reasonable expectation of privacy in text messages sent using an employer-provided pager. Rather than confront the issue, the Court declined to "elaborat[e] too fully on the Fourth Amendment implications of emerging technology before its role in society has become clear." The Court also declined to "establish far-reaching premises that define the existence, and extent, of privacy expectations enjoyed by employees when using employer-provided communication devices." Instead, the Court assumed that the police officer had an expectation of privacy in text messages sent through his employer-provided phone, and found that the warrantless search of his text messages was reasonable.

On June 2, 2010 the Federal Trade Commission ("FTC") rejected a proposal by i-SAFE, Inc. to operate a self-regulatory program that would provide businesses with an additional mechanism to certify compliance with the Children's Online Privacy Protection Act ("COPPA").  COPPA generally prohibits websites from collecting personally identifiable information about children under the age of 13 without providing notice of the nature and purposes of the information collection and obtaining verifiable parental consent before collecting such information.  The rule includes a safe harbor provision, which effectively provides a defense against prosecution by the FTC or a state for alleged COPPA violations.  The provision states that websites that can demonstrate full compliance with an approved safe harbor program shall be deemed to be in compliance with the FTC's COPPA regulations.

In two recent cases, federal courts in California and Florida have permitted service of the Summons and Complaint by email on foreign defendants who operated online businesses solely through electronic communications and who took steps to conceal their physical addresses.