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.

Website that neglected to properly verify bank account ownership held liable for fraud committed by users of site.

Two articles written by Perkins Coie attorneys  Dax Hansen, Kirk Soderquist and Andrew Grant were recently published in the Security Strategies Alert column in NetworkWorld. The articles, "Real legal issues with virtual currencies" and "Legal risks with virtual currencies in online games" provide a legal perspective on the increasing use of virtual currencies in online role-playing games and virtual worlds.

Perkins Coie Of Counsel Susan Lyon will be serving as co-chair for the Data Breach program at the IAPP Practical Privacy Series on June 14-15, 2010 in Santa Clara, CA. The program provides a full day of exercises that will test your ability to make decisions in a data breach situation. Perkins Coie Partner James McCullagh is on the agenda, along with Jonathan Fox of eBay, Inc.

The Federal Trade Commission recently closed an investigation of Ann Taylor for suspected violations of the agency's new product endorsement advertising guidelines, which require advertisers who compensate endorsers to disclose this in the advertisement. This is the first reported investigation relating to endorsements through blog entries solicited by an advertiser.

Congress should bring the Electronic Communications Privacy Act (ECPA) into the twenty-first century.  That was the message from several witnesses, including Perkins Coie Partner Albert Gidari, to the Committee on the House of Representatives' Judiciary Committee, Subcommittee on the Constittution, Civil Rights, and Civil Liberties at a hearing Wednesday and described in the PCWorld article, "Lawmakers Consider Changes to Wiretapping Law."  

In Asis Internet Services v. Richard Rausch et al., No. 08-03186 (N.D. Cal May 3, 2010),  the court awarded $2,596,020 to a provider of dial-up and broadband internet and email services to just under 1,000 customers for damages resulting from the receipt of 24,724 spam emails that were sent by defendants.   Asis provides its service through its own equipment and services and equipment provided by vendors such as Postini (the popular spam filtering service) and a team of four employees.  Asis receives approximately 200,000 spam emails a day and incurs costs of approximately $3,000 per month to process spam emails in both processing and employee costs. 

Perkins Coie Partner Albert Gidari testified today before the Committee on the House of Representatives' Judiciary Committee, Subcommittee on the Constitution, Civil Rights, and Civil Liberties, on the need for reform of the Electronic Communications Privacy Act (ECPA). Gidari noted that ECPA is 25 years old and its application to many new services like cloud computing, social networking and location-based services is unclear. He called for clear rules for service providers to disclose user content, communications and information and for more transparency about the amount of information collected by governmental agencies. Read written testimony.