| Publication Schedule |
| The Tech Law Journal Daily E-Mail Alert will not be
published on Wednesday, August 28, Thursday, August 29,
Friday, August 30, or Monday, September 2. |
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| Court Holds There is
Presumptive Entitlement to Attorneys' Fees in Small Copyright
Infringement Cases |
8/23. The U.S.
Court of Appeals (7thCir) issued its opinion
[4 pages in PDF] in Gonzales
v. Transfer Technologies, a case regarding the
award of statutory damages and attorneys' fees for copyright
infringement. The Court held that "the prevailing party
in a copyright case in which the monetary stakes are small
should have a presumptive entitlement to an award of
attorneys' fees".
Background. Gonzales owns copyrights on designs.
Transfer Technologies sold temporary tattoos that copied four
of Gonzales' designs, without license or permission.
District Court. Gonzales filed a complaint in U.S. District Court (NDIll)
against Transfer Technologies alleging copyright infringement.
He sought statutory damages and attorneys' fees. The District
Court awarded Gonzales the minimum statutory damages of $750
per incident (pursuant to 17 U.S.C.
§ 504), and no attorneys' fees (pursuant to 17 U.S.C.
§ 505). The District Court explained that
"Transfer's actions, though willful, are not the kind of
flagrant behavior that would justify an award of attorneys'
fees", but otherwise did not explain its ruling. Gonzales
appealed the denial of attorneys fess.
Statute. Section 505 provides that "In any civil
action under this title, the court in its discretion may allow
the recovery of full costs by or against any party other than
the United States or an officer thereof. Except as otherwise
provided by this title, the court may also award a reasonable
attorney's fee to the prevailing party as part of the
costs."
Appeals Court. The Court of Appeals vacated and
remanded. First, Judge
Richard Posner, who wrote the opinion of the three judge
panel, stated that the reversal was warranted because of the
lack of an adequate explanation by the District Court. He
wrote that "we do have to insist that the judge explain
the grounds for his decision in sufficient depth to enable
their reasonableness to be determined; otherwise there would
be no appellate control at all over such decisions. And so we
have not hesitated in the past to remand section 505
determinations when the district judge had not supplied us
with sufficient indication of his reasoning process to enable
us to decide whether the determination was reasonable. ...
This is such a case." (Citations omitted.)
Second, and more importantly, the Appeals Court held that
"we go so far as to suggest, by way of refinement of the Fogerty
standard, that the prevailing party in a copyright case in
which the monetary stakes are small should have a presumptive
entitlement to an award of attorneys' fees." See, opinion
of the Supreme Court in Fogerty v. Fantasy, Inc., 510 U.S. 517
(1994).
The Appeals Court offered the following rationale. "The
infringement was willful; and willful infringements involving
small amounts of money cannot be adequately deterred (and
remember ``the need in particular circumstances to advance
consideration of . . . deterrence´´) without an award of
attorneys' fees. No one can prosecute a copyright suit for
$3,000. The effect of the district court's decision if
universalized would be to allow minor infringements, though
willful, to be committed with impunity, to be in effect
privileged, immune from legal address. The smaller the
damages, provided there is a real, and especially a willful,
infringement, the stronger the case for an award of attorneys'
fees."
The only issue before the Appeals Court was the award of
attorneys' fees. However, the same rationale might be applied
to support the award of statutory damages greater than the
statutory minimum. The Court did not address this. |
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| More News |
| 8/22. Federal Communications
Commission (FCC) Chairman Michael Powell
stated in a release
[PDF] that "I am deeply disturbed about the reports of an
incident involving WNEW-FM and a radio contest involving sex
in public places, and I have directed the FCC's Enforcement
Bureau to proceed immediately with a thorough investigation of
the matter." See also, FCC written
interrogatories [PDF] to Infinity Broadcasting, licensee
of station WNEW-FM. |
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| 9th Circuit Rules on
Application of Wiretap Act and Stored Communications Act to
Secure Web Sites |
8/23. The U.S.
Court of Appeals (9thCir) issued its opinion
[39 pages in PDF] in Konop
v. Hawaiian Airlines, a case involving
application of the Wiretap Act and the Stored Communications
Act (SCA) to password protected discussion web sites. This is
the Appeals Courts' second opinion in this case.
The Appeals Court held in this second opinion that the
unauthorized accessing of messages posted to a password
protected web site does not violate the Wiretap Act because
the Wiretap Act only covers messages intercepted during
transmission, not those intercepted in storage. And hence, the
Appeals Court affirmed the District Court's summary judgment
on this issue in favor of a defendant who accessed the web
site under false pretences. The Appeals Court reversed the
District Court's summary judgment for the defendant on the
Stored Communications Act (SCA) issue, but only on narrow
grounds peculiar to this case.
Background. Robert Konop, a pilot for Hawaiian Airlines (HA),
operated a bulletin board web site for discussion of HA union
representation issues. Konop, who opposed labor concessions
sought by HA, made statements in the web site that were
critical of both his employer and the pilots' union. The web
site was password protected, and required registration and
consent not to disclose the contents of the web site. An HA VP
named Davis repeatedly accessed the web site under false
pretenses: logging in as pilots who had authority to access
the web site. The two other pilots, named Wong and Gardner,
had authority to use the website, and gave Davis permission
and information to access the web site.
Previous Proceedings. Konop filed a complaint in U.S. District Court (DHawaii)
against HA alleging that HA (1) intercepted an electronic
communication in violation of the Wiretap Act, as amended by
the Electronic Communications Privacy Act (ECPA), (2) accessed
an electronic communications facility in violation of the SCA,
(3) violated the Railway Labor Act in several respects, and
(4) committed various torts under Hawaii state law.
The trial court dismissed all of Konop's claims on summary
judgment, except for retaliatory suspension under the Railway
Labor Act. Konop appealed all issues except the state tort
claims. The District Court did not find, or base its judgment
upon a finding, that the other HA pilots, Wong and Gardner,
ever used the web site.
The Appeals Court, in its first opinion
[PDF], issued on January 8, 2001, reversed the District
Court's judgment on both the Wiretap Act and SCA claims on the
grounds that there were triable issues of fact. The Appeals
Court held that "The contents of secure websites are
``electronic communications´´ in intermediate storage that
are protected from unauthorized interception under the Wiretap
Act." It further held that "the Wiretap Act protects
electronic communications from interception when stored to the
same extent as when in transit." See, 236 F.3d 1035.
However, the Appeals Court vacated this opinion. See, 262 F.3d
972.
Appeals Court. In this second opinion, the Appeals
Court affirmed the judgment of the District Court with respect
to the Wiretap Act claim and the retaliation claim under the
Railway Labor Act. It reversed with respect to the claims
under the SCA and the remaining claims under the Railway Labor
Act.
The same three judge panel -- Judges Robert Boochever, Richard
Paez and Stephen Reinhardt -- participated in both opinions.
Reinhardt wrote a partial dissent to this second opinion.
The Statutes. The prohibition of the Wiretap Act is
codified at 18
U.S.C. 2511. It applies to anyone who "intentionally
intercepts, endeavors to intercept, or procures any other
person to intercept or endeavor to intercept, any wire, oral,
or electronic communication". The relevant definitions
are codified at 18
U.S.C. § 2510.
The key terms for this case are "intercept" and
"electronic communication". § 2510(c)(4) provides
that intercept "means the aural or other acquisition of
the contents of any wire, electronic, or oral communication
through the use of any electronic, mechanical, or other
device." § 2510(c)(12) provides, in part, that
electronic communication "means any transfer of signs,
signals, writing, images, sounds, data, or intelligence of any
nature transmitted in whole or in part by a wire, radio,
electromagnetic, photoelectronic or photooptical system
..."
The Stored Communications Act prohibition is codified at 28
U.S.C. § 2701.
The Appeals Court first commented on the legislative history
of the ECPA, which was passed by the Congress in 1986. The
Court wrote that "Title I of the ECPA amended the federal
Wiretap Act, which previously addressed only wire and oral
communications, to ``address[ ] the interception of ...
electronic communications.´´ ... Title II of the ECPA
created the Stored Communications Act (SCA), which was
designed to ``address[ ] access to stored wire and electronic
communications and transactional records.´´ ... As we have
previously observed, the intersection of these two statutes
``is a complex, often convoluted, area of the law.´´ ... In
the present case, the difficulty is compounded by the fact
that the ECPA was written prior to the advent of the Internet
and the World Wide Web. As a result, the existing statutory
framework is ill-suited to address modern forms of
communication like Konop's secure website." (Citations
omitted.)
The Court also noted that "The legislative history of the
ECPA suggests that Congress wanted to protect electronic
communications that are configured to be private, such as
email and private electronic bulletin boards." It added
that "The nature of the Internet, however, is such that
if a user enters the appropriate information (password, social
security number, etc.), it is nearly impossible to verify the
true identity of that user. ... We are confronted with such a
situation here."
Wiretap Act. The Appeals Court affirmed summary
judgment for HA on this issue. The Court first concluded that
Konop's website fits the definition of "electronic
communication." However, the Court held that HA did not
"intercept" an electronic communication.
After a lengthy analysis of precedent, the Court concluded
that "for a website such as Konop's to be ``intercepted´´
in violation of the Wiretap Act, it must be acquired during
transmission, not while it is in electronic storage." And
since the Appeals Court found no "interception", it
affirmed the District Court's summary judgment against Konop
on his Wiretap Act claims.
Stored Communications Act. The Appeals Court wrote that
"The SCA makes it an offense to ``intentionally access[ ]
without authorization a facility through which an electronic
communication service is provided ... and thereby obtain[ ]
... access to a wire or electronic communication while it is
in electronic storage in such system.´´ 18 U.S.C. §
2701(a)(1). The SCA excepts from liability, however, ``conduct
authorized ... by a user of that service with respect to a
communication of or intended for that user.´´ 18 U.S.C. §
2701(c)(2). The district court found that the exception in §
2701(c)(2) applied because Wong and Gardner consented to
Davis' use of Konop's website. It therefore granted summary
judgment to Hawaiian on the SCA claim."
However, the Appeals Court, focusing on the term
"user", reversed the District Court. The Appeals
Court reasoned that because (1) Section 2701 provides that
only a "user" can authorize access by a third party,
(2) Section 2701 defines "user" as someone who
"uses the service", and (3) the District Court did
not make a finding that Wong and Gardner had used the service,
that therefore there is not sufficient evidence in the record
to sustain the application of authorization exception, and the
summary judgment for HA must be vacated.
Of course, on remand, it is hypothetically possible that the
District Court would make the requisite finding of use by the
authorizer, and enter summary judgment for HA once again.
Moreover, the Appeals Court's holding is not likely to have
wide reach, because most persons who have a password to a
protected web site, and know their password, have also used
that web site.
Railway Labor Act. The Court also addressed the Railway
Labor Act claims at length. However, those are not addressed
in this article.
Dissent. Judge Reinhardt dissented from the majority's
opinion with respect to the Wiretap Act. He wrote that "I
dissent, however, from Part B of Section I, which holds that
the term ``intercept´´ in the Wiretap Act, as applied to
electronic communications, refers solely to contemporaneous
acquisition. I conclude instead that ``stored electronic
communications´´ are subject to the statute's intercept
prohibition as well."
Advice for Congress. The Court also wrote that "We
observe that until Congress brings the laws in line with
modern technology, protection of the Internet and websites
such as Konop's will remain a confusing and uncertain area of
the law." However, it is very difficult to move wiretap
or ECPA related bills through the Congress because the issues
involved are so contentious. Moreover, many members of the
Congress are currently not disposed to following the advice of
the Ninth Circuit, as a result of its recent opinion regarding
the constitutionality of the Pledge of Allegiance. |
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| Monday, August 26 |
8:00 - 11:00 AM. Equity International will host a conference
titled "Homeland Security Financing Briefing".
Speakers will address supplemental homeland security spending
for 2002, priorities for 2003 homeland security spending,
critical infrastructure protection, counter terrorism programs
of the FBI, and how to win homeland security contracts. Ron
Dick, Director of the FBI's National
Infrastructure Protection Center, will speak from 9:15 to
9:30 AM. Other speakers include Dale Watson (Executive
Assistant Director for Counterterrorism at the FBI), William
Hoagland (Staff Director of the Senate Budget Committee),
Scott Lilly (Minority Staff Director of the House
Appropriations Committee), Paul Bergeron (Office of the Deputy
Assistant to the Secretary of Defense for Chemical &
Biological Defense), and Donald Vincent (VP for Homeland
Security at Booz Allen). Location: Holeman Lounge, National
Press Club, 529 14th St., NW.
1:00 PM. FTC Chairman Timothy
Muris, Postmaster General John Potter, and other government
officials will hold a press conference regarding telemarketing
fraud. See, release.
Location: USPS Headquarters, 475 L'Enfant Plaza SW, Ben
Franklin Room (11th Floor).
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| Tuesday, August 27 |
10:00 AM - 12:00 NOON. The State Department's International
Telecommunication Advisory Committee (ITAC) will meet. See, notice
in Federal Register, July 23, 2002, Vol. 67, No. 141, at Page
48241. Location: Room 1105, State Department.
8:00 AM - 3:30 PM. The National
Academy of Sciences (NAS) will host partially open, and
partially closed, seminar titled "Review of the Patent
Office's 21st Century Strategic Plan". See, agenda.
Location: NAS, Lecture Room, 500 Fifth Street, NW.
Deadline to submit comments to the National Telecommunications
and Information Administration (NTIA) in response to its
request for comments on the effectiveness of Internet blocking
and filtering technologies. § 1703 of the Children's
Internet Protection Act (CIPA) [PDF] directs NTIA to
initiate a notice and comment proceeding to evaluate whether
currently available Internet blocking or filtering technology
protection measures and Internet safety policies adequately
address the needs of educational institutions. It also directs
NTIA to make recommendations to Congress on how to foster the
development of technology protection measures that meet these
needs. See, notice
in the Federal Register. |
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| Wednesday, August 28 |
| Day one of a two day public hearing before the Federal Election Commission (FEC)
on its second Notice
of Proposed Rulemaking (NPRM) [67 pages in MS Word]
regarding the Bipartisan Campaign Reform Act of 2002 (BCRA),
the recently enacted campaign finance reform legislation. This
NPRM pertains to "electioneering communications".
The proposed rules would exempt webcasts. See also, FEC release. |
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| Thursday, August 29 |
8:30 AM - 12:35 PM. The President's Homeland Security
Advisory Council (PHSAC) will hold a meeting to receive
briefings and to discuss best practices in the areas of
mergers and acquisitions, information technology, personnel
management and related issues that may concern the creation of
the proposed Department of Homeland Security. Public access is
limited. See, notice
in Federal Register. Location: Indian Treaty Room, Eisenhower
Executive Office Building, 725 Seventeenth St., NW.
Day two of a two day public hearing before the Federal Election Commission (FEC)
on its second Notice
of Proposed Rulemaking (NPRM) [67 pages in MS Word]
regarding the Bipartisan Campaign Reform Act of 2002 (BCRA),
the recently enacted campaign finance reform legislation. This
NPRM pertains to "electioneering communications".
The proposed rules would exempt webcasts. See also, FEC release.
Deadline to submit comments to the FEC regarding its NPRM
regarding "electioneering communications". |
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| Friday, August 30 |
| Deadline to submit reply comments to the FCC's regarding
its Annual Assessment of the Status of Competition in the
Market for the Delivery of Video Programming. See, notice
in Federal Register. |
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