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Facebook faces suits for tracking logged out users.

On October 9, 2011, in Litigation, Social Networking, United States, by Jorge Espinosa

It has been a busy legal week for Facebook.  Three separate suits were filed against the social media giant alleging that the company violated united states wiretap laws and state consumer protection laws by tracking user web browsing even when they were not logged into Facebook.  The suits were filed in Texas, Kansas and Illinois by three different Facebook users.  Together with two suits filed the week before in California, this brings the total number of suits filed against Facebook for its tracking activity to five.

Information about Facebook’s tracking activities was first disclosed last month when Australian developer Nic Cubrilovic, reported that Facebook was able track when users visited non-Facebook sites.  Facebook accomplished this with cookies, the “like” button and other social widgets.  As a result of this report, several consumer privacy groups including the Electronic Privacy Information Center, the American Civil Liberties Union, the Consumer Action, the American Library Association, and the Center for Digital Democracy, requested that the Federal Trade Commission (“FTC”) launch an investigation.

The Kansas suit seeks treatment as a class actions which would bring into the suit a wide array of users.  If any of these suits succeed, Facebook could face damages of thousands of dollars per violation together with a permanent injunction against such future conduct.

How can you protect yourself from being tracked?  Find out how to located cookies on your browser.  Then delete any cookies from Facebook.  Some add-ons to browsers such as Firefox or Chrome allow you to block cookies or even to surf the web “incognito” which will save no cookies during the session.

PayPal sues Google for hiring away executive in the midst of negotiations

On May 29, 2011, in Cloud Computing, Employees, Litigation, by Jorge Espinosa

There is an old Cuban saying “dime con quien andas y te diré quien eres” which translates to “tell me who you hang out with and I will tell you who you are.”  It seems that these days being identified as an Internet company does not say much good about you.  Just a week after Facebook was found planting stories with bloggers against Google, PayPal has filed suit alleging that Google reneged on a deal by hiring away PayPal’s employees.

PayPal is a well-known on-line payment service.  Google is the internet services behemoth offering services which span everything from search engine, to office suite, to e-mail, to social networking.  PayPal filed suit against Google, a former officer of eBay and a former officer of PayPal before the California Superior Court for San Mateo County (a Court that the cloud blogger has appeared before).

The Complaint alleges misappropriation of trade secrets, breach of contract, interference with a contractual relationship and breach of fiduciary duty.  It tells how Google approached PayPal and negotiated for two years to have PayPal provide payment services for Google mobile devices.  On the eve of signing the deal, Google backed out and hired away the PayPal executive who had been negotiating on behalf of PayPal, Osama Bedier.  According to the complaint, Stephanie Tilenius, a former a former eBay executive and named defendant in this suit solicited Mr. Bevier and induced him to join Google.  After joining Google, Bedier also solicited and tried to lure away other PayPal employees.

According to the complaint:

[F]rom 2008 to 2010, Google and PayPal were negotiating a commercial deal where PayPal would serve as a payment option for mobile app purchases on Google’s Android Market.   During that time PayPal provided Google with an extensive education in mobile payments.  [Defendant] Bedier was the senior PayPal executive accountable for leading the negotiations with Google on Android during this period.  At the very point when the companies where negotiating and finalizing the Android-PayPal deal, Bedier was interviewing for a job at Google – without informing PayPal of this conflicting position.

Supposedly, Google used Mr. Bedier’s knowhow to craft its new mobile wallet mobile payment strategy which Google announced on May 26, 2011, the date the suit was filed.


The end of digital downloading copyright suits?

On May 4, 2011, in Copyright, File sharing, Litigation, Privacy, United States, by Jorge Espinosa

Every month across the United States large media companies or business associations file dozens of lawsuits accusing individuals of copyright infringement based solely on claims that film or music files were downloaded to their IP-address. An IP-address is a unique number associated with a particular online account.  Over the last few years tens of thousands of suits have been filed on similar grounds, many resulting in settlements of thousands of dollars.  Often the individual defendants are forced into such settlements by fear of statutory damages and costs of litigation even where they feel that they were wrongly accused.  As a result, many commentators have referred to these lawsuits as unfair and a legal a shakedown.

A new decision issued on April 29, 2011, by a judge in the Eastern District of Illinois brings into question the future of such suits.  In VPR Internationale v. Does 1-1017, (2:2011-cv-02068) Judge Harold A. Baker denied a Canadian adult film company’s request to subpoena ISPs for the personal information connected to the IP-addresses of their subscribers.  The court reasoned that since IP-addresses do not equal persons, no defendants had been identified in the suit and there was no adversarial process.  Since, under federal rule of civil procedure rule 26(d)(1), no discovery may be conducted before the parties to the suit have conferred absent special leave from the court, the judge reasoned that VPR could not go on an ex-parte fishing expedition.

The Court’s concern clearly went beyond the mere procedural issue.  Judge Baker cited a recent child porn case where the U.S. authorities raided the wrong people, because the real offenders were piggybacking on their Wi-Fi connections. The judge noted that, based on this example, defendants in VPR’s case may have nothing to do with the alleged offense either.  “The infringer might be the subscriber, someone in the subscriber’s household, a visitor with her laptop, a neighbor, or someone parked on the street at any given moment.”

The fact that the suit involved the downloading of adult content was a significant factor in the case.  Judge Baker noted that “the embarrassment of public exposure might be too great, the legal system too daunting and expensive, for some to ask whether the plaintiff VPR has competent evidence to prove its case.”

Baker concludes by citing another case for the proposition that until at least one defendant is served the Court lacks personal jurisdiction over anyone.  The Court would not support a “fishing expedition” for subscriber information under the circumstances.

VPR responded to the initial denial of the subpoenas by asking for certification of the following question for interlocutory appeal:

Defendants’ identifies are unknown to the  Plaintiff.  Instead, each Defendant is associated with an Internet Protocol (IP) address.  Internet Service Providers (ISPs) know identity and contact information associated with each IP address.  Is the Plaintiff to entitled to discover this information by serving ISPs with subpoenas duces tecum under Fed. R. Civ. P. 45?

The Court refused to certify the question.  We will have to wait to see if other courts follow this decision.


Users finds no virtue in Myspace privacy

On April 16, 2011, in Litigation, Social Networking, United States, by Jorge Espinosa

Two Myspace users, Linda Virtue and Lily Castro, filed suit against Myspace in the Eastern District of New York, Virtue v. Myspace, Inc (Case No. 11-cv-1800), alleging violation of federal privacy law. The 13 count, 33 page complaint alleges breach of the Stored Data Communications Act, breach of contract, invasion of privacy and various other common law counts. The suit bases its claim on the Myspace practice of sending advertisers the user’s unique ID numbers when they click on ads. The unique ID’s can be tied to user’s personal profiles including their name, age and browsing history. The plaintiffs claim that Myspace does this after falsely assuring its users that they can restrict information disclosure.

Myspace, a social networking service operated by News Corp., was a predecessor to Facebook which has seen rapidly declining membership in recent years.

The Social Network settlement upheld on appeal

On April 12, 2011, in Litigation, Social Networking, United States, by Jorge Espinosa

The story of “The Social Network” jumps off the silver screen and back into the news.  On Monday April 11, 2011, a three-judge panel of the Ninth Circuit Court of Appeals ruled that the 2008 settlement deal between Mark Zuckerberg, founder of Facebook, and Olympic rowing twins Cameron and Tyler Winklevoss is valid and enforceable.

The appeal arises from a long series of events retold in the aboved named movie.  The Winklevoss twins hired Zuckerberg to help them develop a social networking site named ConnectU.  When Zuckerberg came out with Facebook the Winklevoss twins sued claiming that Zukerberg stole their idea.  In 2008, the parties agreed to a settlement whereby Facebook acquired all of the ConnectU stock in exchange for $20 million in cash and $45 million in Facebook stock, which was valued at $35.90 a share.

The Winklevosses and the third ConnectU co-founder, Divya Narendra, soon developed buyer’s remorse over the settlement and brought suit to challenge the settlement.  The challenge centered on two issues.  First, that the two page settlement agreement was not an enforceable because it is missing various terms usually and customarily found in such agreements.  Second, that Zuckerberg concealed valuation and other information necessary to properly assess the value of the settlement in violation of the Securities and Exchange Act of 1934.

After the District Court refused to throw out the settlement, Winklevosses and Narenda appealed.  On Monday the 9th Circuit Court of Appeals affirmed the lower court ruling.

In his opinion Chief Judge Alex Kozinski stated “[a]t some point, litigation must come to an end.  That point has now been reached.”  The Appellants, however, disagree and have already announced that they will file a petition for a rehearing en banc by the full 9th Circuit panel.

Does anyone else see a sequel in the making?