by Lee Gesmer | Nov 21, 2005 | Trademark
Trademark. What do you do when someone sets up a web site almost identical to yours, but you can’t find the owner of the site in order to sue them?
This was the problem faced by American Girl , which sells wholesome girls dolls, clothing and books targeted at pre-adolescent girls, when it discovered that someone was publishing pornography on www.amercangirl.com. (Note the missing letter).
American Girl sued the registrar and “John Doe” (legalese for, “I’ll name you when I identify you”) but was rebuffed by a Federal District Court Judge in Wisconsin, who held that a John Doe suit was inappropriate in these circumstances. However, this judge really did his homework, and the decision is an excellent road map on how to go about obtaining an injunction under these circumstances, including remedies such as an in rem action against Verisign under the ACPA or arbitration under the UDRP. The decision also provides an excellent summary of the domain name system and the laws that regulate it.
Read the full decision here.
p.s. Rest easy parents. www.amercangirl.com now links to the American Girl site.
by Lee Gesmer | Nov 20, 2005 | Business Lit. Session, Minority Shareholder/Fiduciary Duty
. . . of your company, that is.
OK, here the facts, minus the legal jargon.
You’re a businessman with a successful company. You meet someone that wants to go into business with you in a related area. You start a new company, making sure that you hold a majority interest (52.5%). Your new “partner” gets 37.5%, and the rest of the stock goes to a couple of employees. Although your partner is a minority shareholder he’s running the business, so you make him president of the company.
Almost ten years go by, and although the company is making money you’re unhappy with your partner. He’s bad at finances, and tensions arise over bookkeeping and other business issues.
Eventually you reach your boiling point, and one morning you fire your minority partner.
Simple enough you think. After all, you own a majority of the company, what’s stopping you from doing this?
In O’Connor v. U. S. Art Co., a recent case decided by Judge Allen Van Gestel in the Suffolk County Business Law Session, the minority shareholder was awarded $218,000 in damages based on these facts. The judgment was against the other three shareholders, personally.
Here’s the rub: in Massachusetts, shareholders in “close” corporations (nonpublic companies with a small number of shareholders) owe each other a fiduciary duty. You can’t fire a minority shareholder unless you have a “legitimate business purpose,” and there is no “less harmful alternative.” Harmful to the minority shareholder, that is.
In the U.S. Art case Judge Van Gestel found that the majority shareholders could have hired a bookkeeper, among other possible solutions. In other words, even assuming there was a problem, they could have solved the problem without firing the guy.
What’s interesting about this case? Nowhere in the 11 page decision did Judge Van Gestel indicate that the minority shareholder had invested any money when U.S. Art was formed. Usually, the rationale behind cases like this is that the minority shareholder invested in the company, expecting to earn a living from the company, only to find him or herself fired, and out both the investment and the job. That appears not to have been the case here.
What could the majority shareholder have done to avoid this outcome? Easy: enter into an agreement when the business was formed, permitting termination, either at will or for cause. If that wasn’t feasible, take proper steps before terminating the minority shareholder. In the U.S. Art case the Judge described the majority’s actions as “ham- handed.” It doesn’t take a Supreme Court Justice to see that the Judge thought the majority shareholders behaved offensively, and that this contributed to the result.
If you’re interested in further details on this case you can read the full decision here.
by Lee Gesmer | Nov 15, 2005 | DMCA/CDA
[Update: this case was affirmed by the First Circuit in 2007; link here]
Massachusetts Lawyers Weekly reports, on the front page of its October 31, 2005 issue, that Federal District Court Judge Robert Keeton has dismissed, under the Communications Decency Act, claims that Lycos was responsible for third-party defamatory postings on Lycos’ Raging Bull website. The case is Universal Communications Systems, Inc. v. Lycos, Inc. Apparently there is no written decision from Judge Keeton.
The idea that a web site is not liable for defamatory postings is not, I repeat not, news. The Communications Decency Act provides:
No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.
Translation: A web hosting service that permits third parties to post on its site is not the publisher or speaker of that information, and therefore cannot be liable for defamation posted by the third party.
This may be the first decision applying this law in Massachusetts, but it’s old news everywhere else. Cases across the country have uniformly interpreted the CDA to immunize ISPs and web hosts accused of defamation posted on their sites by third parties.
by Lee Gesmer | Nov 14, 2005 | Technology
Technology. The business war between Microsoft and Google has the Internet and business communities riveted. This is the best business rivalry in years, better than Coke/Pepsi, better than Microsoft/Sun, better than Microsoft/Apple (okay, I’m stretching with the last one). At least for the moment Google is perceived to be, potentially, maybe (no one’s sure) a fundamental threat to Microsoft. Who knows, maybe later today Google will release (in beta, of course), an online suite of products superior to Microsoft Office that will be file compatible with Office, allow users to store documents with complete security and privacy on Google servers, and put Microsoft out of business (sans Xbox, of course) by the end of the week. Disruptive technology, thy name is Google. Well, its possible, isn’t it?
Robert X. Cringely writes most entertainingly on this subject this week, in his article Paper War.
by Lee Gesmer | Nov 9, 2005 | Copyright
Copyright. Copyright law is often called the “metaphysics of the law,” as judges labor to decide whether one work is enough like another to constitute copyright infringement. Often this involves arcane legal tests that few people, beyond copyright lawyers, care to think about. But, most of us read novels, and when one writer says, “your novel is so similar to my novel that it infringes my copyright,” we think, “that’s not so hard, I can decide that!” And, when one of the books is The Da Vinci Code (ranked 44th in books at amazon.com two and one-half years after publication), the chances are good that you, patient reader, have read one of the books that was the subject of just such a case. To see how a New York federal district judge decided the case in which Lewis Purdue, the author of Daughter of God and the Da Vinci Legacy, accused Dan Brown, the author of The Da Vinci Code, of copyright infringement, click here.
