November 2005

Google And The Digitization of The Planet's Books

November 27, 2005

Copyright. “Imagine the cultural impact of putting tens of millions of previously inaccessible [books] into one vast index, every word of which is search able by anyone, rich and poor, urban and rural, First World and Third, en tout langue — and all, of course, entirely for free.” Eric Schmidt, Google CEO “Mr Schmidt fails to mention that Google’s intent . . . is to make even more money. . . . Can it be so greedy that it seeks to bolster it profits by freely exploiting the rights of publishers and authors?” Patricia Schroeder, President, American Association of Publishers The legal controversy over Google’s plan to use a proprietary high speed scanning process to copy (to start with) the entire book collections in the libraries at Michigan, Stanford, Oxford, the New York Public Library and Harvard, whether or not a particular book is under copyright, and to require copyright owners to notify Google if they wish to “opt out” of this program, has reached fever pitch. Indeed, its easy to see why. In almost every case until now, copyright litigation has implicated the legal rights of one copyright owner and one alleged infringer. In the few cases to involve broader rights, such as the Napster/Grokster line of file sharing cases, it was easy for anyone with a moral compass to conclude that wholesale copying and distribution of copyrighted music…

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American Girl Attempts to Shut Down Porno Site

November 21, 2005

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 (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. now links to the American Girl site.

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It’s Hard to Fire the President . . .

November 20, 2005

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…

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Dog Bites Man, Not News

November 15, 2005

[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.

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"Google’s Plan Is Even Bigger Than Microsoft Can Imagine"

November 14, 2005

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.

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Copyright Law and The Da Vinci Code

November 9, 2005

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 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.

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How The Grinch Stole Christmas Vacation

November 9, 2005

As we rapidly approach the holiday time of year, it’s worth remembering that not all lawyers lack a sense of humor or a talent for poesy. In fact, some have both . . . . “The Grinch Hated Christmas” ….

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Employee Shareholder Gets Upper Hand In "Triple Freeze-Out" Case

November 7, 2005

Minority Shareholders/Fiduciary Duty. Massmanian v. Duboise, decided in September by Judge Ralph Gants in the Suffolk County Business Litigation Session, proves once again that when a party to litigation angers a judge, they can be forced to pay a high price. In this case the plaintiff Massmanian was a 30% minority shareholder and employee in North/Win. After he filed suit accusing the majority shareholders of diverting North/Win’s profits and assets to another company (a serious breach of fiduciary duty, if true), North/Win terminated Massmanian for insubordination and neglecting his duties. Massmanian then asked the court to issue a preliminary injunction reinstating him. In opposing this motion, North/Win, and its lawyers made some serious strategic errors: First, they demanded that all North/Win employees sign a Confidentiality Agreement which (among other things) barred employees from disclosing “matters related to the lawsuit Massmanian has filed against the company, even in a legal proceeding.” This Agreement was demanded upon pain of termination, and one employee was terminated for failing to sign it. The court characterized this as “heavy-handed overreaching” and an improper attempt to prevent employees from testifying in the case. Second, when asked about the Confidentiality Agreement North/Win’s lawyers made false statements to the Court. The upshot of all this was one very angry judge, who lambasted North/Win and its lawyers, and went on to describe North/Win’s actions as a “triple freeze-out,” (1)…

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Google and Turing’s Cathedral

November 6, 2005

Technology. Science historian George Dyson visited Google recently, upon the 60th anniversary of John von Neumann’s proposal for a digital computer. His musings, in the form of a short essay published by Edge, are provocative and fascinating. My visit to Google? Despite the whimsical furniture and other toys, I felt I was entering a 14th-century cathedral – not in the 14th century but in the 12th century, while it was being built. . . .

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Bag and Baggage

November 4, 2005

Denise Howell at Bag and Baggage complimented my firm’s various blogs (1, 2 and 3) and I have to return the compliment. When I sat down with our web/blog master Nathan Burke to show him what I considered the best legal blogs, we basically started and stopped with Bag and Baggage. If I could bring only one blog to a desert island ….

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Politics, Sausages and Computer File Formats

November 2, 2005

Technology. Did you ever think you’d see politicians debating software file formats? Massachusetts has become embroiled in a politicized debate over a state agency’s decision to move away from Microsoft’s proprietary standards and require that all state employees, commencing in 2007, save documents in two state-approved file formats: Adobe Acrobat PDF files and the OASIS Open Document Format for Office Applications. The logic behind this issue is simple: if Massachusetts moves to Oasis OpenDocument, anyone with Internet access will be able to read state documents. As things now stand, if a document was created with Word or Excel (representing the two most common applications, word processing and spreadsheets), a citizen would need to have a licensed copy of Microsoft software to read the document. Of course, Microsoft claims that its Office formats are sufficiently open to satisfy the Commonwealth’s requirements. Needless to say, there have been all kinds of business and political cross-currents swirling around this issue since it first emerged, and it has thrust the Massachusetts Information Technology Division (or ITD), which usually labors in obscurity, into the spotlight. A comprehensive backgrounder on the entire issue was written by my partner Andy Updegrove, and is available here. All of this came to a head (or perhaps the first of several heads), on October 31st, when the Massachusetts Senate Committee on Post Audit and Oversight held a standing-room only hearing…

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