JOLT Digest

District Court Says CAN-SPAM Act Does Not Violate First Amendment
By Samantha Kuhn – Edited by Chinh Vo

U.S. v. Smallwood, 09-CR-00249 (N.D. Tex. July 15, 2011)
Slip Opinion hosted by Scribd.co

The District Court for the Northern District of Texas rejected a First Amendment challenge to the CAN-SPAM criminal statute, which prohibits the computer transmission of “multiple commercial electronic mail messages, with the intent to deceive or mislead recipients . . . . as to the origin of such messages.”

The court first rejected defendant Alicia Smallwood’s motions challenging her indictment for, among other things, electronic mail fraud in violation of 18 U.S.C. §§ 1037(a)(2) and (b)(2)(c) (“CAN-SPAM Act”). The court determined that Smallwood was engaging in “clearly proscribed conduct” and was therefore not entitled to challenge the statute for vagueness. As a result of this finding, the main issue in the case became whether the statute was overly broad in its regulation of protected speech and thus a violation of the First Amendment. The arguments presented by Smallwood for over-breadth centered around the statute’s limitations on commercial speech, and the court rejected them.

Eric Goldman provides commentary on the outcome and implications of the opinion. For a background on the CAN-SPAM Act’s requirements, see Cybertelecom.

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By Tim Grayson

White House Presses for Copyright Reform, Privacy “Bill of Rights”

On Wednesday, the White House released a 20-page white paper (PDF), aimed at helping Congress tackle the increasingly complex issues surrounding copyright and intellectual property laws. As CNET reports, one of the paper’s main purposes was to urge Congress to definitively establish streaming unauthorized media as a felony. Making such “illegal streaming” a felony would empower the FBI to tap the phones, Internet connections, and other communication methods employed by those suspected of such activity. The administration also expressed its support for a new privacy “bill of rights.” The suggested legislation would be aimed at protecting consumers from increasingly invasive data collecting practices that are not expressly illegal under current law.

Former FCC Boss to Become Chief Cable Lobbyist

Ars Technica reports that Michael Powell — who ran the FCC under George W. Bush from 2001 until 2005 — will be the new head of the National Cable and Telecommunications Association, the nation’s principal cable lobby. Powell’s most defining moment as FCC chair was a series of somewhat bizarre remarks (video) regarding the agency’s role in closing the “digital divide.” Powell, the son of former Secretary of State Colin Powell, replaces Kyle McSlarrow, who left the NCTA earlier this month in order to join Comcast/NBC Universal.

Microsoft Teams up with Feds to Stop Spam

Working in concert with federal law enforcement agencies, Microsoft seized computer equipment across the country designed to cripple the “botnet” Rustock. The raids were part of a civil lawsuit Microsoft filed in federal court, alleging that spam distributed by the botnet harms the company’s products and reputation. Rustock was estimated to be responsible for about 40% of all botnet spam, which in turn accounts for the vast majority of all spam. Microsoft is known for its tough-on-botnet-spam stance, suggesting earlier this year that infected computers be banned from accessing the Internet.

Federal Circuit Affirms: Spam Patent is Obvious
By Gary Pong – Edited by Jad Mills

Perfect Web Technologies, Inc. v. InfoUSA, Inc., No. 2009-1105 (Fed. Cir. Dec. 2, 2009).
Slip Opinion

The Federal Circuit affirmed the Southern District of Florida’s decision granting summary judgment to invalidate plaintiff’s U.S. Patent No. 6,631,400 (“‘400 patent”) due to the obvious nature of the asserted claims under 35 U.S.C. § 103.

The Federal Circuit held that the ‘400 patent failed the KSR test for obviousness. The patent specification sets out a series of steps for delivering a prescribed quantity of e-mails to targeted recipients. In so holding, the court noted that the claim was so simple and obvious that “ordinary skill in the relevant art required only a high school education and limited marketing and computer experience.” Furthermore, such a case would not require expert opinion and may rely on the common sense available to the person of ordinary skill.

Patently-O provides an overview of the case. The Patent Prospector features a thorough analysis of the judicial opinion. (more…)

Ninth Circuit Adopts National Obscenity Standard in Adult Website Spam Case

By Ian B. Brooks – Edited by Alissa Del Riego
United States v. Kilbride, No. 07-10528 (9th Cir. Oct. 28, 2009)
Opinion

The Ninth Circuit has affirmed the District Court for the District of Arizona, which had convicted and sentenced defendants Jeffery Kilbride and James Schaffer of transporting obscene materials for sale.

The Ninth Circuit held that a national community standard “must be applied in regulating obscene speech on the Internet, including obscenity disseminated via email.” United States v. Kilbride, No. 07-10528 at 14492 (9th Cir. Oct. 28, 2009).  Defendant Internet spammers Kilbride and Schaffer had appealed their convictions for interstate transportation for sale of obscene material in violation of 18 U.S.C. §§ 1462 and 1465. Judge Fletcher of the 9th Circuit examined the opinions of the fragmented Justices in the Supreme Court’s opinion in Ashcroft v. ACLU for guidance in reaching his conclusion that a national community standard would not pose the constitutional concerns that a local community standard would. Ashcroft v. ACLU, 535 U.S. 564 (2002)

Eric Goldman provides an overview of the case. Orin Kerr, of The Volokh Conspiracy, criticizes the Ninth Circuit’s reasoning in the case. Kerr argues that the Ninth Circuit should have followed the precedent set in Miller v. California, 413 U.S. 15 (1973), wherein local “contemporary community standards” were applied. (more…)

Class Action Complaint Alleges Facebook Click Fraud

By Brian Kozlowski – Edited by Jad Mills
RootZoo, Inc. v. Facebook, Inc., 5:09-cv-03043-HRL (N.D Cal. July 7, 2009)

In a federal court complaint filed in the Northern District of California on July 7th, sports discussion board and social networking site RootZoo alleged that Facebook charged them for advertising referrals that never occurred and that Facebook failed to “properly guard” against click fraud, the practice of third-party individuals or computer programs repeatedly clicking on the advertisement to inflate the number of referrals.

RootZoo’s complaint accuses Facebook of both breach of the “implied covenant of good faith and fair dealing” in their advertising contract and unfair business practices. RootZoo was one of many advertisers who paid Facebook for each click referring a Facebook user to their site. RootZoo claims that Facebook consistently charged them for more outgoing referrals than the RootZoo servers logged as incoming during the period they advertised on Facebook. According to the complaint, when RootZoo submitted server log documentation to Facebook and asked to be refunded for the discrepancy, Facebook refused to provide any refund and would not release any documentation to back up their refusal. The complaint contrasted Facebook’s unwillingness to release data with the more transparent practices of Yahoo! and Google. RootZoo’s filing came only weeks after TechCrunch wrote a series of well-publicized articles on Facebook click fraud prompted by outraged advertiser posts on the marketing discussion board WickedFire. Following the TechCrunch articles, Facebook representatives claimed to have “developed a series of sophisticated systems” to detect click fraud and to have refunded any advertisers that were affected. However, RootZoo is seeking class action status and an unspecified amount of damages..

MediaPost and The Register offer overviews of the filing and a response from Facebook, while TechCrunch summarizes some of the preceding controversy and WickedFire discussion board postings.

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