Monthly Archives: April 2014

Judge Green Lights Trade Libel Lawsuit

cyber defamation lawsuit
Judge green lights cyber defamation lawsuit.

Federal Judge Nora Barry Fischer green lit Tiversa Holding Corp’s trade libel lawsuit against LabMD – a cancer detection facility in Georgia – and author Michael J. Daugherty. Accusations of amoral brinkmanship and government conspiracy anchor the case.

Who’s Who In This Business Defamation Showdown?

Plaintiff

Tiversa Holdings Inc (Tiversa): Tiversa is a data security company. One day, while out exploring the ether, a Tiversa bot stumbled on a curious find — unprotected LabMD files that included the social security numbers and insurance credentials of LabMD patients. According to Tiversa, it contacted LabMD immediately to alert the medical facility of their unprotected files scattered around the Web. Tiversa also took the opportunity to offer LabMD their online data security services.

Defendants

Michael J. Daugherty: Michael J. Daugherty authored “The Devil Inside the Beltway,” a non-fiction expose of (alleged) government shadiness, including digital surveillance and the cyberbullying of small businesses and medical facilities. Marketing for the book included a website and video alleging that Tiversa aided in “abusive government shakedowns” and practiced “psychological warfare.” Other marketing materials included allegations that Tiversa’s actions were tantamount to property theft.

LabMD: LabMD is a cancer detection medical facility. Tiversa discovered their unprotected files online – which included personal patient data. Since medical facilities are beholden to federal medical privacy laws, Triversa’s discovery of the LabMD files was problematic.

When Tiversa offered their services, LabMD requested a quote, but ultimately declined the proposal.

Related Third Parties

Federal Trade Commission: As part of a peer-to-peer security breach investigation, the Federal Trade Commission asked Tiversa for files containing 100 or more Social Security numbers. Basically, since Tiversa is in the business of helping security-challenged companies turn over a new leaf, the commission figured they’d know where the proverbial bodies were buried. Essentially, the FTC wanted Tiversa to snitch on companies with crappy security operations. Tiversa swears, however, that it didn’t hand over the LabMD files.

Regardless, in August 2013, the FTC filed a complaint against LabMD. The charges? Failing to exercise reasonable measures to ensure the security of sensitive patient data.

The Privacy Institute: Though it’s unclear how the file landed in their laps, an entity identified in court documents as the Privacy Institute somehow obtained a copy of the rogue LabMd files. The Privacy Institute eventually complied with a demand from the FTC for the file in question. Subsequently, the FTC launched an investigation.

Why Tech Company Tiversa Filed A Trade Libel Lawsuit

Tiversa brass weren’t impressed with Daugherty’s assertions. Nor was Team Tiversa impressed with LabMD’s seeming compliance with Daughtery’s narrative. So, the digital data security company filed a defamation lawsuit.

The Defendant’s Argument To Dismiss The Defamation Suit…

The defendant’s lawyers first filed a motion to dismiss. Though, instead of just arguing “truth,” Daugherty’s attorney also argued hyperbole (in the US, a constitutionally protected form of speech).

Judge: Business Defamation Case Will Move Forward

Judge Fischer, however, disagreed with the defense. The allegations, she reasoned, exceeded permissible limits for hyperbole and opinion — and could irrevocably damage the company’s bottom line.

Fischer also felt Tiversa would be able to present valid arguments against a “truth defense” since Tiversa inadvertently, not intentionally, accessed LabMD’s file. By accepting the plaintiff’s assertions as true, Fisher waved the case to the next step.

Speak With A Business Defamation Attorney Today

If you’re an Internet or tech business in need of legal counsel, get in touch with Kelly / Warner Law. Not every legal action grows into a full-fledged lawsuit. Often, issues can be resolved quickly and quietly, with just a simple letter.

Get in touch to start fixing the problem.

International Defamation Update: Russia & China

communist defamation
A pair of defamation lawsuits in China and Russia got us thinking about slander and libel in communist countries.

Periodically, we review online defamation debacles making headlines overseas. Last week, two caught our eye. First, Pussy Riot won a small slander victory in a Siberian court. Second, a fame-seeking teenager in China may be headed to jail, for defamation.

Pussy Riot Member Escapes Defamation Lawsuit

In 2012, notorious Moscow punk band, Pussy Riot, pulled an anti-Putin stunt called “punk prayer.” In the end, one member, Nadezhda Tolokonnikova, landed in Mordovian Prison, Siberia. After a few months in residence, Tolokonnikova penned an open letter about the jail’s conditions. She lamented the treatment of prisoners and accused the deputy warden of making death threats. Then, she took a page from Ghandi’s playbook and went on a hunger strike, at which point officials transferred her out of Siberia and into another detention center.

The Mordovian deputy warden, however, wasn’t willing to let the accusations slide . He filed a libel lawsuit against the ex-inmate, asking for 500,000 rubles ($14,000) and a full retraction. But the judge, surprisingly, said no-go. Surprisingly because Russia isn’t known for its defendant-friendly defamation laws – especially when the plaintiff is an official.

Chinese Teenager Heading To Jail For Twitter Defamation

Tolokonnikova may have emerged victorious in her defamation showdown, but it looks like her comrade in China, Qin Zhihui (a.k.a., Qin Huohuo), must spend three years behind bars for gossipy postings. After a public arrest, Zhihui pleaded guilty to online rumor-mongering over comments he made on the Twitter of China, Sina Weibo. Publicly, Qin Huohuo said he “fabricated stories” to “attract public attention.”

The reason Zhihui is receiving a harsh punishment for a seemingly simple act of Twitter bloviating is because China recently passed a super strict online defamation law. The controversial statute allows law enforcement officials to investigate all acts of online defamation, regardless of whether or not the the victim pursues the issue. In other words, nobody has to complain about being defamed; so long as a disparaging post or social media quip is either forwarded 500 times or viewed 5,000 times, law enforcement is free to investigate.

Government officials haven’t been shy about making an example of Zhihui, warning “The public should learn from this case.” A party spokesperson continued, “The Internet is a public space that needs order and is protected by rules. People who disrupt order on the Internet and attack others should be punished.”

Just goes to show that the “Internet” – unlike parents – is not the same no matter time, nor place.

Twitter Defamation Case: Mara Feld v. Crystal Conway

Photo of horse statute to accompany article about equine Twitter defamation case studyA much publicized Twitter defamation case has come to an unceremonious end. An equine scandal gone legal, Feld v. Conway clarified the Federal Massachusetts District Court’s stance on R-rated social media outbursts.

Horse Retirement Mishap Leads To Defamation Lawsuit

Our tale begins in 2010. WikiLeaks was in full swing, royals were getting engaged, and the horse world was buzzing about an equine scandal.

Gossip at the stable was that thoroughbred owner Mara Feld had accidentally sent her gelding to a horse auction instead of a horse farm. As a result, (so the story goes), the poor animal may have ended up in a Canadian slaughterhouse instead of hoofing away his twilight years as a horsey companion.

As is often the case when mistakes become public, the equine-interested peanut gallery took to the Internet to wax poetic about the faux pas — generously showering the owner with jibes and ridicule. One participant, a Kentuckian named Crystal Conway, added to the conversation by Twitter quipping, “Mara Feld…is f*cking crazy.”

Feld was not impressed with Conway’s assessment and decided to sue for Twitter defamation. The way Feld figured, as a PhD-holding toxicologist whose “prospective employers … [found] … her work by searching the Internet for her name,” Conway’s insult was a professional problem.

In response, Conway argued hyperbole – a protected First Amendment form of speech.

But this Twitter defamation case never made it to trial.

Judge Says Twitter Cursing ≠ Twitter Defamation

After reviewing Feld’s filing and Conway’s motion to dismiss, Judge Dennis Saylor IV sided with the latter. Ultimately, he deduced that Feld failed to state an action “upon which relief could be granted.” In other words, since Feld didn’t include a false statement of fact on which a defamation action could hang, there was nothing for the court to consider.

Additionally, according to MA defamation law, Saylor had to consider the entire context of the statement under review. In the end, Saylor said that Conway’s tweet was akin to an “imaginative expression” and “rhetorical hyperbole” — protected forms of speech.
In his own words, Judge Saylor explained:

“Dismissal is appropriate if plaintiff’s well-pleaded facts do not possess enough heft…”

and

The phrase “Mara Feld . . . is fucking crazy,” when viewed in that context, cannot reasonably be understood to state actual facts about plaintiff’s mental state. It was obviously intended as criticism—that is, as opinion—not as a statement of fact.

Contact A Twitter Defamation Attorney

Are you dealing with an online reputation situation? Has someone bad-mouthed you or your business on social media? If yes, and you’re curious about available legal options, get in touch with Kelly / Warner. We’ve successfully handled many social media defamation cases. In most instances, we’re able to help clients fix problems quickly and quietly so life and business can get back to normal.

Lawsuits aren’t your only legal option when it comes to Twitter defamation. Get in touch to learn more.

Lexmark v. Static Control: SCOTUS’ False Advertising Standard

Lexmark v. Static Control false advertising ruling
SCOTUS made a big decision concerning the Lanham Act.

A recent Supreme Court decision marks a change in false advertising case law. The Lexmark v. Static Control decision further defined Lanham Act parameters and created a consistent national standard for allowable marketing claims.

First, A Little About the Lanham Act as It Relates To Lexmark v. Static Control

Signed into law in the summer of 1946, and updated several times since, the Lanham Act addresses intellectual property – and by extension marketing – issues, including (but not limited to) trademark dilution, infringement, and false advertising.

Who Can Sue For Infringement?

The Lanham Act suggests limitations on allowable plaintiffs in certain trademark cases, but the language is vague. Subsequently, local and appellate courts have used different tests when adjudicating false advertising cases. Some courts say only direct competitors can use the Lanham Act for redress, while others insist that anyone in a quasi-supply-chain can do so.

With the new Lexmark ruling, however, there’s now a single test for all cases.

Lexmark v. Static Control: One of the Most Important Tech Lawsuits of Our Time

Lexmark makes printers and print cartridges. Static Control makes parts for “remanufacturers” that recycle parts on Lexmark toners, and then sell the refurbished cartridges (usually for a lower price).

Remanufacturers, like Static Control, rely on cheap and constant access to used Lexmark printers and parts. So, in an effort to dissuade consumers from returning old cartridges to Lexmark instead of refurbishing companies, Lexmark instituted a “prebate” program. To enforce the program, Lexmark equipped their toner cartridges with “turn off” chips that were supposed to prevent other parties from refurbishing Lexmark printer cartridges.

Enter Static Control – toner remanufacturer to the stars. Presumably via reverse engineering, Static Control made a chip that worked like Lexmark’s “turn off” chip, allowing remanufacturers to use Lexmark cartridges outfitted with the special Lexmark prebate chip.

Lexmark sued Static Control for trademark infringement over the replica “turn off chip.” Static Control counter-sued for false advertising and trade libel. The parts manufacturer argued it did nothing wrong by making a chip similar to Lexmark’s, and that Lexmark was in the wrong for sending out industry news blasts saying that the Static Control chips wouldn’t work with their cartridges.

TL;DR: Printer toner cartridge company, Lexmark, got upset with another company, Static Control, for allegedly infringing by way of reverse engineering a chip. So, Lexmark sued Static Control for trademark infringement and Static Control counter sued for false advertising and trade libel.

Competitors & Deceptive Marketing

The original plaintiff, Lexmark, was not in direct competition with the defendant, Static Control. Regardless, Lexmark’s assertions about Static Control allegedly diminished consumer demand for Static Control’s products.

Justice Scalia wrote the Lexmark judgment. In it, he essentially discards existing appellate tests related to competition and trademark cases. In their places, via Lexmark, the Supreme Court produced a new rule for false advertising lawsuits: civil trademark plaintiffs and defendants must be inside the same business “zone of interest” for a suit to proceed. In other words, to file a false advertising claim under the Lanham Act, the plaintiff must suffer a profit loss caused by a damaged reputation or diminished sales.

What Did Lexmark Change About False Advertising Law In The United States?

The Lexmark ruling means more businesses can sue for false advertising using the Lanham Act. However, jurisdictions that previously permitted wide-ranging tests may see a downturn in unfair competition claims.

Consult With A False Advertising Attorney

Are you dealing with false advertising challenges? Kelly / Warner has successfully handled countless unfair competition, advertising, and marketing claims. If you’re interested in learning more about false advertising legal options or compliance standards, get in touch with Kelly / Warner Law today.

Additional Source:
Supreme Court Changes False Advertising Law Across the Country – Eric Goldman

Revenge Porn Update: Illinois’ New Law

revenge porn legalities
Illinois is the latest state to tackle revenge porn.

Revenge porn, defined as knowingly distributing prurient videos or photographs without consent, is on the rise – and lawmakers are moving quickly to stomp out the scourge. Many states have already moved to eradicate revenge porn from their borders – and every week a new state makes an anti-revenge porn move. Most recently, Illinois State Representative John Bradley introduced a bill.

Illinois’ Revenge Porn Law

The legislation, if signed into law, would make revenge porn a class three felony. The State House has already given the thumbs up; now, it’s the State Senate’s turn. If the bill becomes law, revenge porn could result in:

  1. A five-year prison term, and
  2. Fines of up to $150,000.

Should the revenge porn depict a minor or a person dealing with mental illness:

  1. Fifteen-year prison term, and
  2. Fines of up to $250,000.

Heavier charges of assault, corruption of a minor and possession of child pornography, among others, may also be levied against the person who distributed it.

Revenge Porn Extortion

Online revenge porn websites extort victims.

Here’s how it works: the site offers to take down the offending material, in exchange for payment. Revenge porn site owners make a mint this way. One website owner was charged with 31 separate charges after it was discovered he was charging thousands upon thousands of dollars for his revenge porn removal ‘service.’

Revenge Porn: An International Scourge

Revenge porn is quickly turning into an international issue. Both Australia and Israel have federally banned revenge porn, with one Israeli politician, Yifat Kariv, calling it ‘virtual rape.’ In November of 2013, a Brazilian teenager committed suicide when revenge porn destroyed her reputation and made her the target of bullies. Brazil is currently considering its own legislation that would ban the practice in light of the tragedy.

Secret Media = Revenge Porn

Revenge porn may seem simple on its face. Don’t share sexually explicit images with lovers and you have nothing to worry about, right? This is not always the case. Revenge porn can extend into photos and videos your partner may have taken in secret, perhaps hiding a camera in the bedroom without your knowledge before you had sex. Hidden cameras in bathrooms and thought-to-be-empty bedrooms also capture people masturbating, changing clothes or showering. This media also winds up on revenge porn sites when the relationship sours.

Get Revenge Porn Removed From The Internet

Are you grappling with a revenge porn situation? If you want to get material removed from the Web, contact us. We’ve helped many women successfully expunge revenge porn material for the Internet. Get in touch today to learn more about your options.

Twitter Defamation: Turkish Officials v. Twittering Turks

Twitter defamation in Turkey
Turkish officials engaged in a Twitter defamation standoff before the country’s elections last weekend.
  • Turkish politicians shut down Twitter after leaked recordings surfaced.
  • The social media clampdown came right before Turkish elections.
  • Are Twitter quips considered defamatory in the United States?

Turkish Officials’s Twitter Defamation Takedown Campaign

Weeks before Turkish citizens cast their ballots, country officials were nursing a major online concern: social media websites.

In the days leading up to the election, a “gotcha” government bribery tape leaked via Twitter. Politicians lobbed accusations of villainy across party lines – and word on the sokak was that Prime Minister Tayyip Erdogan was the wheeling-dealing politician caught on tape.

A consummate – if not predictable — statesman, Erdogan has maintained his innocence. Basically, he’s pinning the incident on a Pro Tools aficionado with opposition sympathies.

Turkey Doesn’t Have The Best Free Speech Track Record

A free speech vanguard, Turkey is not. In fact, the country has laws outlawing government criticism. So, it came as no surprise when Turkish lawmakers ordered Twitter to remove any and all offending accounts. Turkey’s communications minister put it bluntly, explaining, “Whether it’s Twitter, Yahoo or Google, all social media companies have to obey the laws of the Turkish Republic and they will.”

Twitter: “Defamation? We Don’t Think So.”

The quip-loving company, however, didn’t immediately kowtow to Turkey’s demands. Twitter was all (and, of course we’re paraphrasing here), Slow your roll, Turkey. Our definitions of Twitter defamation are not one in the same.

Turkey: Shut ‘Em Down!

Undeterred by Twitter’s hesitance, the Turkish government blocked the site entirely.  By election time, officials had also blocked Google and YouTube, thanks to another leaked tape.

Alleged Twitter Defamation Did Not Deter Election Outcome…Or Did It?

In the end, Erdogan won the election, and we’ll never know if his victory was aided by the social media shutdown. But one thing seems certain, Turkish politicians intend to keep tight control of social media platforms in an effort to curb Internet defamation.

What Are The Twitter Defamation Rules Under U.S. Law?

Is Twitter snark considered defamatory in the United States? Yes and no. Yes, under United States law, defamation is defamation – no matter if it appears in a well-respected print outlet or a shady website. However, in the past, some plaintiffs have argued that social media platforms are akin to parody and satirical magazines, and won.

Social Media Law Attorneys

Kelly / Warner is a boutique legal practice with considerable experience in international internet law and social media defamation. If you are entangled in a cross-border social media defamation spat, get in touch to learn more about your options.

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