At the request of Congress, the Copyright Office recently agreed to undertake a public study to evaluate the effectiveness of current copyright protections for publishers in the United States, with a particular focus on press publishers. The Copyright Office issued a Notice of Inquiry seeking public comment on a variety of issues that could extend new protections to press publishers and other content creators beyond those afforded under existing copyright law.

In its letter requesting the study, Congress cited a recent directive by the European Union establishing “ancillary copyright” protections for press publishers. The Copyright Office has stated that its study will consider whether or not similar protections are warranted within the United States, as well as the potential scope, source, and appropriate beneficiaries of any such additional protections. Responsive comments from the public are due November 26, 2021. The Copyright Office will also hold a virtual public roundtable to discuss these and other related topics on December 9, 2021. A participation request form will be posted on the Copyright Office website by October 25, 2021.

The study could impact both traditional media outlets producing content and on digital media sharing of that content. It was specifically the impact of digital media on traditional content publishers that served as the impetus for the new study. The Copyright Office’s notice began with the observation that the internet has ushered in an era of disruption and transformation for the press-publishing ecosystem. It recites the financial impact that the internet has had on newspapers and other publishers. Specifically, the notice notes that newspaper advertising revenues enjoyed a steady increase for more than three decades during the years from 1970 to 2006, but have since suffered a precipitous 62% decline during the years from 2008 to 2018. From 2008 to 2019, the number of newspaper newsroom employees dropped by more than 40% and one in five (20%) newspapers closed. Continue reading ›

In a recent decision, the Seventh Circuit clarified the proper standard for deciding a motion for summary judgment. Many litigants and lawyers alike believe that the existence of a factual dispute is sufficient to stave off summary judgment and proceed to trial. However, the Seventh Circuit took the opportunity to reaffirm once again that the existence of factual disputes alone will not preclude summary judgment. Instead, the facts in dispute must be material in nature to prevent entry of summary, often referred to by courts as “genuine issues of material fact.” While acknowledging the existence of factual disputes aplenty in the First Amendment suit, the Seventh Circuit nonetheless ruled that the District Court properly entered summary judgment for the defendants because the plaintiff failed to identify any genuine issues of material fact in the case.

The plaintiff company lost its business licenses to operate two restaurants in the small Chicago suburb of Worth after supporting a political candidate running against the incumbent Village President, Mary Werner. After losing its business licenses, the company, FKFJ, Inc., filed suit against the Village of Worth and Werner under 42 U.S.C. 1983, alleging that the Village and Werner violated its First Amendment rights by retaliating against the company for supporting Werner’s opponent in the election. The case proceeded through discovery and the defendants then filed for summary judgment. FKFJ opposed summary judgment arguing that there were numerous factual disputes in the case. Despite FKFJ’s contention, the District Court granted summary judgment for the Village and Werner.

FKFJ appealed the entry of summary judgment arguing that the District Court erred by ignoring genuine disputes of material fact and making improper credibility determinations at the summary judgment stage. In support of its appeal, FKFJ pointed to a number of factual disputes that it claimed precluded the entry of summary judgment in the case. FKFJ argued that the issue of whether Werner possessed ill-will toward the plaintiff and its owners was a factual dispute sufficient to defeat a motion for summary judgment. Continue reading ›

A federal District Court recently dismissed the defamation claims filed by embattled attorney Michael Avenatti against Fox News and several of its anchors. In its decision, the District Court found that Avenatti’s claims failed to overcome the high hurdle to sustaining defamation claims against a media defendant. In the Court’s opinion, it ruled that the case fell squarely into the longstanding rule that “news outlets are not liable for minor mistakes, especially when reporting on public figures and matters of public concern.”

Avenatti garnered the national spotlight in early 2018 when he represented the adult film actress, Stormy Daniels, who sought to invalidate a non-disclosure agreement regarding her alleged sexual relationship with Trump. Following the filing of these suits, Avenatti became a vocal critic of former President Trump regularly appearing on cable news to criticize Trump and bring attention to Daniels’ suit against the former president. Avenatti’s public image rapidly eroded in late 2018, when news outlets widely reported that he had been arrested in Los Angeles for suspected domestic violence. Though Avenatti’s bail was set, prosecutors never formally charged him. Continue reading ›

In a class-action filed against Champion Petfoods alleging that the pet food company misrepresented the quality of its dog food and ingredients, the Seventh Circuit recently affirmed a grant of summary judgment in favor of Champion. In doing so, the Court reiterated to future litigants that “summary judgment is the proverbial put up or shut up moment in a lawsuit.” The lesson of the case for class-action plaintiffs is that evidence concerning the merits of the plaintiff’s case is just as important as evidence concerning class certification.

According to the plaintiff in the case, Champion advertised on its packaging that its dog food was “biologically appropriate” and made with “fresh regional ingredients” prepared in its “award-winning kitchens.” These claims were false and misleading, according to the plaintiff, because: (1) Champion uses frozen ingredients, regrinds refreshed ingredients, and includes ingredients that are past their expiration date; (2) the ingredients are sourced from all over the world; and (3) there is a risk that the dog food contains BPAs and pentobarbital.

Champion moved for summary judgment while the plaintiff moved for class certification. The District Court granted Champion’s motion on all counts. On appeal, the Court found that the plaintiff failed to present evidence to support his claims. The Court reminded the plaintiff of its oft-repeated refrain that at summary judgment the plaintiff “may not rest upon mere allegations” but must “go beyond the pleadings and support his contentions with proper documentary evidence.”

The plaintiff in the case relied almost entirely on his own testimony to oppose summary judgment. The Court found that this was insufficient to stave off summary judgment. Because the case was a deceptive advertising claim that did not involve patently misleading claims, the Court explained that the plaintiff had the burden of producing evidence to support the contention that the average consumer would be misled by the advertising. The plaintiff’s own testimony could not do this. The Court found of particular note that the plaintiff did not provide either consumer survey evidence or expert testimony to support his claims. Continue reading ›

The federal government has increased its efforts to curtail the abuse of restrictive covenants such as non-compete agreements, non-solicitation agreements, and no-poaching agreements. In July of this year, President Biden signed the Executive Order on Promoting Competition in the American Economy, which encourages the Federal Trade Commission (FTC) to make use of its statutory rulemaking authority “to curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.”

Federal agencies have already been utilizing antitrust and unfair competition laws to combat the abusive use of restrictive covenants. The Department of Justice (DOJ) and the FTC are the two federal agencies authorized to enforce antitrust laws. The two federal laws primarily used by these agencies are the Sherman Antitrust Act, 15 U.S.C. 1 et seq., and the Fair Trade Commission Act, 15 U.S.C. 41 et seq. The Sherman Act makes illegal contracts in “restraint of trade or commerce.” The Fair Trade Commission Act prohibits “unfair methods of competition” and “unfair or deceptive trade practices.” The Supreme Court has held that any violation of the Sherman Act necessarily violates the Fair Trade Commission Act.

The Department of Justice has been cracking down on the use of no-poaching agreements between competitors since 2010. The DOJ’s Antitrust Division has been prosecuting “horizontal” (i.e. agreements between competitors) no-poaching agreements under the Sherman Act. In September 2010, DOJ announced it had reached a settlement with several large technology companies who had agreed not to “poach” each other’s employees. Continue reading ›

The U.S. Court of Appeals for the Seventh Circuit recently affirmed the imposition of a preliminary injunction obtained by Illinois-based medical device maker, Life Spine Inc., against a former business partner who allegedly misappropriated Life Spine’s trade secrets and gave them to its parent company, a competitor of Life Spine. The outcome affirms that injunctive relief is available to plaintiffs when irreparable harm is plausibly alleged, but also highlights that a company need not personally use the trade secrets to be found liable under the Defend Trade Secrets Act (DTSA), 18 U.S.C. §1836 et seq., and the Illinois Trade Secrets Act (ITSA), 765 ILCS 1065/1 et seq.

This trade secret misappropriation case arises from a short-lived business relationship between two companies that sell spinal implant devices. Life Spine makes and sells a spinal implant device known as the ProLift Expandable Spacer System. Life Spine partnered with Aegis Spine, Inc. to distribute the ProLift to hospitals and surgeons. In the distribution agreement, Aegis promised to protect Life Spine’s confidential information, act as a fiduciary for Life Spine’s property, and refrain from reverse engineering the ProLift. Unbeknownst to Life Spine, Aegis allegedly funneled information about the ProLift to its parent company, L&K Biomed, Inc., to help L&K develop a competing spinal implant device.

Shortly after L&K’s competing device hit the market, Life Spine filed suit against Aegis alleging claims of trade secret misappropriation and breach of contract. Following a nine-day evidentiary hearing, the district court ruled in favor of Life Spine and entered a preliminary injunction against Aegis and its business partners, preventing them from marketing the competing product. Aegis appealed arguing that a company cannot have trade secret protection in a device that it publicly discloses through patents, displays, and sales. The Seventh Circuit disagreed. Continue reading ›

It is not at all uncommon for a company to require individuals to agree to its Terms of Use when they sign up for an online service or when creating an account on a website or mobile app. It is also not uncommon for that service, website, or app to incorporate technology from multiple different providers. Such was the case in a case recently decided by the federal Seventh Circuit Court of Appeals. In its opinion, the Seventh Circuit rebuffed arguments by a technology company that it should be entitled to enforce certain arbitration provisions in a user agreement between OfferUp and its users.

Onfido owns and licenses the TruYou facial recognition software, which is marketed as software aimed at helping online resellers verify their identity. OfferUp, an online marketplace for buying and selling used items, uses the TruYou software in its mobile app to verify the identities of its users.

One of OfferUp’s users, Fredy Sosa, sued Onfido, alleging that its TruYou software violated the Illinois Biometric Information Privacy Act (BIPA). Sosa signed up to become a verified user on OfferUp’s mobile app. The identity verification process involved uploading photographs of his driver’s license and face. OfferUp’s verification process allegedly involved using Onfido’s TruYou software to extract and store biometric identifiers contained in the uploaded photos to verify that the face in the photograph matches the face on the driver’s license. Sosa subsequently filed a putative class action lawsuit against Onfido alleging that the company violated the BIPA by failing to provide him with a biometric data retention policy or to advising him whether and when it will permanently delete the biometric identifiers that it derived from his face. Sosa additionally alleged that Onfido violated the BIPA by failing to require him to sign a written release allowing it to “collect, use, or store his biometric identifiers derived from his face.”

After Onfido removed the case to an Illinois federal court, it sought to have the lawsuit dismissed and to compel arbitration of Sosa’s claims. The company relied on an arbitration provision in OfferUp’s Terms of Service which Sosa agreed to when signing up as a user of the OfferUp marketplace as the basis for seeking to compel arbitration of Sosa’s claims. The district court denied Onfido’s motion to stay Sosa’s complaint and compel individual arbitration, finding that Onfido cannot enforce the arbitration provision because it wasn’t a party to the agreement between OfferUp and its users. Continue reading ›

As we previously wrote about, this May the Illinois legislature passed a major bill that significantly alters how and when employers can use restrictive covenants, such as non-compete and non-solicitation agreements, with Illinois employees. As expected, Governor JB Pritzker signed the bill into law. It will go into effect January 1, 2022, and will only apply to agreements entered into after that date.

The new law amends the Illinois Freedom to Work Act and serves both to codify existing requirements under Illinois case law but also to impose new restrictions on Illinois employers as to when, with whom, and under what circumstances they may use restrictive covenants with employees. The goal of the new bill is to clarify when Illinois courts will and will not enforce non-compete and non-solicitation agreements.

The current version of the Freedom to Work Act defines a “covenant not to compete” as an agreement between an employer and a low-wage employee that restricts such low-wage employee from performing:

  • any work for another employer for a specified period of time;
  • any work in a specified geographical area; or
  • work for another employer that is similar to such low-wage employee’s work for the employer included as a party to the agreement.

Continue reading ›

Amazon is facing a class-action lawsuit filed in the Madison County Circuit Court alleging that Amazon’s Alexa violates the Illinois Biometric Information Privacy Act (BIPA). In setting out its case against Amazon, the Complaint quotes an interview with former Amazon senior editor James Marcus in which he said that “It was made clear from the beginning that data collection was also one of Amazon’s businesses. All customer behavior that flowed through the site was recorded and tracked. And that itself was a valuable commodity.”

The Complaint details the near ubiquity of Amazon’s voice-based virtual assistant Alexa by alleging that Alexa is embedded in numerous Amazon devices such as Echo speakers, Fire tablets, and others. The Complaint goes on to allege that Alexa can additionally be integrated into other devices such as phones, TVs, thermostats, appliances, lights, and many more consumer products.

The Complaint alleges that after Alexa responds to a request, Amazon collects and subsequently stores “voiceprints” of the user, and “transcriptions” of the voiceprints. These voiceprints and transcriptions constitute biometric identifiers or biometric information regulated by BIPA, according to the Complaint. The suit goes on to allege that Amazon does not delete the voiceprint or transcription after Alexa has responded. Instead, the Complaint alleges, Amazon uses these recordings to collect biometric information which it uses to improve the speech and voice recognition capabilities of Alexa.

Although Alexa is supposed to activate only after hearing its “wake word,” the Complaint alleges that Alexa-enabled devices frequently capture conversations by accident without being triggered. The Complaint cites a study conducted by Ruhr-Universität Bochum and the Bochum Max Planck Institute for Cyber Security and Privacy that allegedly discovered more than 1,000 sequences of words that incorrectly trigger smart speakers, such as Alexa. According to the Complaint, the study found that Alexa was inadvertently activated by the words “unacceptable” and “election.” Continue reading ›

When you’re a politician, your career is made or broken on your reputation. Donald Trump has been sued for defamation several times, with varying rates of success. Now his son, Donald Trump, Jr., is also being sued for defamation over allegations he made concerning another Republican candidate.

Don Blankenship was a Republican candidate for Senate in West Virginia in 2018, trying to unseat the incumbent, Joe Manchin III, who’s a Democrat. Trump and his allies opposed Blankenship in the primary, and their smear campaign included allegations that he’s a felon.

The allegations refer to an explosion at a mine run by Blankenship, and while felony charges were brought against him, he was only convicted of a misdemeanor. He was sentenced to 1 year in prison, which is the maximum penalty for a misdemeanor and could have caused some of the confusion leading to him being called a felon.

Blankenship also sued multiple media outlets for publishing the same misinformation, but those media outlets corrected their mistake as soon as it was brought to their attention. Trump Jr., on the other hand, doubled down and continued insisting Blankenship is a felon. The tweet he posted on May 3rd, 2018, calling Blankenship a felon was not deleted until late June of the same year, after Blankenship had already lost the primary, and long after Trump, Jr. had allegedly been made aware of the correction. Continue reading ›

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