On this week’s menu: illegal porn downloads, the .XXX Internet domain, Zappos’ terms of use, and AdWords, YouTube, and Justin.tv. For your reading pleasure:

YouTube copyright infringement lawsuit knocked out in first round

A federal court dismissed a lawsuit claiming online video content providers YouTube and Justin.tv “unlawfully induced copyright infringement” by allowing users to upload television footage of a boxing match. Ark Promotions, who owned the copyright to the boxing match, said that YouTube and Justin.tv encouraged others to violate copyright by creating their websites and providing instructions on how to upload videos. The court didn’t buy that argument, and in doing so set an important precedent:

“The guidance [the court] provides should help ease litigation burdens on online services that provide platforms allowing users to share content, provided that they do not take affirmative steps for the specific purpose of encouraging copyright infringement. The decision also adds to the growing body of legal authority holding that the Communications Act does not regulate the streaming of cable television footage on the Internet.”

One to watch, as it were. (Wilson Sonsini

Does your mother know you’re (illegally) downloading that film?

Adult entertainment company Porn film providers make their money like every other film studio: making movies and selling them. But they also have become very skilled at collecting settlements from illegal downloaders, opening up what might be a whole new revenue stream. That could change: a recent lawsuit has raised red flags with a federal district judge, who wonders if adult film companies aren’t misusing intellectual property laws in the process of protecting their copyrighted material:

“… the real issue for Judge Young was the potential for abuse and misuse of the judicial process in service of ‘what seems to be a developing pattern of extortionate settlement demands.’ As Judge Young described: ‘While it is without question that a valid copyright holder is entitled to seek protection of its intellectual property in federal court, it appears that in at least some of these cases, adult film companies may be misusing the subpoena powers of the court, seeking the identities of the Doe defendants solely to facilitate demand letters and coerce settlement, rather than ultimately serve process and litigate the claims.’”

Judge Young’s solution? Require film producers to sue each defendant separately, which, he reasons, undercuts the economic model of abusing the system. Can you start downloading porn without worrying that your mother might see your name in the court record? Not likely. (Foley Hoag

Google dodges a trademark infringement bullet

Google and Rosetta Stone went to court, and all I got was this smiley face: After a three-year legal battle, Google and Rosetta Stone have decided to play nice. Rosetta Stone accused the owner of AdWords of trademark infringement in 200, claiming that Google sold Rosetta Stone’s trademarks to third parties for use as search keywords. More than 30 companies, trade associations, sports leagues and nonprofits filed briefs in support of Rosetta Stone, hoping to resolve the question of Google’s liability when competitors use their trademarks in AdWords. Details of the settlement have not been made public, so those groups will just have to wait to see how Google and AdWords “meaningfully collaborate to combat online ads for counterfeit goods and prevent the misuse and abuse of trademarks on the Internet.” (Mintz Levin)

To click or not click: for Zappos, that is the question

It may not be nobler, but requiring users to expressly agree to the terms of Zappos.com’s terms of use may have allowed the company to enforce the arbitration clause contained in the website’s “Disputes” section. Instead, the company chose “browsewrap” – where website owners post their terms of use on the site – over “clickwrap” – where users are forced to manifest their agreement to those terms by clicking an “Agree” button. That decision that led the court in In re Zappos.com Inc., Customer Data Security Breach Litigation to deny the company’s motion to compel arbitration because “Zappos and its users had not formed a binding, enforceable contract.” (Wilson Sonsini)

Does the .XXX Top-Level Domain break antitrust laws?

Imagine that: two stories this week involving the adult entertainment industry… This time it’s an online content provider, Manwin Licensing International, who’s suing the Internet Corporation for Assigned Names and Numbers (ICANN) for violating the Sherman Antitrust Act when it established the .xxx top-level domain. The judge hearing the case dismissed most of Manwin’s claims, with one notable exception: the company asserted that trademark owners were compelled to register domain names in the .xxx domain solely for defensive or blocking purposes (SesameStreet.xxx makes the point rather well). The judge agreed that this could be problematic, and allowed this portion of Manwin’s suit to proceed. Why does this matter?

“This decision has enormous potential consequences to the domain name registration market, particularly with the coming roll-out of new gTLDs. By way of example, one of the applied-for new gTLDs is .hotel. While Marriott has a very popular website located at marriott.com (as do Hyatt at hyatt.com, Hilton at hilton.com, etc.), these hoteliers may feel compelled to register their corresponding names and trademarks in the .hotel TLD, to protect against cybersquatters.”

No word on how the judge will be proceeding with discovery in the suit… (Ifrah Law