1. January 20, 2007© 2007 The Prinz Law Office.1 HOTTEST TOPICS IN CYBERSPACE: CYBERINSURANCE, BLOGS, AND ON-LINE ADVERTISING By Kristie D. Prinz, Founder The Prinz Law Office

2. January 20, 2007© 2007 The Prinz Law Office.2 Hottest Topic #1: Cyberinsurance The case for Cyberinsurance: -Prevalence of Data Theft Incidents (ChoicePoint, Lexis-Nexis, Visa MasterCard) -California’s Security Breach Information Act (SB-1386), effective July 1, 2003 -Gap in coverage with traditional policies (CGL, Errors and Omissions)

3. January 20, 2007© 2007 The Prinz Law Office.3 Hottest Topic #1: Cyberinsurance Types of Coverage Offered -First Party Business Interruption -First Party Electronic Data Damage -First Party Extortion -Third Party Network Security Liability -Third Party (Downstream) Network Liability -Third Party Media Liability

4. January 20, 2007© 2007 The Prinz Law Office.4 Hottest Topic #2: Blogs Common Legal Principles Relevant to Business Blogs -Copyright Ownership of the Content -Trademark and Copyright Infringement -Trademark Dilution Issues -Potential Disclosure of Trade Secrets -Employment Law -Liability Defenses; Vicarious Liability

5. January 20, 2007© 2007 The Prinz Law Office.5 Hottest Topic #2: Blogs Barrett v. Rosenthal, No. S122953 (Cal. Sup. Ct. Nov. 20, 2006). - California Supreme Court recognized broad immunity for defamatory republications on Internet -Facts of case involved operator of Internet discussion group, which distributed defamatory statements -Case viewed as protecting the free speech of bloggers; also viewed as a victory for online companies such as Google and AOL

6. January 20, 2007© 2007 The Prinz Law Office.6 Hottest Topic #2: Blogs O’Grady v. Superior Court, 139 Cal. App. 4 th 1423, 2006 WL 1452685 (Cal. App., 6 th Dist., May 26, 2006). -Decision prevented Apple Computer from forcing the disclosure of unnamed individuals who allegedly leaked information about new Apple products to online news sites -Viewed as a victory for bloggers in that it protected their status as journalists

7. January 20, 2007© 2007 The Prinz Law Office.7 Hottest Topic #2: Blogs Lawyer Blog Controversy -States of Kentucky and New York contemplated amending ethics rules to regulate lawyer blogs as lawyers advertising in 2006 -State of California has not as of yet taken any steps to regulate lawyer blogs but is contemplating changes to lawyer advertising rules -Should lawyer blogs be protected by the First Amendment?

8. January 20, 2007© 2007 The Prinz Law Office.8 Hottest Topic #3: On-line Advertising Click Fraud Class Action Suits - Involves Pay-Per-Click Advertising: Someone clicks repeatedly on an advertisement until the company advertising budget for the campaign runs out, with no intention of buying from the advertiser -Some estimates suggest that as much as half of an advertiser’s budget is eaten up by click fraud

9. January 20, 2007© 2007 The Prinz Law Office.9 Hottest Topic #3: On-line Advertising Lane's Gifts and Collectibles LLC v. Yahoo! Inc., Case No. CV-2005-52-1 (Ark. Cir. Ct. complaint filed Feb. 17, 2005). - Class Action Suit Against Defendants, including but not limited to Yahoo!, Google, Walt Disney Co., Lycos, Inc., and LookSmart, Ltd. -Crux of Argument: Industry is not doing enough to prevent Click Fraud and is overcharging advertisers -Settlement reached with Google for $90 million in March, 2006: plaintiff’s counsel received $30 million and $60 million will go to pay for credits for future Google services to advertisers in the class

10. January 20, 2007© 2007 The Prinz Law Office.10 Hottest Topic #3: Online-Advertising Checkmate Strategic Group v. Yahoo!, Inc., Case No.: 2:05-CV-04588-CAS-FMO (C.D. Cal. preliminary settlement approved June 26, 2006). -Settlement reached for $4.95 million, which will cover cash payments to plaintiff’s counsel -No cap on advertiser refunds where evidence of click fraud is found (will include evidence as far back as January, 2004) -Yahoo! Institutes Five Steps to Combat Click Fraud

11. January 20, 2007© 2007 The Prinz Law Office.11 Hottest Topics in Cyberspace: Cyberinsurance, Blogs, and On-line Advertising CONTACT INFORMATION Kristie D. Prinz, Founder The Prinz Law Office P.O. Box 1594 Los Gatos, CA 95030 kprinz@prinzlawoffice.com www.prinzlawoffice.com Phone: 408.884.3577 Fax: 408.317.0316