1. Technology and Media Law
Presented by Robert Scott and Jonathan Scott
Scott & Scott, LLP

2. Network Security and Privacy Injury Liability
© 2007 Scott&Scott, LLP

3. Network Security and Privacy Injury Claims
FTC Investigations
State Investigations
Private Causes of Action
© 2007 Scott&Scott, LLP

4. FTC Investigations Unfair Practices
Violations of Fair Credit Reporting Act
Failure to Maintain Adequate Security
Failure to Protect Financial Data
Failure to Disclose Security Breaches
Violations of Federal Trade Commission Act
Violations of GLBA
© 2007 Scott&Scott, LLP

5. Losses Related to FTC Investigations
Superior Mortgage Company Agrees to Refrain from Making Misrepresentations and to Allow FTC Compliance Monitoring for 10 Years.
DSW, Inc. , Nations Title, and CardSystems Agree to Implement Comprehensive Security Measures and Allow FTC Compliance Monitoring for 20 Years.
ChoicePoint Agrees to Pay $15 Million and to Allow FTC Compliance Monitoring for 20 Years.
© 2007 Scott&Scott, LLP

6. State Investigations State Consumer Protection Laws
Breach Notification Violations
Violations for Failure to Protect and Properly Destroy Customer Data
© 2007 Scott&Scott, LLP

7. Losses Related to State Investigations
Forty-four state Attorneys General settled for $500,000 with ChoicePoint after it sold personal data to identity thieves.
NY Attorney General settled with Datran Media for $1.1 million after Datran improperly disclosed personal data.
TX Attorney General entered into an agreed temporary injunction with CNG Financial and several other companies requiring proper destruction of customer records.
© 2007 Scott&Scott, LLP

8. Private Causes of Action
Tort / Negligence Claims
Negligent failure to maintain security
Negligent delay in giving notice
Negligent failure to remediate vulnerabilities
Negligent failure to comply with PCI
Negligence Per Se – GLBA
Negligent retention of data
Negligent Misrepresentation
Bailment
Breach of fiduciary duty
© 2007 Scott&Scott, LLP

9. Private Party Claims Scenarios
Class action lawsuit against TJX alleging negligence per se for failure to follow GLBA Safeguard Rule.
Class action lawsuit against the Veteran’s Administration for violations of the Privacy Act.
Class action against Fifth Third Bank alleging failure to require TXJ to maintain PCI compliance.
© 2007 Scott&Scott, LLP

10. Media Liability
© 2007 Scott&Scott, LLP

11. Media Liability Theories of Recovery
Internet Liability
Software Liability
Virtual Liability
© 2007 Scott&Scott, LLP

12. Internet Liability Trademarks Cybersquatting Unfair Competition
Dilution
© 2007 Scott&Scott, LLP

13. Internet Cases
MGM v. Grokster – copyright infringement attaches where object of devise is to promote infringement.
J.G. Wentworth v. Settlement Funding, LLC – Lanham Act claims related to meta tags in the source code.
Perfect 10 v. Amazon – Direct and vicarious infringement claims related to distribution of thumb-nail images.
Perfect 10 v. CCBILL – Trademark claims against ISP partially pre-empted by DMCA.
GEICO v. Google – Trademark infringement claim viable related to Google’s sponsored links.
A&M Records v. Napster – Copyright infringement claim related to distribution of music content.
© 2007 Scott&Scott, LLP

14. Software Theories of Liability
Copyright Infringement
Negligent Misrepresentation
Fraud
Negligent Implementation
Violation of Consumer Protection Laws
© 2007 Scott&Scott, LLP

15. Software Cases
SCO Group v. IBM – Company that owns UNIX sued IBM for misusing its software licensed to IBM. The case is still pending.
Fresh Direct v. Blue Martini – end user sues software publisher after software allegedly fails to perform as promised.
© 2007 Scott&Scott, LLP

16. Virtual Media Theories of Liability
Fraud
Deceptive Trade Practices (State and Federal)
Conversion
Interference with Prospective Business Relationships
Copyright Infringement
Lanham Act
© 2007 Scott&Scott, LLP

17. Virtual Media Cases
Bragg v. Linden Labs – Business owner sued the operator of Second Life for misrepresenting the property ownership rights available in Second Life.
Eros v. Doe – Eros sued unknown virtual defendant for selling unauthorized copies of virtual products in Second Life and subpoenaed Linden Labs to reveal identity.
© 2007 Scott&Scott, LLP

18. Contact Information
Robert J. Scott
Jonathan C. Scott
Scott & Scott, LLP
2200 Ross Avenue, Suite 5350E
Dallas, Texas 75201
Phone:
Fax:
© 2007 Scott&Scott, LLP