2002 Cyberspace Law Exam — Eric Goldman

Santa Clara University School of Law — SPRING 2002

CAMPUS ID: 5793       COURSE: Cyberspace Law   PROFESSOR: Goldman                     

THESE EXAM QUESTIONS MUST BE RETURNED AT THE END OF THE EXAM.

THE STANDARD EXAM RULES GOVERN THIS EXAM.

5793/Cyberspace Law                         May 2, 2002 at 6 p.m.
Eric Goldman                                       1 hour, 40 minutes
3 essay questions                                 Open book (all materials permitted by the exam rules)

PROFESSOR’S INSTRUCTIONS—PLEASE READ CAREFULLY

1.         This is a single part exam with a total time limit of 1 hour, 40 minutes. There are three questions, weighted as follows:

Question 1: 40% of the total grade

Question 2: 40%

Question 3: 20%

You should allocate your time in accordance with these percentages.

2.         I have the following tips and strategies for you:

2.1       Please outline your answers carefully and deliberately. I recommend that you spend approximately 1/3 of your allocated time reading the question and outlining a response.

2.2              Follow the call of the question.  Target your response to your audience.

2.3              While generally your answers should be based on legal principles, it is always appropriate to address business issues.

2.4              Keep separate legally-distinct parties and their respective rights & responsibilities.

2.5       Additional information may be useful in your analysis.  Please indicate what additional information would be helpful, and then state your assumptions in order to proceed with your analysis.

Good luck and have a great summer!

STOP!  DO NOT FLIP THIS COVER PAGE UNTIL TOLD TO DO SO BY THE PROCTOR!

Question #1 (40 minutes)

Your client is Woohoo, a major consumer website.  On the registration page, users are given the following choices:

þ I would like to receive updates about the Woohoo service

þ I would like to receive special offers from Woohoo partners

The above boxes are pre-checked, but users can uncheck the boxes (opt-out).  About 30% of users uncheck a box (some users leave one box checked and uncheck the other box).

These boxes were added to the registration page 1 year after launch.  Before then, users who registered were not asked if they want to receive updates or special offers.

Users who register with Woohoo must provide an email address.  However, Woohoo does not validate email addresses, so a small percentage of email addresses are invalid or are falsely submitted for people who have never been to Woohoo.

Throughout the entire time period, Woohoo has had a mandatory clickthrough privacy policy that says (among other things) (1) Woohoo can amend the policy at any time by posting a new policy to its website, and (2) users should frequently check the website to see if the policy has changed.

Woohoo’s marketing department wants to launch two new weekly email newsletters.  The first will describe movies being released that week; the second is a “deals” newsletter that will consist solely of coupons provided by advertisers.

The marketing department is convinced users will find these newsletters very useful.  Therefore, it plans to subscribe all current users to the newsletters.  However, users can easily unsubscribe by (a) following instructions placed at the top of each newsletter, or (b) going to an email subscription management area on their account page and checking off the applicable boxes.  At the same time, Woohoo will also amend its privacy policy to say that all existing registered users are automatically subscribed to these new newsletters unless they unsubscribe through one of the 2 options.

What are the risks of proceeding with this plan, and how serious are those risks?  Are there other ways for Woohoo to launch its newsletters?

END OF QUESTION #1

Question #2 (40 minutes)

Your client is Onionpie, a website that permits consumers to rate and review third party products and services.

Onionpie creates a “product page” for each product or service available for users to review and consumers to browse.  Each product page contains the name of the product or service, an image (if one is available), some objective details (such as specifications and price), and user ratings and reviews (if any have been submitted).

You receive a letter from an attorney for PawnLabor, a major financial services entity.  The letter says: “‘PawnLabor’ is a registered trademark.  Use of our trademark without permission is an infringement.  If you cannot provide us with written proof that Onionpie has the right to use our trademark, cease and desist using the trademark or we will take further action.”  Assume PawnLabor is a fanciful and famous trademark, and there are no applicable license agreements.

Onionpie has a product page for PawnLabor, where users can critique PawnLabor’s brokerage services.  On the product page, Onionpie displays the PawnLabor name in the page title, the objective details, and the page’s metatags (Onionpie automatically creates metatags for each product that says “Learn more and read reviews about XYZ” (where XYZ is the product name)).  The PawnLabor name also appears on the Onionpie site in navigation links to the product page, when users search for the term “PawnLabor” in Onionpie’s internal search engine, and in user-authored reviews about PawnLabor.

As a result of these uses, when users search for the term “PawnLabor” in third party full-text search engines like Google, Onionpie’s pages are near the top of the search results.

Evaluate the letter from PawnLabor.  What arguments would you make in a response letter?

Eric’s Tips and Hints:

  • Make sure you identify all applicable defenses

END OF QUESTION #2

Question #3 (20 minutes)

Your client is Onionpie, a website that allows consumers to publish online reviews of products and services (yes, the same company as in Question #2).

One category on the Onionpie website is “auto shipping.”  Several dozen companies who ship automobiles for a fee are catalogued there, and consumers have written dozens of reviews about these companies.

Two rival auto shippers, Nellay Auto and US Shipping, compete fiercely with each other.  Each shipper has posted bogus negative reviews about the other.  The negative reviews arguably contain defamatory statements.

Nellay Auto’s attorney demands that Onionpie remove the negative reviews about it because “while current law may protect your company for inadvertently publishing defamatory material, once we have notified you that the material is defamatory, you must remove it to avoid liability.”

US Shipping’s attorney sends a similar demand letter asserting “your client cannot hide behind the First Amendment for intentionally publishing defamatory statements without any attempt to verify the truth of such statements.”

Evaluate and critique the attorneys’ statements.

END OF QUESTION #3

END OF EXAM

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