Legal Briefing: Google May Lose Key Precedent for Battle with Viacom


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Veoh Can't Afford to Defend Its Victory

In Google's (GOOG) titanic copyright battle with Viacom (VIA), Google's most helpful precedent is a case won by video-sharing website Veoh Networks Inc. Universal Music Group sued Veoh because Veoh users had uploaded Universal music videos without permission. Veoh successfully invoked the Digital Millennium Copyright Act (DMCA)'s "Safe Harbor," based on Veoh's policy of taking down copyrighted material as soon as it is aware of the content. Google's YouTube has a similar policy, and is asserting that the DMCA "Safe Harbor" should apply to Google, too, providing it with a defense against Viacom's claims.

However, Universal has appealed the 2008 decision, and if it wins its appeal, Google's most favorable case will disappear. Google is no doubt hoping that Veoh fights hard to defend its victory. Unfortunately for Google, The Recorder reports that Veoh has since fallen on hard times, and may not be able to pay lawyers to defend its appeal. Briefs are due in a month. Surely the court will do its best to decide the case on its merits, and the lack of a brief -- if it comes to that -- will not be decisive. Nonetheless, both sides to an appeal file briefs for a reason: The brief lays out the client's perspective in the best light possible, marshaling the facts and law to do so. If Veoh does not file a brief, especially when facing a deep pocket like Universal, it could really weaken the website's chances. Perhaps Google and others will file friend-of-the-court briefs to fill at least some of the gap.

Attention Bargain Shoppers: Supreme Court to Rule on Cheap Luxury Imports

Costco (COST) sold "gray market" Omega watches, giving its customers huge price discounts of about $700 per watch. In a "gray market," goods that are manufactured for sale abroad at reduced prices are instead purchased abroad and resold at home for more than the foreign price but substantially less than the normal home price. In Costco's case, Swiss-made Omega watches that were intended to be sold in Latin America, were bought in Latin America but then re-sold to Costco in the U.S. Costco then sold the watches at prices that were above the Latin American prices, but well below Omega's U.S. prices.

Omega sued the wholesaler, but Costco won at trial, citing the First Sale Doctrine, which says that once you buy an item, you can use it, sell it, lend it, whatever, without consulting the original trademark owner. It's this doctrine that allows libraries to operate. Omega won the appeal in the Ninth Circuit, however, and on Monday the Supreme Court agreed to decide in the case.

School Used Laptops to Spy on Students

A few months ago, a school system chastised a student for allegedly popping pills while at home. Claiming he was only eating Mike and Ikes, the kid wanted to know where the school got its information. It turned out that his school-issued laptop, like the ones distributed to his classmates, came equipped with a webcam and software that allowed the school to remotely activate the camera. The student sued. The school system denied any practice of regular spying on students, saying the software was intended purely to be activated after a computer had been lost or stolen.

Yesterday the ABA Journal reported that "Discovery to date has now revealed that thousands of webcam pictures and screen shots . . . have been taken from numerous other students in their homes, many of whom never reported their laptops lost or missing." Worse, the student's attorney claims, "[t]he computers took photos of students in bed, even partially dressed, and captured their online chats and kept a records of the websites they visited."

Parents, if your kids go to a school that lets them bring a laptop home, make sure you find out whether or not your school system is doing the same thing.

Hard Time for White Collar Crime

A Virginia man convicted under the Foreign Corrupt Practices Act of bribing Panamanian officials just got a little over seven years in prison, the longest sentence ever for an FCPA conviction.