[Post by Venkat Balasubramani]

I’ve blogged a couple of times about PhoneDog v. Kravitz, the lawsuit over a Twitter account Kravitz used while he was working for PhoneDog. The court initially declined to dismiss PhoneDog’s claims for misappropriation of trade secrets or its claims for conversion. This means that the lawsuit moves forward. The court did dismiss PhoneDog’s claims for “interference with economic relationships.”

PhoneDog amended its economic interference claims, and this time the court says they are sufficient. (You can access a copy of the short four page ruling here.) This doesn’t mean that PhoneDog will necessarily win, just that PhoneDog can include these claims in its lawsuit, conduct discovery around these claims, and try to argue facts around them at trial. I thought the court took a pretty lenient look at PhoneDog’s claims — is Kravitz continuing to use a Twitter account really interfering with the economic relationship between PhoneDog and its advertisers? This seemed like a stretch.

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[Post by Venkat Balasubramani]

Kwan v. Clearwire Corp., C09-1392JLR (W.D.Wash.; Jan. 3, 2012)

In a case involving Facebook, a court enforced the company’s terms of use and, based on a venue clause in Facebook’s terms, transferred a dispute from New York to California. The court delved into the distinctions between “clickwrap” and “browsewrap” agreements while eventually concluding that the plaintiff was apprised of the terms (or should have been), so there was no reason not to enforce the contract.

Kwan v. Clearwire doesn’t involve strictly online terms, but Clearwire wasn’t so lucky — it botched its terms of use. (Judging from the court’s order, it also botched its customer service efforts). End result: It can’t summarily move the dispute to arbitration and has to undergo discovery around whether its customers agreed to the terms.

The court was fairly skeptical of Clearwire’s position, so its chances of success on the arbitration front don’t seem great.

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[Post by Venkat Balasubramani]

Many different statutes regulate the collection and use of personal information, but a key question is whether a certain category of information falls under the statute or a privacy policy’s definition of “personal information.” The California State Supreme Court concluded last year that a ZIP code qualifies as personal information under that state’s statute which regulates the collection and retention of such information by retailers. A federal court in Massachusetts recently came to the same conclusion although for different reasons.

The court in California concluded that the statute in that case was enacted to prevent retailers from collecting information from customers and using it for marketing purposes. The court said that retailers could use the name and ZIP code of customers to then match them in a database and locate them.

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[Post by Venkat Balasubramani]

PhoneDog v. Kravitz, No. C 11-03474 MEJ (N.D. Cal.) (Amended Complaint) (Motion to Dismiss) (PhoneDog Opposition) (Kravitz’s Reply)

In November, the court allowed PhoneDog’s claims against Kravitz for conversion and trade secrets to proceed. In its initial order, the court rejected PhoneDog’s interference with economic advantage claim because it was muddled and didn’t clearly specify what economic relationship PhoneDog alleged Kravitz allegedly interfered with.

PhoneDog filed an amended complaint, clarifying its economic interference arguments (or trying to at least). Kravitz moved to dismiss the amended claims. (I’ve linked to the pleadings above.) PhoneDog claims that it had an economic relationship with the followers of Kravitz’s Twitter account, so Kravitz taking the account disrupted this relationship. PhoneDog also claims this affected its relationship with “existing and prospective advertisers” on PhoneDog’s website. Finally, PhoneDog argues that Kravitz interfered with its economic relationship with CNBC and Fox News by continuing to contribute to programs on these channels after he left PhoneDog. Regardless of how the court rules on the economic interference claims, the conversion and trade secrets claims will continue (for now).

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[Post by Venkat Balasubramani]

I’ve posted on the FTC endorsement guidelines, which broadly require disclosure of relationships, and incentives provided to those who endorse products or companies. (See “FTC Cracks Down on Misleading Online Endorsements by Affiliates.”) The FTC recently closed an investigation on Hyundai, whose marketing agency gave bloggers gift certificates as an incentive to “incline links to Hyundai videos in their posts and/or to comment on . . . forthcoming Super Bowl ads.” You can access a copy of the FTC’s closing letter here [.pdf].

The FTC provided two reasons for why it closed the investigation into Hyundai’s promotions.

1. Hyundai did not know in advance about the incentives, which were offered by an employee of Hyundai’s marketing agency.

2. Offering an incentive to post about or endorse a Hyundai product was contrary to the social media policies of both Hyundai and its marketing agency.

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