Coalition Challenges State Law Guarding 'Net IP

Coalition Challenges State Law Guarding 'Net IP

Advocates argue that a Georgia statute violates free speech and interstate commerce.

By Jeffrey R. Kuester and Matthew C. Kramer
The National Law Journal, October 28, 1996, at C22.

Mr. Kuester is a partner in Atlanta's Thomas, Kayden, Horstemeyer & Risley, where he prepares and prosecutes patents for software and electronic technologies. Mr. Kramer is a third-year student at the University of Georgia School of Law.

On Sept. 24, a diverse coalition of fourteen plaintiffs fired back at Georgia's Cyber-Sheriff[1], bringing an action to overturn the state's controversial attempts to regulate the Internet[2]. The ACLU, joined by the Electronic Frontier Foundation, State Representative Mitchell Kaye, and others[3], filed suit in the United States District Court for the Northern District of Georgia, seeking both injunctive and declaratory relief in a challenge to Georgia's new law.

Recently enacted, the law, known as HB1630, makes it a criminal act to "..transmit any data through a computer network...if such data uses any individual name... to falsely identify the person." Furthermore, it would also restrict the "use" of a trade name, registered trademark, logo, legal or official seal, or copyrighted symbol, which would "falsely state or imply that such person...has permission or is legally authorized to use [it] for such purpose when such permission or authorization has not been obtained."[4]

Many have claimed that the law criminalizes the use of any e-mail address that does include the name of the mailbox owner, as well as the use of domain names and Web-page hyperlinks for which permission was not first obtained from the owner of any included trademark, trade name, logo, legal or official seal, or copyrighted symbol.

The plaintiffs argue that enforcement should be enjoined because the statute violates constitutional protections of free expression, association, access to information, and privacy, and is substantially overbroad and unconstitutionally vague. In addition, because the statute attempts to regulate interstate commerce occurring wholly outside the borders of the state of Georgia, the statute violates the Commerce Clause of the United States Constitution.[5]

Citing the recent case of ACLU v. Reno,[6] plaintiffs note that the Internet "is a far more speech-enhancing medium than print, the village green, or the mails,"[7] and "[a]s the most participatory form of mass speech yet developed, the Internet deserves the highest protection from government intrusion."[8] Plaintiffs fear that the Georgia statute could unconstitutionally "chill" their rights to exercise their rights in the growing cyberspace frontier.

Because the statute is not limited to commercial uses, the plaintiffs fear that their constitutionally protected non-commercial uses of trademarked names and logos are now prohibited by the act.[9] Many people have created pages on the World Wide Web that use trade names and logos of others to provide links to the sites of those whose names and logos they use.[10] Because the statute is not limited to commercial uses, it is alleged that the statute is simply a content-based restriction on speech which cannot withstand the strict scrutiny that applies to such restrictions.[11]

Express Limitation

Congress, in the new Federal Trademark Dilution Act,[12] recognized these same concerns by expressly excluding application of the Act to noncommercial "use" of trademarks, and in news reporting and commentary.[13] It was precisely Congress' concerns about the interplay of the First Amendment and intellectual property rights that led to the express limitations.

Second, even without an intent to defraud, providing links which include such trademarks, tradenames, or logos may violate the Georgia statute. At least one commentator has suggested that the links may falsely imply official sponsorship or permission to unsophisticated users simply because the links provide automatic connections between web pages.[14] Many of the plaintiffs use these trade names and logos to engage in political and religious speech and argue that such use should not be suppressed by application of intellectual property protections.

Although the plaintiffs concede that the State may have an interest in laws that legitimately secure intellectual property rights, they argue that "the State may not suppress protected expression under the thin guise of protecting intellectual property."[15] Quoting one court, "It offends the Constitution . . . to invoke [a state intellectual property statute] as a basis for enjoining the noncommercial use of a trademark by a defendant engaged in a protected form of expression."[16]

Furthermore, they argue that, assuming the purpose of the prohibition is to protect the intellectual property of others, there are already numerous other less restrictive civil and criminal remedies to achieve this end.[17] Thus, according to the plaintiffs, the act's broad restriction upon the use of trade names, logos, etc. is not narrowly tailored to serve any compelling state interest and is, therefore, an unconstitutional content-based restriction upon protected expression.

Plaintiffs also argue that the act attempts to directly regulate commerce occurring wholly outside the borders of the state of Georgia, and is thus per se invalid. According to the "dormant" Commerce Clause of United States Constitution,[18] state authority is severely limited in areas which affect commerce occurring entirely outside the state.[19] Prosecution is possible under the statute even where the sender and reader of an electronic message reside outside the state of Georgia.

Internet users usually have no control over the path which a message may take.[20] If a prohibited message passes "through" Georgia, the parties to the communication have violated the law. For example, if a web page maintained by one party in California were accessed by a second party in New York, both parties are criminals under the Georgia statute if the data happens to pass through Georgia.[21]

Just Passing Through

The venue provisions of the statute make it clear that the statute applies to interstate communications that "simply pass through Georgia, and would have the effect of regulating a substantial amount of activity occurring entirely outside the State."[22] Therefore, plaintiffs argue that it should struck down without further inquiry.[23]

There is significant danger in a patchwork that regulates content of the Internet and the World Wide Web. If each of the 50 states imposed different regulations on the use of trade names, logos, trademarks, etc., no Internet user or web page author would know what standards to follow. Arguably, no state has a legitimate interest in regulating the Internet in this manner.

Because access to a web page can not currently be blocked based on the state from which a request originates, the computer administrator would be forced to remove the page from the Internet entirely. Such an intra-national result would be expected in light of the inter-national CompuServe newsgroup restrictions which were self-imposed after Germany expressed obscenity concerns recently.

In addition, since Georgia is the first state in the country to pass a law which regulates trademark and tradename usage on the Internet, the outcome of this case will go far in determining the relationship between free speech and state-based intellectual property protection. If parts of the statute are upheld, other states are likely to use those sections of the Georgia legislation as a model in crafting laws of their own.

Even if the plaintiffs achieve a complete victory in the Georgia case, other states are still likely to attempt to craft similar statutes. After all, fraud, misrepresentation and trademark infringement are typically damaging behaviors which should be no more tolerated in cyberspace than in real space. Innocent users and newcomers to the Internet will surely be victimized by the unscrupulous among us unless penalties are encountered for such behavior.

Many will undoubtedly feel that states need to quickly address this situation rather than waiting on the federal government to act. Also, local enforcement may be quicker to implement and more apt to be used, thus serving as a better deterrent than federal prosecution.

State by State

The question is whether those new laws should come from the states or from Congress. While reducing fraud and preventing trademark infringement on the Internet are worthwhile motivations, these concerns are not limited to any particular state. Moreover, the effects of a state-by-state approach to addressing the issues may be undesirable.

While many existing statutes already address the evils contemplated by Georgia, the apparent usefulness of a new statute should not be overlooked. First, enactment of such a statute in other states would improve the public awareness in those states that such behaviors are discouraged.

Second, some lawmakers may have the concern that the public and the legal system fail to equate on-line activity with similar types of off-line activity. By clarifying that fraud and trademark infringement are just as illegal in cyberspace as they are in the physical world, deterrence is much more likely.

Nonetheless, drafters of any statute attempting to regulate the Internet should pay very close attention the many technical aspects of the Internet and the resultant implications on free speech and interstate commerce.

If the plaintiffs lose this case, the Internet may eventually be controlled by a state-by-state system of local cyber-sheriffs, each with their own brand of justice. If the law is overturned, it may be up to the federal courts to set the standard.


[1] See Jeffrey R. Kuester, "Cyber-Sheriff's in Town," National Law Journal, July 1, 1996, at C-1.[Return]
[2] O.C.G.A. 16-9-93.1 (1996).[Return]
[3] Other plaintiffs include Electronic Frontiers of Georgia, AIDS Survival Project, Atlanta Freethought Society, Atlanta Veterans Alliance, Community ConneXion, Kenneth Leebow, Bruce Mirken, Bonnie Nadri, Josh Riley, John Troyer, and Jonathan Wallace.[Return]
[4] O.C.G.A. 16-9-93.1 (1996).[Return]
[5] Plaintiffs' brief in support of motion for preliminary injunction at Par. 1, ACLU of Georgia v. Governor of Georgia ("Plaintiff's Brief").[Return]
[6] ACLU v. Reno, 929 F. Supp. 824 (E.D. Pa. 1996) (Dalzell, J.).[Return]
[7] Plaintiffs' brief at Sec. I-A, citing ACLU v. Reno, 929 F. Supp. at 882.[Return]
[8] Id., citing ACLU v. Reno, 929 F. Supp. at 883.[Return]
[9] Section (a) of the law provides: It shall be unlawful for any person, any organization, or any representative of any organization knowingly to transmit any data through a computer network or over the transmission facilities or through the network facilities of a local telephone network for the purpose of setting up, maintaining, operating, or exchanging data with an electronic mailbox, home page, or any other electronic information storage bank or point of access to electronic information if such data uses any individual name, trade name, registered trademark, logo, legal or official seal, or copyrighted symbol to falsely identify the person, organization, or representative transmitting such data or which would falsely state or imply that such person, organization, or representative has permission or is legally authorized to use such trade name, registered trademark, logo, legal or official seal, or copyrighted symbol for such purpose when such permission or authorization has not been obtained; provided, however, that no telecommunications company or Internet access provider shall violate this Code section solely as a result of carrying or transmitting such data for its customers.[Return]
[10] Plaintiff's brief, citing affidavits (Leebow Aff. 7-8A; Nadri Aff. 3-7; Riley Aff. 3-6, et al.)[Return]
[11] Plaintiffs' brief at Sec. I-B 4.[Return]
[12] P.L 104-98, 109 Stat. 985.[Return]
[13] Plaintiffs' brief at Sec. I-B 4.[Return]
[14] See Stuart D. Levi, "Web-Site Hypertext Links Raise Issues of Control," National Law Journal, Aug. 12, 1996, at B12 (suggesting that the mere link itself combined with the use of a distinctive logo to identify it "falsely impl[ies] formal relationships between the sites.").[Return]
[15] Plaintiffs' brief at Sec. I-B 4.[Return]
[16] L.L. Bean, Inc. v. Drake Publishing, Inc., 811 F.2d 26, 32 (1st Cir.), cert. denied, 483 U.S. 1013 (1987) (refusing to apply Maine trademark anti-dilution statute to enjoin parody using defendant's trademark).[Return]
[17] See, e.g., 15 U.S.C. 1125 (federal remedy for trademark infringement); O.C.G.A. 10-1-450 et seq. (1994) (Georgia remedy for trademark and trade name infringement); O.C.G.A. 10-1-453 (1994) (unauthorized and deceitful use of name or seal); O.C.G.A. 10-1-393 (Supp. 1996) (unfair and deceptive consumer trade practices); O.C.G.A. 10-1-372 (1994) (deceptive trade practices); Jellibeans, Inc. v. Skating Clubs of Georgia, Inc., 716 F.2d 833, 837 & n. 6 (11 Cir. 1983) (common law action for unfair competition).[Return]
[18] U.S. Const. Art. 1 Sec. 8, cl. 3.[Return]
[19] See Healy v. Beer Institute, 491 U.S. 324, 336 (1989).[Return]
[20] Plaintiffs' brief at Sec. I-D 1,.citing Steele Aff. 17.[Return]
[21] Id. at Sec I-D 1., citing O.C.G.A. 16-9-94(4) (1996).[Return]
[22] Id. at Sec. I-D 2.[Return]
[23] Id. at Sec. I-D 2, citing Brown-Forman Distiller's Corp. v. New York State Liquor Auth., 476 U.S. 573, 579 (1986).[Return]

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Copyright 1996 Jeffrey R. Kuester and Matthew C. Kramer.