ReedSmith Serving Clients in a Digital World

January 2007 Volume VI, Number 1

Advertisers Online and on the Frontline New York’s Attorney General has just settled actions against Priceline, Travelocity and Cingular Wireless for promoting products and services using “adware”—the first time a law enforcement agency has held an advertiser responsible for ads displayed through adware. These settlements require the advertisers (and affiliates—presumably sales agents and promotional partners) to give consumers full disclosure of any adware (in- Light Bytes cluding adware bundled in other software); ensure advertising has a conspicuous, identifiable brand; obtain consent from the consumer to download and allow the “To laugh often and much, to win adware to operate on the computer; and make it reasonably simple for a consumer the respect of intelligent people to actually remove the adware from his or her computer. The settlements require and the affection of children, to these three companies to investigate how their online advertising is being distrib- earn the appreciation of honest uted; and if the delivery mechanism violates the terms of the settlement (or the critics and endure the betrayal of law), the advertisers must take immediate stops to cease use of the offending adware false friends, to appreciate beauty, programs. Priceline, Travelocity, and Cingular have also agreed to pay penalties to find the best in others, to leave and investigatory costs to the State of New York. the world a bit better, whether by a healthy child, a garden patch… To those of you familiar with the old saying “Caveat emptor,” we can now add “Let to know even one life has breathed the Advertisers Beware.” easier because you have lived. This is to have succeeded!” Video Gaming—First Amendment Prevails —Ralph Waldo Emerson A California appellate court has held (Kirby v. Sega of America) that makers of video games have a First Amendment right to base game characters on real celebrities, as long as the characters have been transformed. The celebrity in this case, Lady NEW YORK Miss Kier, former lead singer for Deee-Lite, claimed a character (named “Ulala”) LONDON PARIS in the video game Space Channel 5, infringed her rights. Not so—at least not in LOS ANGELES this case. So what does “transformed” mean? For that, you have to call us (or read WASHINGTON, D.C. the case for yourself). SAN FRANCISCO PHILADELPHIA PITTSBURGH Just When You Thought File Sharers Would Know OAKLAND Better MUNICH ABU DHABI So you think it’s nice to share? A Federal District Court has ruled in favor of Uni- PRINCETON versal and Paramount Studios, holding that willful copyright infringement is com- N. VIRGINIA WILMINGTON mitted when digital movies are downloaded from KaZaA, a peer-to-peer file-sharing BIRMINGHAM service, and stored in a directory of shared files capable of being downloaded by DUBAI other KaZaA users. CENTURY CITY RICHMOND GREECE r e e d s m i t h . c o m ReedSmith

New E-Discovery Rules of searching and retrieving informa- a question you don’t already know the tion that could and should have been answer to,” imagine how a litigator for With file sizes growing, you would purged. Absent actual or an expectation the company will feel blindsided by think computers that can rapidly pro- of specific litigation or a subpoena re- records she was unaware of or cited by cess large files and storage capability quiring production of data, companies a court for destroying records he didn’t would be all the rage. For compliance can purge their systems of informa- know his client had. officers, record managers and lawyers, tion that may no longer be relevant or Why pay attention? Because by exer- it’s retrieving the information that is the necessary to their business operations. cising preventive care, you can avoid hot issue and hardly a trivial one. New As the cost of storage has come down, potentially huge legal and operational Federal rules relating to civil litigation however, companies routinely store expenses. By crafting and enforcing took effect at the end of last year, requir- information and don’t bother to delete compliant and well-thought-out record ing companies involved in federal liti- unnecessary information—because retention and destruction policies, you gation to produce electronically stored it’s easy and affordable to simply keep can avoid high-priced lawyers sorting information as part of the pre-trial dis- everything! covery process. The new rules apply to through email messages about the staff employee e-mails, instant messages and The opposite is also an issue. Communi- luncheon, and the pitfalls associated other electronic, digitally stored infor- cation between lawyers and technology with a “smoking gun” needlessly show- mation. In the event the companies are folks is less than perfect. A lawsuit ar- ing up in that pesky lawsuit. Call us. sued, legal experts say, companies will rives, but no one tells data management The ATM Legal Team can help! need to start worrying about everything or systems. Tapes and disks continue in electronic form—from digital photos to be routinely erased or written-over, ATM is Here! with corresponding loss of data. Lots on employee cell phones to text (“SMS”) Effective Jan. 1, our global Advertis- of companies don’t have policies and messages. ing Technology & Media Law practice don’t know what information they group here at Reed Smith is “live.” You Companies need to have sound record have, where it is stored, and who may can license the use of a full-featured, retention and destruction of records have, have kept or destroyed copies of live production copy of one or more policies to ensure compliance with information in electronic form. Lack of of our professionals, by contacting regulatory record-keeping requirements information is a weakness for lawyers. any of our Reed Smith lawyers around and to avoid potentially massive costs If you remember the adage, “never ask the world, bu going to our website, reedsmith.com, or by contacting Doug- Useless But Compelling Facts las J. Wood ([email protected]), Ste- phen S. Edwards (sedwards@reedsmith. Let’s start the new year off easily. There are 52 cards in a deck of playing cards. com) or me, Joseph I. Rosenbaum Four of them are Kings—each of a different suit. Which is the only King without ([email protected]) directly. a moustache? Send your answers to [email protected]. Reed Smith em- ployees are ineligible. EDITOR-IN-CHIEF Last Month we asked you to identify the practice group at Reed Smith that is the newest, the most global, the most compelling and exciting and the most relevant Joseph I. Rosenbaum New York to your legal needs. We also said if you were one of the first 100 clients to send 212.702.1303 us work in January, mention “ATM is TOPS” and pays the last bill in 30 days, you [email protected] will win a prize. Well, if the most recent billing statement is paid in 30 days, not If you would like to know more about the top- only will Fara Blecker at Sony Connect receive a personal prize, but Sony Connect ics in this issue, about Reed Smith or the ways will get something truly valuable. Pay attention folks, you missed an opportunity. we can help serve your legal needs, please contact Joe Rosenbaum, head of our New Don’t do it again. York-based e-commerce practice. The month before that, when we had a really useless question about music; Shari The material is not intended to provide legal advice to be used in a specific fact situation. Gottesman (a regular respondent and a former rock star), at Garden of Life, an- “Reed Smith,” which refers to Reed Smith LLP swered correctly and wins the prize! Oh, and did we again mention Debbie Kaste and related entities, is a limited liability part- at Hilton Hotels who will not let me forget I forgot to mention she won the month nership formed in the state of Delaware. before that. You think this job is easy? ©Reed Smith LLP 2007. All rights reserved. The business of relationships.SM 2