Is it okay for a company to take an image found on the Internet and freely utilize it for commercial purposes? Probably not. Although the Internet certainly makes it easy to post, share and download pictures, this online content is not necessarily free for the taking. Unfortunately, many companies do help themselves.

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The MPAA brought a lawsuit against TorrentSpy operators for copyright infringement in February of 2006.  The U.S. District Court for the Central District of California recently ruled in favor of the MPAA.  A ruling on damages has yet to occur and TorrentSpy does plan to appeal.  Perhaps the most interesting aspect of the ruling is that it was not necessarily based on the merits of the MPAA’s case. Instead, the Judge issued a default judgment, declaring that the defendants destroyed evidence and that their conduct was “obstreperous.”

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Here are a few loss scenarios arising from recent events.  Topics include Denial of Service/ECommerce, Defamation and Website Accessibility.

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You had better think twice before you send a copy of the great article you just read to your entire staff; you could end up entangled in copyright infringement litigation. A California-based market research company recently settled complaints brought against it by the Software & Information Industry Association (SIIA). The company had been internally distributing a variety of third-party owned content including market research reports, news articles and other information. Many companies engage in the same practice and as a result, it doesn’t occur to most people to obtain permission or a license to use the content unless it is going to be used externally. Even if the disseminator of the content knew that technically they should obtain permission prior to use, it’s only being distributed internally, so who’s going to know? That position works fairly well, until one of your employees blows the whistle, which is exactly what happened in this case.

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The increasing prevalence of ecommerce, social networks and other technological advances offer unprecedented convenience and access to shopping, paying your bills and interacting with the world. With these benefits, there are dangers in putting personally identifiable information on the internet that go beyond the obvious stolen credit card or social security numbers. Responsible online businesses have lots of tools to help set their customers at ease but there is not always a perfect understanding between the parties regarding what they can and will do with private information.

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Attorneys, risk managers and consultants advise their clients to use various techniques in contracts to manage the clients’ liability and contractual exposures. Underwriters of online liability risks scour an applicant’s website, contracts and the application for insurance to evaluate how aware an applicant is of potential risks and how adept it is at managing or eliminating risks. Now a case decided by the U.S. Court of Appeals for the Ninth Circuit provides guidance that may cause some of those parties to review how they use contracts and websites in the risk management process. The issue before the court was simple: whether a service provider may change the terms of its service contract by merely posting a revised contract on its website. The answer was a unanimous “no.”

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Message boards, blog comments and chat rooms create a whole new arena for a company to generate good public relations and maybe even spread a marketing message. It’s also a whole new opportunity for defamation. While there’s really no such thing as an anonymous press release, ad campaign or direct mail piece, anonymous posts made to industry blogs and message boards are commonplace.

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