Social media sites are transforming not only the daily lives of consumers, but also how companies interact with consumers. Here at Morrison Foerster, across all of our practice groups, we are seeing complex, cutting-edge legal issues arising out of social media. As with the Internet boom during the mid-to-late 1990s, social media is generating new legal questions at a far faster pace than the law’s ability to provide answers to such questions. In an effort to stay on top of these emerging issues, and to keep our clients and friends informed of new developments, Morrison Foerster publishes this blog devoted to the law and business of social media.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.Aaron’s practice focuses on advising both established and emerging companies in a variety of data- and technology-intensive sectors, including software, SaaS, cloud-based technology, digital media (social media, AR/VR, gaming, streaming media, AdTech), AI, healthcare, consumer electronics, e-commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on branding and marketing, trademark licensing, and content-related transactions, as well as the intellectual property aspects of mergers, acquisitions, asset spin-offs, and private equity investments.He has represented clients such as Autodesk, Meta, OpenAI, Splunk, Konami, Kaiser Permanente, SoftBank, Visa, and Yahoo, among others.Aaron has been recognized by numerous publications for his work on market-defining technology transactions. He is currently ranked by Chambers USA for “Technology Transactions.”Aaron also serves as co-editor of Socially Aware, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics. Aaron is also a sought-after speaker on new and emerging areas of law, and is a frequent presenter and panelist at conferences and legal services programs. In addition to his active practice, Aaron regularly provides pro bono assistance to various nonprofit and charitable organizations such as Common Sense Media and the Starlight Children’s Foundation. He is a member of the board of directors of California Lawyers for the Arts.While in law school at the University of California, Berkeley, Boalt Hall School of Law, Aaron served as executive editor of the California Law Review and was elected to the Order of the Coif. Following law school, Aaron served as law clerk to the Honorable William H. Orrick and the Honorable Martin J. Jenkins, both United States District Judges for the Northern District of California.

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Partner

Aaron is the chair of our Technology Transactions Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals. Aaron’s practice focuses on advising both established and emerging companies in a variety of data– and technology–intensive sectors, including software, SaaS, cloud computing, AR/VR, AI, gaming, healthcare, consumer electronics, social media, e–commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on the intellectual property aspects of mergers, acquisitions, asset spin–offs, and private equity investments.

Aaron P. Rubin

Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.Lawrence focuses his practice on technology transactions and licensing matters. His diverse experience includes advising on SaaS agreements, cross-licensing agreements, research and collaboration agreements, development agreements, and distribution agreements. He counsels a broad range of companies across the software, hardware, life sciences, biotech and FinTech spaces, as well as other entities including universities.He advises clients in connection with general corporate matters including contract negotiations, and leasing and technology placement agreements.Lawrence also serves as co-editor of <a href="https://www.sociallyawareblog.com/" target="_blank">Socially Aware</a>, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics.Prior to joining the firm, Lawrence was counsel at another major law firm. Before earning his law degree, Lawrence was a web consultant, project manager, and web developer in Portland, Oregon, where he managed and consulted on projects using industry methodologies and performed custom development and integration of content management systems.Lawrence was named a Super Lawyers “Rising Star” in 2015 and 2018–2022, and is licensed in both California and New York. Lawrence earned his J.D. from the University at Buffalo School of Law, where he was the electronic systems editor for the Buffalo Law Review and awarded the ABA-BNA Award for Excellence in the Study of Intellectual Property Law.

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Lawrence Gallick

Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster.Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions. His clients include technology, digital media and content for television and music, financial services, and communications companies with diverse intellectual property assets and issues.His practice focuses on the legal aspects of developing, licensing, and commercializing technology and intellectual property, as well as negotiating general commercial contracts, including outsourcing transactions, as well as content and data licenses. He regularly assists clients with legal issues relating to licensing and commercialization of digital media and content, digital content that is distributed over the Internet or streamed, mobile applications and social media, as well as the licensing of recorded music for distribution via digital platforms. Anthony is also experienced with issues relating to open-source software, software development, artificial intelligence and machine learning, cloud-based technology, and protection of proprietary information.Anthony has extensive experience working on matters involving disruptive technologies, such as blockchain. He has helped fintech clients with general intellectual property issues in connection with terms of service for online financial products and services.Anthony is an integral part of the outside pro bono legal team for nonprofit organizations based in New York, including advising clients on legal issues regarding entertainment, social media, privacy rights, and the negotiation of outsourcing and service agreements. Anthony received his J.D. from the University of Michigan Law School in 2009. He received his B.S. from Cornell University in 2004.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. He advises clients on general commercial and transactional matters. His clients include technology, media, and communications companies with considerable intellectual property assets. His practice focuses on the legal aspects of licensing and commercializing technology and intellectual property, as well as negotiating general commercial contracts. He also regularly assists clients with legal issues relating to mobile applications and social media.

Anthony M. Ramirez

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Socially Aware is devoted to the law and business of social media, proactively addressing emerging issues and keeping our clients informed of new developments. We cover fields such as artificial intelligence, privacy and data security, Section 230, intellectual property, and much more.

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Lawrence W. Gallick

Social Links: If the Suit Fits

Social Links: Age Verification, X Appeal, and the Great White North

Social Links: Fake Reviews, Real Rulings, and an Epic Fail

Lawrence W. Gallick on Toth v. Everly Well, Inc.

Social Links: Going Back to Cali

In <a href="https://cdn.ca9.uscourts.gov/datastore/opinions/2020/10/21/19-55204.pdf" target="_blank" rel="noopener noreferrer">Stover v. Experian Holdings</a>, the Ninth Circuit decided an issue of first impression for the circuit, holding that a party’s single visit to a website four years after her original visit—when she agreed to an online contract containing a change-of-terms provision—is not enough to bind her to an arbitration provision that she wasn’t aware of and that appeared in a later version of the contract.The panel held “a mere website visit after the end of a business relationship” is not enough “to bind parties to changed terms in a contract pursuant to a change-of-terms provision in the original contract.”In something of a departure from the typical case involving modification of an online contract, the plaintiff in the case, Rachel Stover, asserted that the updated arbitration provision did apply, while the defendant website operator, Experian, argued that the parties remained subject to the original terms.Ms. Stover is a consumer who bought a credit score service from Experian’s website in 2014. At that time, she agreed via a click acceptance to the website’s then-current terms of service, which stated that claims arising out of the transaction were subject to arbitration and contained a class action waiver.Stover cancelled the agreement a month later.Four years after that, in 2018, Stover visited Experian’s website just one time. At that point the website’s terms and conditions had been updated to exclude from the arbitration provision cases “arising out of or relating to the Fair Credit Reporting Act (FCRA) or other state or federal laws relating to the information contained in your consumer disclosure or report, including but not limited to claims for alleged inaccuracies in your credit report or the information in your credit file.”The next day Stover brought a putative class action against Experian alleging—among other things—that the company violated the FCRA. Experian moved to compel arbitration of Stover’s claims.The Central District of California granted Experian’s motion to compel arbitration, but it did so based on the 2018 arbitration provision that contained the carve-out for FCRA claims rather than on the original 2014 provision that did not include the carve-out. The district court held that the 2018 terms applied because “the plain language of the 2014 terms . . . assumed assent” to the updated terms based on Stover’s subsequent use of Experian’s website, but that her claims were not within the FCRA carve-out in the updated arbitration provision because the claims did not arise out of “information contained in [her] consumer disclosure or report.”The district court also rejected Stover’s argument that the arbitration provision was unenforceable under <a href="https://casetext.com/case/mcgill-v-citibank-na-6" target="_blank" rel="noopener noreferrer">McGill v. Citibank</a>, which held that a contract that waives a person’s right to seek public injunctive relief in court is invalid under California law. According to the court, McGill did not apply because Stover was not seeking public injunctive relief.On appeal, Experian argued that the version of the terms of use that appeared on Experian’s website in 2018 did not apply because Stover “had no opportunity to review the new terms before visiting the website and becoming bound by them.”Stover, on the other hand, argued that the district court was correct in applying the website’s 2018 terms, but mistaken when it failed to enforce the McGill rule because Stover was, in fact, seeking injunctive relief.The Ninth Circuit panel held that the 2014 arbitration provision, which did not include the FCRA carve out, applied. In order to bind parties to new terms pursuant to a change-of-terms provision consistent with basic principles of contract law, the panel held, both parties must have notice that the terms have changed and have had an opportunity to review the changes. Stover did not have such notice or opportunity to review the 2018 terms, so the updated terms did not apply to her.The panel then went on to hold that the 2014 arbitration provision was not unenforceable under McGill, because “the arbitration agreement does not flatly prohibit a plaintiff seeking public injunctive relief in court” and that Stover did not allege the requisite “Article III standing to bring such a claim.”Accordingly, the Ninth Circuit panel affirmed the district court’s holding that Stover was required to arbitrate her claims against Experian.

Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.

Aaron Rubin

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Role Reversal: Ninth Circuit Rejects Consumer’s Attempt to Enforce Updated Arbitration Provision in Website Terms of Use

Role Reversal: Ninth Circuit Rejects Consumer’s Attempt to Enforce Updated Arbitration Provision in Website Terms of Use

In Stover v. Experian Holdings, the Ninth Circuit decided an issue of first impression for the circuit, holding that a party’s single visit to a website four ye

Experts anticipate that the incoming Biden administration will be tough on tech. What does that mean for the future of §230 of the Communications Decency Act? The antitrust suit against Google? <a href="https://www.npr.org/2020/11/09/931039648/how-will-tech-policy-change-in-the-biden-white-house-heres-what-you-need-to-know" target="_blank" rel="noopener noreferrer">This NPR piece</a> makes some predictions.Human rights activists are outraged over a <a href="https://www.marketwatch.com/story/protests-erupt-in-france-over-bill-that-would-restrict-filming-and-publishing-images-of-police-officers-01606766693" target="_blank" rel="noopener noreferrer">proposed law in France</a> that would makes it illegal to publish images of police officers with intent to cause them harm. Supporters of the law, which was passed partly in response to demands from police unions, argue that it doesn’t ban people from filming police in action, but rather, just from using the images to cause them physical or psychological injury.<a href="https://www.brecorder.com/news/40048358" target="_blank" rel="noopener noreferrer">Regulations in Pakistan</a> expand the power of the Pakistan Telecommunication Authority (PTA) by allowing the agency to require social media platforms with more than half a million users in the country to register with the PTA and establish a permanent office and database servers in Pakistan.We’ve discussed the U.S. Federal Trade Commission’s <a href="https://www.sociallyawareblog.com/2020/03/03/fake-news-paid-reviews/" target="_blank" rel="noopener noreferrer">Use of Endorsements and Testimonials in Advertising</a> on Socially Aware. Here are some tips on how to comply with the <a href="https://www.natlawreview.com/article/ftc-lawyer-uk-endorsement-guide-compliance" target="_blank" rel="noopener noreferrer">UK’s guidelines for social media influencers</a>.Trying to use social media to convince people that COVID-19 vaccinations are the way to end the pandemic? Think again. <a href="https://www.axios.com/social-media-covid-vaccine-poll-b49a343c-cd5e-4eb0-81d9-1ad7c37ff899.html" target="_blank" rel="noopener noreferrer">Harris Poll endorsements</a> show that “more than half of Americans say they have little or no trust in social media when it comes to information on the COVID-19 vaccine.”

Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions.











Anthony Ramirez

Social Links: Internet law under Biden; new tech-laws around the world; the UK’s Endorsement Guides

Experts anticipate that the incoming Biden administration will be tough on tech. What does that mean for the future of §230 of the Communications Decency Act? T

Social Links: Internet law under Biden; new tech-laws around the world; the UK’s Endorsement Guides

Reports of social media scams that have caused users to lose money had tripled by the end of 2020’s second quarter, resulting in the loss of $117 million during the first two quarters of this year alone. Romance scams and supposed economic relief offers are a large part of the problem, but e-commerce scams are the biggest culprits, with goods advertised on social media never reaching the consumer. The <a href="https://www.ftc.gov/system/files/attachments/blog_posts/Scams%20starting%20on%20social%20media%20proliferate%20in%20early%202020%20/data_spotlight_oct_2020.pdf" target="_blank" rel="noopener noreferrer">FTC is offering tips</a> to help you avoid becoming a victim.Should the FCC curtail Section 230 of the Communications Decency Act’s protection of sites for liability for third-party content? Both the <a href="https://www.cnet.com/news/fccs-top-lawyer-justifies-agencys-role-in-limiting-section-230-protections-for-social-media/" target="_blank" rel="noopener noreferrer">FCC’s Chairman Ajit Pai, and Tom Johnson, the FCC’s general counsel</a>, have <a href="https://www.axios.com/the-fcc-is-now-ready-to-fight-section-230-6dec58b7-e940-4214-97e9-56afa469c694.html" target="_blank" rel="noopener noreferrer">alluded to the FCC’s power</a>—and their desire—to do it.<a href="https://completemusicupdate.com/article/stream-ripping-site-sues-the-labels-argues-it-is-simply-offering-a-time-shift-service/" target="_blank" rel="noopener noreferrer">Yout.com is seeking a declaratory judgment holding that the site does not violate copyright law</a> by allowing users to obtain permanent downloads of music that YouTube temporarily streams. The suit was instigated by the Recording Industry Association of America’s requests that Google de-list Yout.com because such listing allegedly violates the Digital Millennium Copyright Act. Yout.com is arguing that, like a VCR, it merely allows users to “time-shift” by listening to content at a different time than it is presented.The New York State Department of Financial Services is demanding that the world’s biggest <a href="https://www.techrepublic.com/article/new-york-financial-watchdog-calls-for-social-media-cybersecurity-regulator-after-twitter-hack-of-biden-and-obama/" target="_blank" rel="noopener noreferrer">social media platforms establish positions dedicated to monitoring their cyber defense</a>. The call for designated regulators comes in the wake of the financial watchdog’s investigation into an incident back in July in which three people compromised more than 100 Twitter accounts, including those of former President Barack Obama and former Vice President Joe Biden.A district attorney in Los Angeles is <a href="https://www.latimes.com/california/story/2020-10-22/social-media-scandal-santa-clara-police-charges-dropped" target="_blank" rel="noopener noreferrer">seeking to dismiss more than a dozen cases</a> in which testimony pivotal to a conviction was given by police officers who published comments or images on social media that were derogatory toward women, Muslims or people of color.For the first time ever, a vote has been cast for a US president in the general election <a href="https://nypost.com/2020/10/16/first-presidential-vote-cast-using-blockchain-technology/" target="_blank" rel="noopener noreferrer">using an app</a> on a personal mobile phone.

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Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance c

Julie O'Neill

Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance challenges around a wide variety of both online and offline privacy issues, including tracking, interest-based advertising, geo-targeting and other mobile tracking, personalization, and cross-device tracking. Recognized in The Legal 500 US 2014, 2016, 2019, and 2020 and Chambers USA 2021 for her exceptional legal work, her clients praise her saying, “She is really good at giving practical, targeted advice and taking stock of what the risk profile of the client is, so that the advice is holistic.” (Chambers USA 2021).

Social Links: Avoid becoming a social-media-scam victim; does stream-ripping site violate copyright law?

Reports of social media scams that have caused users to lose money had tripled by the end of 2020’s second quarter, resulting in the loss of $117 million during

Social Links: Avoid becoming a social-media-scam victim; does stream-ripping site violate copyright law?

In <a href="https://www.courtlistener.com/recap/gov.uscourts.nysd.519884/gov.uscourts.nysd.519884.29.0.pdf" target="_blank" rel="noopener noreferrer">Ganske v. Mensch</a>, a defamation suit stemming from a “battle by Tweet,” a federal district court in New York held that the allegedly defamatory statements in the defendant’s Tweet were nonactionable statements of opinion and dismissed the case. The case illustrates that courts in such “<a href="https://www.urbandictionary.com/define.php?term=twibel" target="_blank" rel="noopener noreferrer">Twibel</a>” (Twitter + libel) cases may view Tweets and similar statements on social media as informal and “freewheeling” in nature, which reasonable readers would understand to be expressions of opinion rather than statements of fact.Charles Ganske, a former Associated Press (AP) journalist, sued Louise Mensch, a blogger and former member of the British Parliament, for defamation and tortious interference. Ganske argued that Mensch defamed him and interfered with his employment at AP based on a single Tweet that she posted on July 27, 2018, by which she “interjected herself” into a Twitter thread between Ganske and another Twitter user with the handle @Conspirator0.Mensch’s Tweet from her @patribotics Twitter account stated: “To this xenophobic tweet of yours, sir, I fear we must tell @APCentral ‘citation needed’. You clearly personally spread Russian bots on your own site; and @Conspirator0 work on it has sent you into a frenzy of tweeting and trying to discredit him.”Ganske claimed that Mensch’s Tweet contained false and defamatory statements about him because neither he nor his Tweets were xenophonic and he never spread Russian bots on any website. He also alleged that Mensch deliberately tagged his employer, AP, and published the Tweet to @APCentral in order to interfere with his employment. Ganske’s employment with AP was later terminated, and Ganske argued that this was the result of Mensch’s Tweet.However, the court sided with defendant Mensch, holding that the statements in her Tweet were expressions of opinions rather than defamatory statements of fact. The court explained that statements of fact may be defamatory, while expressions of opinion cannot be defamatory and are entitled to “absolute protection under the New York Constitution.”In ruling that the first statement in Mensch’s Tweet (that Ganske’s Tweet was xenophobic) was a nonactionable expression of opinion, the court focused on the nature of Twitter and other social media platforms. The court cited a number of prior cases to support its determination that “courts have consistently protected statements made in online forums as statements of opinion rather than fact.”The court also noted that social media communications such as Tweets are generally “informal” and “unedited,” which leads readers to give less credence to such remarks even when they are allegedly defamatory. Additionally, the court concluded that the statement that Ganske’s Tweet was xenophobic is incapable of being proven true or false, and that such claims are part of the exaggerated, freewheeling, anything-goes writing style characteristic of online forums. The court came to similar conclusions regarding the other allegedly defamatory statements in Ganske’s Tweet, emphasizing that the context alone—i.e., a social media platform such as Twitter—supported the conclusion that these statements were nonactionable opinions.Based in part on this conclusion, the court granted Mensch’s motion to dismiss Ganske’s defamation claim. As the court noted, “[i]f the Internet is akin to the Wild West . . . Twitter is, perhaps, the shooting gallery, where verbal gunslingers engage in prolonged hyperbolic crossfire.” In this virtual Wild West where users regularly engage in Twibel warfare, plaintiffs may find themselves on the defensive when trying to make out a defamation claim based on Tweets and other social media posts.

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S.D.N.Y. Dismisses Defamation Case Arising Out of “Battle by Tweet”

S.D.N.Y. Dismisses Defamation Case Arising Out of “Battle by Tweet”

In Ganske v. Mensch, a defamation suit stemming from a “battle by Tweet,” a federal district court in New York held that the allegedly defamatory statements in 

A recent ruling in <a href="https://casetext.com/case/parziale-v-hp-inc-1" target="_blank" rel="noopener noreferrer">Parziale v. HP, Inc</a>., arising out of the implementation by Hewlett-Packard (“HP”) of <a href="https://refreshcartridges.co.uk/igloo/hp-firmware-updates-april-2019/" target="_blank" rel="noopener noreferrer">a remote firmware update</a> on many models of the company’s printers, highlights the potentially broad application of the <a href="https://www.law.cornell.edu/uscode/text/18/1030" target="_blank" rel="noopener noreferrer">Computer Fraud and Abuse Act (“CFAA”)</a>. It also serves as a reminder to technology companies that when distributing software and firmware updates, they must be mindful of providing specific advance notice that such updates may impact product or computer performance.The Computer Fraud and Abuse ActIn 1986, Congress enacted the CFAA, reportedly in response to concerns arising from the Matthew Broderick film <a href="https://en.wikipedia.org/wiki/WarGames" target="_blank" rel="noopener noreferrer">War Games</a>, in which a teenage computer hacker accesses a U.S. Defense Department computer, unintentionally starts the launch sequence on the U.S. nuclear arsenal thinking it is a computer game, and comes close to starting World War III. Saving us all from annihilation, Broderick teaches the computer that when it comes to global thermonuclear war, “the only winning move is not to play.”The CFAA is the primary computer crime law in the United States. Over the years, it has been amended several times and has broad application. The CFAA criminalizes fraud and certain other specified activities in connection with unauthorized access to computers. The CFAA also provides for civil remedies based on the same prohibited conduct.For instance, a violation of the CFAA may occur when anyone: (i) “intentionally accesses a computer without authorization or exceeds authorized access and thereby obtains . . . information from any protected computer”; (ii) “intentionally accesses a protected computer without authorization, and as a result of such conduct, causes damage and loss”; (iii) “intentionally accesses a protected computer without authorization, and as a result of such conduct, recklessly causes damage”; or (iv) “knowingly and with intent to defraud, accesses a protected computer without authorization, or exceeds authorized access, and by means of such conduct furthers the intended fraud and obtains anything of value, unless the object of the fraud and the thing obtained consists only of the use of the computer and the value of such use is not more than $5,000 in any 1-year period.” Likewise, as claimed in the Parziale v. HP case, a CFAA violation may occur when anyone “knowingly causes the transmission of a program, information, code, or command, and as a result of such conduct, intentionally causes damage without authorization, to a protected computer.”A key question in most CFAA cases is whether the defendant acted “without authorization” or “exceed[ed] authorized access.” Notably, the scope of what it means to exceed authorized access is before the Supreme Court this term, with argument in that case scheduled for <a href="https://www.scotusblog.com/case-files/cases/van-buren-v-united-states/" target="_blank" rel="noopener noreferrer">later this month</a>.Parziale v. HP, Inc.In April 2019, HP implemented a remote firmware update on many models of the company’s printers. After the firmware update, certain non-HP ink cartridges stopped working on HP printers.John Parziale, an owner of two HP printers, could no longer use his printers unless he inserted a genuine HP ink cartridge with an original HP chip. Alleging that the update reduced the value of his printers and rendered the non-HP cartridges he already owned useless, he brought an action seeking to certify a nationwide class action suit against HP. Parziale asserted claims under the CFAA, trespass to chattels, and the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”).U.S. District Judge Edward Davila of the U.S. District Court for the Northern District of California granted defendant HP’s motion to dismiss all claims.First, the judge dismissed Parziale’s CFAA claims. Parziale argued that HP violated Section 1030(a)(5)(A) of the CFAA, which prohibits “knowingly caus[ing] the transmission of a program, information, code, or command, and as a result of such conduct, intentionally caus[ing] damage without authorization, to a protected computer.” Parziale, however, expressly alleged in his complaint that he had relied on the packaging and store page. The store page included a warning that stated:Dynamic security enabled printer. Only intended to be used with cartridges using an HP original chip. Cartridges using a non-HP chip may not work, and those that work today may not work in the future.The judge agreed with HP that Parziale’s express reliance on the warning on the store page made it clear that any damage caused by the firmware update was not “without authorization.” The judge also rejected Parziale’s contention that even if the warning created authorization for HP to implement the firmware update, the authorization did not extend to disabling printers. The judge pointed out that the warning expressly notified consumers that “[c]artridges using a non-HP chip may not work, and those that work today may not work in the future.”Second, the judge also dismissed Parziale’s FDUTPA claims. Under the FDUTPA, a consumer claim for damages has three elements: (1) a deceptive act or unfair practice; (2) causation; and (3) actual damages. An act or practice is “unfair” if it causes consumer injury that is: (i) substantial, (ii) not outweighed by any countervailing benefits to consumers or competition, and (iii) one that consumers themselves could not have reasonably avoided.According to the judge, there was no dispute that Parziale adequately pled a substantial injury. Parziale also adequately alleged that “the harm caused by forcing consumers to purchase more expensive ink cartridges” and by rendering their already purchased non-HP ink cartridges worthless, the harm outweighed any countervailing benefits to consumers. On the third prong, however, the judge found in HP’s favor. This prong tests if consumers have reason to anticipate the impending harm and the means to avoid it. In the judge’s view, the warning on the store page was sufficient to allow a reasonable consumer to anticipate any impending harm caused by a printer becoming incompatible with non-HP cartridges. Because they were put on notice, consumers could simply buy a different printer or not buy non-HP cartridges with potential compatibility issues in the future. In other words, they had the means to avoid any impending injury.Finally, the judge dismissed Parziale’s trespass to chattels claims. <a href="https://www.courtlistener.com/opinion/2478126/ebay-inc-v-bidders-edge-inc/?" target="_blank" rel="noopener noreferrer">To prevail on a claim for trespass, the plaintiff must establish</a>: (1) defendant intentionally and without authorization interfered with plaintiff’s possessory interest in the computer system; and (2) defendant’s unauthorized use proximately resulted in damage to plaintiff.Thus, the trespass claim also hinged on whether HP acted “without authorization.” The judge had already found under the CFAA claim section that HP did not act without authorization because Parziale was on notice of HP’s ability to interfere with his printers.Key TakeawaysIn HP’s case, the warning on the store page was quite clear that non-HP cartridges may not continue to work after the update. Given the clear notice to consumers and Parziale’s own express reliance on the notice, Judge Davila did not have much trouble dismissing all of Parziale’s claims. But other cases alleging that software or firmware was updated “without authorization” and caused damage may not be so clear cut. Such cases may necessitate fact-intensive inquiries. Companies that fail to give clear advance notice as to the impact of their updates may find themselves in a weaker position.

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