Duane Morris LLP - Nothing but the online truth--or else

By-Lined Article

Nothing but the online truth--or else

By Eric J. Sinrod
October 26, 2005
CNET News.com

If you think that a little white lie, or a big fat lie, won't get you in trouble on the Internet, please think again.

For example, a federal judge in Los Angeles has just barred the allegedly deceptive advertisements of a Web operation that asserted that membership in MP3DownloadCity.com would allow users of peer-to-peer file-sharing programs to transfer copyright materials without running afoul of the law.

On top of that, the Federal Trade Commission plans to permanently ban these assertions about membership in MP3DownLoadCity.com, seek monetary compensation for consumers, and provide notification to consumers who signed up for membership that use of these file-sharing programs may subject them to civil or criminal liability.

The defendant, Cashier Myricks Jr., doing business as MP3DownLoadCity.com in Los Angeles, markets and sells a tutorial and referral service that promotes the use of peer-to-peer file-sharing programs to download digital music, movies and computer games, according to the FTC. The defendant's service does not provide a license to download and share copyright materials to its paying customers, unlike a licensed subscription service. For $24.95, the defendant instead instructs customers on the use of free peer-to-peer file-sharing software provided by Kazaa and others.

Here is the real rub--the FTC claims that consumers are lured into becoming the defendant's members by deceptive statements to the effect that subscribing to the defendant's service somehow makes peer-to-peer file-sharing legal. The allegedly deceptive Internet advertisements make the following types of assertions:

"AND BEST OF ALL PEOPLE ARE NOT GETTING SUED FOR USING OUR SOFTWARE. YES! IT IS 100% LEGAL;" and
"Rest assured that File-Sharing is 100% legal."

The FTC's complaint takes the position that the defendant's customers who use peer-to-peer file-sharing programs to download copyright material, or who make it accessible to others, are guilty of copyright infringement and could face civil and criminal liability to the extent they do not have permission from the copyright holders.

Not surprisingly, the FTC charged in its complaint that the defendant violated the Federal Trade Commission Act by "falsely claiming that membership in its service made P2P file sharing legal."

So, what is the moral of this story? Tell the truth, and nothing but the online truth, especially when stating whether conduct could or could not subject others to legal liability.

For further guidance on peer-to-peer file-sharing, consult the FTC's consumer alert, P2P File Sharing: Evaluating the Risks.

Biography

Eric Sinrod is a partner in the San Francisco office of Duane Morris. His focus includes information technology and intellectual property disputes. To receive his weekly columns, send an e-mail to with the word "Subscribe" in the subject line.

Disclaimer: This column is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this column are those of the author and do not necessarily reflect the views of the author's law firm or its individual partners.

Reprinted with permission from CNET News.com.