Technology & Marketing Law Blog

After $6M and 17 Years Fighting the Record Labels’ Copyright Lawfare, the Court Awards Vimeo $16k in Costs–Capitol Records v. Vimeo

Eric Goldman — Wed, 09 Sep 2026 15:21:27 +0000

The record labels sued Vimeo for user-caused copyright infringement in 2009. The case is still ongoing in 2026. How old is this lawsuit? If it were a person, it would be GenZ and thus older than every Gen Alpha person on earth.

This case was part of a broad-based copyright owner litigation campaign that included Viacom v. YouTube and UMG v. Veoh. All of these lawsuits were designed to permanently shut down the video hosting category by finding a hole in the Section 512(c) online safe harbor so that copyright owners could sue UGC sites even if they didn’t send individual takedown notices. YouTube settled, Veoh went broke, and Vimeo soldiered on (and on and on…).

In January 2025, Vimeo scored a major win in the Second Circuit. When the dust settled, the court summarizes: “Vimeo ultimately achieved complete victory on all of Plaintiffs’ claims after many long, hard-fought years spent litigating this dispute.”

Vimeo sought a 505 attorneys’ fee shift for its $6 million in defense costs over 17 years. The court denies the request, but awards it a token $16,000 in costs.

The court summarizes its thinking:

As Vimeo itself has previously recognized, this case raised “many difficult or new” issues….An award of attorneys’ fees to Vimeo, however, would not serve the purposes of the Copyright Act. Plaintiffs asserted reasonable claims that raised novel, complex questions of law, and they litigated those claims reasonably and in good faith. This case also presents little need for either compensation or deterrence.

What were those novel issues?

This case raised many issues of first impression, including, but not limited to, the legal framework governing when a service provider is deemed to have actual or constructive (also called “red flag”) knowledge of infringement, the circumstances in which willful blindness is a proxy for knowledge, the factual showing necessary for a plaintiff to establish the foregoing, and whether the DMCA’s safe harbor provisions applied to sound recordings fixed prior to February 15, 1972.

Those issues felt more novel back in 2009. The court acknowledges the case’s venerability, saying:

the legal standards governing, and the factual showing required to receive, DMCA safe harbor protection had not been addressed by the Second Circuit when Plaintiffs filed suit in 2009….

Even following Viacom, the evidentiary showing necessary to present or defeat a safe-harbor defense under the DMCA was not settled law, particularly with respect to the question of actual or red flag knowledge of infringement.

Vimeo pointed out that the record labels could have avoided this case entirely by sending proper 512(c)(3) takedown notices. The court is unmoved:

there is no statutory requirement that a plaintiff exhaust its notice-and-takedown remedies against a defendant before bringing suit under the Copyright Act….

As the Second Circuit noted, the notice-and-takedown provisions merely “augment[ed] the arsenal of copyright owners” by creating an alternative remedy. And because the limitation on liability conferred by the DMCA is qualified, rather than absolute, there remains a place for good-faith lawsuits under the Copyright Act to test whether a service provider is entitled to that immunity. From a rightsholder’s perspective, the two remedies are far from the same: unlike a claim brought under the Copyright Act, a DMCA takedown notice does not provide a rightsholder with monetary relief for past infringement or injunctive relief against future infringement, both of which Plaintiffs sought in this action. Penalizing a rightsholder for seeking a remedy available to it under the Copyright Act—without an exhaustion requirement—would not serve the Act’s purposes.

The court did award Vimeo $16k in costs because it prevailed in the most recent Second Circuit appeal.

* * *

Did the record labels really have colorable arguments when they first filed this lawsuit? Well, yes, in the sense that the DMCA is a long and complicated safe harbor filled with ambiguities. Major copyright owners planned to test all of the ambiguities–and are still working on that agenda nearly 30 years later.

However, the copyright owners’ real agenda was never to clarify the ambiguities in good faith. Instead, their goal is, and always was, to tacitly amend the DMCA safe harbor in court to secure terms they did not and could not get from Congress via legislative deal-making–most notably, to let copyright owners bypass the DMCA’s central notice-and-takedown architecture so that they could sue UGC services over user-caused copyright infringement without sending individual takedown notices. The copyright owners have been willing to risk many millions of dollars to obtain that backdoor amendment in court, and they really don’t care about the consequences for the defendants they steamroller or bankrupt in the process. To me, this is exactly why a 505 fee shift would have been the only fair outcome here. If the copyright owners are going to gamble some of their fortune on securing legislative amendments via impact litigation, they should bear the full costs of that strategy.

Instead, the fee shift denial implicitly legitimizes the copyright owners’ lawfare strategy against the DMCA online safe harbors. There is surely one or more lessons about the proper design of immunities and safe harbors buried in this case study somewhere.

Case Citation: Capitol Records, LLC v. Vimeo, LLC, 2026 WL 2606633 (S.D.N.Y. Sept. 3, 2026)

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TWEET and the Bird Logo Apparently Enter the Public Domain, But X Maintains Its Grip on the TWITTER Mark (For Now)–X v. Project Bluebird

Eric Goldman — Tue, 08 Sep 2026 15:44:18 +0000

This case involves Project Bluebird, a social media service previously named “twitter.new” and renamed to tweet.app immediately after this ruling (for reasons this post makes obvious). Project Bluebird’s service is designed to reimagine the Twitter service that Musk imploded when he morphed Twitter into X. Project Bluebird claims X has abandoned the TWITTER, TWEET and Bird Logo trademarks. In 2025, Project Bluebird filed ITU applications for TWITTER and TWEET.

Citing the following evidence, the court says X hasn’t abandoned the TWITTER marks:

X Corp.’ s current listing of the X app on the Apple App Store from which users can learn about the X platform and download the platform’s app to their phones [says] “Welcome to X (formerly known as Twitter), your trusted digital town square where conversations unfold in real time, and the world connects through breaking news, live events, podcasts, and everything in between.”…The listing therefore constitutes evidence of bona fide use of the Twitter-formative marks.

The court cites several cases endorsing “formerly known as” references as ongoing trademark use. The court explains:

the parenthetical identifies and distinguishes X Corp.’s platform as the Twitter platform X Corp. acquired from Twitter, Inc. and is rebranding as X. By virtue of the parenthetical, the listing is telling customers that what they knew as Twitter is now X and can be accessed by downloading the X app from the Apple App Store.

The court is right that X is using TWITTER to distinguish itself from its competitors, in the sense that consumers can identify and engage with X based on any residual goodwill they have towards Twitter. (At this point I’m still amaze any residual goodwill still exists towards X/Twitter. It’s all badwill to me). At the same time, X has made it emphatically clear that it does not intend to promote the TWITTER mark in the future other than to capture that residual goodwill. I could easily have seen the court reaching the opposite conclusion that the “formerly known as” reference isn’t actually trademark usage, at least when Musk has so publicly and prominently repudiated the mark.

I’d analogize the “formerly known as” references to a corporate webpage recounting a company’s past names. Telling the company’s history shouldn’t act as trademark usage of those legacy brands. If a corporate webpage can simpy mention deprecated brand names and thereby prevent abandonment of those marks, then the abandonment doctrine doesn’t exist any more.

In contrast, the court says the TWEET trademark and the Bird Logo are likely abandoned based on the following evidence:

“neither the Tweet mark nor the Bird logo appears in X Corp.’ s listing of the X app on the Apple App Store.”
“X Corp. conceded (eventually) at the April hearing that the Tweet mark and Bird logo are nowhere to be found on x.com’s home page.”
Some of X’s evidence was defective, such as referencing only TWITTER and not the other marks or lacking dates, which suggest they are legacy usages before Musk’s rebrand. (The court says some social media “account postings are a relic of the past”).

The court summarizes: “Musk’s pronouncements and X Corp.’s rebranding of the Twitter platform as X provide compelling evidence that X Corp. harbors an intent not to resume use of the Tweet mark and Bird logo.”

The court ruled on a preliminary injunction request, so it’s not the final word on the merits. Still, it seems highly likely that the TWEET term and the bird logo have been freed from X’s trademark clutches. If so, it’s nice to get some cultural assets back into the public domain (at least, until Project Bluebird tries to repropertize them) so we can tweet all we want and associate ourselves with the bird logo as we see fit. As for the TWITTER mark, X’s ongoing supervision of that mark seems dubious (consistent with Musk’s literal blowtorching of it). I’m guessing that mark will also enter the public domain soon enough, even if it should be there already.

Case Citation: X Corp. v. Project Bluebird Inc., 2026 WL 2606728 (D. Del. Sept. 3, 2026)

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SAD Scheme Plaintiff Must Pay $40k to Defendant–Guangzhou Tinpod v. Schedule A Defendants

Eric Goldman — Mon, 07 Sep 2026 18:06:52 +0000

The plaintiff is Guangzhou Tinpod Electronic Technology Co. The plaintiff initially sued under the XYZ pseudonym and hasn’t updated the case caption, even though its identity is no longer sealed.

I presume the plaintiff and many of the 44 defendants are Chinese entities. This case appears to be another example of how the SAD Scheme has become one of the U.S.’s most popular exports to China.

The plaintiff claims that the defendants infringed its copyright, including registration #VAu 1-517-249, titled “Black Castor Oil 1 and 3 Other Unpublished Works.”

As usual with SAD Scheme cases, the plaintiff initially obtained an ex parte TRO. Then, Shenzhen Moulis Electronic Co., Ltd., on behalf of 18 defendants (the “Aliver Defendants”), appeared in the case and started poking holes in the plaintiff’s assertions.

Following the preliminary injunction hearing, the plaintiff dismissed the defendants voluntarily with prejudice. Voluntary dismissals are a standard tactic when SAD Scheme cases become contested. From the plaintiff’s standpoint, it’s better to cut loose the squeaky defendants who might disrupt the entire case, so the plaintiff can keep squeezing the other defendants.

However, it is less typical for the plaintiff to voluntarily dismiss the defendants with prejudice. Normally that occurs only after a settlement, which did not happen here. The court calls the plaintiff’s dismissal with prejudice “unusual.”

The Aliver Defendants then sought a 505 attorneys’ fee shift of nearly $40k, which the court grants.

Did the Aliver Defendants Prevail?

When copyright plaintiffs are losing, a voluntary dismissal provides a way to reduce any residual exposure, because judges rarely order a fee shift for a defendant who is already out of the case. Also, at least in the 11th Circuit, a court doesn’t have the statutory authority to issue a fee shift to a defendant dismissed without prejudice.

But here, the plaintiff dismissed with prejudice, and the court treats the requested fee shift here as a novel question: “does a defendant prevail if the dismissal materially changes the relationship between the parties but the dismissal does not require judicial imprimatur other than a perfunctory order closing the matter?”

The court says yes: “Plaintiff sought damages and injunctive relief against the Aliver Defendants but obtained neither.” The court notes how badly the case was going for the plaintiff:

At the preliminary injunction hearing, the Aliver Defendants argued—and the Court agreed—that Plaintiff was unlikely to prevail on the merits of its copyright claim against the Aliver Defendants. The Court’s denial of preliminary injunctive relief was based on multiple glaring issues with Plaintiff’s claim, including that Plaintiff failed to allege or provide evidence to support that the Aliver Defendants had access to or copied Plaintiff’s alleged copyrighted artwork and failed to rebut the other issues raised by the Aliver Defendants regarding Plaintiff’s creation, ownership, and publishing of the alleged copyrighted artwork.

It was only after the Court denied Plaintiff’s PI Motion, on the basis that Plaintiff was unlikely to prevail on the merits of its claim, that Plaintiff voluntarily dismissed its claims against the Aliver Defendants with prejudice. The fact that Plaintiff’s notice of voluntary dismissal was with prejudice—as opposed to without prejudice—is persuasive here even if the dismissal did not require judicial imprimatur. A voluntary dismissal without prejudice generally leaves the parties as though the action had never been brought and does not prevent the plaintiff from refiling. By contrast, Plaintiff’s notice of voluntary dismissal with prejudice permanently barred Plaintiff from reasserting the same copyright claims against the Aliver Defendants….

here, the Court denied Plaintiff’s PI Motion on the ground that Plaintiff failed to demonstrate a substantial likelihood of success on the merits and identified on the record the specific deficiencies in Plaintiff’s allegations against the Aliver Defendants. In doing so, the Court effectively “rebuffed” Plaintiff’s claims.

Ultimately, the rights of the parties were conclusively resolved following the preliminary injunction ruling: Plaintiff’s subsequent voluntary dismissal with prejudice permanently barred re-litigation of the very claims the Court had already found deficient. The Court’s rejection of the viability of Plaintiff’s claims coupled with Plaintiff’s with-prejudice dismissal renders the Aliver Defendants prevailing parties

So, the big mystery of this case: why did the plaintiff choose to dismiss with prejudice? Occam’s razor suggests that it was an unforced error.

(To be clear, we should favor plaintiffs dismissing with prejudice rather than without. Dismissals without prejudice leave a Sword of Damocles hanging over the defendants’ heads, with associated inhibiting effects).

[UPDATE: a reader wrote to me: “defendants in this sort of case can put P’s in the position where dismissals MUST be with prejudice (or at least by stipulation or with court permission) by filing an answer or an MSJ.”]

Factors Supporting 505 Fee Shift

Having determined the defendants’ eligibility for a fee shift, the court decides it’s appropriate to issue a fee shift here because:

“Aliver Defendants achieved complete success.”
“Plaintiff’s copyright theory was objectively unreasonable. Plaintiff alleged infringement of unpublished works but did not adequately allege access, even after the Aliver Defendants identified that deficiency”
“compensation and deterrence favor fees” because it encourages plaintiffs to scrutinize their claims (which they should be doing anyway)

This is a good reminder of why copyright owners have not embraced the SAD Scheme as thoroughly as trademark owners. While the copyright and trademark statutes both have attorneys’ fee shifting provisions, courts are more willing to grant fee shifts in copyright cases. As we’ve seen for decades, it’s hard to run a copyright-based online trolling campaign when fee shifts cause the profit meter to run in reverse.

Implications

In contrast to the resolution of many SAD Scheme cases, this case resolved comparatively favorably for the defense. The defendant got the claims dismissed and an award of their attorneys’ fees.

Great, but this outcome still isn’t good news. The court wrongly issued a TRO based on an apparently defective copyright claim. Worse, as the court itself described, the case had “multiple glaring issues”–but, I guess, not glaring enough for the court to catch them at the TRO stage? In other words, had the judge more aggressively policed the plaintiff’s ex parte requests, this case never should have proceeded against the Aliver Defendants. Further, the judge doesn’t acknowledge her complicity, order any further sanctions against the plaintiff, or even scold the plaintiff for extracting an undeserved TRO from her.

The court’s choices not to hold the plaintiff fully accountable or lament her role in the scheme is one of the reasons the SAD Scheme keeps perpetuating. In plaintiffs’ efforts to create SAD Scheme omelettes, they routinely and predictably break some eggs, and the courts don’t adequately impose consequences for the messes they make. #StopTheSADScheme.

Case Citation: XYZ Corp. v. Schedule A Defendants, 0:24-cv-61886-JB (S.D. Fla. Sept. 3, 2026)

SUPPLEMENT: Ningbo Jiaruisi E-Commerce Co., Ltd. v. WHAM-O Holding, Ltd., No. 1:26-cv-10701 (N.D. Ill. complaint filed Sept. 3, 2026). This lawsuit represents some of the fallout from the Seventh Circuit’s Kangol v. Hangzhou Silk decision, which rejected email service on many Chinese defendants. The complaint summarizes its purpose:

to obtain relief from default judgments and related orders entered in Northern District of Illinois “Schedule A” cases against mainland-China defendants who were incorrectly served via email pursuant to FRCP 4(f)(3) and not through the Hague Service Convention, did not appear, did not settle, and were subjected to default judgments, asset restraints and collection. Plaintiff seeks declaratory and equitable relief, including relief from void judgments, an accounting, restitution of funds collected under such judgments, taxable costs and reasonable attorneys’ fees and litigation expenses to the extent authorized by law, including from any common fund or monetary benefit created, preserved, or restored through this action, prejudgment and post-judgment interest, and related relief necessary to restore the parties to the position they would have occupied absent the improper entry and enforcement of those judgments.

This case reinforces how judges don’t voluntarily clean up, or even acknowledge, any mistakes they made in past SAD Scheme rulings. Following Kangol, it’s now clear that a huge number of SAD Scheme defendants were not properly served, but what steps are the courts voluntarily taking to correct those due process violations? As far as I can tell, none. I’m not sure if this lawsuit is the right redress mechanism, but I hope the harmed defendants find some relief.

Prior Blog Posts on the SAD Scheme

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Courts Still Can’t Let Go of the Possibility that Individual Prices are Copyrightable–Rapaport v. Nivoda

Eric Goldman — Sun, 06 Sep 2026 15:26:17 +0000

In my previous blog post on this case, I wrote:

This lawsuit raises one of the venerable but surprisingly vexing copyright law questions: when is a price copyrightable? That might sound like a stupid question because “facts” aren’t copyrightable and a price seems like it should be characterized as a “fact.” And yet…the copyright law jurisprudence is littered with cases saying or implying that individual prices could be copyrightable (e.g., the abysmal CDN v. Kapes opinion), as wacky as that may seem. These cases have imperiled various important social activities, such as price comparisons.

This court, in contrast, treats the copyrightability of prices as the easy question I always thought it should be

Ideally, the clean lower court ruling would have finally ended the price copyrightability drama. Instead, the Second Circuit did a “well, actually….” and revives the case.

[A reminder that in this case, Nivoda never published Rapaport’s prices directly. Instead, Nivoda displays “percentages representing the difference between Nivoda’s price for the diamond and the price for that category of diamond in the Price List, not a display of the entire List itself.”]

The court summarizes its views on when numbers are facts:

Where the expression takes the form of a number, “[t]he question then becomes the possible range of that number.” Determining this range allows the court to assess whether the number is an “original creation[],” deserving of copyright protection, or merely a “pre-existing fact[],” free to be copied.

No, this makes no sense. How can a single number be expressed as a range of numbers???

What’s slowing down courts is when a number is the distillation of an estimator’s asset valuation. Valuations aren’t a precise science, so any numerical expression of a valuation isn’t a “fact” but an “opinion” and could very well be expressed as a range rather than a single number. Yet, as the lower court held, we can’t separate the estimator’s opinion from the fact that the estimator held this numerical opinion. That inseparability triggers copyright’s merger doctrine. This means anyone should be free to republish the estimator’s numerical “opinion” without copyright entanglements.

The Second Circuit, harvesting years of precedential doubt it has sowed on this point, cannot reach such a clean outcome:

Without evidence to establish how the Price List is created, however, the court lacked a basis for concluding that this idea is what is reproduced in the Price List. As pled, the Price List reflects Rapaport’s “opinion as to the market value of any diamond based on size, color, and clarity,” based on Rapaport’s “analysis and sophisticated expert industry opinion.” Rapaport does not allege, for example, that the List reflects nothing more than the average transaction prices for particular types of diamonds in a particular time span, based on an aggregation of reported sales. To the contrary, text accompanying printed versions of the Price List emphasizes that the List reflects Rapaport’s “opinion” of prices, which may differ “substantially” from “actual transaction prices.” Thus, for the limited purpose of our analysis, drawing all reasonable inferences in Rapaport’s favor based on the facts alleged in the complaint and other facts appropriately considered at this stage of litigation, we identify the “idea” at risk of merging with Rapaport’s expression, as “Rapaport’s opinion as to the value,” as opposed to the actual “market price” (meaning the price set by the market) of particular diamonds based on their size, color, and clarity….

No, this makes no sense. The process of manufacturing a number should be irrelevant to its copyrightability. Even if the valuation required the most creative process that has ever existed in human history, the estimator’s valuation becomes a fact about the estimator holding that opinion.

Still harvesting the decades-long bad precedent, the court continues:

In order to determine whether all possible expressions of a party’s opinion
regarding diamond price valuation are “substantially similar,” we must assess the possible range of these estimates. In doing so, we evaluate whether the number is better considered a “mechanical derivation[]” of a pre-existing fact, or an “original creation[],” resulting from “some minimal degree of creativity….

the values included in Rapaport’s Price List, as alleged, reflect Rapaport’s “opinion” as to hypothetical products meeting certain specifications, based on Rapaport’s “analysis and sophisticated expert industry opinion.” On appeal, Rapaport emphasizes that the values included in the Price List do not express the “actual market price of any-real world diamond,” but rather its “opinion as to what should be the sales prices for different classes of hypothetical diamonds.” Perhaps most relevant, unlike the actual market price of particular futures contracts (which the settlement prices in New York Mercantile aimed to capture mostly by reference to a fixed set of trading data), the value of a diamond—like that of a used car—may depend on any number of facts beyond current trading data, such as subjective considerations of personal opinion and aesthetic preference. Rapaport alleges in its complaint that it arrives at the values included in the Price List by reference to factors beyond raw trading data, such as its “extensive market research and proprietary knowledge,” and its “decades of knowledge, investment, and industry relationships.” At this stage of the litigation, we are obliged to take them at their word. Only discovery can tell whether the sources and processes used by Rapaport in fact more closely resemble those used by NYMEX to determine settlement prices, and not (as alleged) those used by the Red Book editors for used-car valuations.

Devastating. This is some seriously bad epistomology. Here’s a possibility: a number could be BOTH an opinion (a valuation estimation) and a fact (the estimator’s published belief) AT THE SAME TIME. If the court had entertained that possibility, this should have been an easy dismissal (as the lower court held).

And what goal does this hack philosophizing advance? It suggests that every copyright claim over single numbers will not be resolvable on a motion to dismiss (and maybe not on summary judgment either). That’s a lot of socially wasteful litigation.

The court addresses other policy matters in wholly unsatisfactory ways:

the List attempts to value hypothetical products whose ultimate value is tied, at least in part, to subjective preferences. We are therefore not persuaded that failing to apply the [merger] doctrine will “seriously impair the policy of the copyright law that seeks to preserve free public access to ideas.”…

Nivoda does not suggest, nor does the present record indicate, that Rapaport would still have an incentive to produce the Price List if it lost its exclusive rights over that publication. The Price List “is available by paid subscription only” and, Rapaport asserts, is the product of “significant time, resources and expense,” resulting from the company’s longstanding “industry and customer relationships.” Accordingly, applying the doctrine appears unlikely, based on what we must assume to be true at this point in the proceedings, to serve copyright’s aim of encouraging the authorship of innovative works.

Feist eliminated sweat-of-the-brow justifications for copyright. Apparently the Second Circuit prefers a pre-1991 world. Oops, I’m not sure I can reference the number 1991. I might have infringed on someone’s copyright.

On remand, I hope the lower court embraces the full spectrum of ways this case should resolve in favor of the defense. Ultimately, I hope this opinion becomes another mockable tangent in courts’ decades-long quixotic quests to manufacture copyrights for single numbers.

Case Citation: Rapaport USA, Inc. v. Nivoda USA, LLC, 25-1065 (L) (2d Cir. Sept. 4, 2026). Judge Nardini, a Trump appointee, authored this opinion.

BONUS: The Construction Specifications Institute, Inc. v. Zerodocs.com, Inc., 2026 WL 2600412 (C.D. Cal. Sept. 1, 2026). The court summarizes the plaintiff’s work:

The work at issue in this copyright and trademark case—the CSI MasterFormat—is a classification system that has been, for decades, the national standard for identifying construction bids. CSI’s 2020 edition of its MasterFormat contains a taxonomy system for classifying and organizing technical information and project details in architectural, engineering, and construction projects. Specifically, each component of a project can be identified by a standardized six-digit number, which can be expanded to eight digits when greater detail is required, accompanied by a standard title that is usually a descriptive word or short phrase…

CSI’s MasterFormat Maintenance Task Team (the “MFMTT”) is tasked with conducting ongoing reviews of the MasterFormat, and the MFMTT has adopted a biennial revision process. Users of the MasterFormat can submit commentary and proposals to the MFMTT for review and approval. The MFMTT bases its approval and revision process on several broad, flexible criteria. The MFMTT draws on user feedback and proposals to make its revision and addition determinations. All proposals must pass through a two-stage process before they can be approved by the MFMTT.

The court’s description of the defendant’s activities:

Zerodocs distributed a product called “SimpleSpec” that is composed of a collection of pre-written word processing document templates. The SimpleSpec templates were created in 2017 to help users write bid proposals that comply with the MasterFormat classification system. Each SimpleSpec template is directed to one entry in CSI’s MasterFormat system.

Zerodocs used CSI’s “CSI” mark on its website to refer to CSI’s MasterFormat, but it did so without CSI’s authorization. Those references accurately reflect the source of the standards to which the Zerodocs SimpleSpec templates were written—the MasterFormat standard…

Zerodocs has adopted the structural style of MasterFormat into its Vendor Specs, and it uses CSI’s MasterFormat framework. Specifically, Zerodocs’s SimpleSpec offers at least 457 templates organized in the MasterFormat framework. CSI further identifies that, in March 2024, Zerodocs’s website displayed at least 199 SimpleSpec specifications that are identical to the 2020 edition of CSI’s MasterFormat. CSI shows that SimpleSpec contains templates that use specific number and title combinations from the MasterFormat—e.g., “03 30 00—Cast-In-Place Concrete.”

Though Zerodocs copied something, there was no copyright infringement. The “divisions, numbers, and titles of the MasterFormat are short phrases, and, therefore, they are not protected elements.”

The taxonomy isn’t copyrightable either:

CSI’s descriptions are factually concise, and they identify “specific work results and construction practices.” For example, in the section for Concrete, there is no room for creative expression because CSI must necessarily be as concise as possible and identify the specific work result—i.e., Concrete. In describing the sections and title of the taxonomy, CSI is “knuckling under” to facts about materials used or jobs performed in construction projects. Furthermore, whether a description is updated or adopted by the MFMTT’s revision process is a rote, four-step process that asks if the new description better defines the subject matter, is more useful, or is more appropriate. Those are utilitarian queries, not creative endeavors. Even if the MFMTT wanted to change a description, it prioritizes established industry terms and introduces new terms only when necessary. No “blood is shed” in the MFMTT’s revision process…

CSI assigns descriptors as concisely as possible by using words that best describe the subject.

I don’t think knuckles or blood have a lot to do with the copyrightability of taxonomies, but it might make a good Netflix series. Also, I’m not sure an author’s utilitarian aim dictates whether a work is expressive. Still, this court is at least doing better than the Rapaport court.

Zerodocs argued Baker v. Selden resolved the case. I do love topical citations in the 2020s to the nineteenth century classic, but the court points to rogue decisions from the 3rd and 7th Circuit that found taxonomies copyrightable despite the Selden case. Instead, “the Court is unpersuaded that CSI’s MasterFormat is wholesale uncopyrightable simply because it is a system. Rather, as previously discussed, the Court concludes that CSI’s MasterFormat did not meet the threshold for copyrightability of a taxonomy, as guided by American Dental and Southco.”

The court dismisses the trademark claims due to the nominative use doctrine.

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New York Judge Shuts Down a SAD Scheme TRO Request–CJB Global v. Schedule A Defendants

Eric Goldman — Sat, 29 Aug 2026 18:19:55 +0000

This SAD Scheme case ended up before Judge Buchwald, who shreds it. Judge Buchwald recaps the scheme’s fundamental corruptness:

if all of plaintiff’s requested ex parte relief were to be granted, plaintiff would at the outset be entitled to broad discovery with serious consequences to defendants. Plaintiff would first be authorized to serve expedited discovery on the Financial Institutions, who would be obligated to provide all known e-mail addresses and mailing addresses for defendants, as well as information relating to defendants’ assets and accounts “regardless of the hosting platform or institution.” Having received that information, and still without notice to any defendant, plaintiff could then freeze the assets maintained in any of the accounts identified through expedited discovery of 100 different international defendants. Acknowledging that plaintiff’s request for an asset restraint is in no way cabined only to accounts through which defendants sell the allegedly infringing products, this restraint would presumably apply to all of defendants’ accounts and assets regardless of their relation to this case. Only after discovery has been provided and the assets frozen would plaintiff notify any of the defendants of the existence of this action, through a proposed procedure inconsistent with the requirements of international service under the Hague Convention.

Judge Buchwald wraps up this overview of the SAD Scheme with a conclusion that seems obvious to me but shockingly isn’t yet obvious to all judges: “It may not be an exaggeration to say that once plaintiff’s requested relief has been authorized, the case is effectively over.”

Given the tenor of this overview, unsurprisingly the judge rejects the case’s “merits.”

On the design patent claim, Judge Buchwald says the “plaintiff has failed to show a likelihood of success on the merits for the simple reason that plaintiff has chosen not to submit its own product nor a physical example of any of defendants’ products for comparison.” The plaintiff tried a standard SAD Scheme trick of placing orders, taking screenshots, and then canceling the orders. The screenshots aren’t enough for the judge to “make a meaningful comparison sufficient to support the ‘extraordinary and drastic’ relief that plaintiff seeks.” She explains why test buys are needed to satisfy the Egyptian Goddess standard:

any existing differences between the products sold by defendants and those sold by plaintiff are of paramount importance. In this context, particularly given that plaintiff asserts design patent claims against 100 separate defendants, the Court is unable to determine from screenshots alone that plaintiff has satisfied the ordinary observer test and is likely to succeed on its design patent claim against each of the 100 defendants.

Click on image to play the GIF

In a footnote, she adds some lemon juice to the paper cut: “The position in which plaintiff finds itself is a self-inflicted wound. Plaintiff made a conscious choice to cancel each of the orders it placed, thus depriving the Court of the ability to meaningfully compare the products.”

#TestBuysOrBust.

With respect to the copyright claim, the plaintiff claims copyrights in the marketing photos. However, due to the high volume of defendants, the case preparation appears suspect: “plaintiff’s exhibits reflect that 22 of the 100 defendants have not violated plaintiff’s copyright.” These errors are enough to inhibit the judge from granting any requested copyright relief.

In a footnote, she adds: “if the plaintiff’s concern was truly in protecting their copyright, the Digital Millenium Copyright Act contemplates that copyright holders may enforce their copyright directly through service providers like Amazon.” I’m not sure we should fully celebrate the DMCA’s remedial powers here, but the DMCA’s notice-and-takedown option highlights what the plaintiff is trying to do here. Is the plaintiff trying to stop the sale of infringing items, or is it running a trolling campaign? The SAD Scheme is a widely preferred tool of choice for the latter; DMCA takedowns, not so much.

Judge Buchwald also questions the standard SAD Scheme argument for joinder. She points out that “the fact that plaintiff placed 99 separate orders to the same address in Manhattan undercuts the idea that defendants are related because the use of a single purchasing address would have placed defendants on notice that litigation was forthcoming.” This assumes that the order details reach the defendants even if the orders are canceled–I’m not sure if that’s true. In any case, the judge doesn’t act on her joinder concerns yet, but it seems like that will be a hurdle for the plaintiff.

Plaintiff’s TRO request denied.

I didn’t check to see if this is Judge Buchwald’s first SAD Scheme case, but either way, her strong and negative reactions to the scheme are commendable and, I hope, persuasive to her judicial colleagues.

Case Citation: CJB Global Imports, Ltd. v. Schedule A Defendants, 2026 WL 2517616 (S.D.N.Y. August 26, 2026).

* * *

BONUS: The Galleon Guild, Ltd. v. Schedule A Defendants, 2026 WL 2495610 (S.D. Fla. July 17, 2026). As usual, the court initially granted the SAD Scheme plaintiff’s requested ex parte TRO and allowed email service, followed by preliminary injunctions. Then, the case got reassigned to a new judge (Judge K. Michael Moore), and the plaintiff’s good times stopped.

The new judge inquired about jurisdiction, and the plaintiff’s answers sucked. First, the court rejects the “on information and belief” framing for the plaintiff’s fact claims, saying that a judge:

need not accept allegations made on information and belief where there is insufficient factual support to make those allegations plausible rather than just conclusory. Given that Plaintiff’s Complaint is largely full of the sort of generalized, form allegations that appear in many Schedule A complaints, the Court is not inclined to give credence to allegations made on information and belief

Second, the judge isn’t impressed with the plaintiff’s standard presentation of evidence by screenshots: “Plaintiff provides screenshots of order screens (which show orders that were not actually placed, let alone shipped into Florida) showing only that it seemed possible to place orders with Defendants that would ship to Florida.” Instead, to satisfy the Florida long-arm statute, the plaintiff must show that the defendant “actually sells trademark-infringing goods to Florida residents through his website.” #TestBuysOrBust.

The court reinforces that evidence of sales in Florida also may be required to satisfy Constitutional due process: “Where a defendant has merely existed on a website and has not consummated a sale into Florida, or even tried making a sale into Florida, there is no personal jurisdiction….[the court] is not holding a single sale into Florida would be sufficient to confer personal jurisdiction, only that Plaintiff has not plausibly alleged such a sale has occurred.”

While this case has reached its logical denouement, remember that the plaintiff long ago got the ex parte TRO, alternative service, and a preliminary injunction. In other words, a case that the court lacked jurisdiction to hear nevertheless caused a whole lot of judicially authorized damage anyway.

Prior Blog Posts on the SAD Scheme

The post New York Judge Shuts Down a SAD Scheme TRO Request–CJB Global v. Schedule A Defendants appeared first on Technology & Marketing Law Blog.

Collaborators Using the ‘Instagram Collabs’ Feature May Forego a Section 230 Defense–Winer v. Mohammed

Eric Goldman — Fri, 28 Aug 2026 15:18:45 +0000

[I have so many Section 230 cases backlogged in my blogging queue, but this one is jumping the queue because of its comparative novelty.]

This is a defamation case between a professor and a student in the Emory School of Medicine. It is one of the countless lawsuits related to the Gaza war, Palestinian rights, and Zionism/anti-Zionism.

In this case, the student publicly and repreatedly criticized the professor for serving in the Israel Defense Forces (IDF), and in response the school suspended her. Her suspension became a cause celebre. Separately, the professor sued her and several outlets that amplified her remarks. It is a major proxy battle over its highly charged topics; about two dozen lawyers are litigating some aspect of this case.

This post focuses on one corner of that larger litigation endeavor. Two defendants, CAIR Georgia and CAIR Foundation, used the Instagram Collabs feature to jointly post allegedly defamatory content involving the student’s story. Instagram describes the Collabs feature:

Instagram Collabs allow you to co-author posts with other accounts, sharing the post with both sets of followers and listing both accounts as authors. To create one, tap Tag people and then Invite collaborator before publishing your post; the invited user must then accept the invite via their messages to be added.

CAIR Foundation claimed that Section 230 protected it from liability for the collaborated post with CAIR Georgia. The court disagrees:

it is apparent from the face of the Second Amended Complaint that CAIR Foundation served as a co-author of the IG Post and therefore cannot be considered a benign user under the CDA.

(I’m not sure the “benign user” term improves the Section 230 jurisprudence, but it might make a good band name).

The court describes Section 230’s limits:

It is true that CDA immunity generally applies to reposting content, as many courts have concluded that private individuals reposting are “users.” See, e.g., Life Mastery Network LLC v. Haygarth, 2026 WL 1622887, at *15-16 (D. Haw. May 22, 2026) (collecting cases). But the CDA does not immunize someone who posts original content, so “it makes sense that adding comments to something that is re-posted would not trigger CDA immunity.” As the Plaintiff pleads it, CAIR Foundation did not simply reshare the WSB-TV segment, nor was it just a tagged user in CAIR Georgia’s post. Instead, it co-authored and published a post to its own Instagram page. Even assuming, as CAIR Foundation alleges, that it did not contribute to authoring the post, it at minimum accepted the collaboration invitation from CAIR Georgia knowing it would be tagged as a collaborator with the post published on its own Instagram profile. Moreover, the IG Post did not “merely share” the WSB-TV segment, but included additional commentary in the caption, with comments from CAIR Georgia on the post sharing links.

These factual allegations are enough to overcome a Section 230 defense now. The court says “a jury could find that CAIR Foundation was responsible in part for the creation or development of the IG Post, including the added commentary.”

* * *

I don’t use Instagram, so this is my first time encountering the Collabs feature (though I’ve occasionally experimented with analogous functionality on other services). It makes me wonder how extensively the Collabs tool is used. I did find one other case mentioning the Collabs tool: Kennedy v. Prime Hydration, LLC, 2026 WL 2018652 (W.D. Ky. July 13, 2026) (the facts are too complicated to cover here). However, I did a search in Westlaw’s Law Reviews and Journals database and found only one mention of Instagram Collabs in that literature (in the footnotes of a 2025 student note). Given the novelty of the Collabs angle, I think this case breaks some new ground.

At the same time, this is a reimagining of the issues I was trying to cover in my Co-Blogging Law paper from over 20 years ago. The Internet enables new forms of joint or collaborative content creation and dissemination that overlay existing legal doctrines. In that paper, I wrote: “The law inevitably will blindside some of these co-bloggers. Bloggers may find unexpected liability for their co-bloggers’ posts or actions.” Here, the court says that CAIR Foundation may become a co-author of the Instagram post (at least for defamation purposes), even if CAIR Foundation did nothing other than accept the Collabs invitation and allow CAIR Georgia’s content to reach its audience. In that circumstance, Section 230 steps aside for the co-authored components, whether CAIR Foundation expected it or not. If you are considering using a Collabs functionality, be aware of these risks.

Still, I think Section 230 continues to cast a long shadow on the plaintiff’s allegations. Even though the Collabs feature presents the defendants as co-authors, they might still not be liable for each other’s contributions. It’s analogous to how an online publisher can extensively edit a third-party’s work and, per Section 230, still not become liable for the parts the publisher didn’t edit. In other words, the public-facing co-author characterization doesn’t end the inquiry.Thus, regardless of the labeling, the plaintiff will need to show that CAIR Foundation contributed to the creation or development of defamatory content. That kind of factual inquiry sounds like a typical jury question.

Case Citation: Winer v. Mohammad, 2026 WL 2523973 (N.D. Ga. August 26, 2026)

The post Collaborators Using the ‘Instagram Collabs’ Feature May Forego a Section 230 Defense–Winer v. Mohammed appeared first on Technology & Marketing Law Blog.

Lawyer’s Fee Agreement Gagging Client Reviews Is Illegal–LS Carlson Law v. Sedgwick

Eric Goldman — Tue, 25 Aug 2026 20:54:32 +0000

Katie Sedgwick is a former client of LS Carlson Law. It sounds like she didn’t love working with them. She negatively reviewed the firm on Yelp. I had difficulty finding the original review.

In response, the firm sued her for defamation and breach of contract. The firm enumerated seven allegedly defamatory statements, including “They are either scam artists or complete crooks” and “They are not tough, they are not effective and they will rob you blind.” The lower court held these statements were nonactionable hyperbole and the author’s opinion. Other claims failed because the firm didn’t show they were false.

With respect to the contract breach, Section 16 of the firm’s fee agreement said the parties “agree not to directly or indirectly disparage each other either electronically or otherwise.” Because of this, Yelp has flagged the firm’s Yelp business page with a “Questionable Legal Threats” warning:

The link goes to the full text of the Superior Court opinion in this case.

As every lawyer knows, suing a client entails substantial risk of blowback, including possibly a malpractice claim and a complaint to the state bar. Here, the law firm gets other unwanted consequences. Sedgwick successfully brought an anti-SLAPP motion to strike, which means the firm will be paying her legal fees.

The appeals court upholds the anti-SLAPP dismissal, saying “we readily agree with the trial court that the Yelp review criticizing the firm’s representation of Sedgwick is protected activity.” The appeals court adds that “calling someone crooked is ‘merely rhetorical and hyperbolic language’ and not defamatory.”

Of particular note is the court’s treatment of the fee agreement’s non-disparagement clause. The law firm equated disparagement with defamation, so the court said the contract breach claim failed when there was no defamation. The appeals court adds:

Section 16 violates Civil Code section 1670.8. That statute provides: “A contract … for the sale … of consumer goods or services may not include a provision waiving the consumer’s right to make any statement regarding the seller … or its employees or agents, or concerning the goods or services.” By its plain language, it precludes a provision that, like Section 16, purports to require Sedgwick “ ‘not to directly or indirectly disparage’ ” the firm.

We do not share the firm’s concern that this statute “would negate existing law and permit consumers to defame businesses … with impunity.” The statute cannot be reasonably read to immunize defamation. In our context, the statute does not prevent the firm from suing for defamation, if the firm could prove defamation sufficiently to survive an anti-SLAPP motion. The statute merely prevents the firm from including Section 16 in its fee agreement—or thereafter enforcing it.

I haven’t exhaustively researched the issue, but I couldn’t think of a prior court finding a 1670.8 violation. It’s 2026, and I can’t believe anyone–especially a law firm–still doesn’t know that contractual efforts to restrict consumer reviews are no bueno.

I’ve complained about the spate of bogus 1670.8 “drive-by” litigation that is clogging our courts, but here is a real-life bona fide example of an actual genuine 1670.8 violation. Review suppression like this is what the drive-by lawyers should be enforcing, not their current tendentious and tortured reading of TOSes.

The argument that the law firm needs a contractual anti-disparagement clause to prevent defamation is specious. If a client posts a defamatory review, defamation law applies–no contract overlay needed. I discuss that issue more in this post.

It would have been more interesting if the firm had claimed that the contract anti-disparagement clause applied even if there wasn’t any defamation. But 1670.8 would kick in, mooting that claim as unenforceable.

Case Citation: LS Carlson Law PC v. Sedgwick, 2026 WL 2410113 (Cal. App. Ct. August 17, 2026)

BONUS: Greenwich Building Company v. Hoots, 2026 WL 2408839 (N.Y. Supreme Ct. August 11, 2026). A real estate company sued a property buyer for negative reviews on Google and Houzz. The court finds the lawsuit was covered by New York’s anti-SLAPP laws. The court says “online review forums such as Google and Houzz have consistently been held to be public forums under New York’s anti-SLAPP law…The statements are of interest to members of the community who may consider buying or renting an apartment at 120 Java Street.”

The court then says the plaintiff showed a substantial basis for its defamation claim because there is some confusion about the identity of parties (the buyer’s complaints may relate to a different, though possibly, related company).

And yet, the plaintiff didn’t adequately show the buyer had actual malice: “Defendant left his reviews on plaintiff’s Google and Houzz pages after diligent pedestrian online research….defendant’s statements specifically on those online review pages appear to have been the result of an honest mistake and that defendant left his reviews on plaintiff’s pages after a good faith attempt to find the correct pages to leave such reviews….This court too chooses to err on the side of non-actionability in this case so as to promote the public’s right to free speech.”

As a result, the case is dismissed, and the defense will get its attorneys’ fees.

Selected Blog Posts Regarding 1670.8

The post Lawyer’s Fee Agreement Gagging Client Reviews Is Illegal–LS Carlson Law v. Sedgwick appeared first on Technology & Marketing Law Blog.

A 512(f) Case Survived a Motion to Dismiss. Guess What Happened Next–Channel 781 v. WCAC

Eric Goldman — Sun, 23 Aug 2026 14:50:43 +0000

The court describes the case:

Plaintiff Channel 781 News (“Channel 781”) is a YouTube-based news outlet focusing on local affairs in Waltham, Massachusetts. Channel 781 posted clips from Waltham municipal government meetings that it believed to be newsworthy. Channel 781 took these clips without permission from recordings of the meetings produced by Defendant Waltham Community Access Corporation (“WCAC”) for the city’s public access channel. The clips Channel 781 posted were accompanied by titles and captioning but otherwise consisted entirely of excerpts from WCAC’s recordings.

In September 2023, WCAC sent three notices to YouTube asking YouTube to take down fifteen of Channel 781’s clip videos on the basis that they infringed WCAC’s copyrights. YouTube complied and temporarily deactivated Channel 781’s account. Channel 781 subsequently sued WCAC under 17 U.S.C. § 512(f), alleging that WCAC failed to adequately consider that Channel 781’s videos were fair use and, thus, knowingly misrepresented in its takedown notices that it had a good faith belief that the videos were infringing.

It seems weird that anyone could restrict Channel 781’s ability to clip-farm videos of local government meetings. However, the videographer WCAC is an independent contractor to the local government, not the local government itself. This contractual arrangement interposes copyright interests into coverage of government functions. Unsurprisingly, WCAC then essentially uses its copyright ownership to act as a censorship proxy for the local government. Sad, but entirely predictable.

In a prior ruling, the court said Channel 781’s 512(f) claim survived WCAC’s motion to dismiss. Now, on summary judgment, the court dismisses the 512(f) claim. This becomes yet another 512(f) case that gets a little traction and then predictably goes splat.

The court adopts the Rossi standard, which means WCAC is liable for a 512(f) violation only if it subjectively believed its takedown notices were unjustified.

(In a footnote, the court disgrees with the Moonbug decision, treating 512(f)’s scienter requirement as negligence, saying that standard “appears to be inconsistent with the Ninth Circuit’s decisions in Rossi and Lenz”).

Applying this standard, the court holds that “no reasonable jury could find that WCAC failed to form a subjective good faith belief that the Channel 781 clip videos for which WCAC sent takedown notices did not constitute fair use.” The court explains:

Sheehan asked Wangler to assess whether Channel 781 had the right to post clips from WCAC’s recordings. To do so, Wangler read the email Kastorf sent to Sheehan about the fair use doctrine and watched a YouTube video on the same topic. He then emailed Sheehan that “[i]t’s possible [Channel] 781 … Zoom videos using short clips qualify as [f]air [u]se” but that “[w]hat does not qualify are the large number of videos taken directly from us and reproduced verbatim with zero editing or commentary.” He attached to his email a screenshot from the YouTube video he watched describing facts that make a use “less likely to qualify for fair use.” Wangler and Sheehan then agreed to send takedown notices only for the clip videos reproducing WCAC’s recordings with no editing or commentary except for the addition of a title. When Wangler later decided which videos to include in the takedown notices, he chose clip videos that consisted solely of excerpts from WCAC’s recordings, which he believed did not qualify for fair use protection. Given Wangler’s viewing of YouTube video about fair use, his determination that some of Channel 781’s videos may have qualified as fair use while others did not, and the fact that WCAC only sent takedown notices for the latter set of videos, the record does not support a reasonable finding that WCAC failed to consider fair use or form a subjective good faith belief that the clip videos posted by Channel 781 were not fair use.

In light of Rossi, the fact that WCAC developed an overreaching fair use policy doesn’t support 512(f). “Channel 781’s arguments are a misguided effort to smuggle an objective reasonableness inquiry into the applicable subjective standard.” Per Lenz, WCAC did, in fact, consider fair use before sending takedown notices, so it satisfied the requirements:

Wangler expressly researched the fair use doctrine; made an effort to apply the doctrine to Channel 781’s clip videos; and determined before sending the takedown notices that the relevant videos were not fair use.

Channel 781 argued that WCAC took down its videos as part of a censorship agenda. The court says that motivation, even if true, would be irrelevant because WCAC properly considered the fair use considerations. The judge summarizes:

While Wangler’s fair use analysis may have been deficient, he did not intentionally fail to consider the possibility that Channel 781’s clip videos were fair use.

When I blogged the Lenz case over a decade ago, I wrote:

Let’s look at a hypothetical deposition transcript of a notice sender:

Q: Did you consider fair use?
A: Yes
Q: What steps did you take to evaluate the possibility of fair use?
A: I thought about it and decided it probably didn’t apply

Where does a 512(f) plaintiff go from here? It seems like the sender can legitimately claim that they considered fair use, albeit not in a “searching or intensive” way. 512(f) case apparently over.

This case is an excellent illustration of that hypothetical transcript and the inevitable futility of most 512(f) cases.

In my opinion, the secret “villian” is this story is the Waltham local government, which outsourced the videographing to a third-party rather than treating government transparency as a social value that should be funded by taxpayers.

Case Citation: Channel 781 News v. Waltham Community Access Corporation, 2026 WL 2409846 (D. Mass. Aug. 18, 2026)

BONUS: Parmar v. Google LLC, 2026 WL 2620416 (E.D. Tex. Sept. 3, 2026):

Parmar cannot show entitlement to an injunction under § 512(f) because that statute makes the defendants liable, if at all, only for “damages, including costs and attorneys’ fees.” It does not authorize injunctive relief. So § 512(f) cannot support a TRO.

Prior Posts on Section 512(f)

* Do DMCA Takedown Notices Need to Expressly Refer to the Lack of Fair Use?–Take-Two v. PlayerAuctions
* Does 512(f) Apply Differently to Counternotices Compared to Takedown Notices?
* It Takes a Lot for 512(f) Claims to Survive a Motion to Dismiss–Cordova v. Huneault
* Copyright Takedown Notices May Be Affecting Your Washing Machine Options–Ningbo Yituo v. GoPlus
* 512(f) Claim Sent to Trial (Which Didn’t Happen)–Leszczynski v. Kitchen Cube
* 512(f) Doesn’t Support Preliminary Injunction–BViral v. TheSoul
* In 512(f), the “F” Stands for “Futility”–Shaffer v. Kavarnos
* Does Anyone Still Care About NFTs? (Yuga Labs, LLC v. Ripps) — Guest Blog Post
* Viral DRM Awarded Damages for Its 512(f) Claims, But At What Cost?
* Big YouTube Channel Gets TRO Against Being Targeted by DMCA Copyright Takedown Notices–Invisible Narratives v. Next Level Apps
* The Competition Between Temu and Shein Moves Into a Courtroom–Whaleco v. Shein
* Copyright Battles Over City Council Videos
* Record Label Sends Bogus Takedown Notice, Defeats 512(f) Claim Anyway–White v. UMG
* Plaintiffs Make Some Progress in 512(f) Cases
* 512(f) Doesn’t Restrict Competitive Gaming of Search Results–Source Capital v. Barrett Financial
* 512(f) Once Again Ensnared in an Employment Ownership Dispute–Shande v. Zoox
* Surprise! Another 512(f) Claim Fails–Bored Ape Yacht Club v. Ripps
* You’re a Fool if You Think You Can Win a 512(f) Case–Security Police and Fire Professionals v. Maritas
* 512(f) Plaintiff Must Pay $91k to the Defense–Digital Marketing v. McCandless
* Anti-Circumvention Takedowns Aren’t Covered by 512(f)–Yout v. RIAA
* 11th Circuit UPHOLDS a 512(f) Plaintiff Win on Appeal–Alper Automotive v. Day to Day Imports
* Court Mistakenly Thinks Copyright Owners Have a Duty to Police Infringement–Sunny Factory v. Chen
* Another 512(f) Claim Fails–Moonbug v. Babybus
* A 512(f) Plaintiff Wins at Trial! –Alper Automotive v. Day to Day Imports
* Satirical Depiction in YouTube Video Gets Rough Treatment in Court
* 512(f) Preempts Tortious Interference Claim–Copy Me That v. This Old Gal
* 512(f) Claim Against Robo-Notice Sender Can Proceed–Enttech v. Okularity
* Copyright Plaintiffs Can’t Figure Out What Copyrights They Own, Court Says ¯\_(ツ)_/¯
* A 512(f) Case Leads to a Rare Damages Award (on a Default Judgment)–California Beach v. Du
* 512(f) Claim Survives Motion to Dismiss–Brandyn Love v. Nuclear Blast America
* 512(f) Claim Fails in the 11th Circuit–Johnson v. New Destiny Christian Center
* Court Orders Rightsowner to Withdraw DMCA Takedown Notices Sent to Amazon–Beyond Blond v. Heldman
* Another 512(f) Claim Fails–Ningbo Mizhihe v Doe
* Video Excerpts Qualify as Fair Use (and Another 512(f) Claim Fails)–Hughes v. Benjamin
* How Have Section 512(f) Cases Fared Since 2017? (Spoiler: Not Well)
* Another Section 512(f) Case Fails–ISE v. Longarzo
* Another 512(f) Case Fails–Handshoe v. Perret
* A DMCA Section 512(f) Case Survives Dismissal–ISE v. Longarzo
* DMCA’s Unhelpful 512(f) Preempts Helpful State Law Claims–Stevens v. Vodka and Milk
* Section 512(f) Complaint Survives Motion to Dismiss–Johnson v. New Destiny Church
* ‘Reaction’ Video Protected By Fair Use–Hosseinzadeh v. Klein
* 9th Circuit Sides With Fair Use in Dancing Baby Takedown Case–Lenz v. Universal
* Two 512(f) Rulings Where The Litigants Dispute Copyright Ownership
* It Takes a Default Judgment to Win a 17 USC 512(f) Case–Automattic v. Steiner
* Vague Takedown Notice Targeting Facebook Page Results in Possible Liability–CrossFit v. Alvies
* Another 512(f) Claim Fails–Tuteur v. Crosley-Corcoran
* 17 USC 512(f) Is Dead–Lenz v. Universal Music
* 512(f) Plaintiff Can’t Get Discovery to Back Up His Allegations of Bogus Takedowns–Ouellette v. Viacom
* Updates on Transborder Copyright Enforcement Over “Grandma Got Run Over by a Reindeer”–Shropshire v. Canning
* 17 USC 512(f) Preempts State Law Claims Over Bogus Copyright Takedown Notices–Amaretto v. Ozimals
* 17 USC 512(f) Claim Against “Twilight” Studio Survives Motion to Dismiss–Smith v. Summit Entertainment
* Cease & Desist Letter to iTunes Isn’t Covered by 17 USC 512(f)–Red Rock v. UMG
* Copyright Takedown Notice Isn’t Actionable Unless There’s an Actual Takedown–Amaretto v. Ozimals
* Second Life Ordered to Stop Honoring a Copyright Owner’s Takedown Notices–Amaretto Ranch Breedables v. Ozimals
* Another Copyright Owner Sent a Defective Takedown Notice and Faced 512(f) Liability–Rosen v. HSI
* Furniture Retailer Enjoined from Sending eBay VeRO Notices–Design Furnishings v. Zen Path
* Disclosure of the Substance of Privileged Communications via Email, Blog, and Chat Results in Waiver — Lenz v. Universal
* YouTube Uploader Can’t Sue Sender of Mistaken Takedown Notice–Cabell v. Zimmerman
* Rare Ruling on Damages for Sending Bogus Copyright Takedown Notice–Lenz v. Universal
* 512(f) Claim Dismissed on Jurisdictional Grounds–Project DoD v. Federici
* Biosafe-One v. Hawks Dismissed
* Michael Savage Takedown Letter Might Violate 512(f)–Brave New Media v. Weiner
* Fair Use – It’s the Law (for what it’s worth)–Lenz v. Universal
* Copyright Owner Enjoined from Sending DMCA Takedown Notices–Biosafe-One v. Hawks
* New(ish) Report on 512 Takedown Notices
* Can 512(f) Support an Injunction? Novotny v. Chapman
* Allegedly Wrong VeRO Notice of Claimed Infringement Not Actionable–Dudnikov v. MGA Entertainment

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Grok’s TOS Formation Failed–Skaggs v. X.ai

Eric Goldman — Mon, 17 Aug 2026 17:50:19 +0000

This case naturally raises some questions that Musk might choose to pose to Grok, like:

“Grok, is it bad when TOS formation fails?”

“Grok, what are best practices for TOS formation and does our current TOS formation process satisfy those?”

* * *

The plaintiff claims Grok “disclosed private and confidential information.” Grok sought to transfer the case to N.D. Tex. per its TOS forum selection clause. Everyone agrees the case should transfer if the TOS was properly formed. It was not.

The Wrap Taxonomy

Here is the applicable TOS formation screen at account signup. Everyone agrees this is a sign-in-wrap.

Here is the screenshot when Grok users submit queries:

The court says the chat screen is closest to a sign-in-wrap as well.

Thus, the court follows the now-standard Chabolla framework for reviewing sign-in-wraps.

Transaction Context

Unhelpfully, the parties obviously didn’t think this factor was important:

the Parties devote little space to addressing the transactional context at play here. Defendant offers one sentence in a footnote in its reply brief, citing to Oberstein and contending that “signing up for an account is the type of transaction that contemplates an ongoing relationship.” Plaintiff does not discuss this issue.

This raises another question for Grok: “Grok: is it good when a litigant fails to provide advocacy for one of the elements the court will analyze?”

The court says the plaintiff should have assumed there were applicable terms:

The first factor is that, although an account is “not required” to use Grok, Plaintiff chose to make one anyway. The second is that, after making that account, Plaintiff used Grok repeatedly “throughout 2025 and 2026” to “enter[] queries related to sensitive information about finances, investment strategy, private health conditions, business projects, and other private information.” In the Court’s view, a user who affirmatively chooses to make an account when doing so is optional and recurrently uses the corresponding web service should reasonably contemplate “some sort of continuing relationship” accompanied by terms and conditions. That Plaintiff used Grok to discuss sensitive personal information also weighs in favor of the notice requirement.

From my perspective, anyone who voluntarily chooses to use Grok extensively has placed themselves into a caveat emptor situation. It’s like the Farmer and the Snake parable.

Reasonable Notice on the Sign-Up Screen

The court then turns to the visibility of the TOS offer language, starting first with the sign-up screen. The court says there is a visual discontinuity between the TOS offer and the acceptance buttons:

although a reasonable user is presented with four sign-up methods, he ultimately selects only one. Having made that selection, the other sign-up options necessarily become “superfluous.” Even if a user chose the sign-up option closest to the bottom of the webpage (the option to “Sign up with Google”), Defendant’s contention that the notice is “positioned immediately below” is still incorrect. The language that is directly below the “Sign up with Google” button reads: “Already have an account? Sign in[.]” A reasonable user who is on Defendant’s sign-up page to sign up for a Grok account, which is how Defendant contends Plaintiff agreed to its terms, would likely see that text and read no further because, by definition, it does not pertain to him

The court is doing some tricky but important work here. Basically, she’s saying that once a user encounters language that isn’t applicable to them, they will stop reading and proceed. So here the “Already have an account? Sign in” language acts as a visual barrier that moots everything below it for a user who is signing up for the first time. Perhaps if the TOS offer language were closer to the buttons and more prominent, it could have overcome that visual barrier. But putting the language above the sign-up buttons would have avoided this limitation. (Or, better yet, two clicks).

The court doesn’t like the TOS offer language presentation either:

The contrast between the white hyperlink and the black background is notable, but it says nothing of the contrast between the hyperlink and the text immediately adjacent to it….the difference between light gray and white is a matter of degree and hardly one that maximizes visibility. Moreover, any distinction that this color variation provides is offset by the fact that other non-clickable text such as the “Create your account” heading is also in white…. the single colorful feature—the multi-colored Google logo on the “Sign up with Google” button—is near the center of the screen, likely drawing a reasonable user’s attention more than the monochromatic notice text at the bottom of the page does

I guess the judge doesn’t love monochromatic screens as much as Musk does?

The court summarizes:

Although the transactional context suggests that Plaintiff should have expected to be bound by contractual terms, the Court finds that the sign-up screen notice is not reasonably conspicuous because of “the notice’s distance from relevant action items, its placement outside of the user’s natural flow, and its font—notably timid in both size and color.”

I’m still waiting for courts to clarify what the “user’s natural flow” means. It brings to mind the great Dave Mason song (RIP).

Chat Screen TOS Formation

The chat screen formation evaluation doesn’t fare any better (and maybe a little worse?):

it is patently untrue that the notice is “directly beneath the query box.” Nothing is directly beneath the query box except a lot of empty space. Moreover, the query box is the only action item on the chat page, and as such a user’s “most obvious and natural next step” is to input text into that box. Because the query box is on the top third of the page and no additional graphics or text give the user any reason to look beyond it, the notice at the bottom of the website is “buried” beyond “the periphery” of where a user would be looking.

A “lot of empty space” “buries” the TOS offer language.

The court also noticed the lack of underlining to signal the link: “The only factor distinguishing the hyperlinked text and the adjacent text is the font color, and, as the Court noted, white and light gray are not “contrasting font colors.””

X pointed to a long list of court cases upholding its TOS formation. The court says there were factual differences in all of those cases. I imagine this will be contested on appeal.

Implications

One more question for Grok: “Grok, after reading this opinion, please suggest the six most important changes we should make to increase the likelihood of TOS formation.” The list would be trivially easy to implement; and there’s no reason Grok waited this long to figure it out.

This opinion is a good example of how Chabolla expedites the TOS formation failure in screens like this. This implementation was possibly marginally passable pre-Chabolla. Now, in my opinion, it’s clearly deficient, but in easily avoidable ways.

Case Citation: Skaggs v. X.ai, LLC, 2026 WL 2352969 (N.D. Cal. August 13, 2026). Defense counsel in this case is Kenneth Michael Trujillo-Jamison, Willenken LLP.

* * *

BONUS: Trimble v Entrata, Inc., No. 25-1975 (4th Cir. Aug 11, 2026).

This case involves the RentalPortal service, which allows tenants to pay their rent but charges a convenience fee for the pleasure of doing so. It sounds like RentalPortal used a clickwrap: “Although users could not finalize their rent payments until they had checked the box indicating their agreement to the Terms, they were not required to click on, scroll through, or otherwise actually review the hyperlinked Terms.”

Tenants sued for the convenience fee collection. RentalPortal moved to send the case to arbitration. TOS formation isn’t at issue. Instead, the plaintiffs challenge consideration.

In an echo from Harris v. Blockbuster from 2009 and the more recent Johnson case, a majority of the panel (over a dissent by Judge Rushing) says the arbitration clause is illusory because “Appellant’s Terms include a Change Clause that expressly gives it the unfettered discretion to unilaterally modify the arbitration agreement without any meaningful limitation.”

The change clause reads:

At [ResidentPortal], [users] are bound by the version of this Agreement that is in effect on the date of [the user’s] visit. This Agreement may change from time to time, so please review it when you visit [ResidentPortal].

The majority says:

Under a plain reading, a person who visits ResidentPortal is automatically bound by the Change Clause the moment ResidentPortal is accessed. The fact that users must click the assent button as part of the user interface in order to make rental payments does not alter the fact that any user paying rent is already bound by any modified terms merely by visiting ResidentPortal in the first instance. We have repeatedly held this type of “change in terms” clause to constitute an illusory promise under Maryland law….

there is no language in the Change Clause here requiring Appellant to provide its users with notice before or even after modifying the terms….

the Notices Clause states that any notices Appellant chooses to provide will be posted to ResidentPortal. But it also provides that the Terms automatically apply if and when Appellee visits ResidentPortal. So, there was no way for Appellee to receive notice of modifications or review them without automatically assenting to them. Therefore, the purported ability of Appellee to opt out of accessing the website and thereby decline the modified terms is illusory because it exists solely at Appellant’s pleasure…

it is entirely in Appellant’s discretion to modify the Terms, and the only restriction on that authority is Appellee’s choice to access ResidentPortal to pay her rent — which is no choice at all, as she is automatically bound by the version of the Terms posted the moment she accesses the website, even though at the time she accesses it, she would not know whether there is any posted notice of new Terms.

The majority concludes:

because the Terms here “allow[ed] [Appellant] to escape all of its contractual obligations at will” and did not provide Appellee with effective notice of any modifications, the agreement to arbitrate here is precisely the type of promise we have previously found to be illusory under Maryland law

Arbitration denied.

Given what we learned in Harris v. Blockbuster 17 years ago, it’s incredible that in 2026 we’re seeing these kinds of TOS amendment implementations. Any TOS amendment clause that purports to permit TOS amendments without actual notice to the users is a toxic provision for the entire TOS. Here, RentalPortal can easily form a new contract through a clickwrap each time the user pays rent, so this outcome was incredibly easy to avoid.

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Every SAD Scheme Opinion Is Weird In Its Own Way–Cai v. Chaozhoushi Yitong Dianzi Shangwu Youxiangongsi

Eric Goldman — Wed, 12 Aug 2026 19:21:01 +0000

This case generally follows the SAD Scheme template, but with several twists:

it’s in the Western District of Texas, not the more typical N.D. Ill.
it’s a copyright claim rather than the more typical trademark claim
it’s against a single defendant, not dozens or hundreds of defendants
it’s filed by the Valley & Summit Law firm, a relatively new firm (formed 2024) I haven’t encountered before. The firm’s principal says in her bio: “Ms. Ouyang started her IP practice by helping cross-border e-commerce stores defend draconian IP lawsuits. Over the years, Ms. Ouyang accumulated abundant experience in the fun area of IP litigation.” Switching sides and bringing SAD Scheme lawsuits is my idea of “fun” too.
it’s in front of a new judge, Judge Andrew Bray Davis, who just took the bench in April. I’ve previously suggested that recent judges tend to be more skeptical of SAD Scheme cases than judges who have rubber-stamped them for years, though I’m not sure this opinion supports that hypothesis.

Add all of these differences up, and the resulting decision reads a little differently than other SAD Scheme opinions I’ve seen.

TRO Against Infringement

The plaintiff has copyright registrations for “two-dimensional artistic works entitled ‘Bohemian Printing.'” Here is the registered work (left) and an allegedly infringing product (right):

The defendant’s version look similar or identical to the plaintiff’s version except that it omits the outer ring. Judge Davis says “a side-by-side comparison of Plaintiff’s designs and Defendant’s wares reveals little—if any—in the way of differences between the two designs.”

Judge Davis says the alleged infringement could cause irreparable harm because “damages fail to address loss of control—as well as damage to reputation and goodwill.” It’s troubling to see a copyright injunction predicated on concerns about the plaintiff’s goodwill, which normally should be the province of trademark law. Even the reputation concern is dubious. The judge further conflates this copyright case with trademark law when considering the public interest, saying the “public also has a clear interest in not being deceived or confused as to the origin, source, or sponsorship of copyrighted products.” Copyright law generally has little to say about products’ origin, source, or sponsorship.

Asset Restraint

The plaintiff requested an order restraining the defendant’s assets to preserve money to cover damages. Judge Davis rejects the request because “Plaintiff seeks to freeze all of Defendant’s assets without either showing that they are all profits or offering a way to separate the profits from the damages.” Citing Grupo Mexicano, Judge Davis says that asset restraints can only preserve “the availability of equitable relief in a final judgment.” In copyright cases, profit disgorgement is an equitable remedy, but actual damages are not. Here, the pleadings don’t make an adequate distinction between the two: “Plaintiff offers no evidence of even the rough proportion of Defendant’s assets attributable to infringement, and without it the Court cannot tether an asset freeze to the ultimate equitable relief Plaintiff seeks—the infringer’s ‘additional profits.'”

But…the judge has no visibility into how the online marketplaces like Amazon will process the infringement-based TRO. If Amazon suspends the account based on the TRO, the assets will be frozen despite the court’s legal distinction.

In a subsequent ruling (on July 16), the court orders the asset freeze anyway based on the following report the plaintiff obtained from Amazon (through expedited discovery):

Defendant has grossed $641,077.99 from 15,136 individual unit sales of 11 different allegedly infringing products over an unspecified time period. Defendant’s U.S. Amazon account held a balance of $1,092.69 when Plaintiff submitted her most recent motion to the Court

Sealing Request

Judge Davis temporarily accepted the sealing request. It was lifted on July 27, 2026, only after the plaintiff voluntarily dismissed the defendant. This is what the sealed complaint looked like:

The post-dismissal unsealing is likely why I learned about the opinion only now.

Service Via Email

The Second and Seventh Circuits have limited email service to Chinese defendants. Nevertheless, based on Fifth Circuit precedent, Judge Davis says that email service is in his discretion, and he orders it. Sounds like a circuit split needs resolution?

It is unclear if/when service was ever effectuated. My guess is that the defendant learned of the lawsuit from Amazon’s asset freeze, and that triggered an extrajudicial settlement regardless of service.

Request for Expedited Discovery

Judge Davis grants that request too.

Bond

The judge approves a $5k bond, which seems quite low based on what the judge knew at the time. I’ve lamented before about the lack of guidelines for bond-setting in ex parte cases.

The “Addendum”

The opinion includes this unusual passage:

Cases like this one requesting ex parte restraint and expedited discovery under seal—often against numerous defendants listed on a “Schedule A”—are being filed at pace throughout the federal courts. See Eric Goldman, A Sad Scheme of Abusive Intellectual Property Litigation, 123 COLUM. L. REV. 183, 193–202 (2023) (dissecting the proliferation of Schedule A cases and their legal shortcomings). For good reason, some courts have found many of these requests to fall short of the clear letter of the law. See, e.g., Price v. Individuals, P’ships, & Unincorporated Ass’ns Identified on Schedule A., 821 F. Supp. 3d 1315 (M.D. Fla. 2026) (Mizelle, J.).

Because this specific case involves only a single defendant, it appears to avoid many of the pitfalls present in Schedule A cases. But it is difficult to be sure. “The whole point of our adversarial legal system is that the robust exchange of competing views helps ensure the discovery of truth and avoid error.” United States v. Quintanilla-Matamoros, 164 F.4th 366, 375 (5th Cir. 2026) (Ho, J., concurring) (cleaned up). Yet Plaintiff in this case, like the plaintiffs in the Schedule A cases, not only demands emergency relief outside of the adversarial process, but likely anticipates seeking a default judgment that is also outside the adversarial process. In these circumstances, it is imperative for courts not only to be vigilant that any relief awarded is lawful, but to be willing to reconsider—sua sponte if necessary—relief already awarded if that relief should not have been granted in the first place.

But what if the TRO causes the case to “settle” before the judge gets another crack at it to fix any past errors? The case settled on July 27, 11 days after the court approved the Amazon asset freeze.

I wasn’t quite sure what to make of this addendum. Was the judge issuing a warning to the plaintiff? Leaving a note to himself? Something else?

Also, the judge says courts must be “vigilant that any relief awarded is lawful” in ex parte proceedings. Does this opinion adequately demonstrate such vigilance?

Implications

Given the plaintiff and defendant are both in China, I didn’t see any clear reason why the case was filed in W.D. Tex. instead of alternative venues, such as California (where the plaintiff’s lawyers are based) or Illinois (where most SAD Scheme cases are litigated). This looks like forum-shopping, but why W.D.Tex.?

This is another SAD Scheme case between Chinese plaintiffs and defendants, taking place in US courts. The Chinese plaintiffs prefer the SAD Scheme because US courts will disregard the rule of law even more than Chinese courts would.

Given that this lawsuit was against a single defendant and was not a high volume operation like a typical SAD Scheme, I didn’t see any legitimate reason why the plaintiff chose the SAD Scheme template over the standard copyright infringement playbook. To me, it’s another datapoint illustrating how the SAD Scheme is functionally displacing all IP litigation. This is because plaintiffs get better outcomes via the SAD Scheme than than they would get from the standard package of rights actually conferred to them via IP and civil procedure law. As the maxim goes, plaintiffs will keep doing it so long as it works. In this case, despite the judge’s quirky addendum, the plaintiff got essentially everything they asked for. So why wouldn’t plaintiffs keep the good times rolling?

Reflecting the case’s novelty, at least to him, Judge Davis goes through most of the plaintiff’s arguments in greater-than-average detail. Yet, as is typical with ex parte proceedings, he ultimately sides with the plaintiff on most questions. Judge Davis correctly spotted some of the weak spots of the SAD Scheme, and yet arguably the scheme sucked him in anyway.

Case Citation: Cai v. Chaozhoushi Yitong Dianzi Shangwu Youxiangongsi, 2026 WL 2294410 (W.D. Tex. June 26, 2026).

Prior Blog Posts on the SAD Scheme

The post Every SAD Scheme Opinion Is Weird In Its Own Way–Cai v. Chaozhoushi Yitong Dianzi Shangwu Youxiangongsi appeared first on Technology & Marketing Law Blog.