In early August, the D.C. Circuit refused to allow victims of terror attacks to take control of the Internet domain names of Iran, North Korea, and Syria as a means of satisfying previous money judgments awarded to the victims. In refusing this Internet domain seizure, the D.C. Circuit expressed concern about a “doomsday scenario” that could fundamentally disrupt the stability and accessibility of the Internet to the detriment of the general public. With this ruling, the D.C. Circuit acted with a degree of caution, mindful not to create waves amidst the global nature of Internet regulation.
Right to Veto Clause Prevents Partnership’s Virtual Reality Lawsuit
A judge in the Northern District Court of California ruled that a virtual reality firm’s “right to veto” provision in its partnership agreement prevented the company from bringing suit against Oculus VR, LLC (“Oculus”), a company that created a popular line of 3-D virtual reality headsets. Total Recall Technologies (“TRT”), a general partnership also in the business of virtual reality headsets, sued Oculus and its founder, Palmer Luckey, claiming that Luckey and Oculus breached a contract to develop headsets for TRT. In his Order, Judge Alsup examined how a general partnership gets authority to bring suit and the subsequent result if that suit was brought without the requisite authority. Judge Alsup granted summary judgment subject to certain conditions in favor of Oculus, finding that TRT lacked the authority to bring suit due to the partnership agreement’s “right to veto” clause. This ruling highlights the critical nature of partnership agreements for technology-based startup companies (and, indeed, all partnerships), particularly in regard to “right to veto” clauses. While veto rights can enforce compromise and cooperation between partners, such a right may prove frustrating if the relationship between partners grows irreconcilably sour.
CA Court Plays “Tag” – Judge Refuses to Drop Facebook Photo-Tagging Privacy Case
Earlier this month, a judge from the Northern District of California allowed a putative class action suit to proceed against Facebook. In this case, the plaintiffs alleged Facebook collected and stored biometric data of individuals’ facial features for use in “tagging” friends in digital photographs. In rejecting Facebook’s attempt to dismiss the suit, the court found that Illinois’ Biometric Information Privacy Act (“BIPA”) applied in place of California law, and that BIPA does not categorically exclude from its scope all biometric information taken from digital photographs.