The ruling doesn’t mean Yahoo is going to lose its entire case. Nor does it mean there’s been a change to the Communications Decency Act, the law that’s meant to strike a balance between promoting the exchange of ideas and encouraging companies to watch out for offensive material on the web. But as the case develops, there could be major implications for Yahoo and other businesses that operate on the web, for the ruling suggests that courts can exercise more oversight than ever before in the way Internet businesses monitor their web sites for inappropriate content. You might think that would bring about more stringent regulations. Perversely, it could have the opposite effect.

The case started out in Oregon when a woman named Cecilia Barnes found out that her ex-boyfriend posted nude photos on a Yahoo profile, along with her phone number at work, her email address and her mailing address. The ex-boyfriend also posed as Barnes in Yahoo chat rooms and made it look like she was soliciting sex. Barnes followed Yahoo’s policy for getting content taken down from its site, and according to the court ruling, waited several months before finally filing a lawsuit against the company for failing to do so.

The court ruled against Barnes on a claim for negligence, but said Yahoo’s monitoring policy and a promise made to her by one of the company’s spokeswomen show its intention to be held to an agreement. By neglecting to take down the profiles created by Barnes’ ex-boyfriend, Yahoo might have violated that agreement.

Kim Rubey, a Yahoo spokeswoman, wouldn’t comment on the facts of the case, but said in a written statement: “We are pleased the United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal of the negligent undertaking claim. We are evaluating the opinion on the remaining claim and look forward to swift resolution in the district court.”

The court’s ruling hints that there might be an easy way out of this mess. If a web-based company disclaims any intention to be bound by a monitoring policy and it never promises to take down offensive material from the web, then it can never be bound by such an agreement.

Jeffrey Neuburger, a lawyer at Proskauer Rose who blogs about new media law, said he had been advising clients to issue disclaimers about monitoring offensive material since before the Yahoo case came along. That’s a general rule that could help a lot of companies stay out of trouble in the first place. But for Yahoo, Neuburger said issuing a disclaimer now might not be enough to prove it didn’t mean to create a legal agreement with Cecilia Barnes. “A court is going to have to make that decision,” he said.

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Why not? Because the ruling in Quon v. Arch Wireless Operating Co. is significant for some employees but less so for others. As for private employers, it might bear no significance at all.

Generally speaking, the Quon ruling says that wireless text messages are to be protected from unreasonable search and seizure, the same way handwritten letters are protected when sent in sealed envelopes through the postal service.

For Jeff Quon, a police sergeant in the small Southern California city of Ontario, the ruling meant vindication in a lawsuit against his employer. Quon had sued the city, its wireless carrier Arch and others for invading his privacy during an internal police investigation aimed at finding out how much Quon had used a two-way, government-issue pager to send personal, rather than work-related, messages.

Despite the limited scope of the Quon ruling, some parts of the decision speak broadly about the private nature of text messages and could serve to guide the court’s reasoning in future cases. And that is what the media coverage so far has focused on.

A CNET blogger said the ruling means employees’ text messages are now safe from their bosses’ prying eyes. The Los Angeles Times put a similar interpretation in a story headline: Your boss shouldn’t read your text or e-mail messages without an OK, court says. And The New York Times went so far as to say that Jeff Quon deserves a hearty thanks for taking the issue to court.

But while Quon’s courtroom victory might lend comfort to people who value privacy, it won’t necessarily dissuade private employers from snooping through employees’ wireless messages, because the constitutional protection against unreasonable search and seizure is pretty much limited to the government. In other words, you can’t use it against your IT manager or your HR department unless you’re a public employee.

You can’t use the Quon ruling against wireless carriers in all cases, either. The court’s conclusion hinges on a determination that Arch Wireless — now known as USA Mobility — held customers’ text messages in “electronic storage” under the Stored Communications Act of 1986. As such, the company violated federal law by disclosing transcripts of Quon’s text messages to the Ontario police department without his consent. Had the company not stored text messages after they were retrieved by users, it seems there would have been no internal investigation and perhaps no lawsuit. (For a more detailed analysis of the SCA, see the Electronic Frontier Foundation’s discussion of the case.)

It’s also unclear how the Ontario police department’s vague and inconsistent practice of regulating text messaging affected the outcome in Quon. The city had informal rules about text messaging on pagers, but no written policy.

Orin Kerr, a contributor to the Volokh Conspiracy law blog, warns that this lack of clarity could lead to some confusion. Clearly it already has. Personally, I’d like to agree with the conventional wisdom, that the court intends to let employees turn their company-issued wireless devices into little free speech stumps inside the virtual public square. It’s not hard to find blogs and news articles that suggest the law is pointing this way. But at least one employment lawyer has a different take. Philip Gordon, who specializes in privacy and data protection for Littler Mendelson, writes on his firm’s privacy blog that employers can easily and lawfully circumvent the Quon ruling, by setting and upholding policies that tell employees their text messages will be searched. If that strategy doesn’t work, I suspect employers will eventually find another one that does.

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Nobody likes to be told this sort of thing. But looking past the public relations hit, the question is: How damaging could this lawsuit be? At this point, it looks like a pesky nuisance, and not much more, for the cable giant.

Here’s why: Assuming Los Angeles City Attorney Rocky Delgadillo can prove his case, he wants Time Warner Cable, and parent company Time Warner, to make some customer service improvements and pay some money to the city and LA cable subscribers. The LA Times said civil penalties from the suit could be in the “tens of millions of dollars.” For Time Warner Cable, a $29 billion company, that liability is manageable.

Two years ago, Time Warner became the dominant cable TV provider in LA after city leaders approved an acquisition of Adelphia Communications and an asset swap with Comcast. As part of the deal, Time Warner agreed to LA’s unique customer service standards for cable TV companies, including a 30-second time limit for answering consumers’ phone calls and a 24-hour time limit for fixing TV service problems. (Hey FCC! Why don’t you have standards like those?!)

If Time Warner fell short of LA’s subscriber standards, it seems the company has probably violated the local franchise agreement that allows it to dominate the market, too. But the suit against Time Warner doesn’t raise a dispute over the franchise agreement. So Time Warner will likely maintain control over the TV market in LA, even if it loses the customer service suit in court.

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New York State Senate Republicans this week
introduced
legislation that
would make it a felony to commit violence for display on Internet
video sites. It’s unclear how this would change things for violent people, because
prosecutors can already bring felony charges against them, whether they’re
shooting video or not.

So what’s the point? Why do we need an Internet violence law that won’t
necessarily change criminal behavior? We contacted Joe Conway, a New York
senate staffer, to find out.

Conway said the legislation is meant as a response to controversial films,
like Bumfights, and other video
sometimes transferred through the Web that seem to glorify or incite
senseless violence. “Kids here in New York, in our state, are viewing this
stuff. Therefore, that’s an issue of concern to us,” he said.

Conway didn’t specifically blame Internet video providers, like YouTube, for
the proliferation of violent video. But he did say that Internet companies
could do more to keep violent video off the Web. “I think they’re headed in
the right direction. And like any company, they want to be recognized as
trying to do the right thing,” he said.

YouTube, for one, says it’s already doing the right thing. Asked about the
New York proposal, a company spokesperson said in an email that “real
violence is not allowed” on the site.

“Our community polices the site for inappropriate material, and users flag
content that they feel is inappropriate,” the spokesperson said. “Once
flagged, content is reviewed by our staff and usually removed from the
system within minutes if it violates our Community
Guidelines.”

Let’s face it: Society sometimes actually benefits when violent video is
spread through the Internet, and other media. One man’s video of the Rodney
King beating brought to light deep
racial tension in Los Angeles and produced clear evidence of police
brutality. And watchers were given a
chilling demonstration of how someone reacts when shot with a non-lethal
Taser when videos of two incidents of unruly students being publicly disciplined were posted online and widely publicized.

Obviously, New York’s Internet violence legislation affects only a
microscopic group of people: those really depraved souls who would stage an
assault to post video on the web. As for the rest of us, we can rightly
wonder about this law: Who really needs it?

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Ruckus says in a legal filing that both patents hold innovative technologies that helped make Ruckus “the success that it is today.” If the federal court finds that Netgear and Rayspan infringed on either one, the court could halt sales of a new Netgear wireless router. So the issuance of the second patent could really help Ruckus in court, the same way a second big gun could help a warrior on the battlefield.

Did the issuance of the second patent persuade Ruckus to take Netgear to court? Not according to one of Ruckus’ lawyers, Colby Springer. The timing was “pure coincidence,” he said. It just “happened to issue at a very convenient time.” Springer said he’s seen patents issued in as short as nine months and as long as seven years. This one took just under two years.

Sunnyvale, Calif.-based Ruckus is betting its smart Wi-Fi technology will deliver reliable signal quality over an extended range while automatically adapting to environmental changes in real time. With a more predictable Wi-Fi signal, the technology would support applications like streaming voice and multicast Internet Protocol video. In the suit, Ruckus says its distributors and resellers have shipped over half a million Wi-Fi systems to date.

Pursuant to a license agreement, Netgear has paid Ruckus royalties on sales of its WPN 824 line of RangeMax wireless routers. Ruckus claims it’s received royalties on nearly 2 million routers. Late last year, Ruckus discovered in an FCC filing that Netgear was developing a new RangeMax router.

In February, Ruckus’ president and CEO Selina Lo met with Netgear’s chairman and CEO, Patrick Lo, to discuss the new model. According to the suit, Netgear informed Ruckus it had begun selling the newest model in place of the ones that generated royalties for Ruckus. Netgear also indicated it would discontinue the manufacture and sale of its earlier RangeMax models by end of 2008, and Ruckus would not receive any licensing royalty revenue from sales of latest model.

Ruckus is seeking injunctions barring Netgear and Rayspan from infringing on its patents. It’s also seeking a “reasonable royalty” for existing patent infringements and other monetary damages.

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