There is something deeply exasperating about the debate, spotlighted Thursday, about whether unlocking an iPhone violates Apple’s copyright on the cellphone’s software. There’s a real issue at stake, but it isn’t fundamentally about copyrights. The Electronic Frontier Foundation, in a filing with the Copyright Office, argues that the government should allow iPhone owners to circumvent technical barriers meant to keep them from changing the phone’s software, a process called jailbreaking. The Digital Millennium Copyright Act bans people from defeating technical protections for copyrighted materials (such as the encryption on DVDs). The act requires the government to consider exemptions to this ban every three years.

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About: Rayan F. Coutinho is an attorney in the Business Group at the law firm of Wood & Lamping LLP and can be reached at 513-852-6030 or by email at rfcoutinho@woodlamping.com.

Turning to the issue of duties owed by departing partner to non-departing partner as a partner, it is well recognized in Ohio that the relation between partners is essentially one of mutual trust and confidence.  Partners owe a fiduciary duty to one another.  The law imposes upon partners the obligations of the utmost good faith and integrity in their dealings with one another in partnership affairs.  The fiduciary duty among partners is generally one of full and frank disclosure of all relevant information for just, equitable, and open dealings at full value and consideration.  Thus, each partner is required to consult and inform his co-partner as to partnership matters.

The Uniform Partnership Law reinforces this requirement by providing that partners must render, on demand, true and full information of all things affecting the partnership to any partner.  The fiduciary nature of the partnership relation means that a partner will not be permitted, without the consent of the other partners from any transaction connected with the formation, conduct, or liquidation of the partnership.  Subject to any agreement between them, each partners shares equally in the profits and surplus remaining after all liabilities, including those to partners, are satisfied.

The duty of good faith deters competition between partners and the partnership. Additionally, it prevents partners from obtaining personal profit from confidential partnership information, as well as from participating in activities which are in direct conflict with the partnership’s interests.

I could not find substantial case law in Ohio that discusses the rights and remedies related to competition by a partner prior to the dissolution and winding up of the business. However, a survey of case law around the country and of the Restatement (Second) of Agency reveals that the non-departing may have an argument regarding breach of the duty not to compete against the departing partner.

In Partnership Law & Practice § 12:9 (2006), it has been noted that in addition to the fiduciary duty not to usurp partnership opportunities, partners have a fiduciary obligation not to compete with their partnership. The duty not to compete is drawn from agency law, which is applied to partnerships by Uniform Partnership Act (UPA) § 4(3). Although the doctrines prohibiting usurpation of partnership opportunities and competition with the partnership are related, in that partners who usurp partnership opportunities often place themselves in competition with the partnership, the two doctrines are not identical. Even when a partnership fails to act on an opportunity presented to it, such that there would not be usurpation if an individual partner takes the opportunity, the partner may not take the opportunity without the other partners’ consent if the opportunity would place him or her in competition with the partnership. If a partner competes with the partnership without the other partners’ consent, the partner must account to the partnership for all profits of the competing business.

Within limits, a partner may compete with the partnership after he or she has withdrawn from the partnership. However, a partner may not solicit partnership existing clients before he or she leaves the partnership. Thus, an argument can be made that the partnership was dissolved when the departing partner was expelled as a partner by non-departing partner or that the departing partner withdrew from the partnership. In Ohio, partners do not have any inherent right to expel or dismiss another partner from the partnership, in the absence of a partnership agreement providing otherwise, since permitting involuntary expulsion of a partner at will would enable one partner to expel another from a profitable business for some real or fancied wrong, continue the business, and profit by his or her wrong.  Ohio has not recognized the summary exclusion of a partner from the business as a willful tort, and thus punitive damages may not be awarded to a partner who was summarily excluded from the partnership business by other partners.

Even though the departing partner may not have a cause of action for expulsion, he may be able to argue that he was free to compete because the partnership was dissolved by his expulsion by the non-departing partner or by his withdrawal.  Dissolution is caused, without violation of the agreement between the partners, by the express will of any partner, if no definite term or particular undertaking is specified.  The dissolution of a partnership may also be caused by the express will of any partner at any time in contravention of the agreement between the partners, despite the fact that the circumstances do not permit dissolution under other provisions of the Uniform Partnership Law.  Thus, any partnership may be dissolved by the act of any partner alone, and no one can be forced to continue a partnership against his or her will.  Even if one partner argues that dissolution did not occur by mutual consent, the other may establish that he dissolved the partnership, as any partner alone can do so.  However, a partner may not effect a unilateral dissolution outside the appropriate statutory procedure for winding up, such as by taking tools used in the partnership business.

In Dunn v. Zimmerman, 69 Ohio St.3d 304, 631 N.E.2d 1040 (1994), the Ohio Supreme Court approved actions between partners for breach of fiduciary duty and commented that an accounting would be the usual remedy.  The Court then specifically stated that “[o]nce the accounting has been conducted, the trial court may enforce the collection of any amounts found owing.  The trial court’s award may include punitive damages in the appropriate circumstances.  Such punitive damages may be awarded upon proof of conduct (1) characterized by hatred, ill will or a spirit of revenge; or (2) a conscious disregard for the rights and safety of other persons that has a great probability of causing substantial harm.  Thus, punitive damages may be awarded for breach of fiduciary duty, just like other intentional torts, upon proof of actual or implied malice.

In conclusion, the non-departing partner may have a cause of action against the departing partner for the breach of duty not to compete against the partnership. The departing partner may be able to argue that the partnership was dissolved when the non-departing partner expelled him from the partnership, thus freeing him to compete and necessitating an accounting of the partnership.

About: Rayan F. Coutinho is an attorney in the Business Group at the law firm of Wood & Lamping LLP and can be reached at 513-852-6030 or by email at rfcoutinho@woodlamping.com.

About: Rayan F. Coutinho is an attorney in the Business Group at the law firm of Wood & Lamping LLP and can be reached at 513-852-6030 or by email at rfcoutinho@woodlamping.com.

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About: Rayan F. Coutinho is an attorney in the Business Group at the law firm of Wood & Lamping LLP and can be reached at 513-852-6030 or by email at rfcoutinho@woodlamping.com.

The company manufactured parts for the seller, which sold the parts to a buyer. When the buyer complained that several thousand of the parts were defective and could not be used, the company requested that the parts be returned so that they could be replaced at no charge if they were defective. However, the seller engaged another vendor to make new parts and then sought to recover liquidated damages. The court held that the common pleas court improperly granted summary judgment to the company on the ground that the company’s right to cure was an exclusive contractual remedy. While the contract provided for a right to cure, this right arose only if the seller first exercised its remedy of rejection in the manner provided by the contract, which it had not done. The contract did not clearly and expressly provide that rejection by the seller followed by a right to cure by the company was the exclusive remedy for defective parts; therefore, the seller could pursue other available remedies. As a result, the seller’s decision to seek liquidated damages for its losses arising from the company’s alleged breach of contract stripped the company of its contractual right to cure the defect.The court reversed the judgment of the common pleas court and remanded the cause for further proceedings.

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About: Rayan F. Coutinho is an attorney in the Business Group at the law firm of Wood & Lamping LLP and can be reached at 513-852-6030 or by email at rfcoutinho@woodlamping.com.

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About: Rayan F. Coutinho is an attorney in the Business Group at the law firm of Wood & Lamping LLP and can be reached at 513-852-6030 or by email at rfcoutinho@woodlamping.com.

The Ohio Revised Code Section 149.43 provides several exceptions and exemptions from disclosure.  A record may be exempt from release under the Public Records Act if a specific provision of either state or federal law prohibits its release, even if the public office would like to disclose it.  Such records that are subject to mandatory withholding fall under what is referred to as the “catch-all exception”.  Other provisions of the Public Records Act explicitly exempt certain kinds of records from the definition of “public records” that must be made available by a public office.  This means that the public office does not have to disclose these records in response to a public records request.  If challenged in court on its decision to withhold a record or redact information, the public office has the burden of proving in court that the records are exempt from disclosure.

The “catch-all exception” essentially acknowledges the confidential nature of certain types of information or records.  This exception states that if any provision of Ohio or Federal law prohibits disclosure of certain types of information or record, a public office must not disclose it in response to a public records request.  A valid “catch-all exception” may be founded in statute.  Some examples include the attorney-client privilege, sealed court records, constitutional right to privacy, records required to be confidential pursuant to HIPAA law, law enforcement investigations, etc.

The Attorney General’s Office in Ohio Sunshine Laws 2008: An Open Government Resource Manual has addressed the issue of whether or not to release copyrighted materials in response to a public records request.  Rather than trying to reinvent the wheel, I am reproducing the language in the manual verbatim for your convenience.  In that manual, the Attorney General addressed two instances, for example, in response to a public records request, must a county building department duplicate copyrighted blueprints, that were submitted for approval as required by law; or does the federal copyright law constitute a “catch-all exemption” that prohibits the public office from disclosing the copyrighted material?  In a 1993 Opinion, the Ohio Attorney General concluded that copyright law does not prohibit disclosure of protected materials, and so it does not constitute a “catch-all exception”.  Later, the Ohio Supreme Court concluded that federal copyright law does not constitute an exception from mandatory disclosure where the requestors intended use is not commercial.

Federal copyright law is designed to protect “original works of authorship, which may exist in one of several specific categories such as literary works; musical works; dramatic works; pantomimes and choreographic works; pictorial, graphic and sculptural works; motion pictures and other audio visual works; sound recording and architectural works.  From the moment of creation, the author of an original work possesses exclusive rights to publish, copy, and distribute the work.  The federal copyright law does not, however, provide to the author the right to keep the work confidential.  Indeed, copyright works are not protected from inspection by the public, so it is seemingly inappropriate to characterize copyrighted works in the possession of a public office as records “the release of which is prohibited by federal law”.  Moreover, the policy underlying the copyright law is “to encourage the broad dissemination of copyrighted works, albeit in a manner which protects the economic interest of the author.  Because the copyright law does not prohibit disclosure of protected materials, nor does it grant copyrighted works, confidentiality, such works are not “records the release of which is prohibited by federal or state law,” as required by the catch-all exception.  Accordingly, at least according to present Ohio law, the catch-all exception will not give a public office an excuse to withhold a public record that is copyrighted.

Similarly, copyright law does permit “fair use” of a copyrighted work, which use does not infringe on the authors exclusive rights.  Under the fair use exception, reproduction or copying of a protected work does not infringe the copyright “where the use is for purposes such as criticism, research, comment, and for other educational or non-profit purposes that are not commercial in nature.”

In determining whether the intended use of the protected work is “fair use,” a court must consider these factors which are not exclusive: 1) the purpose and character of the use, including whether the intended use is commercial or for non-profit educational purposes; 2) the nature of the prospective works; 3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and 4) the effect of the intended use upon the market for, or value of, the protected work.  The fourth factor, whether the use will negatively impact the market for the work, is generally considered to be “the single most important element of fair use.”

The Ohio Supreme Court has addressed the relationship between the public records disclosure of the copyrighted work only once, and in that case concluded that the State Department of Education must disclose portions of previously administered State proficiency tests to a high school student.  Without detailed analysis, the court concluded that the intended use was “fair use” because the requestor had no intention of copying these materials for commercial resale purpose.

Similarly, in order for any information contained in the blueprints for the City of Madeira to constitute a trade secret that is exempt from disclosure under Revised Code 149.43, it must appear to have been “a subject of efforts that are reasonable under the circumstances to maintain its secrecy.”  An entity claiming trade secret status bears the burden to indemnify and demonstrate that the material is included in categories of protected information under the statute and additionally must take some active steps to maintain its secrecy.

In conclusion, a record such as a blueprint submitted to a public agency as part of a permit application is not exempt from disclosure under the Ohio Public Records Act simply because it is subject to copyright or provides competitive advantage to the applicant.  Any violation of the copyright owners statutory rights by a third party related to the disclosure of such documents would be a civil issue between the copyright owner and the person requesting the public record.

About: Rayan F. Coutinho is an attorney in the Business Group at the law firm of Wood & Lamping LLP and can be reached at 513-852-6030 or by email at rfcoutinho@woodlamping.com.

Key legal considerations when using aggregated data appear to be as follows:

Issues relating to disclosure of identifiers and passwords of users of services from which aggregated data is obtained:

Breach of privacy provisions – collection of personal information; use and disclosure of personal information; security of personal information; access and correction rights; and restrictions on trans-border data flows.

Tortious conduct – inducing a breach of contract between the user and the “scraped” institution.

Potential breach of consumer protection legislation at federal and state level. E.g. Right to Financial Privacy Act, Fair Credit Reporting Act, Federal Educational Rights and Privacy Act, Financial Services Modernization Act.

Issues relating to the accessing of the scraped institution’s sites and databases:

Breach of certain criminal laws.

Infringement of the intellectual property rights of the owner of the scraped site.

Certain other torts, including, potentially:

Trespass;

Breach of contract by the web aggregator;

Breach of Digital Millennium Copyright Act by trafficking in technological products, services or components primarily designed to circumvent a copyright owner’s control and protection systems.

Conversion of data and bandwidth;

Interference with economic rights.

Tortious interference with terms of use and privacy policy between the scraped institution and its user.

Unfair trade practices;

Defamation liability as a publisher of false information e.g. false statements about an individual or trade libel in the case of false statements about a business such as a restaurant review.

Unfair competition.

Computer Fraud and Abuse Act violations.

Common law misappropriation.

Possible trademark infringement claim if the aggregated data also includes someone’s trademark.

Action in restitution based on the unjust enrichment of the aggregator.

Whether or not a claim is likely to be brought is therefore in many cases dependent upon the attitude of the website owner to the aggregation services, in particular whether they come to the view that the aggregation service has a positive or negative overall effect upon their business.

This seems to be the reason why some services such as search engines get away.
Similarly, commercial use of the aggregated data rather than fair use is more likely to invite litigation.

Cases indicate that courts are more likely to find against web aggregators if the website operator of the scraped website has observed some basic precautions i.e. ensured that the website terms and conditions specifically prohibit unauthorized access or downloading of data using any computer program; and the terms and conditions of use are clearly identified on each page containing valuable data or a link to them is provided.

At least some courts have determined that the use of the robot.txt file which instructs search engine spider and bots not to “scan” the website constitutes sufficient precaution against scraping.

Reference to the originating website does not necessarily get you off the hook for purposes of copyright infringement because it still involves copying.

About: Rayan F. Coutinho is an attorney in the Business Group at the law firm of Wood & Lamping LLP and can be reached at 513-852-6030 or by email at rfcoutinho@woodlamping.com.