Could Sargon of Akkad-related compensation claims damage/ruin Patreon? In 2018, Patreon removed content creator Carl Benjamin (Sargon of Akkad) from their platform over violations of their terms of service by using racial and homophobic slurs. Recently, calls seem to have emerged within Benjamin's fanbase for followers to pursue arbitration claims against Patreon over his removal. Claims have further been made that due to the specific way in which the Patreon terms of service are structured, dealing with a sufficiently large barrage of complaints would bankrupt Patreon, even if all the claims ultimately fail. In particular, I came across the following YouTube comment which sets out the specifics: Patreon's ToS is a contract of adhesion. Non-negotiable. Within that contract, two things were stipulated—both the drafter of the contract (Patreon) and the user agreed: 1) that binding arbitration would be the method by which disputes were resolved, and 2) both parties waived their rights to legal action based on class grouping. Each complaint would be dealt with on an individual basis. Under California law, any non-drafting party to a contract of adhesion who requests binding arbitration: 1) if an employee, is subject to a one time fee of $400; 2) if a consumer, is subject to a one time fee of $250. All other costs of arbitration (est. $10,00 per complaint) are payable in advance by the drafting party. These costs are, under California law, unrecoverable. I believe if the deposit is not used in full by the arbitration process, they are entitled to a refund of the unspent money. But if they spend the entire thing and win, they can't recover their costs. The non-drafting party bears no financial liability beyond that initial one time payment of $250. Patreon has already arguably violated its own contract by grouping the 72 plaintiffs into a class for the purpose of requesting emergency injunction against these arbitration requests. They should, by the terms of their own contract, have filed 72 separate motions for emergency injunctive relief. It doesn't matter whether the arbitrations are decided in Patreon's favor. Their own contract requires that they address each complaint individually, and win or lose, foot the bill for the arbitration. And here's the thing. Even if the abritrators are biased in Patreon's favor, they can't get around the law. All they can do is minimize the costs to Patreon by ruling early and in Patreon’s favor. They can't eliminate the costs to Patreon, or order any plaintiff to reimburse Patreon for them. It's literally the perfect Chinese finger trap. All of this seems believable enough, but I know better then to take a legal argument made in a YouTube comment at face value. Hence my questions here: Do Patreon's terms of service cause Patreon to lose a minimum sum of money to arbitration costs in all cases, even if the claim is immediately rejected? If yes, is Patreon required to go through full arbitration for each individual claim made? Or is there some mechanism to avoid additional costs for subsequent claims that are essentially identical to one that was already decided? If yes, roughly what number of plaintiffs would be required for the combined claims to bankrupt (or seriously damage) a company like Patreon?
This is the earliest dispute resolution clause I can find for Patreon. Some points to note: It calls up (as do all subsequent revisions) JAMS Streamlined Arbitration Rules &amp; Procedures, These allow the consolidation of arbitration’s between different parties over the same issue, Patreon’s liability is limited to the amount collected from the particular user. Do Patreon's terms of service cause Patreon to lose a minimum sum of money to arbitration costs in all cases, even if the claim is immediately rejected? Not necessarily. As stated above, Patreon can ask that the arbitrations be consolidated. I see no reason why the request wouldn’t be granted. That way they only pay for one. Alternatively, they can simply pay out their maximum liability if that is less than the expected costs. For many users, it’s likely the commissions they have paid will be less than their $250 filing fee. If yes, is Patreon required to go through full arbitration for each individual claim made? Or is there some mechanism to avoid additional costs for subsequent claims that are essentially identical to one that was already decided? There are no precedents set in arbitration so each has to be decided individually. However, it’s likely there will be only one arbitration, see above. If yes, roughly what number of plaintiffs would be required for the combined claims to bankrupt (or seriously damage) a company like Patreon? Well, it depends if they are insured or not. If they are insured for legal costs then the question is how much to damage their insurer. And the answer is - a lot. Patreon has revenues in the tens of millions - insurance companies work in the billions. If they aren’t insured, there would need to be a significant number (far more than 72). Realistically, this is little more than a minor inconvenience.
Yes, it's actally happened. Several outfits have filed cases by the hundreds, and they were even literally photocopies. And it works rather well, until one victim stands up for what's right - and then the house of cards comes tumbling down. Molski For instance, due to a minor ADA issue (toilet paper roll 2&quot; too low etc.) poor Jarek Molski was injured using the bathroom... in hundreds of restaurants, many on the same day, and hundreds in the same week. On one hand, hundreds of defendants simply paid Molski off, raising about a million dollars. On the other hand, the first defendant to actually fight back was able to uncover the hundreds of other cases, and the obvious fraud. The court swiftly ruled that Jarek Molski is a vexatious litigant and can file no more lawsuits, except by asking permission (presenting the facts to a judge and the judge deciding that there's really a worthy case there). The lawyers which represented Molski are likewise barred from representing anyone in an ADA case. Their law firm, likewise. Righthaven Another group of lawyers set up a law firm specifically to sue the owners of &quot;BBS's&quot; / internet forums / Q&amp;A sites such as StackExchange, whose public users had pasted up copies of newspaper articles into the BBS. They Bought the &quot;right to sue&quot; from copyright owners such as newspapers - Righthaven didn't own the content, just the &quot;hunting license&quot; to go after people who infringed on the content - with the content owners getting a cut of proceeds. They too filed hundreds of &quot;madlib&quot; lawsuits. In fact their lawsuit engine was so automated that they 'accidentally' sued journalists writing about Righthaven - (who quoted material from the entirely public lawsuit papers themselves - complaints are public by definition unless sealed by the courts.) Needless to say, Righthaven had never heard of DMCA Safe Harbor, or hoped the forum owners hadn't. Again it worked: hundreds &quot;paid up&quot;. Molski and Righthaven carefully chose &quot;settlement offer&quot; numbers ($5000-ish) that would be slightly cheaper than raising a legal defense ($6000-10,000). In the USA, each party pays their own legal bills - there's no concept of &quot;loser pays&quot; unless the other party's conduct is outrageous. It's so rare that when I had the pleasure of doing so, the court told us to take the standard garnishment forms, cross out &quot;defendant&quot; and hand-write &quot;plaintiff&quot; :) And again, the first defendant to actually stand up to Righthaven in court, asked the court to knock Righthaven to the moon, which the court gleefully did. RIAA / MPAA BitTorrent is a file-sharing network with no central hub. It breaks files into thousands of &quot;chunks&quot;. Users collect chunks from hundreds of other users until they have the whole thing. Part of the social contract of BitTorrent is that people who download also upload (seed) to share the chunks they have gotten so far. People who refuse to upload are called leeches. RIAA and MPAA are the trade associations of the music and movie industries, respectively. They searched for BitTorrent (pirated, they claim) copies of their members' music and movies. They then &quot;leeched&quot; those copies with modified BitTorrent software that recorded the IP address of the &quot;seeder&quot;. They took the IP address to the owning ISP, and demanded the customer identity. Then they sent out &quot;pay-us-or-else&quot; letters by the tens of thousands, and filed suits by the thousands. The argument was that the seeder had pirated the music, and that the ISP account holder was financially responsible for that activity, neither claim 100% reliable. This campaign has been supported by the courts, because RIAA/MPAA were very careful of their legal footing. But I only mention this because another gang of lawyers was paying attention, and they had their own ideas. Prenda &quot;Law&quot; This gang of lawyers correctly guessed that if users panicked at an RIAA/MPAA demand letter, they'd really panic if the topic was pornography. So they set up a law firm specifically to apply RIAA/MPAA's techniques to porn. (one wonders if they paid RIAA a royalty). But they were much more outrageous and careless. For instance, rather than partner or purchase legitimate porn content, they worked with porn stars like Sunny Leone to create shell companies who, unbelievably made original content specifically as bait to ensnare BitTorrent users. Again, this situation only works until someone stands up for what's right: then it all falls apart. This ended much, much worse than Righthaven or Molski. The civil judges were so offended they referred the matter out for criminal prosecution. The organizers got 19 years in prison between them.
Costar Group Inc. v. Loopnet, Inc., 164 F.Supp.2d 688 (D. Md., 2001) touched on this. The court distinguishes Playboy Ent. v. Russ Hardenburgh, Inc., 982 F.Supp. 503 (N.D.Oh.1997) which held that "contributory liability could attach where infringing performances enhance the attractiveness of the venue to potential customers." (internal quotes omitted) This sounds like your concern. The Costar court stated explicitly that merely adding value does not constitute direct benefit. In Costar the court found that Whereas in Playboy and Fonovisa, the finding of added value to the defendant was evidence that the defendant induced the infringement, for the purposes of the DMCA, the financial benefit must be "directly attributable to the infringing activity." 17 U.S.C. § 512(c)(1)(B) (1998). CoStar might make an argument that the indirect type of benefit cited in Hardenburgh is also present here. However, such a benefit does not fit within the plain language of the statute. Accordingly, § 512(c)(1)(B) does not present a barrier to LoopNet remaining in the safe harbor. You could also take a look at Columbia Pictures Indus., Inc. v. Fung, 710 F.3d 1020 (9th Cir., 2013) the relevant inquiry is “ ‘whether the infringing activity constitutes a draw for subscribers, not just an added benefit.’ That case cites Ellison v. Robertson, 357 F.3d 1072 (9th Cir., 2004) Ellison ultimately concluded that the financial benefit standard was not met, because there was inadequate proof that “customers either subscribed because of the available infringing material or cancelled subscriptions because it was no longer available.” But back to Fung, check this out (I quote this in its entirety because it's not that long and it should lead you to your own conclusion): Against this background, we note that we have never specified what constitutes a “financial benefit directly attributable to the infringing activity,” 17 U.S.C. § 512(c)(1)(B) (emphasis added), where, as here, the service provider's revenue is derived from advertising, and not from users. We do so now. Here, the record shows that Fung generated revenue by selling advertising space on his websites. The advertising revenue depended on the number of users who viewed and then clicked on the advertisements. Fung marketed advertising to one advertiser by pointing to the “TV and movies ... at the top of the most frequently searched by our viewers,” and provided another with a list of typical user search queries, including popular movies and television shows. In addition, there was a vast amount of infringing material on his websites—whether 90–96% or somewhat less—supporting an inference that Fung's revenue stream is predicated on the broad availability of infringing materials for his users, thereby attracting advertisers. And, as we have seen, Fung actively induced infringing activity on his sites. Under these circumstances, we hold the connection between the infringing activity and Fung's income stream derived from advertising is sufficiently direct to meet the direct “financial benefit” prong of § 512(c)(1)(B). Fung promoted advertising by pointing to infringing activity; obtained advertising revenue that depended on the number of visitors to his sites; attracted primarily visitors who were seeking to engage in infringing activity, as that is mostly what occurred on his sites; and encouraged that infringing activity. Given this confluence of circumstances, Fung's revenue stream was tied directly to the infringing activity involving his websites, both as to his ability to attract advertisers and as to the amount of revenue he received. Edit to add: There is also some legislative history that some courts point to at H.R.Rep. No. 105-551, Part 2. (I include the link to the closest thing I could find.) This language shows its age! I think the only thing that speaks to your issue is the last sentence (bc it's not you). In determining whether the financial benefit criterion is satisfied, courts should take a common-sense, fact-based approach, not a formalistic one. In general, a service provider conducting a legitimate business would not be considered to receive a ‘financial benefit directly attributable to the infringing activity' where the infringer makes the same kind of payment as non-infringing users of the provider's service. Thus, receiving a one-time set-up fee and flat, periodic payments for service from a person engaging in infringing activities would not constitute receiving a ‘financial benefit directly attributable to the infringing activity.' Nor is subsection (c)(1)(B) intended to cover fees based on the length of the message (e.g., per number of bytes) or by connect time. It would however, include any such fees where the value of the service lies in providing access to infringing material.
As usual with trademarks, the key question is "will reasonable people be confused about the source or affiliations of the product or service". Trademarks are, as you already know, limited to a particular industry or area of business, in general. Displaying user videos is not exactly the same thing as a particular popular song, but they just might be close enough for some consumer confusion tom occur. Whether reasonable people are in fact confused into thinking that the app is in some way sponsored by the makers of the song is a question of fact. A trademark suit would probably need to present some sort of evidence that confusion had occurred or was likely. It also may make a difference whether "Tik Tok" has been registered as a trademark. In the US, registration gets greater protection than mere use. (In some countries there is no protection without registration.) It is also possible that the app has already licensed the rights to the term from the trademark owner for the song. This would avoid a potential suit. It is also worth noting that the term "Tik Tok" is not original with the song. It dates back, in that spelling, to at least the "Oz" books by L. Frank Baum and others Tik-Tok of Oz dates from 1914, and the character of the Tik-Tok from the book Ozma of Oz (1907). Terms that are not original coinages are less strongly protected in trademark law, and the app could claim to be alluding to the Oz character, not the more recent song. A comment by ub3rst4r says that: the term "Tik Tok" is registered as a trademark in the USA by "Bytedance Ltd" (which is the company that operates the app). If that is correct, the US Patent and Trademark office (PTO) came to at least a preliminary conclusion that this trademark did not infringe anyone else's trademark. That doesn't meant that an infringement suit is doomed, but it would make any such suit harder and less likely. It seems that, as described in this news story a company selling watchs under the name "Tic Tok" was sent a cease and desist letter on behalf of the singer Kesha Sebert. The firm responded by filing a suit for a declaratory judgement. The case is Wimo Labs LLC v. Kesha Sebert, U.S. District Court for the Northern District of Illinois, No. 1:11-cv-02978. However, google does not show any resolution of this case, one way or the other. This was brought to my attention in a comment by StephanS. As this docket record shows, the case was dismissed by agreement without prejudice, apparently after a settlement (as stated in the comment by user muru). Thus there was no ruling on the merits of the case.
Did I lose possession of my goods? That seems unlikely. But enforcing it sounds complicated, at least from the standpoint of substantive law (the Code civil). I am not knowledgeable of French procedural law. The difficulty begins with identifying whether your claim is cognizable as unjust enrichment, or --per your subsequent oral agreement-- breach of contract. You might want to read sections "The French Law of Unjust Enrichment" and "Enrichissement sans Cause" in this post. Please note that the French Civil Code recently underwent significant reforms, whence references of its articles are likely outdated. Here I pointed out one example of statutory renumbering in the Code. In the second link, you will read that originally [...] the action in enrichissement sans cause would not be available to the claimant if he or she had any other cause of action, even if that cause of action was blocked for some reason. [...] [B]ut it is perhaps here that the law has relaxed most in recent cases. Thus, the subtleties of your matter can be decisive for identifying the type of claim that is applicable to your situation. Lastly, according to this treatise (on p.54), "[t]he French legal system does not have the principle of [reasonable] reliance as it exists in the American legal system" (brackets added). That makes it easier for a plaintiff to prove his claims under French law.
does the individual have a legal case against the company? Unfortunately, no. Some details and terms you use are unclear (e.g., "phantom" equity, "manifest" core technology, and so forth), but your overall description reflects that the individual sabotaged himself by signing a contract that does not mention the promise of equity through which he was persuaded to engage. A written contract usually supersedes any prior agreement --regarding the subject matter of that contract-- between the parties. That superseding effect means that the contract formalizes or overrides, accordingly, said agreements or promises. Since the initial promises of equity are not reflected in the "interim" contract, the investor's subsequent silence upon individual's reproach/reminders is from a legal standpoint irrelevant. At that point only the terms of the contract matter. The individual might consider alleging mistake in the sense of Restatement (Second) of Contracts at § 151-154 such that would make the contract voidable and perhaps "make room" for other theories of law. However, that seems futile unless the interim contract contains language that (1) provides specific conditions for its expiration, or (2) reflects the company's [mis-]representations that induced the individual to sign it. Neither seems to have occurred in the situation you describe. There is always a possibility that the contract might favor the individual's position and he just has not noticed it. But the only way to ascertain that is by reading the contract itself.
Does Bob have a case/standing? Yes, this is a reasonably straightforward contract dispute. Once you contract to do something and you then don't do it, you are liable for damages. Contractual damages are assessed on an expectation basis - the innocent party is entitled to be placed financially in the same position as though the contract had been completed without the breach. Bob is entitled to have the item and not to be out-of-pocket more than he agreed to pay. But ... There may not be a contract - see What is a contract and what is required for them to be valid? A contract is formed when the parties reach an agreement and most website terms and conditions are clear that this is NOT when the customer pays for it. For example, Amazon says: The Order Confirmation E-mail is acknowledgement that we have received your order, and does not confirm acceptance of your offer to buy the product(s) ordered. We only accept your offer, and conclude the contract of sale for a product ordered by you, when we dispatch the product to you and send e-mail confirmation to you that we've dispatched the product to you (the &quot;Dispatch Confirmation E-mail&quot;). So, here, two things have to happen before Amazon and you have a contract: they have to physically dispatch the goods and they have to send you an email saying they have. If they do one without the other, there is no contract. If your vendor has similar terms, you don't have a contract with them and are not entitled to contractual damages. You would not have a case in equity because they were clear that there was no contract until these things happened. You might be able to argue negligence if they sent the email without dispatching the goods but your damage basis would be different. Tort damage is calculated on a restoration basis, not an expectation basis, so you can recoup your losses but not claim any lost profits. It makes no difference here but if you had had a buyer who was going to pay you twice the price you paid, in contract you are entitled to the lost profit, in tort, you aren't. However, if the contract has a dispute resolution clause, that would normally have to be complied with before you can go to court. In some cases, this may prevent going to court at all, for example, if the dispute resolution clause included binding arbitration or expert determination. If there is a choice of law clause then this will usually be binding, however, if this is a consumer contract in New Zealand then NZ consumer law will apply in addition. Similarly, courts will usually observe a choice of venue clause. With what reasonable time lapse between (false) shipment notification of the original order and placing the eBay order? A reasonable time. Depends on what the product is and what normal delivery times are. For a 5mm screw, a reasonable time is probably measured in months. For an aircraft carrier it's probably measured in decades. Does this sort of a claim fall under the jurisdiction of small claims court (given that the amount is less than the threshold)? Neither New Zealand nor England &amp; Wales (bearing in mind Scotland and Northern Ireland are different jurisdictions) have small claims courts. The correct venue in New Zealand is the Disputes Tribunal which is not a court, and in England and Wales it is the County Court. Procedurally, would it be more advantageous for Bob to file the claim in the UK or in New Zealand? Ask a lawyer in each jurisdiction. Now Bob wants to claim damages from the store in the amount &quot;Total for the eBay order less total for the original store order&quot; — on top of full refund of the original order. Bob is not entitled to a refund. He is entitled to damages. A more accurate way to state the damages is the total for the eBay order and to not make any mention of a refund.
There have been cases in the UK where paying someone's legal bills was interpreted as joining their case. So when A with no money libels someone, and B with deep pockets pays A's lawyer, then B risks being held liable for damages if A gets convicted. So B should be very careful. Just giving you money is probably the safest. But attorney-client privilege is between attorney and client. I have been laid off twice with my company asking me to take an employment lawyer and paying for it. (Interestingly each time the bill was exactly the maximum amount the company was willing to pay :-) It would have been absurd if my company could demand information that is under attorney-client privilege just because they paid the bill. Why did two companies pay the lawyers bill? Because that way they ensure that the separation is without problems. The lawyer explained the settlement contract and what it meant exactly. They also checked that the contract didn’t contain anything unacceptable which the company would have fixed. So if I had tried to sue them later I would have no chance to win (but there was no reason to sue). Another reason not to sue was that the company offered I settlement that was very significantly more than was legally required, but if you sued them you would only get what you got in court - most likely less than you would get without suing. So basically they paid to make sure I would have no reason to sue them later.