Technically Legal

Following up on our discussion about bringing patent suits in the Eastern District (E.D.) of Texas on Podcast 27, the Federal Circuit (the Federal Appeals court that hears all patent cases) issued a ruling today ordering the E.D. Texas to move a case filed there to the Eastern District of North Carolina.

The court’s reasoning was that there was virtually no connection between the suit and the E.D. Texas, and that the E.D. of North Carolina was “clearly more convenient.” This is in line with a growing number of cases that are not looking favorably on the practice of what’s called forum shopping, or bringing your law suit in the place that’s most favorable to your side, but not best for getting witnesses, or administering justice. It’s also another example of the courts stepping in to fix a problem where Congress has failed to act (with regard to the patent reform act, we mentioned in the podcast).

Comments Off Posted in: Analysis, Links on December 2, 2009

Recently, Nokia filed a patent infringement suit against Apple, alleging that the iPhone infringes on Nokia patents.

In a recent SEC filing, Apple summarized the lawsuit, and promised that, “The Company intends to defend the case vigorously.”

What does that really mean? Sadly, little. It’s a public filing, and, as such, the company pretty much has to say that they will put on a vigorous defense. That being said, unless the case is a slam dunk against Apple, and that the patents are clearly valid, I think we can expect Apple to not given in easily.

Comments Off Posted in: Analysis, Links on October 30, 2009

The EFF is reporting that a court has ruled that neither cellphone users, nor the carriers, are liable for copyright infringement when the phone rings in public.

ASCAP argued that playing the ringtone in public constituted a “public performance” under the copyright act. The judge found that the performance was exempt from having to pay royalties because the “performance” wasn’t for commercial gain.

In an interesting twist for the ASCAP/BMI v. Apple dispute, the judge in this case also found that transmitting the ringtone to one person does not constitute a public performance. It still would constitute a reproduction, though. Because the 30 second song clips on iTunes are only transmitted to one person at a time, they would also not count as public performances under this interpretation.

Comments Off Posted in: Analysis, Links on October 15, 2009

About 9 PM EDT on Sunday the 13th, Wil Shipley, developer of Delicious Library, tweeted that an application on the iTunes App store had stolen his copyrighted images.

Wil was talking about the woodgrain background that is a prominent feature of Delicious Library. As the story progressed he found yet another application that had just taken his copyrighted .png files from his desktop app and reused them in iPhone apps.

What followed was a rather extended discussion with his fans about what he could actually do. In cases like this, cost of litigation is always weighed against potential returns.

Wil tweeted:

And at best I’d maybe get an injunction, not damages. And, really, they’re not making enough money for me to regain my losses.

He makes a good point. Even if he had registered a copyright on the images (the only way to get statutory damages, as opposed to actual damages), the company that was using his images probably did not have enough assets for him to recover whatever judgment he could win. And even if the company had money, that would all be sunk into lawyers before Wil saw a dime.

So, what’s an independent developer to do?

So I’m going to call them thieves publicly and embarrass them. Skip the lawyers, let’s go back to shaming people!

The strategy was effective. Eight hours after that last tweet, Wil posted this update:

Stolen images update: Tom from Netwalk apologized, said he didn’t know it was my texture, promised a resubmitted “MyMovies” update tonight!

There are really two important take-away messages from this story.

1. Copying an image from someone computer’s program and using it in your own can constitute copyright infringement. If the owner of the image has registered that copyright, it can open you up to RIAA v. The People sized damages: thousands to tens of thousands of dollars per infringement. If you are selling the images, it could expose you up to jail time.
2. There are ways other than the courts to resolve copyright disputes that leave both parties happy. Here, Wil was happy that people stopped using his intellectual property, and the people who took his images were no doubt happy that he won’t be filing suit, as he very well could do.

And, yes, these tweets were reproduced with permission.

32 Comments Posted in: Analysis on September 14, 2009

This week Twitter was sued for patent infringement. The gist of the law suit is that the plaintiff, TechRadium Inc. owns three patents on a system to have a message from one author be sent to many people, in different forms (including e-mail, SMS, and in plain text).

The Complaint

You can read the complaint here. The first thing I noticed is that there is arguably a claim to have the lawsuit dismissed. Under two recent precedents, Iqbal and Twombly, the Supreme Court has heightened the requirement for properly bringing a lawsuit. It used to be sufficient for the plaintiff to state that it owned the patents, and that the defendant infringed the patents. Under the recent cases, the plaintiff may have to be more specific about what activities are infringing the patent and how, when, and by whom they are being infringed.

Now, some very high profile lawyers (including Judge Posner, whom we’ve mentioned before) question the reach of these decisions, so it’s by no means open and shut. Also, the Federal Circuit, the court that hears all patent appeals, said that Twombly doesn’t apply to patent cases. But the validity of that ruling is in questions after the Supreme Court extended the Twombly standard to other cases in Iqbal.

The First Patent

TechRadium sued for infringement of three patents.

The first patent, number 7,130,389 (The ’389 Patent) claims “[a] digital notification and response system.” This system has two parts: (1) “an administrator interface for preparing and transmitting a message to at least one user contact device” and (2) “a dynamic information database for storing the message.”

Where this claim will succeed or fail is in the dynamic information database. The patent defines that database as comprising of: (1) user contact data, with contact device information and priority order for contacting them, (2) user selected grouping information, with at least one group associated with each user contact device, and a priority order for contact each user contact device within a group, and (3) response data that indicates the individual user has gotten the message, and whether there was insufficient contact data to reach the consumer.

On the face of it, it seems like this patent applies to Twitter. However, without knowing how Twitter’s e-mail and SMS notifications are performed, it’s hard to know for sure. There is the additional problem that Twitter doesn’t quite seem like what they patented. This patent is for a one to many system, not a many to many system. That may not have much bearing in the end.

There are also a series of claims that are dependent on the claim above. However, for the sake of brevity we won’t go into them.

The Second Patent

The last patent (7,519,165, or the ’165 Patent) covers sending messages simultaneously to several user groups. Otherwise it is very similar to the previous patents. As such it doesn’t require much more analysis.

This patent also has the “response” limitation, where the reponse indicates that the device got the message. To the best of my knowledge twitter doesn’t implement this feature, and may not infringe.

Conclusions

It’s hard to come to any firm conclusion one way or the other. But on their face, the patents are neither slam dunks, nor clearly inapplicable. In addition to the fact that there are strong arguments that the patents don’t cover Twitter, there are a host of other defenses: patent invalidity, and inequitable conduct (lying or concealing information from the Patent Office) being two of the most common.

We will be watching this story closely.

2 Comments Posted in: Analysis on August 10, 2009

In Podcast 8 we analyzed the legal implications of Amazon deleting copies of 1984 from users’ Kindles. Earlier this week, in podcast 10, we mentioned that a student, who had his notes about 1984 deleted along with the book itself, had sued Amazon.

The student, Justin Gawronski, is bringing the case as a class action. This means that his lawyers hope to represent all the people who’ve purchased the Kindle edition of 1984. They also seek to represent all people who’ve ever purchased a Kindle, Kindle 2, or Kindle DX, on the grounds that a court should prevent Amazon from ever deleting data off the Kindle again.

In addition to raising all the claims we mentioned on the podcast, the plaintiff also made a claim under the Computer Fraud and Abuse Act (CFAA).

The CFAA has been used in everything from felony prosecution for violating the MySpace Terms of Service to trying to get a court to restrain college students from giving presentations.

The complaint alleges that Amazon violated sections (a)(5)(A)(i) and (a)(5)(A)(iii), which state:

• Whoever
1. knowingly causes the transmission of a program, information, code, or command, and as a result of such conduct, intentionally causes damage without authorization, to a protected computer;
2. . . .
3. intentionally accesses a protected computer without authorization, and as a result of such conduct, causes damage;

Section (a)(5)(B) of the CFAA says that, to actually recover damages, a plaintiff also has to prove that one of the actions above caused, either:

1. $5000 worth of loss to 1 or more people during a 1-year period
2. modification or impairment of medical examination, diagnosis, treatment or care of 1 or more people,
3. physical injury,
4. a threat to public safety, or
5. damage affecting a computer system used by or for a government entity in furtherance of the administration of justice, national defense, or national security.

In this case, the plaintiff alleges that Amazon’s actions caused at least $5000 worth of loss to the people who had 1984 deleted off of their devices. The CFA defines “loss” broadly: “any reasonable cost to any victim, including the cost of responding to an offense, conducting a damage assessment, and restoring the data, program, system, or information to its condition prior to the offense, and any revenue lost, cost incurred, or other consequential damages incurred because of interruption of service.” So, the loss isn’t simply limited to the money that people paid for the book, which Amazon has already refunded. Instead, loss could also include any costs incurred by plaintiffs trying to repair the problem or recover the data.

We’ll keep you updated as this case progresses.

Comments Off Posted in: Analysis on August 5, 2009

Judge Nancy Gertner granted a motion for directed verdict (also known to as a judgment as a matter of law) for the plaintiffs in Sony v. Tenenbaum.   The fatal blow to the trial was dealt after Tenenbaum himself took the stand and admitted “us[ing] P2P” and “lied about it” in response to a cross-examination question. The remaining issue in this portion of the litigation is a determination of damages.

A Judgment as a Matter of Law is a procedural device under the rules of Federal Civil Procedure (see F.R.C.P 50) whereby a party may make a motion requesting a verdict be granted by the judge.  The key inquiry is whether based on the evidence presented up to the point the motion is made, is there any way a reasonable jury could only come to one conclusion.  To ensure some measure of fairness, the motions are evaluated by the judge in “a light most favorable to the non-moving party.”  The judge must find that a “reasonable jury would not have a legally sufficient basis to find for the non-moving party on the issue.”

In a copyright infringement case, a key matter is whether the defendant was in fact responsible for a violation of the exclusive rights to a copyright holder.  At several points during the litigation, Tenenbaum has attempted to shift the blame to other people, claiming he was not responsible himself for the acts of infringement.  Once Tenenbaum admitted to using P2P software in his testimony it was a nail in the coffin on this particular issue.  This empowered the plaintiffs to move for a judgement as a matter of law; and, in effect, this killed the disputed factual elements of the case.

The next portion of the proceedings moves on to a determination of damages.  The jury will be responsible for this determination and must come up with an amount of damages based on the statutory scheme of the Copyright Act.  The Act provides a spectrum of figures that guide damage awards: $750 minimum to $150,000 maximum per infringement.  In this case, that means at a minimum Tenenbaum will be found liable on 30 songs for $22,500, and at maximum $4.5M.

What remains now is still a significant question:  what amount will the jury award?  At this point we’ve seen one other case go to a jury on a determination for damages (Jammie Thomas) which returned an award of $1.92M based on an infringement of 24 recordings.  Many critics of the statutory damages have challenged the nature of high damage rewards based on infringement of a small number of sound recordings, particularly where statutory damages are grossly disproportionate to the amount of actual damages suffered by a plaintiff.  Indeed, a ripe issue on appeal will be whether such damages can pass Constitutional muster.  This is sure to be hotly contested by Tenenbaum’s counsel following the damage award.

Update: As of 2 P.M. Friday, July 31, the case was handed off to the jury.  More to follow.

Update 2: The jury came back with the damages award, only a few hours after deliberations began.  Here’s the bad news:  $675,000 ($22,500 per song).

Comments Off Posted in: Analysis on July 31, 2009

VoloMedia just announced that they’ve patented podcasting (thanks to ArsTechnica for the link).

No, really.

U.S. Patent Number 7,568,213 issued on July 28, 2009 for a “Method for providing episodic media content.”

Before we delve into the specifics on this patent, let’s take a step back and talk about patents in general.

Patents consist of specifications, drawings, and claims. The claims control the scope of what the patent actually protects. Claims fall into two types: independent and dependent. Independent claims, as the name suggests, stand alone, whereas dependent claims depend on independent claims. Dependent claims generally embellish on independent claims, adding specific details.

This patent has nine claims, organized into one independent claim and eight dependent claims. Claim 1, the independent claim, claims:

A method for providing episodic media, the method comprising: providing a user with access to a channel dedicated to episodic media, wherein the episodic media provided over the channel is pre-defined into one or more episodes by a remote publisher of the episodic media; receiving a subscription request to the channel dedicated to the episodic media from the user; automatically downloading updated episodic media associated with the channel dedicated to the episodic media to a computing device associated with the user in accordance with the subscription request upon availability of the updated episodic media, the automatic download occurring without further user interaction; and providing the user with: an indication of a maximum available channel depth, the channel depth indicating a size of episodic media yet to be downloaded from the channel and size of episodic media already downloaded from the channel, the channel depth being specified in playtime or storage resources, and the ability to modify the channel depth by deleting selected episodic media content, thereby overriding the previously configured channel depth.

VoloMedia notes that their patent actually protects more than just podcasts – it protects all episodic media, of which RSS-based podcasts are just the most common subset. But, because “episodic media” doesn’t quite roll off the tongue the same way podcast does, let’s analyze the independent claim in this patent using the word podcast instead.

Upon first inspection, we notice that this claim is for a method– the words “A method for” right at the start of the claim alert us to this fact. Method claims protect a way of doing something.

Method claims generally list several steps that someone needs to follow in order to perform the method. To fall under the protection of the method claim, each step in the method has to occur.

The Method Claim

Breaking down this patent’s method claim, we see:

• A method for providing podcasts, the method comprising:
  1. providing a user with access to a channel dedicated to podcasts,
     1. wherein the podcasts provided over the channel is pre-defined into one or more episodes by a remote publisher of the podcasts;
  2. receiving a subscription request to the channel dedicated to the podcasts from the user;
  3. automatically downloading updated podcasts associated with the channel dedicated to the podcasts to a computing device associated with the user in accordance with the subscription request upon availability of the updated podcasts,
     1. the automatic download occurring without further user interaction;
  4. and providing the user with: an indication of a maximum available channel depth,
     1. the channel depth indicating a size of podcasts yet to be downloaded from the channel and size of podcasts already downloaded from the channel, the channel depth being specified in playtime or storage resources, and the ability to modify the channel depth by deleting selected podcasts content, thereby overriding the previously configured channel depth.

So, in simpler terms, this claim protects a method for showing a list of podcast episodes, letting a user subscribe to the podcast, downloading new podcasts, and showing a user which episodes haven’t downloaded yet.

That sounds a lot like iTunes’s podcast functionality, doesn’t it?

Does this mean that VoloMedia has lawyers racing to the courthouse to sue Apple and collect millions in royalties? Not necessarily.

Licensing

Once a patent issues, a patent holder can choose to write nice letters to potential infringers, letting them know about the patent and inviting them to obtain a license (all for a reasonable license fee, of course). That’s generally the prettier route, as litigation involves far greater expense, both in terms of time and money.

ArsTechnica reports that VoloMedia apparently hasn’t yet moved towards licensing, and includes a quote from a company representative that says, “Our focus is to generate revenues through our products and technologies. VoloMedia is not entertaining or pursuing any licensing conversations.”

Declaratory Judgment

But say a potential infringer doesn’t look kindly on VoloMedia’s patent, and decides that they’d prefer to act first rather than wait for a lawsuit. They can file for a declaratory judgment in court, basically saying to the court, “We’d like to the court to rule that our product does not infringe this patent or that the patent is invalid.”

Non-Infringement

The potential infringer can argue non-infringement by disputing how to read the claims. This process generally happens in what’s called a Markman hearing, where, before trial actually starts, the court attempts to define any contested terms in the claim. Because patent litigation largely centers around claims, this hearing can make or break a case.

Invalidity

The potential infringer will typically also argue invalidity, saying “It doesn’t matter whether or not we infringe the patent, because the patent itself is invalid.” Courts generally find patents invalid on two grounds: lack of novelty and obviousness. Both grounds imply that the USPTO erred in issuing the patent.

Lack of Novelty

A potential infringer generally proves lack of novelty by finding prior art that precedes a patent’s priority date. In other words, the potential infringer finds evidence that someone out there publicly practiced or described the method in this patent before VoloMedia’s priority date – in this case, that priority date appears to stretch back to 2003.

Obviousness

To prove obviousness, a potential infringer argues that while the patent combines existing techniques in a new way, the combination itself is or should be obvious to a person having ordinary skill in the art (a PHOSITA). In other words, the patent covers something that’s such an obvious advance over what’s already out there that there shouldn’t be a patent at all.

Request for Reexamination

Apart from filing for a declaratory judgment, any third-party can also submit a request for reexamination. To do this, the third party needs a piece of prior art that precedes a patent’s priority date that appears to raise significant issues of patentability. The reexamination does not take place in court but instead happens in the USPTO. A reexamination can result in all the claims being thrown out, or patent narrowing what it claims.

Conclusion

The VoloMedia patent presents an interesting situation because podcasting has exploded online, fueled largely by the growth of Apple’s iPod. It’s likely that Apple or a third-party will file a request for reexamination with the USPTO, and the patent will either have its claims significantly narrowed or cancelled entirely, unless VoloMedia can successfully argue that it in fact was the first to invent the fine art of episodic media delivery. We’ll keep you posted as this story develops.

1 Comment Posted in: Analysis on July 30, 2009

Amazon recently deleted copies of 1984 by George Orwell from both Kindles and the Kindle store.

The Kindle User License Agreement clearly states:

Upon your payment of the applicable fees set by Amazon, Amazon grants you the non-exclusive right to keep a permanent copy of the applicable Digital Content and to view, use, and display such Digital Content an unlimited number of times, solely on the Device. . .

So Amazon is pretty clearly in breach of their contract to Kindle users who purchased the book, as Amazon did not allow them to keep a permanent copy of the book on their device. However, the License Agreement goes on to disclaim any liability for breach of the contract, and requires confidential arbitration to resolve any disputes you have with Amazon over the device.

Look for more on this over the weekend.

8 Comments Posted in: Analysis, Links on July 17, 2009

Only a few short hours ago I polished off the latest episode of This Week in Tech (TWiT).  For those unfamiliar, TWiT is a weekly technology news podcast that is hosted by Leo Laporte.  Each week Leo invites several technology news panelists onto the show and the group discusses weekly news stories.

For the last few weeks Leo has been out of country on vacation and guest hosts have taken over until his return.  Episode 203 sported Tom Merrit, who incidentally has his own daily technology news podcast at CNET. During the show, Tom brought up an interesting legal story about a United States Wikipedian user, Derek Coetzee, who received a legal notice from the National Portrait Gallery concerning the use of photographs picturing some 3,000 portraits of historic people that had been uploaded to Wikipedia.  The images, as you can see here, are high pixel reproductions of the portraits in the Gallery.  Tom and the panelists (Veronica Belmont, Ryan Block, Patrick Norton, Roger Chang, and Robert Llewellyn) dove head on into what is actually a very nuanced area of copyright law.

First, the TWiT panel glossed over the fact that the National Portraits Gallery is located in London, and  the legal notice they issued is based on a reading of English copyright law, not U.S. law.  This is significant because U.K. law is not bound by the same copyright principles as we recognize here in the U.S., even though based on similar principles and underpinnings.

Second, the panel seemed to confuse the claims on a tangential discussion of photographing of public domain art and its legal effects in public places.  In reality, the legal notice claims that Mr. Coetzee accessed these images from the National Portraits Gallery’s website, downloaded them, and then uploaded them to Wikipedia without authorization.  The notice does not mention that Mr. Coetzee actually took any photographs himself.

In 1999, the Southern District of New York (S.D.N.Y.) opined on this exact issue in Bridgeman Art Library v. Corel Corp., 36 F. Supp.2d 191.  In Bridgeman, an English company which sells reproductions of public domain art sued a Canadian defendant for copyright infringement based on, inter alia, unauthorized reproduction of their images.  After a multitude of complicated procedural maneuverings, the S.D.N.Y. held for the defendant, and declared the images were not protectable under the U.K. copyright law (The Copyright, Designs, and Patents Act 1998).

U.S. laws are limited by the principle of extraterritoriality– meaning, U.S. laws generally have no force outside the boundaries of U.S. soil.  The Bridgeman court decided that U.K. law applied to the claims of infringement under the Berne Convention.  The reasoning behind this focused on the fact that U.K. law bore the “most significant relationship” to the property and the parties in the dispute.  The court noted that the images were first affixed in the U.K. and first published in the U.K.  The fact that a U.S. court is deciding a case based on U.K copyright law probably seems confusing.  In reality, this is a common, albeit complicated, international intellectual property principle that is regularly applied in these scenarios under international IP treaties the U.S. is a party to (e.g., The Berne Convention, and Universal Copyright Convention).  Note though, not every case is treated identically to this one.  The method of determining international choice of law issues is fairly complicated and is done on a case-by-case basis.

Under U.K law, subject matter that qualifies as “original literary, dramatic, musical or artistic works” is copyrightable.  “Originality” hinges on whether a work “originates with an author” and “is not copied from another work.”  Similarly, under U.S. law, copyright attaches to original expression fixed in a tangible medium.  A work that is within the public domain is not protectable under copyright law.  The argument the defendant, Corel, successfully presented was that since the subject matter of the images is not protectable, any reproduction of the subject matter does not qualify as “original,” and therefore does not merit copyright protection under U.K law.

So, that’s a pretty good answer from a U.S. court on the issue, but it comes with a huge caveat.  Since a U.S. court decided the Bridgeman matter, a U.K. court is not actually bound by the decision in terms of precedential value.  This brings us back to the concept of legal territoriality:  U.S. courts simply have no power over U.K. courts.  Although the argument looks fairly persuasive under the U.S. holding, a U.K. court does not have to follow this particular interpretation of U.K. law.

The National Portrait Gallery noted this precise point in the notice to Mr. Coetzee.  The solicitors across the pond interpret the U.K. statute to cover certain aspects of the image database on the website as well as the photographs of the portraits themselves.  The Copyright, Designs, and Patents Act explicitly mentions “photographs” as protected works, but is silent on any requirements for the subject matter of such a photograph.   In any infringement lawsuit in either the U.S. or U.K., a plaintiff needs to establish that a valid copyright exists before the issue of infringement will be heard.   Without controlling U.K. precedent on the matter, this leaves a huge question mark in place of a legal outcome prediction.  Assuming the matter is heard and decided under U.K. law, the ultimate determination of whether protection applies will likely be dispositive.

If the National Portrait Gallery’s reading is correct, there is a colorable claim for infringement in the U.K.  Moreover, the legal notice also indicates that the National Portrait Gallery intends to pursue the matter in the U.K. legal system, not in the U.S. legal system.  On his Wikipedia page, Mr. Coetzee indicates he is currently seeking counsel, but no apparent legal response has been publicized.

Three cheers goes out to the TWiT panelists for taking on a very interesting legal story, even if they didn’t get it all correct!

4 Comments Posted in: Analysis on July 14, 2009