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Calls to Weaken Federal Circuit Grow

The Wall Street Journal’s Law Blog is reporting on a growing call to divest the Federal Circuit of its exclusive jurisdiction over patent appeals.

These calls have grown over the past few years, following an impressive series of reversals in the Supreme Court.

When Congress granted the Federal Circuit exclusive jurisdiction over patent appeals in 1982, patent litigation had slowed. Many circuits had poor track records when it came finding patents valid, and the patent litigation was happening was often subject to forum shopping – plaintiffs seeking to bring their cases in a circuit where their patent was more likely to be found valid.

The Federal Circuit is credited with making patent litigation more uniform, and revitalizing it. In the wake of dramatically increased patent litigation, and some would argue abuse of the system, commentators have started to wonder if the Federal Circuit’s exclusive jurisdiction was the right choice.

One big problem that I see from this is that for over thirty years the 1st through 11th Circuit and DC Circuit Courts of Appeals haven’t had to hear a patent case. Few judges on those courts will have experience with patents, let alone specific technical expertise. Suddenly flooding those circuits with patent cases is unlikely to provide good, uniform, or even regularly correct opinions.

Comments Off Posted in: Commentary on July 7, 2014

Subject-Verb Agreement

Summer is typically a slower time for news, moreso for news relating to courts. We’ll continue to update with discussion and analysis on important cases that crop up, but July and August tend to be slow months for this kind of thing.

Today, we will leave you with one Judge’s elegant solution to a problem most lawyers have encountered at one time or another.

Meyer Intellectual Properties Limited and Meyer Corporation, U.S. (collectively “Meyer,” treated after this sentence as a singular noun to avoid awkward verb usage) claim that Bodum, Inc. (“Bodum”) “infringed, induced and/or contributed to the infringement.” of two of its United States patents

Meyer v. Bodum

Comments Off Posted in: Commentary on July 6, 2014

Massachusetts High Court Orders Defendant to Decrypt Computer

Weighing in on an issue that has split federal courts, the Massachusetts Supreme Judicial Court has ruled that a defendant can be ordered to decrypt a computer.

Interestingly, this is typically viewed as a question that falls under the Fifth Amendment. While a defendant cannot be made to testify against him or herself, courts can order that defendants submit to certain actions that could provide incriminating evidence: actions such as genetic testing, fingerprinting, giving blood samples, or performing breathalyzer tests.

The court recognized that by entering a decryption key the defendant would essentially be testifying as to the ownership of the computer. But, the court noted, here it was a “foregone conclusion” that the defendant was the owner, thus his providing the key “adds little or nothing to the sum total of the Government’s information.” Thus, the court reasoned, the defendant’s Fifth Amendment rights were not violated.

In this case the defendant had

explained that his communications with this company, which purportedly was owned by Russian individuals, were highly encrypted because, according to the defendant, ‘[that] is how Russians do business.’ The defendant informed Trooper Johnson that he had more than one computer at his home, that the program for communicating with Baylor Holdings was installed on a laptop, and that ‘[e]verything is encrypted and no one is going to get to it.’ The defendant acknowledged that he was able to perform decryption. Further, and most significantly, the defendant said that because of encryption, the police were ‘not going to get to any of [his] computers,’ thereby implying that all of them were encrypted.

A case can easily be envisioned where the defendant made no such statements, and the target computer was one of several in common areas of a house. Potentially making this case a much closer one.

The court performed this analysis primarily under the Fifth Amendment, but also made a determination that forcing the defendant to provide the encryption key was lawful under the Massachusetts Constitution, which is typically interpreted to be more protective of individuals than the Federal Constitution.

Justices Lenk and Duffly joined in a dissent, where they agreed that the act of decryption is testimonial, but disagreed that any such act would be a “foregone conclusion” due to the lack of evidence presented by the Commonwealth that the documents sought actually existed.

Comments Off Posted in: Analysis, Commentary on June 26, 2014

Supreme Court Holds Warrantless Cell Phone Search Unconstitutional

The Supreme Court handed down an opinion in two related cases relating to searching cell phones. Both cases involved defendants who were searched incident to arrest. Those defendants had cellphones on their person, and, without first obtaining a warrant, the police officers searched the cellphones for evidence of unrelated crimes.

When someone is arrested, police may conduct a limited search of that person and the immediate surroundings for the safety of the police officer. This often includes emptying pockets, or searching the inside area of a car where the person was sitting. This kind of search is also justified due to a risk of defendants destroying evidence on their person.

The Court held that neither of these justifications come into play with a cellphone. The device is not dangerous, and there is no reason to think that, when seized by the police, there is any risk of destruction of evidence. While data on phones may be encrypted or remotely wiped, neither justifies a warrantless search of the phone. The concern about destroying evidence is typically about evidence in the possession of the defendant: that he would flush drugs down a toilet, or shred papers. The concern is not that a third party would find out about his arrest and instigate a remote wipe.

Like all cases involving the Fourth Amendment, the Court was careful to state that there may be exceptions to this rule. If, for instance, the police had specific information that data on the phone implicated public safety, or there was another pressing need (based on reliable information), the warrant requirement could be waived.

Importantly, the Court put a lot of weight on cellphones containing a large amount of personal information — information that would not otherwise be readily available to police officers. This strikes me as a solid win for digital privacy.

I leave you all with this quote from the Chief Justice’s opinion:


In 1926, Learned Hand observed . . . that it is “a totally different thing to search a man’s pockets and use against him what they contain, from ransacking his house for everything which may incriminate him.” United States v. Kirschenblatt, 16 F. 2d 202, 203 (CA2). If his pockets contain a cell phone, however, that is no longer true. Indeed, a cell phone search would typically expose to the government far more than the most exhaustive search of a house: A phone not only contains in digital form many sensitive records previously found in the home; it also contains a broad array of private information never found in a home in any form—unless the phone is.

1 Comment Posted in: Analysis, Commentary on June 25, 2014

Alice Corp v. CLS Bank – Abstract Claims Continue to Be Like Obscene Material

Judges in the Federal Circuit and Supreme Court appear to know an abstract claim when they see it, but they don’t seem to be able to delineate any guidance for the rest of us mere mortals.

At least, that’s the feeling a lot of folks are getting from the most recent patent case out of the Supreme Court. The case, that involved structured settlements, continues to blur the line between patentable computer processes and unpatentable business methods.

The case only came out an hour ago (as of writing this). I’m sure there will be insightful analysis over time, but meanwhile many of us are feeling a bit lost.

Comments Off Posted in: Commentary on June 19, 2014

Second Circuit Limits Scope of Data Retention

On June 17, 2014, the Second Circuit Court of Appeals addressed the question of:

whether the Fourth Amendment permits officials executing a warrant for the seizure of particular data on a computer to seize and indefinitely retain every file on that computer for use in future criminal investigations.

The Second Circuit held that the Fourth Amendment does not permit that conduct. The court relied on underlying principles of the Fourth Amendment in finding that the government may not seize and retain all documents, regardless of whether they were responsive to a warrant.

The Fourth Amendment requires that a warrant specify the documents and things to be seized. While modern technology allows for police officers to easily copy the entire contents of a hard drive, that does not permit them to retain those documents indefinitely, or search documents that were not covered by the warrant through which they obtained the hard drive.

In this case, the government obtained a narrow warrant in 2003. That warrant did not include certain personal records. Despite separating the personal records from the business records, the government retained the personal records until 2006. The government then obtained a second warrant, and searched those personal records, which led to the charges from which this case arose.

Because the government had no basis for retaining those personal records for so long, that they obtained a warrant several years later did not cure the underlying problem: that they still had the documents long after they should have been destroyed.

This is certainly a win for the public, albeit a limited one. We’ll continue to closely watch the development of case law surrounding the Fourth Amendment with relation to technology.

Comments Off Posted in: Analysis, Commentary on June 18, 2014

Third Circuit Condones Warrantless Use of Directional WiFi Sniffers

In an opinion in an appeal from a criminal case, the Third Circuit Court of Appeals has held that, under the circumstances presented, a defendant had no expectation of privacy in the WiFi signal coming from his home.

The facts are these: in 2010, a police officer was conducting an investigation into the sharing of child pornography on the Gnutella network. After determining the IP address of the user sharing the materials, the officer obtained a warrant. Upon executing the warrant, the officer found no illegal materials on the target’s computers, but found an unprotected WiFi router. With permission, the office attached a computer to the router that would allow him to remotely monitor the network.

Eventually, the WiFi router was accessed, and the illegal materials were once again shared on Gnutella. Accessing the router remotely, the officer obtained the MAC address of the sharing computer. Using that MAC address, a directional antenna, and a program called MoocherHunter, the officer determined which house the signal originated from, resulting in the defendant’s arrest.

The defendant argued that this constituted an illegal warrantless search. The court disagreed, first asking:

(1) whether the individual demonstrated an actual or subjective expectation of privacy in the subject of the search or seizure; and (2) whether this expectation of privacy is objectively justifiable under the circumstances.

The defendant argued that this case was similar to Kyllo, in which police used thermal imaging to determine whether someone was using heat lamps: commonly used in the cultivation of marijuana. The court noted that here, the defendant made no attempt to keep his actions to within in home. Indeed, in order to access the unprotected router, the defendant had to send radio signals outside his home. This would have been a fine place to end the discussion however, the court continued:

Here, the presence of [the defendant's] unauthorized signal was itself “wrongful.” When [he] deliberately connected to the Neighbor’s unsecured wireless network, he essentially hijacked the Neighbor’s router, forcing it to relay data to Comcast’s modem and back to his computer, all without either the Neighbor’s or Comcast’s knowledge or consent. [The defendant] was, in effect, a virtual trespasser.

It does not appear that this particular finding was necessary to determine this case, and the idea that merely using someone else’s unprotected network without permission is unauthorized or illegal is worrying. The court stopped short of saying that “wireless mooching” is per-se illegal, but the dicta clearly shows the court’s opinion of using unprotected networks.

The court did take a moment to chide the district court for making a common mistake in Fourth Amendment analysis. The district court found that because the defendant broadcast his signal to a third party, the police did not need a warrant. This comes from a common misreading of Fourth Amendment case law, which states that you don’t have an expectation of privacy in things you willingly turn over to a third party. However, that only means that if that third party has possession of those things, the third party can feely turn them over to the police. It does not mean, as district courts often find, that police can obtain information also held by third parties by any means, regardless of the implications to the Fourth Amendment.

Overall, I think the court got this right. If I’m sending data to a neighbor’s house, and the officer, with permission from the neighbor, and readily available software and hardware, can determine where that data is coming from, he hasn’t violated the Fourth Amendment. However, predicating this finding on the access to the network being “unauthorized” or “likely illegal” seems to go too far.

Comments Off Posted in: Analysis, Commentary on June 16, 2014

Sixth Circuit Reaffirms Vicarious Liability for Copyright Infringement

In a terse opinion, the Sixth Circuit reaffirmed that someone who has the right and ability to supervise infringing conduct, and has a direct financial interest in that infringement, can be vicariously liable for copyright infringement, despite committing no direct acts of infringement themselves.

In this case, Roy Barr owned 95% of an LLC that ran a restaurant that offered music and dancing. Over the course of several years, BMI sent the restaurant more than twenty letters informing them of infringement and offering a license. No response was given.

Roy Barr, who represented himself, argued that because he did not perform the copyrighted music, he could not be liable. The court conducted a vicarious liability analysis and found that this case “falls within the heartland of vicarious liability,” and was essentially “the canonical illustration of the doctrine.”

This case serves as a stark reminder to owners and operators of venues that publicly perform music that the music must be properly licensed, or the owner may be liable for the infringing acts of the restaurant and its employees.

Comments Off Posted in: Analysis, Commentary on June 11, 2014

District Court Awards Fees In Patent Dispute

The blogosphere has been going a little bonkers over a recent opinion awarding legal fees to a defendant in a patent case.

I believe the opinion is the first to award fees under a new standard that the Supreme Court handed down in April. That case was not unusual in that it told the Federal Circuit that the test it was using, here to determine whether fees should be awarded, was too restrictive (a common theme in Supreme Court patent opinions).

This case is important because it has a lot of the features that people most associate with so-called patent trolls: settlement offers from plaintiff well-below the cost of litigation, limited or absent pre-suit diligence, weak infringement claims, and weak patents. This case is less important because those cases make up a relatively small percentage of patent litigation. Further, the conduct that the plaintiff engaged in was arguably independently sanctionable, even without the need of 35 U.S.C. 285 to shift fees.

Notably, nothing in this opinion reach patent trolls who send demand letters, but never file a case. If anything, this opinion will encourage trolls to send more demand letters to companies, but avoid reaching a court room.

Comments Off Posted in: Commentary, Links on June 2, 2014

Patent Reform Likely Dead This Term

Patently-O is reporting that patent reform has been taken off the agenda for the Senate judiciary committee due to a lack of consensus regarding the competing proposals. Because of the impending mid-term elections, it is unlikely that this matter will come up again before the 2015 Congress is sworn in.

There were two major competing proposals for patent reform this term: one that concentrated on fee shifting, and a second that would have, among other things, raised the pleading standard in patent cases – requiring more proof from the plaintiff before a suit could be filed.

Comments Off Posted in: Commentary, Links on May 21, 2014

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