Technically Legal

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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

Delaying Suit in Copyright Cases

On Monday, May 19th, the Supreme Court decided a case relating to delay in bringing a copyright case.

The Disruptive Competition Project has some nice analysis of the case, so I won’t rehash it, but I will give a cliff-notes version.

The plaintiff in the case obtained the rights to the Raging Bull screenplay. The plaintiff then let MGM know that their continued use and distribution of derivative works (including the movie, Raging Bull) constituted copyright infringement. The parties attempted to negotiate over a few years, but never came to an agreement.

In 2009, the plaintiff sued for copyright infringement going back to 2006, the statutory limit, and well after negotiations broke down. MGM argued that because the plaintiff knew about this copyright infringement for many years, she was barred from bringing suit. The court disagreed saying that if Congress says you can get damages going back three years, even long standing knowledge of the infringement doesn’t defeat your claim.

Comments Off Posted in: Commentary on May 20, 2014

Second circuit reverses hot news misappropriation case

The second circuit issued an opinion in Barclays v. TheFlyOnTheWall.com today, reversing the district court’s previous ruling in favor of the plaintiffs.  The case has been closely watched by content-owners and copyright attorneys since 2010, after the district court enjoined the defendants from publishing the plaintiffs’ financial recommendations to clients until 30 minutes after the securities market opened.

I’ve only had a chance to skim the opinion, but it appears that the court found that the misappropriation claim was federally preempted by the Copyright Act (see 17 USC § 301).  It’s worth noting that while this case is important, the facts seem to play a decisive role and the court (unsurprisingly) didn’t opine on the first amendment issues.

For background:  The claim in the lawsuit was that TheFlyOnTheWall.com had misappropriated “hot news”– which may be (loosely) described as free-riding off news that was “gathered at the cost of enterprise, organization, skill, labor, and money” of another.  The hot news doctrine has a long history that dates back to the early 20th Century as a state common law distinct from copyright infringement.  This is important to most content owners because:  (1) copyright law protects expression, and generally affords little, if any, protection to factual information (though it still protects the expression of factual information), (2) even when expression is unlawfully reproduced,  the fair use doctrine may protect certain uses of the expression.  In other words: where copyright law doesn’t provide a legal relief, a state-recognized exclusive property right to news might.  The right to hot news was widely recognized until the enactment of the “Copyright Act of 1976″ (the last major overhaul of the Act) in which Congress added an express preemption provision (under 17 USC § 301) that severely limits the ability of state law to mimic rights granted by the Copyright Act.  It’s still recognized, but under limited circumstances.

[Opinion]

Comments Off Posted in: Commentary on June 20, 2011

Righthaven sues Eriq Gardner, an Ars Technica writer, then withdraws

This case is a real head scratcher. 

Eriq Gardner, who writes The Hollywood Reporter ESQ blog and occasionally contributes legal commentary to Ars Technica, recently found himself at the business end of a Righthaven copyright lawsuit.

The story begins last December, when Gardner wrote an article for Ars Technica that Described Righthaven’s copyright claims in a lawsuit against the DrudgeReport.  In that case, Righthaven alleged that the DrudgeReport had reposted a photograph of a TSA Agent giving an airport traveler a pat down without authorization.  In Gardner’s Ars Technica article about the DrudgeReport lawsuit, he reposted the photograph as it had appeared in the court filing:  as a black and white, grainy image that (probably) had been printed out and attached to the complaint as an exhibit and then rescanned for the Ars Technica article.

Last Friday, Righthaven filed a complaint against Gardner claiming that his use of the photograph from the court filing in the Ars Technica article was an infringement of copyright(!).  According to Ars Technica, which has a detailed post about the incident, Righthaven voluntarily dismissed the suit this morning, stating to Ars that the filing was the result of a “clerical error.”

It’s hard to imagine a set of facts that is a better candidate for a fair use defense.  Aside from the fact that the image in question wasn’t even the original photograph, Gardner’s Ars Technica piece is a news article, with commentary on the DrudgeReport lawsuit.  News reporting and commentary about ongoing cases has a long history of public policy support in the courts.  Moreover, those activities are among the few explicitly mentioned as examples of fair use in the Copyright Act (use of a work “for purposes such as criticism, comment, news reporting … is not an infringement of copyright”).  This lawsuit looks bad for other reasons too, as one could seemingly perceive it as an attempt by Righthaven to quell commentary about its litigious activities.

Even more confounding, however, is that the majority of Righthaven’s lawsuits (that I am aware of, at least) come from its newspaper clientele.  If we take a momentary trip to upside down world, where this lawsuit wasn’t dismissed and the fair use argument failed in court, Righthaven would have obtained a ruling that is rather antithetical to the same principle that its client-newspapers rely on for commentary and reporting in their own publications.

Comments Off Posted in: Commentary, Links on March 29, 2011

FCC approves Comcast – NBC merger

Today, the FCC announced their approval [CNET article] of the Comcast/NBC merger, after a 4 to 1 vote in favor of the merger.  According to the announcement [via FCC.gov], the FCC only approved the merger after NBC/Comcast agreed to a number of restrictions, which will be enforced for a period of seven years following the merger.

The FCC’s 3-page announcement provides an overview of the conditions in bullet point form.  Here’s a few interesting points (that I noted after a quick skim) which pertain to “Protecting the Development of Online Competition”:

  • that Comcast/NBC provide “any affiliated content that Comcast makes available online” to its own subscribers at “fair market value and non-discriminatory prices and conditions” to customers of other online video service.
  • that Comcast/NBC offers a broadband service at “reasonable prices and of sufficient bandwidth” so that customers do not need a cable television subscription through Comcast/NBC to view online videos and the like.
  • that Comcast/NBC does not enter into agreements that unreasonably restrict online distribution of video programming
  • that Comcast/NBC does not “disadvantage rival online video distribution through its broadband Internet access services and/or set-top boxes”
  • that Comcast/NBC does not “unreasonably withhold programming from Hulu”

Read the announcement for the rest.

There is a lot of information to digest related to this deal and it’s still early in the process.  So,  I would expect to hear a lot more about it in the coming weeks. In the meantime, check out Commissioner Michael J. Copps dissenting statement on the vote.  Copps was the only commissioner to vote against the combination.

Related:

Comcast’s Blog Post on the FCC announcement.

1 Comment Posted in: Commentary, Links on January 18, 2011

The legality of denial of service attacks

With all the banter about Wikileaks and the reports of attempted DDoS attacks, I thought this might be a good time to explore some of the legal issues that can follow DoS activity. As usual, this isn’t meant to be a comprehensive practice guide or constitute advice.

First, for a primer on denial-of-service (DoS) and distributed-denial-of-service (DDoS) attacks, read the Wikipedia article — it’s easy to follow. In the simplest terms, a successfully orchestrated DoS or DDoS attack results in an overloaded network device (e.g., a webserver) such that the device ceases responding to requests for activity or functions intermittently for the duration of the attack.

In the United States, participants in these attacks can run into a number of legal problems at the Federal level, both criminally and civilly. For our purposes, there is no need to distinguish the “distributed” form of the attack from the singular (i.e., DDoS vs. DoS), since, as you will see below, a culpable person is one who merely directs the attack at a target.

In terms of criminal violations, there’s the Computer Fraud and Abuse Act (the “CFAA”), which prohibits a person from “knowingly caus[ing] the transmission of a program, information code, or command, and as a result of such conduct, intentionally causes damages without authorization to a protected computer” (see 18 U.S.C. § 1030(a)(5)(A)). The requisite “damage” element under the CFAA is “any impairment to the integrity or availability of data, a program, a system, or information” (see 18 U.S.C. § 1030(e)(8)) and a “protected computer” is defined as a computer “which is used in or affecting interstate or foreign commerce, including a computer located outside the United States that is used in a manner that affects interstate or foreign commerce or communication” (see 18 U.S.C. § 1030(e)(2)(B)).

DoS attacks almost unquestionably fall under the broadly-worded prohibited activity in this portion of the CFAA (“transmitting … information, code, or command”) and would likely meet the low standard of damage (“any impairment to the integrity or availability of data, program, system, or information”). The CFAA may also apply to unsuccessful attempts (see 18 U.S.C. § 1030(b)).

The CFAA also has a civil component that permits “[a]ny person who suffers damage or loss by reason of a violation of this section may maintain a civil action against the violator to obtain compensatory damages and injunction relief.” In other words, the target of the DoS attack can sue the individual(s) who were responsible for the damages incurred as a result of the attack (e.g., server downtime, costs to repair, and in some lost revenue (see 18 U.S.C. § 1030(g)). There is a limitation that requires the damages exceed $5,000; however, some courts have liberally construed its calculation to include consultation services (e.g., IT/security persons) used to assess the extent of damage caused by the attack.  Also, this provision does not require that a person ever be convicted before being sued for damages.

Private parties that are an intermediary along the vector of attack (e.g., an ISP) may also have additional legal options available at the state court level. Since most U.S. homes connect to the internet through an ISP, like Comcast, their usage of Comcast’s services are likely subject to a “terms of service” agreement that prohibits DoS attacks and other illicit activities. For instance, the Comcast Terms prohibits “undertak[ing] or accomplish[ing] any unlawful purpose” including “interfer[ing] with computer networking or telecommunications services service to any user, host or network, including, without limitation, denial of service attacks, flooding of a network, overloading a service, improper seizing and abusing operator privileges, and attempts to ‘crash’ a host.” Since these terms are a legal contract, it is possible for an ISP to sue a subscribe/user for breach of contract.  Similarly, if the target of a DoS attack is a website, website visitors may also have their own terms of service agreement with similar contractual prohibitions. For instance, PayPal’s terms prohibit users from “tak[ing] any action that imposes an unreasonable or disproportionately large load on our infrastructure” under the “Restricted Activities” section. The PayPal terms also list a number of potential remedies that the company may pursue legal action for violations — which might include a lawsuit for breach of contract or even on a “trespass to chattels” theory.

Finally, one last  point, social websites like Facebook also contain provisions within their terms of service agreement that prohibit certain types of unlawful activity (e.g., “you will not use Facebook to do anything unlawful, misleading, malicious, or discriminatory”). Although it would be unlikely for a company to be charged with a crime under the CFAA (at common law corporations usually lack the requisite criminal intent) for unknowingly hosting a group that encourages participation in DoS attacks, once aware, they most certainly do not want to find themselves defending their lack-of-action to an unlawful situation or face a civil lawsuit filed by the target website (though, it would probably take very unique facts to be successful on the merits).  So, it comes at no surprise that Facebook took the risk-averse approach this week by terminating groups that encouraged participation in DoS attacks.

I hope this post clears up some of the misconceptions I’ve heard in passing this week.

Comments Off Posted in: Commentary on December 12, 2010

The Borings win $1 from Google Street View lawsuit

Remember Mr. and Mrs. Boring?  The Pennsylvanian couple making headlines? … no?

In 2008, they found out that Google Street View allowed users to see into their property from a private drive next to their home.  In response, they sued Google for invasion of privacy and trespass.  This week, they’re back in the news again.

For the last two and half years, the case has crawled through the legal system.  In February 2009, the District Court for the Western District of Pennsylvania granted a 12(b)(6) motion to dismiss  in favor of Google (read the order here), for failure to state a claim.  The Boring’s invasion of privacy claims were rather dubious from the start.  A plaintiff generally needs to establish that the invasive act caused “mental shame, suffering, or humiliation” that a person of “ordinary sensibilities” would have suffered in the same instance.  Without this, a mere photograph of a residential structure, even when taken from private property, without any visible persons, is not likely to pass the threshold motion to dismiss stage of a lawsuit.

The Borings appealed the dismissal to the 3rd Circuit, which partially reversed the District Court’s ruling in February 2010.  However, the only claim reversed was the trespass claim.  Common law trespass is a tort that governs interference with rights associated with real property,  personal property, and certain personal rights.  The Borings’ best claim here is that the Google car with the mounted camera committed trespass to land when it snapped the photographs.  In fact, the photographs appear to offer strong evidence in support of this theory since it would have been difficult for the photographs to have been taken by the vehicle from any area other than the private drive.  As I noted last February at the Citizen Media Law Blog, trespass to land claims aren’t much of a risk to the longevity of Google Street View, so long as Google cars aren’t driving across everyone’s front yard.

Trespass to land is simple to understand; it only requires that a person voluntarily enter the property of another without consent.  But, just because the Borings might have a “good case” on a trespass to land theory, it doesn’t mean they are entitled to millions of dollars.  The trespass by the Google car didn’t appear to have caused any actual harm to the property, structures or items on the property, or persons.  Also, since the Borings couldn’t establish that they any suffered mental shame, suffering, and humiliation, the fact that the Google car may have been trespassing on private property while capturing images doesn’t revive the invasion of privacy claims.

In these cases, if you really feel strongly about the “principle of the matter” as the Borings seem to, it’s possible to be awarded “nominal damages,” which is akin to saying: “yes, you’re technically correct, but you haven’t suffered any harm worthy of compensation, so here’s a token for the violation of your right.”  Considering how expensive it is to obtain a lawyer, file a lawsuit, and pay the associated costs of the filing the suit, it’s not very surprising that you don’t often hear about nominal damages being awarded these days.

One last thing.  The award of $1 in this case was actually a “consent judgment” which is procedurally distinct from the damage awards issued by juries that you probably hear about on the news.  Consent judgments are usually negotiated settlements between the parties that are adopted by the judge and recorded as part of the case.  One purpose of doing this is to bind the parties to the judgment and invoke res judicata on the claims — which prevents the Borings from suing Google again with identical legal claims based on the same facts.

On that note … I should get back to scanning for more sidewalk baby births caught by Google cameras while I finish lunch.  Happy Friday.

Comments Off Posted in: Commentary, Links on December 3, 2010

Capitol Records, RIAA v. Jammie Thomas-Rasset: Take-3

Yesterday, the third installment in the Jammie Thomas-Rasset case began in the district court of Minnesota.  As has been noted by several others, this case only involves the issue of damages, not liability.

Recall back in 2009, a jury found Ms. Thomas-Rasset liable for infringing the copyrights on 24 songs and awarded the record company $1.92 million dollars in statutory damages.   On granting a motion for remittitur, Judge Michael Davis reduced the damages to $54,000 noting that the statutory damages must bear some relation to the actual damages incurred by the plaintiffs.

When a judge reduces damages on remittitur, the plaintiff then has two immediate procedural options:  accept the reduction or have a new trial on the issue of damages.  In this case, Capitol Records opted for the new trial.

Since the previous trial already resolved the issue of liability, the only issue before the jury in this case is the amount of damages that should apply. At the heart of this issue are the “statutory damages” provisions in the Copyright Act, which lay out a spectrum of damages per instance of infringement.  If the infringement is proved to be “willful,” as was the case in the Thomas-Rasset trial, the spectrum is $750 – $150,000 per instance of infringement.  Since there were 24 songs at issue, that’s 24 instances of infringement.  For Ms. Thomas-Rasset, this means the jury can award Capitol Records somewhere between $18,000 – $3.6 million.

Since this is an abbreviated trial, I would expect arguments and witness examinations by the attorneys to conclude quickly–probably either today or tomorrow. Then the Judge Michael Davis will issue jury instructions and send the jury off to deliberate over the award of damages.   Updates will be posted as soon as they are known.

Huge thanks to Ars Technica for their endless coverage.

Comments Off Posted in: Commentary, Links on November 3, 2010

US argues that genetic material is not patentable in ACLU v. Myriad

The New York Times reported last Friday, October 29, 2010, that the United States has filed a brief, as an amicus curiae, in ACLU v. Myriad Genetics case which is currently on appeal before the Federal Circuit.  This follows the March 2010 landmark ruling by a federal district court in New York (see our related posts here and here) which invalidated several patents claims over isolated and purified genetic material and certain diagnostic processes related to BRCA 1 and BRCA 2 (tumor suppressor gene and protein linked to breast and ovarian cancers).

The brief was filed on behalf of the United States by the Department of Justice’s Antitrust Division. As noted by the NYT, the most surprising takeaway is the brief argues that isolated but otherwise unmodified or untransformed human genetic material is not “patentable subject matter” because it is a product of nature. This argument is a rather sharp contrast to the prior policies of the USPTO which routinely granted patents for isolated genetic material after the famous Diamond v. Chakrabarty Supreme Court decision issued in 1980. The brief also argues in tandem that certain types of genetic material, such as cDNA, vectors, recombinant plasmids, and chimeric proteins, that do not otherwise exist but for human ingenuity and intervention, are patent eligible subject matter. More importantly, the brief uses this logic to argue that several claims in the Myriad patents related to cDNA were incorrectly invalidated by the SDNY in March.

Overall, the brief seems to be well reasoned. In particular, I think the DOJ is correct in that many of the points of law on appeal could be easily addressed by Diamond v. Chakrabarty and by some dicta from the recent Bilski v. Kappos decision.  I wouldn’t be surprised if the Federal Circuit resolves the case on very similar grounds to those argued in the brief. However, I suspect that the case will continue to play out as a major courtroom and media drama and continue its route on appeal to SCOTUS who, by the way, will eventually remind us that this is a legislative problem that needs to be addressed by Congress and not by legislation from the bench.

Also, in case you are unfamiliar with the concept of amicus briefs, here’s a little background on amici curiae. Amicus curiae (or amici in the plural) is a latin legal term which means “friend of the court.” Amici are people or organizations who interject information, which usually highlights or raises awareness of a certain legal, factual, or policy issues that might otherwise go unnoticed on appeal. More often than not, these briefs are filed at the appellate level—I have been told some courts accept amicus curiae briefs at the district or trial court level too, but I think it’s rare.

Amicus curiae briefs can argue partisan issues of interest to the litigants (i.e., take a side) or help a party by simply supplementing legal points from an neutral outsider’s perspective.  Regardless of what is argued, these briefs usually help the presiding judges consider multiple legal viewpoints that are affected by the case but not necessarily at issue between the litigating parties immediately bound the decision. Before filing a brief, the amicus curiae must have the consent from all litigating parties or have been granted permission from the court, directly, to file a brief.  There are also circumstances in which a court may solicit amicus submissions on particularly complicated or controversial issues. After a brief has been filed, there aren’t any specific rules that require the judges take the substantive points into consideration in their final opinion, but arguments on significant policy issues tend to be acknowledged in final opinions. (More rules/background on these amicus curiae briefs available in Fed. R. App. P. 29).

1 Comment Posted in: Commentary, Links on November 1, 2010

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