Archive for December 2009

1,200 TV Stations Sue BMI Over Music License Fees

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The topic of music royalties has come up time and again in 2009, from the introduction of the Performance Rights Act, currently making its way through Congress, to various digital performance royalty rate disputes, from Internet broadcasts to satellite radio.

To end the year in music royalties and law, and to help open up 2010, on the week of December 21, 2009 the owners of about 1,200 “local” television stations filed a lawsuit against performing rights organization Broadcast Music, Inc. (BMI) seeking “lower broadcast fees to reflect declining television viewership and advertising revenue,” according to a report from music industry news publication Billboard.  The suit, WPIX v. BMI, was filed in U.S. District Court, Southern District of New York.

The plaintiffs, who have periodically renegotiated the rates with BMI, now state that a federal judge should “set reasonable fees and terms” because of a decline in television viewership and advertising revenue, according to Businessweek.  According to the Businessweek article, the “television industry will end the year with lower-than- expected revenue of $15.6 billion, a 22.4 percent decline from 2008.”

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December 31st, 2009 at 4:46 pm

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Stud or Dud: How much should your date know?

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It is a fair guess that just about anyone uses the Internet regularly has run some kind of search on themselves, a future employer, their co-workers, etc. Reviewing a Facebook profile or Googling a name are two common techniques. Capitalizing on this sleuthing, several companies now offer or are developing cell phone applications that will deliver far more detailed reports on prospective romantic partners. Stud or Dud promises bankruptcies, stable address histories, marriages and divorces, property ownership, criminal/sex offender records, business licenses, evictions, and “other useful facts.” Are They Really Single, an application from the same developer, will provide marriage and divorce records. Similarly, DateCheck will provide criminal offenses, home details including square footage and taxes, educational background, the names and ages of all persons living at their address, horoscopes, and much more.

In an interview with CNN, Bryce Lane, president of PeopleFinders Network, said that all information was publicly available and had just been combined into one database in order to facilitate accessibility. But the increased accessibility raises many areas of concern. For instance, a man who learns a woman’s name – and nothing but her name – at a bar can use one of the above sites to identify current or previous roommates and pressure them for information regarding that woman. The comments on one blog suggest that such concerns are not likely to weigh heavily on the target audience: readers of Rosa Golijan’s post on the applications commented far more frequently on her musings about which boyfriend took her stockings than on her reference to “creepy” stalkers taking advantage of the applications. To take another example, an employer might not be able to resist the ability to easily access this information when making employment decisions, even if they may not be able to legally rely upon the information.

The potential for misuse of the information is only compounded by the potential for confusing one person with another, especially since the misidentified person has no way of knowing that someone has accessed inaccurate information regarding them. A search on Stud or Dud for the author’s full name disclosed her correct age, place of birth, and the full names of her parents. But searching for the author’s phone number turned up a 107-year-old Georgia women with a very large family. A potential date or employer might not confuse those two, but what about the potential for confusing one of the more than fifty John Smith’s in Ann Arbor, Michigan? Let us say that there are two John Smith’s in the same Ann Arbor zip code who are between 45 and 55; we’ll call them JS1 and JS2. JS1 has a mortgage on one residential property at which he has lived for the past twelve years, has always filed his taxes on time, and is married. JS2 filed bankruptcy at least once in the past, has moved frequently throughout the midwest region in the past six years, and rents an apartment with two roommates. A potential employer wishes to hire someone for a position that requires allocating and tracking financial resources, and the employer hopes that the new hire will remain in the position for at least three years. The employer would likely prefer someone with JS1’s profile, but the employer running a search on one of the above sites might confuse JS2’s profile with JS1’s and deny JS1 the position. JS1 would never know the employer’s search and so would not be able to correct the error.

Paul Stevens of the Privacy Rights Clearinghouse argues that that the above problems could be mitigated if information brokers were subject to the same or similar regulations as the Fair Credit Reporting Act. In particular, Mr. Stevens wants free annual disclosures to individuals, the right to dispute inaccurate information, and time limits on reporting adverse information. See also Online and Offline Collection of Consumer Information: Hearing Before the Subcomm. on Commerce, Trade, and Consumer Protection, 111th Cong. (2009) (testimony of Pam Dixon, Executive Director, World Privacy Forum). Lane does point out in his CNN interview that individuals can have their information removed from his sites, although he suggests that only “criminals” would do so.

Other concerns are rooted in a more visceral feeling that most people do not need the information that is now at their fingertips. A bank considering whether to finance a loan has good reason to know how many properties the applicant has. The promoters of DateCheck (“look up before you hook up”) would likely argue that a woman at the bar has a strong interest in the martial status of the man who just bought her a drink. But an idly curious co-worker or classmate? The undeniably correct assertion that this information is publicly available does not necessarily justify the ease with which it can be accessed. In the past, it took some effort to obtain the information: a call to the relevant records departments, maybe a delay before delivery. Though it was not the goal of the systems by which information could be obtained, the inconveniences may have limited access to those with a strong motivation to know. Perhaps, as Lane suggest, in an age where we meet new people at a rapid pace without any means of confirming their backgrounds, we do need some means of confirming the information they provide about themselves. Or maybe we should slow down a little and establish some relationships the old-fashioned way? If the latter, consumers will require at least some greater control over the information made available through information brokers, whether that information is packaged as a dating tool or in some other format.

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December 31st, 2009 at 4:09 pm

Sexting at Work: Right to Privacy?

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The Supreme Court granted certiorari to City of Ontario v. Quon on December 14, 2009 (No. 08-1332).

Quon was a SWAT member who had sent and received text messages on his work-issued pager. While the city’s written policy was that employees should have no expectation of privacy when using their work network, the supervising lieutenant who had issued the pagers had an informal policy that employees could use them for personal communications and their messages would not be inspected as long as they personally paid for any overage fees. However, when the higher-ups decided to audit the texts to determine if they should increase the texting allotments with the outside service provider, they read transcripts of Quon’s sexually explicit messages to his wife and someone it appeared he was having an affair with.

Quon, his wife, his alleged girlfriend, and another employee sued the city, claiming Fourth Amendment violations. The Ninth Circuit found that the employees had a reasonable expectation of privacy in the content of their text messages because the formal policy was in effect overridden by the supervisor’s informal one. It also determined that the search was unreasonable because there were less intrusive ways to investigate the employees’ personal usage levels.

The main issue is whether Quon, as a public employee operating under this informal policy, is protected by the Fourth Amendment against warrantless searches of the content of his text messages because of a reasonable expectation of privacy. The other issue is whether the sender of a message to a government employee on the employee’s work device (i.e., Quon’s wife) has an a reasonable expectation of privacy from employer review.

In O’Connor v. Ortega, 480 U.S. 709 (1987), the Supreme Court dealt with similar issues of employees’ right to privacy in the workplace. The plurality opinion, written by Justice O’Connor, found that there was a reasonable expectation of privacy in the public workplace, but also that a balancing test of “the employee’s legitimate expectation of privacy again the government’s need for supervision, control, and the efficient operation of the workplace” should be applied to determine whether a search is reasonable. Scalia concurred with a broader take on privacy. While the justices couldn’t all agree on whether the employee had a reasonable expectation of privacy in his office, all of them agreed that he had a reasonable expectation of privacy in his desk and file cabinets.

How to apply O’Connor‘s holding to electronic communications is one of many questions courts face with our evolving use of technology in the Internet age. Some courts still try to analogize this to wire-taps on phones; anyone with a BlackBerry would disagree. Laptops, cellphones, pagers, and other digital devices are used so ubiquitously that today the line between personal and non-personal communications is blurred.

Will the Court be as divided as in O’Connor? The Court has changed since then, and of the five for public employee right to privacy, only Scalia remains. It’s expected that Sotomayor will side with the employer in Quon. She previously ruled in a 2001 case that a workplace search of an employee’s computer was reasonable, balancing the “modest intrusion” with the “need to investigate allegations of improper conduct.”

While whatever the Court decides here will only be binding on government employers (who would be subject to Fourth Amendment restrictions), it is very likely that lower courts will be applying this to private employers as well.

[ Washington Post: Supreme Court will decide whether employees’ text messages are private ]

[ Wall Street Journal: Supreme Court to Review Employer Access to Text Messages ]

[ Double X: No more Sexting with Sotomayor on the Court ]

[ Oyez case summary of O’Connor v. Ortega ]

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December 31st, 2009 at 4:09 pm

Protecting Traditional Medicines from Biopiracy

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As biotechnology continues to expand the boundaries of medical treatment, it is important to protect the traditional medicines used and developed over hundreds of years by communities around the world. To that end, the Indian and U.S. government have recently taken steps to ensure the protection of intellectual property of traditional knowledge and medicines.

The goal of both actions is to limit the misappropriation of traditional knowledge through mistaken issuance of patents, also known as “biopiracy.” In a press release, Sharon Barner, Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the USPTO, said “The USPTO has long been concerned about attempts to patent traditional knowledge, not only because it may result in an incorrectly granted patent, but also because it removes knowledge from the public domain.”

In a Memorandum of Understanding between India’s Department of Industrial Policy and Promotion and the U.S. Patent and Trademark Office, the countries agreed to bilateral cooperation on protecting intellectual property rights of traditional medicines.

In addition to the Memorandum, India provided access to their newly developed Traditional Knowledge Digital Library (TKDL) a research tool containing 2000,000 traditional medical formulations. Developed by India’s Council of Scientific & Industrial Research and the Department of Ayurveda, Yoga & Naturopath, Unani, Sidda and Homeopathy, the database currently comprises 30 million pages and has been translated into English, French, German, Japanese, and Spanish. TKDL could provide U.S. patent examiners with the needed evidence to deny a patent application claiming a new invention for what is in fact traditional knowledge, something they have failed to do in the past.

After the US and European Union granted of patents for the wound-healing properties of turmeric and pesticidial uses of seeds of the neem tree, Indian scientists argued the patents were biopiracy. Both turmeric and the neem tree (which is native to India) have been used in India for thousands of years. Through protracted legal battles, India successfully had both patents revoked.

Continued steps by both developed and developing countries, such as the ones recently taken by the Indian and U.S. government, are vital to ensure that traditional knowledge will continue to be available in the public domain. The TDKL is one of numerous databases and other tools that U.S. patent examiners will now have at their disposal deciding to accept or reject patent application that might conflict with traditional knowledge and medicine.  As the economy grows increasingly more global, it is imperative that traditional medicine and knowledge is safeguarded from biopiracy. Collaboration between countries on the issue is certainly a step in the right direction.

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December 31st, 2009 at 4:09 pm

Posted in Commentary

Court Dismisses AT&T’s Trademark Claim Against Verizon

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When AT&T sued Verizon Wireless for its “There’s A Map for That” advertising campaign,

AT&T could have brought a dilution claim against Verizon’s use of the slogan, “There’s a map for that,” which is very similar to AT&T’s slogan, “There’s an app for that,” featured in its own iPhone commercials.

In bringing a dilution claim, AT&T could have argued that Verizon’s use of “There’s a map for that” weakened the effect of AT&T’s slogan because consumers would no longer think exclusively of AT&T when hearing the phrase. It seems like AT&T would have had a good argument for dilution, but instead, it sued Verizon for false advertisement under the Lanham Act, federal trademark law.

The ads themselves feature two maps comparing AT&T’s 3G network coverage area to Verizon’s superior 3G coverage area. AT&T asked the court to stop Verizon from running the ads because they could mislead customers into thinking AT&T doesn’t offer any coverage in areas where its 3G network isn’t available. (In reality, customers can still make calls and access the Internet using AT&T’s slower EDGE or GPR networks, even where there isn’t 3G network coverage.) Verizon, on the other hand, argued that the ads simply point out that AT&T hasn’t invested enough in upgrading its network to handle new smartphone activity from the popular Apple iPhone.

In its response to AT&T’s complaint, Verizon wrote: “AT&T did not file this lawsuit because Verizon’s ‘There’s a Map for That’ advertisements are untrue; AT&T sued because Verizon’s ads are true and the truth hurts.” Verizon also pointed out that the Lanham Act requires AT&T to show actual proof that the ads are misleading consumers because First Amendment free speech is at stake in the suit. Verizon continues:

As to four of the five challenged ads, AT&T has presented no evidence of consumer deception. This alone is a sufficient basis to deny AT&T’s motion as to these ads. As to the one ad . . . AT&T commissioned a consumer survey . . . . But this survey is riddled with errors.

Apparently the court agreed. Judge Timothy C. Batton, a federal judge in Atlanta, declined to grant AT&T a preliminary inunction that would temporarily stop Verizon from running the ads. He stated that he didn’t believe AT&T would succeed in its claim based on the evidence submitted. The judge said:

I think that a person with a skeptical bent of mind might call Verizon’s ads sneaky . . . . I think a more sanguine view is that they are simply clever. Either way, however, they are literally true. And the Court holds that AT&T has failed to carry its burden of showing that they are nevertheless misleading.

Immediately following the court’s ruling, AT&T indicated that it would continue with the suit despite the initial loss, but it has since decided to drop the claim.

Perhaps AT&T realized that after its own expansive advertising campaign touting its network as the “fastest 3G network” (implicitly comparing it to Verizon’s coverage and other secondary competitors’ — such as Sprint and T-Mobile), it isn’t likely to garner much sympathy in its claims against Verizon. The bottom line is that Verizon’s maps of AT&T’s 3G network are accurate. If AT&T wants to say its 3G network is faster than Verizon’s, why shouldn’t Verizon be able to say its own coverage is more expansive than AT&T’s? Maybe AT&T realized that it should stop sinking its money into law suits and instead use it to fill those gaps in its coverage. Federal trademark law is meant to protect against false advertising, but this should promote fair competition, not hinder it. Therefore, Verizon’s ads, if accurate, should encourage AT&T to improve its service. This type of competition, in a free market, will hopefully produce the best quality products at the lowest prices for consumers.

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December 31st, 2009 at 4:07 pm

New Legislation Targets Unsolicited Text Message Ads

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New Jersey senators Joseph Vitale and Sean Kean have proposed legislation that would impose heavy fines on entities that sent unsolicited text message advertisements. Though the Telephone Consumer Protection Act was enacted prior to the advent of text messaging, such unsolicited text message ads have recently been found to fall under the TCPA. The 9th Circuit has declared this interpretation of the FCC to be reasonable and other circuits are likely to follow. The FCC prohibitions, however, do not include all text messages; rather, they only prohibit those sent from an internet domain name. Messages sent from cell phone to cell phone are exempt.

Vitale and Kean’s bill provides that fines will only be levied in two instances: if the text message causes the recipient to incur a fee or decreases the number of text message the recipient is allocated by his cell phone provider. The fines, only imposed if the advertiser sends more than one per year, are very steep; $10,000 for the first offense, $20,000 for subsequent offenses, and $30,000 if the advertiser knew or should have known the recipient was disabled or elderly. The bill also contains a provision requiring all phone companies to offer New Jersey consumers the option of blocking all incoming and outgoing text messages. Senator Vitale explains the motivation of the legislation, “We have to do a much better job in New Jersey to protect consumers from unsolicited text advertisements which can drive their cell phone bills through the roof.”

Certainly the New Jersey bill correctly recognizes the need to close the loopholes in the FCC’s regulation; however, it is still deficient. Firstly, in many cases it would be impossible to determine whether an advertiser knew or should have known if the recipient was disabled or elderly. The bill contains no guidance on what type of inquiry, if any, the advertiser should undertake to determine if the recipient falls into one of those categories. In many cases, it seems unlikely the advertiser would have enough information to know the recipient’s status. If the bill’s intent is to protect these groups, the additional fee should be levied regardless of the advertiser’s knowledge; otherwise, it is unlikely they will ever be subject to this additional fine.

More importantly, under the terms of the bill, unsolicited text messages to a recipient who had an unlimited text messaging plan would be permitted; a consumer with an unlimited plan would not incur a fee or a decreased number of available messages. Thus, the bill does not properly deal with the nuisance of unsolicited texts, rather it only recognizes the monetary cost. Such a stance is unreasonable; a consumer would have to receive a massive amount of unsolicited ads for any real cost to be incurred. Sprint, AT&T and T-mobile charge only twenty cents per text message. Most consumers would not be aggravated by this minimal charge, but rather at the annoyance of unsolicited contact. The bill should be amended to prohibit all unsolicited text ads, even if the consumer suffers no monetary loss. With this alteration, the bill would operate as an effective deterrent.

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December 31st, 2009 at 4:05 pm

FCC re-examines cableCARD as part of the national broadband plan

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Most people don’t think of TV when the subject of broadband internet comes up.  That may change if the FCC gets its way.  The commission is currently reviewing some of its TV policies as part of its National Broadband Plan to encourage nationwide adoption.  Last month, an FCC task force identified several current hurdles to overcome, including what it calls the “Television Set-Top Box Innovation Gap.”  The focus on television comes from a task force finding that 99% of American households have television sets, while only 76% have computers.  Despite the relative ubiquity however, the task force notes that current innovation is limited with regard to the convergence of video, TV, and internet-based services.

This may be due to the fact that cableCARD has yet to meet its goals under the  Telecommunications Act of 1996.  Under the act, the FCC has authority to ensure that cable and satellite television networks are open to third-party devices.  Similar to the earlier Carterfone decision (allowing customers to connect third-party phones to the AT&T network), the goal is to foster innovation through competition.  Roughly the same size and shape to a laptop PCMCIA card, a cableCARD can be inserted into a compatible device, like a TiVo,  and allows it to access encrypted video content such as video on demand or HD channels without requiring a separate cable box.  Since the TiVo could also be connected to the internet, the ability to combine the two sources has potential for a number of interactive applications.  Despite this, adoption has been slow and cableCARD devices have not yet achieved significant market share.

As a result, the FCC announced earlier this month that it is seeking public comment on methods to bridge the set-top box gap.  Specifically, it stated that cableCARD “has not achieved its intended result” and therefore the commission is considering other options.  This might result in a modification of the current standard, or may involve scrapping cableCARD in favor of a whole new standard.  The FCC has already received numerous suggestions, ranging from complete overhauls to tweaks of the existing standard.  It will be very interesting to see what direction the commission decides to take when they submit the final plan to Congress in February.

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December 31st, 2009 at 4:05 pm

Cloud Computing: Risks and Regulation

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Cloud computing, though its definition can be expressed in a more detailed manner, is basically the next generation of IT systems organization, where data and applications are centrally accessible through individual portals such as laptops or desktops.  Many popular sites operate on a cloud computing model, including Facebook and Google Docs.   Earlier this year, the announcement that the U.S. government would be moving toward cloud computing raised the profile of this rapidly developing phenomenon.  By adopting a cloud computing model, the government highlighted the increased efficiency that cloud computing can produce, but also brought to the forefront some of its problems, including security and privacy risks and the difficulties posed by questions of how, or whether, to regulate this form of systems organization.

In Security in the Ether, David Talbot examines the expected expansion of cloud computing and the potential security risks posed by such computing.  Major security risks are implicated by storing data on remote servers also used by third parties, who may be able to access the data.  Providers of cloud computing services are working to increase security with more sophisticated methods of encryption.  Because cloud computing will most likely grow in popularity, and become popular amongst entities such as banks and health care providers that deal with sensitive information, cloud computing represents an area in which the government may wish to regulate the storage, protection, and use of information.

The aggregation of more and more data into fewer and fewer places provides an environment for government regulation that the internet thus far, with its seemingly infinite reach and scope, has not.  Most government regulation of information use, such as the Red Flags Rule requiring businesses to track their own information for signs of identity theft, has involved a particular provider of services monitoring its own information for potential misuse.  Large scale cloud services providers, whose servers will provide data processing and storage for numerous entities, could present an easier method of regulation of information.  In addition, because of the large amounts of data involved and the security risks posed by data centralization, the government has a strong incentive to regulate cloud computing providers.

Government involvement in cloud computing could prove problematic.  The incentive to regulate also invites the risk of over regulation.   Government regulation regarding the use and dissemination of information, though intended to increase security for individuals, could stunt technological innovation and decrease the efficiency of cloud computing.  Jonathan Zittrain, co-director of Harvard’s Berkman Center for Internet and Society, points out that the freedom and experimental nature of the internet are at risk with the rise of cloud computing.   In addition to risks posed by over regulation, cloud computing poses significant Fourth Amendment concerns.  Legal precedent for privacy rights of information stored in clouds is murky at best because of the sophisticated technology involved.  As cloud computing continues to increase in popularity, policy makers will need to balance the interests of individuals in the privacy of their data with the interests of the government in having access to that data, the interests of these same consumers in a more efficient, free, and innovative internet, and the interests of businesses that provide and utilize cloud computing services.  Any government action that does not balance these competing interests will work to the detriment of developing the next generation of systems organization that further realizes the potential of the internet.

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December 31st, 2009 at 4:04 pm

The Big Test – Proposed Comcast and NBC Universal Merger

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The proposed merger between Comcast and NBC Universal is a major test for the Obama administration’s positions on vertical mergers and media consolidation.  Comcast has already made some commitments to aid it during the review process, which is likely to take at least a year.  These commitments include continuing free over-the-air broadcast of NBC and Telemundo as well as enhancing availability of children’s programming and Hispanic-focused content through on demand capabilities and some use of the digital spectrum available to various channels.

The big questions left are how the Obama administration will react to the proposed merger and what conditions might be placed on the merger once its terms become more concrete.  The merger would see a significant combination of internet service provision, television programming distribution, television programming production, and news gathering into one entity.  At the very least, Comcast’s position as “one of the nation’s leading providers of cable, entertainment and communications products and services” is certain to raise a lot of questions during the review process.

An interesting effect of entering the review process is how Comcast’s need to enhance its image to aid in regulatory agency approval, and how this might affect the ability of other television networks to demand better retransmission terms from Comcast.  It is entirely possible that Comcast may have to take a softer line in its negotiations and pay more for local broadcasts than it has in the past, in order to help convince regulatory agencies that the merger will not have anticompetitive effects.

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December 31st, 2009 at 4:03 pm

Microsoft Word Injunction and Damages Upheld in the Federal Circuit

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A three judge panel of the Court of Appeals for the Federal Circuit recently upheld the injunction against Microsoft that goes into effect January 11, 2010.  The panel also upheld the nearly $300 million in damages from the U.S. District Court for the Eastern District of Texas.  The injunction will bar Microsoft from selling versions of Word that contain the ability to open documents with “custom XML.”  The injunction does not affect any versions of Word sold before January 11, 2010, but does prevent Microsoft from “instructing or assisting new customers in the custom XML editor’s use.”  Technical support can still be offered by Microsoft from versions of Word sold before January 11.  Regardless, Microsoft has said that it is ready to remove the infringing feature from copies of Word and Office that will be sold after January 11.  The upcoming 2010 versions of Word and Office should not have the infringing feature, and thus should be unaffected by the injunction.

The only changes to the injunction by the panel were a modification of the effective date of the injunction, from the original 60 days (stayed during appeal) to 5 months from the original issue date of the injunction.  This was because the panel determined that the district court erred in setting a time frame of 60 days, when the only evidence concerning time to remove the infringing XML functions from Word was “at least” 5 months.  As Microsoft has said, it initiated steps in August to remove the infringing feature, so the change in the effective date of the injunction should have little practical impact.

In regard to the damages, most significant is the $200 million damages for royalties.  The panel even admitted that, “Given the opportunity to review the sufficiency of the evidence, we could have considered whether the $ 200 million damages award was “grossly excessive or monstrous” in light of Word’s retail price and the licensing fees Microsoft paid for other patents.”  The opinion makes it sound as if the panel, if able to review sufficiency, would have significantly reduced the royalty damages.  This is because the baseline royalty rate used by i4i’s expert witness to calculate damages was $98, when certain Word products could sell for as low as $97.  On a sufficiency review, it seems entirely possible that the baseline royalty used was grossly excessive and monstrous, since it could be greater than the entire selling price of a single copy of Word.  Further, Microsoft told the court the typical license it paid to use a patent was in the $1 – $5 million range, something completely out of line with the i4i calculations of $200 million.  But the panel stated it was unable to review the sufficiency of the evidence, as Microsoft had failed to file a pre-verdict judgment as a matter of law motion, restraining the panel’s review to the standard of a clear showing of excessiveness.  The panel even seemed to question Microsoft’s failure to file a pre-verdict JMOL motion as to the sufficiency of the evidence for the damages, stating, “Had Microsoft filed a pre-verdict JMOL, it is true that the outcome might have been different” because then the panel could decide “whether there was a sufficient evidentiary basis for the jury’s damages award.”  Given the panel’s statements, Microsoft might have blown its chance to have the damages significantly reduced on appeal by deciding not to file a JMOL motion for sufficiency of the evidence as to damages.

It also seems as if i4i’s decision to file in Texas has paid off, after gaining some measure of approval from the panel of the Court of Appeals for the Federal Circuit.  I don’t know if I would go so far as to call the panel’s opinion “a complete and utter vindication of the judgment,” given the statements of the panel regarding the royalty calculation and the limited level of review available for the findings of the jury, but it does give some credence to the inability of an appeal to alter the jury verdict.  While Microsoft’s loss on appeal may not make the district court’s decision completely right, it may well signal the verdict’s irreversibility.  The Federal Circuit may well refuse a request for a full hearing, as the decision clearly sets out the limits of appellate review in this case.

The size of the verdict against Microsoft makes you wonder why they didn’t just license the patent from i4i back in 2000, when Microsoft was aware of i4i’s presence in the market, or even at the start of litigation in 2007.  At this point, there appear to be very few reasons for i4i to consider talking with Microsoft about licenses or settlement, as i4i looks to have a winning case and a firm hold on nearly $300 million from Microsoft.