Archive for the ‘legal reform’ tag

Paramount Pictures Speaks to Michigan Law Students about Online Piracy, Cyberlockers

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Last month, copyright students at Michigan Law were able to engage in a Q&A after a presentation from Alfred Perry, the VP of Worldwide Content Protection at Paramount Pictures. The topic? SOPA, PIPA, and the legal issues that surround file-sharing websites, like the recently indicted Megaupload.

Many students were eager to engage in a discussion with a representative of the movie industry, especially given the current debate over the Stop Online Piracy Act, and the possibility of future copyright legislation that would address online infringement. As a copyright student myself, I was anxious to hear what a representative of a company that advocates and supports these recent legislative initiatives had to say.

During the presentation, I was most impressed by the emphasis that was put on the problem with cyberlockers- online file storage providers. While they have completely legitimate uses such as storing documents, and sharing files, some users post pirated content of movies or TV shows. It seems that major media companies are targeting these sites- Mr. Perry said that “We continue to make criminal referrals.” Paramount Pictures stated that their content is not being protected adequately by the current laws. However, these cyberlockers are bound by the Digital Millennium Copyright Act, and are obligated to take down infringing content when given notice that it has been posted.

During the presentation, five cyberlockers were identified as “rogue” sites- Fileserve, MediaFire, Wupload, Putlocker, and Depositfiles. In a later email, Mr. Perry explained that “My use of the term ‘rogue’ was meant to designate those cyberlockers which would fall within the definition of a foreign infringing site.” However, MediaFire is a cyberlocker that is located in Texas.  They recently released a press release that addressed these claims. The owner, Tom Landridge said  “MediaFire continues to cooperate fully with the MPAA, RIAA, and various other organizations who work to identify and prohibit the distribution of copyrighted content. We have a variety of advanced automated systems designed to detect violations of our Terms of Service and automatically warn and terminate users.”

It appears that the war between media companies and cyberlockers is only just beginning. Although it is apparent that studios do not like these companies, there doesn’t seem to be a ready solution. Cyberlockers provide a legitimate service, used by many for legitimate purposes. The recent firestorm has caused two sites- Wupload and FireServe to become backup sites, disabling all fire-sharing to avoid the risk of criminal prosecution. While media companies might rejoice, I believe this points to a bigger problem- the media industry business model. Mr. Perry in an e-mail to me, stated “Looking forward, why would anyone invest in an innovative new distribution service if they believed that there would be no legal protection for their fantastic new platform, forcing it to compete with rogue sites that pirate all of their product?”. However, this belies the point that these cyberlockers are innovative- it is the reason they receive 41 billion page views a year. While there is no easy solution, and stolen content is a problem, it might be in the best interest of both cyberlockers and the entertainment industry to work together moving forward- sparing cyberlockers the fear of criminal prosecution, and innovating the media distribution business model.

Biotechnology, Bioterrorism & the First Amendment

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Last year, two teams of researchers funded by the National Institutes of Health (NIH) succeeded in genetically modifying the H5N1 avian flu virus.  The modified virus is capable of respiratory transmission between ferrets, suggesting that it would also be transmittable between humans and potentially capable of causing a “pandemic of disastrous proportions” with mortality rates exceeding 50%.

The central controversy arose around attempts to prevent publication of the research findings, which some considered a “blueprint for bioterrorism.  The U.S. National Science Advisory Board for Biosecurity (NSABB) met to discuss the issue and adopt a solution that would both protect national security and be consistent with scientific freedom and the First Amendment.  While the NSABB recommended redacting details from the paper, the international community came to a different conclusion.  At a meeting convened at the World Health Organization in Geneva, international experts felt that the papers should be published in full.

On the domestic plane, preventing publication of scientific research raises issues of free speech and the First Amendment.  The Supreme Court has consistently read the First Amendment broadly, as evidenced by the landmark Pentagon Papers case.  In New York Times v. United States, the government sought to prevent the New York Times from publishing a top secret study on the U.S.’s policy in Vietnam.  This marked the first time that the federal government sued the press to prevent it from disclosing information for reasons of national security. The Supreme Court recognized that there was a “heavy presumption against” restraints on the press, and found that the government did not meet this burden.

Even in instances – as with the H5N1 research – where the U.S. government has funded research, this does not give it the power to censor publication.  In Board of Trustees of Leland Stanford Jr. University v. Sullivan, the Court ruled that federally funded scientific research should not be subject to prior restraint.  That is, the government may choose whether or not to fund research, but if it chooses to fund a certain study, it may not restrain the dissemination of findings from that research without a compelling state interest.

Although First Amendment jurisprudence is strong, freedom of speech does not extend to every situation.  The Court ruled in Chaplinisky v. New Hampshire that certain utterances may be of such low value “that any benefit that may be derived from them is clearly outweighed by the social interest in order and morality.”  Since New York Times v. United States, courts have found themselves judging cases in which it is necessary to balance the value of free speech against other interests, such as security.  In 1979, the Court in United States v. Progressive, Inc. recognized that “First Amendment rights are not absolute,” and enjoined the press from publishing an article with technical details on constructing a hydrogen bomb.  The Court ruled that the threat to national security met the standard established in New York Times v. United States.

In the case of the H5N1 research, a redacted publication may survive a First Amendment challenge under the reasoning of the court in Progressive.  In both instances, free speech must be balanced against the potential threat to life and security.  The government could evoke the war on terror to argue that heightened restraints on speech are necessary when it comes to issues of biosecurity during wartime.

Another possible solution to the H5N1 controversy is for Congress to legislate in this domain.  One of the Supreme Court’s main reservations in New York Times v. United States was that the judges did not want to legislate from the bench; they saw this as an issue of separation of powers.  In recent years, Congress has considered expanding legislation to protect national security over freedom of the press.  After the upheaval caused by Wikileaks, the Securing Human Intelligence and Enforcing Lawful Dissemination (SHIELD) Act was introduced in Congress.  This proposed legislation would amend the Espionage Act, providing greater protection for classified government information.

Unfortunately, as the H5N1 controversy has shown, problems relating to security and free speech do not end with domestic law.  The two researchers who led the H5N1 study were from universities in the U.S. and the Netherlands, and the international community and the World Health Organization have already become heavily involved.  Even if redacting the articles would survive a First Amendment challenge in the U.S., these efforts would be fruitless if other countries chose to publish the data in science journals abroad.  With increasing international collaboration in scientific research and greater security risks posed by research findings, it may soon become necessary to create a set of international standards for biosecurity.

One major problem with international standards to suppress speech in the interests of security is determining who decides when these standards have been met.  In the case of the H5N1 research, would the U.S. and the Netherlands be the sole decision makers?  This seems certain to displease other nations who have an interest in the sensitive information or in voicing their opinions.  On the other hand, if all nations had a say in weighing the benefits of publication against security interests, then the risk of sensitive information getting out could grow even greater.

Threats to biosecurity like the H5N1 research will continue to present themselves in the years to come, and political leaders should seek to address these issues both domestically and internationally.  While First Amendment jurisprudence may pose an obstacle to preventing the dissemination of dangerous information, a coordinated effort on the international level is also necessary.  With clear standards for undertaking research and withholding sensitive findings from the press, threats to biosecurity may be contained without prejudice to scientific freedom.

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March 21st, 2012 at 1:40 pm

Bollywood & Hollywood: Opportunity for Collaboration through Reform of Policies Governing Copyright and Plagiarism

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The Bollywood film industry has been using ideas from foreign films since its inception. This “borrowing” has ranged from melodies for background scores to entire plot summaries and even translated dialogues. However, with the advent of technology and the increasing popularity of Bollywood cinema in the United States, we are beginning to see American film producers “borrowing” Bollywood film elements as well. Prominent examples are the use of the Bollywood song “Chamma Chamma” from the Hindi movie China Gate as a dance number in Moulin Rouge; the use of the Bollywood song “Chaiyya Chaiyya” as the title song for the Hollywood movie Inside Man; and the Black Eyed Peas sampling of songs from both Don and Apradh on the track “Don’t Phunk with my Heart”.

The media exchange between both nations is increasing as Bollywood actors and directors are entering the Hollywood industry while Hollywood filmmakers and production companies are trying to break into the Bollywood media market. As the cross-border media sharing intensifies, the need for answers regarding legal implications for both nations increases. While both countries have copyright statutes and are signatories to numerous treaties regarding intellectual property rights there is a lack of enforcement of these provisions in the Indian courts.

There is a great need for international collaboration between the United States and Indian governments to work towards a solution to this legal issue. As evidenced by the Indian High Court’s ruling against Will Smith’s production company’s suit against the Bollywood producers who re-made Hitch without permission, the two governments have vastly different approaches to intellectual property rights enforcement. Without some way for Hollywood and Bollywood film producers to compromise and reach a mutual understanding regarding sampling each other’s productions, the creativity that could be fostered by increased communication is hindered. Furthermore, without some sort of reprimand for producers who abuse their “sampling” privileges and effectively steal whole works of others, relations between these two film industry giants will be frayed.

For further reading on this topic, check out this, this, & this.


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March 20th, 2012 at 2:54 pm

DOJ Reverses Stance on Legality of Online Poker?

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For online poker aficionados, April 15, 2011, the so-called “Black Friday” is a date that lives in infamy. For those who are unfamiliar with the event, on Black Friday the owners of the three largest poker sites in the United States (PokerStars, Absolute Poker, and Full Tilt Poker) were arrested and the sites were shut down due to allegations of money laundering and wire fraud used to circumvent U.S. gaming laws. The FBI used the provisions of the Unlawful Internet Gambling Enforcement Act (UIGEA) in order to charge these executives. Enacted in 2006, the UIGEA was enacted to prohibit institutions from accepting payments from any person engaged in the business of betting or wagering with a business in unlawful Internet gambling. Subject to a great deal of controversy, the UIGEA has been criticized by a number of Congressmen and a range of modifications have been suggested.

A major point of controversy with the UIGEA is the question of whether the Act applies to online gambling in the form of internet poker. Undoubtedly, the executives of the sites closed on Black Friday felt that the Act could not cover internet poker and thus continued with their business as usual. Now, these executives may have an ally in the form of the United States Department of Justice. While not specifically addressing the UIGEA, the DOJ memorandum released on December 23, 2011 revealed its position that interstate transmissions of wire communications that do not relate to a “sporting event or contest” fall outside the reach of the Wire Act of 1961, another Act previously used to outlaw online poker. Ellen Whittemore, attorney for Nevada web poker applicant International Game Technology, said that the legal opinion “cracks open the door” for the interstate offering of poker.

Because the DOJ opinion is so recent, its full effect is still unknown. Nonetheless, the opinion marks a dramatic shift that seems to be moving in the direction of online poker legality. Making the legalization more likely is the dismal state of the United States budget. In an era when increased focus is needed on addressing the growing debt, the country seems to be in need of additional revenue. Online poker could bring that revenue. Over 10 years, legal online gambling could generate $42 billion in tax revenue, according to the Congressional Committee on Taxation. Such a potential source of revenue may prove too large to be ignored and may further grease the wheels toward the return of online poker in the United States.

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January 25th, 2012 at 1:27 pm

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The Policy of Gene Patenting – Are the Courts the Appropriate Venue for this Debate?

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Last week, following the denial of its petition for a panel rehearing, the ACLU announced that it will seek to bring the much-debated Myriad Genetics case before the Supreme Court.  Among other things, the case involves the patentability of isolated DNA – pieces of natural human DNA that have been chemically cleaved from the chromosome.  Myriad Genetics holds patents over two isolated DNA genes, BRCA1 and BRCA2, which are linked to susceptibility to breast cancer and may be used for clinical screening.  According to Myriad, women with mutations in these genes have an 82% risk of developing breast cancer, compared to about a 10% chance in the general population.

The history of the Myriad Genetics case has been tumultuous.  The U.S. District Court for the Southern District of New York unsettled the biotech industry when it ruled that isolated DNA was not patent eligible under 35 U.S.C. § 101.  This decision went against the long-standing tradition of the U.S. Patent and Trademark Office, as well as the Supreme Court’s history of interpreting § 101 broadly.  However, although the statute is broad, it does have certain established limitations.  The one at issue here is the restriction on patenting “products of nature” unless they are “markedly different” from naturally occurring ones. See Diamond v. Chakrabarty, 447 U.S. 303 (1980).  In a 2-1 decision in July, the U.S. Court of Appeals for the Federal Circuit reversed the district court’s ruling, restoring the status quo by finding isolated DNA patent eligible under § 101.  The court based its decision on the finding that isolated DNA is “markedly different” from DNA occurring in nature because the act of cleaving it from the chromosome gives it a new chemical composition.  The court also stressed the importance of deferring to Congress regarding potential changes in the scope of patentable material.

While the waters may currently seem calm, there is a good chance that this case will move forward, and a Supreme Court decision could have an historical impact on the future of biotechnology.  First, the decision itself is not beyond critique.  The dissent makes a strong case against patenting isolated DNA.  It compares the extraction of natural DNA to plucking a leaf from a tree or isolating the element lithium, since lithium only occurs in nature as part of chemical compounds.  Judge Bryson argues that isolated DNA is no different from naturally-occurring DNA except for the chemical changes that necessarily result from its extraction.  Consequently, he finds unconvincing the majority’s argument that isolated DNA is “markedly different” from natural DNA based solely on this minor chemical difference.

Secondly, the Myriad case exposed a tension within the government.  Although the ACLU brought the case against Myriad Genetics and the U.S. Patent Office, the Department of Justice actually submitted an amicus brief in support of the plaintiffs.  This uncertainly on the federal level suggests that the Supreme Court may hear the case and perhaps even restore the lower court’s ruling.  If the case goes forward, it will be interesting to see whether the Court rules narrowly or decides to expound more broadly on the patentability of other biotech products.

The Myriad case has received a lot of attention because of its policy implications.  On the one hand, the plaintiffs argue that the patents stifle patient access to clinical tests and suppress related DNA research.  They also raise ethical issues regarding the “ownership of what some view as our common heritage.” Ass’n for Molecular Pathology v. U.S. Patent and Trademark Office, 702 F. Supp. 2d 181 (2010).   Strong policy arguments exist on the biotech side as well, since companies rely on their patents when developing new products.

Do patents on isolated DNA restrict patient access to care any more than patents on new medications? Although clinical screening based on genetic code is an emerging field of medicine, access to affordable health care is far from a new debate.  There are also some who say that patents are preferable to their alternatives.  If a company is unable to rely on a patent for exclusive rights to a newly discovered gene or product, it will be forced to rely on trade secrets to keep its discovery private.  Thus, it is argued that patents actually encourage the free exchange of information and thereby incite other parties to conduct related research.

Many also fear the repercussions from a decision finding isolated DNA patent ineligible.  Would this restrain a growing biotech industry during a time when the last thing we want to do is stifle the job market?  What would happen to those who already hold DNA patents and rely on these patents for their work?  Would a Supreme Court decision reverberate beyond isolated DNA and prevent patents relating to stem cells and proteins?

With all of these worries and uncertainties at stake, it seems that maybe the U.S. Court of Appeals for the Federal Circuit was right in deferring to Congress. For even if the majority’s “markedly different” holding is weak, isn’t the concurrence correct in finding that “the judiciary is ill-suited to determine whether the claims at issue pro­mote or inhibit science”?

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October 23rd, 2011 at 10:22 pm

Momentum Builds for Reform of Electronic Communications Privacy Act

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Business, legal, and academic leaders urged reform of the Electronic Communications Privacy Act (ECPA) during hearings last week before the Senate Judiciary Committee and a Subcommittee of the House Committee on the Judiciary. Enacted in 1986, the ECPA regulates government access to citizens’ electronic communications while seeking a balance between the demands of law enforcement and privacy protection. A broad coalition of interests, spearheaded by the group Digital Due Process, has been advocating ECPA reform because of the staggering changes in electronic communication since 1986, including the growth of email and cloud computing.


Senator Patrick Leahy (D-VT) highlighted in his opening statement that “a single e-mail could be subject to as many as four different levels of privacy protections under ECPA.” Brad Smith, General Counsel for Microsoft, eviscerated the arbitrary legal standards in a serious of rhetorical questions during the Senate Judiciary Committee hearing:

“Why should email in someone’s inbox be treated different from something in someone’s sent folder?” asked Smith. “Why is something unread in my junk folder subjected to greater privacy than something read in my inbox? Why does an email I sent in April have fewer privacy protections than one I sent in September?”

Cloud Computing

Internet users are increasingly storing important photos, documents, emails, and more online in the “cloud.” Businesses are also looking at the cloud as a cost-effective storage system. Edward Felten, Professor of Computer Science and Public Affairs at Princeton University, described the cloud in his testimony before the House committee as “rather than keeping the only copy of your data on your own computer, you rent computing resources from a service provider, and that provider keeps the primary copy of the your data.”

But the ECPA could never have predicted the growth of online storage in 1986. Michael Hintze, Associate General Counsel for Microsoft, summarized the problem for the House Subcommittee:

“When law enforcement officials seek data or files stored in the cloud, such as Web-based email applications or online word processing services, the privacy standard that is applied is often lower than the standard that applies when law enforcement officials seek the same data stored on an individual’s hard drive in his or her home or office.”

A Potential Solution

Digital Due Process has proposed that electronic communication such as email be disclosed “only with a search warrant issued based on a showing of probable cause, regardless of the age of the communications, the means or status of their storage, or the provider’s access to or use of the communications in its normal business operations.”

While no one expects Congress to reform the ECPA in the very near future or as precisely as Digital Due Process would hope, there is growing consensus among academics, businesses, legal advocates, and political leaders that the status quo is unacceptable.

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September 27th, 2010 at 11:34 pm

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

The Supreme Court’s Recent Patent Decisions from the Perspective of a New IP Associate

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by: Ming Shui, MTTLR Alum

The state of patent law today has significantly changed in the two years since I graduated from law school. In fact, the changes are such that I would estimate that around half of what was taught in my patent classes is no longer good law.

Beginning in 2006 with eBay v. MercExchange,1 the Supreme Court has heard and agreed to hear a significant number of patent cases relative to recent years. eBay signaled that the Court was beginning to push back against what some would argue as too many patent-friendly decisions coming from the Federal Circuit which were beginning to stifle rather than spur innovation.

eBay was found to be infringing a patent held by MercExchange. MercExchange sought to enjoin eBay from using its product. Under the Federal Circuit doctrine prevailing at the time, an injunction was virtually guaranteed once infringement was found. The Supreme Court in eBay, however, held that courts should consider the traditional four-factor test for issuance of an injunction, and should not issue injunctions automatically.

The result is that patent holders potentially lose one of the most powerful weapons they have against infringers — the ability to exclude. Whether this is a good result is debatable, and there are many good arguments for each side that I will not repeat here. But the effect has been that although in most cases the injunction still issues, the District Courts have greater flexibility to decide whether to issue injunctions in specific cases.

In KSR v. Teleflex,2 the Supreme Court weighed in on one of the most litigated areas in patent law: obviousness. The issue in obviousness is whether a person of ordinary skill in the art (POSITA) would have found the patented invention to be obvious. The Federal Circuit for many years used a test commonly referred to as teaching/suggestion/motivation (T/S/M) to determine if an invention that combines two or more items is obvious. The T/S/M test asks if there is some teaching, suggestion, or motivation in the prior art to combine those two items. If yes, then the invention is obvious.

The Supreme Court held in KSR that the Federal Circuit’s rigid application of the T/S/M test, which Justice Scalia referred to as “gobbledygook”,3 is inconsistent with the Court’s holding in Graham v. John Deere.4 The Court essentially invalidated the T/S/M test and held that courts should follow Graham‘s “expansive and flexible framework” in determining if an invention is obvious. The “expansive and flexible framework” leaves a lot of room for lower courts to develop new tests and standards for determining obviousness. Where it will end up, nobody is exactly sure. However, one thing is clear: since KSR, a lot more patents have been found to be invalid for obviousness.

The court has also accepted for this term Quanta Computer v. LG Electronics,5 a case that questions whether a patent holder can seek royalty fees from more than one company in the supply chain that uses the patented product. This has the potential for profound impact on the possible damages in a patent case. The basic facts are LG licensed to Intel the right to produce and sell the patented chip. But license agreement Intel has with LG only authorizes Intel to combine the chips with other Intel products. Quanta uses the chip and combines it with non-Intel products. Can LG sue Quanta for infringement damages?

This was argued under the exhaustion doctrine at the Federal Circuit which is similar to the first sale doctrine in copyright law. The textbook example is if you buy a book, you are then free to resell the book to someone else without having to pay the copyright owner royalties for your sale of the book. The District Court found there to be an exhausting sale. The Federal Circuit reversed. Oral arguments are scheduled for January 16, 2008.

Finally the USPTO recently made final several changes to the way patents are prosecuted.6 Some notable changes include: an applicant may only make one request for continued examination after a final rejection, an applicant is limited to two continuing applications, and an applicant is limited to 5 independent and 25 claims total. These changes were to take effect on November 1, 2007. However, the United District Court for the Eastern District of Virginia issued an injunction on October 31, 2007 barring implementation of the rule changes.7

These cases and rule changes will have a profound effect on how patents are prosecuted, defended, and sold for the foreseeable future as practitioners adjust to the new framework the lower courts and USPTO will establish over the next few years.8

1  eBay Inc. v. MercExchange, L.L.C., 126 S. Ct. 1837 (2007).
2  KSR v. Teleflex, 127 S. Ct. 1727 (2007).
3  Transcript of Oral Argument at 41, KSR v. Teleflex, 127 S. Ct. 1727 (2007).
4  Graham v. John Deere Co., 383 U.S. 1 (1966).
5  Quanta Computer, Inc., et al. v. LG Electronics, Inc., 453 F.3d 1364 (Fed. Cir. 2006), cert. granted, 128 S. Ct. 28 (Sept. 25, 2007) (No. 06-937).
6  See Department of Commerce, Patent and Trademark Office, Changes to Practice for Continued Examination Filings, Patent Applications Containing Patentably Indistinct Claims, and Examination of Claims in Patent Applications: Final Rule (Aug. 21, 2007).
7  Tafas v. Dudas, No. 1:07cv846 (JCC), (E.D. Va. Oct. 31, 2007).
8  Microsoft v. AT&T, 550 U.S. ___, is another interesting patent case that the Supreme Court decided in 2007. While the issues and holding are important, they are less relevant to general day-to-day patent practice and so I’ll simply mention that this is another case to explore if interested.

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December 3rd, 2007 at 8:40 am

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Copyright Reform Part 2

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by: Professor Jessica Litman
Professor of Law, University of Michigan Law School

In part 1, I explained some of the appeal of seeking to begin a copyright reform process by agreeing on a set of copyright principles to guide lawmakers in their drafting. In the intensely polarized environment that has come to characterize the copyright bar, confining a group’s attention to copyright principles may be one way to begin a productive conversation.

Last spring, Boalt Professor Pamela Samuelson recruited a group of copyright experts with diverse views to come together and discuss copyright reform, with the ultimate goal of producing such a set of copyright principles. I’m a member of that group. One of our first homework assignments was to write and circulate individual drafts of appropriate copyright principles. In this initial stage, the goal was not for each of us to come up with a comprehensive Restatement of wise copyright law. Rather, we agreed that each of us would write down one or more principles that we believed should be reflected in the group’s final work product.

The draft that I sent to the other members of the group follows. The draft does not represent what I would write if I could use a magic wand to replace the words in title 17 with words of my choosing. It is, instead, an attempt to articulate principles on which copyright experts across the copyright political spectrum might be able to agree. I agreed to post the draft here, because I’m interested in your comments.

Preliminary draft of copyright principles

The copyright law grants exclusive rights that are bounded in time, subject matter and scope. Some ambiguity in the location of those boundaries is probably inevitable, since technological progress introduces new possibilities, and the prospect of lobbying to expand or contract extant rights is always on the horizon. To the extent possible, boundaries should be clear, since ambiguities can deter investment in and exploitation and enjoyment of copyrighted works.

A functioning copyright system requires that there be easy ways for people who want to make lawful licensed uses of works to find out to whom they need to apply for permission. The U.S. law used to rely on indivisibility, notice, registration, and recordation to perform those functions. It has also introduced a variety of compulsory licenses to obviate the need to seek permission to use some works in some markets. Other jurisdictions rely on limited alienability or/and a multiplicity of collecting societies to perform these functions. The copyright system needs some mechanism or mechanisms to do this job.

Exclusive rights that are ambiguous in scope exacerbate the problems posed by rights holders who are difficult to identify, and vice versa.

The exclusive rights granted by copyright law should encourage creation and dissemination of works by ensuring that copyright owners have meaningful opportunities to control the direct commercial exploitation of their works. Copyright owners should not necessarily be entitled to control all incidents of direct exploitation of their works. Resale of books and paintings, for example, is direct commercial exploitation of copyrighted works that has traditionally been sheltered from copyright owner control by the first sale doctrine.

The exclusive rights granted by copyright law should encourage reading, viewing, watching, listening to and learning from copyrighted works by preserving individuals’ freedom to read, view, watch, listen to and otherwise enjoy copyrighted works as they want to without being subject to pervasive copyright owner control of reading, viewing, etc. Reading freely, however, is not necessarily the same thing as reading for free.

The exclusive rights granted by copyright should encourage investment in new markets and modes of enjoying copyrighted works by excluding most indirect exploitation of copyrighted works from copyright-owner control. The makers and sellers of trumpets have built their business model on the foundation of band music that was written and is controlled by someone else. The availability of trumpets has increased the market for and popularity of band music, to the benefit of composers, trumpet players, and trumpet music fans. Insofar as possible, the copyright law should neither give the owners of band music copyrights the right to control the design, manufacture or sale of trumpets, nor give the makers and sellers of trumpets the right to control the sale or performance of band music.

The public invests in the copyright system both by granting rights to copyright owners through the enactment of copyright laws, and by complying with the laws its Congress enacts. If the public perceives copyright law to give it a poor return on its investment, it may well respond by divesting – either pressing its elected representatives to enact additional limitations and privileges or simply failing to comply with rules it no longer perceives as legitimate. Enforcing copyright law in an atmosphere of public cynicism about the legitimacy of the law is a difficult task. A public that complies with copyright only because it’s afraid of the copyright police will soon find ways to evade or restrain the copyright police. (Recent efforts to enforce copyrights against individual consumers alleged to have infringed copyrights over peer-to-peer file sharing networks, for example, have garnered significant press coverage. Insofar as people are able to make accurate measurements, these efforts do not seem to have reduced the volume of unauthorized peer-to-peer file sharing, nor to have significantly increased public respect for copyright law.) The long-term health of the copyright system, thus, requires that members of the public believe that their investment in copyright is well spent.

One key feature of copyright laws that have public confidence is a balance between the copyright owners’ exclusive rights to control the exploitation of their works and the public’s freedom to enjoy those works. (In general, countries other than the U.S. that phrase their exclusive rights in broader terms than the United States does have needed more numerous explicit exceptions for members of the general public.) The public appears to believe that copyright exclusive rights are already very broad, and decades of public relations efforts don’t seem to have persuaded people that copyright gives creators and disseminators too little. If copyright is to retain or regain its legitimacy, any broadening of exclusive rights probably needs to be balanced by an increase in personal freedom to enjoy copyrighted works.

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November 20th, 2007 at 5:21 am

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Copyright Reform Part 1

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by: Professor Jessica Litman
Professor of Law, University of Michigan Law School

If you hang out among copyright lawyers, you’ll notice widespread agreement that the current copyright statute, enacted more than 30 years ago in 1976 and amended piecemeal in the years since, isn’t working very well. (That doesn’t mean that copyright lawyers agree on which parts need fixed.)1  The statute treats dissemination of works over digital networks especially poorly. That’s unsurprising; extensive use of digital networks post-dates the statute’s enactment. Yet, you’ll also notice widespread discomfort with the prospect of asking Congress to undertake the project of wholesale copyright revision.

That discomfort is only partially due to the fact that copyright revision is lengthy and expensive. The number of interests affected by copyright is huge, and the complaints those interests have with the current regime are diverse. Overhauling the copyright statute took more than 20 years the last time Congress tried it, and there’s no reason to think it could happen more quickly today.

More importantly, the large role played in copyright lawmaking by lobbyists for important copyright actors has in the past produced statutes that are neither models of clarity nor well-designed to weather the pressures of technological progress. It is difficult to look at section 114 of the current copyright statute,2  for example, and come up with anything nice to say about it.

Moreover, history teaches that in the course of any major copyright revision, new copyright-affected players will pop up and demand that the law be reshaped to accommodate their needs. In the revision process that culminated in the enactment of the 1909 copyright act, the manufacturers of phonographs and phonograph records nearly derailed the entire effort until they were satisfied with the statute’s treatment of them. Multiple attempts to modernize the copyright law during the 1920s and 1930s foundered because new players ASCAP and radio broadcasters could not agree on anything. In the revision process that led to the 1976 Act, broadcast television and then cable television showed up and demanded special treatment; copyright revision ground to a halt until they got it. The prospect of the upstart new copyright interest may be especially scary today because there are tens of millions of ordinary people whose use of YouTube and peer-to-peer file sharing networks means they have direct personal interests in the copyright law. Nobody has succeeded in mobilizing them into a significant political force, but the majority of them are over 18, and many of them vote. It’s entirely possible that over the course of a multi-year, highly publicized copyright reform effort, the interests of ordinary voters could end up playing a more than a nominal role. One can imagine circumstances in which a new awareness on the part of Congress that voters care about copyright could move the law pretty far from where current players would like to see it go.

Thus, it is unsurprising that the perceived need for copyright reform combined with widespread reluctance to involve Congress in the effort, at least at the outset, has generated a host of extra-legislative copyright reform efforts. Some of these efforts have involved taking adventurous positions in litigation, in the hope of persuading courts that the law already means what one wishes it did.3  Some of these efforts have involved using private agreements to contract around inconvenient statutory defaults.4   Some have involved committing the United States in trade negotiations to take particular positions on copyright enforcement, and then seeking to import those commitments as a gloss on the meaning of current law.5

A different approach seeks to generate a menu of principles to guide later congressional reform. A group may draft copyright principles as part of an advocacy effort6 or as an effort to steer legislative drafting in particular directions or away from others.7

The copyright bar has grown increasingly polarized over the past 15 years.8  Precisely because of that polarization, a project designed to gather a group of copyright experts and charge them with generating a list of copyright principles has features that make it appealing across the copyright political spectrum. First, because the effort involves articulating principles of copyright law, the power and money imbalance between different interests looms smaller, blunting the influence of what Larry Lessig has called “all the money in the world.”9  Second, even those with well-developed lobbying muscles have reasons to prefer conversing with other copyright specialists rather than a more general crowd. There’s probably some truth to the charge that we who practice, teach, or write about copyright law for a living have all drunk the copyright Kool-Aid®.10  Copyright lawyers, as a group, are less likely to challenge the received copyright wisdom, and less likely to propose that copyright-affected players adopt radically new business models. Finally, casting a project as a pursuit of copyright principles allows participants to try to ferret out the issues on which they agree and paper over or vague out the issues on which agreement proves impossible.

One sign that copyright reform is on the horizon is that copyright principles projects are springing up, trying to figure out a way to generate something that will prove useful. I don’t mean to impugn such projects – indeed, as I’ll explain in the next post, I’ve been working with one myself.

Editor: Part 2, in which Professor Litman attempts to “articulate principles on which copyright experts across the copyright political spectrum might be able to agree,” will publish tomorrow.

1  Compare, e.g, Pamela Samuelson, Preliminary Thoughts on Copyright Reform, Utah L. Rev. (2007) with, e.g., David Nimmer, Codifying Copyright Responsibly, 51 UCLA L. Rev. 1233 (2004) and Protecting Copyright and Innovation in a Post-Grokster World: Hearing Before the Senate Comm. On the Judiciary, 109th Cong. (Sept. 28, 2005) (testimony of Marybeth Peters, Register of Copyrights).
2  17 U.S.C. § 114 (“Scope of Exclusive Rights in Sound Recordings”).
3  See, e.g., Capitol Records v. Bertelsmann, 377 F. Supp. 2d 796 (N.D. Cal. 2005); Viacom International v. YouTube, Inc., No. 07-CV-2103 (S.D.N.Y. filed March 13, 2007); Capitol Records, Inc. v. Thomas, No. 06-CV-1497 (D. Minn. 2007).
4  CBS, Inc. et. al, Copyright Principles for User-Generated Services (Oct. 18, 2007); the GNU General Public License (June 29, 2007); Microsoft, Inc., Microsoft Windows Vista Home Basic English End User License Agreement (visited Nov. 12, 2007); see generally Prof. Margaret Jane Radin, The Evolution of Contracts in the Digital Era (Seminar, Fall 2007).
5  See, e.g., Brief Amicus Curiae Americans for Tax Reform in Cartoon Network, LP v. Cable News Network, LP, No. 07-1480-CV(L) (2d Cir. filed July 11, 2007) at 15-16.
6  E.g., Adelphi Charter on Creativity, Innovation and Intellectual Property (Oct. 13, 2005); CBS, Inc. et. al., Principles for User-Generated Content Services, supra note 4; Center for Democracy and Technology, Protecting Copyright and Internet Values: A Balanced Path Forward (Spring 2005); EFF et. al., Fair Use Principles for User-Generated Video Content (Oct. 31, 2007).
7  See National Information Infrastructure Task Force Working Group on Intellectual Property, Public Hearing on Intellectual Property Issues Involved in the Information Infrastructure (Nov. 18, 1993), (testimony of Gary J. Shapiro, Home Recording Rights Coalition); id. (testimony of Ronald J. Palensky, Information Technology As’sn of America).
8  See Jessica Litman, War and Peace: The 34th Annual Donald C. Brace Lecture, 53 J. Copyright Socy 1 (2006).
10  Kool-Aid® is a registered trademark of Kraft Foods. :-)

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November 19th, 2007 at 2:08 am

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