Wednesday, June 29, 2011

Who Knew?

Who knew that law practice group names have been trademark registered? I wonder how many law firms have an employment law group that is marketed as their "Employment Law Group"? I'm guessing a lot. It is interesting to note, however, that the PTO has issued a trademark registration for "The Employment Law Group" in Class 42 for legal services (Reg. No. 3436135). There is also a pending application for "Intellectual Property Law" (Ser. No. 85205240) for legal services, a registration for the "Litigation Media Group" (Reg. No. 3051750) for legal services, for "Intellectual Property" (stylized design) (Reg. No. 1690628) for legal services, and "The Construction Law Group" (Reg. No. 2129634) for legal services. These are but a few of numerous trademark filings related to very common legal service offerings of the type provided by, I imagine, thousands of lawyers and law firms. Who knew that these common legal service descriptions could be registered?

Who knew that there is no copyright protection for the idea of a crime fighting hair dresser? We should all be cautiously optimistic that the issue of copyright infringement relating to crime fighting hair stylists has been, apparently, resolved. In Cabell v. Sony Pictures Entertainment, the Second Circuit affirmed in last week's unpublished decision that the plaintiff's idea of a crimefightinghairdresser brandishing a hair dryer in stock fighting poses is not protectable in copyright. Here is the plaintiff's artwork:

Here is Sony's movie art for You Don't Mess With The Zohan:

Who knew? Notwithstanding the warnings from Lenz v. Universal Music Group, new cases continue to be filed over liability for claimed wrongful takedown notices. Under the Digital Millennium Copyright Act, a copyright claimant can employ the takedown notice procedure in order to remove claimed infringing postings from the Internet. But wrongful takedown notices create the potential for liability for a wrongful takedown. Lenz posted a 29 second video on the Internet of her infant daughter dancing in the kitchen to the music of Prince's "Let's Go Crazy." Universal sent a takedown notice to the ISP claiming that the video infringed the copyright interest in the song and performance. Lenz sued for the wrongful takedown, arguing that the takedown was wrongful because her posting was protected by fair use of the Prince song. The court agreed. The court in Lenz made clear that liability attaches when the claimant who sends the takedown notice does not have a viable copyright claim in light of the poster's fair use. Now comes word that a similar DMCA case is pending in federal court in Ohio. In Smith v. Summit Entertainment, N.D. Ohio, 3:11cv348, Summit sent a takedown notice claiming to own a copyright interest in Smith's musical work posted on line. The music was taken down. Subsequently, Summit acknowledged that it did not have a copyright interest in Smith's music. Smith sued under several theories, including wrongful takedown under the DMCA, plus defamation and other theories. The court allowed several of Smith's claims to proceed forward in ruling on Summit's motion to dismiss, stating in part: "While defendant post hoc and promptly acknowledged that it has no copyright interest in plaintiff's song, that does not matter. Plaintiff alleges that defendant made an unquestionably false assertion in take down notices and the song was taken down." Lawsuits for wrongful takedowns are tracking up out there! Who knew?

July 4th
The Fourth of July is around the corner. Be careful out there!

Tuesday, June 28, 2011

Washington State Has A New IP Law: Stolen Or Misappropriated Information Technology

Washington State's new law that takes effect on July 22, 2011 creates state-based liability for use of so-called stolen or misappropriated information technology. In particular, the new act creates liability for the use without authorization, as a component in an "article or product," of stolen or misappropriated hardware or software that was available for retail purchase on a stand-alone basis. Before liability is imposed, the law requires advance notice from the claimant and an opportunity to cure. Liability only applies when the product containing the stolen or misappropriated information technology causes "a material competitive injury as a result of the stolen or misappropriated information technology."

The Washington Attorney General is authorized to bring a claim under this new law, as are private claimants. But the law does not identify who can bring a private claim. Certainly, it appears that the owner of the stolen IP can sue, but the new act does not appear to limit claims to parties who themselves have experienced a material competitive injury. At any rate, the law allows for several remedies, including an injunction, plus damages consisting of "actual direct damages" or "statutory damages of no more than the retail price of the stolen or misappropriated information technology." If the misuse is found to be willful, the court can treble the damage award and assess costs and reasonable attorneys' fees.

The foregoing is but a brief and incomplete description of the new Washington law. Interested persons should review the session law and make an independent determination as to its meaning, application and merit. But from my perspective, this law appears to have a very high burden to overcome -- preemption. That is, the very definition of stolen or misappropriated information technology, and the use thereof, appears to fall squarely within the four corners of a patent infringement claim or a copyright infringement claim. Indeed, even though the so-called "information technology" is not the subject of an issued patent or copyright does not take the potential claim out from under the foot of preemption jurisprudence.

In any event, this may all be sorted out in the future. The fun begins on July 22, 2011!

Sunday, June 26, 2011

Death on the Plains

This weekend marks the anniversary of Custer's Last Stand. Fought in southeastern Montana in the area of rolling hills and prairie dogs around the Little Bighorn River, some 600 members of the U.S. Seventh Cavalry were outmanned by Sitting Bull's combined force of some 20,000 Sioux and Cheyenne.

On June 25, 1876, Custer's army came upon the Indian village, peacefully camping along the Little Bighorn, and elected to attack. Custer did not believe the information from his scouts as to the true size of the Indian position. Custer separated the army into several columns; he lead one, General Reno another and General Benteen a third. A fourth column stayed in the rear to protect the army's horses. Custer's column was completely and swiftly annihilated while Reno lost about a third of his column.

Reno ordered a retreat that became chaotic, and for the next day fought off the attacking Indians in a holding action from his entrenched positions. The Indians withdrew at noon on June 26th.

Reno was severely criticized for his actions in not coming to Custer's aid. While he was exonerated following an 1879 formal inquiry, Reno's career and legacy were seriously harmed.

Friday, June 24, 2011

A Question Of Infringement: Digital Course Packets Used In University Instruction

A current copyright infringement lawsuit, pending in the federal court in Georgia, concerns the practice by instructors at Georgia State University of posting electronic versions of copyrighted material on the GSU computer system for use by course students. Importantly, from the point of view of the plaintiffs (Cambridge University Press, Oxford University Press and Sage Publications), GSU fails to obtain permission and pay for the electronic posting of the copyrighted course materials. Although GSU does apparently obtain permission and pay rights fees for traditional paper course packets, it takes the position that the electronic course packets are fair use. As such, the three publishers are seeking an injunction to prevent further postings of electronic course packets at Georgia State without permission.

Both parties are fighting hard. A bench trial was held several weeks ago and the parties are presently participating in post-trial briefing. A decision should be forthcoming from Judge Orinda D. Evans sometime this summer, hopefully prior to the start of fall classes.

The mechanism employed at GSU to electronically post course materials is interesting. The university has two systems in place for this purpose. In one system, the instructor fills out a fair use check list form, makes an initial determination whether fair use does or does not exist by, apparently, adding up the pro and con check marks, and then submits the form to the library for review. If the checks add up to fair use, then the library will digitally copy the copyrighted material and electronically post the digital file on the university's computer system for access by course students. In the second system, a similar fair use check-off system is employed by the instructor but the instructor uploads the copyrighted material directly to the university's computer system. In either case, the instructor will assign the digital course packets to class students as part of the class requirements.

The publishers argue that there is no practical difference in terms of copyright harm between distributing the course packet in paper form or in digital form. [The case of Princeton University Press v. Michigan Document Services, Inc. is one of the leading cases finding that the production of paper course packets by a commercial printing service does not constitute fair use.]

The fair use check-off form is of interest. A copy of the form is reproduced below. It takes the various fair use elements from the Copyright Act and case law and creates two columns, for and against fair use. Here is the form:

The problem with this form, as I see it, is not that the form omits any of the key elements of a fair use analysis, but rather that the form compels the application of equal weight to all of the factors across the board. In counting up the check marks, it certainly appears that the result will constitute fair use in all circumstances. If the fair use exemption were this broad, then no educational institution would be liable for copyright misuse since in virtually all instances of educational use the check marks will tally toward fair use. Logically, this cannot be. Indeed, if greater weight were applied to certain of the factors, and less or no weight to others, then the exemption calculus might produce different results than merely adding up the equally-weighted check marks.

Georgia State is not the only educational institution to employ an equally-weighted fair use check-off form. Columbia University, as an additional example, provides a similar form to its instructors.

It will be interesting to learn Judge Evans' view on all of this once the trial opinion is entered. Stay tuned.

Tuesday, June 21, 2011

There Is No i In Apple

For some reason, Apple is in love with the letter i -- using it on its products (iPad, etc.) and services (iTunes, etc.). For some other reason, Apple does not pay enough attention to the need for trademark clearance searches. Last week, Apple was sued by iCloud Communications of Phoenix for trademark infringement of the mark iCloud. Now comes word that a small New York publisher, J.T. Colby, is suing Apple (S.D.N.Y., 11-cv-4060-DAB) for use of the trademark ibooks for Apple's electronic library service. Colby claims to own the common law trademarks "ibooks" and "ipicturebooks," asserting that it acquired priority rights to ibooks going back to 1999 from a predecessor user. Note to Apple, it costs a lot less to obtain and analyze a good trademark clearance report than to litigate trademark claims after a product launch.

It's Not Just .com Anymore!

It's official. This morning in Singapore the Internet Corporation for Assigned Names and Numbers (ICANN) voted to open up the filing of generic top level domains (gTLDs). The new world of .xxx, .disney, .coke, .(your tradename here) is now upon us.

The Hangover: Part II -- Case Settled?

Reuters is carrying a report this morning that the copyright infringement claim relating to a face tattoo has been settled. There is no present report as to how much money, if any, was paid in settlement and there is no filing in the case records relating to the settlement as of this morning. My prior blogs on the topic of the copyrightability of facial tattoos were published on May 26 and May 30.

Monday, June 20, 2011

Investment Firms Lose Their News To News Aggregators

News aggregators won a big victory today in the Second Circuit Court of Appeals in the case of Barclays Capital v. The Second Circuit held that it is not a violation of the Copyright Act for a news distributor to report the fact that a stock analyst makes an investment recommendation. Nor is it a violation of the "hot news" misappropration tort when the news distributor accurately reports that the investment recommendation originates from its true source.

In the early hours prior to the opening of the stock exchange, Barclays and other investment firms provide investment analysis and recommendations to their subscribers and clients. The sales staff of the investment firms then contact their customers in an effort to procure investment transactions based on the recommendations. theflyonthewall is a news gatherer, or aggregator, that claims to be the "fastest news feed on the web." theflyonthewall somehow obtains the recommendations from the investment firms early in the day, often before the markets open, and distributes the recommendations to its subscribers. In doing so, the investment firms claim that theflyonthewall undercuts their research service and ability to trade on the hot news of their recommendations.

The Second Circuit held that there is no hot news claim if all that is done by theflyonthewall is to truthfully report that an investment firm makes a certain investment recommendation. The fact that an investment firm makes a recommendation is, itself, news. theflyonthewall is merely distributing this news without improperly "free riding." The Second Circuit observed that if theflyonthewall copies the recommendation report of the investment firms so as to induce a customer into believing that the recommendation originates with theflyonthewall, then this would be impermissible free riding and violation of the hot news tort. But theflyonthewall accurately reports a recommendation and the origin of the recommendation from the particular investment firm. In this circumstance, the hot news tort is preempted by the Copyright Act since the recommendations come within the subject matter of copyright and the scope of copyright protection. And because the Copyright Act does not extend protection to facts, the fact that an investment firm makes an in investment recommendation is not protected in copyright, either.

So, in the end, the investment firms who invest significantly in investment research are not able to control their own investment recommendations to their customers. Their recommendations are not protectable by copyright as non-protectable news or fact. Their recommendations are not protectable under the hot news misappropriation theory. This is the case even in relation to a fast acting news distributor who can distribute the recommendation quicker, at potentially less expense, and then seek to direct the customer to make a transaction from a discount trader. It appears that the news distribution problems impacting the newspaper industry now squarely have reached the stock analysts desks on Wall Street.

Stanford Lost A Fortune: Faulty Drafting Of An Inventorship Agreement

The wrong word choices can lead to devastating results -- just ask Stanford University!

Last week’s Supreme Court decision underscores the necessity of careful drafting in employment and inventorship agreements. Stanford University lost out on the ownership of valuable patent rights because of poor word choices. The problem? Stanford's assignment form used the future tense (I agree to assign) rather than the present tense (I hereby assign).

The factual circumstance was not all that unusual. Stanford hired a research fellow, Dr. Mark Holodniy, to work on HIV research. At the time of the hire, Dr. Holodniy signed Stanford’s Copyright and Patent Agreement, by which he “agree[d] to assign” to Stanford his “right, title and interest in” inventions resulting from his employment at the University. Thereafter, Stanford loaned Holodniy to a small California research firm, Cetus, to collaborate on HIV research. Cetus required Holodniy to sign its Visitor’s Confidentiality Agreement that provided Holodniy “will assign and do[es] hereby assign” to Cetus his “right, title and interest in each of the ideas, inventions and improvements” made “as a consequence of [his] access” to Cetus.

Holodniy worked at Cetus for a period of time on HIV testing processes before returning to Stanford. As a result of further research conducted at Stanford by Holodniy and others, Stanford was awarded several patents relating to HIV measurement techniques. Cetus was eventually acquired by Roche Molecular Systems, by which Roche specifically acquired all rights that Cetus owned in its Visitor’s Confidentiality Agreement. Thereafter, Roche commercialized the HIV quantification methods developed by Holodniy at Cetus, and now sells its HIV test kits to hospitals and HIV clinics world-wide.

Stanford sued Roche for patent infringement, claiming that Roche’s HIV test kits infringed Stanford’s HIV measurement patents. Roche argued that it had an ownership interest in the HIV inventions by virtue of its acquisition of Holodniy’s Visitor’s Confidentiality Agreement. Stanford disputed Roche's ownership interest, pointing out that Holodniy had no rights to assign to Cetus since he had earlier signed Stanford’s Copyright and Patent Agreement.

The district found that Cetus’ Visitor’s Confidentiality Agreement transferred Holodniy’s inventorship rights to Cetus. However, the district court also held that, because the development of the HIV measurement technique was funded by federal money, the Bayh-Dole Act superseded the assignment to Cetus and placed ownership of Holodniy’s invention with the recipient of the federal funds, Stanford.

The Federal Circuit disagreed with the district court. It held that the choice of words in Stanford’s Copyright and Patent Agreement did not transfer to Stanford a present interest in Holodniy’s inventorship in HIV measurement research. The Federal Circuit determined that Stanford’s Copyright and Patent Agreement constituted only an agreement to assign in the future. On the other hand, there was an actual, present transfer of Holodniy’s inventorship rights by virtue of the present assignment provided for in Cetus’ Visitor’s Confidentiality Agreement. The Federal Circuit also held that the Bayh-Dole Act does not change normal invention ownership rules, even when the invention is developed with federal funds.

The Supreme Court granted certiorari on the issue whether the Bayh-Dole Act supersedes normal contract language pertaining to assignment of an inventorship interest when funding is provided by the federal government. The Supreme Court made clear that, since the initial patent act of 1790, an invention is owned in the first instance by the inventor, and there must be an actual present assignment of the rights in the invention in order to cause a transfer from the inventor. The Supreme Court further confirmed that the Bayh-Dole Act does not usurp this established law.

The problem with Stanford’s choice of words was that “agree to assign * * * right, title and interest in” only created a promise to assign in the future, not a present assignment. A further problem was that Stanford’s language related only to inventions, and did not seek to transfer broader rights for ideas, improvements and issued patents.

On the other hand, Cetus' agreement specifically provided that Holodniy “will assign and do[es] hereby assign.” The language assigned the inventor’s “right, title and interest in each of the ideas, inventions and improvements” made “as a consequence of [his] access” to Cetus. Not only does the Cetus language constitute a present-day assignment of Holodniy’s present and future inventions, but it provides an expansive assignment of ideas, inventions and improvements.

While the Supreme Court holds that the Bayh-Dole Act does not change, but supports, traditional law of patent ownership and transfer notwithstanding the use of federal funds in the development of the invention, Stanford lost exclusive patent rights from poor choice of language in its employment agreement with Holodniy. Critically:
  1. The inventor is the initial owner of an invention, even if the invention is developed during the course of the inventor’s employment.
  2. The inventor’s employer must obtain a present-day assignment in writing from the employee-inventor in order to obtain an interest in the invention. A promise to assign rights in the future is not good enough to create a present assignment.
  3. An assignment of rights in an invention is too narrow. The employer should make certain that the assignment covers the ideas, improvements and issued patents, as well.
  4. Funding of invention development by the federal government does not, without more, change these rules.

Sunday, June 19, 2011


On this date 126 years ago in 1885, a nice round number to be sure, the Statue of Liberty arrived at its permanent place of repose in New York Harbor. The 151 foot high statute was a gift from the people of France to commemorate the 100th anniversary of American independence.

Jack Boucher, photographer, 1984

Thursday, June 9, 2011

The Supreme Court Tells Microsoft To Reboot

It must be tough being Microsoft. This huge multi-zillion dollar company just can't seem to catch a break. It gets no respect. Apple is floating in the clouds with its ultra-innovative efforts. Wasn't Microsoft claiming to be the great innovator at one point in time? Paul Allen is brow-beating his former Microsoft friends, telling the world who the real Idea Man truly is. In your face, Bill! And now, the Supreme Court is kicking sand at Microsoft.

In one corner, you have Microsoft, the Redmond behometh that outsources legal tasks overseas and tries to talk the Supreme Court into seeing things its way. In the other corner, you have nine Supreme Court justices who could care less about Word.

In Microsoft v. i4i, the Supreme Court today tells Microsoft that, while it is very sorry that Microsoft lost a huge jury award for willfuly infringing i4i's patent in some of Microsoft Word's products, too bad. Microsoft argued that its defense of patent invalidity should not be based on a clear and convincing standard but the less arduous preponderance of the evidence standard. Microsoft particularly argued that this should be the case when the Patent Office issues a patent without examining relevant prior art. Microsoft claimed that i4i's patented software contained elements of i4i's earlier software and therefore, because the earlier software failed to satisfy the on-sale bar, the Patent Office's issuance of i4i's current patent was faulty. Of note, the code for i4i's earlier software had been destroyed years prior to commencement of the litigation. i4i relied on the testimony of the inventors of the earlier software to explain verbally why the earlier destroyed software was not present in the patented software. [ I can only hope that the inventors did not use shadow puppets during their software testimony! ] In any event, Microsoft lost big time at trial even though i4i did not introduce into evidence its former code that was the subject of the on-sale bar! Brutal!

The Supreme Court explained that §282 of the Patent Act very clearly provides that an issued patent is presumed valid. The meaning of the term "presumed valid" is well settled in common law. Indeed, the Supreme Court cites to Justice Cardozo, and his analysis of over a century of case authority, confirming the clear and convincing burden of proof needed to overcome a presumption of validity.

Let's be clear. Whenever any court, including the Supreme Court, cites to Benjamin Cardozo, the appellant is going to lose. I am not aware of any court overturning Cardozo. Indeed, it should not have been necessary for Microsoft's counsel to read to the end of the Supreme Court opinion, where the court writes Affirmed, to know that Microsoft lost. This should be clear once Cardozo's name is mentioned early in the opinion. Hopefully, Microsoft will not be billed for any time reading past the name Cardozo.

Benjamin N. Cardozo (1870 - 1938):

So, bottom line, the proof of invalidity requires a clear and convincing showing, just as has been the case for decades. Further, a jury is willing to believe a software inventor's testimony concerning software code that is destroyed and not introduced into evidence. Microsoft just can't catch a break.

Wednesday, June 8, 2011

The Forfeiture of Le Marché

On November 16, 1981, the monotype Le Marché, created by Camille Pissarro, was stolen from the Musée Faure in the Alpine town of Aix-Les Bains in southeastern France. The print was transported into the U.S. by the alleged thief and consigned in 1985 to an art gallery in Texas, where it was ultimately sold to a corporate buyer. Sharyl Davis eventually acquired possession of the print in 1992 from its prior corporate owner and displayed the work in her home for more than ten years. Ms. Davis consigned the print in 2003 to Sotheby’s for auction. The French National Policy became aware of the impending sale of Le Marché and notified U.S. law enforcement who, in turn, requested that Sotheby’s withdraw the work from auction; and Sotheby’s complied. In 2006, the U.S. government brought a civil forfeiture action seeking to recover possession of Le Marché for return to France.

Faure Museum:

Contentious litigation thereafter ensued between the U.S. and Ms. Davis culminating in the recent decision by the Second Circuit Court of Appeals. The court held that notwithstanding Ms. Davis' status as an innocent purchaser, the stolen print was subject to civil forfeiture under U.S. customs law.

The print, Le Marché:

Specifically, in a two-step analysis, the government brought a claim under the customs law, 19 U.S.C. §1595(a), a part of the Tariff Act of 1930, that authorizes the forfeiture of merchandise brought into the U.S. contrary to law that is stolen, smuggled or clandestinely imported or introduced. The government argued that the print was stolen and brought into the U.S. contrary to law in that the possession or sale of stolen goods with a value of at least $5,000 that has moved in interstate or national commerce with knowledge that the goods are stolen violates the National Stolen Property Act. Because the thief stole the print, valued at more than $5,000, from the French museum and imported the work into the U.S., the government maintained that the National Stolen Property Act was violated and the print was subject to civil forfeiture under the Tariff Act.

Ms. Davis argued that she was an innocent owner, but the Second Circuit confirmed that the innocent-owner defense does not apply to a civil forfeiture claim under the customs law. "Indeed, the Supreme Court held, in a case addressing another provision of the Tariff Act of 1930, that 'forfeiture may be enforced even against innocent owners . . . . The penalty is at times a hard one, but it is imposed by the statute in terms too clear to be misread.' General Motors Acceptance Corp. v. United States, 286 U.S. 49, 57 (1932)."

The Second Circuit was mindful that the civil forfeiture law rendered a harsh result for Ms. Davis. Nonetheless, the return of stolen artwork that was introduced into the U.S. in violation of the customs laws represents the law and the enforceable position of the U.S., even when the art is presently owned by an innocent party. In this context, the rule of "buyer beware" aptly applies to art, particularly international art.

Thursday, June 2, 2011

And The New Register Of Copyrights Is ...

The new Register of Copyrights is Maria Pallante, appointed to this permanent position by the Librarian of Congress on June 1st.

Ms. Pallante becomes the 12th Register in the history of the U.S. Copyright Office. She follows in the foot steps of the recently retired Marybeth Peters. Ms. Pallante has spent much of her career as IP counsel and director of licensing for the Guggenheim Museums in New York. More on this appointment is available from the Copyright Office press release.