Wednesday, June 13, 2012

2012 Millennium Technology Prize

Linus Torvalds
The Technology Academy of Finland has awarded its 2012 Millennium Technology Prize to co-laureates Linus Torvalds of Oregon and Shinya Yamanaka of Japan. Many consider the Millennium Technology Prize to be on a par with the Nobel prize, but focusing on the development of new technology. Torvalds won a share of this year's prize in recognition of his development of the Linux kernel, the core of the open source software movement. Dr. Yamanaka was awarded the prize for his discoveries in stem cell development.

Quoting from the Finish Academy's announcement regarding Torvald's accomplishment:
One of the most important elements of the system, which he still writes code for from his Oregon home, as far as its creator is concerned, is that it should be open source software, publicly licensed for anyone to use. “I think open source is so important, it is basically taking the scientific approach of building on top of the openly published work of others, and applying it to software. And software is too important in the modern world not to be developed that way.”
Congratulations to both!
Shinya Yamanaka

Tuesday, June 12, 2012

An Example Of Bad Patent Quality

The ability of an economy to grow is related to the restraints on development. Particularly important, restraints come each day from the Patent Office in the form of newly issued patents.In 2011, for example, the U.S. Patent Office issued 247,713 patents of all types, representing an average of 678 new patents issued each day, or 28 new patents each hour of every day.

So long as the new patents are consistent with the requirements of the Patent Act -- that is, so long as the patents are good patents -- then the economic restraint that comes from each new patent is hopefully offset with the societal value inherent in the patented invention.

But certainly not all patents are good patents. Some are bad, and the bad patents restrain the economy without benefiting the greater good in a manner consistent with the requirements of the Patent Act. Are there really bad patents? You bet. Consider this one:
The above Patent No. 6368227 (issued on April 9, 2002) grants a monopoly to a "Method of Swinging on a Swing." The inventor, Steven Olson of St. Paul, Minnesota, claims to have invented a "a new and improved method of swinging." Reading carefully the patent claims confirms to everyone but the most naive that this invention has been practiced by all of us years -- indeed, decades -- ago in our backyards. So why did the Patent Office issue this patent in the first place? No idea, but the good news is that it only took about a year for the Patent Office to reexamine the patent and cancel all claims (reexamination certificate dated July 1, 2003).

Or, consider this patent:
Pat. No. 5443036 was issued August 22, 1995 for a "Method of Exercising a Cat" by having the cat chase a beam of light. Many cat owners have used a light for this purpose, and many cats understand what it means to chase a light beam. Perhaps these cats know more than the examiner who approved this patent.

That these bad patents should never have been issued is certain to most of us. That the quality control of the Patent Office allowed these patents to issue should be shocking and upsetting to all of us. Not only does it cost the taxpayers money for the Patent Office to issue obviously bad patents, but the economy is not helped  when bad patents restrain economic growth. Bad economy, bad Patent Office.

Toward An Online Bill Of Rights

Sen. Wyden (D-Ore.) and Rep. Issa (R-Cal.) have been vocal advocates against last year's Congressional steamroller that attempted to enact the Stop Online Piracy Act (SOPA) and the Pro IP Act (PIPA). The proposed legislation sought to impose government supervision on the use and function of the Internet. Loud public criticism stopped the steamroller, but Wyden and Issa believe that it may only be a matter of time before renewed energy becomes focused on enhanced Internet regulation.

In order to help focus the contours of public discussion for a free Internet, Wyden and Issa propose the development of a Digital Citizen's Bill Of Rights. Their belief is that this statement will establish minimum doctrinal standards to prevent the regulation of the Internet to fall below a base set of rights. Here are their proposed basic rights for the Internet:
1. Freedom - digital citizens have a right to a free, uncensored internet
2. Openness - digital citizens have a right to an open, unobstructed internet
3. Equality - all digital citizens are created equal on the internet
4. Participation - digital citizens have a right to peaceably participate where and how they choose on the internet
5. Creativity - digital citizens have a right to create, grow and collaborate on the internet, and be held accountable for what they create
6. Sharing - digital citizens have a right to freely share their ideas, lawful discoveries and opinions on the internet
7. Accessibility - digital citizens have a right to access the internet equally, regardless of who they are or where they are
8. Association - digital citizens have a right to freely associate on the internet
9. Privacy - digital citizens have a right to privacy on the internet
10. Property - digital citizens have a right to benefit from what they create, and be secure in their intellectual property on the internet
In my view, while a free Internet is important, so to is the freedom from harmful and illegal conduct that occurs on the Internet. A parent whose child is abused by cyberbullies will feel the need to provide some level of protection for improper Internet use, particularly when the actor resides in a foreign state that provides little or difficult legal protections. The same holds true for Internet purveyors of counterfeit goods, and other similar wrongful conduct. The notion of a free Internet is appealing, but the practical problems associated with undeveloped or difficult legal jurisdictions around the world provide, it seems to me, a practical impediment to a completely free Internet. When a person in a foreign state that provides little legal support against wrongful Internet usage can create international harm with little practical recourse, then a completely free Internet will not work.

Tuesday, May 29, 2012

An Offensive Vodka Label

An Ogden, Utah distiller, Ogden's Own Distillery, is having a problem distributing its vodka in the state of Idaho. After obtaining approval from ATF (Bureau of Alcohol, Tobacco, Firearms & Explosives) for its label, and after obtaining federal trademark registration for its mark FIVE WIVES, the distiller has encountered the sensitivities of Idaho's liquor division.

Idaho will not permit the distribution of Five Wives vodka because the concept "is offensive to a prominent segment of our population." There is no explanation of what this means, how it was determined, or what specifically about the product is offensive to the prominent segment. The problem cannot lie with the vodka itself, since Idaho permits the sale of many other brands of vodka. The shape of the bottle cannot be the problem, one would think. So, the only remaining option centers on the label. But ATF has determined that the label is fine, and the PTO (which is prohibited from registering a mark that is immoral or scandalous) has registered FIVE WIVES as a federal trademark. So, what can it be that has the Idaho liquor division so intoxicated?

Sunday, May 27, 2012

A Memorial Day for Vietnam -- At 50 Years

The Wall

This Memorial Day 2012 marks the remembrance of the 50th anniversary of the U.S. involvement in the Vietnam War. President Obama will mark the beginning of a 13 year war remembrance on Monday, May 28th.
NOW, THEREFORE, I, BARACK OBAMA, President of the United States of America, by virtue of the authority vested in me by the Constitution and the laws of the United States, do hereby proclaim May 28, 2012, through November 11, 2025, as the Commemoration of the 50th Anniversary of the Vietnam War.
The U.S. was involved militarily in Vietnam one way or another since the mid-1940's, including assisting in what became a disastrous French defeat by the Viet Minh at Dien Bien Phu in 1954.

The first American soldier killed in Vietnam during the U.S. war? Air Force T-Sgt. Richard B. Fitzgibbon Jr. His is the first name on the extreme western panel of the Vietnam War Veteran's Memorial.

Sunday, May 20, 2012

Paul Horn's "Dream Machine" and Copyright Termination

Last week, a federal court judge in San Diego ruled that Victor Willis, the cop in the Village People music group, had the right to terminate his prior transfer of interest in certain musical compositions, including Village People hits.

I was not a big fan of the Village People, although it was difficult not to listen to their all-prevalent music in the 1970s. But I was, and continue to be, a fan of Paul Horn, the flutist. My favorite Paul Horn album is "Dream Machine" on Mushroom Records, that came out in 1978. Just what does the ruling favoring Victor Willis' copyright transfer termination have to do with Paul Horn and "Dream Machine" ?

The present Copyright Act permits the termination of prior copyright transfers in certain instances. The rules for termination differ for transfers occurring prior to January 1, 1978 and after that date (the present Copyright Act took effect on January 1, 1978). For post-1977 copyright transfers, the U.S. Copyright Act permits termination during a five year period only, commencing 35 years following the execution of the grant. To effect termination, a notice of termination must be provided to the grant recipient at least two years prior to the date of termination.

Because this coming January 2013 represents 35 years following the effective date of the present Copyright Act, the first wave of terminations is expected to begin this coming January for transfers occurring in 1978, so long as at least a two year advance notice of termination is given. Willis gave his notice of termination timely, with the intent to effect a termination of his post-1977 copyright grants in his musical compositions to Scorpio Music and Can't Stop Productions. Not being pleased to lose ownership of valuable music rights, Scorpio Music and Can't Stop Productions brought a declaratory judgment action, seeking a court determination that Willis did not have the right to terminate his prior transfer.

Willis won. The court ruled that the statute means what it says. If a person makes a transfer of copyright post-1977, then the transfer can be terminated during a five year window beginning 35 years following the date of the transfer, provided at least a two year advance notice of termination is given. Willis complied with the notice requirement, and come 2013 he will be permitted to recapture his copyright interest in previously transferred music compositions. And because the termination cuts off the rights of the grant recipients, Scorpio Music and Can't Stop Productions, Willis' recapture is not restricted by the royalty limitations included in the grant.

It may come as a bit of a shock to learn that an asset bought and paid for can be lost after 35 years with no reimbursement. Copyright transfer is a limited right. The court explains that one purpose of the copyright termination provision is to"safeguard authors against unremunerative transfers" and address "the unequal bargaining position of authors, resulting in part from the impossibility of determining a work's value until is has been exploited."

But there is another justification supporting copyright termination. This brings me to Paul Horn's "Dream Machine." This jazz-funk-fusion album came out in 1978, featuring Paul Horn, Joe Sample, Emil Richards, Dean Parks, Ernie Watts, Jim Keltner, and a host of other fine musicians. The album was composed, arranged and conducted by Lalo Schifrin (he composed the themes to Mission Impossible and The Man From UNCLE, music for Cool Hand Luke, Dirty Harry, and other well-known music). Dream Machine is magic. And it is out of print. There are a few albums available from resellers. But the label, Mushroom Records, is out of business and new vinyl, CDs, and electronic versions are not available. This is a great album, which new listeners will not be able to enjoy.

Perhaps Paul Horn and Lalo Schifrin have given their notices of termination to Mushroom Records, or to whoever now owns the rights to that label's assets. If so, perhaps they may be able to reclaim ownership and control of this great music. Of course, there is a question about ownership of the original recording tapes, but these tapes will not have much value without ownership of the underlying copyright. Perhaps one day, the termination right in the Copyright Act will permit the reintroduction of music that has been buried or out of print for too long. But, the period to deliver the notice of termination is short -- five years. Then the termination window slams shut, forever.

Monday, May 14, 2012

When Does The U.S. Government Not Own The Rights To A War Memorial?

The City of Washington perhaps has more memorials, including war memorials, than any other American city. But does the federal government really own the rights in these memorials? The ongoing litigation between sculptor Frank Gaylord and the United States reveals what happens when the U.S. fails to adequately secure the copyright, or at least a perpetual license, in its war memorials.

Frank Gaylord is a prominent sculptor of "The Column," a group of 19 sculptures depicting a platoon of U.S. foot soldiers in the Korean War. "The Column" is the centerpiece in the Korean War Veterans' Memorial on the west end of the National Mall in Washington, DC.

The Korean War was as brutal as World War II. Some sources peg the U.S. war dead in excess of 33,000, plus more than 8,000 MIAs. In honor of the sacrifice and service to the U.S. during the Korean conflict, Congress in 1986 passed legislation putting in process a mechanism to develop a Korean War memorial. The Army Corps of Engineers was responsible for selecting the memorial's design team, Cooper-Lecky Architects of Washington, DC. Frank Gaylord, a well-regarded sculptor, was selected to craft the sculptural works. He began working on this project in 1990. His sculpted soldiers were assembled into the memorial, and depicted on a sunny day as follows:

The memorial was dedicated in July 1995 and has become a favorite venue on the National Mall. In 2002, the U.S. Postal Service elected to issue a stamp to acknowledge the 50th anniversary of the Korean War armistice. The stamp, depicted below, --

-- was financially successful. By 2005, the Postal Service sold nearly 48 million stamps, earning over $17 million. The Postal Service also sold retail goods, including commemorative panels and framed art, bearing the stamp's image.

Frank Gaylord sued the United States in 2006 for copyright infringement. Following trial in the Court of Claims, the Federal Circuit in February 2010 determined that Gaylord was the copyright author of The Column and that the U.S. government was liable for infringement. The case was remanded to establish damages. The first Federal Circuit opinion is located here.

During the damages case, Gaylord sought a 10% royalty on approximately $30.2 million in total revenue earned by the Postal Service in using The Column image. The Postal Service countered that Gaylord should receive at most a nominal amount since the Postal Service would never have entered into a 10% royalty arrangement. The Postal Service further argued that it never agreed previously to license an existing image for more than $5,000. The Court of Claims awarded Gaylord $5,000 for copyright infringement damages.

On appeal for the second time, the Federal Circuit reversed the nominal monetary award. A copy of the second appellate opinion is here. The Federal Circuit criticized the Court of Claims for limiting its analysis of the damage award solely to the Postal Service's position that it would never pay a 10% royalty. On the contrary, the Federal Circuit explained that, in establishing a copyright damages award against the federal government, "the court should not arbitrarily cap this award at $5,000 simply because the Postal Service claims it has never paid more to license a copyright for use on a stamp."
"Defendants cannot insulate themselves from paying for the damages they caused by resting on their past agreements and by creating internal 'policies' that shield them from paying fair market value for what they took."
The Federal Circuit observed that the test for copyright damages is not based on what the infringer would prefer to pay. Indeed, the amount of damages for this present claim of infringement may be unrelated to prior royalty agreements of either of the parties.
"The court should keep in mind that Mr. Gaylord's recovery is not limited to the Postal Service's actual profits. * * * Indeed, the court may find that a hypothetical negotiation between the parties would result in a higher ongoing royalty that the rate earned by Mr. Gaylord or the Postal Service under past agreements."
The Federal Circuit further determined that an award of prejudgment interest on the damages sum was appropriate. "Mr. Gaylord is entitled to prejudgment interest because it is necessary to make his compensation complete." The Federal Circuit vacated the trial court's decision and remanded for a new damages determination.

While it will be interesting to learn how the trial court resets the sum that the Postal Service will be required to pay Gaylord for nonpermitted use of The Column images, a much more fundamental question presents itself. Why must the government ever be required to pay for use of the image of a beloved memorial, particularly when the memorial was undertaken pursuant to federal legislation, involving federal money, located on federal ground, and depicting federal military personnel in U.S. sponsored military action? There is no question that Frank Gaylord's creativity and artistic talents resulted in a magnificent war memorial honoring brave wounded, dead and missing military personnel. But why did the government lawyers and procurement staff not include a perpetual copyright license or, better yet, a copyright release to the federal government for use of The Column?

Monday, May 7, 2012

The Branding Message From Leonard Lauder

The International Trademark Association (INTA) annual meeting is occurring this week in Washington, DC. Providing the key note address this year was Leonard Lauder, Chair Emeritus and son of his company's namesake Estée Lauder. Leonard's company sells such well-known brands as Estée Lauder, Clinique and Aramis, enjoying annual world-wide revenue in excess of $7 billion. The messages provided by Leonard Lauder to the assembled trademark practitioners were profound:
  • Brands stand for a promise between the product and the consumer. Consumers come to know a product by this promise. Does a brand adequately protect this promise?
  • Companies must seek a broad view of what constitutes a brand. A brand is not only a product name, but also product color, design, packaging and a domain. Have all of these brand elements been protected?
  • A company's intellectual property counsel must be involved in licensing and transactional negotiations. This is particularly true in that IP impacts so many aspects of a company's product and brand.
  • The image of a company's product can be key to product success because it is the image that sells.
One element that Leonard did not mention, but that was presented during the course of INTA's educational offerings, is the sobering reality that over 50% of people under 20 years of age look to social media for brand information. As such, and to the above important branding issues addressed by Leonard Lauder, it should be asked whether a company's brand is adequately being developed on-line and in social media.

The Old False Marking Statute Is Dead -- Really, Truly Dead

Prior to the recent amendments to the U.S. Patent Act, it became common for anyone to bring a claim in federal court accusing a manufacturer of mislabeling based on false patent marking. Former section 292 of the Patent Act allowed anyone to sue for up to $500 per item when a patent number was falsely applied to a product, or on advertising for a product. Numerous lawsuits erupted claiming $500 for hundreds of thousands of items bearing false patent numbers. But this is now behind us with the recent patent amendments contained in the America Invents Act. The present section 292 no longer allows anyone to bring a claim for false patent marking. Now, only a plaintiff who suffers a competitive injury caused by the false marking is permitted to sue.

Congress made the amendment retroactive to pending cases, and the retroactive application is made clear in the Federal Circuit's new decision in Rogers v. Tristar Products, dismissing a pending false patent marking claim. In Rogers, the plaintiff sought $500 per falsely marked item but conceded that he was not a competitor to Tristar Products and did not suffer a competitive injury. He argued, nonetheless, that the amendments to section 292 should not be made retroactive because, to do so, constitutes a governmental taking of his litigation rights in violation of the Fifth Amendment. The Federal Circuit quickly disposed of Roger's argument, pointing out that a litigant does not have a vested right in a statutory-based claim until entry of final judgment. Statutory amendments can be made retroactive so as to negatively impact pending litigation. The Federal Circuit observed that Congress had a real good reason to make the section 292 amendments retroactive: to protect companies from having to expend resources to defend themselves from claims that they intentionally sought to harm consumers.
"By making the False Marking Act amendments retroactive, Congress was in significant part attempting to reduce the litigation expenditures in the large number of complaints filed but not yet subject to final judgment. 
* * * 
This was a legitimate justification * * *."
Recalling that the former false marking statute prohibited the fraudulent use of false patent markings, the Federal Circuit's new Rogers decision confirms Congressional elimination of an important tool preventing fraud on consumers.

Wednesday, April 25, 2012

The Value Of A Student-Athlete's Jersey

LaMichael James has been a college football star at the University of Oregon, and will be drafted pretty high in this week's NFL draft. The University of Oregon is doing spring cleaning this week. What do these two things have in common?

The University of Oregon has a lot of excess football gear in storage that it is trying to get rid of. This makes perfect sense since the UO football team wears an assortment of jerseys, pants, helmets, socks and shoes in different color and style combinations. Images displaying a wide assortment of the "can't figure out what to wear" team is located here. So, with all of this stylish apparel, is it any wonder that the team needs to clear out its cupboards of old gear so as to make room for this fall's new fashions? Of course not. Who wouldn't?

So, the University of Oregon is auctioning off the jerseys and other equipment worn by players, including well-known NFL draft-eligible players such as LaMichael James. The gear auction is happening now at Some of the LaMichael James gear is commanding an auction price in excess of $600. And we know that the gear was genuinely worn by these famous players because the website says so. The gear is Oregon authentic!

All of which caused LaMichael James to go onto Twitter recently and inquiry "How much do I get?" Good question. Most likely, NOTHING.

Most states in the U.S. have some form of right of publicity law that protects a person's image and persona from commercial appropriation by third parties. The states of California and Washington, each bordering Oregon to the south and north, have right of publicity laws. But not Oregon. Nope. Oregon is one state that does not recognize a person's right of publicity. A person who wants to protect their image or persona from crass commercial appropriation by another without permission is basically out of luck in Oregon. If LaMichael James played football at a school in California or Washington -- heaven forbid! -- he would certainly have the ability to call up the athletic department and request his cut of the proceeds from the auction of his worn and valuable jersey. But because he played in Oregon, and because the appropriation of his persona is occurring in Eugene and not in Seattle or LA, he gets nothing.

Let's be clear. The reason the UO athletic department is holding an auction of LaMichael James' jersey, together with the gear of a lot of other well-known players, is because these worn jerseys represent a gold mine to the school. These worn jerseys have no inherent value beyond the reasonable value that any used apparel might bring in a thrift store. But because these jerseys were worn by well-known college football stars, there is extra value to be gained. These jerseys were sweat stained. They were put on, tugged at, yanked, tackled, rolled on the turf and otherwise abused during the course of athletic play by college football stars. The public is offering to pay extra for this gear because of the star-association with these players.

So, the UO athletic department may end up pocketing hundreds of extra dollars for each auctioned item rather than the lower mark-up that it usually gets from retail sales of new gear. The extra margin exists because of the player. The skill and renown of the player created this extra value. These players, such as LaMichael James, paid their dues to the school, left the school and its football program, and are now free citizens who should have the ability to control their fame, their name, their persona and their innate value.

But not in Oregon.

Friday, April 20, 2012

A Grand Dame at 100

A ball park constructed on cheap land in a backwater area of Boston has become over the past 100 years a national treasure. Boston's Fenway Park hosted its first professional baseball game on this date 100 years ago: April 20, 1912. Then, the Boston Red Sox beat the New York Highlanders (later renamed the Yankees) 7 - 6 in 11 innings.

There aren't many things that survive and remain useful for 100 years. Many large, modern ballparks have been constructed in other towns that are sterile and uninspired (e.g., the old Riverfront Stadium in Cincinnati and the ugly Kingdome in Seattle, now each thankfully torn down and replaced). Many recent parks have gone for the retro look (Baltimore's Camden Yards started this trend twenty years ago). But Fenway doesn't need the retro look -- it is retro! Indeed, its foul lines are now too short, its seating capacity provides a challenge for last minute ticket buyers and parking stinks. But it's a good thing to appreciate oldness. Not everything old needs to be destroyed and rebuilt. Sometimes old things, like the U.S. Constitution, stand the test of time.

Wednesday, April 18, 2012

A Second Bite Of The Patent Apple

The Supreme Court ruled today that inventors whose patent applications are denied by the PTO, and by its Board of Patent Appeals and Interferences, can either appeal the denial to the Federal Circuit or can institute a new civil action in the district court against the PTO Director. In Kappos v. Hyatt, the Supreme Court expressly permits a do-over by allowing a patent applicant to present new evidence in a district court proceeding, and requiring the district court to review all evidence de novo.

For these reasons, we conclude that there are no limitations on a patent applicant’s ability to introduce new evidence in a §145 proceeding beyond those already present in the Federal Rules of Evidence and the Federal Rules of Civil Procedure. Moreover, if new evidence is presented on a disputed question of fact, the district court must make de novo factual findings that take account of both the new evidence and the administrative record before the PTO.

The basis of today's Supreme Court decision is §145 of the Patent Act, permitting a patent applicant who is refused a patent registration by the Board of Patent Appeals and Inferences to either appeal the administrative denial to the Federal Circuit or to maintain a new action against the PTO Director.

35 U.S.C. 145 Civil action to obtain patent.
An applicant dissatisfied with the decision of the Board of Patent Appeals and Interferences in an appeal under section 134(a) of this title may, unless appeal has been taken to the United States Court of Appeals for the Federal Circuit, have remedy by civil action against the Director in the United States District Court for the District of Columbia if commenced within such time after such decision, not less than sixty days, as the Director appoints. The court may adjudge that such applicant is entitled to receive a patent for his invention, as specified in any of his claims involved in the decision of the Board of Patent Appeals and Interferences, as the facts in the case may appear, and such adjudication shall authorize the Director to issue such patent on compliance with the requirements of law. All the expenses of the proceedings shall be paid by the applicant.

This opportunity to retry in district court a case, with new evidence and de novo review, is certainly rare. But today's decision may open the litigation floodgates for inventors whose patent applications are denied by the PTO administrative process. That is, rather than appeal directly to the Federal Circuit -- which is not permitted to receive new evidence or to evaluate the record de novo -- the inventor can now bring a new proceeding with new evidence, obtain independent and de novo review, and thereafter seek appellate review with the Federal Circuit based on the new evidence and new argument. In effect, the administrative proceeding before the PTO will become mere trial preparation for the more significant district court case.

Wednesday, April 11, 2012

Misuse Of Your Employer's Computer System Is Not A Crime In The U.S. West Coast

The Ninth Circuit has confirmed what many employees have understood for a long time: while it may be beyond inappropriate for an employee to use access to a workplace computer in a way that misuses the employer’s confidential data, it is not a crime.

In my post from May 2, 2011, and again on December 27, 2011, I discussed the Ninth Circuit's criminal case of U.S. v. Nosal. The Justice Department accused Mr. Nosal under the Computer Fraud and Abuse Act (CFAA) of aiding and abetting the criminal misuse of his employer’s computer.

Nosal’s conduct was absolutely outrageous, assuming the allegations against him are correct. The Ninth Circuit explains:

David Nosal used to work for Korn/Ferry, an executive search film. Shortly after he left the company, he convinced some of his former colleagues who were still working for Korn/Ferry to help him start a competing business. The employees used their log-in credentials to download source lists, names and contact information from a confidential database on the company's computer, and then transferred that information to Nosal. The employees were authorized to access the database, but Korn/Ferry had a policy that forbade disclosing confidential information. The government indicted Nosal on twenty counts, including trade secret theft, mail fraud, conspiracy and violations of the CFAA, The CFAA counts charged Nosal with violations of 18 U.S.C. §1030(a)(4) for aiding and abetting the Korn/Ferry employees in “exceed[ing their] authorized access” with intent to defraud.

The Ninth Circuit wrestled with the question whether the CFAA criminalizes the conduct of an employee who is not a hacker but merely misuses employer data. The Court determined that Congress intended the CFAA to prevent hacking – the unauthorized access to a computer system – and that the CFAA does not address the unauthorized use of data taken from a properly accessed computer system.

Minds have wandered since the beginning of time and the computer gives employees new ways to procrastinate, by g-chatting with friends, playing games, shopping or watching sports highlights. Such activities are routinely prohibited by many computer-use policies, although employees are seldom disciplined for occasional use of work computers for personal purposes. Nevertheless, under the broad interpretation of the CFAA, such minor dalliances would become federal crimes. While it is unlikely that you’ll be prosecuted for watching Reason.TV on work computer, you could be. Employers wanting to rid themselves of troublesome employees without following proper procedures could threaten to report them to the FBI unless they quit. Ubiquitous, seldom-prosecuted crimes invite arbitrary and discriminatory enforcement.

This decision of the Ninth Circuit is in line and consistent with similar interpretations of the CFAA from several district courts in New York, Arizona, Georgia and Maryland. However, the Eleventh Circuit, the Fifth Circuit and the Seventh Circuit have seen things differently, extending the criminal reach of the CFAA to use restrictions, even when hacking is not involved.

Should most people care about how the CFAA is interpreted and applied? Is this a real problem, really?

For example, it's not widely known that, up until very recently, Google forbade minors from using its services. See Google Terms of Service, effective April 16, 2007—March 1, 2012. §2.3, (“You may not use the Services and may not accept the Terms if … you are not of legal age to form a binding contract with Google …”) (last visited Mar. 4, 2012). Adopting the government’s interpretation would turn vast numbers of teens and pre-teens into juvenile delinquents—and their parents and teachers into delinquency contributors. Similarly, Facebook makes it a violation of the terms of service to let anyone log into your account. See Facebook Statement of Rights and Responsibilities § 4.8 (“You will not share your password, … let anyone else access your account, or do anything else that might jeopardize the security of your account.”) (last visited Mar. 4, 2012). Yet it’s very common for people to let close friends and relatives check their email or access their online accounts. Some may be aware that, if discovered, they may stiffer a rebuke from the ISP or a loss of access, but few imagine they might be marched off to federal prison for doing so.
Note to the world: any comments to this post must only contain nice thoughts.

Thursday, April 5, 2012

Justice Kennedy: Say It Ain't So

This blog deals with intellectual property and not the present legal issues relating to Obamacare, nor the limits of Congressional power under the Commerce Clause. And so, to comment on last week's oral argument at the Supreme Court regarding Obamacare, the following tie-in with the U.S. Copyright Act is offered.

Focusing on the one justice who may end up writing the majority opinion, Justice Kennedy made the following comment:

"And here the government is saying that the Federal Government has a duty to tell the individual citizen that it must act, and that is different from what we have in previous cases and that changes the relationship of the Federal Government to the individual in the very fundamental way."

Examples have been provided recently of instances in which the U.S. government requires citizens to act, or risk adverse consequences. It has been pointed out that citizens are required to contribute to Social Security and Medicare even if they don't elect to do so. It's mandatory.

So, here is the IP tie-in that may help Justice Kennedy understand that his observation is not rationally based. The U.S. Copyright Act, at Section 407, requires that all copyright owners shall deliver -- free of charge -- to the Library of Congress two best copies of a published work within three months of publication, or risk paying a fine. This obligation to donate two copies of a work applies whether or not the copyright owner seeks to register the copyright. This obligation applies to everyone who owns a work published in the U.S. The purpose of this "donation" requirement, of course, is to assist the Library of Congress in developing its collection. 

Congress certainly has no problem requiring a tribute of two free copies of a work for its library -- with no quid pro quo to its citizens, other than a nicely developed federal library. And no one has previously expressed the view, as best as can be determined, that this donation requirement fundamentally changes a citizen's relationship with government. 

Justice Kennedy, as you think through the issue of Obamacare, the Commerce Clause, and the power of Congress, reflect that there are many onerous obligations to act imposed on citizens by government, but ultimately Congress gets to decide if these are publicly beneficial.