Thursday, April 21, 2011

Verdict Form in Mattel v. MGA

As has been widely reported, MGA won the retrial in the long-running lawsuit filed by Mattel over MGA's "Bratz" line of toy dolls.  The jury said that MGA is the answer to Judge Kozinski's question, "Who owns Bratz?" The verdict form is here.

Federal Circuit to Decide Joint Liability Issue En Banc

The Federal Circuit has agreed to decide en banc the issue of joint liability of method claims.  In three cases, the court had discussed the issue of when a method claim is directly infringed by the combined actions of multiple parties.  For direct infringement, at least, the court had taken a very narrow view of infringement in these cases:

BMC Resources, Inc. v. Paymentech, LP, 498 F.3d 1373 (Fed. Cir. 2007)
Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008)
Akamai Techs., Inc. v. Limelight Networks, Inc., Nos. 2009-1372, 2009-1380, 2009-1416, 2009-1417 (Fed. Cir. Dec. 20, 2010)

In Muniauction, for example, the court held:
Accordingly, where the actions of multiple parties combine to perform every step of a claimed method, the claim is directly infringed only if one party exercises "control or direction" over the entire process such that every step is attributable to the controlling party, i.e., the "mastermind."

In the Akamai case from last December, the court went further and stated:
In assessing infringement based on the actions of joint parties, it is not enough to determine for whose benefit the actions serve, for in any relationship there may be benefits that inure in some respects to both parties. This court therefore holds as a matter of Federal Circuit law that there can only be joint infringement when there is an agency relationship between the parties who perform the method steps or when one party is contractually obligated to the other to perform the steps. Neither is present here.

The court has now decided to rehear Akamai en banc.  Per today's order, the question presented is:
If separate entities each perform separate steps of a method claim, under what circumstances would that claim be directly infringed and to what extent would each of the parties be liable?
(1) Here's Patently-O's post on this order.  That post references a relevant 2004 article by Mark Lemley and others on divided infringement.

(2) I did some more thinking and analysis of what's going on here.  It turns out there are two other cases applying the BMC/Muniauction reasoning:
Golden Hour Data Systems, Inc. v. emsCharts, Inc., 614 F. 3d 1367 (Fed. Cir. 2010)
McKesson Technologies Inc. v. Epic Sys. Corp., No. 2010-1291 (Fed. Cir. April 12, 2011)

Judge Newman dissented briefly in Golden Hour,  and at length in the recent McKesson Technologies case.  Her dissent in McKesson probably acted as an incentive for the court to order a rehearing en banc in Akamai.  Something else that probably helped was Judge Bryson's concurring opinion in McKesson, joining the majority opinion in view of BMC, Muniauction, and Akamai, but suggesting en banc review.  (The mandate has not yet issued in McKesson, so the outcome of Akamai will probably apply to McKesson eventually.)

What's interesting is looking at the lineup of the judges in the 5 cases decided so far (the judge authoring the opinion is listed first; Chief Judge Rader is just referred to as "Judge" for convenience):

BMC:  Judges Rader, Gajarsa, Prost
Muniauction: Judges Gajarsa, Plager, Prost
Akamai:  Judges Linn, Rader, Prost
Golden Hour:  Judges Dyk, Friedman; Judge Newman dissenting
McKesson:  Judge Linn; Judge Bryson concurring; Judge Newman dissenting

Adding up the scorecard suggests that Judges Rader, Linn, Gajarsa and Prost seem to like the BMC/Muniauction rule, having agreed to it in two cases each.  Judges Dyk, Friedman and Plager are also willing to follow it, in one case each.  Judge Bryson might or might not follow it, especially now that he is free to vote to repeal the rule in an en banc setting.  Judge Newman will obviously vote to overturn the rule.  However, since Judges Friedman and Plager are senior Judges, they won't participate in the en banc panel.  Although enough active Judges voted to rehear the case en banc, based on the previous cases it seems that to overrule BMC and Muniauction, Judge Newman (and perhaps Judge Bryson) will have to pick up the votes of nearly all of the remaining judges who have yet to decide this issue.

Wednesday, April 20, 2011

Sign of the Day

"This Is Not a Good Sign."  If not, what is?

En Banc Federal Circuit Clarifies Law of Contempt

Today the Federal Circuit released an en banc opinion in Tivo v. Echostar.  This case deals with the standards for contempt proceedings after trial and entry of a permanent injunction.  As such, the issue doesn't come up very often, but the Federal Circuit took the case en banc to clarify -- and overrule -- some of its earlier precedent.  Rejecting the application of the previous "colorably different" test, the court held:
Thus, the party seeking to enforce the injunction must prove both that the newly accused product is not more than colorably different from the product found to infringe and that the newly accused product actually infringes.
We have stated the test for colorable differences as one that requires determining whether “substantial open issues with respect to infringement to be tried” exist. KSM, 776 F.2d at 1532. In some cases, that has misled district courts to focus solely on infringement by the newly accused devices in deciding contempt. That is the case here. Today, we reject that infringement-based understanding of the colorably different test. Instead of focusing solely on infringement, the contempt analysis must focus initially on the differences between the features relied upon to establish infringement and the modified features of the newly accused products.
The primary question on contempt should be whether the newly accused product is so different from the product previously found to infringe that it raises “a fair ground of doubt as to the wrongfulness of the defendant’s conduct.” Cal. Artificial Stone Paving Co., 113 U.S. at 618. The analysis must focus not on differences between randomly chosen features of the product found to infringe in the earlier infringement trial and the newly accused product, Additive Controls, 154 F.3d at 1350, but on those aspects of the accused product that were previously alleged to be, and were a basis for, the prior finding of infringement, and the modified features of the newly accused product. Specifically, one should focus on those elements of the adjudged infringing products that the patentee previously contended, and proved, satisfy specific limitations of the asserted claims. Where one or more of those elements previously found to infringe has been modified, or removed, the court must make an inquiry into whether that modification is significant. If those differences between the old and new elements are significant, the newly accused product as a whole shall be deemed more than colorably different from the adjudged infringing one, and the inquiry into whether the newly accused product actually infringes is irrelevant. Contempt is then inappropriate. Arbek Mfg., Inc. v. Moazzam, 55 F.3d 1567, 1570 (Fed. Cir. 1995) (“[T]he modifying party generally deserves the opportunity to litigate the infringement questions at a new trial.”).
There is more going on in this opinion, including a separate section on a provision requiring Echostar to disable certain products already sold, but the above holding is of greatest interest.

Monday, April 18, 2011

Oral Argument in Microsoft v. i4i

Today the Supreme Court heard oral argument in Microsoft v. i4iThe transcript is available here.  As I explained in previous posts on the subject, this cases involves the standard of proof for the difficulty of invalidating a patent.  Microsoft is asking the Court to lower the standard of proof from clear and convincing evidence to a preponderance of the evidence -- at least when the prior art was not considered by the Patent Office (PTO).  In particular, see my most recent post containing some thoughts about the oral argument.  i4i has a case page linking to all of the briefs except for Microsoft's reply brief, which is here.  In addition to counsel for Microsoft and i4i, a deputy Solicitor General argued in support of i4i.

The oral argument did not clearly favor either side.  (This is in contrast, for example, to the oral argument in KSR v. Teleflex, which seemed to predict, correctly, that the Court would overrule the Federal Circuit's standard for proving obviousness.)  Some thoughts:
  • The Justices asked all three counsel about the wording of the statute and its construction, which has two separate sentences about proving invalidity, but which does not specify that the standard of proof is clear and convincing evidence.
  • Several Justices seemed at least somewhat sympathetic to i4i's argument that the RCA case established a clear and convincing rule in all circumstances.
  • The Justices did not ask either i4i's counsel or the deputy SG about either the Grogan or Huddleston cases.  My most recent post observed that if the Justices did ask about those cases, it would have been a good sign for Microsoft.
  • There was a fair amount of discussion about an alternative to lowering the standard of proof: a jury instruction saying that the defendant could more easily meet the clear and convincing standard using evidence that was not before the Patent Office.  i4i's counsel described the instruction as follows:
 But you could -- certainly could say that the defendant contends that the patent is invalid because the law presumes that a patent issued by the PTO is valid, the defendant bears the burden of proving invalidity by clear and convincing evidence, and in deciding whether the defendant has met that burden, you may find it more easily met with evidence that you conclude the Patent Office did not consider in evaluating patentability.
         i4i probably likes that idea because Microsoft didn't ask for such an instruction in this case.  Microsoft's counsel pointed out that Microsoft did ask for such an instruction in an earlier case, and that the Federal Circuit rejected the instruction as potentially confusing.  Some Justices commented that even such an instruction would require the jury to decide what prior art had or not been considered byt the PTO.
  • Only Justice Breyer expressed concerned about the harm in erroneously granting invalid patents:
JUSTICE BREYER: All those first principles are along the lines of how important patents are and what a disaster is it is to the person once they're invalidated. Okay. I think the other side will say: In today's world, where nobody really understands this technology very well, a worse disaster for the country is to have protection given to things that don't deserve it because they act as a block on trade, they act as monopolies, and they will tie the country up in individual monopolies that will raise prices to consumers, et cetera. You can imagine my spelling out this argument.
A decision is expected by June.  UPDATE:  Here are discussions by SCOTUSblog and Patently-O.

Friday, April 15, 2011

YouTube Copyright School

YouTube has a new video:  "YouTube Copyright School."  I think this is serious, but I'll label it under both "Copyright" and "Humor" to be sure.
(Note to the creator of this video, if you need it:  my DMCA contact information is available in the lower right.)

UPDATE:  Here are comments by EFF, Joe Mullin and Techdirt.  And here's a post by The Onion, thus validating my initial decision to label this under both "Copyright" and "Humor."

FURTHER UPDATE:  Public Knowledge has started a contest to create a better video than YouTube's.   The winner gets a $1,000 prize. 

Monday, April 11, 2011

Facebook Wins Winklevoss Appeal

Today, Facebook won an appeal against the Winklevoss brothers.  The film "The Social Network" featured the lawsuit the Winklevosses filed against Facebook and Mark Zuckerberg, claiming that they and not Zuckerberg invented the concept for Facebook.  The parties settled the case for a reported $65 million in cash and stock.  However, the Winklevosses claimed the settlement was invalid.  Facebook asked the courts to confirm the settlement, which a trial court did awhile ago and which the Ninth Circuit Court of Appeals did today.  Here's the opinion.  Of course, the stock is worth even more now, so don't feel too sorry for the Winklevosses.

Go Celebrate!

It's International "Louie Louie" Day!

Sunday, April 10, 2011

Appellee Round Briefs in Viacom v. YouTube and Premier League v. YouTube Appeals

The Appellee round briefs (sometimes called "bottom side" briefs) have been filed in the Viacom v. YouTube and Premier League v. YouTube appeals.  My post about the opening round briefs described the case, which is about the "safe harbor" provisions of the Digital Millennium Copyright Act, 17 U.S.C. §512.  Briefly, the plaintiffs in two related cases in the Southern District of New York -- Viacom et al. in one case, the Premier League et al. in the other -- sued YouTube and Google for copyright infringement.  The plaintiffs claimed that YouTube was responsible when its users uploaded copyrighted videos and music to YouTube.  YouTube claimed it was entitled to the DMCA's "safe harbor" since it took down any copyrighted material promptly upon receipt of a notice that complied with the statute.  The district court agreed with YouTube and granted summary judgment in YouTube's favor in June 2010.  The case is now before the Second Circuit Court of Appeals.

YouTube filed its opening brief on March 31, 2011; its corrected brief is hereTechdirt has a detailed analysis of YouTube's brief, which is worth reading (and which saves me the trouble of writing my own detailed summary).  Three things I liked about YouTube's brief included: (1) it clearly explained the statutory requirements and why the statute should be interpreted as YouTube claims; (2) it pointed out how the Appellants distorted the record, to try to paint YouTube as a "pirate" site (see pages 11-15 of YouTube's brief); and (3) YouTube cleverly used the plaintiffs' posting of their own videos on YouTube for marketing purposes to support YouTube's legal arguments, such as YouTube's lack of knowledge of what was allegedly infringing (see, for example, pages 44-53).

Thirteen amicus briefs were filed in support of YouTube (not counting the AIPLA brief filed during the opening round of briefs, which mostly favors YouTube).  I co-authored an amicus brief by the Consumer Electronics Association.  The 13 amicus briefs are as follows:

  1. Anaheim Ballet, Michael Moore, Khan Academy Inc., Adam Bahner, Michael Bassik, Dane Boedigheimer, Mathew Brown, Michael Buckley, Shay Butler, Charles Como, Iman Crosson, Philip De Villis, Rawn Erickson, Hank Green, John Green, Kassem Gharaibeh, William Louis Hyde, Kevin Nalty, Allison Speed, Charles Todd, Charles Trippy and Barnett Zitron
  2. Computer & Communications Industry Ass'n (CCIA) and NetCoalition
  3. Consumer Electronics Association
  4. eBay Inc., Facebook, Inc., IAC/InterActiveCorp, and Yahoo!
  5. Electronic Frontier Foundation, Center for Democracy and Technology, International Federation of Library Associations and Institutions, American Library Association, Association of College and Research Libraries, and Association of Research Libraries
  6. Human Rights Watch, Freedom House, Reporters Without Borders, and Access
  7. Intellectual Property and Internet Law Professors
  8. MP3tunes, Inc.
  9. National Alliance for Media Art & Culture and The Alliance for Community Media
  10. National Consumers League, Consumers Union of United States, Inc., Consumer Action and the United States Student Association
  11. National Venture Capital Association
  12. Professor Michael Carrier
  13. Public Knowledge

EFF and Public Knowledge have published posts about their briefs.

UPDATE:  Eric Goldman has a lengthy post about YouTube's brief and the amicus briefs.   I'll try not to repeat what Eric says, but here's some of my thoughts about the amicus briefs, organized by topic:

  • Stealth Marketing:  The MP3Tunes brief discusses the efforts by Viacom and many other media companies to use YouTube and similar UGC sites for "stealth marketing" purposes.  In so doing, this brief offers perhaps the best practical examples of why Viacom's "generalized knowledge" scheme simply won't work.  Briefly, content companies use YouTube and similar sites to market their content, by uploading their own content using fake or dummy accounts to make the content look like it isn't associated with the content owner.  It's impossible for UGC sites like YouTube to figure this out and properly take down what's authorized and what isn't.  As the brief says, "Internet marketing practices have created a climate of uncertainty wherein service providers cannot differentiate between authorized and unauthorized content on user-generated websites."  Read this entire brief to appreciate it fully.  The brief concludes by showing that after the marketing departments of Viacom or other media companies secretly posted their own content, the same companies' legal departments then sent takedown notices, to which the marketing departments then had to send counter-notices, to re-post the authorized content.  As the brief says, "If media titans with enormous resources like Viacom and EMI cannot monitor their own copyrighted works and keep track of whether the posting of a work is authorized or not, it is absurd to expect service providers, which are not privy to even a fraction of such information, to make these distinctions."
  • User Groups:  One of the best amicus briefs at the district court level was by the "Sideshow Coalition," a collection of YouTube users who were able to distribute their own content using YouTube, which traditional media distribution channels didn't easily accommodate.  (The term "Sideshow Coalition" reflected Viacom's dismissal of individual users using YouTube to their benefit as a "sideshow," an expression Viacom left out of its appeal brief.)  While the "Sideshow Coalition" didn't make it to the Second Circuit, there are two briefs of similar user groups, the Anaheim Ballet et al. brief, and the National Alliance and Media Art and Culture et al. brief.  A related brief is by the National Consumers League et al., which discusses the value of consumer reviews.
  • "Least Cost Avoidance":  An amicus brief supporting Viacom by Stuart Brotman et al. argued that under the tort law principle of "least cost avoidance," UGC sites should bear the entire cost and liability for monitoring infringements.  The brief by Professor Michael Carrier shows why this principle isn't applicable here.  (After all, this case doesn't involve an oil spill, asbestos, or a defective product.)  It's not clear that YouTube is in fact the least cost provider -- after all, only copyright owners know if content is authorized (see the MP3Tunes brief, for example), and copyright owners are best able to decide issues such as fair use.  Prof. Carrier asks what would have happened if, for example, all photocopier machines were required to automatically refuse to copy any paper that had a copyright notice on it.  The brief by the IP and Internet Law Professors also discusses this issue.
  • Free Speech and Political Advocacy:  The briefs by the Human Rights Watch et al. and the Electronic Frontier Foundation et al. discuss the importance of YouTube and other UGC sites, such as Facebook and Twitter, to free speech and human rights, including recent events in places like Egypt, Tunisia, Iran, and elsewhere.
  • Rebutting the Content Industries' Claim that UGC Sites Are Causing Enormous Harm:  Two briefs respond to the claims by many of the opening round briefs by Viacom and its amici that "the sky is falling" because of YouTube and other UGC sites.  In sum, the content industries have been making such claims for over 100 years, and have uniformly been wrong.  See my brief on behalf of the Consumer Electronics Association, and Prof. Carrier's brief.
  • Filtering:  Two briefs supporting Viacom, by Audible Magic and Vobile, asserted that those companies' filtering technologies could detect allegedly infringing content.  A brief by Public Knowledge rebuts these assertions.  Among other things, filtering technologies can identify content (with both false positives and false negatives, see also my CEA brief); but filtering can't identify infringements.   In other words, a content filter isn't the same thing as an infringement filter.  Content filters can't identify any of the following:  stealth marketing; other authorized content; fair use of content; or de minimus use of content.
  • Inducement Liability:  The CCIA brief contains a detailed discussion of the issue of inducement liability.  (I don't necessarily agree with all of the analysis in this brief, but it nicely rebuts arguments that Viacom makes in this case.)
  • Statutory Analysis and Discussion of Case Precedent:  As Eric's post notes, several briefs discuss the statutory language and case precedent relevant to these appeals.  These include briefs by the IP and Internet Law Professors, eBay, EFF, and the National Venture Capital Association.  As to precedent, the NVCA brief interestingly notes how its VC members funded many of the defendants in previous cases, including Veoh, LoopNet, eBay, Amazon, and Photobucket.

    Final updates:  When this post was first filed, I included links to the amicus briefs as they existed at that time.  Since then, several amicus briefs have been re-filed to comply with the Second Circuit's arcane formatting rules.  (The rules actually make a lot of sense, but they are difficult to follow.)  I have since updated the above links to the re-filed briefs; this includes the briefs by Prof. Carrier, the National Consumers' League, eBay, and the NVCA.

    Techdirt has a detailed discussion of Professor Carrier's brief.

    Thursday, April 7, 2011

    Google's Testimony Before the House Subcommittee on Intellectual Property, Competition and the Internet

    On April 6, 2011, Kent Walker, Google's Senior VP and General Counsel, testified before the Google's Testimony Before the House Subcommittee on Intellectual Property, Competition and the Internet.  This was at a hearing on “Promoting Investment and Protecting Commerce Online: Legitimate Sites v. Parasites, Part II.”  (Any chance that the use of the word "Parasites" in the title of the hearing showed some bias?)  Anyway, Mr. Walker's written testimony can be found here.  Techdirt has an article about the hearing here

    A few highlights of the written testimony:

    Internet technologies are used every day in amazing and perfectly legal ways. Without question, the information technology industry is the fastest growing business sector in the world, regularly experiencing double-digit growth and accounting for nearly one-fourth of our nation’s real GDP growth. The Internet adds an estimated $2 trillion to annual GDP. Interactive advertising alone is responsible for $300 billion of economic activity in the U.S., employing 3.1 million Americans.

    The Internet has been a boon to businesses of every kind and size across the country. The efficiencies of the web reduce transaction costs for suppliers and consumers in every sector, while creating entirely new markets. Thanks to the Internet, it’s never been easier to start a business and reach a wide audience. More than a million small and large advertisers use Google as a platform to find customers in an increasingly global marketplace—from Twiddy, a vacation rental business in North Carolina that attributes recent growth and job creation to Google’s advertising tools, to two brothers in Austin Texas who use Google to grow loyalty and demand for premium YETI Coolers, certified to withstand smashing by hungry grizzly bears.

    The innovations brought about by the Internet economy have also delivered enormous benefits to content creators. Google empowers traditional artists and an emerging generation of new creators to promote their work to a global audience. Google drives traffic to creators’ websites, sending, for example, four billion clicks a month to news sites. Every minute, users upload 35 hours of video content to our YouTube site.YouTube has allowed performers to rocket from oblivion to fame; has given politicians, pundits, andprotesters a powerful new way to communicate; has facilitated citizen journalism; and has inspired laughter atthe antics of dancing babies.

    The Computer and Communications Industry Association has found that industries that rely on fair use and other limitations generate $4.7 trillion in revenue, represent one sixth of total U.S. GDP, and support 17 million jobs. While online piracy remains a serious enforcement problem, we should not lose sight of the overall balance of our nation’s copyright laws, which continues to spur a broad array of American-bred creativity and innovation.

    There is much more in Mr. Walker's written comments, which are worth reading.

    The Exodus, 2011 Version

    Want to see how much easier the Exodus would have been in 2011? Watch this video. Hit the "pause" button frequently to catch all the subtle humor.  (Here's a YouTube link.)

    Tuesday, April 5, 2011

    Some Thoughts About the Upcoming Oral Argument in Microsoft v. i4i

    On April 18, the Supreme Court will hear oral argument in Microsoft v. i4i.  As I explained in previous posts on the subject, this cases involves the standard of proof for the difficulty of invalidating a patent.  Microsoft is asking the Court to lower the standard of proof from clear and convincing evidence to a preponderance of the evidence -- at least when the prior art was not considered by the Patent Office (PTO).

    i4i filed its opposition brief on March 11, and a number of amicus briefs supporting i4i were filed the following week.  i4i has helpfully prepared a web page linking to all the briefs -- thanks, i4i!

    The amicus briefs supporting i4i -- and the higher standard of proof -- can be grouped into several categories:

    • As expected, several large biotechnology companies or organizations supported i4i, such as Genentech and Bayer.
    • Certain "non-practicing entities," such as Intellectual Ventures.
    • Several bar associations, such as the San Diego IPLA.
    • The United States, represented by the Solictor General's office, filed a brief that argued that the higher standard was justified as a way of showing deference to the PTO, a governmental agency.  (Discussions about the USA's brief are here and here.)
    • A mix of several other organizations, individuals, and companies, such as a group of former PTO Commissioners.

    Now that the briefs are all in, here are some points to watch out for during the oral argument.  (A transcript of the oral argument will be available within a day or two after April 18.)

    1.  The patent statute in question, 35 U.S.C. §282, says that the party challenging validity (usually the defendant) has the burden of proving invalidity.  However, specifying which side has to prove an issue isn’t the same thing as quantifying the quantum of proof (standard of proof) on the issue.  Normally in a civil case, the plaintiff has to prove all the elements of its claims.  So but for §282, a patent plaintiff would otherwise have to prove ownership of the patent, validity, infringement, and damages.

    Because Congress felt that the PTO’s issuance of a patent is entitled to at least some degree of deference, §282 reverses the ordinary allocation of proof and requires the defendant to prove invalidity.   But that allocation alone (1) shows deference to the PTO, and (2) doesn’t by its wording mean that the deference has to be by clear and convincing evidence.  A presumption that a patent is valid doesn’t necessarily require that the proof to invalidate the patent must be clear and convincing.  In this case, §282 is silent on the standard of proof.

    The Internet Retailers’ brief contained a 40-page appendix of federal statutes that explicitly require “clear and convincing” proof.  Since §282 doesn’t contain such a standard, the plain inference is that Congress didn’t intend §282 to require clear and convincing evidence.  i4i counters with its own list of statutes that specify a preponderance standard, see i4i Brief at 1a-7a.  At most, that means we should look to ordinary rules of statutory interpretation to figure out §282’s standard of proof.

    2.  The ordinary rules for deciding standards of proof are set out in two Supreme Court non-patent cases called Grogan and Huddleston. (In past situations where the Court has reviewed a patent case, it has applied its ordinary rules of law, something the Federal Circuit hasn't always done.)  If you hear some of the Justices asking about Grogan and Huddleston, that means they are interested in applying that law in this case.  Interestingly, although briefs of Microsoft and its amici discussed those cases at length, i4i's brief hardly did at all.  Only one of i4i's amici, the Pharma Research brief, did so in detail. 

    There is probably a good reason why Microsft and its amici discussed Grogan and Huddleston, and i4i and its amici probably didn't:  the cases strongly favor Microsoft.  The cases say that the usual rule is that the burden of proof in a civil case is preponderance of the evidence, and the clear-and-convincing standard only applies where "particularly important" interests are involved. These are usually things like proceedings to terminate parental rights or involuntary commitments.  This wouldn't seem to apply to patent cases.

    i4i did argue that promoting innovation is "particularly important," so patents should enjoy a strong presumption of validity.  The problem with this argument is that promoting innovation isn't the end of the story with the grant of patents.  The patent system reflects a balance between promoting innovation and avoiding monopolies that stifle innovation.  Improperly granted patents that are invalid can harm innovation by removing existing knowledge from the public's use.  i4i relied on part of a Supreme Court case called Bonito Boats for the proposition that patents promote innovation -- but i4i ignores Bonito Boats’ point about balancing innovation against the harm to competition caused by improperly-granted monopolies.  Bonito Boats has language about a “carefully crafted bargain” in the patent system that i4i partially quotes in its brief -- but after i4i quotes the part it likes, Bonito Boats then goes on to explain what that “bargain” means:

    “The attractiveness of such a bargain, and its effectiveness in inducing creative effort and disclosure of the results of that effort, depend almost entirely on a backdrop of free competition in the exploitation of unpatented designs and innovations.  The novelty and nonobviousness requirements of patentability embody a congressional understanding, implicit in the Patent Clause itself, that free exploitation of ideas will be the rule, to which the protection of a federal patent is the exception.”  489 U.S. at 151 (italics added).

    If you hear the Justices asking about Grogan, Huddleston and Bonito Boats at the oral argument, that's a good sign for Microsoft, and a bad sign for i4i.

    3.  i4i and its amici are left to argue that court precedent has always set a "uniform" rule of clear-and-convincing proof, so all §282 did was codify that uniform rule.  i4i relies on a case called RCA, or Radio Corp., that supposedly established clear-and-convincing proof as the standard in all cases.  There is a big debate in the briefs over whether RCA really established an absolute rule in all circumstances.  (See, for example, EFF's brief at 30-31.)  If the Justices discuss RCA, listen carefully to what they think it means.

    4.  In any event, it's doubtful that RCA either established a "uniform" rule, or even a clear rule that the Courts of Appeals understood to be uniform.  Both before and after the 1952 Patent Act, and before the Federal Circuit was created in 1982, many other Courts of Appeals didn't hold that the standard of proof was always clear-and-convincing.  Rather, many such courts held that if the prior art asserted in the lawsuit hadn't been considered by the PTO, the presumption of validity was weakened, or lowered to just a preponderance of the evidence. 

    Click here for a list of such cases

    5.  i4i and its amici argue that the existing standard of proof should be kept because of "settled expectations" by the public.  Given the large number of pre-Federal Circuit courts that didn't rely on the clear and convincing standard -- at least where the PTO had not considered the prior art -- it's not clear how "settled" those expectations should have been.  In any event, that same argument was made and rejected in the 2007 case of KSR v. Teleflex, where the Supreme Court made it easier to find a patent obvious, overturning two decades of Federal Circuit precedent in the process.

    I'll post a link to the transcript of oral argument as soon as it is available.

    Blogging Hiatus is Over

    Blogging has been light the past few weeks since I've been busy working on an amicus brief in the Viacom v. YouTube and Premier League v. YouTube appeals.  This time, the brief is on behalf of the Consumer Electronics Association.  I should have more time to blog going forward.