Is the Supreme Court Going to Revisit Bilski?

Today the Supreme Court granted cert in Prometheus Labs v. Mayo (captioned Mayo Collaborative Services v. Prometheus Laboratories, Inc. at the Supreme Court).

By way of background, the case involves the issue of whether an invention is eligible for a patent under 35 U.S.C. §101.  In a case called In re Bilski, the Federal Circuit had adopted a "machine-or-transformation test" to judge patentability: a patent applicant "may show that a process claim satisfies § 101 either by showing that his claim is tied to a particular machine, or by showing that his claim transforms an article."  The Supreme Court granted review of this case, and in Bilski v. Kappos, held that the Federal Circuit test was too strict, making it easier to obtain patents and finding that §101 was less restrictive than the Federal Circuit's view.

The Federal Circuit had twice held that Prometheus' asserted medical treatment claims were patentable subject matter in view of both Bilski decisions.  After the first Federal Circuit decision so held, the Supreme Court had previously granted cert, and vacated and remanded so the Federal Circuit could reconsider the case in view of the Supreme Court's Bilski opinion.  The Federal Circuit then held the claims patentable again.

Putting aside any personal views about what the scope of 35 U.S.C. §101 should be, I had thought that (1) the Federal Circuit having initially ruled the Prometheus claims patentable in view of its strict Bilski test, there was no reason for the Supreme Court to grant cert and remand; (2) in view of the Supreme Court's less strict Bilski test (that is, a much more expansive view of patentable subject matter than the Federal Circuit test), it was a foregone conclusion that the Federal Circuit would again find the claims patentable, which it did; and (3) there was therefore no need for the Supreme Court to grant cert.

However, now the Supreme Court will review this case on the merits.  Are they going to revisit Bilski?

Here is a representative claim of the Prometheus patents:

1. A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising:

(a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and
 
(b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder,
 
wherein the level of 6-thioguanine less than about 230 pmol per 8x10^8 red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and
 
wherein the level of 6-thioguanine greater than about 400 pmol per 8x10^8 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.

The issue presented in the case is as follows:

Whether 35 U.S.C. § 101 is satisfied by a patent claim that covers observed correlations between blood test results and patient health, so that the claim effectively preempts all uses of the naturally occurring correlations, simply because well-known methods used to administer prescription drugs and test blood may involve “transformations” of body chemistry.

Facebook: Do NOT Try This in Real Life.

Can I be your friend?

Patent Application of the Day

Someone filed a patent application on "Godly Powers."  Here are claims 1-3:

1. Godly powers are being used on planet Earth. For example, technology (i.e. Electronic and Medical) is being assisted by godly powers throughout the planet. Godly powers could be used prior, during, and after godly product/procedure. For example; Before--in the making of a device, like a micro-processor chip. During--in the operation of a device, like an inkjet printer cartridge. Afterwards--like gradual scar removal from breast implant surgery. A magician might perform magic before, during, and after, for any given trick ("illusion").

2. There is a plan governing our existence and actions--God's plan.

3. Christopher Anthony Roller is the godly entity powering Earth with godly powers as stated in claim 1.

Good news:  I checked the PTO's public PAIR database, and following (surprise!) a rejection of this application on every ground imaginable, it has been abandoned.  Great work, PTO!

"This Week in Law" Featuring . . . This Blogger

Today I was a guest on "This Week in Law."  You can watch the whole thing here.

"Everything Great About YouTube"

All of YouTube's greatest hits, in one convenient video.

Supreme Court Affirms High Standard of Proving Patents Invalid

Sadly, today the Supreme Court affirmed the Federal Circuit in Microsoft Corp. v. i4i Limited Partnership.  My previous posts about the case are here, here, here, here and here. 

The Court affirmed the Federal Circuit's rule that patents must be proven invalid by clear and convincing evidence.  The Court did say that in circumstances where the evidence before the jury was not before the Patent Office, "a jury instruction on the effect of new evidence can, and when requested, most often should be given."  Slip opinion at 17-18.  Thus, "[w]hen warranted, the jury may be instructed to consider that it has heard evidence that the PTO had no opportunity to evaluate before granting the patent."  The Federal Circuit's decision in z4 Technologies, Inc. v. Microsoft Corp., 507 F. 3d 1340, 1354-55 (Fed. Cir. 2007) had rejected a similar instruction, and is now probably incorrect.

Patently-O's discussion is here.  UPDATE:  Here are posts by EFF, Techdirt, and Peter Zura.

Today is National Llama Day!

Well, not really.  But you can still try using llama font.

Cloud Computing Explained

XKCD shows that we have nothing to worry about.  Well, almost nothing.

Supreme Court Decision on Patent Assignments and Federal Contractors

Today the Supreme Court decided Board of Trustees of Leland Stanford Junior Univ. v. Roche Molecular Systems, Inc.  The Court held that the Bayh-Dole Act does not automatically vest title to federally funded inventions in federal contractors or authorize contractors to unilaterally take title to such inventions.  The Court thus affirmed the Federal Circuit's holding that Roche held title to the patents in suit because of a written agreement a Stanford researcher had signed with Cetus (Roche's predecessor), and that Stanford did not acquire title under the Bayh-Dole Act.

This makes two rare Supreme Court affirmances of the Federal Circuit in one week (although Global-Tech was only an affirmance in the result, not the reasoning).

UPDATE:  Here's Patently-O's discussion of the case.

Best Disneyland Commerical Ever

"Darth Vader Goes to Disneyland"

Supreme Court Affirms Knowledge Requirement for Actively Inducing Infringement

Today the Supreme Court decided Global-Tech Appliances, Inc. v. SEB S.A.  This case involved the level of knowledge required for actively inducing infringement under 35 U.S.C. § 271(b).  The Federal Circuit had imposed liability based on a standard of "deliberative disregard" of a "known risk" of a patent.  Since this standard was arguably less than actual knowledge, the losing party (Pentalpha) asked the Supreme Court to review the case.

The Supreme Court granted cert and affirmed, but on different reasoning than the Federal Circuit.  First, the Court held that § 271(b) requires actual knowledge (largely relying on the 1964 Aro II decision):

Accordingly, we now hold that induced infringement under §271(b) requires knowledge that the induced acts constitute patent infringement.

Slip Opinion at 10.  Second, the Court held that a very narrow form of "willful blindness" is sufficient to support such knowledge.  The Court first noted that "willful blindness" wasn't at issue in MGM v. Grokster:

But the Court had no need to consider the doctrine of willful blindness in that case because the Court found ample evidence that Grokster and StreamCast were fully aware—in the ordinary sense of the term—that their file-sharing software was routinely used in carrying out the acts that constituted infringement (the unauthorized sharing of copyrighted works) and that these acts violated the rights of copyright holders.  See 545 U. S., at 922–927, 937–940.

Slip Opinion at 13.  The Court defined "willful blindness" sufficient to impose liability for active inducement as follows:

While the Courts of Appeals articulate the doctrine of willful blindness in slightly different ways, all appear to agree on two basic requirements: (1) the defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of that fact.  We think these requirements give willful blindness an appropriately limited scope that surpasses recklessness and negligence.  Under this formulation, a willfully blind defendant is one who takes deliberate actions to avoid confirming a high probability of wrongdoing and who can almost be said to have actually known the critical facts. See G. Williams, Criminal Law §57, p. 159 (2d ed. 1961) (“A court can properly find wilful blindness only where it can almost be said that the defendant actually knew”). By contrast, a reckless defendant is one who merely knows of a substantial and unjustified risk of such wrongdoing, see ALI, Model Penal Code §2.02(2)(c) (1985), and a negligent defendant is one who should have known of a similar risk but, in fact, did not, see §2.02(2)(d).

The test applied by the Federal Circuit in this case departs from the proper willful blindness standard in two important respects. First, it permits a finding of knowledge when there is merely a “known risk” that the induced acts are infringing.  Second, in demanding only “deliberate indifference” to that risk, the Federal Circuit’s test does not require active efforts by an inducer to avoid knowing about the infringing nature of the activities.

Slip Opinion at 13-14 (footnote omitted).  The Court then reviewed Pentalpha's acts and concluded that it acted with such willful blindness; hence, the Court affirmed the outcome (but not the reasoning) of the Federal Circuit.  Seven Justices joined Justice Alito's majority opinion.  Justice Kennedy dissented, as he would have not adopted the above "willful blindness" test -- particularly since it will now apply to all criminal cases involving knowledge, which doubtless will be a surprise to the criminal defense bar, which didn't participate in this case.

Given the other possible outcomes, this seems to be a reasonably good result.

Patently-O's analysis is here.

Federal Circuit Greatly Narrows Inequitable Conduct Defense

In Therasense, Inc. v. Becton, Dickson & Co., the Federal Circuit greatly narrowed the inequitable conduct defense.   The Patently-O blog and Peter Zura's 271 blog have detailed writeups on the case, which the Federal Circuit heard en banc to clarify the law.

Facebook Keeps Winning Winklevoss Appeal

As previously reported, on April 11, 2011, Facebook won the appeal in the case brought by the Winklevoss brothers.  Not satisfied with the Ninth Circuit's decision, the brothers filed a petition for rehearing and/or rehearing en banc.  Today the Ninth Circuit issued an amended opinion that denied the petition for rehearing.  Unless the U.S. Supreme Court unexpectedly grants a petition for certiorari by the Winklevoss brothers, this should be the end of this case.

Cats in Tanks!

Cats: Don't bring them to the office.

Letters You Wish You Were Clever Enough to Have Written

Dear Noah,
We could have sworn you said the ark wasn't leaving till 5.
Sincerely,
Unicorns

Dear Twilight fans,
Please realize that because vampires are dead and have no blood pumping through them, they can never get an erection.
Enjoy fantasizing about that.
Sincerely,
Logic

Dear Icebergs,
Sorry to hear about the global warming. Karma's a bitch.
Sincerely,
The Titanic

Dear America,
You produced Miley Cyrus.
Bieber is your punishment.
Sincerely,
Canada

Dear Yahoo,
I've never heard anyone say, "I don't know, let's Yahoo! it..." just saying...
Sincerely,
Google

Dear 2010,
So I hear the best rapper is white and the president is black? WTF happened?!
Sincerely,
1985

Dear Windshield Wipers,
Can't touch this.
Sincerely,
That Little Triangle

Dear Rose,
There was definitely room on that Door for the both of us.
Sincerely,
Jack
PS, you let go

Dear Fox News,
So far, no news about foxes.
Sincerely,
Unimpressed

Dear Michael Jackson,
You really should have became a Catholic Priest. The pay isn't great, but the benefits....
Sincerely,
The Pope

Dear Scissors,
I feel your pain.....no one wants to run with me either.
Sincerely,
Sarah Palin

Dear Osama Bin Laden,
Marco....
Sincerely,
United States

Dear World of Warcraft,
Thank you for ensuring my son's virginity.
Sincerely,
Parents Everywhere 

Dear Batman,
What was your power again?
Sincerely,
Superman

Dear Global Warming,
You're the best imaginary friend ever!
Sincerely,
Al Gore

Dear Ugly People,
You're welcome.
Sincerely,
Alcohol

Dear Mr. Gump,
WTF are you talking about? There's a little diagram on the lid that tells you EXACTLY what you're gonna get....
Sincerely,
Jenny

Dear Katy Perry,
I liked the kiss too.
Sincerely,
Justin Bieber

Dear Martin Luther King Jr.
I have a dream within a dream within a dream within another dream.... What now?
Sincerely,
Leonardo Di Caprio

Dear World,
Please stop freaking out about 2012. Our calendar ends there because the Spanish invaded our country and we got a little busy ok?
Sincerely,
The Mayans

Dear Giant Spider on the Wall,
Please die. Please die. Please die. Please die. CRAP! Where did you go?
Sincerely,
Terrified

Rambus Liable for Spoliation, But Sanctions to be Determined

Today the Federal Circuit issued rulings on two Rambus spoliation cases, Micron v. Rambus and Hynix v. Rambus.  These cases arose out of Rambus' enforcement efforts on its semiconductor memory patents.  Two district courts had reached different results on whether Rambus' document destruction policies resulted in sanctionable spoliation.  Judge Robinson in Delaware had found spoliation and dismissed Rambus' infringement claims against Micron.  Judge Whyte in California did not find spoliation, and let the patent case go to trial.

The Federal Circuit:
(1) affirmed Judge Robinson's finding of spoliation but reversed her dismissal sanction because of inadequate findings on Rambus' bad faith, and remanded the case (including a determination of whether the appropriate sanction for spoliation should be short of dismissal);
(2) reversed Judge Whyte's finding of no spoliation, and remanded;
(3) in so doing, rejected the notion that the spoliation standard requires that litigation be "imminent":  It agreed with Hynix's (and Micron's) position:

Hynix argues that reasonable foreseeability incorporates no requirement of imminence of litigation, while Rambus argues that “to be reasonably foreseeable, litigation must be ‘imminent,’ at least in the sense that it is probable and free of significant contingencies.

. . .

In Micron II, this court held that that standard does not carry a gloss requiring that litigation be “imminent, or probable without significant contingencies.”

Hynix slip opn. at 12-13; see also Micron slip opn. at 12-14.  The Micron opinion noted that bad faith requires a showing of actual intent, and that a "should have known" standard was insufficient.

Oral Argument in UMG v. Veoh and Columbia Pictures v. Fung

On May 6, 2011, I attended the Ninth Circuit Court of Appeals’ oral argument in two copyright cases, UMG v. Veoh and Columbia Pictures v. Fung, in a packed courtroom.  The cases were set for argument on the same day before the same three-judge panel.  However, the facts of the cases, and the trial court rulings, were quite different.  Links to audio recordings of the arguments are here and here; a summary of my notes of the hearing is below.

UMG Recordings v. Veoh is about UMG's claim that Veoh's user-generated content (UGC) web site contains copies of UMG's copyrighted music, and that Veoh should be secondarily liable when its users post allegedly infringing music on the Veoh site.  The trial court had granted summary judgment to Veoh on the grounds that it was immune from suit since it complied with the “safe harbor” notice-and-takedown procedures of the Digital Millennium Copyright Act, 17 U.S.C. § 512(c).  The case raises many of the same issues as the Viacom v. YouTube case presently pending in the Second Circuit Court of Appeals, where the trial court also granted summary judgment to YouTube's video service, which is similar in many respects to Veoh's service. 

EFF has case pages about the Veoh and YouTube cases, which includes the briefs (and EFF’s amicus brief supporting Veoh, that I co-authored); my previous posts about YouTube and § 512 are here, here, and here.  As noted below, the Veoh case also spawned two related appeals.

Columbia Pictures and other movie studios sued Fung over Fung’s web sites, including Isohunt.com, which linked to bit torrent files.  Since many of those files were of popular copyrighted movies, Columbia and other movie studios sued Fung and Isohunt for secondary copyright liability.  The trial court granted summary judgment for the studios, and Fung appealed.  The parties’ briefs are here, here, and here.

The Judges hearing the appeals were Judges Harry Pregerson, Raymond C. Fisher, and Marsha Berzon.  Judges Fisher and Berzon were the most active questioners.

Veoh Appeals
The oral arguments in Veoh tracked many of the differing arguments about the scope of the § 512 safe harbor that the content industries and that Internet-based companies have made in the past.  The former seek to narrow the safe harbor, and the latter seek broader protection.

Steve Marenberg of Irell & Manella argued first for UMG.  He expressed the content industries’ usual position that the trial court’s ruling would upend the balance between copyright owners and Internet service providers, so as to harm not only content owners but also “lawful” Internet services like iTunes.  Judge Fisher asked Marenberg if, under the DMCA, the copyright owner can send a takedown notice to an ISP asking for infringing content to be removed.  Marenberg replied that as a practical matter, they couldn’t: there is too much infringing content on the web, at dynamically changing locations.  Judge Fisher said that the panel had to deal with the language of the statute Congress wrote, and asked whether the 9th Circuit’s precedent in Perfect 10 v. ccBill put the burden on copyright owners to enforce takedowns.  Marenberg contended that ccBill’s language to that effect only dealt with the adequacy of takedown notices that were actually sent, not to the overall burden.

The discussion then turned to two or three other issues, primarily the meaning of (1) “by reason of the storage at the direction of a user” in § 512(c)(1), and (2) “control” in § 512(c)(1)(B)’s provision that an ISP is eligible for the safe harbor only if the ISP “does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity.”  (To make this post flow more smoothly, I’ll go through both issues with both sides’ arguments; arguing for Veoh on the main appeal was Michael Elkin of Winston & Strawn.) 

Marenberg argued that “by reason of the storage at the direction of a user” was very narrow, and limited to “backshop” Internet infrastructure operations, including transmission.  In particular, he denied that “storage” included being able to download stored material.  (My view of this argument by the content industries is that they view the Internet as solely a black hole that can only swallow information.)  Judges Fisher and Berzon seemed skeptical of this argument, as had the trial court; Judge Berzon wanted to know what § 512(c) would ever apply to if Marenberg was right.  In response, Elkin pointed out that three different subsections of § 512(c) used the word “access,” meaning that viewing and/or downloading is clearly contemplated (see § 512(c)(a)(A)(iii), (c)(1)(C), and (c)(3)(A)(iii)).  Judge Berzon asked Elkin if there was a distinction between web sites that merely enhanced stored content to make the downloading experience more efficient, versus a web site that had its own software or distribution system; he gave examples of several cases that recognized different forms of downloading as both being “storage.”

On the “control” issue, Marenberg argued that § 512(c)(1)(B) merely codifed common law vicarious liability.  Judges Fisher and Berzon had problems with that interpretation.  Judge Fisher said that under vicarious liability principles, most commercial web sites would satisfy the “financial benefit” provision, and since in response to a takedown notice they could remove the content, that would satisfy Marenberg’s interpretation of the control provision.  Both Judges Fisher and Berzon told Marenberg that under his interpretation, the safe harbor would therefore go away: Judge Berzon told Marenberg his view of the statute “kind of blown the whole thing up.”  Elkin later responded that the DMCA rule is not the common law standard and that § 512(m) made it clear that an ISP has no duty to monitor its site for infringements.  If “control” means more than the ability to comply with takedown notices, then Veoh had no such control. 

Elkin had begun his argument by stating that the purpose of the DMCA was to facilitate the robust development of Internet commerce, education, and information in the digital age, and resulted in successful companies like eBay, Amazon, Google and Facebook.  Elkin stated that Veoh was a responsible company of the kind Congress had in mind when it created the DMCA: it complied with all takedown requests, used filtering to detect infringements, and cooperated with content owners.  He blamed UMG for never providing a list of allegedly infringing videos until a year into the litigation, which were taken down promptly.

After Elkin argued, three other attorneys argued for Veoh.  At that point I realized that there were two additional appeals being heard at the same time as the main appeal on the merits.  Another appeal was Veoh’s appeal of the trial court’s denial of Veoh’s request that UMG pay Veoh’s attorney’s fees.  Thomas Lane argued briefly for Veoh on that issue.  Lane said that Veoh made a good faith settlement offer under Federal Rule 68 of $100,000, and UMG responded that there weren’t enough zeroes.  Lane argued that Veoh’s subsequent victory made a fee award mandatory.

The third appeal involved UMG’s attempt to sue Veoh’s investors, for secondary liability just for investing in Veoh.  The district court had dismissed UMG’s complaint against the investors, and UMG appealed.  However, Marenberg only briefly mentioned that appeal in his initial argument.  Robert Badal of WilmerHale argued first for one group of investors.  He defended the district court’s decision as a correct rule about corporate governance.  In this case, Veoh’s investors did not assist in any direct infringement.

After Badal argued, a fourth attorney stood up, Glen Kulik, who represented a different group of investors.  People seemed surprised that Kulik was arguing, and Judge Berzon asked “who is this guy now?”  Kulik assured the court he wasn’t merely going to repeat Badal’s arguments.  What Kulik said was perhaps the most entertaining part of the day.

Kulik first addressed UMG’s argument that since the lawsuit had forced Veoh into the equivalent of bankruptcy, Veoh’s investors shouldn’t walk away “untroubled.”  Kulik pointed out that the investors lost tens of millions of dollars because UMG, the self-described “biggest and baddest guy on the block,” had forced Veoh out of business.  Next, Kulik said that the whole case involved policy concerns about the Internet itself.  He said that UMG doesn’t like the Internet, since it provides competition.  Before the Internet, UMG and other music companies had a monopoly on new music and videos.  With the Internet, new artists can market themselves and don’t need UMG, posing a big threat to UMG.  So UMG sued Veoh – a legitimate company with legitimate investors – but didn’t sue its management or directors individually for contributing to Veoh’s alleged infringement.  Rather, UMG sued the investors, to try to chill the flow of capital to Internet start-ups to stop future competitors.  He called UMG’s investor suit a “major threat to investment in this country.”  This prompted Judge Pregerson to ask if the case was dealing with “economic warfare”; Kulik responded that the case dealt with competing considerations between Internet commerce and copyright holders.

In sum, at least Judges Fisher and Berzon didn’t seem inclined to narrow § 512.  Obviously, we’ll have to wait for the opinion.

Columbia Pictures v. Fung

In this appeal, Ira Rothken argued for Fung and Isohunt; Paul Smith of Jenner & Block argued for Columbia and the other studio plaintiffs.

Most of this argument dealt with causation requirements for inducement.  Rothken said that the trial court found Isohunt liable for inducing infringement based on 15 messages sent in 2003, even though the alleged infringements they caused didn’t happen until 2007, and only 0.3% of the traffic to Isohunt’s site went to those messages.  In other words, Rothken argued that the Supreme Court’s Grokster decision only imposed liability for inducement based on “resulting acts of infringement,” and if Isohunt’s inducing messages were so far removed in time from any infringement, and if hardly anyone read them anyway, any infringement was not “resulting” from, or caused by, Isohunt.  Judge Fisher pointed out that Isohunt’s site prominently displayed links to obviously copyrighted works, such as “top 10 movies,” and asked why this wasn’t obvious solicitation of infringement.  As Judge Berzon put it, the system encouraged infringement.  In trying to get a summary judgment reversed, Rothken pointed out ways that causation was still lacking.

Paul Smith argued for a broad ruling on both inducement and causation.  He argued that the causation element is satisfied if someone intentionally created a service or device to facilitate infringement, and in fact people used it for that purpose.  He said that causation is simply the use of the site for infringing activity.  Judge Berzon responded that “we have this amicus brief from Google which is very nervous about that.”  Smith responded that Google wanted the 9th Circuit to overrule Grokster (which of course it can’t do).  Judge Berzon repeatedly asked Smith if a public communication was required for inducement; Smith claimed that Grokster had no such requirement. 

Rothken and Smith both briefly argued about whether Isohunt was entitled to the DMCA safe harbor and about the scope of the injunction.

This argument probably went better for Isohunt than I had expected, but Isohunt appears to have an uphill battle.


UPDATE:  Here's a post about these arguments from Techdirt.

Brilliant Street Fliers

Here are 13 "brilliantly pointless street fliers."  Don't miss "Free!  Take one!"  and "Have you seen these droids?"

Cracked.com's Graphic About The Pirate Bay

Cracked.com created this interesting graphic about the RIAA and The Pirate Bay.  At least some of the things in this graphic are probably true.

Greg Aharonian on a Serious Problem With the Proposed Patent Reform Act

For the umpteenth year in a row, Congress is considering a patent reform act.  The bill this year has made more progress than past bills, and might actually pass.  The current bill doesn't have many of the controversial provisions that killed previous draft bills.

However, the current bill does appear to have one serious problem:  it changes the current U.S. law giving inventors a one-year grace period to file a U.S. patent application.  Briefly, under current law, inventors have one year after a public disclosure or sale to file their application without the public event counting as prior art against the application.  There are lots of advantages to this system: among other things, it gives inventors, their investors, and their attorneys sufficient time to develop their inventions and make sure they are worth the expense of a patent.  Even people such as myself who favor limits on patent protection think the grace period is a good idea.  In other words, it doesn't need any "reform."

But as several people have pointed out, the bill does try to fix something that isn't broken.  One of them is Greg Aharonian, a commentator on IP law who also is a prior art searcher.  His web site is http://www.bustpatents.com/.  Greg also publishes an email newsletter.  A recent email discusses problems with the proposed patent reform bill's changes to the grace period.  Greg has given me permission to publish his comments here -- they are worth reading.

[Post of Friday, April 29, 2011]

*******************

Good or bad, the U.S. grace period has had many important uses in the
history of entrepreneurs becoming successful.  So it is sad to see how
Congress is playing vague, semantic games with the grace period. Worse,
as many people are pointing out, with Hal Wegner and David Boundy
leading the way, is that one goal of patent reform is to TOTALLY destroy
all aspects of the U.S. grace period.  If this crap passes with the vital
support of the AIPLA, inventors will have to remain completely secret
until ALL of their patents are filed.  Which is impossible.  Which is
the goal.  Because under S.23, as supported by the House Judiciary
committee, pretty much any public disclosure kills your patent rights.

Which will ending up KILLING Americans!  How you ask, if you are still
reading this?  That's to come, but first some more hysterics:

S.23 must not be allowed to pass - because its grace period changes will
lead to the deaths of many Americans. S.23 doesn't want progress - it
wants death (you have to solve Medicare/Medicaid problems somehow). S.23
is a threat to U.S. national security, in that it will cause more deaths
than hundreds of planes hitting buildings.  If S.23 passes, part of the
PTO becomes a DEATH PANEL.

So how does S.23's grace period lead to the deaths of Americans (don't
think I can pull this argument off, do you?).

Under S.23, you CANNOT obtain a patent if you do the following:

    January:    you invent a brilliant new idea
    April:        you publish a paper on your brilliant new idea
    July:        you publicly use / sell a few items based on idea
    December:    Under S.32, YOU CAN'T FILE A PATENT APPLICATION

because your public use/sale acts as prior art.  You can publish, but
can't use/sell.  That's the clear result of the current grace language of
S.23.  It is Flook Puke logic (Flook Puke ruling that a novel algorithm
is prior art to itself), i.e., a novelly-sold product is prior art to
itself - let's call it Grace DisGrace, the sister of Flook Puke.  If you
are not aware of this aspect of S.23, read the damn bill (and even worse
provisions).  You cannot call yourself ethical, and accept this aspect
of S.23.

The House, in its infinite honesty and lack of corruption, realized this
is outrageous, and in an April 12 Manager's Amendment, improved (but did
not fix) the S.23 language, allowing the following process more compatible
with current U.S. law (note: the House Judiciary committee, after being
paid a lot of money by lobbyists, killed this partial fix):

    January:    you invent a brilliant new idea
    April:        you publish a paper on your brilliant new idea
    July:        you publicly use/sell a few items based on the idea
    December:    Under HR 1249, you can file a patent application

But this now-dead change improves NOTHING in a competitive inventive space.  Because even this now-dead House amendment, and much more worse so, S.23 and its Grace Disgrace language, says NOTHING about a competitor selling your product after you publish.  That sale then becomes novelty-destroying prior art, as follows:

    January - Noble scientists invent a cure for all cancers
    April  - At an important cancer meeting, they announce
          their results to the world
    July    - Generic drug companies start producing the drug
    December  - The scientists drink themselves to a stupor because
              they can't apply for a patent on their discovery.

So what do the scientists do to defeat the death-encouraging grace period
of S.23?  They do something THAT LEADS TO THE DEATHS OF AMERICANS:

    January - Noble scientists invent a cure for all cancers
    February - They file a quick provisional
    November - They file a patent application
    December - At an important cancer meeting, they announce
          their results to the world

In that one year of secrecy, because of the evilness of S.23, MILLIONS OF AMERICANS DIE FROM CANCER because, even under testing conditions, they can't take advantage of the drug for that one year.  Even worse, S.23 may lead to even more Americans being killed:

    January  - Noble scientists invent a cure for all cancers
    February - They file a quick provisional (or not)
    July    - They won't tell investers more than is in the
                      provisional, so the investors won't invest.
    December - At an important cancer meeting, they sit on their
                      secret and wait eighteen months (they are
                      filing PCT) until they approach investors.

How many tax-paying, patriotic, Americans are going to die of cancer in those eighteen months?  MILLIONS, BILLIONS. (What, there aren't over a billion Americans?  Facts - please don't bother me).

More seriously, if patent reform passes with any of this language, the
reality is that many patent applicants, big and small, are going to have
to perfect their invention COMPLETELY, and file a 100 PERCENT, TOTALLY PERFECT, TOTALLY ANTICIPATING THE NEXT 30 YEARS OF CASELAW, patent application, before going public.  Because the day you go public, you are pretty much screwed from that date forward in terms of any priority matters, and any improvements.

Why the latter comment?  Once your initial disclosure is out there, any
additions or corrections are pretty much unpatentable under KSR, since
given your initial breakthrough, in the eyes of ignorant, contemptous
caselaw, everything else is pretty much predictably-obvious.  See, the
Supreme Court was paid to write KSR the way it did, not for reasons of
clarifying "obviousness" (which KSR doesn't even do), but rather for
reasons of being part of a longer term strategy tied into patent reform.
The only logic in KSR was the valuation of the decision that was sold.

So if you have an invention, make sure you have at least $15,000 to spare
in your pocket before you go public, because that is what it is going to
cost to get a real good patent application prepared by a good patent
prosecutor, with a few thousand dollars needed for your lawyer to guess
how the CAFC is going to change the rules after you finally file.

Now, I know all of my overseas PATNEWS readers outside the United States
are saying "Grow up, stop crying like a baby, and use the patent system
like the rest of us do.", because the goal of S.23 is unilateral patent
harmonization.  After all, the large companies, who have active foreign
patent practices, have already learned to patent in regimes with no
grace period.  To them, S.23 just simplifies matters a bit.  And that is
why they are happy to see PTO Director Kappos talking outside the U.S.
about how one goal of U.S. patent reform is unilateral disarmament
(whoops, I mean harmonization - the words look so Chamberlinianly similar)
of America's horrible, childish, nasty patent system.


No surprise.  S.23 is the "Patent Harmonization to Help Large U.S.
Multinationals" bill, and nothing else.  And such a gold may be in the
best interests of the United States.  Or not.  But at least let us be
honest about this gold of reform.  S.23, and to much the same extent,
HR.1249 is meant to hurt small and independent inventors.  Again, that
gold might be in the best interests of the United States.  Screw the poor,
use their old people for kindling (which also cuts down on Medicaid), and
whack the heads of any poor person smart enough to invent something that
progresses the arts and sciences who has delusionaly fantasies about
becoming rich - all important golds.  ENTREPRENEURS DON'T FREAKIN DESERVE TO BE RICH FOR THEIR INVENTIONS THAT SAVE SICK AMERICANS WHO SHOULD JUST DIE OFF.

      (I am not even drinking tequila while writing this crap.)

And then, assuming you survive the gauntlet and get a patent issued under
the new harmonized system, I and my searching colleagues are there to
crush it to death (at least 80% of the time).  And what we don't crush
outright, is ground to a pulp in post-grant review, and if not so ground,
then quintiplily (is that a word?) re-guessed into 101- and 103-oblivion
by feral judges, who don't understand incoherent patent caselaw, let alone
any science or engineering.

S.23's destruction of the grace period - is un-American.  If there were
any real communists left in the world, I would call it a Commie-plot.
It pisses on the Constitution, and then uses the Constitution to soak
up BP's TEPCO irradiated oil.  (Geesh, how does Glenn Beck make millions
with such nonsense - what am I not doing right?).  Anyone know if there
is a potter's field in Middlesex, Vermont?

*******************

Other comments about this problem are here, here and here.

Reply Briefs in Viacom v. YouTube and Premier League v. YouTube

The reply briefs have been filed in Viacom v. YouTube and Premier League v. YouTube.

Sure Hope This Includes Facebook

"Want Better Brains?  Party!"

George Lucas Collaborates with Jean-Paul Sartre

Here's the video:  Sartre Wars!

Easter: Unclear on the Concept

"Kosher for Passover"

Random Philosophy Thoughts for a Saturday

Read this cartoon.

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?

UPDATES:
(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.

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.

Oral Argument in Microsoft v. i4i

Today the Supreme Court heard oral argument in Microsoft v. i4i.  The 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.

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. 

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!

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 here.  Techdirt 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.

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.)

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.