UMG v. Veoh Affirmed Again

On Thursday, the Ninth Circuit Court of Appeals issued a superseding opinion in UMG v. Veoh (Shelter Capital Partners).  The Court filed its original opinion in the case on December 20, 2011, which I wrote about here.  Both the original and new opinions held that Veoh's user-generated content website is entitled to the "safe harbor" protection of 17 U.S.C. § 512. Briefly, UMG 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) ("DMCA").

UMG v. Veoh raised many of the same issues as the Viacom v. YouTube case in New York, where the district court had granted summary judgment to YouTube, also on the safe harbor defense.  Viacom's appeal to the Second Circuit Court of Appeals was a little later in time than the original UMG v. Veoh appeal.  As a result, when the Second Circuit issued its opinion -- on April 6, 2012 -- it had the benefit of the earlier Ninth Circuit opinion in UMG v. Veoh.

While the Second Circuit largely agreed with the Ninth Circuit, it didn't agree 100%, as my post on the opinion explains.  This led to an interesting procedural development.  After the December 2011 opinion in UMG v. Veoh, UMG had petitioned the Ninth Circuit for rehearing, and that petition was still pending when the Viacom v. YouTube opinion was released in April 2012.  As a result, in an Order dated June 7, 2012, the Ninth Circuit requested that the parties submit supplemental briefs to address two issues about the interpretation of the DMCA in light of the Second Circuit’s intervening decision in Viacom v. YouTube. The first issue on which the Ninth Circuit asked for supplemental briefing concerned the distinction between actual and red flag knowledge under the DMCA; the second issue concerned the meaning of “right and ability to control” under the DMCA.  The parties filed supplemental briefs a few weeks later.

The Ninth Circuit has now re-affirmed Veoh's victory in its latest, superseding opinion.  In doing so, it largely eliminated any conflict with the Second Circuit's reasoning.  First, the Ninth Circuit agreed with the Second Circuit’s interpretation in Viacom v. YouTube of the meaning of both “knowledge” and “red flag knowledge” under the DMCA as applying only to specific instances of infringement, rejecting UMG's argument that “red flag knowledge” can be shown by generalized knowledge that a service can be used to infringe. Second, the Ninth Circuit agreed with the Second Circuit’s interpretation in Viacom v. YouTube of the meaning of “right and ability to control” under the DMCA as requiring a showing that a service provider exerts “substantial influence on the activities of users,” rejecting UMG's argument that it can be shown by a service provider’s general ability to locate infringing material and terminate users’ access.

Thus, the Ninth Circuit concluded that Viacom v. YouTube supports its earlier conclusion that Veoh was properly granted summary judgment based on the safe harbor under Section 512(c) of the DMCA.  By largely agreeing with the Second Circuit, the Ninth Circuit has now greatly lessened any need for the Supreme Court to review either case.

EFF's discussion of the opinion is here, and TechDirt's is here.  (EFF's amicus brief in the case, on which I worked, is approvingly cited at page 24 of the opinion.)

Ninth Circuit affirms Summary Judgment of Fair Use, Attorneys' Fees for Using a Seven Second "Ed Sullivan" Clip in "Jersey Boys"

Today the U.S. Court of Appeals for the Ninth Circuit issued a good fair use opinion in SOFA Entertainment, Inc. v. Dodger Productions, Inc.  The defendants used a seven second "Ed Sullivan" clip in the musical "Jersey Boys" as a point of historical reference.  The clip was just of Ed Sullivan introducing the Four Seasons band, at a time when the "British Invasion" was threatening to swamp American bands.  The musical used the clip as an historical reference to note the band's success despite the changing social times of the mid-1960's.

The Ninth Circuit affirmed a summary judgment for the defendants on the fair use defense, and also affirmed an award of attorneys' fees for the defendants. 

The Court began by noting the purposes of Copyright:

The Copyright Act exists “‘to stimulate artistic creativity for the general public good.’” Mattel, Inc. v. MGA Entm’t, Inc., –F.3d–, 2013 WL 264645, at *2 (9th Cir. Jan. 24, 2013) (quoting Twentieth Century Music Corp v. Aiken, 422 U.S. 151, 156 (1975)). It does so by granting authors a “special reward” in the form of a limited monopoly over their works. Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 546 (1985). However, an overzealous monopolist can use his copyright to stamp out the very creativity that the Act seeks to ignite. Stewart v. Abend, 495 U.S. 207, 236 (1990). To avoid that perverse result, Congress codified the doctrine of fair use. Id.

Applying the four fair use factors, the court found that the first factor was present because the musical used the short clip as a biographical anchor.  The second factor was present since the clip was mainly factual, who was about to perform.  The fourth factor was present since "Jersey Boys" is hardly an economic substitute for "The Ed Sullivan Show."  As to the third factor, the court stated:

. . . the seven-second introduction is hardly qualitatively significant. Sullivan simply identifies the group that is about to perform and the section of his audience to whom the Four Seasons would appeal. It is doubtful that the clip on its own qualifies for copyright protection, much less as a qualitatively significant segment of the overall episode.

In affirming the attorneys' fee award, the Court had this to say:

In light of the education SOFA received as the plaintiff in Elvis Presley Enterprises, SOFA should have known from the outset that its chances of success in this case were slim to none. Moreover, we agree with the district court that “lawsuits of this nature . . . have a chilling effect on creativity insofar as they discourage the fair use of existing works in the creation of new ones.” The fair use doctrine is an integral part of copyright law precisely because it gives authors “breathing space within the confines of copyright” to build upon their predecessors’ works. Campbell, 510 U.S. at 579. When a fee award encourages a defendant to litigate a meritorious fair use claim against an unreasonable claim of infringement, the policies of the Copyright Act are served. Fogerty, 510 U.S. at 527. Therefore, we conclude that the district court’s award of attorney fees to Dodger was justified.

Cute Example of Why DRM is a Problem

Digital Rights Management (DRM) is a way providers of digital content have attempted to "lock up" their content so only authorized users/purchasers can access it.  It sounds like a good idea in principle, but there are tons of problems with DRM, as EFF has repeatedly explained, and as Techdirt has also explained.

Perhaps an easy way to understand why DRM is a problem is this cute example: the DRM chair!  The "chair that self-destructs after 8 uses."

38 Fascinating Maps

Enough of the Oscars.  Here are 38 fascinating maps.

Ice Cubes: The Recipe

Ice Cubes. The recipe.

To appreciate fully how special this recipe is, click on "Ratings and Reviews."

"Happy Birthday" -- a Copyright Problem

Although the song "Happy Birthday to You" was written in the 1800's, Time Warner/Warner Music claims that it's still under copyright and demands royalties each time it is publicly performed. While its copyright status is doubtful, Warner still collects $2 million per year in royalties.

There was a contest to come up with a royalty-free alternative. It's not good.  Sadly, "It sounds like Radiohead made a birthday dirge and left out their trademark happy-go-lucky pep."  So it looks like Warner will keep getting its royalties.

Social Media Explained.

As told by #donuts.

My Latest EFF Project: Orphan Works Comments

For my latest project with EFF, I helped write the comments that EFF and Public Knowledge filed with the Copyright Office about "orphan works."  Orphan works are copyrighted works where the copyright owner cannot be contacted.  The orphan works problem arose as a result of the 1976 Copyright Act and subsequent amendments to that act.  The 1976 Act (1) removed the requirement that works be published with a copyright notice, making it harder to identify the author; (2) made copyrights to be effective merely upon creation of the work, rather than upon registration of the work with the copyright office, which also makes it harder to find the author; and (3) lengthened the term of copyright, so that very old works are still possibly covered even though their author is long gone.  The orphan works problem is a serious issue in the United States and throughout the world.

EFF's article about our recent comments is here.  A link to all 91 comments is here.

Super Bowl Commercial Preview

I found a few previews of some more Super Bowl commercials.  Here are some by Doritos (skip ahead to the 2:09 mark).  Here are ten of them, including one of the Doritos commercials and the Samsung classic, which is understandably #1.

A Super Bowl Commercial Featuring . . . Trademark Law

Some of the commercials for the Super Bowl are being released early.  Here's one by Samsung, which features . . . avoiding trademark infringement!  Or perhaps Samsung just doesn't want to get sued again.

Another Set of Fine Customer Reviews on Amazon

The banana slicer.  "Saved my marriage . . . this is one of the greatest inventions of all time."  And many more.

Four More Post-Trial Orders in Apple v. Samsung

As reported by FOSS Patents and by Joe Mullin at Ars Technica, yesterday Judge Koh released four more post-trial orders in the long-running Apple v. Samsung case.  There are direct links to the orders at the bottom of the Ars Technica article; Apple has also posted the orders here and here.

Since the two articles summarize what happened in some detail, I won't repeat what they say here.  In summary, not much happened (as FOSS Patents put it, "only limited adjustments to the jury verdict").  Judge Koh did overturn the jury verdict that Samsung willfully infringed Apple's patents, meaning Apple won't get any increased damages.  The other orders don't much affect what has happened so far, meaning that there is still a $1 billion judgment against Samsung (for now) and no injunction.

Both articles mention that there is still one remaining motion to be decided:  Samsung's motion to reduce the $1 billion damage award, or for a new trial on damages.  As I read Rule 4(a)(4)(A) of the Federal Rules of Appellate Procedure, this remaining motion means that the time for the parties to file their expected appeals hasn't started yet.

Be Grateful If Your Parents Never Did Any of These

Twenty-eight examples of parents who really know who to mess with their kids.  Be grateful if none of these happened to you.

Animated Short Video Explaining the America Invents Act

The Klarquist Sparkman firm has released this animated video, which briefly explains the first-to-file provisions of the America Invents Act.  These provisions become effective March 16, 2013.

Morgan Freeman Narrates Everything

"Penguins didn't exist until Morgan Freeman made that movie.  He's that good."

Start your Holiday 2013 Shopping Now!

Need a gift for your little toddler?  Here's the latest.

53 Terrible Jokes!

Here are 53 Terrible Jokes.  Such as, "Q: What are the strongest days of the week?  A: Saturday and Sunday, because all the rest are week(weak)days."  

 

Or: "Q: What concert costs 45 cents? A: 50 Cent, featuring Nickelback."

"Top 10 Worst Children's Toys Available This Christmas"

Need some last-minute gift ideas?  Here you go.

My Ten Favorite Stupid Patents

In my last post, I congratulated my EFF colleague Julie Samuels had been awarded the new title of "The Mark Cuban Chair to Eliminate Stupid Patents."  In honor of that award, here are my ten favorite stupid patents.  

10.  U.S. Patent No. 6,025,810, "Hyper-light-speed antenna."  The abstract reads (boldfacing and underlining added):

A method to transmit and receive electromagnetic waves which comprises generating opposing magnetic fields having a plane of maximum force running perpendicular to a longitudinal axis of the magnetic field; generating a heat source along an axis parallel to the longitudinal axis of the magnetic field; generating an accelerator parallel to and in close proximity to the heat source, thereby creating an input and output port; and generating a communications signal into the input and output port, thereby sending the signal at a speed faster than light.

9.  U.S. Patent No. 5,356,330, "Apparatus for simulating a 'high five.'"  Fig. 4 is here:

 

8.  U.S. Patent No. 5,564,239, "Horse shaped building with recreational area."  You can't tell from the title that this 1996 patent actually is about . . . a Trojan horse.  Which was what, over 3,000 years ago?

 

7.  U.S. Patent No. 4,195,707, "Communicating device."  Remember when you were a kid and you used to tie a string between two tin cans to make a "telephone" and talk?  Someone got a patent for this in 1980.

 

6.  U.S. Patent No. 6,360,693, Animal toy.  The "toy" in question is a stick to throw to a dog . . . patented in 2002.

5.  U.S. Patent No. 6,293,874, "User-operated amusement apparatus for kicking the user's buttocks."  No comment needed other than Fig. 2:

4.  U.S. Patent No. 5,443,036, "Method of exercising a cat."  This is the famous (or infamous) patent on exercising a cat using a hand laser.  It even has its own Wikipedia entry.

3.  U.S. Patent No. 6,004,596, "Sealed crustless sandwich."  Essentially, this 1999 patent covers a peanut butter and jelly sandwich with its crusts cut off.  Fortunately the Patent Office killed this one in 2007.

2.  U.S. Patent No. 6,368,227, "Method of swinging on a swing."  Seven-year-old Steven Olson proudly got this patent in 2002.  (It helps if your dad is a patent lawyer.)  In 2003, the Patent Office killed this one also.

1.  U.S. Patent No. 5,498,162, "Method for demonstrating a lifting technique."  Essentially, this is a 1996 patent on lifting up a box.  I could have sworn this had been done before.

Honorable mention: There are a number of published patent applications that never became patents, meaning that even the Patent Office couldn't see fit to allow a patent (unlike the real patents listed above).  My favorite is U.S. Application No. 2006/0259306, "Business method protecting jokes."  Some representative claims are as follows:

1. The process of protecting a novel joke which comprises filing a patent application defining the novel features of the joke.

10. A joke relating to the unexpected but partial skill of animals (preferably large mammals or birds) in sports involving spheroidal projectiles, characterised in that the punch-line employs alliteration.

22. A process claimed in any of claims 1-7 in which the patent application is filed, or claims priority from an application that is filed, on 1 April.

"The Mark Cuban Chair to Eliminate Stupid Patents"

Congratulations to EFF Staff Attorney Julie Samuels, who has been awarded the new title of "The Mark Cuban Chair to Eliminate Stupid Patents."  I am not making this up.

Apple v. Samsung: Permanent Injunction Denied

Apple v. Samsung is a well-publicized case involving smartphones.  Today U.S. District Judge Lucy Koh denied Apple's motion for a permanent injunction on the Apple patents that the jury found Samsung infringed.  The order is here; Patently-O's discussion is here.  The court also denied Samsung's request for a new trial based on jury misconduct; that order is here.

It is likely that Apple will ask for additional damages based on Samsung's infringement of the patents after the jury verdict a few months ago, although since Samsung apparently has discontinued most of not all of the infringing features, that won't amount to much.  Both sides can appeal these orders to the Federal Circuit Court of Appeals.

Apple Patents Letters.

Apple patents letters.  All 26 of them.

Google in 1960!

Remember that they used to call "enter" the "return" key.

The Latest Holiday Gift!

A doorbell for dogs!

A Redditor's Mom Correctly Predicts the Internet

In the 1970's, a Redditor's Mom correctly predicted "the Internet."

My Latest EFF Amicus Brief: Trying to Solve the Abstract Patent Problem

Today EFF filed the latest amicus brief which I helped write.  The case is CLS Bank v. Alice Corp.  EFF's press release about the filing is here.

The case involves several business method patents that manage financial risk in commercial transactions.  The trial court held that the patents were invalid under 35 U.S.C. § 101, which limits the types of things that can be patented.  As EFF explains on its Abstract Patent Litigation page, things like laws of nature, natural phenomena, and abstract ideas can't be patented.  In recent years, both the Federal Circuit Court of Appeals and the U.S. Supreme Court have struggled on what § 101 means and how and when it limits what can be patented. 

In March 2012, the Supreme Court decided Mayo v. Prometheus, which held that medical diagnostic processes are not patentable.  The opinion gave some good guidelines about when processes aren't patentable: things that are "well-understood, routine, conventional activity" can't be patented.  However, all 12 active judges of the Federal Circuit don't agree on the proper test for when patents are abstract.  Some think that § 101 should strictly limit what is patentable, some think mostly anything should be patentable.  The outcome of any particular case depends on which 3 judges are selected to hear an appeal.

CLS Bank was first heard and decided before a 3-judge panel, in a July 2012 decision.   Two of the three judges upheld the patents against the § 101 challenge.  Their test was whether the patent claimed "nothing more than" an abstract idea, and that a patent was permitted unless it was "manifestly evident" that only an idea was claimed.  This is a very permissive test, to say the least.  The other judge dissented and said that the patents weren't permitted under the Supreme Court's test in Mayo.  The majority's rule was also plainly inconsistent with other recent cases holding similar patents to be invalid.

CLS Bank then asked all 12 judges of the court to hear the case (called an en banc hearing).  EFF filed an amicus brief supporting those efforts.  In October 2012, the full Federal Circuit agreed to hear the case.  Briefing is underway, and oral argument is scheduled in February 2013. 

EFF's amicus brief for the en banc hearing makes two principal points.  The first is that patent litigation has been greatly increasing during the last several years, particularly for software and business method patents, and for patents owned by non-practicing entities.  This litigation puts a great burden on innovative companies who actually sell a product.  Second, rather than try to decide the difficult question of whether something is "abstract," process patents should not be allowed to claim broad functionality, but rather should be limited to the particular ways a patent implements those processes, and equivalents.  On that point, we suggest that the court use an analysis by Professor Mark Lemley of Stanford.  If the patents are limited to what was actually invented, this both makes the abstractness test easier, and also makes them less of a threat to companies whose products work in a substantially different way.

UPDATE: Techdirt has this nice writeup on EFF's brief.  Patently-O has analyzed all of the opening round amicus briefs.

Supreme Court to Review Patentability of Human Genes

Today the Supreme Court agreed to review the Myriad gene patenting case, Association for Molecular Pathology v. Myriad Genetics. The case involved the patentability of genes directed to detection of breast cancer (BRCA genes) and methods for using them. The review is limited to question 1, which asks whether human genes are patentable.  I previously wrote about the case here and here; SCOTUSblog's case page is here.

Cat-Friend vs. Dog-Friend

Some of you might have dogs, some might have cats, some might have both.  But here's a good reason to be glad none of your human friends act like dogs or cats.  At least I hope none of them do.

Happy Thanksgiving Everyone!

Courtesy of The Onion.

Need a Holiday Present?

Hard to go wrong with one of THESE.  Ordering information here.

Windows Explained

Windows explained, starting with Windows 95.  Remember it?

It's the Viola-Matic!

Good thing my guitar can't do what this fine kitchen utensil can do.

Tips for Biology Students

Do you know someone taking a biology class?  Then they will appreciate these helpful tips.

EFF and Techdirt Posts About "First Sale" Doctrine Case

Yesterday the Supreme Court heard oral argument in Kirtsaeng v. John Wiley.  The case involves the "first sale" doctrine, or the issue of whether someone who buys a copy of something legally manufactured abroad can resell, lend or give away the copy without getting permission from the copyright owner.  EFF and Techdirt have excellent posts about the case.  While oral argument isn't always a reliable predictor of the outcome of a lawsuit, the oral argument went very well for petitioner Kirtsaeng, who claims she has first sale rights in John Wiley's books that were purchased overseas.  UPTDATE: Here is an analysis by SCOTUSblog.

Guys and Girls Explained

Want to know what guys and girls really mean when they say things?  Click here.  (Scroll the mouse over the photos; this requires flash to work.)

Hurricane Sandy Update

I just saw the weather forecast for Hurricane Sandy, and boy is it scary.  Best of luck to all my readers on the East Coast.

One of the Reasons I Visit Reddit

It turns out that some people can't even steal things from Reddit correctly.

Digitizing Books is Fair Use

Google Books is a useful research tool.  It permits you to scan the contents of millions of books that Google paid to have digitized.  If the book is in the public domain, you can see the entire text of the book.  If the book is still under copyright, you can still see the entire text (if the copyright owner has authorized it), or you can at least see the book's table of contents and "snippets" of some of the book's text.  Either way, Google directs users to places like Amazon where you can buy an authorized copy.

Google obtained many of its books through a deal with major university libraries, including the University of California and the University of Michigan.  The libraries loaned the books to Google, which scanned the books and returned the books to the libraries with a copy of the digital scan.  Google used the digital scans for its own Google Books tool, and the libraries used the scans as well.  The libraries set up a trust, the Hathitrust, to coordinate their use of the digital scans.  The libraries had their own search feature for research purposes, and also allowed blind or print-disabled people to have access to the entire books (as permitted under the Copyright Act and the Americans with Disabilities Act).  

If all this sounds like fair use, it should.  Library research is a classic fair use.  Despite this, The Authors Guild filed two lawsuits, one against Google and one against the Hathitrust.  I helped EFF file an amicus brief in the Google books case in support of Google's fair use defense; EFF and its library co-amici filed a version of that same brief in the Hathitrust case. 

In a victory for fair use and libraries, yesterday the Judge overseeing the Hathitrust case agreed with the defendants' fair use defense and dismissed the case.  EFF's post discussing the dismissal is here; Techdirt's is here; Arstechnica's is here.  Those commentators note that this opinion's reasoning might also apply to the Google Books case, since the cases are similar.  On that point, one wonders why The Authors Guild sued the libraries directly in the first place, instead of just suing Google.  The libraries are sympathetic defendants, and part of their activities were clearly helping blind people, which the Judge's opinion referred to several times.  Beating up on blind people isn't the best way to win a lawsuit -- especially given express provisions in the Copyright Act supporting access to copyrighted works for disabled people, and the ADA's stated purpose.

Introvert Fairy Tales

Are these better than the originals?  You decide.

Copyright Infringement Is Over

The content industry has just found a foolproof way to stop copyright infringement.

Monsters U!

My daughter apparently wishes she could have gone to THIS university (instead of the college she actually went to, the best public university on the planet).

This Is What Happens When You Go On Vacation

I've been away on vacation (in China), and when I got back, my iPhone demanded that I upgrade.  So THIS happened.

Capitol v. Thomas: No Constitutional Limit on Statutory Damages?

Earlier this year I helped write EFF's amicus brief in Capitol v. Thomas.  Capitol had sued Ms. Thomas for unauthorized file-sharing of 24 songs.  After a jury awarded Capitol $1.5 million in statutory copyright damages, the trial judge reduced the award to $54,000 on Constitutional grounds.

The defendant record companies appealed the reduction of statutory damages, and last week the Sixth Circuit Court of Appeals agreed.  The Court reinstated an earlier jury award of $222,000.  That's damages of $9,250 per song, for songs that sell for about a dollar at retail.  The Court rejected arguments by EFF and Ms. Thomas that such statutory damages awards were unconstitutional.  The Court appeared to hold that an award of statutory copyright damages (1) didn't depend on whether the defendant's activities were non-commercial; (2) could punish the defendant for the acts of others (in this case, other file-sharers): and (3) did not have to bear any relationship to actual damages.

Hopefully, this reasoning will be limited to cases involving peer-to-peer file sharing, which the courts don't like.  EFF's more detailed blog past about the appellate decision is here.  Techdirt's post is here.

Warning to Teachers Everywhere

Now that school is starting, watch out for kids like this one.

The Blog Disapproves of This Holiday Gift

Because ducks and dogs just don't mix.

OK, Apple, Don't Push Those Design Patents Too Far

Apple, Inc. recently won a patent infringement lawsuit against Samsung.  The lawsuit included claims for several Apple design patents on the designs of its products.  However, perhaps Apple should not push future lawsuits too far -- it turns out there is some prior art out there.

Federal Circuit Decides Joint Liability Issue -- By Deciding Something Else

On Friday August 31, the Federal Circuit Court of Appeals released its opinion in Akamai Tech., Inc. v. Limelight Networks, Inc., and McKesson Tech. Inc. v. Epic Sys. Corp. (the court released a combined opinion in both cases).  This was a 6-5 en banc decision, meaning that all 11 active judges participated.  I had previously blogged about the court's decision to hear the Akamai case en banc, and about EFF's amicus briefs filed in Akamai and McKesson.

 The cases dealt with the issue of when a method claim is directly infringed by the combined actions of multiple parties.  In previous cases, the court had held, for example, that "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."  Because the rules on direct infringement for joint (or divided) liability were causing confusion, the Federal Circuit decided to hear the issue en banc.  In the Akamai case, the question involved was:

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?

In McKesson, an additional question was:

Does the nature of the relationship between the relevant actors—e.g., service provider/user; doctor/patient—affect the question of direct or indirect infringement liability?

The Federal Circuit's decision didn't answer the first question, and instead focused at most on the second question.   The majority opinion stated:

In the two cases before us, we address the question whether a defendant may be held liable for induced infringement if the defendant has performed some of the steps of a claimed method and has induced other parties to commit the remaining steps (as in the Akamai case), or if the defendant has induced other parties to collectively perform all the steps of the claimed method, but no single party has performed all of the steps itself (as in the McKesson case).

The 6-member majority opinion overruled its prior precedent (BMC v. Paymentech), but did not resolve the issue of joint or divided direct infringement.  Instead, it held that a party could be liable for actively inducing infringement of a method claim as long as the party induced one or more other parties to perform all the steps: "we hold that all the steps of a claimed method must be performed in order to find induced infringement, but that it is not necessary to prove that all the steps were committed by a single entity."

As Dennis Crouch's blog post on the case points out, inducement requires a high level of intent, which direct infringement does not.  As I emailed Dennis on Friday (see his post), the majority merely holds that an active inducer will be held liable so long as one or more parties are induced to practice all the steps of a claimed method.  Therefore, it appears that innocent actors who were "induced" by someone else will not be individually liable (unless, of course, they perform all the steps of the method claim themselves and thus are direct infringers).  That was one point of EFF's amicus briefs, so from that standpoint, the decision was not all bad.  Our briefs urged that innocent third parties (those with no level of intent) not be held strictly liable for direct infringement.  It appears that is the law. 

 

However, the court didn't decide the underlying issue on which it agreed to hear both cases en banc, that is, when there is joint (or divided) direct infringement.

 

Judge Newman's dissent would have answered the question by imposing essentially unlimited liability for direct infringement:  

The court should simply acknowledge that a broad, all-purpose single-entity requirement is flawed, and restore infringement to its status as occurring when all of the claimed steps are performed, whether by a single entity or more than one entity, whether by direction or control, or jointly, or in collaboration or interaction. . . . When the several steps of a process claim are performed by more than one entity, whether the entities operate under common direction or control, or jointly or independently or interactively, remedy for infringement is appropriately allocated based on established criteria of culpability, benefit, and the like.

Thankfully, no other judge agreed with this rule, which would have potentially imposed liability on scores of innocent third parties.  (Unlike inducement, direct infringement doesn't require any intent to infringe.)  Judge Linn, joined by three other judges, would have kept a strict rule on joint liability (his dissent also criticized Judge Newman's theories).

Techdirt's post on the case is here. 

Federal Circuit Opinion Limiting Patent Damages

Today the Federal Circuit decided LaserDyamics v. Quanta Computer.  This is an interesting case on patent damages.  The case covers a lot of interesting areas, including limits on the use of the entire market value rule, admissibility of settlement licenses, the starting date for royalty calculations, and using Daubert to challenge a large damage calculation.

The case involved LaserDyamics' patent that can distinguish between DVDs and CDs inserted into an optical disc drive.  It's useful in personal computers, particularly laptops.

First, the court reversed the use of the "entire market value" rule to calculate damages.  LaserDyamics' expert had calculated damages based on the sales of the entire computer, instead of just the disc drive portion affected by the patent.

We reaffirm that in any case involving multi-component products, patentees may not calculate damages based on sales of the entire product, as opposed to the smallest salable patent-practicing unit, without showing that the demand for the entire product is attributable to the patented feature.

. . .

LaserDynamics’ use of the entire market value rule was impermissible, however, because LaserDynamics failed to present evidence showing that the patented disc discrimination method drove demand for the laptop computers. It is not enough to merely show that the disc discrimination method is viewed as valuable, important, or even essential to the use of the laptop computer. Nor is it enough to show that a laptop computer without an ODD practicing the disc discrimination method would be commercially unviable. Were this sufficient, a plethora of features of a laptop computer could be deemed to drive demand for the entire product. To name a few, a high resolution screen, responsive keyboard, fast wireless network receiver, and extended-life battery are all in a sense important or essential features to a laptop computer; take away one of these features and consumers are unlikely to select such a laptop computer in the marketplace. But proof that consumers would not want a laptop computer without such features is not tantamount to proof that any one of those features alone drives the market for laptop computers. Put another way, if given a choice between two otherwise equivalent laptop computers, only one of which practices optical disc discrimination, proof that consumers would choose the laptop computer having the disc discrimination functionality says nothing as to whether the presence of that functionality is what motivates consumers to buy a laptop computer in the first place. It is this latter and higher degree of proof that must exist to support an entire market value rule theory.

Second, an issue in the case was when the licensing experts should figure out the "hypothetical negotiation" began to calculate a royalty.  Since Quanta wasn't liable for actively inducing infringement until August 2006, LaserDynamics' expert used that date, instead of the earlier date when Quanta began selling the computers.  The Federal Circuit rejected that approach:

Thus, we hold that in the context of active inducement of infringement, a hypothetical negotiation is deemed to take place on the date of the first direct infringement traceable to QCI’s first instance of inducement conduct—in this case, 2003.

Third, the court excluded a prior settlement agreement as "the least reliable license by a wide margin."  The settlement in question was forced on the settling party due to a series of adverse decisions in the litigation.

Finally, the court held that LaserDynamics' experts use of a 6% running royalty wasn't reliable or admissible: "In sum, the 6% royalty rate was untethered from the patented technology at issue and the many licenses thereto and, as such, was arbitrary and speculative."

In sum, this opinion is quite favorable to limiting excessive patent damages.

Apple Wins Huge Verdict Against Samsung

Today a San Jose jury awarded Apple over $1 billion against Samsung in a patent infringement case over features of the iPhone and iPad.  The verdict form is here (assuming the link works; the jury was then asked to clarify some things, resulting in an amended verdict form).  Dennis Crouch and Joe Mullin explain the verdict (Joe's post also has a copy of the verdict).  According to The Verge, there will be a hearing on September 20 to consider Apple's request for an injunction and Samsung's motions to set aside the jury verdict.  

As EFF explains, it's not clear whether this outcome is actually good for either innovators or for smartphone and tablet consumers.

Thanks to Judge Alsup and Google for Publicizing My Blog!

I wrote previously about the Oracle v. Google trial involving the copyrightability of Java APIs.  A few weeks ago, Judge Alsup ordered Oracle and Google to disclose if they had paid money to anyone who had commented or blogged about the case.  I figured that wouldn't include me -- neither party pays me anything to write this blog.

After Oracle and Google filed their disclosures, the Judge ordered Google to do a better job.  That order included organizations to whom the parties gave money and whose employees commented or blogged -- whether or not the payment was to comment about the case.  That was quite a broad standard for disclosure.  I figured that might include the Electronic Frontier Foundation (EFF), since Google donates to EFF and (independently of the donations) EFF blogged about the case.  I still didn't figure it would include me, since EFF doesn't sponsor my blog, and I'm not an EFF employee anyway -- I'm an unpaid volunteer.

Today Google filed its supplemental disclosure.  Google made it clear that "neither it nor its counsel has paid an author, journalist, commentator or blogger to report or comment on any issues in this case."  However, at page 7, Google identified its contributions to EFF, and identified EFF's blog posts about the case.  But Google also identified this blog and me. 

Michael Barclay, now a volunteer fellow for the Electronic Frontier Foundation, commented on the case on his blog, IP Duck.  See Ex. Y (available at http://ipduck.blogspot.com/2012/05/judge-alsup-rules-that-java-apis-are.html); Ex. Z (available at http://ipduck.blogspot.com/2012/05/phase-one-verdict-in-oracle-v-google.html). Mr. Barclay’s interest in the copyrightability of software interfaces, however, long predates his association with EFF, and in fact predates Google’s existence—Mr. Barclay represented Borland in Lotus v. Borland. Ex. AA (Borland’s Supreme Court merits brief).

I assume Google was just being overly careful here by including me although it didn't really have to.  (Or as Mike Masnick put it -- since Google also listed him and his Techdirt blog -- "Apparently I'm a Google Shill and I Didn't Even Know It.")  Anyway, since people will read this filing, my thanks to Judge Alsup and Google for publicizing this blog!

Update: Here's Eric Goldman's post about this filing.

Oh Darn, I Should Have Gone Here When I Was in Israel

I went to Israel a couple of years ago, but somehow missed this: "Israeli biblical park outfits donkeys with wi-fi."  Darn.

Patent of the Day -- The Taco Shell!

I just came across U.S. Patent No. 2,570,374, which covered the commercial taco shell.  A truly historic invention in the food industry.

My Musician Friends and I Already Knew This

Why choose?

Ian Fleming, George Lucas, Lewis Carroll and Others Rewrite "Lord of the Rings."

Read them all here.  For example, here's the one by George Lucas:

"Did you ever wonder who your father was, Frodo?"

"Uncle Bilbo was my father, Obi Gan Dalf."

"Your Uncle is a fine man, but he is not your father. Your father was a fine warrior and a great captain, strong in the Force. He was called Sarumann the Wise, and he was a good friend."

"Was? Is he dead?"

"He is no more. It is your destiny to avenge his death, young Baggins."

Federal Circuit Reaffirms Patentability of Isolated Gene Sequences, But Not Methods for "Comparing" or Analyzing" Them

Last July the Federal Circuit issued an opinion the Myriad case involving the patentablity of genes directed to detection of breast cancer and related methods for using them, which I blogged about here.  

 

In March 2012, the U.S. Supreme Court issued an opinion in Mayo v. Prometheus, which I also blogged about.  Mayo limited the patentablity of medical diagnostic processes.  Following that decision, the Supreme Court ordered the Federal Circuit to reconsider its decision in view of Mayo's reasoning.

 

Today the Federal Circuit issued a new opinion in Myriad.  To summarize 106 pages very briefly, there was no change in the outcome from last year's original opinion.  Isolated DNA remains patentable subject matter, as do some of the method claims.  However, some of the method claims (method claims directed to comparing or analyz-ing gene sequences) are unpatentable.  Judge Bryson again dissented on the isolated DNA claims.  

 

Expect a cert petition or two.

Recent Patents You Don't Need

Here's a slideshow of some recently-granted patents that you don't need. 

Best Escalator Ever?

Imagine doing something like this in 1977.

Good Thing I Don't Have a Cat

Because if I did, something like THIS would happen to me.

My Latest EFF Amicus Brief

Today EFF filed an amicus brief in The Authors Guild v. Google, a case in the Southern District of New York.  I helped prepare that brief.  EFF's press release describes the case as follows:

The Electronic Frontier Foundation (EFF) filed an amicus brief today urging a federal court to find that the fair use doctrine shelters Google's Book Search "snippet" project from copyright infringement claims from the Authors Guild. EFF was joined by three associations representing over 100,000 libraries, the Association of Research Libraries, the American Library Association, and the Association of College and Research Libraries.

For years, Google has been cooperating with libraries to digitize books for a searchable database available to the public. Google Book Search now includes over 12 million works that users can search for keywords. Results include titles, page numbers, and small snippets of text. Google Book Search has become an extraordinarily valuable tool for librarians, scholars, and amateur researchers of all kinds. For example, librarians surveyed about Google Book Search said the service can help them find valuable research sources inside their own libraries as well as lead them to rare books they can borrow from other institutions. Many librarians say that they have purchased new books for their collections after discovering them through using Google Book Search. However, the Authors Guild argues that its members are due compensation in exchange for their books being digitized and included in the database – even though blocking Google Book Search's digitization wouldn't bring any author any additional revenue.

"Google Book Search is a reference tool that helps people find books. It doesn't take the place of sales," said EFF Fellow Michael Barclay. "The fair use doctrine allows for services like Google Book Search – they cause no economic harm and serve the welfare of the public."

The amicus brief filed today is part of EFF's long involvement in Authors Guild v. Google. In 2009 EFF and a coalition of authors and publishers objected to a proposed broad settlement of the case that would have created a business for Google selling access to whole books, based on the failure of the settlement to protect the privacy of readers. A judge rejected that broad settlement last year. Now Google seeks approval of the more narrow search and snippet project, and EFF agrees that the fair use doctrine applies.

"Google Book Search is a digital update to the old card catalog that helps libraries, helps researchers, and ultimately helps authors reach their audiences," said EFF Legal Director Cindy Cohn. "We hope the court protects Google Book Search – and the researchers and other readers who depend on it – from these meritless copyright claims."

What to Get For the Person Who Has Everything

The perfect gift:  A Magical Unicorn Mask.  Especially if it's as good as some of the reviews -- this one, for example:

I'm going to be honest, I have tried several different unicorn masks in the past. I have about 6 masks from various retailers around the internet and I've gotta say, this is the right one for me. When I put it on, I feel the rush of pretending I am a real-life unicorn! It is so realistically styled that there's a connection I feel deep inside when I put it on.

As mentioned in other reviews, the mask is very durable. The latex holds up well against brush and other woodland undergrowth. However, I found that when I tried to spear some pineapple from a tree or defend myself from approaching predators, the rubbery material of the horn just didn't hold up as well as I needed it to. More times than I'd like to admit, I had to gallop away from an attacking bear instead of standing proud and defending my honor like an actual unicorn. The solution I came up with was to simply reinforce the hollow inside of the horn with steel rods welded in a cylindrical shape. I just gorilla glued the metal into place (making sure a longer, pointed rod stuck out of the end so that I can pierce the hearts of my enemies) and voila!

Now I have a sweet unicorn mask that lets me fulfill all of my unicornical fantasies. You will not be disappointed in this mask.

"2001: A Space Odyssey" Trailers -- Then and Now

Stanley Kubrick's "2001: A Space Odyssey" is one of the all-time classics.  It was released in 1968.  To get an idea of how movie trailers have changed between then and now, watch either this trailer or this other trailer from 1968 -- and compare them to someone's 2012 rework of what the movie's trailer would look like now.

Bored of the Regular Olympics?

Watch the Lego Olympics.

Internet Defense League

Today I signed this blog up for the Internet Defense League.  If you have a web site or a blog, you might want to look into it.

Relativistic Baseball!

What happens if a baseball was pitched at 90% of the speed of light?  "A careful reading of official Major League Baseball Rule 6.08(b) suggests that in this situation, the batter would be considered "hit by pitch", and would be eligible to advance to first base."

Regional Patent Office to Open in Silicon Valley

The U.S. Patent Office announced today that it will open a regional office in Silicon Valley, California.  Hooray!

Further Briefing in UMG V. Veoh

A few weeks ago the Ninth Circuit asked for further briefing in UMG v. Veoh, which I wrote about in this post.  As I explained, in response to UMG's petition for rehearing, the Court asked the parties to brief the effect of the Second Circuit's Viacom v. YouTube decision.  Both the Ninth Circuit and Second Circuit opinions largely interpreted the DMCA in ways that favored the user-generated content (UGC) websites, Veoh and YouTube, and that disagreed with interpretations requested by UMG, Viacom, and other content providers.  However, on a few issues, the Second Circuit had different views than the Ninth Circuit.

The parties have now filed their briefs.  UMG's brief is here; Veoh's brief is here; a separate brief by Shelter Capital Partners (the Veoh investors that UMG also sued) is here.  Not surprisingly, Veoh argued that it was still entitled to summary judgment under the Second Circuit's standard, should the Ninth Circuit choose to agree with the Second Circuit in those few areas where the courts initally disagreed.  UMG had a more difficult task.  UMG disliked the legal rules proposed by both the Ninth and Second Circuit.  Thus, UMG's brief asked the Ninth Circuit not to adopt the Second Circuit's views, but rather arguments that both circuit courts had already rejected.

My prediction is that sometime in the next two to six months (depending on how busy the Judges are with other matters) we will see an amended opinion in UMG v. Veoh, adopting some if not all of the reasoning of the Second Circuit.  Doing so might or might not require a remand to the district court for more summary judgment proceedings, as the Second Circuit ordered in Viacom v. YouTube (my guess is not).  UMG would then have to try to persuade the Supreme Court to hear a case where the two circuit courts that hear most of the nation's copyright appeals are in substantial or complete agreement -- it's unlikely the Supreme Court would act in such circumstances.

More Proof That the Internet Is **Indeed** Made of Cats

Because you might think that the Affordable Care Act (a/k/a Obamacare) has nothing to do with cats.  But it does.

I Am Definitely NOT Moving to the East Coast

Best weather forecast ever?  You decide.

But the "IPCat" Blog Just Doesn't Sound Right

Today, we indeed have proof that the Internet is made of cats.  Courtesy of Google, of course.

Haiku of the Day

Thanks to the Huffington Post for the perfect Haiku:

Five syllables here

Seven more syllables there

Are you happy now??

Dave Barry's Christmas Gift Guide Comes Early This Year

Introducing . . . The Squatty Potty.  In particular the videos have . . . a little too much information.

Order for Further Briefing in UMG v. Veoh

I have written previously about the UMG v. Veoh and Viacom v. YouTube cases.  Briefly, both cases involve claims by content owners that the operators of user-generated content (UGC) websites such as YouTube and Veoh are liable when their users post allegedly infringing content.  Both YouTube and Veoh convinced trial courts that they are not liable for such postings because they complied with the notice-and-takedown procedure of the Digital Millennium Copyright Act, 17 U.S.C. § 512(c).  The UGC sites claim that upon receipt of proper requests, they promptly took down any infringing content.

Both sets of content owners appealed.  In December 2011, the Ninth Circuit Court of Appeals affirmed the trial court's summary judgment in favor of Veoh.  In April 2012, the Second Circuit Court of Appeals affirmed the trial court's summary judgment in favor of YouTube in part, but remanded the case in part for further fact finding on some issues (and possible further summary judgment briefing).  I discussed both opinions here and here.  In the YouTube case, the Second Circuit agreed with the Ninth Circuit's decision on many issues, but not all of them.

After the December 2011 decision in the Veoh case, the plaintiffs asked the Ninth Circuit to rehear the case.  After reading the April YouTube decision, the Ninth Circuit decided to rethink its Veoh opinion.  In an order last week, the Ninth Circuit asked the parties in Veoh to file additional briefs on the following issues:

     On December 20, 2011, this Court issued its opinion in UMG Recordings v. Veoh Networks, 667 F.3d 1022 (9th Cir. 2011), affirming in part, remanding in part and upholding the District Court’s grant of summary judgment because the defendants were protected by the Digital Millennium Copyright Act (DMCA) safe harbor provisions. The Appellants have filed a petition for rehearing and rehearing en banc, and the Appellees have filed a response.

     The Appellants argue, inter alia, that (1) the panel decision has conflated the 17 U.S.C. § 512(c)(1)(A)(i) actual knowledge standard and the § 512(c)(1)(A)(ii) “red flag” knowledge standard, see PFR/EB 12-15; and (2) by importing a knowledge requirement into § 512(c)(1)(B) (the “right and ability to control” provision), the panel decision has rendered it duplicative of § 512(c)(1)(A), see PFR/EB 15-17.

     After briefing was completed on the pending petition, the Second Circuit issued its opinion in Viacom International v. YouTube, Inc., 676 F.3d 19 (2d Cir. 2012). The Second Circuit held, in relevant part, that (1) the § 512(c) safe harbor (including the “red flag” provision) requires knowledge or awareness of specific infringing activity, see id. at 30-35; and (2) the District Court erred by importing a specific knowledge requirement into the § 512(c)(1)(B) “right and ability to control” provision, see id. at 36-38.

     Within 21 days of the date of this order, each party shall file a supplemental brief, not exceeding 3800 words or 15 pages, addressing certain relevant issues pending before this Court in light of the Second Circuit’s opinion in Viacom. Specifically, the parties should address the following questions:

1. Actual and “red flag” knowledge

The Second Circuit held:

The difference between actual and red flag knowledge is . . . between a subjective and an objective standard. In other words, the actual knowledge provision turns on whether the provider actually or “subjectively” knew of specific infringement, while the red flag provision turns on whether the provider was subjectively aware of facts that would have made the specific infringement “objectively” obvious to a reasonable person. The red flag provision, because it incorporates an objective standard, is not swallowed up by the actual knowledge provision under our construction of the § 512(c) safe harbor. Both provisions do independent work, and both apply only to specific instances of infringement.

Viacom at 31. Does the Second Circuit draw the correct distinction between actual and red flag knowledge? If so, does the distinction affect the disposition of this case?

2. “Right and ability to control”

     Does a service provider have to be aware of the specific infringing material to have the “right and ability to control” the infringing activity? Does importing such a knowledge requirement make it duplicative of § 512(c)(1)(A)? If there is no knowledge requirement, does a copyright holder need to show that a service provider possesses “something more than the ability to remove or block access to materials posted on a service provider’s website” in order to have the right and ability to control infringement? Id. at 38 (citations and internal quotation marks omitted). If so, what must the copyright holder show? Should this Court adopt the Second Circuit’s resolution of these questions? See id.

This briefing will likely result in an amended decision in the Veoh case.  That isn't necessarily bad news: there's a good chance that Veoh still wins depending on how the Ninth Circuit decides these issues.  And if the Ninth Circuit fully agrees with the Second Circuit, that lessens the possibility that the U.S. Supreme Court will decide to hear either case.

That Darn Modern Technology

A student brings a typewriter to class instead of a laptop. Hilarity ensues.  YouTube link is here.

Haiku Error Messages

Apparently the BeOS operating system used haiku error messages.  A sample:

Yesterday it worked
Today it is not working
The web is like that.

The web site you seek
Lies beyond our perception
But others await.

Error reduces
Your expensive computer
To a simple stone.

First snow, then silence.
This expensive server dies
So beautifully.

and the most well known one:

These three are certain:
Death, taxes, and site not found.
You, victim of one.

Pigs Fly Safely: With EFF's Support, Viacom Wins Fair Use Lawsuit

In December 2011, I wrote about my EFF amicus brief where EFF supported . . . Viacom.  I noted that this was a bit unusual.

EFF supported Viacom and its "South Park" subsidiary in Brownmark v. Comedy Partners because Viacom had been sued for making a parody of Brownmark's music video in a South Park episode.  EFF supported Viacom's right to make such parodies, and to get copyright suits against such parodies dismissed at the pleading stage, avoiding costly discovery and trial.

Today the Seventh Circuit Court of Appeals ruled in favor of Viacom and South Park, finding that the parody video was fair use, and that courts could dismiss cases at the pleading stage based on fair use.  The court stated:

The expense of discovery, which SPDS stressed at oral argument, looms over this suit. SPDS, and amicus, the Electronic Frontier Foundation, remind this court that infringement suits are often baseless shakedowns. Ruinous discovery heightens the incentive to settle rather than defend these frivolous suits.

I'm pleased that the copyright universe is safe for flying pigs, and the fair use defense in particular.  EFF's blog post about this decision is here.  Update: Techdirt's post about this opinion has links to the two videos.  And another blogger claims that this is the first appeals court decision to use the term "copyright troll."

I Just Have to Buy This Book When It Comes Out

If not just for this article's headline: "Copyright law threatens to destroy the world, in Year Zero."  And best of all, it's a real book!

My Friends in Texas Should NOT Click Here

However, if you live in Alaska, click away.