January 09, 2013
Q4 2012 Quick Links, Part 2 (Privacy, Advertising, Content)
By Eric Goldman
Privacy/Security
* Knowing how the FTC is cracking down on privacy violations and deceptive persuasion techniques, it's a little jarring to see how aggressive Obama's campaign was on both fronts. NY Times (1, 2), WSJ and Time. Even if the tactics were completely legal, is it the kind of ethical behavior that the Obama administration expects to see from businesses? Kate Kaye nails it at AdAge: Obama's Approach to Big Data: Do As I Say, Not As I Do.
* Google's privacy audit disclosure mandated by its settlement of the FTC Google Buzz case. Does this look like it's a helpful document to anyone? To me, the document looks very...expensive.
* Danny Sullivan, Microsoft To Make Same Privacy Change Google Was Attacked For; No One Seems To Care. NY Times coverage.
* U.S. v. Google Inc., 2012 WL 5833994 (N.D. Cal. November 16, 2012). Court approves the FTC-Google settlement over Safari cookie tracking.
* Using sophistry, Microsoft navigates FERPA to provide cloud services to universities.
* EU Data Privacy regulators want Google to fix its integrated privacy policy.
* Google Video executives' Italian privacy conviction overturned
* In HR 6671, Congress gives Netflix the right to get users to provide advance consent to frictionless sharing. Forget the fiscal cliff; this is maximally important work for Congress to prioritize. Of course, the ECPA update—part of a quid pro quo with NetFlix’s request—somehow got lost along the way.
* Murdock v. L.A. Fitness Intern., LLC, 2012 WL 5331224 (D. Minn. Oct. 29, 2012). A Facebook posting about an employee's termination isn't a privacy invasion.
* In re Platt, 2012 WL 5337197 (Bkrtcy. W.D. Tex. Oct. 29, 2012). After a physical altercation, the court made negative inferences against one of the participants for that person making their Facebook page private shortly thereafter.
* Del Vecchio v Amazon settles. Prior blog post.
* KISSMetrics settles supercookies lawsuit.
* Twitter's t.co shortened link--which Twitter automatically overlays on other shortened links--got briefly suspended, possibly because it was misclassified as a phishing threat.
Advertising
* Facebook's pay-to-promote and Sponsored Stories advertising units may create a conflict of interest with its algorithmic filtering of friends' posts: Ars Technica and George Takei. Facebook's sorta response.
* NY Times reports that advertisers are increasingly moving away from buying ads at publishers with attractive audiences and instead delivering ads via ad networks that find the targeted audiences wherever they are on the web. The result is that publishers can't charge a premium for aggregating high-value audiences because, through targeting, advertisers can reach that audience at cheaper venues. More NYT coverage of this issue.
* Wired: Facebook Is Quietly Making a Killing With Ads That Pursue You
* AdWeek interviews Google's "ad cop," David Baker.
* Internet Retailer: How Zappos balances privacy and targeted ads
* If most brands in movies are paid product placement, the logical inverse is that brands want to veto free placement they don't like.
* False advertising lawsuit against New York Law School rejected.
Content Industry
* 90% of Brazilian newspapers opt out of Google News. Meanwhile, Google threatens to cut off French publishers if France passes a law taxing Google for including them in Google News. NY Times recap of the issue.
* Blodget digs into the economics of the New York Times' newsroom.
* How cable bundling is leading to inflated cable subscription prices, mostly because sports broadcasters are overpaying sports leagues for broadcasting rights. Another reason why we don’t have cable at home.
Posted by Eric at 08:50 AM Permalink | Marketing , Privacy/Security | TrackBack (0) | Printable Version
January 08, 2013
Q4 2012 Quick Links, Part 1 (IP Edition)
By Eric Goldman
Copyright
* Author’s Guild v. HathiTrust, 1:11-cv-06351-HB (SDNY Oct. 10, 2012). James Grimmelmann's take.
* Hillicon Valley: ‘Shell-shocked’ lawmakers shy away from online piracy in new Congress
* Ars Technica: Voters boot three SOPA-sponsoring Hollywood allies from Congress
* Triple Town/Yeti Town cloned game app lawsuit settles. Prior blog post.
* Righthaven, LLC v. DiBiase, 2012 WL 5868154 (D. Nev. November 16, 2012). Shawn Mangano is substituted out as counsel in this case, replaced by Michael Mushkin. Bold move by Mushkin to walk into this shitstorm.
* Ricchio v. Amazon.com Inc., No. 12-332 (E.D. Wis. Oct. 12, 2012): "I find plaintiff has failed to state a claim for copyright infringement. He alleges defendant is again allowing third-parties to sell copies of his book without plaintiff’s authorization, but he does not claim that any of the books being sold on defendant’s website are counterfeit copies. Plaintiff claims only that defendant is allowing third parties to re-sell copies of his book without compensating him. However, under the “first sale” doctrine, plaintiff is not entitled to profit from the resale of his book."
* TorrentFreak: Google Removed 50 Million “Pirate” Search Results This Year
* PeerMusic, III, Ltd. v LiveUniverse, Inc., 2:09-cv-06160-GW -PLA (C.D. Cal Oct. 9, 2012). Awarding $12,500 per song in a default judgment against lyrics website, for a total of $6.6M.
* Time: How Microsoft’s Copyright Claim Went Awry
Trademark
* Split ruling on Google’s motion to dismiss in Home Decor Center v Google. Prior blog post.
* John Crane Production Solutions, Inc. v. R2R and D, LLC, 861 F.Supp.2d 792 (N.D. Tex. March 21, 2012):
JCPS is essentially concerned about initial interest confusion. A claim for trademark infringement can be based not only on whether purchasers are confused as to the source of the product at the time of the sale, but also based on “confusion that creates initial consumer interest, even though no actual sale is finally completed as a result of the confusion.” Elvis Presley Enters., 141 F.3d at 204 (internal quotation marks and citations omitted). Some courts have concluded that the fact that purchasers are sophisticated does not foreclose a finding of initial interest confusion if products and marks are sufficiently similar. Others have held that the character of a given market, including the sophistication of potential purchasers, is enough to overcome a likelihood of initial interest confusion. Compare Mobil Oil Corp. v. Pegasus Petroleum Corp., 818 F.2d 254, 260 (2d Cir.1987) (holding there was likelihood of initial interest confusion “even though defendant's business is transacted in large quantities only with sophisticated oil traders”) with Checkpoint Sys., 269 F.3d at 285 (holding no likelihood of initial interest confusion, in part because purchasers were sophisticated and exercised high degree of care) and Rust Env't & Infrastructure, 131 F.3d at 1217 (holding no likelihood of initial interest confusion, in part because purchasers were sophisticated and market was small). Because even a sophisticated purchaser can be subject to initial interest confusion, the court will weigh this digit and the potential for initial interest confusion along with the other digits in determining whether a likelihood of confusion exists.
Yet, the plaintiff still lost the case. Why not just give up the "initial interest confusion" charade?
* Paramount Farms Intern. LLC v. Keenan Farms Inc., 2012 WL 5974169 (C.D. Cal. November 28, 2012): "Ms. Hodari testified that the Wonderful Pistachios brand has a Facebook page with almost 300,000 “likes.” While the Facebook recognition of the brand does not conclusively demonstrate actual recognition of the associated trade dress, it lends credence to the other evidence that the trade dress has become famous. Accordingly, the Court finds there remains a triable issue whether the Claimed Trade Dress is famous."
* Google's algorithmic changes are curtailing demand for domain names.
* Robert G. Bone, Taking The Confusion Out Of “Likelihood Of Confusion”: Toward A More Sensible Approach To Trademark Infringement, 106 Nw. U. L. Rev. 1307 (2012).
* Latest round in Nextdoor.com and Raj Abhyanker.
* Stipulated contempt finding in the North Face v. South Butt case.
Patents/Trade Secrets
* Project DisCo: One In Six Active U.S. Patents Pertain To The Smartphone
* NDSL, Inc. v. Patnoude, 2012 WL 6096584 (W.D. Mich. December 7, 2012): "Patnoude's November 12, 2012, generic LinkedIn invitation is not sufficient to establish that Patnoude has solicited NDSL Customers in violation of subparagraph 9.a(2). NDSL has not established that Patnoude has solicited any NDSL Customer."
* Skyhook Wireless, Inc. v. Google Inc., 2012 WL 5309755 (Mass. Superior Ct. Sept. 28, 2012). Granting summary judgment to Google.
Posted by Eric at 12:06 PM Permalink | Copyright , Domain Names , Patents , Trade Secrets , Trademark | TrackBack (0) | Printable Version
Let's Stop Using the Term “Soft IP”
By Eric Goldman
You may have heard--or even used--the phrase “soft IP.” I'm not a fan of it, and I think we should retire the term.
The term "soft IP" is inherently ambiguous. Sometimes, people use "soft IP" to refer to “copyrights and trademarks;” other times, the term is intended to cover all IP other than patents--presumably publicity rights, trade secrets, etc. I especially cringe when I hear students tell me they are looking for a "soft IP" job. Typically, that's a reliable tipoff that the students don't know what kind of IP job they want; they just know they don't want to be (or aren't eligible to become) a patent prosecutor. That lack of clarity in the student's mind is rarely an asset to their job search.
I've had difficulty tracing the term's etymology. I searched several online databases looking for early uses and I found published references as far back as 1998, but my vague recollection (corroborated by others) is that the term goes back well before then.
As a term establishing a classification of IP, “soft IP” implies an antonym--presumably, “hard IP.” I don’t hear people use the term "hard IP," but given that soft IP always excludes patents, presumably patents are part of the antonym.
I can think of a few explanations for a hard/soft distinction among intellectual properties. First, patents often cover physical devices, so they often have a physical tangibility, while copyrights, trademarks and other IPs may be more intangible by comparison (even though patents protect "ideas," which is as intangible as they come).
Second, the hard/soft distinction might imply some difference in the degree of the practice's difficulty, i.e., the perception that patent law, and any associated technology, are complicated and “hard,” while other IPs are relatively easy and "soft" by comparison. People rarely articulate this relative value judgment explicitly, but I'm sure some patent practitioners believe that what they do is more challenging than the work of other IP practitioners; and I'm even more confident (because I've seen it repeatedly) that some patent practitioners feel comfortable "dabbling" in other IPs on the grounds that if they can do patents, they are well-qualified to handle other IPs.
It's true that patent prosecution requires passage of a separate bar exam, which in turn requires a technical background, so in that sense becoming a patent practitioner is "harder" than becoming an IP practitioner generally. Still, there is a certain implicit arrogance in this line of thinking.
Although I concede that patent law has plenty of arcane and baffling rules, I think patent practice is demonstrably not “harder” than other IP practices. I invite any patent practitioner--or, for that matter, any lawyer--who thinks that non-patent IP is "easy" to: walk me through 17 USC 114 (the music streaming provisions); calculate a pre-1976 copyright term duration; tell me what the term "use in commerce" means in trademark law; or walk me through the multitudinous ICANN procedures for objecting to or challenging gTLDs. And while historically the biggest bucks were in patent litigation, we're seeing big bucks across the IP spectrum, such as Oracle's $1.3B copyright damages award in the SAP case and Google's $100M+ defense costs in Viacom v. YouTube. (As I explain to my Internet Law class, $100M of legal fees is like the cost of *twenty* typical patent lawsuits!) And patent cases don't have a monopoly on hard technological questions; think about the technological sophistication to resolve Oracle v. Google, the Cablevision case or the Goforit case (just to pick three examples off the top of my head). Not only would it be condescending to say or imply that non-patent IP is "easy" or fluffy, I don't think it's remotely supportable factually.
A third hard/soft distinction is in the phrase “hard sciences,” although we rarely hear the antonym "soft sciences" (presumably social sciences). Because a technical background is required for patent prosecution, perhaps “hard IP” implicitly cross-references “hard sciences.” The thing is, there are several paths to qualify for the patent bar that don't require a “hard” science background, so that linkage would be odd.
In conclusion, I see at least three problems with the term “soft IP”:
1) It has at least two different definitions, making the term ambiguous.
2) It establishes an implicit hierarchy between different IP practices, which is potentially condescending and factually unsupportable.
3) It might imply an linkage with “hard sciences” that isn't necessarily true.
OK, so what should we use instead of the term "soft IP"? I don't have a great answer. The reality is that the IPs being lumped together under the "soft IP" appellation don't have enough commonalities to support the linkages--other than that they aren't patents. So we could use the term "non-patent IP" as the antonym to a patent practice. You probably like the term "non-patent IP" as much as I do (i.e., not much). My only other suggestion is to skip any effort to combine IPs in a single term and instead specify which IPs you are referring to. For example, if you're using "soft IP" to copyrights and trademarks, just say "copyrights and trademarks."
[I'm deliberately sidestepping the broader debate about the legitimacy of the term "IP"/"intellectual property," although I think that topic deserves additional discussion given some people's intrinsic absolutism towards "property" rights.]
Precise nomenclature is especially crucial for students in their job searches. If you aren't interested in a patent career, that's fine; but it's not a strong sales pitch to tell employers what you're *not* interested in, and the requirements and expectations of a trademark practice are quite different than a copyright practice (and different still from other IP niche practices). In reality, the best thing to students can do is to match their search criteria with the way employers structure the jobs. Few employers recruit for a "copyright" lawyer; typically, they are looking for a software licensing attorney or an entertainment attorney or an IP litigator knowledgeable in copyright law. My recommendation to students: figure out what employers are looking for, assess how the requirements of the job match against your skills and interests, and proceed accordingly. If you haven't gotten to the point where you can avoid the term "soft IP," your job search process probably still needs more cultivation, no matter how much effort you've invested in it to date.
[Photo credit: illustration depicting a sign post with directional arrows containing a choices concept // ShutterStock]
Posted by Eric at 08:51 AM Permalink | Copyright , Patents , Publicity/Privacy Rights , Trade Secrets , Trademark | TrackBack (0) | Printable Version
January 07, 2013
The FTC Smartly Ends Its Imprudent Google Search Antitrust Investigation (Forbes Cross-Post)
By Eric Goldman
The U.S. Federal Trade Commission (FTC) has ended its nearly two-year-old antitrust investigation of Google's ($GOOG) search engine practices with minimal consequences to Google. You can see the details from the FTC's announcement.
With any company as large, complicated and fast-moving as Google, antitrust regulators inevitably will find some problems if they look hard enough. If this is the worst they found, it's the virtual equivalent of a clean antitrust bill-of-health.
Ending the investigation into Google's search behavior is a smart decision by the FTC, but the FTC's initial decision to investigate Google's search practices was terrible. We've known since the beginning that regulating search results makes no sense. Still, all along, we've been waiting to see if nevertheless the FTC had enough "smoking gun" evidence of Google's impermissible search behavior to justify its initial decision to investigate, or if the FTC would find smoking gun evidence through its investigation. It now turns out the FTC never had compelling evidence against Google, and its lengthy and expensive investigation came up essentially dry--despite the determined (and costly) efforts of both the FTC and legions of free-spending and very whiny Google enemies. Looking back at the FTC's initial decision to investigate, it seems that the FTC got gamed by Google's enemies.
Google's antitrust problems are hardly over. Its enemies have gotten zero traction in court, but they have been shopping their gripes to other regulatory bodies, including the U.S. Department of Justice, multiple states' attorneys' general and international antitrust regulators, most obviously the E.U. Fortunately, the FTC's investigation strikeout offers numerous useful lessons for these regulators and any other regulators considering going after Google for its search engine operations--or, for that matter, any Internet company:
Haters Gonna Hate. Google's enemies lobbied the FTC to launch the investigation, but the FTC should have been more skeptical of their evidence. Microsoft ($MSFT) self-admitted it wanted to hobble its competitor after getting badly beat in the marketplace. Most of the other kvetchers just wanted more customers for less money (the typical expectations of advertisers)...or better yet, free favorable indexing in Google's search engine. Instead of dismissing their self-serving gripes, the FTC entertained them because Google's power and sheer size scares the FTC and because the FTC has been on a half-decade-long trajectory to crack down on Silicon Valley. But regulators need to watch out for any initial impulses that tremendous marketplace success is bad, and they need to remember that every successful company has accumulated haters on the way to the top.
A further cautionary tale for regulators: the FTC called out the gripers for their hypocrisy. For example, Microsoft attacked Google's pay-for-play shopping search engine, even though Microsoft does the same thing; and Expedia ($EXPE), a member of the anti-Google organization FairSearch, non-transparently marginalized American Airlines' listings from its search results in apparent violation of FairSearch principles. If the people complaining to regulators are engaging in duplicitous behavior, regulators probably got gamed (and the gripers' gambit may backfire on them).
Another irony: Microsoft seemed to think it was pretty clever to put Google through the antitrust wringer after Microsoft experienced its own antitrust hell from the 1990s. However, perhaps Microsoft didn't learn how to play the antitrust game as well as it thought it did.
Antitrust Investigations Take Too Long for Technology Cycles. It took the FTC 20 months to determine its investigation was largely fruitless. 20 months is nearly a full generation of technology development in the Internet industry. A few major developments during the past 20 months that (individually and collectively) undermine the investigation's rationale:
* Siri. Search is increasingly moving from the web to mobile, and Siri is picking up searches from mobile devices that used to go to Google.
* Pinterest. Pinterest is the fastest growing website of all time, and about 2 years ago it emerged from nowhere to become a major source of referral links. Pinterest reminds us that major Internet competitors can develop really quickly--in ways that no one, and certainly not regulators, can anticipate.
* Social Networking. Increasingly, consumers are using social networking site links (like recommendations from Facebook friends) as substitutes for keyword searches.
* Home-grown Apps. Websites are getting increasing traffic from their existing users who have installed the website's propriety mobile app. For example, Yelp ($YELP), a vocal Google critic, recently reported that "45 percent of searches on Yelp come from its apps."
In general, Internet innovation necessarily will outpace antitrust regulatory procedures, such that the marketplace's structure will change meaningful during the investigation's pendency. We had already learned that lesson from the Microsoft case; the Google case shows that even a 20-month antitrust investigation period is longer than prevailing innovation cycles.
If There Are No Good Remedies, Enforcement Actions Might Not Be Prudent. The FTC never had a clear path to remedying problems with search results even if it found Google had impermissibly manipulated them. The FTC can't really tell search engines how to manage search results; they lack the expertise to do so, plus such editorial discretion has constitutional protection. The best thing the FTC can do is to foster competition between search providers and get them to spur each other to new innovative heights, but it's not clear what the FTC itself can do to enhance competition in the search industry.
As a result, the FTC got itself stuck in this investigation. The FTC never had a feasible way to achieve any good outcome. When a satisfactory remedy to any antitrust problem isn't clear at the investigation's outset, the entire journey might be for naught--and probably isn't worth taking.
Antitrust Investigations Are Costly To Everyone. Almost every little fact matters to an antitrust investigation, meaning that antitrust cases typically involve heavy, and very expensive, fact discovery. Antitrust law also involves the subjective weighing of the facts (all too often based on intuition, not science), and it's common for players at an antitrust fiesta to spend lots of money trying to spin-doctor the facts.
Putting aside Google's costs to comply with various regulators' disclosure demands (and ignoring any degradation of Google's product development due to the regulators' heightened scrutiny), Google spent millions of dollars trying to sway the FTC. Google's economic stimulus package included a dozen DC lobbying firms (a DOZEN!), big brand-name paid influencers such as Robert Bork (recently deceased), Eugene Volokh, Marvin Ammori and many others, and multiple conferences designed to educate DC insiders (see, e.g., the 2011 and 2012 George Mason Law School conferences). Not directly tied to this investigation, Google also has invested substantially in its policy and advocacy work in other ways, as we discovered in Oracle v. Google and we've seen from its work in Germany.
Fortunately for Google, throwing money at the problem seemed to work really well (some of the FTC's announcement sounded like Google's PR flacks wrote it). But is that really how the system's supposed to work?
Google wasn't the only player spending like a drunken sailor. The FTC hired an expensive outside lawyer and invested countless staff hours. And Google's enemies spent plenty of money themselves, both directly and through advocacy groups like FairSearch. For example, Microsoft has put on its own event (both in DC and in Europe), and see this San Jose Mercury News list of Microsoft-supported influencers (the article also tries to enumerate Google beneficiaries). With the FTC investigation over, we might project a recession in the legal industry when all of this money stops sloshing around.
In the end, though the FTC reached the right result from its investigation, the money avalanche left me with a queasy stomach. As the cynical maxim goes, "he who has the gold makes the rules." When titans clash over antitrust matters, it's a fine line between justice being served and justice being bought.
More Reading. I've written two academic articles on search engine bias. The first, from 2006, was part of the first wave of academic discourse about search engine bias. It explains why search engine bias is both inevitable and desirable. The second, from 2011, recounts some changes over the prior 5 years and discusses how academic discourse about the subject degrades once the spin doctors take over.
Disclosure Notes. I have never been a lawyer, expert or consultant for Google or any of the other major players in this fracas. I am a Google AdSense publisher, but my earnings are meager (typically $30-$40 a month). I own a small number of Expedia shares.
[Photo Credit: Handgun // ShutterStock]
Posted by Eric at 06:39 AM Permalink | Content Regulation , Search Engines | TrackBack (0) | Printable Version
Privacy Plaintiffs in Deep Packet Inspection Case Get No Love From the Tenth Circuit -- Kirch v. Embarq Managmenet
[Post by Venkat Balasubramani]
Kirch v. Embarq Management, No. 11-3275 (10th Cir. Dec. 28, 2012)
This is an appeal from one of the many lawsuits against IAPs for implementing the ill-fated NebuAd “deep packet inspection” system. 
Here’s my post on the district court grant of summary judgment in favor of Embarq: Deep Packet Inspection Lawsuits: NebuAd Partner ISP Wins Summary Judgment. Plaintiffs do not fare any better in their appeal.
On the factual side, plaintiffs were not able to develop any evidence that (1) Embarq obtained or utilized any of the data extracted by NebuAd, or (2) the flow of data through Embarq’s system differed in any way from how data typically flowed through Embarq's system (the big exception being that the data was routed in a way that allowed NebuAd to extract data regarding plaintiffs).
Canvassing the ECPA's legislative history and context, and the fact that there’s no general federal statutory liability for aiding and abetting (absent a clear Congressional directive), the court says that Embarq cannot be held liable for any alleged ECPA violations of NebuAd. Thus, the court looks to see if Embarq violated the ECPA directly.
With respect to whether Embarq itself “intercepted” plaintiffs’ communications, the court notes the clunky application of the term "intercept" to the facts. "Interception" is defined as the "acquisition" of a communication's “contents,” but the line between "access" and "acquisition" is murky at best. The court instead relies on the portion of the definition of “device” that excludes any equipment “used by a provider of wire or electronic communication services in the ordinary course of its business.” Noting there was no dispute that Embarq only acquired the same access to the data that it had as an IAP, the court concludes that Embarq falls under this exception and can't be held liable for intercepting plaintiffs' communications.
__
Ouch. There were some mildly favorable facts to Embarq (the fact that it was paid an absurdly small amount of money for participating in the DPI test), but I still find the emphatic defense win somewhat remarkable. Privacy plaintiffs just cannot seem to catch a break.
The lack of a derivative liability concept under the ECPA is significant, and a majority of courts have said there is no derivative liability under either the ECPA or the Computer Fraud and Abuse Act. (See also Valentine v. WideOpen West Finance (another NebuAd case) and the somewhat factually bizarre CAIR v. Gaubatz which recently came to the same conclusion on the ECPA issue; the CAIR case fell through the cracks of the blogging queue.)
Interestingly, in Valentine, the district court granted summary judgment on the basis that plaintiffs failed to adequately allege any interception but left things open as to whether plaintiffs could state a claim for "disclosure" or "use" of communications under 2511. The court directed the parties to file additional briefs on this issue.
Additional coverage:
Courthouse News: ISPs Duck Class Claims of Targeted Ad Spyware
Wendy Davis: Appeals Court Sides With Embarq in Privacy Lawsuit
InsidePrivacy: Two New Decisions on the Wiretap Act and Secondary Liability
Bloomberg/BNA: ISP Falls Beyond Reach of ECPA for Role In Transmitting User Traffic to NebuAd
Related posts:
NebuAd Deep Packet Inspection Lawsuits Sputter -- Deering v. CenturyTel & Green v. Cable One
Deep Packet Inspection (NebuAd) Litigation: Court Dismisses ECPA Claim but CFAA Claim Continues
Deep Packet Inspection Lawsuits: NebuAd Partner ISP Wins Summary Judgment
[image credit: Shutterstock/lightspring - Internet privacy and spying on line with a computer laptop and the web by hacking or cyber virus that steals your technology data and follows your social media history]
Posted by Venkat at 04:26 AM Permalink | Privacy/Security , Publicity/Privacy Rights | Printable Version
January 06, 2013
In Its Rush to Fix Patent Reform, Congress Didn't Fix Its Biggest Error (Forbes Cross-Post)
By Colleen Chien and Eric Goldman
Congress passed the Leahy-Smith America Invents Act (AIA) (S.23), commonly referred to as "patent reform," in September 2011. The AIA is widely acknowledged as the most important change to U.S. patent law since 1952. The AIA took years of legislative wrangling to pass, and it went through many, many iterations. The resulting law is a voluminous 59 PDF pages with 37 sections.
As it turns out, not only was this bill quite important, but for its length, it was quite buggy. With so many words and moving parts in the enacted law, it's not surprising that some errors crept into the final version.
More than a year after its passage, Congress has just begun fixing the bugs. H.R. 6621, styled as a bill of "technical corrections," was introduced in the House on Nov. 30 and was approved on December 18 on a super-fast-track (on a motion to suspend the rules). As introduced, the bill had fourteen separate sections of legislative fixes, ranging from corrections of clear typographical errors to provisions that were quite substantive and potentially contentious. Amidst the frantic end-of-year efforts to avoid the fiscal cliff, the Senate approved the House bill with one change (involving pending patent applications filed before 1995). Late last night, the House concurred to the Senate's modified version, sending the bill to the White House, where it undoubtedly will be signed.
What’s most noticeable about H.R. 6621, however, isn't what it does, but what it didn’t do. As one of the AIA’s main architects recently said: “There are a few minor errors in the bill and one major error in the bill." Yet the technical corrections bill, which made 14 fixes to the AIA, didn't tackle this major error.
The error relates to the scope of estoppel in a procedure called post-grant review (PGR). By way of background, one of the AIA’s goals was to drive more fights over patent validity into administrative proceedings run by the U.S. Patent & Trademark Office (PTO), rather than have those battles take place in federal court.
One of the centerpieces of this effort is PGR, which allows third parties to challenge patents within the first 9 months of their life. PGR was meant to improve upon pre-AIA proceedings by allowing administrative patent challenges on more grounds and decreasing the challenger’s risk of being estopped from raising any issues later, in litigation, that “could have been raised” in the PGR. The same "could have been raised" estoppel standard had discouraged patent challengers from bringing administrative challenges under prior PTO rules (see former legislative counsel Joe Matal’s authoritative guide to the AIA, which describes how the earlier procedure was lightly used).
By all accounts, in the AIA, Congress intended to remove the “could have been raised” language and provide a narrower estoppel for PGR proceedings. As the Congressional committee report explains, the PGR was designed to “remove current disincentives to current administrative processes.” But something funny happened on the way to the Congressional floor, and the problematic “could have been raised” language was inadvertently inserted into the bill.
We’re not the only ones to recognize the error. House Judiciary Chairman Lamar Smith referred to the AIA's PGR estoppel standard as “an inadvertent scrivener’s error.” Senate Judiciary Chairman Patrick Leahy, in advocating that the Senate adopt the technical corrections bill, said the PGR estoppel standard in AIA was "unintentional," and it was "regrettable" the technical corrections bill doesn't address the issue. Sen. Leahy expressed "hope we will soon address this issue so that the law accurately reflects Congress's intent." The PTO also thinks Congress made a mistake, saying “Clarity is needed to ensure that the [PGR] provision functions as Congress intended.”
Yet, even with such apparent consensus, the technical corrections bill—which found 14 other errors to fix—perplexingly bypassed the issue. The next time Congress revisits the AIA to fix the remaining bugs, we hope it will finally get its PGR estoppel standard right.
[Colleen Chien and Eric Goldman are professors at Santa Clara University School of Law. We thank Paul Steadman, a litigation partner in Kirkland & Ellis' Chicago and Washington, DC offices, for his help explaining post-issuance PTO procedures.]
Posted by Eric at 10:12 AM Permalink | Patents | TrackBack (0) | Printable Version
January 03, 2013
The Problem of “International Orphan Works” (Guest Blog Post)
By Guest Blogger Marketa Trimble
The U.S. Copyright Office recently extended the deadline by which the public may submit comments on issues related to orphan works until February 4, 2013. The Office is gathering suggestions for shaping future U.S. legislation and taking other actions to address the issues of works whose copyright has not expired, yet the owner of the copyright cannot be identified or located. However, legislating on orphan works at the national level cannot solve an important problem: the problem of establishing the status of an orphan work internationally. The solution to this problem is crucially important for anyone hoping to use orphan works on the internet – particularly entities that are among the most active lobbyists for orphan works legislation.
The key component of orphan works legislation is a definition of what qualifies as an “orphan work.” The definition relies on a standard for the diligent search that a prospective user of a work must conduct in searching for the copyright owner of the work. If, even after performing a diligent search, the prospective user cannot identify or locate the copyright owner, the work will be considered an “orphan work.” The legislation also must address whether, if the work is an orphan work, the user must pay royalties, and if so, when, in what amount, and to whom.
An important accelerator in the search for a solution to the orphan works problem has been the various projects that were developed to digitize library collections and make digital copies available online. Although the orphan works problem did not first arise because of digital technology or the internet, the problem certainly attracted significantly more attention when it was pointed out by entities that wished to make large quantities of materials available to the general public online.
Given the link between the internet and the interest in orphan works, it would appear to be an imperative that a legislative solution to the orphan works problem pay particular attention to the use of orphan works online. However, a legislative solution that is merely national in scope will not solve the orphan works problem for prospective users of the works if that use will be online – it will only set a national standard for diligent search for one country, exposing a prospective user to the risk that his diligent search will not meet the standards of other countries, where the work will also be accessible online. While a user might have searched for the copyright owner in a manner that met the standard prescribed by the legislation of country A and thereby be free of liability for infringement under the law of A, the same search might be insufficient according to legislation in country B, thereby making the user liable for infringement in country B.
The European Union, which leapfrogged the United States in legislating on orphan works when it adopted its directive on certain permitted uses of orphan works in October 2012, had to solve the problem for all 27 EU member states. The directive offers a hybrid solution: it sets common minimum standards for a prospective user’s diligent search and combines the minimum standards with an obligation for mutual recognition of additional national rules for the prospective user’s diligent search. While the directive dictates what constitutes a minimum diligent search for a prospective user of a work (the Annex of the directive and Article 3.4), it also gives EU member states an opportunity to set in their implementing national legislation additional requirements for diligent searches (Article 3.2). Once a prospective user meets the standard of one of the EU member states and determines that the work is an orphan work, other EU member states must respect that status based on the national standard (Article 4). The European Union thus creates the status of an EU-wide orphan work – undeniably an important step for the EU single market.
How will EU-wide orphan works fare beyond EU borders? If a German library identifies a work first published in Germany as an orphan work under future German EU-compliant legislation (see Article 3.3 of the directive for the applicable law) and makes a digital copy of the work available online, the library will not face infringement liability in any EU member state. But suppose the copyright owner suddenly emerges and sues for copyright infringement in a country outside the European Union where the diligent search standard is different – or where no legislation on orphan works exists at all. One possible way for the library to limit its exposure to potential copyright infringement liability outside the European Union will be to allow access to the work online only to those users who connect to the internet from EU member states – a solution that could generate a greater need for effective geolocation tools and raise questions about how the law should treat acts of evasion of geolocation (see my article on the topic here).
Can an orphan work solution serve prospective users of a work who intend to use the work on the internet, although the solution does not provide for an “international orphan work” status? Such a status could only be established by an international treaty, which could adopt the EU hybrid model or set a single diligent search standard. Without an “international orphan work” status the problem could still be solved by the operation of the rules for jurisdiction and choice of law, which would effectively limit the number of countries whose national laws would apply to the acts of the prospective user. Such rules could either be left to develop naturally with no international coordination (as has been the case so far with the exception of the European Union and the European Free Trade Association), or could be shaped by collective action – if countries could eventually agree on a treaty on jurisdiction, choice of law, and the recognition and enforcement of judgments (the restarted activities of the Hague Conference on Private International Law in this area provide a possible forum for such an effort). Four completed and one ongoing academic projects attempt to provide guidelines for courts and legislators on which rules to adopt (for the ongoing project see here).
There might be one other possibility: the EU directive, once implemented in EU member states’ national legislation (which should occur by October 29, 2014), might prove that the standard set by the directive is high enough to identify orphan works reliably at the international level. If the EU standard is sufficiently high, the instances in which works will not be legitimate “international orphan works” – instances in which their copyright owners will in fact exist and emerge to claim infringement – will be very few, if any.
However, even if copyright owners are truly unidentifiable or non-locatable under any standard, the question will remain as to what law should govern the royalties due, if any, for the use of the work if the work is accessible online from multiple countries. But maybe the question of the law applicable to the royalties arrangement will not necessitate an international agreement: it might transpire (as it does with other infringement issues on the internet) that in most cases various natural barriers will provide sufficient limits on the territorial scope of potential liability. The limited financial resources of copyright owners – who are the potential plaintiffs – or a limited willingness of courts to adjudicate infringements under multiple national copyright laws might delineate the territorial scope of potential liability in the majority of cases. Furthermore, if the copyright owner is truly unidentifiable or non-locatable, there might be no one with standing to sue for copyright infringement anyway.
[Photo credit: Puzzle World Globe // ShutterStock]
Posted by Eric at 09:23 AM Permalink | Copyright | TrackBack (0) | Printable Version
January 02, 2013
Section 230 Still Keeping the Pro Se Plaintiffs at Bay--Klayman v. Facebook, and More
By Eric Goldman
I'm personally committed to blogging every Section 230 case I see, but I fell off the wagon in the second half of 2012. So what better way to usher out 2012 and ring in the new year than to recap some Section 230 wins from the past 6 months? The following four cases all involve pro se litigants whose unmeritorous cases got unceremoniously swept out of court, just like Baby New Year walks Father Time out the door. In 2013, I resolve to give continued thanks to Section 230 for keeping the court system relatively free of junk lawsuits like these:
Klayman v. Zuckerberg, 2012 WL 6725588 (D.D.C. December 28, 2012). Klayman is a lawyer-plaintiff. For reasons that are unclear to me, pro se lawyer-plaintiffs fail in court at about the same rate (or worse) as the typical pro se. I find this hard to comprehend; after all, shouldn't lawyers have a better sense which legal claims are worth pursuing than the average individual litigant? Presumably, the only more knowledgeable litigants are judge-plaintiffs; I don't see many of those cases, but these usually also fail in a pretty embarrassing way. This sounds like a good area for further research.
Larry Klayman is notorious enough to have his own Wikipedia page. I'm not sure how to gauge his accomplishments because the Wikipedia page only highlights his failed lawsuits--the word "unsuccessful" shows up four times on the page, not including this lawsuit.
The case involves a user-created Facebook page titled 'Third Palestinian Intifada.'" It's not clear from the opinion how this page harmed Klayman, but I guess it doesn't take much to provoke a lawyer to sue. While typing the complaint, Klayman's finger apparently got stuck on the "zero" key. He demanded $1,000,000,000.00--that's right, $1 billion--because Facebook didn't take down the page fast enough.
The court runs through the typical three-factor Section 230 analysis:
1) ICS? Facebook provides an interactive computer service because it maintains "a website that gives its users the ability to create, upload, and share various types of information, potentially with hundreds of millions of other users."
2) Publisher/Speaker Claim? Klaynan sued Facebook for assault (!) and negligence. The court says:
the defendants' alleged conduct ascribed to them the status of publishers of information, whether by "using" the website to post certain content (i.e., publishing), id. ¶ 17, "allow[ing]" certain content to be posted to the website (i.e., deciding whether to publish), id. ¶¶ 17, 19, or by "refus[ing] . . . to remove these postings," id. ¶ 19. The defendants' potential liability is thus "derive[d] from [their] status or conduct as a publisher or speaker."
Klayman belatedly attempted the Barnes promise-based workaround to Section 230 and gets mocked:
It begs credulity that the plaintiff, a "highly visible and well known lawyer," Compl. ¶ 11, would not have included a claim for breach of contract if he contemplated such a claim as a viable possibility.
3) Were the defendants the ICPs? [note: normally this is phrased as whether the content came from third party content providers, but I think this restyling is OK in this case.] The court says:
Nowhere in his complaint or in his opposition brief does the plaintiff allege that the defendants contributed to the content of the Facebook page at issue. Rather, as described above, the plaintiff focuses on the role that the defendants played in publishing the Facebook page. [FN3] The plaintiff's own allegations are inconsistent with a finding that the defendants acted as information content providers with respect to the offensive material at issue.
FN3 is interesting. Klayman argued that Facebook collects data about its users and then personalizes their site views based on this data. The court says that even if that's true, it would just represent another form of editorial control immunized by Section 230.
Having satisfied the three elements of a successful Section 230 immunity, the court grants Facebook's motion to dismiss. This is a good outcome for Facebook, but I'm not clear why Facebook didn't make an anti-SLAPP motion under D.C.'s anti-SLAPP law. That way, Klayman would have to write Facebook a tuition check for his Section 230 schooling. Even without anti-SLAPP protection, I hope Facebook seeks Rule 11 sanctions against Klayman. We haven't seen too many courts grant Rule 11 motions in Section 230 cases (I wish they did) but Klayman's lawsuit broke absolutely no new legal ground and was doomed from inception.
A Facebook spokesperson told me: "We are pleased with the court's ruling dismissing all claims with prejudice."
Merritt v. Lexis Nexis, 2012 WL 6725882 (E.D. Mich. October 23, 2012). Merritt claimed Lexis-Nexis published false information about him. The court never explicitly says the information comes from third parties, but that's the logical inference given Lexis-Nexis' business model. The court says that Lexis-Nexis qualifies for Section 230's immunity (citing the memorable Gaston case). The court then says Merritt's claims fall "squarely" in Section 230's immunity.
Nieman v. Versuslaw, Inc., 2012 WL 3201931 (C.D.Ill. August 3, 2012). See also the magistrate's report, 2012 WL 3201935 (C.D.Ill. June 13, 2012). I've held off blogging this case because the University and I have received threats from Nieman (lucky us!). So just the facts on this one.
The court summarizes Nieman's arguments:
Between January 2009 and the date of filing this action, Plaintiff applied for one or more positions of employment. Plaintiff believes that the potential employers have performed Internet browser searches by way of Google.com, Yahoo.com, or Bing.com, and found documents related to litigation against his former employer Nationwide. Plaintiff also believes that the potential employers have used this information to disqualify him from candidacy for the applied position or have shared this information with others who have done so. In other words, Plaintiff alleges he “has been effectively ‘blacklisted’ as to employment opportunities due to the ease at which these references appear pursuant to a simple name search, and due to the unlawful acts of third parties who then use such information to unlawfully disqualify” his candidacy.
He sued Microsoft, Versuslaw, Yahoo!, Google, and Joseph W. Acton for, among other claims:
* violations of Illinois' human rights law. The court rejects the claim, saying the complaint only alleged "Defendants provided access to public information that potential employers used to deny Plaintiff employment," and that doesn't suffice.
* publicity rights. The court says:
First, the exemption from liability for using a person's identity for a non-commercial purpose, including in a news or public affairs account is applicable here. Plaintiff's prior litigation is a matter of public record and public interest. Moreover, Plaintiff's identity is not being used for a “commercial purpose” as defined by the Right of Publicity Act because his name is used only to find documents related to his case, which are part of the public record. His name is not being held out or used to entice anyone to buy a product. Under Plaintiff's theory, every person who is involved in litigation who has public court documents that can be accessed for a fee on the Internet by doing a browser search or found by using Westlaw, Lexis, Versuslaw, or any other legal research site can state a claim under the Right of Publicity Act. This cannot be the case.
* 42 USC 1981. The court says he didn't allege any discrimination on improper bases.
* Lanham Act. Nieman alleged "Defendants Versuslaw and Acton are attempting to associate Plaintiff with their for-profit website. Plaintiff accuses Defendants Google, Yahoo, and Microsoft of actively participating in “these unlawful acts ... by way of their paid search ranking and/or AdWords mechanisms.”"
Citing Stayart v. Yahoo, the court says Nieman doesn't have standing because he lacks the requisite commercial interest in his name.
* Unjust enrichment. "Defendants are not “retaining a benefit” to Plaintiff's detriment just because they are selling electronic access to public information and Plaintiff does not like the information contained in those public documents."
The court also grants Microsoft and Yahoo's First Amendment and 47 USC 230 defenses. Regarding the First Amendment, the court says "all of Plaintiff's allegations rest on the premise that Defendants' websites provide links to information that is in the public record. Plaintiff cannot show he is plausibly entitled to relief." Regarding 47 USC 230, the court says that it agrees with the magistrate report that Section 230 applies, but the judge expresses uncertainty about the immunity for the trademark and publicity rights claims because they are IP claims; and also about the RICO claim as a federal crime (the court doesn't cite the several cases rejecting its line of reasoning on that point).
Getachew v. Google, Inc., 2012 WL 3217611 (10th Cir. August 9, 2012). This case is quite similar to the Nieman case. The court recaps:
Mr. Getachew alleges that when all or part of his name is entered into Google's Internet search engine, the search results yield negative information about him. For example, Mr. Getachew was previously a plaintiff in an employment action, and he alleges that the summary judgment order in that case is available when part of his name is entered into Google's search engine. He also alleges that another Google search result links his name to a "[g]raduate position available in evolutionary systems biology."
All of this, he alleges, hurt his employment prospects. The district court said that his discrimination and Title VII claims were "frivolous" and his state law claims against Google were immunized by 47 USC 230. The appeals court upholds these conclusions. With respect to 47 USC 230, the court says "Google is immune from Mr. Getachew's state-law claims under 47 U.S.C. § 230(c)(1). Under that provision, Google cannot be held liable for search results that yield content created by a third party."
[Photo Credit: Dust Bunny // ShutterStock]
Posted by Eric at 07:38 AM Permalink | Content Regulation , Derivative Liability , Privacy/Security , Publicity/Privacy Rights , Search Engines , Trademark | TrackBack (0) | Printable Version