JOLT Digest

Palin E-mail Hacker Indicted on Federal Charges by Tennessee Grand Jury
By Andrew Ungberg –- Edited by Jon Choate

United States v. Kernell
E.D. Tenn., October 7^th, 2008, No. 3:08-CR-142
Indictment

On October 7^th, 2008 a Tennessee grand jury charged David C. Kernell with violating 18 U.S.C. § 2701 (part of the Stored Communications Act) and 18 U.S.C § 1030(a)(2) (a subsection of the Computer Fraud and Abuse Act) for allegedly accessing the Yahoo e-mail account of Alaska Governor Sarah Palin, the Republican vice-presidential nominee, without authorization. Images and information from Gov. Palin’s e-mail account first hit the Internet on September 17^th, and began making headlines shortly thereafter. Several websites, including Wikileaks.org and popular blog network Gawker.com, posted screen shots and content from the hacked e-mail account.

Professor Orin S. Kerr, of the George Washington University Law School and the Volokh Conspiracy blog, sees a potential problem with the indictment. He notes that in order to charge the case as a felony, the government must claim Kernell accessed the account “to further criminal or tortuous activity.” According to Kerr, however,

[T]he indictment doesn’t exactly state what the crime or tort is that the intrusion was designed to further. It just states that the intrusion was “in furtherance of the commission of a criminal act in violation of the laws of the United States, including 18 U.S.C. Section 2701 and 18 U.S.C. Section 1030(a)(2)” But Section 2701 and Section 1030 are the intrusion statutes themselves! It makes no sense to allow a felony enhancement for a crime committed in furtherance of the crime itself . . . .

Info/Law draws parallels between this case and the Lori Drew MySpace case.

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Supreme Court Denies Echostar’s Appeal; TiVO Awarded $104 million in Damages
Docket Page 

On Monday, October 6th 2008, the Supreme Court denied Dish’s (formerly EchoStar) appeal of TiVO, Inc. v. EchoStar, 516 F.3d 1290 (Fed. Cir. 2008), bringing the long patent infringement suit to a close.  By refusing to hear argument, the Court upheld both the district and Federal Circuit decisions, which found Dish had infringed TiVO’s patented DVR software and awarded TiVO $74 million in damages. Dish will be forced to pay TiVO $104 million - the amount of the 2006 judgment plus interest. 

Dish Network had successfully argued for a stay of the district court injunction pending appeal; the Court’s actions this week would restore the order against operating or selling the infringing DVRs. Earlier this year, Dish claimed to have developed a non-infringing workaround which would allow the company to continue providing DVR service to customers. 

Jacqui Cheng of ars technica provides commentary, noting that litigation is likely to continue as TiVO has a pending motion for contempt which will effectively subject the workaround to a noninfringement test. 

Previously: Federal Circuit Upholds Damages Award Against EchoStar

Expelled Lawsuit Dropped

Lennon v. Premise Media Corp. (S.D.N.Y.)

The suit filed by Yoko Ono and the children of John Lennon against the producers of Expelled, a motion picture that used a clip of the song “Imagine” without permission, was withdrawn and dismissed last month.  However, Anthony Falzone, Executive Director of Stanford’s Fair Use Project and counsel for defendants, notes:

[T]he right result came far too late. The mere pendency of these cases caused the film’s DVD distributor to shy away from releasing the full film — the version that includes the Imagine segment. So the film goes out on DVD on October 21 in censored form, illustrating the damage that even an unproved and unsupported infringement claim can do.

Previously: District Court Denies Yoko Ono Lennon’s Motion for Injunctive Relief

District Court Vacates Verdict and Damages in File-Sharing Copyright Infringement Case, Grants New Trial 
By Dmitriy Tishyevich - Edited by Bradley Hamburger 

Capital Records Inc. v. Thomas
D. Minn., September 24, 2008, No. 06‐1497
Order (provided by EFF)

On September 24, 2008, Chief Judge Michael Davis of the United States. District Court, District of Minnesota, issued an order in Capitol Records Inc. v. Thomas (formerly Virgin Records America, Inc. v. Thomas) vacating a jury’s October 2007 copyright infringement verdict and award of $222,000 in damages to members of the Recording Industry Association of America (“RIAA”) and granting the defendant, Jammie Thomas, a new trial.  The vacated award was the first jury trial victory for the RIAA in a federal copyright infringement case against an individual since it began litigation against alleged peer-to-peer users in 2003.

In the original trial, plaintiff recording companies alleged that defendant Jammie Thomas had infringed twenty-four of their copyrighted sound recordings by downloading and making them available via the Kazaa peer-to-peer file sharing network.  Judge Davis instructed the jury that the “act of making copyrighted sound recordings available for electronic distribution on a peer‐to‐peer network, without license from the copyright owners, violates the copyright owners’ exclusive right of distribution, regardless of whether actual distribution has been shown.”  The jury found that Thomas had willfully infringed on all twenty-four of the plaintiff’s sound recordings, and awarded statutory damages of $9,520 per violation ($220,000 in total damages).  On May 15, 2008, however, Judge Davis issued an order stating that he was contemplating granting a new trial due to the possibility that the jury instruction at issue constituted a manifest error of law.  Both parties briefed the issue, and Judge Davis allowed submission of five amicus briefs.

Eric Bangeman at ArsTechnica provides a summary of the order.  

Corryne McSherry of the Electronic Frontier Foundation applauds Judge Davis’ call to lower the Copyright Act’s statutory damages. 

David Kravets of the Wired “Threat Level” blog notes that the decision “nullified an almost foolproof method for the RIAA,” but suggests that it simultaneously “replaced it with another” by holding that the music files downloaded by RIAA investigators can form the basis for an infringement claim.

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Federal Circuit Rejects Point of Novelty Test for Design Patent Infringement
By Anna Lamut — Edited by Stephanie Weiner

Egyptian Goddess v. Swisa
CAFC, September 22, 2008,
Slip Opinion

The U.S. Court of Appeals for the Federal Circuit affirmed the decision of the District Court for the Northern District of Texas, which had granted summary judgment in favor of Swisa, Inc, finding that no jury could reasonably find Swisa’s nail-buffer design infringed Egyptian Goddess’s design patent.

A panel of the Federal Circuit had upheld the District Court’s decision on August 29, 2007, applying the “point of novelty” test for design patent infringement. On November 26, the Federal Circuit vacated the panel’s decision, deciding to hear the appeal en banc to determine the proper standard for assessing claims of design patent infringement.

The point of novelty test states that “the accused device must appropriate the novelty in the patented device which distinguishes it from the prior art.” Sears, Roebuck & Co. v. Talge, 140 F.2d 395, 396 (8th Cir.1944). This test requires that in order to find infringement, a court must attribute the similarity of two items to the novelty which distinguishes the patented device from the prior art. By contrast, the “ordinary observer” test, established in 1871 in Gorham Co. v. White looks for substantial similarity between the two designs, as taken from the viewpoint of an ordinary observer familiar with the prior art. The Federal Circuit held that the point of novelty test should no longer be used to assess claims of design patent infringement, favoring the ordinary observer test instead. (more…)

Virginia State Supreme Court Holds Anti-Spam Statute Unconstitutionally Overbroad
By Jay Gill — Edited by Nicola Carah

Jaynes v. Commonwealth of Virginia
Supreme Court of Virginia, September 12, 2008, No. 062388
Slip Opinion

The Supreme Court of Virginia overturned the conviction of prolific spammer Jeremy Jaynes, unanimously reversing not only the Virginia state court of appeals, but its own earlier holding in the case. In doing so, the court held that the Virginia anti-spam statute under which Jaynes was convicted was unconstitutionally overbroad, as it did not distinguish between commercial and non-commercial instances of anonymous, unsolicited bulk e-mail. The court ruled that non-commercial anonymous bulk e-mail falls squarely within First Amendment protection and that no reasonable construction of the Virginia statute could remedy the constitutional defect.

In a press release praising the decision, the ACLU, which filed an amicus brief in support of Jaynes, wrote, “[s]peech on the Internet deserves no less First Amendment protection than in any other medium.” Jon Praed of the Internet Law Group took issue with the court’s characterization of the situation, telling the Washington Post: “I guess a burglar can break into your home as long as they are reciting the Gettysburg Address.” John Levine, president of the Coalition Against Unsolicited Commercial E-mail, and an expert for the prosecution in Jayne’s jury trial, argues that IP forgery is a red herring and points out that there are a variety of alternatives to send anonymous emails. Nonetheless, he commented, “I don’t see it as a fatal setback for anti-spam law.” According to Levine, Virginia’s statute was unique in prohibiting noncommercial spam, and other statutes, including the federal CAN-SPAM act (which took effect after Jaynes’s arrest), do not contain the flaw that led to the result in this case.
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Harry Potter Lexicon Found to Infringe J.K. Rowling’s Copyright
By Miriam Weiler - Edited by Evie Breithaupt

Warner Bros. Entertainment v. RDR Books
S.D.N.Y, September 8th 2008, No. 07 Civ. 09667 
Slip Opinion (hosted by Justia.com)  

This week, Judge Robert P.  Patterson of Southern District of New York, granted a permanent injunction against Defendant RDR Books (”RDR”) and awarded statutory damages to Plaintiffs Warner Brothers Entertainment, Inc.  and J.K.  Rowling (”Warner Bros.” and “J.K.  Rowling”) for the infringement of Rowling’s Harry Potter books.  In this long awaited decision, the court ruled that RDR’s plan to publish “The Lexicon,” an A-to-Z reference guide to Harry Potter facts written by Steven Vander Ark, infringed upon Rowling’s famous series and two of her other works, Quidditch Through the Ages (2001) and Fantastic Beasts and Where to Find Them (2001). 

There was no dispute that J.K. Rowling owned the copyright to the Harry Potter series, the film rights of which had been licensed to Warner Bros., and that Steven Vander Ark had originally copied from the books to create an online reference source called “The Harry Potter Lexicon.” The court applied the Ringgold test for substantial similarity, finding that Vander Ark copied a quantity and quality of material sufficient for infringement when he developed the website into a book to be published by RDR. 

Briefs and relevant court documents are available here.

The Wall Street Jounal provides an overview of the case, and the Vanderbilt Journal of Entertainment & Technology Law features a thorough analysis of the decision.

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Website Finds Safe Harbor from Copyright Infringement Damages for User-Provided Videos
By Debbie Rosenbaum - Edited by Andrew Ungberg

Io Group, Inc. v. Veoh Networks, Inc.
N.D. Cal., August 27, 2008, No. C06-03926 HRL
Slip Opinion
(hosted by Electronic Frontier Foundation)

Last week, a federal judge in San Jose, U.S. District Judge Howard Lloyd, ruled that Veoh Networks, Inc. (“Veoh”), is not liable for copyright infringement for material that was uploaded to its site. Veho provides software and a website that enables the sharing of user-provided video content over the Internet.

The case arises from a complaint filed by Io Group, Inc. (”Io”), a company that holds and owns a number of registered copyrights for a variety of adult entertainment products. Between June 1 and June 22, 2006, Io alleged that it discovered clips from ten of its copyrighted films had been uploaded and viewed on veoh.com without its authorization. None of the clips contained copyright notices, except one work that displayed a “Titan Media” trademark several minutes into the clip; Io conducts business under that name.

Veoh’s first notice of the claimed infringement was Io’s filing of the instant lawsuit on June 23, 2006. Independently, Veoh had already decided that it would no longer permit adult content on its website. By the time this suit was filed, access to all adult content on Veoh’s website – including any content allegedly infringing Io’s copyrights – had been terminated.

Io sought summary judgment on liability for direct, contributory and vicarious copyright infringement. The court ruled that, even assuming that plaintiff’s infringement claims pass summary judgment muster, Veoh was eligible for safe harbor protection from damages; furthermore the court found the limited injunctive relief provided under the DMCA was moot.

Commentators have noted the potentially far-reaching effects of this decision, especially for the ongoing YouTube-Viacom infringement litigation. See the L.A. Times, CNet, Wired, Silicon Alley Insider, Techdirt, TechCrunch.

Bruce Boyden of Prawfsblawg notes, most commentators have focused the holding that Veoh’s automated reformatting of uploaded materials does not create copies for which Veoh is responsible. Boyden also notes the similarities to the Second Circuit’s recent Cablevision case, calling the cases “good precedent for ISPs who process uploaded content. . . . .”

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District Court Rules Virginia Law Protecting Social Security Numbers Unconstitutional As Applied to Watchdog Website
By Jon Choate — Edited by Daniel Ray

Ostergren v. McDonnell
E.D. Va. No. 3:08cv362
Slip Opinion (hosted by the ACLU)

On August 22nd, 2008, Judge Robert E. Payne of the U.S. District Court for the Eastern District of Virginia found § 59.1-443.2 of the Virginia Code to violate the First Amendment as applied to Betty J. Ostergren’s website The Virginia Watchdog. The court granted plaintiff Ostergren limited injunctive relief against the State of Virginia as represented by its Attorney General, Robert F. McDonnell.

Ostergren is a privacy advocate who has lobbied the General Assembly of Virginia to stop publicly posting land records containing Social Security Numbers (“SSNs”) online without redacting the SSNs. On her own site, she has posted a number of these land records, including those of former Secretary of State Colin Powell, former House Majority Leader Tom Delay, and members of the Virginia legislature and judiciary. She has also posted examples of publicly available records from other states containing SSNs.

Section 59.1-443.2 of the Virginia Code is a provision of Virginia’s Personal Information Privacy Act (“PIPA”). In part it provides that “a personal shall not . . . [i]ntentionally communicate another individual’s social security number to the general public.” Until July 1, 2008, PIPA excepted “records required by law to be open to the public.”
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Federal Circuit Affirms Economic Interest of Open Source Copyright Holder
By Yelena Shagall - Edited by Evie Breithaupt

Jacobsen v. Katzer 
Federal Circuit, August 13, 2008, No. 2008-1001
Slip Opinion 

On August 13, the Federal Circuit ruled that open source license terms can create enforceable copyright conditions.  In Jacobsen v. Katzer, the Federal Circuit addressed the Northern District of California’s rejection of Jacobsen’s motion for preliminary injunction against competitor Matthew Katzer and Kamind Associates, Inc (”Katzer/Kamind”) for infringement of the terms of an open source license (”Artistic License”).  Jacobsen held the copyright to computer programming code, which he made available for free subject to the Artistic License.  According to Jacobsen, Katzer/Kamind incorporated portions of the code into one of their software packages without following the terms of the license. The district court concluded that the Artistic License was an unlimited non-exclusive license.  The district court held the terms of the license created mere covenants, not copyright conditions, and the defendants were thus not liable for copyright infringement.  At most, they had breached a non-exclusive license.  Breach of contract, unlike copyright infringement, creates no presumption of irreparable harm, and the court rejected Jacobsen’s motion for a preliminary injunction. The Federal Circuit reversed and remanded the district court. 

The Open Source Initiative provides commentary, stating that “the District Court decision was wrong and wrong in a way that could have been a disaster for open source community.”

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