JOLT Digest

Seventh Circuit Clarifies Online Service Liability for Illegal Advertisements

By Michelle Yang — Edited by Wen Bu

Chicago Lawyers’ Committee for Civil Rights Under Law, Inc. v. Craigslist, Inc.
Seventh Circuit, March 14, 2008, No. 07-1101
Slip Opinion

On March 14, the Seventh Circuit affirmed summary judgment by the District Court for the Northern District of Illinois for Craigslist, holding that the online bulletin board did not violate the Fair Housing Act by providing “an electronic meeting place” that hosted, among many other things, illegally discriminatory housing advertisements. The opinion by Chief Judge Easterbrook clarified the potential liability of an online service: as Craigslist was not a “speaker” of the illegal information, it was not liable as a publisher.

Eric Goldman of Technology and Marketing Law Blog analyzes Judge Easterbrook’s reasoning as part of 47 USC 230 Week.
Howard Bashman of How Appealing provides additional links, as well as coverage on the en banc rehearing of a similar case, Fair Housing Council v. Roommates.com, before the Ninth Circuit.
Randy Picker of the University of Chicago Law School Faculty Blog sees the ruling as yet another reason newspapers are dying in the competition against less-strictly-regulated online competitors.
In 2001, Joel Michael Schwarz contributed a JOLT article about liability for third party postings in the context of practicing law over the Internet.

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House Passes Version of Controversial Wiretapping Legislation Without Telecom Immunity

By Andrew Ungberg — Edited by Wen Bu

H.R. 3773 – Foreign Intelligence Surveillance Act of 1978 Amendments Act of 2008
Full Text of House Bill
Full Text of Corresponding Senate Bill
CRS Summary of House Bill
GovTrack Summary (including House vote details)

On Friday, March 14, the House of Representatives approved H.R. 3773, the Foreign Intelligence Surveillance Act (“FISA”) of 1978 Amendments Act of 2008. The House bill, which passed 213-193, would set new rules for governmental “eavesdropping” on phone calls and emails within the United States. Originally introduced in October 2007 by Rep. John Conyers (D-MI) and several other House Democrats, the bill aims to resolve issues associated with the wiretapping program the Administration created in the wake of September 11, 2001. The House version of the bill would establish restraints for future government action, as well as the procedures for challenging those actions in court.

Unlike the Senate version of the bill, S. 2248, which the Senate passed in February, the House version does not grant immunity from civil liability to telecommunications companies accused of illegally cooperating with government surveillance.

Some other highlights of the bill:

• Government must seek approval of the Foreign Intelligence Surveillance Court before conducting surveillance.
• Intelligence agencies are forbidden from reverse-targeting American citizens through surveillance of foreigners.
• A “Commission on Warrantless Electronic Surveillance Activities” will be established to investigate government surveillance since September 11, 2001.

The Associated Press and OMB Watch report on the passage of the House bill.
Rep. Jerrold Nadler (D-NY) explained more of the process behind the House bill’s passage.
Hugh D’Andrade of the Electronic Frontier Foundation, in response to the debate on the FISA amendments, excerpted several opinion pieces on “how surveillance hurts free speech.”

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Sixth Circuit Affirms Dismissal of § 1983 Claim Arising from Publication of SSN on County Website

By Evan Kubota — Edited by David Lawson

Lambert v. Hartman et al.
Sixth Circuit, February 25, 2007, No. 07-3154
Slip Opinion
District Court Order

On February 25, the Sixth Circuit affirmed a ruling of the U.S. District Court for the Southern District of Ohio dismissing a § 1983 claim brought against the Hamilton County Clerk of Courts and Board of City Commissioners by a victim of identity theft, after the clerk published the victim’s Social Security number and other identifying information on a publicly accessible website. The court held that potential financial harm alone was insufficient to implicate the “fundamental liberty interest” necessary to trigger a right to informational privacy.

Online commentary on the appellate decision has been light, despite its potentially serious implications.
The Stanford Law School Center for Internet and Society elucidated the district court opinion.
The circuit court cited Helen L. Gilbert’s interesting Chicago Law Review Comment on informational privacy.

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En Banc Hearing of the Federal Communications Commission on Broadband Network Management Practices
Ames Courtroom, Harvard Law School, February 25, 2007
Full video recording (RealPlayer format)
Full audio recording (RealPlayer format)
Statements of FCC Chairman Martin and Commissioners Copps, Adelstein, Tate, and McDowell

On February 25, Harvard Law School and the Berkman Center for Internet and Society hosted an unusual en banc hearing of the Federal Communications Commission (”FCC”) at Harvard Law School. FCC held the hearing in response to a Petition for Rulemaking filed by Vuze, Inc., a peer-to-peer video distribution company, objecting to the network management practices of Comcast Corp., a large U.S. Internet service provider. JOLT Digest’s Debbie Rosenbaum recently covered Comcast’s filing in response to the Vuze petition.

The Ames Courtroom reached capacity well before the hearing began, and multiple JOLT Digest staff members were unable to gain access to the hearing. Other media outlets and commentators have, however, extensively reported on the proceedings. A selection of news articles and commentary follows.

Chris Kanaracus of IDG News Service reported extensively on the hearing.
Stephen Labaton of the New York Times and Cecilia Kang of the Washington Post reported on the hearing.
Mark Jewell of the AP reported on accusations that Comcast paid unaffiliated individuals to arrive early, occupy seats in the Ames Courtroom, and applaud after Comcast-friendly testimony.
Matthew Lasar of Ars Technica reports on the hearing from a technical perspective.
The Berkman Center has a roundup of additional links.
Richard Koman of Sci-Tech Today evaluated the testimony of Comcast Executive Vice President David Cohen.
Josh Stearns of Save the Internet and Sam Gustin of Conde Nast Portfolio commented on the “astroturfing” allegations.
Finally, Boston entrepreneur Christopher Herot offered detailed commentary on all portions of the proceedings.

Federal Circuit Holds that Automatic Assignment of Employee Rights May Foreclose Certain Defenses

By Sarah Sorscher — Edited by David Lawson

DDB Technologies, L.L.C. v. Major League Baseball Advanced Media, L.P.
Federal Circuit, February 13, 2008, No. 2007-1211
Slip Opinion

On February 13, the Federal Circuit affirmed in part, vacated in part and remanded for further discovery a decision of the District Court for the Western District of Texas related to employee assignment of patent rights.

The court affirmed the district court’s holding that appellant DDB Technologies could not assert statute of limitations and equitable defenses against patent claims by Schlumberger Technology Corporation — a former employer of DDB’s co-founder, inventor David Barstow — because Barstow’s employment agreement with the company automatically assigned the patent rights in question to Schlumberger, and Texas law foreclosed those defenses for automatically assigned patent rights.

The Federal Circuit vacated the district court’s dismissal for lack of jurisdiction (and resulting denial of jurisdictional discovery). The district court held that DDB failed to join either Schlumberger or Major League Baseball Advanced Media (MLB), which it held were both necessary parties because they were co-owners of the patents. While holding that DDB was not yet entitled to a jury trial on the merits, because the facts of the case were insufficiently intertwined with the jurisdictional issue, the Federal Circuit remanded for further discovery on the jurisdictional question alone.

Dennis Crouch of Patently-O sees the decision as a major victory for employers, and warns employees to explicitly protect their rights.
Gary Odom at Patent Prospector dissects the opinion, also seeing severe dangers ahead for inventive employees.

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Comcast Comments to FCC on Broadband Network Management Practices

By Debbie Rosenbaum — Edited by David Lawson

Comcast Comments to the Wireline Competition Bureau
FCC Request for Comment on Broadband Network Management Practices
FCC Request for Comment on Request for Declaratory Ruling on ISP Network Management Policies
Vuze, Inc. Petition for Rulemaking
FCC Internet Policy Statement

On February 13th, Comcast Corporation, one of the largest Internet service providers (“ISP”) in the United States, filed comments pursuant to two Requests for Comment issued by FCC’s Wireline Competition Bureau. The comments addressed 1) whether managing peer-to-peer (“P2P”) traffic generated by Comcast subscribers violates FCC’s Internet Policy Statement and 2) whether the agency should promulgate further regulations defining reasonable network management.

The FCC notices arose from an investigation launched earlier this year after Vuze, Inc., a company that uses P2P to legally distribute video content, filed a Petition for Rulemaking with FCC in objection to Comcast’s treatment of P2P connections initiated by Comcast subscribers.

In its comments, Comcast argues that the tools it uses minimize interference that would otherwise degrade the activities of all Comcast subscribers. The company requests that FCC not initiate a rulemaking proceeding to address which broadband network management practices are reasonable, and further requests that FCC declare that network management practices such as Comcast’s are reasonable and consistent with the Internet Policy Statement.

Peter Svensson of the AP (carried on Wired News) summarizes the story.
Nate Anderson of Ars Technica details Comcast’s argument.
Craig Aaron of Save the Internet argues that Comcast’s practices are much more harmful than the company admits.

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Federal Circuit Upholds Damages Award Against Echostar

By Andrew Ungberg — Edited by Wen Bu

TiVo, Inc. v. EchoStar Commc’n Corp.
Federal Circuit, January 31, 2008, No. 2006-1574
Slip Opinion

The U.S. Court of Appeals for the Federal Circuit upheld in part and reversed in part an Eastern District of Texas jury verdict finding that EchoStar’s DVR machines infringed hardware and software claims of TiVo’s patent.

Writing for a unanimous panel, Judge Bryson found that EchoStar’s devices infringed TiVo’s software claims, but not the hardware claims. The court noted that the trial jury did not award separate damages for each kind of infringement and found the software infringement sufficient to support the entire damages award. Finally, the stay of the trial court’s permanent injunction against EchoStar that the Federal Circuit issued pending appeal will dissolve once the judgment becomes final.

Dennis Crouch of Patently-O adds commentary, including EchoStar’s reaction to the verdict.

Christopher S. Rugaber of the Associated Press examines the business consequences for TiVo.

Bloomberg provides further reporting on the decision.

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UK Patents Court Holds Software Patents May Be Enforceable

By Sarah Sorscher — Edited by Wen Bu

In re Astron Clinica, High Court of Justice, Chancery Division, Patents Court (EWHC (Pat)), January 25, 2008, Case No. CH/2007/APP/0466
Opinion

On January 25, the United Kingdom High Court ruled that the U.K. Intellectual Property Office (IPO) cannot categorically reject patent claims for computer programs under Section 1(2) of the Patents Act of 1977 (designed to implement Article 52 of the European Patent Convention), which prohibits “programs for computers” from being considered inventions for the purposes of patenting. Noting the “apparent illogicality of allowing claims to a suitably programmed computer and to the method performed by the computer so programmed but not to the program itself,” Justice Kitchin, writing for the court, held that computer programs themselves (as recorded on suitable storage media) may be patentable if the program makes a conventional computer deliver a new technical effect.

The WLR Daily offers a synopsis of the decision.
David Pearce of IPKat expressed surprise at the decision in light of the strong language that had been used in the earlier U.K. Court of Appeal ruling in Aerotel/Macrossan and noted that this decision, if left intact, amounts to “falling into line with the EPO.”
Andres Guadamuz criticizes both this decision and the earlier EPO decisions for changing the meaning of an otherwise clear treaty provision.
The Register’s Kelly Fiveash takes a more positive view, commenting that the ruling “could open up the playing field for small UK businesses looking for a leg-up.”
Finally, Emma Barraclough of Managing Intellectual Property predicts that the ruling might reverse the trend of UK companies applying for patents through the EPO instead of directly through the UKIPO.

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European Court of Justice holds that EU law does not require ISPs to disclose subscriber information

By Daniel Ray — Edited by Wen Bu

Productores de Música de España (Promusicae) v. Telefónica de España S.A.U.
European Court of Justice (Grand Chamber), January 29, 2008
Case C-275/06, 2008 CELEX no 62006J0275 (Jan. 29, 2008)
Opinion

On January 29, the European Court of Justice issued a Grand Chamber ruling in Promusicae v. Telefónica. The court held that European law does not require Internet service providers (ISPs) to disclose their subscribers’ identities to trade organizations for the purpose of civil litigation against them, but that European law also does not prohibit member states from imposing such requirements if the legislation sufficiently balances IP and privacy rights.

David Meyer of ZDNet UK summarizes the decision, and quotes a British ISP spokesperson who claims the ruling vindicated ISPs’ self-policing efforts.
Nikki Tait of the Financial Times cites mixed opinions from copyright holders on whether the Court’s leaving open to member states the option of legislating stricter controls will help protect copyrighted content.
Eric Bangeman of Ars Technica notes that copyright holders still have recourse because criminal charges may be brought against infringers, but that some European nations have been unwilling to press charges for copyright infringement.
Gwen Hinze of the Electronic Frontier Foundation notes that any victory for privacy advocates may be short-lived, as the decision may impel copyright holders to step up their legislative efforts to impose intermediary liability on ISPs or pan-European criminal penalties on filesharers.

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Federal Circuit Holds Patent Unenforceable Following Patentee’s Failure to Disclose Material Notes

By Michelle Yang — Edited by Wen Bu

Monsanto Corp. v. Bayer Bioscience N.V.
Federal Circuit, January 25, 2008, No. 2007-1109
Slip Opinion

On January 25, the Federal Circuit affirmed the District Court for the Eastern District of Missouri’s holdings: 1) that Bayer’s patent for certain chimeric genes was unenforceable for inequitable conduct, and 2) that the district court had jurisdiction to declare three related patents unenforceable.

The Federal Circuit held that Bayer’s patent was unenforceable for inequitable conduct. Judge Gajarsa’s opinion held that Bayer breached its duty of candor and good faith to the United States Patent and Trademark Office in failing to disclose its employee’s notes on another researcher’s poster at a scientific conference.

The court also upheld the district court’s jurisdiction over three other patents relating to the chimeric genes, holding that the district court still retained jurisdiction because of Monsanto’s request for attorney fees, despite Bayer’s motion to dismiss the claims on the other patents and subsequent signing of a covenant not to sue Monsanto for infringement of those patents.

Dennis Crouch of Patently-O summarizes the opinion.
Lawrence B. Ebert of IPBiz mentions some interesting aspects of the case’s procedural history.
Stephen Albainy-Jenei of Patent Baristas warns that “note-taking can come back to bite your patent.”

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