JOLT Digest

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…)

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. . . . .”

(more…)

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.”
(more…)

District Court Declares Purchasers of Software to Be Licensees
By Anna Volftsun — Edited by Joshua Gruenspecht

MDY Industries, LLC v. Blizzard Entertainment, Inc. et al.
District Court of Arizona, July 14, 2008, No. CV-06-2555-PHX-DGC
Order (via Justia)

The District Court of Arizona entered a summary judgment motion finding that MDY Industries, LLC (“MDY”), creators of a software program called WoW Glider (“Glider”), were liable for contributory and vicarious copyright infringement because their program loaded a copy of a copyrighted Blizzard Entertainment, Inc. and Vivendi Games, Inc. (collectively, “Blizzard”) game into computer memory on the game-owners’ machines against the terms of the game’s End User License Agreement (“EULA”). As part of this decision, the Court also found that over-the-counter buyers of the computer game were licensees rather than owners and were thus bound by the terms in the EULA.

Judge David Campbell ruled that the EULA created a limited license rather than a sale because the title explicitly uses the word “limited” and because several of the provisions contain explicit restrictions on the use of the game which, when read together, prohibit the use of Glider. As licensees rather than owners of the game, users were only allowed to copy it under circumstances dictated by the EULA and were thus guilty of direct infringement when they used Glider because it loaded the game into the user’s RAM. A line of Ninth Circuit cases had previously held this to be “copying,” an exclusive right of the copyright holder under Section 106 of the Copyright Act. MDY was found to be liable for contributory and vicarious copyright infringement because it materially contributed to users’ direct infringement, profited from it, and declined to exercise its ability to stop Glider users from activities infringing the license.

The motions of both parties can be found here.

Public Knowledge argued that because 17 U.S.C §117 reserves to the computer user the right to make RAM copies to run the program, this construction of the EULA will allow Blizzard to retain rights it has never owned. Their amicus brief can be found here, and and Blizzard’s reply can be found here.

The Patry Copyright Blog notes the dismissal of the DMCA claim with approval but finds the copyright ruling to be wrongly decided and to also be a “chilling extension of control” by copyright holders over their products.

Corynee McSherry of the Electronic Freedom Foundation Blog also disagrees with the copyright ruling and notes other recent district court cases under Ninth Circuit jurisdiction which have come out differently, speculating that there will be an appellate decision on this matter soon.

A Note by Christina Hayes published at 22 Harv. J.L. & Tech. touched on whether Blizzard’s EULA could be enforced to limit users’ copyright fair use rights. (more…)

District Court Will Not Require Ebay to Make Greater Effort to Police Trademark Infringers
By Jeff Gritton — Edited by Joshua Gruenspecht

Tiffany, Inc. v. eBay, Inc.
S.D.N.Y., July 14, 2008, No. 04 Civ. 4607
First Circuit, June 18th, 2008, Nos. 07-2078, 07-2246
Slip Opinion

On July 14, the Southern District of New York denied Tiffany’s claims of direct and contributory trademark infringement against eBay. The court agreed with eBay that, as a legitimate seller of Tiffany goods, the online auctioneer had the right to use the Tiffany marks under the nominative fair use doctrine. It also rejected Tiffany’s demand that eBay be held jointly and severally liable for sales made on eBay.com by third parties.

Tiffany instigated this suit against eBay after its research showed that the majority of claimed Tiffany products for sale on eBay were counterfeit. While eBay provided reporting services for both users and trademark holders to notify its fraud division of counterfeit items, Tiffany had requested a more proactive solution: removal of all sellers placing five or more Tiffany items up for sale and suspension of the use of the Tiffany mark on the eBay site and in eBay advertising.

Brad Stone at the New York Times notes that courts in two prior international cases brought by luxury brands (Rolex in Germany and Louis Vuitton in France) had ruled against eBay. The divergent opinions may pose a challenge to eBay’s operation of a single global marketplace.

Professor Eric Goldman also provides a detailed analysis of the case. (more…)

New Law Expands Government Surveillance Powers
By Daniel Ray — Edited by Sarah Sorscher

H.R. 6304 — FISA Amendments Act of 2008
Full Text of Enrolled Bill
Senate Vote Summary
GovTrack.us Summary

On July 9, the Senate passed H.R. 6034, the FISA Amendments Act of 2008, and President George W. Bush signed it into law the following day. The new law modifies the Foreign Intelligence Surveillance Act of 1978 (“FISA”) to expand (subject to certain new checks) the federal government’s surveillance powers and retroactively immunize telecommunication companies that cooperated with the warrantless wiretapping program brought to light in 2005.

The New York Times summarizes the politics surrounding the FISA issue, in which presumptive Democratic nominee for president Barack Obama’s “yea” vote attracted scorn from some Democrats.

The Electronic Frontier Foundation (PDF), a longtime opponent of President’s surveillance program, calls Section 202 an immunity “compromise” in name only.

Orin Kerr, writing at The Volokh Conspiracy, criticizes as “misleading” media coverage that ignores the law’s new procedural safeguards (as compared to last year’s less restrictive Protect America Act (“PAA”)).

On the issue of immunity, Charlie Reina (writing at the Huffington Post), regrets that the public will never know who was monitored or which companies cooperated with the original warrantless wiretapping requests.

(more…)

District Court Compels Disclosure of YouTube User Logging Records, Protects Source Code
By Jay Gill — Edited by Sarah Sorscher

Viacom International, Inc. v. YouTube, Inc.
S.D.N.Y., July 1st, 2008, No. 07 Civ. 2103
Order (Provided by Justia)

The District Court for the Southern District of New York partially granted a discovery motion made by Viacom in its copyright suit against YouTube and YouTube’s parent company Google. The order compels Google to produce the contents of YouTube’s logging database, including the login IDs, IP addresses, and viewing information of YouTube users. The court denied Viacom’s motion to compel production of the protected source code for the Google search engine.

Viacom’s complaint alleges that YouTube is directly or vicariously liable for duplication of copyrighted material on youtube.com, and seeks damages of over $1 billion and injunctions against further infringing conduct.

Wendy Seltzer at the Citizen Media Law Project summarizes the bifurcated outcome of the case: “trade secret wins; privacy loses.” Kurt Opsahl of the Electronic Frontier Foundation calls this a “setback to privacy rights,” and argues that some of the login names and IP address information, which the court states are anonymous, can in fact be used to identify individual users.
(more…)

First Circuit Lifts Trademark Injunction to Make Way for Super Duck
By Miriam Weiler — Edited by Evie Breithaupt

Boston Duck Tours v. Super Duck Tours
First Circuit, June 18th, 2008, Nos. 07-2078, 07-2246
Slip Opinion

On June 18, the First Circuit lifted a preliminary injunction granted by the District Court of Massachusetts, which had enjoined Super Duck Tours, LLC (“Super Duck”) from using the phrase “duck tours” in its trade name and the cartoon of a duck in its logo. On July 2, 2007, Boston Duck Tours, LP (“Boston Duck”) filed a complaint in the district court alleging federal trademark infringement and unfair competition and seeking a preliminary injunction against Super Duck. The district court granted the injunction and Super Duck appealed.

The First Circuit held that the lower court clearly erred in concluding that Boston Duck was likely to succeed on the merits of its trademark infringement, by over-estimating the likelihood that use of the phrase and image would cause consumer confusion.

The court of appeals did not address the district court’s ruling regarding Super Duck’s purchase of the key word phrase “Boston duck tours” on Google. “Sponsored linking” or “keyword advertising” allows the purchaser of a keyword to link his or her website to the search engine’s results page with a highlighted link at the top of the page.

The district court found that Super Duck’s sponsored linking did not violate the injunction. It found that sponsored linking, however, does constitute “use” under the Lanham Act, which states that “a mark shall be deemed to be in use in commerce. . . (2) on services when it is used or displayed in the sale or advertising of services.” 15 U. S. C. §1127. The district court reasoned that the plain language of the statute and the majority of courts have considered sponsored linking “use.” (more…)

Ninth Circuit Applies Fourth Amendment to Text Messages at Work
By Anna Volftsun — Edited by Evie Breithaupt

Quon v. Arch Wireless Operating Company, Inc.
Ninth Circuit, June 18, 2008, No. 07-55282
Slip Opinion

On June 18, 2008, the Ninth Circuit held that the City of Ontario, California violated the Fourth Amendment when Ontario Police Department officials viewed text messages sent by a department employee. The court also held that Arch Wireless, the city’s service provider, had violated the Stored Communications Act (“SCA”), 18 U.S.C. § 2701-2711, when it disclosed messages to individuals who were not the addressees or intended recipients.

In late 2001, Sergeant Jeff Quon received a pager from his employer, the Ontario Police Department. The pagers’ wireless text-messaging service provider, Arch Wireless, had stipulated that the city was required to pay overage charges for text messages exceeding a set character limit. Quon paid the overage fee several times without further inquiry into the content of the messages until August 2002, when the Ontario police Chief Scharf moved to obtain transcripts of Quon’s text messages from a support specialist at Arch Wireless.

At least three department employees, including Quon’s immediate supervisor, reviewed the transcripts and read many of Quon’s personal messages, some of which were sexually explicit. Quon and several recipients of the messages brought suit in the District Court of Central California. They appealed the district court’s holding, arguing that Arch Wireless had violated the SCA. Quon also argued that the city violated his Fourth Amendment right to be free from unreasonable search and seizure, as well as his rights under the California Constitution.

(more…)

District Court Denies Yoko Ono Lennon’s Motion for Injunctive Relief
By Nicola Carah — Edited by Evie Breithaupt

Lennon v. Premise Media Corp.
S.D.N.Y., June 2, 2008, No. 08cv03813
Slip Opinion

The District Court for the Southern District of New York denied Yoko Ono Lennon’s motion for preliminary injunctive relief in a case involving Premise Media Corp.’s use of a fifteen-second clip of the song “Imagine” in Expelled, its controversial documentary about intelligent design. The court found that the plaintiffs failed to show a clear likelihood of success on the merits — required to obtain preliminary injunctive relief — because the defendants were likely to succeed in asserting an affirmative defense of fair use.

The court looked to the fair use factors articulated in § 107 of the Copyright Act of 1976: “(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.” Although Expelled is commercial in nature, the court found that the movie’s use of “Imagine” is “highly transformative, and not merely exploitative.” According to the court, the pairing of the lyrics and accompanying music to a sequence of images provided “a layered criticism and commentary of the song.” The court concluded, therefore, that defendants were likely to prevail on their fair use defense.

Expelled is a feature-length film that, according to one producer, “examines the scientific community’s academic suppression of those who ask provocative questions about the origin and development of life.” It is narrated by actor and writer Ben Stein, who graduated as valedictorian from Yale Law School in 1970, and who recently has become a proponent of Intelligent Design theory. (more…)