By Davis Doherty – Edited by Jad Mills
Assn. for Molecular Pathology, et al. v. USPTO, et al., Case no. 09-CV-4514 (S.D.N.Y. Nov. 2, 2009)
Slip Opinion (hosted by Patent Baristas)

The United States District Court for the Southern District of New York denied defendants’ motion to dismiss plaintiffs’ claim that patents on a human gene violate the First Amendment and Article I of the Constitution for jurisdictional issues, lack of standing, and failure to state a claim.

District Judge Sweet found that the plaintiffs’ constitutional claims challenging the validity of Myriad Genetics’ gene patents provided subject matter jurisdiction and standing to sue the United States Patent and Trademark Office because of the lack of available statutory remedies.  The plaintiffs claim that Myriad’s patents are inappropriate because they cover “products of nature”, and seek invalidation of the patents under the Constitution of the United States. Judge Sweet held that these claims met the stricter pleading standards recently announced in Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009).  In so holding, the court noted the “novel circumstances presented by this action against the USPTO”: The Patent and Trade Office is generally immune from suit due to the availability of statutory remedies for claims arising from patents. Such remedies do not provide for constitutional claims.

Ars Technica provides a brief overview of the case.  The ACLU, who represents the plaintiffs, writes in support of the decision.  Patent Baristas put forward a more skeptical view of the plaintiffs’ prospects. Patent Docs features a longer analysis of the decision.

Defendant Myriad Genetics owns interests in several patents on the human genes BRCA1 and BRCA2, both of which can indicate an increased risk of breast or ovarian cancer.  Myriad can thus control the availability of genetic testing for the BRCA1 and BRCA2 sequences, a process that can cost as much as $3000.  The patents also allow Myriad to restrict other laboratories’ research on the BRCA sequences.  The numerous plaintiffs include researchers, testing laboratories, medical societies, advocacy organizations, and cancer patients with various interests in seeing the invalidation of the patents-at-issue.

Arguing on behalf of the plaintiffs, the ACLU and the Public Patent Foundation claim that the patents violate the First Amendment’s protection of freedom of thought and Article I, section 8, clause 8’s instruction that Congress “promote the Progress of Science and useful Arts”.  In holding that the plaintiffs have standing to sue and that subject matter jurisdiction exists, the court relied on the fact that these constitutional claims fall outside the remedies provided by the Patent Act.  In holding the pleading sufficient, the court reasoned that the First Amendment claim is supported by the plaintiffs’ argument that the BRCA patents cover a product of nature, and the Article I claim is supported by the contention that the patent has inhibited research on the genes.

This suit is significant for both procedural and public policy reasons.  Using constitutional claims in an attempt to invalidate patents is a novel approach, and is probably the only approach that would allow the plaintiffs to include the USPTO as a defendant. A victory for the plaintiffs could result in an increased availability of genetic testing for breast cancer risks.  More broadly, if the plaintiffs present a successful challenge to the USPTO’s general policy of granting gene patents, the validity of patents on an estimated 20% of the human genome would be called into question.

U.S. v. Cioffi, et al., Case No. 08-CR-415 (FB) (E.D.N.Y. Oct. 26, 2009)
Slip Opinion (hosted by WSJ)

The Eastern District of New York granted defendant Matthew Tannin’s motion to suppress evidence obtained from his personal Gmail account. Ralph Cioffi and Matthew Tannin were charged with conspiracy, securities fraud and wire fraud in connection with their roles as Bear Sterns hedge fund managers. Prosecutors obtained a warrant to search Tannin’s personal Gmail account, but the warrant failed to specify what evidence could be seized or to what crimes the evidence must relate.  After some initial difficulty, Google delivered a copy of the email account to the Government. As the Wall Street Journal reported, one email contained a comment that funds Tannin managed could “blow up.” Tannin moved to suppress this evidence on the ground that it violated the Fourth Amendment.

District Judge Block held that the warrant was facially overbroad and thus violated the Fourth Amendment. The Court reasoned that because the warrant itself was not particular as to either the items to be seized or to a particular crime, and because the affidavit was not attached or incorporated into the warrant, the warrant was unconstitutional. The court also held that the warrant did not merit a “good faith” or “inevitable discovery” exception, largely because the executing officers should have known the warrant was overbroad.

The Wall Street Journal provides a brief overview of the case. The Eric Goldman Blog also provides a summary of the case. Orin Kerr of the Volokh Conspiracy criticizes the ruling, saying that the good faith exception should have been granted since the case law was not firmly established at the time of execution.

In holding that the warrant was overbroad, the court reasoned that the warrant should have included information about the particular items to be seized and what crimes were at issue. Interestingly, the court did not take a firm position on the particularity requirement for computer searches. Instead, the court focused on particularity requirements in general.  Even though the warrant was based on an affidavit containing useful and particular information about the evidence to be siezed and the crime being charged, the warrant was facially overbroad because it did not formally incorporate and attach the affidavit.

The court went on to deny admission under either the “good faith” or  “inevitable discovery” exceptions. In denying the first exception, the court held that the good faith exception does not apply to cases with facially invalid warrants that executing officers could not reasonably presume to be valid. The court reasoned that this was such a case  because of the lack of particularity in the warrant. In denying the inevitable discovery exception, the court relied on United States v. Eng., and held that the analysis must focus on “what would have happened had the unlawful search never occurred.” 997 F.2d 987, 990 (2d Cir. 1993). The court reasoned that the government relied on the invalidation of the warrant to show that discovery was inevitable. Thus, the government essentially focused on what would have happened given, rather than without, the unlawful search. The court, therefore, granted the motion to suppress the evidence obtained from the government’s warrant.

This case is significant for two main reasons. First, it deals a major blow to the prosecution’s case against the two former hedge fund managers. The emails seemed to contain powerful evidence of knowledge of the funds’ instability, evidence that is now inadmissible. Second, it helps affirm the Second Circuit’s position that an affidavit must be attached and incorporated into the warrant in order for it to “cure” the warrant’s lack of particularity. To do so, it interprets a less than explicit section of the Supreme Court’s opinion in Groh v. Ramirez, 540 U.S. 551 (2004). It thus adds weight to this distinct interpretation of Groh. Perhaps future Supreme Court jurisprudence will clarify and solidify the issue.

In re: In the Matter of the Application of Cellco Partnership d/b/a Verizon Wireless, Case Nos. 09-cv-07074 & 41 Civ. 1395 (S.D.N.Y. Oct. 14, 2009)
Opinion (Hosted by EFF)

The Southern District of New York has ruled that cell phone ringtones do not constitute a public performance, and thus mobile phone carriers do not need to pay performance royalties under the Section 110(4) of the Copyright Act.  The court also dismissed the argument that cell phone carriers publicly perform when they reproduce and download a ringtone to a phone.

United States District Judge Denise Cote dismissed the music industry argument that a ringtone is like a concert hall when it begins ringing/playing in public, instead determining that playing music in public, when done without any commercial purpose, does not infringe copyright.   In so holding, the court ruled that cell phone users are not liable for royalty payments and that carriers are not secondarily liable.  Judge Cote reasoned that the exemption Section 110(4) applies because cell phones announce phone calls and are not sources of commercial public entertainment.

Ars Technica and Wired.com provide an overview of the case.  Both EFF and CDT applaud the decision as a major win for consumers and fair use.

The American Society of Composers, Authors and Publishers (“ASCAP”), which collects royalty payments for public performances of songs, argued that the wireless cellular companies engage in public performance of musical works when they download ringtones to customers’ phones, and should be directly and secondarily liable when customers play ringtones on their telephones.  It requested additional royalties for these performances under Copyright law.  In a different strategy from the RIAA’s lawsuit campaign against individual users, the ASCAP instead went after AT&T and Verizon for revenues above those already paid for download rights.

The court reasoned that downloading a ringtone to a customer’s cellular telephone does not “transmit” a performance of the work to the public because only one subscriber is capable of receiving the transmission and it is not made available to the larger public.

ASCAP also argued that cellular companies engaged in a public performance of copyrighted musical works when ringtones play in public on customers’ cellular telephones.  The court ruled, however, that the cellular companies do not “recite, render, play, dance, or act [the ringtone] either directly or by means of any device,” and thus do not “perform” the music, as that term is defined in the Copyright Act.

The court held that secondary liability depends upon a finding of direct or primary infringement, and that Verizon “has shown that the cellular telephone user is not liable for copyright infringement even when the telephone rings in a public setting.”  Moreover, the court reasoned that without a commercial purpose in the playing of the ringtone, the public performance exemption in 110(4) applies.

The ruling is a win for consumers because it expands the public performance right and preserves the ability of consumers to make private uses of the music they legally purchase.  It also expands a 2007 ruling that likewise concluded that a download is not a public performance.

Lori Drew “Cyberbullying” Conviction Thrown Out

The Los Angeles Times reports that on July 2nd, a federal judge dismissed the case against “cyberbully” Lori Drew, saying that the clear terms of the Computer Fraud and Abuse Act (CFAA) preclude a guilty verdict. The Lori Drew case received widespread media attention eight months ago when the 50 year-old mother was found guilty of “unauthorized computer access” under the CFFA for aiding her daughter in creating a fake MySpace account that led to another girl’s suicide. The guilty verdict was ardently criticized for criminalizing violations of websites’ terms of service, which few users actually read when creating accounts, essentially allowing websites to make their own law.

China’s Mandatory Client-Side Censoring Program Delayed

Only a day before the previously announced July 1st deadline, the Chinese government announced, through official news agency Xinhua, a delay in the requirement that PC makers pre-install a web-filtering program called “Green Dam Youth Escort.” The Wall Street Journal reports that the project is not abandoned, but merely delayed. Green Dam was first released several months ago as a pornography-filtering program and didn’t evolve into a requirement until the beginning of June, much to the chagrin of PC manufacturers. After the University of Michigan discovered serious security holes, which would open computers to remote code execution, PC manufacturers began to worry about liability issues and possibly acquiring reputations for supporting censorship. So far, only Sony has shipped computers with the software pre-installed in advance of the July 1st deadline.

Supreme Court Allows Remote Storage DVR

Ars Technica and Wired both report that the Supreme Court declined to hear a final appeal in the Cablevision DVR case on the final day of its term. The Second Circuit had allowed Cablevision to continue offering its customers a recording system that is different from traditional recording only in that it stores the customers’ recordings of copyrighted content remotely on Cablevision’s servers. Because the consumer maintains control over the recordings, rather than accessing an on-demand library provided by Cablevision, the court ruled that the recordings were still fair use. Television networks called the case the most important since the 1984 ruling that consumer VHS recording of copyrighted movies falls under fair use. The Supreme Court’s silence aligns with the filing by the Obama administration suggesting that this case was not the appropriate forum to “clarify” the legal issues of fair use.

Another Nesson-RIAA Continue to Clash over File-Sharing

As reported by Ars Technica, Harvard Law professor Charlie Nesson is once more facing off against the RIAA’s MediaSentry in the illegal file-sharing suit against Joel Tenenbaum. Tenenbaum, like Jammie Thomas-Rasset before him, is accused of sharing songs illegally on KaZaa. Nesson and his associates aim to try the same legal tactic that has failed them in the past, namely attempting to discredit the evidence brought by the RIAA as being gathered illegally. The high-profile cases, including controversial high damage awards and internal defense disputes, have been part of a larger attempt to establish solid legal precedent, or prompt a legislative solution, for future file-sharing disputes.

Google Sued for Use of Trademarked Terms in Adwords Program

A class action was filed against Google on May 11, 2009 in federal court in Texas challenging its use of trademarked terms in its adwords program. The New York Times covered the case and surrounding issues. Ars Technica analyzes Google’s new AdWords policy.

ACLU Challenges Constitutionality of Gene Patents

The ACLU filed suit in the Southern District of New York challenging the patenting of genes and genetic tests as unconstitutional. The New York Times reported on the suit and the ACLU’s plaintiff. Patently-O provides further analysis and links to the ACLU blog and the complaint.

Rescuecom v. Google
Second Circuit, April 3, 2009, 06-4881-cv
Opinion (hosted by EFF)

On April 3, 2009, the Court of Appeals for the Second Circuit vacated the District Court for the Northern District of New York’s dismissal of a trademark infringement suit against Google by Rescuecom, Corp., a computer repair firm.

At issue was Google’s AdWords program, which allows advertisers to purchase ads based on the appearance of another (often competing) company’s name in search terms, thus allowing the purchaser’s ads to appear in the search results alongside links to the searched-for company. Also in dispute was Google’s Keyword Suggestion Tool, which recommends potential keywords to advertisers for use in the AdWords program. The key issue was whether Google’s use of Rescuecom’s trademark in both programs constitutes a “use in commerce” under § 1127 of the Lanham Act.

Ars Technica explains that, having distinguished away precedent, the court determined that Google was appropriating trademarked terms. Google’s claim – that it was only using these terms internally as part of its ad-placing algorithm – was dismissed as disingenuous because its Keyword Suggestion Tool was specifically suggesting trademarks to potential ad buyers. The Wall Street Journal Law Blog notes that this may add some clarity to the jumbled law on the use of keywords.

Rescuecom alleged that it was trademark infringement for Google to allow Rescuecom competitors to purchase advertisements that would appear when a user conducted a search for the keyword “rescuecom,” and to recommend purchase of the term “rescuecom” to the company’s competitors. A federal judge dismissed the case in 2006, accepting Google’s argument that its use of Rescuecom’s trademark was internal and not an infringing “use in commerce.” The district court relied heavily for its finding on a 2005 decision, 1-800 Contacts v. WhenU. In that case, the Second Circuit ruled that an adware program that triggered ads from competing companies that appeared in a separate popup window when a user visited certain corporate websites did not constitute trademark infringement. The district court in this case found that 1-800 controlled and required dismissal of Rescuecom’s infringement claims. The dismissal was hailed as a victory for Google and other search engines, for which keyword advertising is a lucrative business.

Reversing the district court, the Second Circuit found that Google’s use was “in commerce” and remanded the case for further proceedings. Judge Pierre Leval, writing for the Second Circuit, found that the district court had misapplied circuit precedent. The Second Circuit distinguished 1-800 on the basis that in that case ads were triggered by a corporate URL rather than by a trademarked product or service name, and they appeared in a separate window. These features, the appeals court ruled, limited any confusion on the part of consumers, who might otherwise mistake the advertised brand for the trademarked one.

Google’s programs, by contrast, market the trademark itself to advertisers and display links to competitor websites on the same page, next to the searched-for brand. These differences, the court found, were significant enough that 1-800 did not require dismissal. The court determined that remanding for trial was appropriate to determine whether Google’s programs actually constitute trademark infringement by causing trademark confusion among those performing searches.

Trademark law is designed to protect consumers by preventing companies from selling their products under false pretenses. The core issue in this case is whether choosing a competitor’s trademark as an advertising keyword is likely to confuse consumers. It is unclear whether Google will win on the merits in the district court. The trial will undoubtedly be expensive, but, if Google were to prevail, it would be worth every dollar to the company to protect the revenue that online advertising generates.

The Cartoon Network LP v. CSC Holdings, Inc.
Second Circuit, August 4, 2008, 07-1480-cv(L) & 07-1511-cv(CON)
Slip Opinion (also hosted at the EFF)

On August 4, the Second Circuit reversed the District Court for the Southern District of New York, ruling that Cablevision’s “Remote Storage” Digital Video Recorder system (RS-DVR) does not infringe the copyrights of the various broadcast and cable channels that produce or provide individual programs.

First presented by Cablevision in March 2006, the RS-DVR allows customers who do not have a stand-alone DVR device to record cable programming on central hard drives housed and maintained by Cablevision at a remote location.

RS-DVR customers may then receive playback of those programs through their home television sets using a remote control and a standard cable box equipped with the appropriate software. This is different from a traditional DVR in that instead of sending signals from the remote to an on-set box, the viewer sends signals from the remote, through the cable, to a server at Cablevision’s central facility.

The plaintiffs, several networks and studios that hold the copyrights to numerous movies and television programs, sought declaratory and injunctive relief. They claimed that Cablevision’s operation of the RS-DVR would directly infringe their exclusive rights to both reproduce and publicly perform their copyrighted works. The District Court for the Southern District of New York awarded the plaintiffs summary judgment, and enjoined Cablevision from operating the RS-DVR without licenses from its content providers. On appeal, the Second Circuit reversed and remanded.

ipFrontline carries a thorough summary of the case, including a technical breakdown of Cablevision’s RS-DVR system.

Law.com also provides coverage.

Eric Goldman suggests that the opinion leaves open more questions than it resolves.

The Second Circuit reasoned that two exclusive rights provided to copyright owners by Section 106 of the Copyright Act were implicated in this case: the right “to reproduce the copyrighted work in copies,” and the right “to perform the copyrighted work publicly.” 17 U.S.C. § 106(1), 106(4). Writing for the court, Circuit Judge Walker found that Cablevision does not infringe the first right by buffering the data from its programming stream or by copying content onto server hard disks to enable playback of a requested program. The buffering, the court held, does not amount to “reproduc[ing]” the buffered work “in copies” as required for a violation of § 106(1), because the copyrighted works are only embodied in the buffer for a “transitory duration” (1.2 seconds). With respect to the copying, the court found that it is the customer, not Cablevision, that supplies the necessary element of volition in actually making the infringing copy, since it is the customer who presses the button to make the recording. The court suggested that Cablevision’s role might subject it to contributory infringement liability, but the plaintiffs had only alleged claims based on direct infringement.

The court further held that Cablevision does not engage in unauthorized public performances of the plaintiffs’ works through the playback of the RS-DVR copies, and thus is not in violation of § 106(4). This was because the RS-DVR playback does not involve the transmission of a performance “to the public.” Rather, the court found, each RS-DVR transmission is made to one subscriber using a unique copy produced by that subscriber, and that subscriber is the only person capable of receiving that transmission. Since the potential audience for any transmitted work is so limited, no transmission is made “to the public.” The court held that Cablevision was entitled to summary judgment on this point. The court emphasized, however, that Cablevision and other content delivery networks may still be open to other types of copyright liability, such as liability for unauthorized reproductions or liability for contributory infringement.

The Second Circuit’s decision raises several interesting issues, one of which is whether the court’s analysis conflicts with established case law regarding computer memory. For example, in MAI Systems Corp. v. Peak Computer Inc., the Ninth Circuit held that despite the fact RAM is cleared when a computer is powered off, copies of works written to RAM are sufficiently “fixed” and may violate the Copyright Act. 991 F.2d 511 (9th Cir. 1993). Buffers are a form of temporary RAM, which might suggest MAI Systems reasoning would apply; however the Second Circuit chose to distinguish buffers from RAM in general on the basis of the brief time during which the copied work exists. Prior to this case, no court has expressly considered works passing through buffer memory only.

Doninger v. Niehoff
Second Circuit, May 29, 2008, No. 07-3885
Slip Opinion

The Second Circuit unanimously affirmed the Connecticut District Court’s decision to deny a motion for preliminary injunction in a case involving a high school’s alleged violation a student’s First Amendment rights. Ms. Doninger filed suit after the high school prohibited her daughter from running for senior-class secretary, a move prompted by the school’s discovery of a blog in which the daughter had posted a “vulgar and misleading message” about administrators and an upcoming school event. The court found that the lower court had not abused its discretion in denying the preliminary injunction on the grounds that the case was unlikely to succeed on the merits.

Scott H. Greenfield of Simple Justice is troubled by the broad application of a “potential for disruption” standard. Greenfield claims that the Second Circuit ruling flies in the face of the Supreme Court’s holding in Tinker v. Des Moines Independent Community School District, 393 U.S. 503 (1969), that students do not “shed their constitutional rights to freedom of speech or expression at the schoolhouse gates.” Instead of protecting the rights of students in the schoolyard, Greenfield says, the Second Circuit is restricting those rights even once the students have left school.

Professor Jonathan Turley views the decision as part of a “steady eradication of student rights” and thinks the decision teaches a “foul lesson to these future citizens.” While he thinks that punishment is warranted when students use vulgar language or behave inappropriately, he thinks this punishment should come from parents and not school authorities.

At the time, Avery Doninger was a junior at Lewis Mills High School (LMHS) in Burlington, Connecticut. As the junior-class secretary, she was involved in organizing “Jamfest,” a battle of the bands concert taking place at the school. After the event had been delayed twice by the school administration, Avery and three other students dispatched a mass e-mail encouraging other students to contact defendant-appellee and school superintendent, Paula Schwartz, to urge that the concert take place as scheduled. A meeting ensued that day in which LMHS principal Karissa Niehoff, also defendant-appellee, informed Doninger that the e-mail was an inappropriate way to try to resolve the issue. That evening Doninger published a Livejournal blog post in which she referred to the administration as “douchebags,” claimed Jamfest was cancelled, and encouraged readers to call or write Schwartz and Niehoff “to piss [them] off more.”

When Niehoff discovered the blog posting, she prohibited Doninger from running for senior-class secretary. Doninger’s mother filed suit, alleging, inter alia, that the school had violated her daughter’s First Amendment rights. Among other relief sought, she moved for an injunction that would either require the school to hold new elections or grant her daughter the same title, honors, and obligations as those granted to the current secretary. The district court denied the motion and the Second Circuit affirmed, citing its ruling in Wisniewski v. Board of Education, 494 F.3d 34 (2d Cir. 2007), which held school sanctions of student expression constitutional where the expression “would foreseeably create a risk of substantial disruption within the school environment.”

In denying Doninger’s motion for preliminary injunction, the Second Circuit held that, while Doninger had shown Avery would suffer irreparable harm absent the injunction – the violation of her First Amendment rights – she had not shown a “likelihood of success on the merits.” The court cited Tinker for the proposition that there are “special characteristics of the school environment,” that must be taken into account when deciding First Amendment cases in the school context. Noting that the Supreme Court has not addressed a school’s authority to regulate expression taking place off of school grounds, the court relied heavily on its own precedent, Wisniewski, in determining that Doninger’s First Amendment claim for regulation of expression outside of the school context was unlikely to succeed on the merits. The court also relied on the “Bong Hits 4 Jesus” case, Morse v. Frederick, 127 S. Ct. 2618, 2623 (2007), which held that schools were entitled to discipline students for conduct that “would foreseeably create a risk of substantial disruption within the school environment.” The Second Circuit concluded that potential disruptive effects of Doninger’s post, such as a threatened sit-in in protest of the cancelled event, were reasonably foreseeable and, as such, the claim was unlikely to succeed on the merits.

Related Links

The Citizen’s Media Law Project hosts the relevant court documents and a case summary.

Howard Bashman of How Appealing provides commentary, as does THELEN’s Technology Law Update. Carolyn Elefant of Legal Blog Watch comments on the case, and responds to critics who believe the school’s actions were justified.

Written in response to criticism of the school’s actions, The Cool Justice Report features a letter from Karissa Niehoff, principal of Lewis S. Mills High School.

Bergstein & Ullrich, LLP summarize the story, including the blog posts in question.

By Andrew Ungberg — Edited by Wen Bu

In Re Literary Works in Electronic Databases Copyright Litigation
Second Circuit, November 29, 2007, No. 05-5943-cv(L)
Slip Opinion

On November 29, the Court of Appeals for the Second Circuit vacated and remanded a decision of the District Court for the Southern District of New York to certify a class of freelance authors and accept a settlement of their copyright infringement claims. The claims arose from unauthorized reproduction of the authors’ works on internet sites and web databases.

The Second Circuit vacated the district court’s ruling on jurisdictional grounds. Citing Section 411(a) of the Copyright Act, which provides that claims will not be instituted until preregistration or registration of the copyright claim has been made, the court held that the district court lacked jurisdiction over the claims raised by the majority of the class members, who had not registered their works. The court held that because § 411(a) requires each class member’s claims to be based on a registered copyright, the district court lacked the authority to both certify the class and accept any settlement.

Richard Pérez-Peña of the New York Times reports on the decision.
Google’s William Patry sharply disagrees with the court’s reading of § 411(a).

Judge Walker dissented, arguing that the majority fundamentally misunderstood the nature of § 411(a), treating it as a jurisdictional bar when in reality it is a claim-processing rule. Relying on Eberhart v. United States, 546 U.S. 12 (2005) and a series of other Supreme Court decisions to define the distinction, he argued that § 411(a) is more like claim-processing rules than a jurisdictional bar because the rule primarily allows consideration of the Copyright Office’s views on the validity of a copyright (which is not at issue in a settlement), is a prerequisite only to particular remedies, and is limited through a number of recognized exceptions. He stated that as Congress passed the Act to facilitate the enforcement of copyrights, the statute makes registration a prerequisite to recover damages, but not all members of a settlement-only class need to hold registered copyrights for the court to have jurisdiction over their claims.

Interestingly, Judge Walker and Judge Winter are possible members of the plaintiff class but declined to recuse themselves, issuing a separate opinion explaining their non-recusal.