JOLT Digest

By Tim Grayson

White House Presses for Copyright Reform, Privacy “Bill of Rights”

On Wednesday, the White House released a 20-page white paper (PDF), aimed at helping Congress tackle the increasingly complex issues surrounding copyright and intellectual property laws. As CNET reports, one of the paper’s main purposes was to urge Congress to definitively establish streaming unauthorized media as a felony. Making such “illegal streaming” a felony would empower the FBI to tap the phones, Internet connections, and other communication methods employed by those suspected of such activity. The administration also expressed its support for a new privacy “bill of rights.” The suggested legislation would be aimed at protecting consumers from increasingly invasive data collecting practices that are not expressly illegal under current law.

Former FCC Boss to Become Chief Cable Lobbyist

Ars Technica reports that Michael Powell — who ran the FCC under George W. Bush from 2001 until 2005 — will be the new head of the National Cable and Telecommunications Association, the nation’s principal cable lobby. Powell’s most defining moment as FCC chair was a series of somewhat bizarre remarks (video) regarding the agency’s role in closing the “digital divide.” Powell, the son of former Secretary of State Colin Powell, replaces Kyle McSlarrow, who left the NCTA earlier this month in order to join Comcast/NBC Universal.

Microsoft Teams up with Feds to Stop Spam

Working in concert with federal law enforcement agencies, Microsoft seized computer equipment across the country designed to cripple the “botnet” Rustock. The raids were part of a civil lawsuit Microsoft filed in federal court, alleging that spam distributed by the botnet harms the company’s products and reputation. Rustock was estimated to be responsible for about 40% of all botnet spam, which in turn accounts for the vast majority of all spam. Microsoft is known for its tough-on-botnet-spam stance, suggesting earlier this year that infected computers be banned from accessing the Internet.

By Vivian Tao

Supreme Court Hears Oral Arguments in HIV Test Patent Dispute

Mercury News reports that oral arguments in the Supreme Court began this week over whether a Stanford University researcher’s patent on an HIV test belongs to Stanford or pharmaceutical company Roche. Researcher Mark Holodniy developed the test while he was employed as a professor at the Stanford School of Medicine. The dispute centers around whether he could transfer Stanford’s patent rights while working as a visiting researcher at Cetus laboratories, which later sold that line to Roche. Although the Bayh-Dole Act assigns the patent to Stanford automatically, Holodniy signed a form assigning rights to Cetus for patents that resulted from their collaboration. The decision will determine whether the Bayh-Dole Act remains the source of governance on research patents when researchers sign off on those rights.

Motorola Sues TiVO for Infringement on DVR Patents

Bloomberg reports that Motorola has filed a complaint against TiVo for infringing its patents on digital video recording (“DVR”) technology. General Instrument, a Motorola subsidiary, applied for its DVR patents in 1995; TiVo applied for its own patents for allegedly infringing technology in 1998. PCMag suggests that this suit may be in response to TiVO’s ongoing 2009 suit against Motorola client Verizon on similar claims of infringement related to Verizon’s FiOS service. PCMag notes that this is just the latest in an ongoing battle over DVR providers: in 2009, TiVO sued AT&T U-Verse and was awarded damages from DISH and Echostar on similar claims, while Microsoft sued TiVO last month on software patent violations.

USTR Identifies Top Chinese Search Engine as “Notorious Market”

Business Week reports that the United States Trade Representative’s office has included Baidu.com, China’s top search engine, on its list of “notorious markets” for its use of techniques that link users to commerce sites that sell pirated items. Reuters notes that Baidu.com is the most visited site in China, and one of the top 10 most visited sites in the world. The USTR’s list identified Asian and Latin American regions as the primary markets for these sites, and was followed by a Chamber of Commerce statement encouraging legislators to empower courts to block foreign sites marketing pirated goods.

Former Senator Dodd to Head MPAA

On March 17, former Connecticut Senator Chris Dodd will become the new head of the Motion Picture Association of America (“MPAA”). CNET reports that Dodd is “truly excited” about the new position and named the protection of motion picture studio distributions as his “highest priority.” This announcement comes as the MPAA is engaged in lobbying Congress to pass the Combating Online Infringement and Counterfeits Act, aimed at fighting piracy.

By Greg Tang

TSA Offends Travelers with Body Scanners, Fails to be Accountable

The Electronic Frontier Foundation (EFF) commented on the TSA’s use of body scanners in airports across the country, which has raised serious public concerns over the indignity and invasiveness of the body scanners and pat-down searches. The EFF expressed skepticism over the effectiveness of the body scanners in detecting terrorist attacks like the Christmas Day Bomb of 2009, citing various sources, including a TSA document, that have shown materials such as liquid, powder, and thin plastic — as well as passenger clothing — to be undetectable by the scanners. The EFF also reported on the Government Accountability Office’s criticisms of the TSA. The TSA has routinely refused to release test results to the public or perform cost-benefit analyses before adopting new technologies, despite estimated direct costs of $2.4 billion over a 7-year life cycle for the body scanners.

FCC Commissioner Casts Doubt Over Net Neutrality Rules

Ars Technica reported on comments that FCC Commissioner Robert McDowell made regarding the likelihood of FCC-issued net neutrality rules in a talk to the Federalist Society last Monday. The Commissioner expressed uncertainty regarding the substance and timing of any potential rules. The comments came just one week after FCC Chair Julius Genachowski spoke at the Web 2.0 summit in San Francisco, promising to make the rules happen and lambasting Google and Verizon for proposing their own version of open Internet rules back in August. McDowell cautioned against “taking a giant leap into a potentially dark and dangerous regulatory abyss,” and instead advocated cooperation with the FTC, trade associations, consumer groups, and Internet engineers to use existing consumer protection and antitrust laws to punish bad actors and help consumers — a proposal similar to the self-regulatory approach suggested by Comcast last week.

Novell Acquired by Attachmate; IP Goes to Microsoft

Enterprise Linux provider Novell announced last Monday that it would merge with Attachmate, with some intellectual property assets going to a consortium organized by Microsoft. InfoWorld reported on speculations that Microsoft would acquire core Unix IP from the deal, but ComputerWorld confirmed that Attachmate retains control over Novell’s copyrights for the Unix operating system. Since SCO Group launched its attack on Linux in 2003, claiming ownership of Unix intellectual property and copyright infringement by the open-source Linux operating system, Novell has defended the Linux community by defeating SCO in court and declining to pursue copyright action against Linux users. However, Novell has been subjected to criticism from the open-source community in 2006 for reaching a patent agreement with Microsoft over claims that Linux infringed upon Microsoft’s patents.

Jury Awards $1.3 billion in Copyright Damages from SAP to Oracle

Ars Technica reported on the record $1.3 billion that German software maker SAP was ordered to pay rival Oracle in their copyright infringement lawsuit in the Northern District of California. Oracle sued SAP in March 2007 for allegedly using customers’ login credentials to download software and technical support materials from Oracle’s servers. Despite admitting to the inappropriate downloads, SAP had hoped for damages of $41 million from the jury. Several jurors have stated that the award was determined by focusing on how much SAP would have paid if it simply licensed the rights from Oracle, a common method for determining losses in piracy cases.

US Government Cracks Down on Piracy by Seizing Over 70 Domain Names

The New York Times reported that the Department of Homeland Security’s Immigration and Customs Enforcement (ICE) division seized over 70 websites suspected to be involved in file-sharing and counterfeiting goods early Friday morning. The popular file-sharing blog TorrentFreak explained that the websites were shut down by ordering ICANN, the non-profit corporation responsible for mapping human-understandable domain names into numeric IP addresses, to redirect traffic from the seized domains to ICE’s takedown notice. OSNews raised concerns that the method used by the ICE could escalate to censorship of websites outside the US (such as whistleblower site WikiLeaks), as ICANN operates the root domain name servers for the entire Internet. The domain name seizures resemble actions authorized under the Combating Online Infringement and Counterfeits Act, which just passed the Senate Judiciary Committee last week.

By Sharona Hakimi

The White House Endorses FCC Plan and Calls for More Broadband Spectrum

Reuters and CNet report that on June 28, President Obama signed a Presidential Memo endorsing the FCC’s goal to free up 500 megahertz of wireless broadband over the next ten years. The memo estimates that the flow of wireless data used in the next five years will increase to as much as 45 times the total bandwidth used in 2009. The memo calls on government agencies to work with the FCC to identify spectrum that could be repurposed or sold, determine the best purposes for the licenses, and explore new ways the spectrum could be used for public safety or deficit reduction. Television broadcasters have resisted previous plans to reclaim their spectrum, but the new White House proposal would instead offer a share of the profits to those that voluntarily share unused spectrum.

Google to Cease Rerouting China Users to Uncensored Portal

Wired and Ars Technica report that on June 29, Google announced plans to stop automatically redirecting Google China users to an uncensored portal in Hong Kong. The announcement came in anticipation of an upcoming renewal deadline for Google’s Internet Conent Provider license in China. In order to keep operating in the Chinese market, Google determined that it needed to accommodate the requests of Beijing officials. Instead of automatically rerouting users to google.hk.com, the new Google China page offers a non-functioning search box: clicking almost anywhere on the page will reroute a user to the Hong Kong site. Although the Hong Kong Google search is uncensored, Chinese firewalls still prevent users from accessing some websites, and access to the website can be periodically unstable.

New Documents in Dell Suit Reveal Knowledge of Faulty Computers

According the New York Times, new documents were recently unsealed in a three-year-old civil case against Dell regarding millions of faulty computers with components that leaked chemicals and caused electrical malfunctions. Dell shipped close to 12 million defective desktop computers to business and government customers between May 2003 to July 2005. Internal memos and other documents unearthed during discovery have recently revealed  that Dell was aware of the flaws and made concerted efforts to conceal the problems from the public. Dell has recently been the subject of an SEC investigation, as well as an external audit that revealed manipulation of financial reports.

The Digest Staff is thrilled to announce that the newest volume of the Harvard Journal of Law and Technology, volume 23, is now available online, featuring:

Timothy Holbrook, “Equivalency and Patent Law’s Possession Paradox”
This paper explores the paradox of the doctrine of equivalents — that the patentee is afforded protection for that which she did not possess — and offers two possible means of reconciling it: first, that patentees should only be protected under the doctrine of equivalents for changes in technology that arise from outside their field of technology (the status quo); and second, that patentees should be protected by the doctrine of equivalents if the patent’s disclosure would enable the asserted equivalent at the time of infringement, thus allowing the patent’s disclosure to grow over time.  This paper advocates that the second approach offers a better fit with the doctrine as traditionally understood.

Oren Bar-Gill & Rebecca Stone, “Mobile Misperceptions”
This Article studies three central design features of cell-phone service contracts, arguing that rational-choice explanations of these contractual features fall short and that they are better understood as a rational market response to the imperfect rationality of cell-phone users. After verifying the theoretical claims empirically, this Article finds that the identified consumer mistakes and providers’ responses to these mistakes generate substantial welfare costs.  As a solution, this Article proposes mandated disclosure of use-pattern information, including average-use and, more importantly, individual-use information that, by directly targeting the identified consumer mistakes, can enhance efficiency and increase consumer surplus in the cellular service market.

Natalie Ram, “Assigning Rights and Protecting Interests”
This Article proposes a new model for adjudicating disputes between individuals providing tissue for research and researchers accessing that tissue.  Drawing on intellectual property doctrines, this Article advocates the creation of “informational property,” a property right to one’s own genetic information. Guided by a framework of the interests of tissue providers, researchers, and society in the control and use of human tissue in research, this Article advocates an informational property approach modeled on Creative Commons licensing and reinforced by enhanced privacy protections in tort.

Kevin Werbach, “Higher Standards: Regulation in the Network Age”
This Article proposes that the Federal Communications Commission (FCC) remake itself as a standards organization, making its mission to catalyze the adoption of open standards that promote its regulatory objectives.  This Article then explains how a standards-based approach offers a better solution to the network issues faced by the FCC, such as network management practices of broadband access providers and unlicensed wireless devices adjacent to broadcast television frequencies.

Jon Darrow, [“The Neglected Dimension of Patent Law's PHOSITA Standard”] (Student Note)
Modern invention bears little resemblance to inventive activities of the nineteenth century.  Today, invention typically involves teams of highly-trained specialists provided with funding and equipment, who devote months or years to developing an invention. As a result, when judges look at a patent from the perspective of a “person having ordinary skill in the art,” the “art” they consider is the art of innovation.  This is a shift from early patent jurisprudence, however, which considered patents from the perspective of practitioners. The change has resulted in the withholding of patents on deserving inventions.  By restoring the traditional meaning to the word “art,” patent law can appropriately motivate socially valuable inventions that are currently being neglected.

Chris Johnson, [“Leveraging Technology to Deliver Legal Services”] (Student Note)
This paper examines technological solutions and tech-enabled business models for the delivery of legal services to those with limited incomes and specific needs. In particular, it considers several existing websites as case studies, and then proceeds to discuss the potential future commoditization of legal services and the coming transformation in the legal profession.

Sarah Sorscher, [“A Longer Monopoly For Biologics?: Considering the Implications of Data Exclusivity as a Tool for Innovation Policy”] (Student Note)
Analyzing the Access to Life Saving Medicines Act, currently under consideration by Congress, explaining how it will create a regulatory pathway for follow-on biologics that will likely include an extended period of data exclusivity for innovator brands and exploring the conflicts between and overlap of patent protection and data exclusivity protection, focusing especially on the impact of these new protections on the market for follow-on biologics.